I have been a VC since 1995 and have lived in Oregon all that time. As I see it, there are 3 issues / challenges for growing the emerging technology company ecosystem here:
1. Lack of successful "poster children". Start up companies that end up with "home run" success (either big M&A or IPO) do several things - they demonstrate to other local entrepreneurs how it is done, they create wealth in the community that gets reinvested (look at all the angels in Seattle), and they show to others outside Oregon that they need to come here to get the next big deal. We have had pitifully few if any home run exits in the last 8 years. Ask Gerry how he responds to Silicon Valley VCs who ask him "tell me again what was the really good deal in Oregon in the last X years that I missed"?
2. Wrong core strengths. Oregon's (or at least metro Portland's) biggest strengths have been semiconductors, digital displays, and EDA. These are all TERRIBLE sectors for future growth. No one person or decision is to blame here ? it's just what it is. There has been hope in recent years that open source (I'm glad to see Stuart Cohen of CSI on the panel) and nanotech would be the "next big things" but still too early to tell.
3. No Stanford or MIT. And last time I checked, they weren't looking to move to Oregon.
But there are some promising things on the horizon:
1. The Oregon universities are getting MUCH better in terms of securing federal research dollars (Arun can elaborate) and in terms of commercializing the technology that comes out of the universities. At the conference, there are two VERY interesting companies that have spun out of OSU - NuScale and Wi-Chi. Both of these companies have gotten VC $ from prominent Silicon Valley investors, and show great promise for the future.
2. We are getting more out of state investment $ to come here. Klieiner Perkins did its first investment in Oregon a couple of years ago (Platial) and Sequoia did their first investment in Oregon since Pixelworks when they invested in Jive Software in 2007. Many elected officials have done a good job to put programs in place such as OIF, OGA, and Oregon Inc to help bring new investors to Oregon, foster what we have, and target state resources on the highest growth opportunities going forward. Success of these programs cannot be measured in a year or two - they will take much longer to pay dividends.
3. IMO, the best hope for the "next big thing" is green / sustainable industries. Many other regions are also targeting this. But Oregon has some unique advantages - a solar power industry leverages Oregon's semiconductor expertise, with Bonneville Power (and PGE / Pacific Power) we have the experienced managerial and technical workforce, and it is very aligned with Oregon's green / sustainable culture. Will all of those solar plants out off the Sunset Hwy eventually go the way of all the Japanese semiconductor plants that were built in the 80s and early 90s? I hope not.
As a VC, I am an optimist. While 2009 and perhaps 2010 will be very grave years for the global economy, this is actually a great time to start a company ? cheaper office space, easier to hire talent when big companies are laying off, it enforces fiscal discipline, etc. The glass remains half full.
posted 4 years, 6 months ago
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