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This out-of-the-way town is fast becoming a start-up hub

Nadia, Maria Sascha, Nicholas, and Julian Kahn dance on a truck in Bozeman, Mont. (Tom Robertson For The Washington Post)

It’s small, quiet and out of the way.  It’s Bozeman, Mont., and, according to this long-form piece in Fast Company, it’s quickly becoming a start-up hub for technology and other young companies.

Bozeman has about 100,000 people in its metropolitan area, and its airport is the busiest in the state, with direct flights to Los Angeles, San Francisco, New York and Dallas. Its median annual household income in the technology sector is $60,000 compared to $50,000 statewide. That is not Bay Area numbers, but it certainly can buy a lot in Montana. The city is residence to Montana State University.   There are areas zoned for multistory, mixed-use development and a growing fiber-optic network. Yeah, it’s Bozeman and it’s attracting start-ups.

Bozeman is home to photonics, manufacturing and outdoor gear companies. The town has topped the Kauffman Foundation’s ranking of start-up activities for the country’s 25 least populated states over the past four years. More than a dozen alumni from RightNow, a giant customer relationship management firm in the town (it’s now part of Oracle), have left the company to start their own businesses in the Bozeman area. The town’s local business technology trade group says that more than 900 jobs were added in 2016, with even more expected this year. Five Bozeman firms made the Inc. 5000 list in 2016.

Bozeman has high speed Internet. It has a university. It has a strong business community. But, like many other small towns looking to grow it suffers from one big thing: a lack of skilled human capital.  Let’s face it:  Montana is not exactly San Francisco or New York. Incomes are lower.  The city is 87 percent white. Cultural diversity is hard to find, making it harder for employers to attract developers and other technical people from India or China. Current laws are not exactly friendly to LGBT groups (although Bozeman passed its own non-discrimination policy in 2014 Montana doesn’t have statewide nondiscrimination policies). Access to capital is challenging. And now that start-ups are moving in, real estate prices are moving up. The median home price in Bozeman is around $420,000, compared with $250,000 in Billings.

Graduates of Montana State are a big resource, especially those that want to stay in their home state. And there’s good reason to stay.  The area is beautiful – with thousands of acres of natural habitat and ski trails and plenty of activities for fisherman, hunters or anyone who wants to trek through Yellowstone National Park – which is only 90 minutes away.  “You can get anywhere in Bozeman in 15 minutes,” says the president of a marketing consulting firm based there.

“People in Silicon Valley are always looking for better job opportunities . . .  [but] people in Montana are a lot more laid back,” says Yasuyuki Motoyama, the Kauffman Foundation’s director of research, told Fast Company. “They don’t constantly seek other opportunities or counteroffers. They are happy with the company where they are working.”

Survey after survey shows that the millennial generation – those between the ages of 18 and 34 – are looking for more work-life balance.  As this generation grows to dominate the workforce, big cities will be challenged to compete with the benefits of living the Bozeman life. We’re already seeing that. As one local business owner puts it, “there are tons of people who are moving to Montana, and then figuring out the rest once they get here.”