Portland as a Startup Hub

Takeaways:

There's been a lot of hype and local/national press about Portland's startup economy. OAF and CBRE convened a panel of economists & startup community members to separate fact from fiction with a data-driven discussion led by the most knowledgeable economists who study and track Portland to understand how does Portland compare and what metrics could we look at to track, measure, and predict the success of our startup economy?

Expert Panelists:

-        Colin Yasukochi, Director of research, CBRE

-        Janet LaBar, CEO, Greater Portland Inc

-        Skip Newberry, CEO, Technology Association of Oregon

-        Joe Cortright, Regional Economist, Impressa Consulting

Key Metrics:

Key metrics for tracking and measuring the health of our startup ecosystem, and for assessing Portland’s startup strengths and competitiveness.

  • Brain Gain or Brain Drain: A telling way to measure and predict the success of a startup ecosystem is to track the net in-migration of talent, especially of college-educated 22-35 year olds. Key metrics to consider:
  • % of software engineers in the tech workforce:
  • According to Hiring Lab, Portland is in the top 10 of cities with highest % of high paying and fast growing tech jobs
  • Average wages in local tech sector:
  • Oregon Angel Fund Annual Compensation Survey suggest average wages for startup executives & software engineers in VC-backed companies = $120K (up 20%)
  • Size and caliber of local major research universities:
  • OHSU School of Medicine– 29th in the nation for research universities according to US News & World Report
  • OSU - #67 in computer science, #78 in engineering
  • Size of university R&D budget and depth of university relationships with local industry?
  • OHSU – $389.6M in R&D award dollars; 28th for NIH           
  • Livability Drives Talent: Immigration into cites by high skilled workers is driven by livability - distinctive urban environments that are walkable, dense, with easy transit. The ability to attract and retain smart, ambitious people who stick around enables continuity for high growth startups. 
  • According to Zillow, Portland is the top city in the US for residents wanting to stay, and outsiders wanting to move
  • Portland = only US city on Monocle’s Quality of Life Survey for 2017 based on walkability, price of coffee, and speed of receiving an ambulance, among others
  • Cost of Living & Doing Business: What is the cost of housing RELATIVE to tech job quality and wages?  This metric more important than just cost of labor or cost of real estate.
  • CBRE, according to their Scoring Tech Talent Survey, cites Portland as #26 as top tech ecosystem for cost of doing business & tech talent based on this metric
  • Openness to Foreign-born Immigrants: Immigration drives innovation -  the % of immigrants in a startup ecosystem contributes to the health and success of a regional startup economy.  Attracting the best and brightest from across the world drives innovation and new business formation.
  • Just 6 out 55 companies in the Oregon Angel Fund portfolio were founded by foreign-born immigrants. 
  • Flow of Venture Capital into City Center: Number of dollars into an ecosystem can be a leading indicator of startup health - more dollars correlates highly with more companies funded.
  • Venture capital increasing in OR, though still small compared to Seattle and Bay Area. According to Pitchbook, $311M in VC dollars invested in Oregon in 2016, 2x more than 10 years ago. 
  • Successful Exits: The ultimate indicator of a healthy startup ecosystem is the number of success stories and ability to speed up a virtuous cycle of local wealth creation and reinvestment.
  • Recent profitable exits of VC-funded Oregon companies include Elemental, Simple, Meridian, ClearAccess, GlobeSherpa, and Giftango.
  • No tech IPOs since Cascade Microtech in 2004

Clearly, we have more to do as a startup community, especially re bolstering our local universities, finding more opportunities to collaborate with foreign-born immigrants, and increasing the virtuous cycle of exits & startup investing. With Portland’s brand growing as a livable and economically vibrant city, we see the trend of more talent, and more companies, building and growing here. 

Thank you to Ajay,  Kristin , and the team at CBRE for supporting our workshops!