Workers collaborate in SendGrid’s new headquarters in downtown Denver.

Tech magnet: Metro Denver’s innovative spirit lures employers large and small The Innovation Economy - 2017

When Amazon  announced its plans to build a second North American headquarters, business analysts at The New York Times examined the e-commerce giant’s eight-page list of needs and quickly went online in September with their recommendation on where the $5 billion facility and its 50,000 jobs should be located.

  • Amazon said it wanted a metropolitan area with at least a million people. That whittled the possibilities down to 52.
  • Amazon said it wanted “a stable business climate for growth.” The analysts pared the list to 25.
  • Amazon said it wanted a growing labor pool of technology-savvy workers and a strong nearby university system. Now 14 metros were left standing.
  • Amazon said it wanted a place with an alluring quality of life that young, skilled workers would like but also could afford to live in. The list was down to nine.
  • Amazon said it wanted a place with amenities that compared with its Seattle home, including a good transit system with the means of mobility for its workers. That trimmed the list to four: Portland, Ore.; Boston; Washington, D.C. — and Denver.

Portland? Too close to Seattle. Boston? Not enough room for the 8 million square feet of space Amazon wants. Washington? Land in the District of Columbia would be too expensive, and a sprawling complex in a far-flung Virginia suburb wouldn’t fit with the company’s urban roots.

That left Denver — and J.J. Ament, head of the Metro Denver Economic Development Corp., was euphoric.

“That’s very valuable for our business brand,” he said. “Whether we’re successful in attracting HQ2 here or not, a lot of companies are going to learn about us because they’re watching Amazon.”

In an interview with BizWest in September, Ament said, “We’re delighted any time we read publications or hear news reports that recognized what we already know. Colorado is a great place to live and work. It’s a place that has a thriving business community to grow and scale your company in a way that is going to be successful. We’re delighted that everyone seems to recognize that and report on that.”

Amazon wants cities to submit proposals by Oct. 19, and Ament said MDEDC, which promotes site selection for a nine-county Front Range corridor stretching from the Wyoming border to Larkspur, already is working on its pitch.

Ament can point to the area’s lifestyle and affordability, a culture of diversity and inclusion that Amazon prizes, and the supply of tech talent from nearby universities that has attracted companies such as IBM, Google, Twitter and Oracle. He can note that Colorado has the nation’s third-highest concentration of tech workers, according to CompTIA’s Cyberstates 2016 report. More than 39 percent of its adult population has completed a bachelor’s or higher-level degree, ranking Colorado second most highly educated, behind only Boston. He can tout the state’s third-best ranking in terms of Small Business Innovation Research grants per worker — $32.90, compared with the U.S. average of $11.80. He can brag about Colorado’s low corporate income tax rate and simplified structure.

And he will.

“That’s what our organization was created for,” Ament told BizWest. “Within that nine-county region there are 70 different municipalities, and we work in partnership. When we have prospects like this, they work through us to put forward one common message.

“At the end of the day, our goal with Amazon or any company is first they choose Colorado and then they choose our region,” Ament said.  “And where within the region they choose is a decision best made by the company themselves. It’s our role to put our best foot forward as a region and all come together to deliver and execute on a strategy that best suits the company. We don’t compete with each other; we collaborate and work for the best of the region and the state.”

That synergy helps explain why other economic-development organizations in the region aren’t too fazed when MDEDC lures a giant company to the heart of Denver or a company moves around within the region — such as homegrown tech firm SendGrid’s move 11 months ago from several locations in its native Boulder to a 52,000-square-foot space at 18th and California streets in downtown Denver.

“Every time there is a company that moves their offices out of Boulder, we want to understand the reasons for it and use that as an opportunity to consider whether there are things we can do to avoid those kinds of situations in the future,” said John Tayer, president and chief executive of the Boulder Chamber. “We’re not going to have the solution for every business.”

For SendGrid, “It​ ​was​ ​important​ ​that​ ​we​ ​have​ ​all​ ​of​ ​our​ ​Colorado​ ​employees​ ​together​ ​in​ ​one​ ​office so​ ​we​ ​can​ ​continue​ ​to​ ​innovate​ ​and​ ​collaborate​ ​as​ ​we​ ​attract​ ​new​ ​customers​ ​and introduce​ ​new​ ​features​ ​to​ ​our​ ​existing​ ​customers,” said ​Scott​ ​Heimes,​ the company’s chief marketing officer.

The company invested in a wifi-enabled shuttle bus to connect its remaining Boulder employee base to its new Denver headquarters, he said, because “connecting​ ​the two​ ​communities​ ​enables​ ​us​ ​to​ ​recruit​ ​from​ ​both​ ​talent​ ​pools​ ​in​ ​an​ ​innovative​ ​and productive​ ​way.​ … The​ ​buses​ ​allow​ ​our​ ​employees​ who ​live​ ​in​ ​Boulder​ ​and​ ​Longmont to​ ​continue​ ​working​ ​on​ ​the​ ​bus​ ​but​ ​get​ ​home​ ​in​ ​time​ ​to​ ​make​ ​it​ ​to​ ​school​ ​functions, spend​ ​time​ ​with​ ​their​ ​friends​ ​and​ ​families​ ​and​ ​unplug​ ​in​ ​the​ ​evening.”

Yancey Spruill, SendGrid’s chief financial officer and chief operating officer, told BizWest in May 2016 when the planned move was first announced that “it’s really just a matter of numbers. The Boulder demographic area is measured in the hundreds of thousands. The Denver area is measured in the millions.”

On a smaller scale, when New York-based Madwell Creative Agency, whose advertising clients include Boulder-based Justin’s Nut Butter, moved from Boulder to Denver’s River North area, its managing director told the Denver Business Journal that “while Boulder is the Silicon Valley of natural-food startups, Colorado’s talent is in Denver.”

Tayer understood both companies’ thinking.

“Boulder has been part of a wider economy hub since the beginning of time, and that results in the flow back and forth of businesses as they grow and develop,” Tayer said. “We recognize that there’s going to be movement of businesses to meet their specific needs. We welcome the opportunity to continue to help build the Front Range innovation and entrepreneurial system. At the same time, we always need to be sensitive to the things that will strengthen our own innovation and entrepreneurial environment, and that’s why we work closely with our government and business leaders to address challenges that include workforce housing, mobility and accessible commercial space.”

At a recent BizWest CEO Roundtable, Simon Knapp, co-founder and CEO of Pixmoto, noted that Boulder has no shortage of tech talent but that the price companies have to pay there to land that talent compared with Denver is 10 percent to 20 percent more because of the cost of living.

Acknowledging that Boulder now is the sixth most expensive housing market in the United States, Tayer cited opportunities within the city beneath the Flatirons “to increase our stock of workforce housing across the economic spectrum. There are areas of our community that are currently underutilized and could accommodate additional housing.

“But we recognize that housing is a regional issue,” Tayer said, “and that’s why we encourage to work with our fellow communities to identify and support construction of a spectrum of workforce housing across Boulder County.”

To increase worker mobility, the Boulder Chamber and its regional colleagues focus on expanding alternative commuter modes along U.S. Highways 36 and 287 and Colorado Highways 7 and 119. “We always want to see a completion of the infrastructure for FasTracks,” the Regional Transportation District’s commuter rail service, Tayer said, “but we also need to take advantage of opportunities on the nearer term, such as bus rapid transit on some of the regional corridors.”

Tayer said the city of Boulder needs “to allow for the redevelopment of some of our commercial properties to accommodate flexible workspace that can be offered to smaller businesses at lower cost, and to allow our commercial areas to evolve to facilitate growth and development of some of our growing companies. We need to give businesses and property owners the opportunity to pursue their creative solutions.”

Ament heralds companies locating in Denver as a boon for the entire region.

“That’s the whole genesis of MDEDC — working together regionally is the best way to build our brand and diversify, so we’re not dependent on one industry. Each community has something that makes it special — but we can attract a diverse workforce because they can live wherever they want and work anywhere.

“We’ve got 4,000 Schwab employees in Lone Tree, four times more than they have in San Francisco, because they love that campus style of workplace. On the other hand, TIAA has an office building downtown, where they can best appeal to their workforce.

“It’s all driven around talent.”

Ament worries that Denver’s housing prices, while still a more affordable alternative to those in Boulder or along the coasts, are gradually creeping closer to them.

“We’ve addressed the construction-defects legislation that had really stymied growth,” he said. “Now that we’ve fixed the policy, we need homebuilders to start supplying the stock. We just need to give it time for the market to take over and catch up. We need housing stock to be available and affordable for every type of employee throughout a company, not just the CEO.

“We’re never going to be the cheapest location, but I do think we offer a tremendous value. Post-recession, employees have realized it’s not just where they want to work but where they want to be for their life,” Ament said. “They come to Colorado because very few places in the world can combine the quality of life with the vibrancy of our businesses. … Healthy and happy employees are more productive employees.”

Mike Freeman, who heads the Fort Collins-based tech incubator Innosphere, noted that “we  work with small companies that are growing, so they’re rather agnostic about location — but the exception would be when companies start scaling. Then they’re going to go where the talent is in numbers. To me, that could be any community on the Front Range. It just depends on what they’re doing and what they’re looking for.”

In the eyes of an emerging company, Freeman said, “for a relatively small state, we’ve got three research universities, 20 federal labs. Really smart, innovative people are attracted here anyway — and with all these things colliding, that’s what keeps organizations like Innosphere busy.”

The group of companies that just started Innosphere’s program is the result of the largest number of applications for a single cohort in its history, Freeman said.

“I’ve talked to a number of people who have relocated here,” he said, “and another thing they mention is great public schools. A lot of other places, you’d have to pay for private school. And the weather is fantastic. It’s a great package. That’s why we’re doing so great here in Colorado.

“Funding follows good entrepreneurs with good ideas,” Freeman said. “As Colorado continues to grow and scale — projects like Amazon — it’ll always make a difference. They want to be in Colorado, where there’s a diversity. Capital chases companies like ours.”

Added SendGrid’s Heimes, “Colorado’s tech culture is something special. Its spirit of entrepreneurship and innovation is contagious. There is a generous spirit deeply ingrained in Colorado’s entrepreneurial ecosystem that is harder to find in places like San Francisco, New York or even Boston.

“For years, people have been calling the Denver/Boulder tech scene the next Silicon Valley, but Colorado has developed its own distinct culture and personality to become a competitive market for innovation, putting relationships, mentorship and education first, as we saw and reaped the benefits from as a Techstars grad, born and bred here in Colorado.

“Colorado’s flywheel is turning, and I have no doubt it will continue,” Heimes said. “As business leaders and entrepreneurs, we are just lucky to have the opportunity to contribute to it.”

BizWest reporter Jensen Werley contributed to this report.