Local tech startup might decide to grow elsewhere

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Prosperent co-founder Mike Christensen and his staff have developed their own pros-and-cons list for several locations.

Prosperent is a growing tech startup based in downtown Colorado Springs — for a few more months, anyway.

The company, which manages pay-per-sale online advertising for companies like REI, QVS and Zappos, might be ready to outgrow Colorado Springs, its founders say.

Prosperent is a group of five skilled computer software programmers in their 20s and early 30s. They play ping-pong and watch movies in their office. Of course, they also work, but they don’t turn on the overhead lights during the day and there are no rules about coming and going as long as it all gets done.

They’ve tried very hard to develop a specific culture, said co-founder and president Mike Christensen.

“We boot-strapped it and we’ve been profitable since day one,” Christensen said.

Now they’re getting ready to take the company to the next level, and there are a few reasons they don’t think Colorado Springs is the right place to do it.

The first and biggest reason is that it’s hard to find qualified programmers locally to grow their team, and even harder to attract them from outside the area. That plays into the second reason: The culture here doesn’t quite match the culture the company is trying to achieve, which will make it hard to attract and keep talent. Finally, there’s a perceived lack of venture capital — the big money Christensen says the company will need for the big growth it’s planning.

Most of Prosperent’s issues aren’t news to those who work with entrepreneurs, startups and workforce development. It’s not news to the folks at the Colorado Springs Regional Business Alliance, either. And there are some efforts to make changes and improvements.

“They’re absolutely trying,” Christensen said. “They’ve done everything they could do. But most of these things are bigger and they’ll take longer than we’re willing to wait to fix.”

Workforce development

Prosperent uses a computer language called PHP, used almost exclusively in Web and cloud development. And it’s really hard to find PHP programmers in Colorado Springs, Christensen says.

He’s not the only one who has had trouble. Ric Denton, who leads the Colorado Springs Technology Incubator, said he knows it’s hard and other local tech startups have had the same problem.

“It’s hard to find anywhere,” said Dr. Dan Dandapani, dean of the College of Engineering and Applied Sciences at the University of Colorado at Colorado Springs. “It doesn’t matter where you go — Boulder, San Francisco — they’re hard to find everywhere because they’re all in demand.”

Dandapani said he and his department have known that software engineers and computer programmers, especially those working in higher-level cloud and Internet applications, are in demand. In response, UCCS’ CS3010 Web programming class teaches PHP as does its newly added CS3110, which teaches development for mobile devices.

“But we need to be careful we don’t just address the needs of one industry,” Dandapani said.

Denton said the key is greater collaboration between the schools and the companies that need the employees. And there needs to be some analysis of why students aren’t choosing to study computer programming, what schools can do to turn out higher-level and quality programmers, or why programmers choose to leave the community when they graduate.

Dave White, executive vice president of marketing for the Business Alliance said the group is developing a new program aimed at keeping existing businesses in town. The Business Alliance will interview companies and find out what they need and begin immediately addressing their needs, White said.

They’ll pay special attention to emerging companies like Prosperent and will work closely with trade schools and colleges in the area on workforce development.

“We can’t just wave a wand and create PHP programmers,” White said. “But we can coordinate with our service partners.”

Attracting employees

Working with schools is a good step in the right direction and a great idea for the city if it wants to keep other companies like Prosperent in the future, Christensen said.

But it probably won’t happen fast enough for Prosperent. He’s looking to make the move in the first or second quarter of 2013. Fully grown, he pictures up to 10 programmers and 20 sales staff plus some C-level administration.

Christensen said he figures their prospective employees would more likely come from the working world than school anyway. The trick is enticing someone away from a well-paying job to work at a startup. Sure, there’s ping-pong, but the paycheck is smaller and the benefits aren’t as deep.

“It’s my sense,” Denton said, “that the best people who have experience in PHP and other languages used in software as a service are already gainfully employed or doing fairly expensive developer work where they can name their price.”

While that might be a problem most places, it’s worse in Colorado Springs, said Prosperent co-founder and CEO Brian Lovett.

“One of the biggest issues here is the military,” Lovett said. “It’s hard for a startup to compete with government contractors.”

Any computer programmers coming out of school here will look at their opportunities and gravitate toward those higher salaries and benefits. And once they get security clearance, there’s no reason to leave government contract work, Lovett said.

White said the Business Alliance is working on coming up with incentives that will help emerging companies compete in the Colorado Springs market.

Mayor Steve Bach recently announced a package of tax incentives. But White said the city will need to go beyond taxes to help young businesses, which often don’t have enough income to benefit from big tax breaks.

It’s not easy to draw people from out of the area either, Christensen said. Prosperent is successful and growing, but it’s still a startup and it takes a special person to move away from home for that.

Part of attracting talent is culture.

“It’s not youthful,” Lovett said. “There’s not much for young people to do here.”

The mountain access is great, he said. But he goes to Denver for nice dinners, museums and shopping.

Efforts to redevelop downtown and spur new development there could help. But it won’t happen fast enough for Prosperent.

Comparisons

The guys at Prosperent wrote a list of pros and cons for Austin, Colorado Springs and Boulder. They thought about moving to Austin, but decided against it because of the lack of mountain access and shallow talent pools. They all have family and friends in Colorado Springs and love the state.

Boulder looks likely to be Prosperent’s future home. And one of the reasons is the city’s technology cluster and access to capital.

Denton said he could help Prosperent access capital through High Altitude Investors. Christensen said Denton offered that months ago and he has been dragging his feet because High Altitude Investors are primarily angel investors who can offer up to $2 million.

“We really need growth capital,” Lovett said.

They believe they’re too mature for angel investors, but Christensen said he’d still like to set up some meetings and see what the options are.

Denton said the High Altitude Investors are well connected up and down the Front Range with other investor groups and there could possibly be access through that group to whatever Prosperent needs.

Christensen says the company won’t move until it’s ready to grow, but he thinks that’s soon.

“We’re looking at growing,” he said, “and Colorado Springs just doesn’t seem like the best place for that.”

6 Responses to Local tech startup might decide to grow elsewhere

  1. Translation = we want all the *old* hard working people to give us their money so we can go spend it playing all day and since you won’t give it to us, we are going to go find somewhere else that has lots of OPM (other peoples money) to spend.

    And we wonder why Colorado is going to pot – figuratively and literally…

    Colorado Citizen
    November 8, 2012 at 1:33 pm

  2. The article states that the company is bootstrapped and profitable. I am lost as to how that equates to them spending other people’s money exactly? I have worked for a number of startups in the tech sector, and the culture is typically very relaxed because it has to be. Sitting behind a desk programming for 12+ hours a day is pretty stressful. Blowing off steam for a few minutes enables someone in that position a much needed time to refocus before tackling the next problem. The last thing you need is a team of burnt out team members wasting time and money.

    anonymous
    November 8, 2012 at 2:03 pm

  3. *Colorado Citizen, you are correct. This town isn’t aligning with the needs/wants of high tech startups like this. The town fathers talk platitudes about small businesses yet this small business self-identifies as a startup. Their aspirations exceed their size and their work ethics foster creativity. While not mentioned, I’d bet they have a fridge full of craft beers for quick celebrations of breakthroughs… or just because….

    Ray Krueger
    November 8, 2012 at 2:29 pm

  4. “We’re looking at growing,” he said, “and Colorado Springs just doesn’t seem like the best place for that.”

    This is an interesting and subtle statement that says a lot. Subtle in that it relates to the underlying cultural reasons that sophisticated, high-tech firms refuse to consider placing their staff and employees in the El Paso County area – and thus be able to have open positions to fill from within the local unemployed population.

    Perhaps it is time to strap on the big boy britches – and form a ‘task force’ (yes, Another one!) to open up all those things we refuse to accept or talk about that forces firms out of the area and keeps firms from moving to the area. It is interesting to hear from successful, out of state firms on what the perception of the area is – and why they move to Boulder and Longmont. Or Austin and Charlotte. Some of it relates to ‘incentives’. A good part is ‘attitude’.

    Rick Wehner
    November 8, 2012 at 2:36 pm

  5. Take a look at what downtown Denver has done to attract and keep young high-tech workers and startups.

    http://www.denverpost.com/business/ci_21922566?source=pop_section_business

    Why not here?

    MikeP
    November 8, 2012 at 4:37 pm

  6. I have met with the company mentioned in this article and was born have lived in this town 50+ years. This town has always been slow to offer any entertainment besides bars or anyone living here. The guys that work at Prosperent work 40-60 hours a week or more if needed. They probably do have a fridge of beer for those breakthrough moments but they work hard in a very competitive environment. They have t work hard to stay ahead in their industry and deserve it at the end of the day. It sounds like money is only one of the issues they have to deal with what can the business network or the city offer them and others like them to give them a chance to succeed? Colorado Citizen should re-read the article before misstating what the article says. They are not asking the world for a hand out, they are asking for the tools to prosper. If they are successful then they help support the employees, the city through taxes and so on. This town has a limited reputation for new start up businesses and this reputation goes out to all the other companies looking for a home. Good luck Mr Christensen and Mr Lovett with you future endeavors.

    Sir Curt
    November 8, 2012 at 5:18 pm