Tracing the Ancestry of Puget Sound’s Technology Cluster

1/22/09Follow @xconomy

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since the average company had 2.3 founders, she says. Almost half (46 percent) of companies found in the survey were started by serial entrepreneurs. And about half had an R&D or technical background, which can be seen as good or bad. “A lack of marketing and sales skills is a regional disadvantage,” Mayer says.

Most of the founders were driven to start their own company by the entrepreneurial spirit, or the desire to be their own boss and reap the rewards for their efforts. Some sought financial security, and others were frustrated with previous employers, Mayer says. Slightly more than half (51 percent) of the companies were financed through bootstrapping (personal finances, friends, and family), while just 19 percent were backed by angels, and 15 percent got venture capital, she says.

Seattle’s companies were different from Portland’s and Boise’s in another key respect—independence. Companies in the other cities tend to leave the parent’s nest while also maintaining a supplier relationship or R&D partnership of some kind. In Seattle, companies tend to make a cleaner break from the parent and strive to be independent on their own, she says.

Alberg, one of the people who has helped shape much of the growth of the region’s tech sector, helped out with fact-checking the project and filling in blanks Mayer may have otherwise missed. (In fact, WTIA is hoping that readers like you will offer comments and suggestions here for improving it in an update slated for next year.)

Since Alberg has seen so much, dating back to his days as one of the founding employees at McCaw Cellular and continuing today with all the business proposals he sees at Madrona Venture Group, I wondered what surprised him most about the project.

“I was surprised by Aldus, that there was so much that came from it,” Alberg told me. On another level, he says he was not so much surprised as impressed by all the rings around the orbit of Microsoft—a total of 153 founding connections. “Microsoft has played such a big role in attracting talent from all over the country and the world here.”

The map reinforces what Alberg says he already believed, that “we do better than almost every place in the country but Silicon Valley” in terms of incubating new technology companies. One thing this region lacks compared to the Valley is the sheer depth of numbers of anchor companies, he says. “It would be nice to have another Amazon or two,” he says.

This map, of course, is nowhere near comprehensive. It doesn’t include all the dead companies, which in the Portland map was represented visually with “black holes,” Mayer says. It also doesn’t include any biotechnology companies, many of which trace their lineage to the UW or research centers like the Fred Hutchinson Cancer Research Center. A few medical device companies with an IT bent were listed on this map, like ATL Ultrasound, which came out of the UW and later gave rise to SonoSite, the maker of portable ultrasound machines as medical diagnostic tools.

Lazowska, who also contributed to the mapping project, says his initial reaction when looking at the map was a “Wow.” The map now is a much more vibrant one than would have appeared 10 years ago, he says, when there were fewer venture firms and fewer law firms playing key supporting roles. Companies like Amazon, with their web services, make it much cheaper and easier for a new breed of startups to create innovative new company ideas, like New York-based Animoto Productions, which combines photo files with audio clips to create integrated slide shows. “You can build companies now with much less capital than before, you can pay with your credit card as you go,” Lazowska says. “I think we’re at the stage now where we’re a perpetual motion machine.”

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