November 3rd, 2010

Dave Chase: 10 reasons I chose Portland over Seattle and Silicon Valley to locate my startup


Dave Chase: 10 reasons I chose Portland over Seattle and Silicon Valley to locate my startup
[HTML2][Editor's Note: Today's guest post comes from Dave Chase, a serial entrepreneur who chose Portland for his next startup. Why? Read on.] I recently relocated to Portland to start my new venture. Though I grew up in Portland (and the Bay Area), I hadn't lived in the area since the early 80's and I no longer have family or close friends in Portland. Thus, in many regards, it's a completely new city to me. Yet, it's the place I've chosen for my new startup. Why? I have far more friends and relatives in Seattle and the Bay Area. Clearly those are great areas to live and start a company as well and much as been written about that. I think Portland is a dark horse and for people who have criteria such as mine, I think they'll find it to be a better choice particularly if they are pre-disposed to an active lifestyle. Naturally, everyone has their own set of criteria and experiences that will sway their decision one way or another. Before I list the 10 reasons, let me give you a bit of context.
  • I am starting a company that intends to disrupt the traditional, flawed health insurance model which we believe is the only way in the near term to slay the healthcare cost beast in a meaningful manner.
  • I began my career in the Healthcare Practice of what is now Accenture (one of the largest consulting firms in the world) and then moved to Microsoft in 1991 to help get them into the enterprise.
  • During my 12 year tenure, I served in senior marketing, business development and general management roles.
  • The first chunk of my Microsoft experience was founding their healthcare business that represents over $500MM in revenue. The latter half was spent working on Internet media businesses helping create Microsoft's next billion dollar business that was briefly profitable before I left in 2003.
  • Subsequent to leaving Microsoft, I have been immersed in startups as an advisor, interim executive and investor helping build successful businesses in the travel and digital marketing arena that are on a tear (e.g., LiveRez is one of the hottest companies in the Internet travel sector).

10 reasons to start a company in Portland, Oregon

Now comes the time to start a new business of my own and choose where to locate it. It's a blend of personal and business factors that drove the decision. The following are the reasons I selected Portland over Seattle and Silicon Valley:
  1. Cost of living for employees: It's dramatically less costly for people to live in Portland. Thus, a startup trying to preserve cash simply doesn't have to pay as much for the employee to live comfortably.
  2. Food scene: In a word, Portland's food scene is Epic. From the restaurants to food carts, there's no doubt there's more quality dining choices per capita than anywhere in the West. And they won't break your bank like those in Seattle and the Bay Area.
  3. Better skiing: Both Mt. Hood and Mt. Bachelor offer very good skiing a reasonable drive away and are better ski areas than what Seattle and Silicon Valley have to offer nearby. In Seattle, you need to drive a long ways to Whistler dealing with border hassles or do what I did when living there...fly to Sun Valley. In the Bay Area, you have a brutal drive to over-crowded slopes.
  4. Better beaches: The Oregon Coast is a popular tourist destination for a reason. Certainly the San Juans and the Olympic Peninsula are nice but they are further away. In the Bay Area, one needs to travel a good deal further to get to nice beaches.
  5. Wine: No doubt, Silicon Valley has something to crow about when it comes to access to Wine Country but I happen to prefer reds and avoiding crowds so the Willamette Valley gets to nod. There's some good wine in Eastern Washington but there isn't the sort of weekend getaways that are present in Oregon and California.
  6. Cost of talent: One of the secrets to Microsoft's success was they had talent that stayed on a long time during it's critical growth stage without hopping from one company to another like the Silicon Valley. Similarly, Portland isn't as competitive to find great talent. There simply aren't as many companies to choose from so there's less of a bidding war to attract and retain top talent.
  7. Airport: Portland's airport is just big enough to fly virtually anywhere but not so big that it's a hassle to get in and out. Even the Max gets you much closer to the terminal than Seatac and BART.
  8. Forest Park: Portland's famed park is the largest in a city anywhere in the country. Whether you want to go for a run, go to the zoo with your kids or visit a world class rose garden, this park has something for you. No city I've been to comes close. As an aging middle distance runner, I appreciate all the dirt paths that don't pound your body like pavement.
  9. Biking: Portland is one of only 3 communities in the country to receive the Platinum level Bike Friendly Community status and is by far the largest. Many ascribe to my motto: "there's no such thing as bad weather, just bad clothes" and aren't phased by a little liquid sunshine. Thus, you see bikers everywhere which helps drivers be more aware and thus make it safer.
  10. Openness to new ideas: Ultimately, one has to make a business decision in locating a business and Portland is well suited for what we are planning to do which is to fundamentally alter what we believe is a flawed health payment model. Portland/Oregon have proven time and again to be at the vanguard of major behavioral changes. It was one of the first areas to jump on the recycling bandwagon, the jogging revolution was sparked by Nike, it has been well ahead of the curve on non-vehicle commuting choices and it has also been a hotbed of sustainable businesses. When we introduce our offering, we think Portland is a natural testbed that can serve as the foundation for future expansion.
Certainly the lack of startup capital has been an issue for Portland so it helps to have a track record and contacts in Seattle and Silicon Valley beyond what's available in Portland. Having said that, Intel Capital has been one of the two or three most active venture investors. Many of the folks I know at Intel Capital base themselves in the Portland area. Every area has its areas to work on and Oregon is no different. Let's hope that the new leadership at the state level recognizes that it is entrepreneurs who drive the vast majority of job growth. Too often, political leaders chase after yesterday's businesses as they are the biggest political contributors (but not biggest job creators). As Portland's startup ecosystem continues to evolve, hopefully it gets the attention of the political leaders. I'm thrilled to be back in Portland and hope we play our small part in growing Portland's success as a startup-friendly community. Wouldn't it be nice if Portland not only was a Platinum level Bike Friendly Community but also was a "Platinum" level Startup Friendly Community?

About Dave Chase

Prior to working in startups, Dave spent 12 years at Microsoft in various senior marketing and general management roles, including his role as Worldwide Healthcare Industry Director and Managing Director for Industry Marketing & Relations for the Digital Media industry. He both founded industry organizations and served on their board that played pivotal roles in the growth of those industries. In the aftermath of the dotcom bust, he was selected to take a leadership role within the online ad industry to grow online’s share of the overall ad market in concert with AOL, Yahoo!, DoubleClick/Google and other market leaders. During his tenure, MSN championed three major initiatives that the industry adopted that led to the turnaround of the online ad industry. Prior to joining MSFT, Dave was a senior consultant with Accenture's Healthcare Practice working with a wide array of healthcare providers and systems. Dave has also been a successful investor and adviser to several early-stage companies. He can be found on Twitter as @chasedave.
(Image courtesy darynbarry. Used under Creative Commons.)

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18 Responses to “Dave Chase: 10 reasons I chose Portland over Seattle and Silicon Valley to locate my startup”

  1. james hanover says:

    I agree that overall Portland might be better than Seattle, but your facts are a bit.. off.

    “In Seattle, you need to drive a long ways to Whistler dealing with border hassles or do what I did when living there…fly to Sun Valley.”
    …or you could drive to Crystal Mt, Snoqualmie, Mt Baker, or Steven’s Pass, to name a few.

    “Even the Max gets you much closer to the terminal than Seatac and BART.”
    Seattle now features Light Rail which takes you a short walk from the Seatac terminal.

    And those were the glaring ones, since I was skimming.

  2. Interesting read, Dave, and look forward to following your growth. Appreciate the details on Portland, but you forgot to mention their huge selection of IPAs! Kidding, of course, and wish you every good thing

  3. Joe Stump says:

    Forrest Park is not the largest. http://bit.ly/cO8nZ5

  4. nelking says:

    Nailed it. Attitude is everything and I think there are quite a few people doing cool things right here. No more whining Portland.

    Plus disrupting the health insurance model? Between that and financial services there is so much dinosaur thinking that needs to be challenged. I’d love to see Portland be involved in getting it done.

  5. Rick Turoczy says:

    @joestump You’re totally right. They’ve really started slicing and dicing the description on Forest Park saying “Forest Park now includes over 5,100 wooded acres making it the largest, forested natural area within city limits in the United States.” Those two parks mentioned in your link are substantially larger than that.

  6. Rick Turoczy says:

    P.S. Anyone reading this post should read @joestump’s pros and cons piece on Seattle, Portland, Boulder, and San Francisco. It’s a great read.

    http://stu.mp/2010/11/your-city-sucks-and-so-does-mine.html

  7. Loved @joestump’s article, but he doesn’t count Intel as a PDX tech anchor?

  8. Dave Chase says:

    I stand corrected on Forest Park (here’s the list of largest in-city parks – http://www.tpl.org/content_documents/citypark_facts/ccpe_150_LargestParks_08.pdf). Having said that, nothing in Seattle or the Bay Area compares to Forest/Washington Park. I have enjoyed Golden Gate Park, Seattle Washington Arboretum, Lincoln Park, etc. but they are much smaller than Forest/Washington Park in Portland.

    James – Responding to your points. Other than the rare clear day I have had at the Washington ski areas, they don’t qualify as great ski areas in my book. The visibility is frequently brutal as well as the snow quality. Mt. Hood sometimes gets a taste of that but Mt. Bachelor is far better than any of the Washington ski areas in terms of weather, visibility and snow quality. Bachelor is the only one in the Northwest that gives my favorite ski area (Sun Valley) a run for its money.

    The train proximity may be splitting hairs but I literally road both Max and the Link Light Rail (Seattle) today and Max is literally right outside baggage claim. Not a huge deal but Seattle’s airport station is a decent hoof from the terminals. Same for BART – it’s a long walk. Portland is light years ahead of Seattle in developing its rail system though thankfully Seattle is finally catching up.

  9. pdxanchor says:

    Portland has no anchor company? Lockheed qualifies as an anchor but Intel doesn’t?

  10. Dave – welcome back. As a board member for the Oregon Bioscience Association and announcing today that 21 Oregon companies received $5.4 million to fund bio-start ups and innovation research, I say we want you to innovate here! Also having been in health care for 22 years, I am thrilled you’ll be modeling some innovative approaches to the old, tired, coverage model. Can’t wait to meet you soon!

  11. Dave Chase says:

    Dianne – Thanks for the welcome back and congratulations on the fundings. That is terrific to hear. I can be reached at chasedave at [gmail] dot com. Happy to hear from you. I’m in the very early stages so won’t have something to unveil for awhile. In fact, I’m now looking for great technical co-founder that has some database and web dev experience. That’s the toughest thing about coming into a new locale. I know lots of folks in Seattle’s tech scene but just getting started here though people have been incredibly welcoming (not surprising given how friendly Portland is – I had actually forgotten that and probably is #11 to add to the list). I’ve been blown away by the response this has generated.

    Alert to advertisers: This would be a great place to reach a lot of people in the Northwest tech ecosystem – it seems I’ve heard from everyone of them. Rick’s doing a terrific job. This article has been tweeted something like 60+ times not to mention spawning a post in TechFlash in Seattle.

  12. [...] Why I chose Portland over Seattle and Silicon Valley to locate my startup (siliconflorist.com) [...]

  13. Riel says:

    Welcome to town!

    I also chose Portland as my home after working at startups in Seattle and Silicon Valley. Here’s my story:

    When I was deciding on what city to live in, I made several analytical approaches, such as listing attributes and weighing them to find an optimal choice. I had climate, cost of living, walkability, job market, close to family, etc.

    It makes me laugh that in the end after I spent half a day in Portland in 2010, I simply FELT this was the obvious and best choice. I moved here the following month. Thankfully my wife said she didn’t matter where we lived as long as we didn’t move back to Las Vegas.

    How is it that my intuition trumped my rational thought so completely and quickly–and has made me so happy? I have no idea.

    As a person who likes to think of themselves as practical and rational, I hope to “reverse-engineer” my intuition to figure out why I’m so darn happy here. I have subtracted-out owner’s bias the best I can.

    I don’t think I’ve got anything close to an answer, but here’s the best I can do so far:

    1. I like the culture here.
    2. The city has some good planning (public transit, land use, etc.)
    3. The city is family-friendly (I hope to have a family soon)
    4. I prefer a cloudy over dry climate
    5. There is still hope for a creative-intellectual job here

    A note about culture. There is no way to capture the culture of a place in a few simple words, but that does not stop me from trying! Here goes…

    The culture of Silicon Valley is about achievement in Business and Technology and maybe even Uniqueness of life experience.

    The culture of Portland is about Healthy Community and Progressive Environmentalism.

    The culture of Seattle is still unknown to me after 2 years there. I think it has to do with making yourself better, and understanding your place in the world and how to express it.

    The culture of Phoenix is about being middle-class. With a touch of health for beauty’s sake.

    The culture of Los Angeles is about managing appearance and popularity. With a touch of Latino culture.

    The culture of Los Vegas is about consuming to feel rich and have fun.


    One final note about culture:

    I realize that my (future) kids growing up in Portland are not as likely to have the intensity to pursue academics, riches or power as they would in Palo Alto or Bellevue, but I somehow imagine them more comfortable with themselves here.

    I look around at the teens in Portland (such as at Lloyd Center) and they seem not too jaded and not too innocent. I think I won’t have to worry about my kids dating when they get to that age. I think it’s ridiculous that I want to offer them a good dating pool, but I do.

    See you around Portland!

  14. [...] clean tech clusters. Guest writer and serial entrepreneur Dave Chase, whom you may remember from "10 reasons I chose Portland over Seattle and Silicon Valley to locate my startup," is back with an interesting take on where all of these clusters could [...]

  15. [...] Dave Chase: 10 reasons I chose Portland over Seattle and Silicon Valley to locate my startup [...]

  16. [...] some thought provoking pieces that have generated quite a bit of dialog here and offline. He has shared why he chose Portland over Seattle and Silicon Valley and how Oregon’s Athletic & Outdoor, Software & Clean Tech clusters should meet. Then [...]

  17. Derek Norcom says:

    Dave,

    Great observations about Portland. Portland is the perfect combination of moderate size, unassuming Northwest outdoor grandeur – we don’t fuss about how beautiful it is, we live in it, wet or dry – and eclectic thinkers in many fields.

    How I would so love it if we could deconstruct/reconstruct the economic stream of revenue in primary healthcare – so that it more represents what we all want in almost every service transaction: to barter for a given service at a fair market price, receive that service, and know what we got.

    Your are so right in your assertions that using insurance economically to pay for typical maintenance of our body, car, or house, makes no sense. It is a ruse. Physicians and patients, as groups have cornered themselves into buying into this maintenance insurance ruse because somehow over the last 50 years they failed to carry out their ends of the transaction in a way that seemed fair to both sides. And when you can’t make a deal without one, what do you need? A broker. In my opinion doctors likely raised their fees, mainly for procedures, too steeply in the sixties and seventies, and doctors all know the old joke is sadly true, that the physician’s bill is usually on the bottom of the pile. (Doctors have never been good bill collectors, it runs counter to their general nature). So, what were we left with when we raised the fees printed on the bills at the bottom of the stack? An unpaid spread ripe for economic exploitation.

    Currently, healthcare customers pay the insurance company a fee that has no relative market value. The big silent third party has promised to pay the provider of our care, but won’t pay on our behalf at the time of the transaction. Instead it demands that we pay a small part of the fee to attempt appeasement and feign payment, in the hope that this will supplant a real barter and provide some transactional motivation to the provider of care. But the copay is really a sort of small payoff to the house, more of a gesture that mocks a real business transaction. The third party then will only pay 90 days after the transaction or longer and attempts to not pay a defined percentage of those transactions – and here I’m talking about a typical office visit – by requesting more information – information that is already in the record – from the provider regarding the office visit, creating deliberate redundancy in the hope that the provider of care will toss that letter in the trash due to the realization that their are an ill-defined percentage of these ‘ask again’ claims that will be denied automatically. Is that a run-on sentence? Whew.

    And I could have made it much longer had I chosen to include info about what I coined the “triple prescription”. Here’s how it goes. The doc writes a prescription for the patient, they take it to the pharmacy, and the pharmacist checks the insurance payment for that medication and sees that the prescription needs to be ‘priorly authorized’ (double-speak for written again). The pharmacist then contacts the doctor’s office and notifies the patient of same. The doc’s staff then receives, hopefully soon, a ‘prior-auth’ form from the insurance company, a form that requires the doctor to answer questions regarding the date of the visit, the diagnosis, prognosis, reason for prescibing that specific medication, any prior medications the patient has been on for the problem, and the expected length of time the patient will be on the medication. This form is then sent back to the insurance company, where purportedly a physician at the insurance company reads the form and then either approves or denies filling of the prescription. So essentially the doc has now written the prescription twice, on the original Rx, and the prior auth form. Now – take a deep breath Norcom – the Wizard of Oz at the insurance company makes a decision as to whether the insurance company will pay the pharmacy for the medicine I prescribed Expletive, that makes me mad. If the med is denied then the form is sent back to the docs office and another office visit is required to discuss with the patient – shocking? – and a different Rx is written, the triple Rx, a. If the med is approved the patient usually needs another Rx written for the pharmacy as the prior one has expired, the triple Rx, b.

    Man, Dave, I’m sort of stressed after writing that. Imaging conducting it socially.

    Gotta go now,

    Derek

  18. Dave Chase says:

    For those readers wondering where Derek comes from that he can share this experience, he is a practicing primary care physician. For those who haven’t lived inside of this “system”, it’s almost impossible to imagine just how convoluted the entire process is. It’s no wonder we spend so much more than other industrialized countries for the same or worse outcomes. One way or another, we are all paying for this. My opinion is that it will be a bottoms-up consumer and care provider “revolution” to find a better way. Dr. Norcom is one example of those who’ve opted out of the flawed model and are innovating to find a more optimal model. It’s extremely difficult in our political environment to do a top down fix.


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