BILLINGS -- A new report from the Kauffman Foundation reveals that Montana continues to lead the nation in business startups. As measured by Kauffman, Montana had 540 new entrepreneurs for every 100,000 population during any given month in 2014. In other words, Montana had around 6,500 business startups last year.
Most people think of high-flying technology centers such as the Silicon Valley when discussing entrepreneurship. But the Big Sky State continues to be fertile ground for business startups.
At Montana State University, a new building that houses the College of Business is named after one of the state’s best-known entrepreneurs. MSU alumnus Jake Jabs, founder of American Furniture Warehouse stores, became a retail icon by featuring animals on his television commercials.
When Jabs donated $25 million to MSU’s College of Business, it was the largest-ever donation made in the history of Montana higher education.
Kregg Aytes, dean of the Jake Jabs College of Business and Entrepreneurship, says Montana’s nation-leading business startup activity can be attributed to several factors.
“A lot of it is driven by the type of people we have in Montana,” he said. “Montanans tend to be independent and self-sufficient, and they figure out a way to do things on their own.”
Montana is a state of vast distances and small businesses.
“People want to stay in Montana, and given that there aren’t that many large corporations here, people try to figure out a way to stay,” Aytes said.
Dena Johnson, regional director of the Small Business Development Center at Big Sky Economic Development, helps clients turn an idea into a business.
“We’re seeing an average of 25 to 30 clients per month, and that’s a huge amount of activity,” Johnson said.
Many of the SBDC’s clients have experience in their industry, and have accumulated financial access and intellectual capital. “It’s not just your typical hot dog stand that we’re seeing,” she said.
Making Montana work
Many people opt to start a company as a way to stay in Montana.
Wisconsin native Tyler Jarosz got his first taste of Montana during high school while visiting Whitefish for a school-sponsored snowboarding trip. After graduating from high school and earning a technical degree in machining, Jarosz moved to Bozeman where he put his skills to work in a variety of Montana businesses.
That led Jarosz to forming Twenty6 Products, which designs and manufactures pedals, stems, seatpost clamps and other bicycle components.
“Like a lot of people who moved here, I found there weren’t a lot of jobs, so I decided to make my own job,” Jarosz said.
Finding financing for his business wasn’t a problem, Jarosz said. But the long distance between Montana and major suppliers can be a disadvantage when shopping for materials that go into his products, Jarosz said.
“The shipping is higher, and there’s access to only so many vendors,” he said.
Thanks to the Internet, many businesses don’t have to locate in a specific place in order to succeed, Aytes said.
Montana’s best-known high-tech startup, RightNow Technologies, bucked national trends by opting to locate in Bozeman instead of Silicon Valley in 1997.
RightNow, under the guidance of chief executive Greg Gianforte, thrived under Montana’s big sky. The company was purchased by Oracle in 2011 for $1.5 billion.
Billings native Andrew Hull left RightNow in 2011 to launch his own company, Elixiter, a firm that specializes in the growing field of marketing automation. Hull said Elixiter works within the business-to-business realm, helping companies sell to other companies.
He hired his first employee in 2011, but Elixiter has grown to 30 employees since then.
Elixiter doesn’t necessarily hire tech geeks, Hull said. “We take people who are smart business people and marketers who we can train on a lot of technology. We have a four-month training program.”
Hull said Montana has proven to be a friendly place to do business. Elixiter recently received a workforce training grant that helped him in hiring more people.
“We can do world-class marketing automation from Bozeman and not be on a plane every week.” Hull said.