Diversifying Bend’s economy

Building a tech hub

By Rachael Rees / The Bulletin

Published Dec 26, 2013 at 12:01AM

Silicon Valley investor Bruce Cleveland has teamed up with local investor Dino Vendetti to create a plan to transform Bend’s economy.

As part of the strategy, they intend to build a user-experience design academy — a school for programmers who write code and design the graphic interfaces that generate the overall experience users have with products such as websites, smartphones and computer applications — that will attract techies from around the world.

But first, they have created a competition called the Big Bend Theory to draw Silicon Valley startups and entrepreneurs to Bend.

There are more than 40 software companies in Bend, according to Economic Development for Central Oregon. But Cleveland and Vendetti want to build billion-dollar tech companies that will employ hundreds.

“The idea is to transplant high-growth companies through this contest and create anchor tenants,” Cleveland said. “If we bring in two or three really high-growth companies that then forms the backbone of a high-growth technology community … and then we can attract others.”

Their goal is to diversify and stabilize the local economy currently so reliant on the real estate market and seasonal tourism industry by building a tech hub that will generate high-tech jobs.

Nationally, high-tech industries were more resilient during the recession compared with other service-providing industries, such as retail, leisure and hospitality and construction, Oregon Employment Department Regional Economist Damon Runberg wrote in an email. And high-tech firms tend to provide high-paying and stable jobs for a community, he wrote.

“Most of the technology hubs in the United States tend to be very prosperous regions with unemployment levels lower than the national average and strong job growth,” Runberg wrote, adding that most hubs are in large metro areas. “The question is whether these metro areas are prosperous because of the high-tech industries or if the industry is successful because of the characteristics of these metro areas? It is likely a combination of both, but clearly a region’s workforce, infrastructure, and industry clusters play a huge role in the success of these tech hubs.”

He agreed the addition of high-tech firms would help diversify the Central Oregon economy and limit the effect of large economic shocks, such as the crash of the construction industry in 2008 and the collapse of the timber industry before that. But to make Bend a technology hub, he said it would likely take time to build the reputation, workforce and infrastructure to compete against other regions for startups and other tech firms.

Cleveland said the biggest fear Silicon Valley entrepreneurs have about bringing their startups to Bend is not having a place to work if their companies fold. But by bringing in two or three Silicon Valley companies, it mitigates the risk to smaller startups.

Vendetti recently said he had received around 20 applications for the competition, which is scheduled to take applications through Jan. 31. The top three startups will receive a weekend trip to Bend for the company co-founders and spouses. And if they choose to relocate, he said they will be provided a temporary office space and funding.

“Bruce and I believe that there are many of these folks in Silicon Valley who are fed up with the cost structure down there and want to build their business in a community that offers a high quality of life and yet still has the infrastructure needed for them to build their businesses (active tech community, university, venture capital),” Vendetti wrote in an email. “So the challenge we issued was really an experiment to see if we are right about our assumptions.”

Along with attracting high-growth startups, Cleveland said the next step is to work with Oregon State University-Cascades to create a pipeline of engineers who can form ideas and new high-growth companies in Bend.

And lastly, the duo plans to build the user-experience academy in 2014, where students will live in Bend and work on user-experience code for real companies locally and around the world.

“I think these are the building blocks to enable Bend to transform from its reliance (on) recreation and retirement to a full-time clean, stable economy,” Cleveland said.

— Reporter: 541-617-7818, rrees@bendbulletin.com