As Montana's Tech Sector Grows, Pitch Competition Aims To Support Startups
High tech is one of the fastest-growing and highest-paying sectors in Montana’s economy, but it’s not without its hurdles. An organization helping new tech startups is wrapping up its second annual pitch competition this week. One of the founders of Sellout, a new Bozeman-based tech company and one of the winners last year, shared some of the opportunities and challenges that come with starting a tech business in Montana.
Joel Martin loves going to concerts and hates getting ripped off.
“Whenever I wanted to go to a concert in a larger Metropolitan area, I’d be I think like everyone else, waiting around at 10 am for them to release tickets, just refreshing, refreshing, refreshing the page. And as soon as the tickets were available, they were all gone in like five seconds," says Martin.
But then, he says, the tickets would immediately be available on StubHub or some other ticket resale website where the price would be four or five times higher.
“I started to get really frustrated with that, and so I started to try to wrack my brain to figure out how we could solve that issue and keep tickets all fair prices, keep tickets out of the hands of scalpers,” Martin says.
Martin was brainstorming ideas with Henry Vinson, a fellow Bozeman resident, in 2017.
“And we thought, well one of the solutions is you could just prevent people from getting the barcode until the time that the doors open; so if you don’t actually send someone the barcode, there’s no way they can re-sell the same ticket for three, four times the original price,” says Martin.
Martin and Vinson launched Sellout, an online ticketing service, which allows customers to buy tickets, join a waitlist for a sold-out show or resell tickets at their original price. The company has sold almost half a million dollars worth of tickets and acquired 17 concert venue clients over the last year.
He credits a lot of their success to Early Stage Montana, a non-profit that helps connect tech startups to mentors and capital.
The organization is wrapping up its second regional pitch competitions in Billings, Bozeman and Missoula this week. Sellout tied for first place in the Bozeman finals last year. Co-founders Martin and Vinson joined the other finalists across the state for a weeklong business boot-camp — the Hyper-Accelerator Program.
“They get a chance to work with over 50 mentors during the week, and we focus on things like how to create a stronger product strategy; how to develop a better team; how to create better financial plans, how to be better leaders and then ultimately how to think about financing your business," says Pat LaPointe, one of the organizers for Early Stage Montana.
Participants in the Hyper-Accelerator Program are invited to a state-wide showcase to increase their visibility, and they’re offered up to $50,000 in investment capital.
LaPointe says there have been some very big success stories of tech companies in the state, like former RightNow Technologies in Bozeman and onX Maps in Missoula. Montana’s tech sector generated more than $2 billion in 2018 - nearly double from two years ago. And it’s growing up to 9 times the statewide economy according to the University of Montana’s Bureau of Business and Economic Research.
But LaPointe says support for younger companies is needed for that trend to continue. Around 70 percent of new tech companies in the U.S. fail within the first few years. LaPointe says success often depends on finding the right market for your product.
"The guys at Sellout have done a really nice job of doing a lot of market research and getting out and talking to a lot of perspective customers, showing them the software, talking about what makes them different, capturing all that information and using it to enhance their understanding of what their product should be,” says LaPointe.
Sellout Co-Founder Joel Martin says there are other challenges as well.
“When we get outside of the state, it’s harder to be taken seriously," says Martin. "It’s harder to find capital here than it is in other places where they’re used to dumping much larger amounts of money on new start-up companies. It’s harder to find engineers."
But Martin adds there are a lot of advantages starting a business in Montana. He says it’s cheaper and there’s less cut-throat competition.
Christina Quick Henderson is the Executive Director of Montana High Tech Business Alliance. The Alliance supported an in-depth survey in 2017 looking at the entrepreneurial ecosystems in Missoula and Bozeman and the surrounding areas.
“And we did find Montana has this distinct support system available for entrepreneurs and a unique way of doing business that’s kind of different from Silicon Valley, different from Austin or Boulder or other places that get highlighted as tech hubs. Elected leaders were viewed as supportive and often knew entrepreneurs by name,” says Henderson.
Quality of life was found to be a key factor that attracts and retains entrepreneurs as well.
The second Early Stage Montana regional pitch competitions wrap up this week in Billings and Bozeman.