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U.S. Land of Potatoes (Idaho) Aims to Be High-Tech Hotbed

Jeffrey Moeser and his company are aiming to change the future of home entertainment.

His effort to link music, video, pictures and other digital information into an all-in-one box is a goal many high-tech entrepreneurs share.

By Adam Tanner

http://www.reuters.com/newsArticle.jhtml?type=technologyNews&storyID=6170350&src=rss/technologyNews&section=news

(Many thanks to Kent Kleinkopf for passing this along- Russ)

What is unusual about Moeser’s effort is that his start-up company, Dedicated Devices Inc., is based in a suburb of Boise, Idaho, in a sparsely populated northwestern state best known for its potatoes.

"I think this is the hotbed of entrepreneurship in the country right now," Moeser said.

That statement may seem unlikely in the Boise area, where the slow pace of life, lesser traffic and low-rise landscape recalls America in the 1950s. Yet boosters of Idaho, population 1.3 million, say those very features are what lure and keep 800 high-tech companies in the state.

"I don’t think there is anything other than a great lifestyle that would draw companies here," said Mark Solon, who heads a $27 million Boise venture capital firm that has invested in Dedicated Devices. "It’s very Sleepy Town, U.S.A., and it’s very appealing."

Access to the great outdoors near more relaxed urban settings is a central selling point for the state, but it does take some convincing to get people to move here.

"Idaho is being discovered," Gov. Dirk Kempthorne told Reuters. "There is something positive taking place here, or very, very successful CEOs would not be making the decisions to invest here, and others are taking note of that."

Kempthorne acknowledged that Idaho companies sometimes find it difficult to hire employees from out of state, but "once we relocate them, we can’t get them out."

Dedicated Devices’ Moeser, who moved to the Boise area from Austin, Texas, made his name as chief technology officer of Micron Technology Inc. (MU.N: Quote, Profile, Research) . The maker of computer memory chips set up operations in Boise in 1978 and has become one of Idaho’s great success stories.

Moeser’s latest concept, which will be unveiled publicly later this month, involves installing a massive hard-drive brain at the point where cable, Internet and other wiring join in new homes. From there, the 120-gigabyte device would serve up music, film, television shows and family photos to any room in the house and also oversee the home alarm system.

Dedicated Devices says the device will be easier to use and far more robust than computers. The company would not name an exact price, but said it would range in the thousands of dollars, making it more expensive than most computers.

"We want to change the way people think about digital media," said Moeser. "We want to build a significant company. We want to be an example to people in Boise."

TWISTS OF FATE

How did a state with its economic roots in agriculture, timber and mining come to attract high-tech companies? Two events proved key, with the whim of one executive and the riches of a potato magnate paving the way.

It began in 1973, when Ray Smelek moved from the San Francisco Bay area to set up a facility for Hewlett-Packard (HPQ.N: Quote, Profile, Research) .

"When we were looking to set up a printer operation, Bill Hewlett said he didn’t want to do it in Colorado or California, we have enough presence there, so look in other states," Smelek said. "They didn’t want to go too far from Cupertino (California)."

Today, HP’s LaserJet division is one of the state’s largest employers, with 3,700 workers.

Other major tech companies have since followed, including computer maker Dell Inc. (DELL.O: Quote, Profile, Research) , which set up a call center in Twin Falls in 2002.

In another key episode in Idaho’s tech history, J.R. Simplot, founder of his massive namesake agribusiness in Boise, invested $1 million into a local start-up. Today that company, Micron, is the state’s largest private employer, with about 10,000 workers, and it has become one of the world’s largest maker of computer memory chips.

Of course, there are drawbacks to setting up shop in a relatively isolated corner of the United States. Air connections are not always convenient, and the state suffers a shortage of software engineers and other specialists.

But things are getting better.

"Today we have a lot more infrastructure in place for small companies than we had back in 1973," said HP pioneer Smelek. "The legal profession knows a lot more about the high-tech profession and how to set up a business, how to do stock options. The banks are more aware of what it takes to advance."

Such developing infrastructure makes it easier for venture capitalists like Solon, who had previously lived in San Francisco, Boston and New York.

"Screaming and kicking is the only way I’d leave Boise," he said, "even if my fund went up in flames."

© Copyright Reuters 2004. All rights reserved.

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