Businessman touts Montana for tech dreams -Nonprofit tries to create jobs

John O’Donnell dreams of rebuilding Denver’s tech economy in a city about 514 miles away. And he is using a drift boat and fly-fishing trips to get started.

By Jennifer Beauprez
Denver Post Business Writer

As head of a nonprofit economic development group called TechRanch in Bozeman, Mont., O’Donnell has been traveling the West, including Denver, singing the praises of Montana to local executives.

The rich and famous — including Ted Turner and Connie Chung — have already discovered the state’s beauty and have been snapping up ranches in Bozeman’s surrounding Gallatin County. But the county’s agricultural culture doesn’t necessarily jibe with some of the newcomers, who complain of the area’s tractor noise and ranching smells.

“We’re an open-range state here, where cattle have the right-of-way. It’s illegal to hit a cow,” said Jarvis Brown, Bozeman city commissioner. “We have a long tradition of farming and ranching and we do want to preserve that.”

O’Donnell and fellow Bozemanites worry that their town could soon become another Aspen, a playground for the rich. Already, the average home price has skyrocketed to $197,000 despite the county’s median annual household income of $40,000.

“We’re not trying to discourage wealthy people from coming here, but affordable housing is a big issue,” Brown said. “It’s difficult to buy or rent a house. If you have entry-level jobs, you can’t afford to live in Bozeman.”

O’Donnell wants to create higher-paying jobs by giving Montana’s agricultural heritage a high-tech spin. He wants to pull cutting-edge science — from laser optics to high-tech hog feed — from the local university to create startups that provide high-paying jobs.

Those jobs will give college students a reason to stay after graduation and keep Bozeman a more normal city, said O’Donnell, 37.

Yet Bozeman lacks the people — the entrepreneurs, investors and service professionals — to build a solid tech market. That’s where Denver and a drift boat come in.

Each day, O’Donnell drives his pickup truck past a herd of buffalo to his office, where a slate gray boat sits out front, waiting to take some hotshot investor fly-fishing.

That’s the hook he uses to get people to pay attention: a promise of the best fly-fishing in the country if they listen to pitches from a number of Bozeman companies.

In the wintertime, it’s the promise of skiing without long lift lines at the nearby Big Sky Ski Resort. TechRanch is a federally funded nonprofit, so his visitors foot their own bill for fun, he said.

So far the hook is working, luring half a dozen executives in the past several months to visit and discover a wide range of high-tech ideas brewing there.

“They’re doing a lot more than Jackson, Wyo., or Cheyenne or some of these other small regional cities,” said Mike Devery, senior vice president of Silicon Valley Bank in Boulder, who visited O’Donnell recently.

“It has a lot of drawbacks — it lacks the capital and a large international airport,” he said. “But if you have another interest, i.e. fishing, it’s a desirable place to go to have some clients and go build a business.”

O’Donnell argues that while Denver’s tech sector continues to get pummeled by the economy, Montana is gaining momentum.

TechRanch is planning a 90-acre technology business park next to Montana State University. And a number of companies are hiring and expanding, including RightNow Technologies, a maker of customer service software with $21 million in sales. Another software firm, Zoot Enterprises, which makes banking software, plans to build a 177-acre campus with condominiums and commercial sites.

O’Donnell’s upbeat claims, of course, are relative: Bozeman’s surrounding Gallatin County extends 100 miles and has a population of 67,000. Metro Denver has 2.4 million people. Gallatin County has 80 tech companies; metro Denver has 183,600.

Yet Gallatin County lost 200 tech jobs and 10 companies in the tech downfall; metro Denver has lost hundreds of companies and more than 10,000 jobs this year alone.

O’Donnell’s mission to expand Gallatin significantly may be an uphill battle, said Philip Burgess, former president of the Center for the New West, a dormant think tank that analyzed how technology was changing the West.

“In general it’s very difficult for remote areas to attract high-tech industries,” Burgess said. He said those areas typically lack resources, such as venture capital, a steady supply of high-tech workers, and strong science and tech research, whether it be several universities or government labs.

O’Donnell is out to find those resources, namely people with skills and people with money.

With four direct flights to Bozeman, Denver is a prime recruiting ground, since the city is among the tops in the nation for high-tech workers, new startups and venture capital. And plenty of people racked by the tech downturn are looking for opportunity.

O’Donnell is now hunting for prospective CEOs from Boulder to Denver to help lead a handful of young startups based on technology from the university. One startup will turn canola oil into motor oil and industrial lubricants.

Another startup, called Envirozyme, plans to take advantage of a new enzyme that can withstand high temperatures. It can be used to change how fish, pig and chicken feed is processed and eventually help eliminate toxic waste, O’Donnell said.

Currently, manufacturers of food for fish hatcheries use such extreme heat in the process that it destroys valuable minerals the fish need to break down food. Without those nutrients the fish actually produce waste that is toxic and has been identified by the Environmental Protection Agency as a serious hazard.

“We’ve got some pretty interesting technology here — renewable energy, fuel cells, wind technologies; we’ve got a lot of wind,” O’Donnell said. “We say if you’re thinking about starting another company, come up here.”

O’Donnell grew up in Denver, graduated from the University of Colorado and moved to the wide-open spaces of Montana two years ago after starting a dot-com in Seattle.

Plenty of other tech workers, if not entrepreneurs, find Montana without O’Donnell’s soapbox pitches.

Gallatin County has grown 34 percent in the past 10 years. New arrivals typically come for lifestyle.

That includes Jim Delaurenti, a laid-off WorldCom worker who moved from Colorado Springs three months ago to work as a software engineer for RightNow.

“There’s several of us that came from the Denver area,” Delaurenti said. “It’s got everything Colorado does with less people and less hassle. A little colder, though.”

Most transplants brag about the same thing: the outdoors.

“It’s sunny, 20 degrees and gorgeous,” Andrew Field said last week via phone from Livingston, Mont., population 17,000. “I was out following grizzly bear tracks this morning.”

Field, who is president of Printingforless.com, wraps up board meetings by noon so he can go fishing for trout.

Most of his company’s 55 employees are from outside Montana. He himself moved to Montana several years ago from Minneapolis, not long after seeing a man get shot and killed downtown in broad daylight.

“There’s been one homicide in this county in 10 years,” he added. “It’s a big deal if your bicycle gets stolen.”

O’Donnell admits that his vision is a bit of a contradiction: He’s begging for growth that ultimately threatens to ruin what he now touts — the peace and quiet and outdoor lifestyle of the Rockies.

“It’s the million dollar question,” he said. “It’s on my mind every day. But the cat is out of the bag. This is a great place to live.”

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