So, free Internet and office space in beautiful Montana (which has a low cost of living, BTW). Is this enough to get you to come visit?
Most of the start-up crowd seems to think that it's worth paying several times more rent to be physically near the big money in SanFran. But there are a few cities that have an active tech scene (Dallas and Kansas City come to mind) that have managed to make it. The difference is that those were decently sized cities with lots of other infrastructure to start with. Can a city with a population under 100,000 offer the other infrastructure needed to create a successful business? You've got fast internet, but do you have enough blue collar workers to support your office needs? An airport big enough to offer flights out to important meetings that can't be done virtually? There are several other things to consider when picking a city to base a company from.
I'd recommend getting in touch with the Chamber of Commerce to see how you can come together to pitch the city. Helena is certainly a nice place, but you have to sell the other aspects than just fast internet.
It's not an unfounded belief, imo. I've been trying to convince several of my friends to move to San Francisco, and the "it's too expensive" refrain is something I'm getting a little tired of hearing. Yes, it's expensive, but in general, the salary and other income opportunities make it worth it for a decent software engineer.
I don't know how much the cost of living is in Montana, but I'm from Alabama, and I assume it's relatively comparable, and I had a 40K/year job there. My rent was $500/mo. I'd say my monthly expenses were a little less than $1600/mo, which puts my annual expenses at around 20K. Over the last five years in SF, my annual expenses approached 60K, mostly toward rent (like you said, rent is high). Whoa. That's crazy, right? But let's stop and do the math.
Let's throw out a nice round number and say my average income over those first few years in SF was ~120K and say 30% tax rate, to keep things simple. In San Francisco, 120K (income) - 60K (expenses) - 36K taxes = 24K savings. In Alabama, 40K (income) - 20K (expenses) - 12K (taxes) = 8K savings.
My expenses in Alabama were 1/3 that of SF -- the rent was almost 6 times cheaper in Alabama than my rent in SF is! But in San Francisco, my increased salary means that I'm saving three times as much in San Francisco versus Alabama. My cost of living in SF is 3x higher than my cost of living in San Francisco -- but my income is also 3x higher! And I'm not even included income from stock or freelance work. (Granted, I could get stock and freelance work elsewhere, but again, like you said, "the big money" is in SF, so roughly the same math would apply.)
All this is to say that, assuming you enjoy living in an urban environment and are responsible with your money, it IS worth paying several times more rent to be physically near the big money in SF. A dollar is a dollar anywhere in the United States. Saving 24K per year for 5 years gets you awfully close to 125K, well on your way to a nice house pretty much anywhere else in the country - Montana included. It would take you over twice that long to get to even 100K if you lived in Alabama.
Is it worth paying a high rent to enjoy the benefits of living in SF? I think so. I love SF -- the city, the culture, the weather, the working environment, and yes, the money. There are times when I wish I had a bigger house, but by and large, I'm extremely happy here.
But more to OP's point: Would I move to Montana? I agree with you. There would have to be really, really attractive incentives aside from money. Great schools, great entertainment, friends, family, and plenty of job opportunities. Solid infrastructure is a must, but my day job isn't my identity -- there are another 12-18 hours in a day that command my time and energy as well, and those needs must be met!
For one thing, though this may not apply to Helena, the salary differential is not nearly that big when you compare to many other cities. You can easily make over $100k working in tech in lots of places that are comparatively cheap: Austin, Pittsburgh, Houston, Chicago, etc. I think you will have trouble running the numbers on salary vs. CoL in Google Mountain View vs. Google Pittsburgh in a way that makes Google Mountain View come out ahead. I think whether you prefer to rent or buy also makes a difference. SF is just about doable on a high salary to rent, but requires serious wealth to buy. But the strategy you allude to of renting there a few years and saving up to later buy elsewhere is plausible.
I'm a pescatarian who lives a car free lifestyle. I have a variety of interests which include museums, musical theater, night clubs and restaurants. I also enjoy cultural diversity. I'd have to give all that up to move to Helena, while taking such a huge financial hit that it be difficult to move back to a city that fits my lifestyle.
Maybe instead of an incubator, you should focus on local education. 'Growing your own developers' outside of Silicon Valley seems to be a trend. It's working in Nashville, at least.
Parent may be speaking about the Nashville Software School[1]. Very recently it has been turning out some great talent in the 0-2 yrs of experience range.
The rest of this post is pure anecdote from the perspective of someone that has hired tech workers in Nashville, both full time and contract.
We seem to have a decent (but not enough, never enough) supply of junior devs (0-2 yrs experience). Really experienced talent seems more elusive. I believe that it's here, I just think most of it is employed already.
Additionally, the tech scene here is a little strange. There's an ever expanding pool of web folks (e.g., Rails, Node, etc) and a surprising amount of more Enterprise experienced developers (e.g, C#, Java) that arose as result of all the HealthTech hiring that's been going on the last several years. So veteran (e.g., 7+ years) software developers I've encountered seem to skew toward Enterprise.
There's some startup activity here[2], and we're seeing some larger non-healthcare outfits set up shop in Nashville (e.g., Warby Parker, Lonely Planet). The technology scene here is really starting to come together, but it's by no means a Silicon Valley, NYC, Boston, or even Austin yet, really. It's getting there, but we're still a ways from seeing Music Row's inevitable transformation into Silicon Row ;)
[1] http://nashvillesoftwareschool.com/ [2] https://angel.co/nashville
We weren't looking for juniors, either, which complicated things.
I hated the cruft enough to build my own private company.
Ugh. Tell me about it. The old guard in tech around here has led to some real hair pulling moments for me.
I think we're headed for a schism, though. Can't wait.
To pull a number out of my hat, let's say that one in twenty random tech startups would be a good fit for me (based on tech used, experience needed, culture, mission, pay, etc).
Say I find a great startup in Helena (where Helena is a stand-in for the many US cities trying to foster a tech scene). It's one of, say, 15 up-and-coming tech startups in the area. I move to Helena and work there.
What happens when that startup goes under (which is more than likely for any early-stage startup anywhere)? What happens when it doesn't go under, but I no longer want to work there for whatever reason, since companies necessarily change significantly as they grow? There are 14 other companies in my target size, and odds are none of them are a good fit. But I've moved here, settled in, made friends, etc, and now I have to deal with either the high social and financial cost of moving, or settle for companies I'm a worse fit for.
That's the main reason I live in SF and not any of the other cities trying to be the next SF. If my startup goes under, I can pick up a similar job at another in a few weeks without having to change apartments.
However, I would say that Bozeman is becoming quite the magnet for startups - we get a bunch of experienced developers who are sick of working for Oracle and a pipeline of CS majors straight out of MSU. A lot of execs also love to live here with all of the outdoor activities, so they bring a branch of their companies and startups here.
The lifestyle is very different from that of the city (I just recently went to our home office in NY, so speaking from very recent experience). Entertainment here consists primarily of outdoor activities (skiing, hunting, biking, hiking, 2/4 wheeling, fishing, etc) than it does plays, theaters, and museums. You'll also be driving at least some of the time... the nearest store is typically 3-4 miles from your house, not 3-4 blocks. Public transport exists, but not to the same degree as it does in a large city: a bus will visit a particular stop every hour or more, instead of every few minutes.
It's a different pace of life, but I love it.
I've worked for a few years around the edges of boosting a startup scene in a rural area that's roughly the same population as Helena. It's very, very difficult work. Part of the trouble is that you meet a lot of really nice, well-intentioned people, but ... the talent just isn't there. You see a lot of bad results from a lot of effort.
You have to have someone there that is the go-to person for building and supporting tech businesses in the area. We had a great guy here, but he eventually moved on to other things and nobody else has yet filled the hole he left. It has to be what they spend 100% of their time doing, and they have to be well enough compensated for it that they don't start looking for other opportunities.
You have to provide a real incentive for talent to come and stay, and unfortunately office spaces and fiber connections aren't enough. Talent seems to be drawn mostly to other talent and unique projects, so if you can convince somebody with a good reputation to move there, that will help.
For startups specifically, money can be a problem in rural areas. Promising startups will eventually need either venture capital or some really fantastic business funding. Other people in our community have been told to their face (by VCs) that they'd never get funding because there's no talent in our area.
And rural areas can have other issues too. Small-town politics, a local rag for a newspaper, too much isolation can all wear people down, even those of us that prefer small rural areas to living in dense metropolitan places.
Congratulations on building out your fiber network though, that's a hell of a job. We've got a local ISP that's been trying to do the same for several years now. They've been held up by federal bureaucracy for the last two years...
It's not entirely without charm, of course. Here are some photos I took on a solo hike out the back of my parents' place: https://www.flickr.com/photos/beefman/sets/687958
One thing I like about being on the west coast is the slow dismantling of the gender binary.
But not in a position to move to Montana!
Since you mention that you live in a semi-rural area, one hugely important factor is the density of premises along a street. The less dense an area, the fewer potential customers you can "pass" by installing a new fibre cable down a street. Not all premises that you pass with a cable will want to sign up and pay for a fibre plan.
Construction can be made dramatically cheaper if it is possible to re-use existing infrastructure. This is important, as if you are laying underground fibre then the cost of digging new trenches (~AUD$100/m) is a huge component of the total construction cost. For example, when installing underground fibre, if there is existing underground duct with capacity that can be used then it is far cheaper to re-use that (~AUD$20/m) than digging new trenches. Similarly, if there are existing poles that can be rented then installing aerial cables (~AUD$30/m) is cheaper than digging trenches, but more expensive than using existing underground duct [1].
Another way to re-use existing infrastructure to reduce construction cost is to make use of existing cable, such as copper lines or HFC, instead of laying fibre over the full path from the exchange to the premises. The quality/speed of the connection will not be as good as a pure fibre connection, particularly if the existing infrastructure is old/degraded. These approaches are now being favoured in Australia's national broadband project [2].
[1] note that in the U.S. labour costs are lower than in Australia, so don't take these cost-per metre estimates too seriously. These costs exclude the cost of the fibre itself, which is typically a few dollars per metre.
[2] personally I think it is short-sighted to embark on a major infrastructure project and then try to save money by avoiding building the new infrastructure, and instead re-use the existing degraded infrastructure. These decisions were hugely influenced by political factors after a change of federal government, i.e., the old plan was necessarily bad and needed changing because the previous government started it.
We are ~10Km from the nearest village that likely has decent bandwidth, though no idea on the backhaul available from there.
Still 10K @ $30 (AUD/CAD)\m would be $300K+ to put it along existing hydro infrastructure. Wonder what the likelihood of getting 100 households to put up say $3-5K in installation costs would be? That would represent a decent fraction of those reachable along that stretch, and those nearer in may already have DSL.
For reference, the overall construction costs for Australia's FTTH rollout was somewhere around AUD$1000 - AUD$2000 / premises -- probably toward the high end of that scale, but the order of magnitude is right. This would underestimate the cost for a semi-rural area. In Australia's project they use fixed wireless / satellite for some areas where FTTx was not cost-effective.
Another thing to keep in mind is the maximum optical path distance -- from memory this is probably somewhere around the 20km mark from the exchange, probably a bit less, will depend upon the technology used. That still gives you a ~10km buffer region of potentially reachable households around your main fibre-atop-hydro stretch.
As a sysadmin by trade, trying to pivot into software development/engineering, I wonder if I should study and work in a 'hub' city (like the Bay Area) with lots of bright and eager minds, or somewhere with cheap rent and few distractions (like Helena) so it's easier to tune out the world and hit the books/code.
Keep in mind that high speed internet won't make an idea into a product people want. The critical issues in tertiary markets are access to smart capital and technical talent. How does the incubator plan to make money? What is the Ruby/Python/Clojure/etc. community like?
Good luck.
What else is there in terms of opportunities in the tech industry in Helena besides your new ISP?
I could see folks that are starting a new business with relatively few employees and no immediate plans for explosive non-remote worker growth being interested though.
As for me, I don't have a reason to move to a small city without many non-related work activities to engage in. I like the city life. I understand that others would embrace the slower-paced outdoor Montana life style. However, for me it is not a selling point :(
A business in an isolated location like that might have more luck hiring remote employees.
I have some friends who have a vision systems startup in Bozeman.