When web development company SiteCrafting opened up its new office in Tacoma last month, it made another move that goes a bit against the conventional wisdom.
It closed down its Seattle satellite office.
Yes, that Seattle. The one with all the big tech companies and seemingly millions of startups. Amazon, Expedia, Tableau, Zillow, Allrecipes.com, Classmates.com, Cheezburger, WhitePages.com, Redfin, F5 Networks and so on. It’s dubbed the new Silicon Valley, the crown jewel (or the crown emerald?) of the tech world, its streets teeming with iPads and smart watches and Surface devices.
Returning to its roots, SiteCrafting turned its back on all of that and consolidated its 10 Seattle employees back to its Tacoma office, a move that founder Brian Forth neither hesitated to make nor regrets.
“It has to do with collaboration and being able to service our customers. It’s better for us and more efficient. It’s certainly not an indictment of Seattle, that it’s not a good place to have an office,” he said.
It is, however, a sign of faith in Tacoma, which Forth believes has made several improvements over the years and is much more accommodating for tech companies. The downtown is stronger, the schools are producing more quality tech workers and the Internet infrastructure is sound.
While Tacoma still sits in the tech shadow of Seattle, Forth said there’s no reason why it can’t have a vibrant tech industry of its own.
“The reasons we stay are the same as before,” he said, mentioning the qualities that made Tacoma attractive when SiteCrafting was first founded in 2001. “That good quality work force, affordable rent and also just a great way of life. Most of our employees live here in town and they love all the things that Tacoma offers.” [Editor’s note: For more on SiteCrafting, see page 11.]
Despite all the optimism, Tacoma has a long road ahead if it hopes to achieve the status of tech hub. King County currently has about 86,000 jobs in the information industry, which comprise about 6.5 percent of all nonfarm jobs in the county. Pierce County, meanwhile, has 3,000, or 1 percent of all nonfarm jobs.
So, why can’t Tacoma seem to get on the radar for other tech companies? It’s a question that causes some local CEOs to have visible question marks shoot out their head.
“I really don’t understand why tech just hasn’t exploded in Tacoma,” said David Barach, CEO of Good Done Great, a company which provides Fortune 500 companies with software to make giving to charities easier. The company is jointly headquartered in Tacoma and Charleston, S.C.
“This is a considerably more affordable place for both office space and real estate, and very close to Seattle with very similar everything. It just seems to me it wouldn’t be hard at all to attract good tech talent to Tacoma, if people would just open their eyes to it.”
The most obvious answer is also the most simple, though: Tacoma can’t seem to shake off a bad reputation.
Grit City blues
When Tacoma’s economic development director Ricardo Noguera put an April ad in the San Jose Mercury newspaper attempting to lure companies to Tacoma, his attempt was modestly lambasted online.
The advertisement touted the benefits of locating in Tacoma, including paying one-third less for office space compared to Seattle, residences with million-dollar views at half the cost of Seattle, earning employee hiring incentives and enjoying retail, educational, cultural and recreational amenities in downtown Tacoma.
The attempt saw both support and criticism from online commenters. While no one seemed to have a problem with the idea of turning Tacoma into a tech hub, some saw the ad as expressing no value other than, simply, “we’re cheap.” Not a winning strategy, they argued.
Noguera, however, said that he has actually had a few inquiries as a direct result of the ad, though there’s nothing to disclose publicly yet.
The big question remains: How do you advertise a city that has historically had branding and image issues? Just look at the nicknames over the years.
There’s the “City of Destiny,” which sounds lofty, but it harkens all the way back to 1873 and is tied to the railroads — still a thriving industry, but certainly not cool or edgy.
The rest, though — “Tacky-oma,” “T-Town” and “Grit City” — come off as either slightly negative descriptors or, in the case of “T-Town,” generally non-descriptive, except for the fact that Tacoma starts with a T.
Around town, you can see the resident-adopted “Keep Tacoma Feared” slogan on bumper stickers and T-Shirts, with the obvious goal of trying to keep people out.
And then there’s “America’s No. 1 Wired City,” which came up in 1996 when Tacoma invested $200 million in the Click! infrastructure. That would be perfect for what Tacoma is trying to do now — if it were still true.
In general, Tacoma is known for its ships and railroads and manufacturers, not its tech or downtown or arts. Stories of Tacoma are often accompanied by photos of smokestacks, gritty industrial streets and gray clouds: not the type of image that sparks a lot of interest from clean cut tech companies.
“I hate it,” said Andrew Fry, assistant director of industry partnerships at UWT.
“There’s nothing wrong with an industrial manufacturing past, and there’s nothing wrong with an industrial manufacturing sector,” he said. “But if it’s your sole identifying image, that means something is wrong.”
Fry continued his little rant.
“Do I take offense? Yeah I do. We’re more than that,” he said.
These days, “Grit City” is a misnomer, said Fry, who grew up in the city and is happy to back in it. Tacoma is a different city than what it was before.
“When you take into consideration what I’ve seen (in the 1970s) — and I’ve been in places in east L.A. that have scared me less — this now, this is a place I would want to live in,” he said.
Fry cited the museum district, UWT’s transformation of downtown, Point Defiance park, Ruston Way, the booming dining scene, nightlife of 6th Ave, thriving arts and performance happenings in the city and more.
In short, Tacoma has a lot to brag about, Fry said. But people outside, including a lot of tech companies, don’t seem to be getting the message.
“One of the things I think we’ve suffered from is lack of communication of the good things that go on here in the South Sound,” he said. “I think if there was more awareness of what’s happening, people wouldn’t be so reticent and say ‘Yeah, but why Tacoma?’”
A growing work force
Whereas Tacoma has struggled with branding, it has succeeded to overcome another obstacle: growing the tech-ready work force.
Before, Tacoma had nearly nothing in terms of developing a savvy tech work force. University of Puget Sound and Pacific Lutheran University exist mostly as liberal arts colleges and while the community colleges have more technical classes, they haven’t produced an army of software engineers.
That all changed when UWT Tacoma launched the Institute of Technology in 2001.
“Fifteen years ago, there were 60 students getting computer science degrees. Now we have 700-plus juniors and seniors and graduate students in computer science, computer engineering and information technology,” said Fry, who is a staffmember at the Institute.
The institute has also been designated by National Security Agency as a “Center of Excellence in Information Assurance Education. It’s just one of 10 universities with the designation.
“Not only does this NSA designation show we are capable of doing some of the most advanced work in the nation in the field of cybersecurity and information assurance, it opens the door to federal grants as well as scholarships for students,” said Steve Hanks, former director of UW’s Center for Information Assurance and Cybersecurity and a professor at UWT’s Institute of Technology.
Needless to say, when a company looks at moving to Tacoma, finding suitable employees won’t be as much of a problem.
“The biggest question (a company is) probably going to have is ‘Can I find a work force?’ If anything right now, we have a great fountain of candidates for the work force,” Fry said. “I would personally like to see more of them stay here than go away, because they’re all working in industry but most of them are working out of the area.”
When talking to sources in the local industry, the No. 1 reason that they expressed optimism about both starting and staying in Tacoma was UWT’s computer science programs.
Cybersecurity company IID, which started the same year as the UWT institute, launched in Tacoma in part because of the promising future the school’s program provided.
“We were betting on things happening,” said co-founder Lars Harvey. “One of the main ones was the university. They started to focus on Internet and cyber technologies, and it’s become much more focused on cybersecurity.”
Harvey paused to let that sink in.
“We had a university just down the street with people that were taking courses in what we do. It’s been great. We work a lot with the university and we’ve been able to hire a lot of people coming out of that program,” he said.
Now, it’s a matter of leveraging the university’s institute to create a tech community, Harvey said.
Fry said that was already happening.
“(When I first arrived), companies used to talk to me, ‘Where do they find folks?’ They were constantly having to recruit outside the area, which was really the problem. We’ve seen a lot more relationships happen. I got people asking my ear off about students or possible interns that are students,” he said.
Sarah Champion, director of operations at SiteCrafting, lauded the efforts of the local schools.
“We’ve got so many schools here that are excellent schools. I think that somehow gets overlooked. I love having so little work to find good people to fill out our house.”
Tech hubs aren’t recruited, they’re born
Looking at the past of today’s tech giants, there is a lesson to learn.
Bill Gates was born in Seattle. Microsoft was founded and is still headquartered just a short distance away, in Redmond.
Steve Jobs grew up in Cupertino in the Silicon Valley, where Apple was founded and is still headquartered.
Jeff Bezos moved to Seattle and started Amazon out of his garage before it grew into the largest Internet-based retailer in the United States.
The lesson, Harvey said, is that oftentimes becoming a tech hub is just a roll of the dice location-wise.
“If Bill Gates (had) started Microsoft in Tacoma, Tacoma would be a tech center. It’s just a little bit of luck,” he said. “You can go look at almost any tech center around the country, it will grow out of a successful company. The more you start, the more chances you have to win.”
Ideally, as an educational institution, this is where UWT comes in, to help attract and develop young talent so they can (hopefully) take off with an idea locally.
“You find the people who have promise and you get them to start here,” Harvey said. “What do we need to do in Tacoma? What do we do to get winners? Well, to get winners you need to get players. Winning companies start with good ideas. We’re really trying to start at the base, support that energy, support that effort of people. I think that’s been one of the main focuses.”
If you look at the current tech players in the South Sound today, most of them started in Tacoma out of circumstance, not because they were wooed by the city or economic development recruiters.
Janine Terrano, CEO of cybersecurity company Topia Technology, started her firm in Tacoma because her husband lived there. Good Done Great opened up offices in Tacoma last year because cofounder Barach lives there. And IID chose Tacoma after weighing the advantages and disadvantages because cofounder Rod Rasmussen grew up in the city.
Another company is looking to launch in Tacoma in the near future, Fry said, though he couldn’t name names. He did say it was very well funded and that it is going to hire 10 computer engineers off the bat.
It’s true, none of these companies may ever become the next Microsoft or Apple (although who knows), but each of them has grown and expanded throughout the years. They help represent a foundation for things to come.
Still, it won’t be easy. While Tacoma has its incubators, it isn’t booming with startups the way other cities are.
“What you have in Seattle and Redmond is there are a whole bunch of companies that exist to service Microsoft,” said SiteCrafting’s Forth. “Those companies tend to create new opportunities for other companies. Funding is there, perhaps, for angel investment, and these big firms have positioned themselves to be in that market. We don’t have those sorts of tenants here in Tacoma that are looking to create those halo effects.”
Fry, however, believes at least one halo-effect company is already in town.
In his office at UWT, there is a map of the “Puget Sound Tech Universe” published by Washington Technology Industry Association. On it, there are five “suns” representing five large companies that have a solar system of smaller companies built around them: Aldus, Amazon, Boeing, McCaw Cellular, Microsoft — and University of Washington.
“When you talk about spinoffs from large companies, you also have to take into consideration the educational institutions,” he said. “You do have the engine to spin off companies and create companies (in Tacoma), but everything takes a while. I’d love it if we would see a company that would grow and become a recognized company and see the cross pollination from it, but that’s normally a happenstance of fate.”
The little brother complex
Tacoma’s tech leaders have one last request before defining the city’s success in growing a tech industry. Stop comparing Tacoma to Seattle.
“I’m not saying that this is a hotbed of technology companies, but I will tell you that it is a resource rich area for software companies to take root. No one’s going to get any comparisons with Seattle because there is no comparison to Seattle,” Fry said.
Hopefully, Tacoma will eventually see more tech density in downtown to help bolster the industry, Fry said, but he realizes that the tech industry may never become the city’s savior — and that shouldn’t necessarily be the goal, in his opinion, despite what stary-eyed community boosters might imagine.
“We will never be a primary technology center economy — that has it’s own problems — but (the goal should be) to have a healthy technology industry in the region,” he said.
As Tacoma continues to build out its downtown, recruit and nurture talent and create a new brand for itself, the city needs to come out of Seattle’s shadow, said Topia CEO Terrano.
“I think we have to be proud of what Tacoma is and not necessarily make it a comparison to Seattle,” she said. “We have to have our own story, we have to highlight our own assets.”
Correction, Monday, June 8: The original article stated that Andrew Fry led University of Washington Tacoma's Insitute of Technology. He does not. The institute is led by Director Robert Friedman and Fry is a staffmember.
Correction, Monday, June 8: The original article stated that Steve Hanks is the director of University of Washington's Center for Information Assurance and Cybersecurity and a professor at UWT’s Institute of Technology. Hanks did hold these positions, but he has left UW and is now in the private sector.