Less than $50,000.
There are vehicle loans larger than the amount of money Greg Gianforte started with when he founded RightNow Technologies in a spare bedroom in his Bozeman home in 1997.
What happened next has become a well-known success story in Montana: the high-tech company skyrocketed to over 1,100 employees worldwide and over $225 million in annual revenue. The software company, which was an early provider of hosted services in the cloud, became one of the top websites in the world with over 8 million visitors a day and prominent clients such as Motorola, Nikon and British Airways. The rising success peaked in 2012 when Oracle, the global tech giant, purchased Gianforte’s startup for $1.5 billion in 2012.
Gianforte’s success foreshadowed the opportunities of Montana’s upstart high-tech industry, a wide-ranging sector that is enjoying massive growth.
A new study released last week by the University of Montana Bureau of Business and Economic Research estimated the state’s high-tech industry will grow eight to 10 times the projected statewide growth rate with average wages at roughly $50,000, twice the median earnings per worker. A survey of high-tech businesses in the state found that Montana’s quality of life, including the recreational opportunities, create a significant advantage when it comes to attracting new employees and firms.
As the industry continues to grow, Gianforte has emerged as its cheerleader and mentor. The 53-year-old visited Northwest Montana last week, speaking at various community events, including the Flathead Area Young Professionals Luncheon, where he encouraged entrepreneurialism and tech startups.
Gianforte, whose book “Bootstrapping Your Business: Start and Grow a Successful Company with Almost No Money,” has become a popular read for prospective businessmen and women, stopped by the Beacon to discuss the emerging tech industry, the various opportunities for startups and how he thinks the Flathead Valley can help grow a strong high-tech sector. Here are excerpts from an interview with Gianforte.
Flathead Beacon: You founded RightNow Technologies without any outside financing?
Greg Gianforte: None. We had no outside financing. We started with less than $50,000. We did take some venture capital money when we were at about 160 employees. We ultimately raised about $32 million but that wasn’t until a lot further along.
This is one of the things I’ve commented on quite a bit. The vast majority of businesses in the U.S. do not have outside financing. There is hundreds of thousands of business starts in the U.S. every year. Less than 1 percent (of businesses) raise professional money. But the conventional wisdom is you write a business plan and you go raise money. That’s what the business schools teach. That’s why I’ve been such a proponent of “bootstrapping.” My book has been out for awhile about how to start a business with no money … The hero in my story is the entrepreneur. This is how most businesses are started, and the reality is for professional money to come into a business, there has to be a way for the investor to get their money out again.
If an entrepreneur wants to grow a business and continue to run it, there is no event that allows an investor to get the money back out. Raising the money has a set of constraints that come with it that may not be the best set of constraints for a Montana entrepreneur.
Beacon: Did anything in the BBER high-tech report surprise you? Did you think there would be this many high-tech businesses?
Gianforte: The two things that surprised me were just how quickly membership has grown. That’s a big deal.
Secondly, how distributed the companies were across western Montana. It’s not just Gallatin Valley. One other statistic that came out of the recent economic outlook seminar was that last year 40 percent of all payroll growth in the whole state occurred in Gallatin County.
I jokingly say, Bozeman beat the Bakken in payroll growth. It was over $100 million in payroll growth in Gallatin County alone last year.
Now it wasn’t all high-tech. Part of it was construction but a big piece was high tech. I think it represents a proof point that the Internet really removes geography as a constraint.
Every community including the Flathead can benefit from what we learn down in Gallatin County. Because ultimately right now, our most precious export in the state is our kids and grandkids.
So we need to create opportunities for them. High-tech is not the only solution but I think it’s an important one to add another cylinder to the economic engine.
Beacon: What can communities like the Flathead do to follow Gallatin?
Gianforte: First, we’ve got to focus on industries that have higher wages. I think there are four specific ones that we need to focus on.
We need to focus on natural resources. If you look at U.S. Department of Labor data, natural resources jobs are the best paying jobs in the whole country. That’s timber. That’s mining. That’s oil and gas.
Number two: high-tech. The national average salary is about $94,000 a year. Our average wage in Bozeman was $86,000 per year.
Number three is manufacturing. We have good businesses up here already, like Proof and Vizn.
Number four is a kind of a new one. It doesn’t show up in any of the economic reports, and that’s telecommuting. More and more companies allow their employees to work from anywhere. Oracle today, if you go on their website and look at careers, they have 800 jobs open that could be filled in Montana. My son works for Oracle and he doesn’t even go to the office in Bozeman. He works from home … The Internet removes geography as a constraint.
The second thing we need to do; the private sector is the source of opportunities. The government is a zero sum game. You take from one to give to another. The private sector actually creates prosperity in a community. It creates opportunities for individuals. And the spark for that fire is entrepreneurism.
So we need to support and encourage entrepreneurship. Young people have to know that starting a business is an OK career path. It’s high risk but high reward.