Portland startups play musical chairs, making space for one another as they grow – OregonLive.com
There’s a faded silver plaque outside the door on a vacant building in Portland’s fashionable Pearl District.
Squint a bit and you can make out a pair of names – Jama Software and Opal Labs, two of Portland’s most highly touted young companies and the building’s most recent tenants.
If you could look deeper, you’d see the building used to house Urban Airship and Simple, both of which outgrew the site and are now helping anchor Oregon’s ongoing tech renaissance elsewhere.
Deeper into the past, you’d find Ziba Design, the building’s owner and original occupant. Even Pixelworks, a startup from a prior generation of Oregon tech, traces its roots to the site at 334 N.W. 11th Ave. when Ziba opened its doors to the company at a key moment in the 1990s.
As Portland tech business grow they’re swapping offices and sharing spaces, playing a game of musical chairs in reverse — making room for one another as they grow.
Oregon’s startup community, tiny relative to those in Washington and California, is also unusually chummy. Businesses rarely compete head-to-head, except for employees, so office swapping and office sharing are one way entrepreneurs try to grow the whole ecosystem.
When they burst out of their old spaces, bigger companies sometimes become landlords for smaller ones, offering flexibility conventional landlords might not – and occasionally a discounted price, too.
Jama Software and Opal Labs were roommates at the 334 building, in the same space that once housed Urban Airship and Simple. For Jama, that office was an overflow space, housing part of the company after it outgrew older offices nearby. For Opal, it was the nest where it grew from a marketing-technology concept into one of Portland’s most promising startups.
In January, Jama – whose software helps companies manage complex projects – moved all 140 employees under one roof in a swanky, newly renovated downtown office. It subleased its old headquarters to Opal at rates below what the companies’ real estate brokers said it would have fetched on the open market.
“We quickly realized that it was a perfect match, in terms of their growth and growth trajectory,” said Colleen Yeager, controller for Jama Software.
“We could have gotten a fair amount more from this lease, and made some money out of it,” she said. But Urban Airship did Jama a favor two years earlier, offering a great rate at the 334 building, and Jama wanted to pay it forward.
Landlords all over Portland are courting tech companies, among the fastest-growing segments of the city’s economy. Oregon tech employment is, by some measures, now at its highest point since the dot-com era.
Building owners love to lease to big, out-of-town companies like Airbnb, Squarespace, New Relic and Survey Monkey, which have the scale and staying power to make long-term commitments. All have set up big Portland outposts.
But it’s hard for local startups to predict their growth rate. If things go badly, a landlord could be stuck with a failing company that can’t pay its rent. If things go well, startup employees will be tripping over one another in a matter of months.
Puppet Labs, for example, has been in five offices – each larger than the last – since moving the company to Portland in 2009.
“How ridiculous to think of getting a space for five to seven years as a startup,” said George Huff, Opal’s chief executive.
So Opal has been especially fortunate that first Urban Airship, then Jama, made space available. Opal has already provided space to freelance technologists and company president Steve Giannini said he hopes his company will be in a position to open a door for a future generation of startup.
“We will remember what Urban did for us at one point and we will remember what Jama did for us at one point and we will try to do something,” he said.
Often times, of course, it’s just serendipity and suitability that match one startup with another tech company’s old office. When data center management company Puppet Labs moved 250 Portland employees into a big, new downtown headquarters last fall, online banker Simple took its offices in the Pearl District.
The match was mostly a matter of timing, according to Krista Berlincourt, spokeswoman for Simple: Puppet was done with its old office at just the moment when Simple needed a larger space. Still, she said Puppet put in extra effort to ensure its old office was ready when Simple’s 180 employees needed it.
And Simple’s very presence in Portland is, to some degree, a product of the pervasive office-sharing ethos.
In 2011, mobile marketing company Urban Airship was a small startup in a big office: Ziba’s old 334 building. Urban Airship offered Simple a landing space when the online banker made the unconventional decision to move its headquarters from New York to Oregon.
“Urban did something really special for us,” Berlincourt said. “They housed us and they were friends to the company.”
That sort of thing has been going on for years, it turns out, in that very building.
Pixelworks, one of the biggest Oregon startups from the dot-com era, was still a four-person company in Lake Oswego in the late 1990s. Representatives from a large, prospective customer were flying in from Japan and Pixelworks needed a place to host them.
So Pixelworks co-founder Allen Alley called his friend Sohrab Vossoughi, Ziba Design’s founder and president, whose company was still in that same 334 building. He provided the startup with a big, sleek conference room and arranged for lunch and coffee on fine china.
“We never told the customer this was our office, we also didn’t exactly tell them it wasn’t. The meeting went amazingly well,” Alley recalls. “The customer left very satisfied. We closed the deal and the rest is, well, history.”
Pixelworks went on to hold an initial public offering in 2000 and was briefly among Oregon’s biggest tech businesses before fading, then moving its headquarters to Silicon Valley.
“I think it says a lot about the startup scene in Portland,” Alley said. “We tend to be a community that helps each other out.”
At the moment, that 334 building remains vacant, three stories awaiting a new tenant who can make use of the 22,600 square feet. It’s an unusually large, open space, connected by stairwells and open floor plans of the kind design firms and tech companies tend to favor.
However, Portland’s game of musical chairs appears over for the moment. Most of the city’s big, young tech companies have moved recently and aren’t seeking new homes.
So real estate brokers are casting a wider net, looking for someone to reimagine 334’s space and give it a new identity. This time, said Rennie Dunn of Apex Real Estate Partners, which is marketing the property, it may not even be a Portland company.
“It’s going to have to be a tenant who’s willing to overlook that and get a little exercise, going up a flight to get to a meeting,” Dunn said. “There’s a lot of them that are poking around from out of state.”
— Mike Rogoway