Tech companies ready to grow
Success depends on building strong support system and attracting more venture capital to fund startups

Tom Sowa
Staff writer

At a glance Interview with Dan Roark

There are no technology companies currently ranked among the top-20 employers in the Spokane region, but that could change over the next few years.

Two Spokane Valley companies with solid potential -- World Wide Packets and newcomer Vivato Inc. -- are the tech sector's heavyweight contenders.

Both stand to capture significant market share in their sectors as corporations nationwide begin investing in technology again, local observers predict.

Vivato is a privately owned company started by three former Agilent Technology engineers. The company designs ultra-efficient wireless switches and communications systems. Its Spokane Valley plant now employs about 75 engineers and support workers.

World Wide Packets, started by local tech heavyweight Bernard Daines three years ago, designs cutting-edge network hardware that manages ultra-broadband data. The company employs about 80 local workers.

Together, the two companies are poised to change the region in the same way Hewlett-Packard and Micron Corp. boosted Boise's fortunes in the late 1970s, said Nathan Brown, a partner in Spokane business consulting company Morgan Leigh and Associates.

"Both companies have developed amazing new technology," said Brown, who is the author of "The Innovation Economy," an economic strategy for the region funded by several area groups.

The success of Vivato and World Wide Packets should not overshadow the work of other local companies, Brown said. The region is not tech-impoverished.

Itronix, Itron, Agilent, Telect, Isothermal Systems Research, Schweitzer Engineering and Hollister-Stier Laboratories form a tech nucleus with strong potential for growth, he said. But wireless and broadband data management are two sectors that put Vivato and World Wide Packets ahead of the pack.

"Due to their enormous potential, those two companies really can hit home runs for the area's economy," Brown predicted.

World Wide Packets, Brown said, has been held back by being "a bit ahead of the market with its technology. But it's situated now for the next phase of telecom expansion into broadband networks for campuses, communities and metropolitan areas."

Dave Curry, CEO of World Wide Packets, isn't promising all-star earnings in 2003. But he's convinced the company's "last-mile" fiber-network products will fuel growth of between 300 and 400 percent in the coming year.

"Wi-Fi" -- the booming industry that has evolved around radio-wave networks -- represents the leading edge of technology growth for the immediate future.

Vivato and World Wide Packets may be following in the well-worn path of two Idaho success stories.

Micron, founded by several Boise businessmen with the backing of potato magnate J.R. Simplot, has become Idaho's largest private employer with more than 10,000 workers in the Boise area.

Hewlett-Packard's Boise plant became a major employer in the early 1980s when the company rode the wave of the personal computer revolution and the public demand for inexpensive laser printers.

Local technology experts also believe Spokane's biotech and biomedical industries bear watching, although the tepid economy has hurt prospects for several companies.

Biomedex, for example, has postponed plans to develop a West Plains contract-manufacturing site due to limited investment opportunities, said CEO George Coleman.

Area business and civic leaders, meanwhile, have concentrated on a proposal to launch a medical research institute in conjunction with Washington State University. If developed, the institute would work to lure millions of dollars in medical research for area physicians, researchers and biomedical companies.

One such biomedical company, MatriCal, relocated to Spokane this year from Pennsylvania and Delaware. The company designs and builds storage units and plates for pharmaceutical companies.

MatriCal employs nine workers in Spokane and projects growth of about 300 percent in 2003, said president Kevin Oldenburg.

MatriCal, said Oldenburg, falls into the category of businesses most in need of help -- small tech startups.

Since moving to the region, Oldenburg said he's found a flawed support network for new technology companies.

"The hardest thing facing small tech startups is the difficulty to raise investment capital," he said.

The region also needs a more sophisticated and effective incubator program. "We don't see that kind of system well established here. Back in Pennsylvania and Delaware, incubators had the staff and resources to help companies apply for grants and help receive extra funding," Oldenburg said.

Consultant Brown agreed, and said he and others are proposing several options to fund entrepreneurs and startups.

One idea is to create a significant investment fund focused entirely on new Inland Northwest companies. It would resemble the Highway 12 Ventures Fund created last year in Boise. That fund is an early stage investment operation focusing on new high-growth companies in the Northwest.

The second plan is to create proof-of-concept funding at a smaller level to help companies get out the door with a sound idea. The fund would generate loans or investments of between $50,000 and $200,000.

"A lot of people don't have friends and families who can provide that money. This would be a way to take those entrepreneurs and move them through the tunnel," said Brown.

Technology fact

In 2001, Microsoft Corp. received 362 patents from the U.S. Patent and Trademark Office, more than any other company in Washington state. In Idaho, Micron Technology received 1,380 separate patents.

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