The sell-out state

| Print |  Email
Articles - Jan/Feb 2012
Thursday, January 19, 2012

 

0112_SelloutState_05
Above: Terry Oftedal, director of supply chain operations for YoCream, was one of the company’s original employees when it was founded in 1977.
//Photo by Matthew Ginn
Below: Rejuvenation was founded in Portland in 1977 by Jim Kelly. His brother, Tom, owns the Portland-based remodeling firm Neil Kelly.
//Photo by Alexandra Shyshkina
0112_SelloutState_06

Tripwire, Hanna Andersson and YoCream weren’t startups when they sold. They were established companies. But some of the challenges they faced ring true for a new generation: Startups are responsible for more job growth in the state than any other sector, noted Nick Fowler, CEO of Perpetua Power Source Technologies, during this past December’s Oregon Leadership Summit. Where the state falls short, he added, is securing the investment capital that allows companies to scale globally.

Scaling — and keeping — Oregon companies wasn’t always a big problem. “Thirty years ago, Oregon was home to quite a number of large companies of national or international stature,” says Jeffrey Wolfstone, another Lane Powell attorney who focuses on M&A. “Relative to the size of the population, that hasn’t kept up. In fact, it’s gone backwards.”

To be sure, globalization plays a big role in the changing corporate landscape. Yet the Oregon pattern contrasts with the dynamic in Seattle, where over the past two decades a number of scrappy startups such as Amazon and Starbucks have blossomed into international powerhouses, now standing alongside the region’s largest longstanding employers such as Boeing and Weyerhaeuser.

“Maybe it’s something in the water here,” muses Wolfstone, “A different type of ambition, or we’re more of a lifestyle city.” Or, as one Portland investor put it, Oregon is a bit lacking in the “animal instinct.” Others point to more material drivers. Oregon’s corporate tax structure favors startups because “you’re losing money,” but acts as a deterrent to growing big, says Ryan Deckert, president of the Oregon Business Association.

Unlike Seattle, Boston, San Francisco or New York, Oregon lacks a major research university — “a geographical anomaly,” says Sue Levin, a former Nike executive who in 1999 co-founded Lucy Activewear, which was sold to a Greensboro-based private equity firm in 2007.

To grow companies “you have to have brains, wealth and business savvy in significant proportions and in proximity to each other,” says Levin, who is now director of the nonprofit Stand For Children. “You do not have it in Eugene and you have it in small quantity in Portland.”

Another “unfortunate thing” is there are not enough Oregon acquirers, says Levin, adding that it takes $50 million to get to profitability in retail. “The only company in Oregon that could have bought Lucy, literally, was Nike.” Levin adds that the original objective was to take Lucy public and “build a large Oregon company,” a decision that was nixed by the company’s original Silicon Valley investors “who had pretty high expectations for return on investment.”



 

Comments   

 
Juvenal Goldstein
0 #1 DiasporaJuvenal Goldstein 2012-01-23 10:46:40
Oregon is a hostile business environment and Portland is a branch office town.
Quote | Report to administrator
 

More Articles

Can small be large?

Linda Baker
Wednesday, April 01, 2015
040115-lindablogthumbBY LINDA BAKER

Leaders in Oregon's ag sector gathered this morning in Portland’s Coopers Hall winery/taproom to discuss the role of the region as an export gateway, impediments to exporting products and solutions to containerized shipping challenges.


Read more...

Editor’s Note: It’s a Man’s World

Linda Baker
Thursday, April 30, 2015
lindablogthumbBY LINDA BAKER | EDITOR

Earlier this week we posted an article from our May issue:  It’s a Man's Man’s Man’s World. The story covered the gender divide in tech from the perspective of male workers. Twitter didn’t like it.


Read more...

Much ado about data-driven organizations, for good reason

Contributed Blogs
Monday, April 13, 2015
bigdatathumbBY GRANT KIRBY | OP-ED CONTRIBUTOR

The mega-shift from technology-driven to data-driven organizations raises questions about Oregon’s workforce preparedness.


Read more...

Celestial Eats

May 2015
Monday, April 27, 2015
BY JACOB PALMER AND EILEEN GARVIN

A power lunch at Solstice Wood Fire Cafe & Bar.


Read more...

The ancient fish that stops bullets

The Latest
Friday, May 08, 2015
hagfishthumbBY CHRIS NOBLE | PHOTOS BY JASON E. KAPLAN

Hagfish may not have evolved much over the last 300 million years, but their protein-heavy slime promises advances in super-materials.


Read more...

6 development projects reshaping Bend

The Latest
Thursday, April 09, 2015
bendthumbBY JACOB PALMER | DIGITAL NEWS EDITOR

Bend has reclaimed its prerecession title as one of the fastest growing cities in the country.


Read more...

Foundations perspective

May 2015
Monday, April 27, 2015
BY KIM MOORE

A conversation with Martha Richards, executive director of the James F. & Marion L. Miller Foundation.


Read more...
Oregon Business magazinetitle-sponsored-links-02
SPONSORED LINKS