Startups are putting Las Vegas on the map as a high-tech hub
19 November 2012
When most people think of U.S. tech hubs, Silicon Valley, Seattle and Boston come to mind.
Las Vegas used to fall far down on that list, but thanks to companies settling and expanding here, it’s starting to creep higher.
The valley is experiencing a startup boom that has produced entrepreneurs who, sometimes with minimal capital, are building tech companies. Many are focused on social media, but other ideas are being hatched as well, including mini-robots, video streaming and Internet-based phone services.
“Everyone has their own thing they want to go after,” said Pin Tan, a Las Vegas lawyer who helps clients acquire patents and trademarks and who himself develops mobile apps.
The companies are shining a spotlight on Las Vegas’ burgeoning geek scene and helping people realize that the valley is about more than just glitzy casinos and foreclosed homes.
The 800-pound gorilla is Henderson-based online shoe and apparel retailer Zappos, which is expected to shift 2,000 employees to its new downtown headquarters next year. No other nongaming tech firm employs nearly as many people. Additionally, Zappos is fueling much of the recent buzz. Its executives are financing startups, planning real estate projects and attracting new businesses downtown.
Despite the activity, it will take years before Las Vegas makes it into the upper echelon of tech cities, if ever. Startup founders need piles of capital and talented engineers to make a go of it, and both are in relative short supply in the valley. Many local firms are self-funded and earn little revenue, making it nearly impossible to hire whiz kids from Stanford University or MIT, who often are lured with big salaries to heavyweights like Google and Apple.
Tech startups also have a famously high failure rate, and even promising companies and products sometimes flop or stall.
In July, tech blog GigaOM profiled several up-and-coming local startups. One was Counterless, whose iPhone app lets people order meals from their cell phones. Only four months later, founder Chris Shepherd said the Counterless team had “decided to work on other projects.”
Others are still getting attention. Romotive, which makes an iPhone-controlled robot that interacts with people, received national press attention after it raised $5 million from investors, including the high-profile Silicon Valley venture firm Sequoia Capital. Its robot, known as “Romo,” also was picked for Neiman Marcus’ holiday catalogue.
Then there’s data-center operator Switch, which has hundreds of clients. Founder Rob Roy has since designed the “inNEVation Center,” a 40,000-square-foot working space for entrepreneurs, economic development officials and academics slated to open next year. He also formed the investment group NV Angels.
Roy has inked at least one deal so far, putting $500,000 of his own money into Las Vegas social media startup Tracky, which offers customers ways to organize their lives, including to-do lists, calendars, data storage and task management.
VEGAS INC took a look at some other tech firms that are making waves — or at least hope to.
The Internet streaming company was founded in 2000 by Mio Babic, a 6-foot-8 native of the former Yugoslavia, after knee injuries ended his pro basketball career.
His first client was the Little White Wedding Chapel north of the Strip. He negotiated a deal to broadcast their weddings live online. The first was in January 2001 for a Scottish couple, and nearly 200 people logged on to watch.
Babic still streams about 1,000 weddings a year there, but his business has expanded considerably. He broadcast the World Series of Poker for a few years and the 2010 Winter Olympics in Vancouver, British Columbia.
This year alone, iStreamPlanet broadcast the Super Bowl, Tour de France and London Summer Olympics, as well as political debates and corporate events.
On pace to broadcast 370 live events this year, the company streams content to cell phones, tablets, Xbox consoles and other Internet-connected devices.
Babic has about 60 employees, including more than 20 in Las Vegas. He has satellite offices in London and Redmond, Wash., and sales reps in New York, Cincinnati and Phoenix.
The company has raised at least $9 million of investor capital, according to Securities and Exchange Commission records, and revenue has soared. This year, Inc. magazine named iStream to its list of the 5,000 fastest-growing privately held companies, ranking it No. 3,231.
According to the magazine, iStream earned $4.5 million of revenue last year, up 63 percent from $2.8 million in 2008.
They aren’t exactly the Niña, Pinta and Santa Maria, but Leith Martin’s telecommunications products have quite a ring to them: TINA, NINA, justINA and EDWINA.
As co-founder and CEO of Ubiquita, Martin sells Internet-based phone, voice mail and fax services, as well as spam and virus protection. He said he has 20 to 30 clients, all small businesses in Las Vegas, and more than $2 million of investor capital.
The company, founded in 2010, is mainly focused on building TINAs (“Telephony Integrated Network Appliances”) and, to a lesser extent, NINAs (“Nano Internet Network Appliances”), both of which allow phone and fax services to be accessed online.
The other two devices are listed on the company’s website, but Martin said they haven’t been produced in any significant volume. EDWINA stands for “Enterprise Data-center Wide-area Internet Network Appliance,” while justINA is “Just Internet Network Appliance.”
Martin doesn’t sell the devices but places them in clients’ offices. Data that pass through them are stored in the appliances and in off-site servers.
The company hopes to expand its customer base into Reno, Salt Lake City, Phoenix, Southern California and the San Francisco Bay area over the next 12 to 18 months, Martin said.
If all goes well for Kevin Collignon, he will be despised by college athletes around the country.
The 22-year-old Las Vegas native founded AthleteHall, a website that lets faculty better monitor student-athletes’ academic performance. Coaches get weekly reports on study hall attendance, alerts are sent when grades slip, and faculty can check automated progress reports.
Collignon has no outside funding and only a few people working with him. But eight schools already use the site, and he is in negotiation with 10 to 15 others.
Student-athletes must follow a host of rules to stay eligible for their sports and scholarships, and they are monitored with progress reports on grades, absences and study hall attendance.
According to Collignon, students can fabricate their reports and turn them in. Also, it can be hard for faculty to detect academic problems quickly because the reports are on paper and, thus, difficult to analyze in bulk. AthleteHall, however, can spit out data showing that certain groups of players cut class or dodge homework, while highlighting others’ tumbling grades.
“You can set them up with tutors, advisers or give them more study hall hours,” Collignon said.
A Bishop Gorman High School graduate, Collignon went to the University of Northern Colorado on a golf scholarship.
The website Meetup has changed the way many people socialize, offering get-togethers for strangers with shared interests. But as Mark Johnson sees it, there’s plenty of room for improvement.
Johnson co-founded Ayloo, a mobile app that he said will soon be available and will let people organize social events.
While Meetup charges all organizers a fee, Johnson plans for his service to be free. Ayloo organizers would pay only if their events carry a cost, he said.
Johnson said customers have complained about the quality of Meetup’s mobile app, and his research indicates people would have no qualms using a different site.
He is developing the app full-time with a few others. They have no outside funding yet.
Internet surveys are about as far from scientific as you can get.
Questions are posted online and only the people who happen to drop in and answer them create the results. Respondents are not targeted through random sampling, and there is no pre-determined sample size. The answers collected can’t be seen as reflecting what the general public thinks.
But people still take the surveys and check the results, a fact that Porter Haney and Jimmy Jacobson see as a business opportunity.
They founded Wedgies, an online social polling service that allows customer-generated polls to be pasted into Twitter feeds, emails and text messages.
The company says it provides “simple surveys to share with friends.” Results are produced quickly.
“It’s about fast data and maybe even small data,” Jacobson said in a video on the Wedgies website. “You know, if you’re just asking your friends where you want to eat for lunch, you want to know that quickly.”
Local tech financier VegasTechFund, whose partners include Zappos CEO Tony Hsieh, invested in Wedgies. SEC records show the startup has raised at least $500,000 of investor capital.
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