HOW RURAL ENTREPRENEURSHIP IS TRANSFORMING COLORADO'S BUSINESS LANDSCAPE
For centuries, the words “rural” and “entrepreneurship” have been at odds. Even the word itself—rural—has the connotation of rustic, uneducated, and poor. But that’s not how we see things in Colorado.
Sure we wear flannel instead of suits, but here in the Centennial State, entrepreneurs and small business owners are redefining what it means to live, work, and startup in Rural America. Thanks to an elevated quality of life, a can-do culture, and a growing number of favorable business incentives, Colorado makes rural look good.
From the mountains to the plains, rural startup communities are cropping up in the most unexpected places, offering robust entrepreneurial ecosystems to start and scale businesses.
These ecosystems are similar in many ways to their urban counterparts, but the resources essential to starting a business are often spread across major geographic boundaries. Instead of finding a co-founder or investor at a meetup in downtown Boulder, rural entrepreneurs must look across endless horizons. The state’s geographic scale, paired with a low population density, provides a unique set of challenges and opportunities.
At Startup Colorado, we work with both entrepreneurs and the local ecosystem builders who support them to further enrich our state’s potential for rural startups. For more than five years, our team has worked hand-in-hand with the people building for Rural Colorado, and we’ve developed a deep understanding of the state’s startup scene outside of the urban Front Range.
Here’s what we’ve learned about Rural Colorado’s business landscape.
TABLE OF CONTENTS
THE INGREDIENTS OF A HEALTHY STARTUP ECOSYSTEM
We get this a lot: “How do you build a startup ecosystem?” And the honest answer is this: you (singular) do not. This is not a one person job; nor is it a single organization’s job. Building a vibrant startup community or ecosystem is all about having the right ingredients and—and maybe the only time—that you want more cooks in the kitchen.
A healthy ecosystem includes: entrepreneurs/business owners, ecosystem builders (aka startup champions), access to funding and business resources, support from local and state governments, storytelling to build a culture of belief, customer/market access, and collaborative networks to facilitate business connections and innovation.
HERE'S WHAT IT LOOKS LIKE IN RURAL COLORADO
- Entrepreneurs – Rural Colorado is home to a multitude of entrepreneurial endeavors, spanning industries, business models, and stages. The folks behind these businesses are equally diverse. We’ve worked with multi-generational Coloradans transforming family businesses, locals that see a need to support their neighbors, remote workers launching their first enterprise, and out-of-staters moving their business operations to the state.
Entrepreneurship is, of course, not new to Rural Colorado. Over the years, numerous companies that launched in small towns have hit the big time like outdoor manufacturer Smartwool, the payment processor Mercury Payment Systems, and Greeley Hat Works (known for outfitting the stars of Yellowstone).
- Ecosystem Builders – These are entrepreneurs’ biggest fans and over the years Colorado has developed a robust network of business support organizations like SBDC offices, professional networking groups, coworking spaces, and ad-hoc meetup groups. There are a lot of people who want to see Rural Colorado thrive and have dedicated themselves to developing long-term initiatives and goals for their local communities.
- Access to funding and business resources – Access to capital is undeniably a challenge for rural entrepreneurs, but there is a growing number of funds and incentives targeting these communities and under-served demographics. The Greater Colorado Venture Fund and First Southwest Community Fund are two great examples of the unique opportunities available to rural founders.
Access to and visibility of business resources has also been a historic challenge, but that too is beginning to change. Check out our Resource Center and Ecosystem Map to search resources by region, business stage, type, and more.
- Local and state government support – Colorado is one of the more progressive states in terms of its support for entrepreneurship. There are numerous tax incentives, funding programs, and other forms of support that not only support entrepreneurs currently in the state, but attract new business as well.
- Collaborative networks and partnerships – While somewhat nebulous, collaborative programming is essential to the health of a startup ecosystem. These types of programs and partnerships can take a variety of forms—from networking meetups to local industry groups to educational programming. In Steamboat Springs, a group of outdoor industry founders created a monthly event called Garage Beers as an opportunity to brainstorm solutions to community problems like the housing crisis.
Coworking spaces like Olathe Conexion near Montrose host regular meetups to facilitate networking connections. Check out the Startup Colorado rural events calendar to find something in your neck of the woods.
- Access to markets and customers – For many businesses—particularly brick-and-mortar retail and service-based companies—market access and a reliable customer base in a rural community can be a challenge. But that doesn’t mean impossible. Maya’s Carniceria, for example, in the agricultural-hub of Rocky Ford, has found success by addressing unique community needs.
On the other side of the state, in Durango, Backcountry Experience has been able to diversify its revenue stream beyond a local customer base by creating a corporate sales division to generate bulk orders on backpacks and apparel. As high-speed internet becomes more accessible, online businesses and tech enterprises can access customers anywhere in the world.
“Colorado's ecosystem is simply the best. Our state is cohesively creating something special and pragmatic, not flashy and disconnected.”
Jonathan Ballesteros, founder and CEO of Geyser Systems in Montrose
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LEANING INTO THE POWER OF RURAL
In the national conversation, we talk a lot about the challenges and setbacks rural businesses face. And while those issues are present in Colorado, we are seeing a shift in the conversation and the attitude toward “rural.” More entrepreneurs and small business owners are not only founding businesses in spite of their rural location, but rather because of it.
“I’ve put a lot of emphasis on being proactive and conscious about choosing where I live first and then figuring out how to make a living second.” – Olivia Pedersen, Founder and CEO of Sustaio, a climate tech startup in Telluride.
Tech plays a big role in many rural communities. Towns like Steamboat Springs, Durango, and Telluride have long histories as remote worker destinations, but founders are also launching successful startups from these remote locations.
The successful acquisitions of both Mercury Payment Systems and GitPrime were two big wins for the Durango tech scene; and AppOmni and Revel are two fast growing startups from the Roaring Fork Valley. We’re also seeing an emergent trend of urban and out-of-state companies creating remote workforce hubs in rural areas like Fremont County.
The outdoor industry is unsurprisingly big business in Colorado, and numerous international successes have started in communities like Dolores and Steamboat Springs. In addition to household names like Osprey Packs, Yeti Cycles, and Big Agnes, there are hundreds of new outdoor brands cropping up in rural Colorado. Look at Tailwind Nutrition, Oveja Negra, and Geyser Systems for examples of emergent companies.
Many towns—like Pueblo and Grand Junction—have created incubators to facilitate the development of innovative food and beverage products. Other small towns have communal kitchens, which help cottage businesses overcome the financial hurdle of acquiring a commercial space.
And while beer remains big business in the state, craft cider and spirits are adding a bit more flavor to the local menu. In Montezuma County, three cideries source apples from historic orchards to produce nationally recognized products that are completely unique to the region. In Carbondale, Marble Distilling is developing a sustainable distilling process that could change the industry.
Throughout Rural Colorado, founders and small business owners are leveraging the perceived weaknesses of rural areas and turning them to their advantage. Many of the most innovative cannabis and hemp products have been created in small towns—like Oh Hi THC Seltzers in Durango and Dram Apothecary in Salida.
Even advanced manufacturing companies are starting up in towns previously considered “geographically challenged.” QuikRStuff in Grand Junction, Sasquatch Campers in Silverton, and Barn Owl Precision Agriculture in La Junta are developing products for a national customer base while simultaneously creating jobs in their hometowns.
BUILDING STARTUP COMMUNITIES IN RURAL COLORADO
If you want to see entrepreneurship grow in your local community, you first have to tend to the business environment. Throughout Rural Colorado, towns of all sizes—from 16 to 65,000—are developing initiatives to nurture their business environment.
There is, of course, no standard operational manual for ecosystem development. A tactic that works in one community might fail in another. At Startup Colorado, we support local ecosystem builders to create strategies that meet their community’s needs.
Colorado’s mountain communities are beginning to diversify their economies beyond tourism and service-based industries. Today, places like Steamboat Springs, Telluride, Durango, and Salida are attracting entrepreneurs across industries. This hasn’t happened overnight.
Ecosystem builders have been developing long-term game plans to create events, educational programming, and economic incentives. And, as we all know, energy attracts like energy. These towns—and many in their surrounding areas—have exciting momentum.
(This can present its own set of challenges, as we’ve seen many rural towns experiencing dire housing shortages. Read our writeup on a possible solution in Steamboat Springs.)
In parts of Southern Colorado and the Eastern Plains, we’ve worked with towns that are just starting their entrepreneurial journey. Many of these communities have experienced years of depopulation and economic hardship, but are now looking forward to building a new future for themselves. We consider many of these to be “emergent communities”—towns that are the cusp of becoming the next big thing in Colorado.
Trinidad, in the southeastern corner of the state, once had an 80% vacancy rate in its beautiful downtown. While this community has experienced its fair share of booms and busts, community leaders have spent the last several years developing outdoor recreation and arts industry opportunities. Today, the community is attracting investments from Denver and other “outside” regions.
Other communities like Sterling, La Junta, and Pueblo are pursuing similar trajectories in which local ecosystem builders are laying the groundwork for future entrepreneurial development. You’ll find one of the most unique coworking experiences in Sterling. As a former prison, The Annex offers comfortable workspaces inside old jail cells.
Further south in La Junta, a new makerspace, Klein, enables founders to build prototypes and convene with other makers. Also on the cutting edge of trends, Pueblo has just opened a food hall experience–Fuel & Iron–where local food & bev startups are on display growing together.
A major component of Rural Colorado’s potential is the State itself. The Office of Economic Development and International Trade has numerous incentives in place for supporting entrepreneurial communities in rural. The State of Colorado also benefits from a strong SBDC and other business support and economic development organizations. In fact, there are more than 100 such organizations that are focused specifically on Rural Colorado.
“Small businesses are big economic drivers across all of Colorado, but particularly Rural Colorado, regularly employing more than 50% of local workers and often more. These entrepreneurs experience unique challenges and opportunities, and we work closely with rural businesses and economic development partners to develop effective programming.
Our most impactful programs, which help businesses achieve goals like creating new jobs and accessing capital, have grown out of this type of collaboration. To further this collaboration the State created the Rural Opportunity Office to build partnerships and connect rural communities to state support.” – Jeff Kraft, Deputy Director, OEDIT and Director of Business Funding and Incentives.
Local and regional governments have also stepped up their game to attract business. Both Montrose and Gunnison have successfully offered unique tax and grant incentives to persuade nascent businesses to relocate to their communities. Today, Geyser Systems is employing X number of people in Montrose as a result of some forward-thinking efforts on behalf of the local, regional, and state governments.
RESOURCES FOR RURAL ENTREPRENEURS AND ECOSYSTEM BUILDERS
Startup Colorado has developed a comprehensive database of targeted resources for entrepreneurs, small business owners, and ecosystem builders. This includes a funding database, templates, guides, coworking spaces, and “required reading” for anyone interested in rural entrepreneurship.
Check out our:
Our partners throughout the state have also developed valuable business resources, some of which are targeted to specific regions and industries. They include:
- Colorado SBDC resources for both entrepreneurs and communities
- Local economic development organizations
- Incubators and accelerator programs
- Funding opportunities and grants
Choosing to open a business in Rural America will always require courage and hard work, but Colorado is uniquely positioned to support startups because of organizations like Startup Colorado. We are committed to fostering innovation and improving the rural entrepreneurial experience because we know that it is the most rewarding and sustainable path to maintaining Colorado’s desirability, and economic vitality.
A RURAL STARTUP COMMUNITY
Think you have to live in the big city to find a startup community? Think again. At Startup Colorado, we’re building a statewide startup ecosystem that breaks down geographic boundaries and ensures you’re not starting up alone. Expand your professional network through peer-to-peer networking, curated business resources, and events. Anyone with a vested interest in the success of Rural Colorado’s startup scene is welcome to join: founders, ecosystem builders, mentors, and funders.