Why Portland Needs As Many Californians As We Can Get

Forget the "No Californians" bumper stickers. For Portland's white-hot tech scene, "outsiders" can't come soon enough.

By Marty Patail October 19, 2015 Published in the November 2015 issue of Portland Monthly

There are many ways to arrive in a new town.

Beth Archibald provides one of the cushiest. Her company, Archibald Relocation, handles the logistical needs of professionals moving to new jobs in Portland. She notes that when she started in the industry back in 1984, “more people were leaving Portland than moving here.” These days, this is not a problem. The future employers of newly minted Portlanders—often rapidly growing software companies like Elemental, Ecova, and Jive—pay her to take care of their fresh talent’s moving hassles. She sends the relocatees pictures of potential apartments and gets the necessary paperwork in their hands, often long before they ever take a breath of Rose City air.

“They hit the ground, and they don’t have time to go look at property,” Archibald says. “We even have landlords and real estate agents who call us ahead of time saying, ‘Hey, this unit is coming available, just wanted to let you know.’ Especially for the higher-end, executive homes.”

Think of Archibald as an officer on the front lines of the economic, demographic, and cultural tumult transforming Portland, tapped into deeper forces: in the tech industy’s case, a new juggernaut, crucial to the city’s future, that desperately needs talented people.

Those people, for the most part, are not here. But they’re coming.

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Image: Amy Martin

Since 2010, Portland’s population has leapt 6.1 percent; the big brains in urban planning predict almost 260,000 new city residents over the next two decades. (Expect a 1,000 percent increase in whining about traffic.) The median home price has shot up from $285,000 to $305,000 over the past year alone, and, in one of the nation’s tightest rental markets, the average price of an apartment rose 7.1 percent to $1,119. Where demand goes, supply follows: by one estimate, Portland could add 94,000 apartment units by 2035.

Our city has always considered itself different (better) than its flashier West Coast neighbors—founded by people searching for Eden, not gold, in one historian’s oft-cited phrase. A nativist backlash to “the changes” was perhaps inevitable. The masses have taken matters into their own hands, circulating a viral YouTube video called “Stop Telling People About Portland” and slapping anti-California stickers on “For Sale” signs. (For her part, Archibald notes that her inbound clients hail from manyplaces. “It’s just Californians getting blamed for it.”)

But for Portland’s high-tech industry, the biggest worry about “outsiders” is that there will never be enough. In our so-called Silicon Forest, demand for talent has never been higher. Given that the image of “tech bros”—gauche, rich, young, wearing hoodies with software firm logos, bending whole urban cultures to their will—has become a stereotype, some fear those businesses’ hiring needs will erode our cherished old Portland ways. The people who run the city’s top tech companies, on the other hand, believe that only more fresh blood can feed the reborn Portland economy.

“No one’s really grown a company that big here yet,” says Rick Turoczy, a longtime start-up scene blogger and organizer. “So a lot of the people our tech companies go after are executives or developers from other places, who not only understand how to code but how to manage people and move projects forward. Portland is super-good, at the grassroots level, at starting things up. But we’re still building up the acumen of how to build a big, sustainable tech company.”

The feeling is mutual among many industry people looking to escape high costs elsewhere—especially in tech’s heartland, the San Francisco Bay Areaand embrace Portland’s ever-quirky civic charisma.

“We’re seeing a profound amount of people thinking about Portland as an option for relocation,” says Art Amela, a senior recruiter at one of Portland’s biggest local software firms, Puppet Labs. “There’s many reasons for that. It’s everything from the consumer world, Portlandia and Grimm, to the commercial messaging around beer and art, to the press around the technology companies. It’s a dynamic time for Portland. It has certainly helped us in hiring.”

Call it an outbreak of xenophilia.

On a rainy winter evening last January, TechTown Portland, a collaborative venture including 21 of Portland’s fastest-growing tech employers, convened at the software company Smarsh’s sparkling new headquarters overlooking Pioneer Courthouse Square.

Smarsh’s product is conversational Ambien; the company makes digital archiving tools for government and for the financial and medical sectors. But the firm’s offices, on this night, embodied the hip, fun, ultracasual Portland workplace: glass-fronted fridges stocked with juice and beer, an indoor park with benches and fake shrubbery, an arcade-style video game machine. Roughly 100 Smarsh employees and peers from around the city crowded the open bar, becoming progressively louder with each round. Beyond a glass wall separating the cafeteria from the company’s workspace, several rows of empty, computer-less desks silently underscored the party’s purpose.

A few rounds later, the main event: the unveiling of “People on the Move,” a glossy video commissioned from Uncage the Soul, a local team that produces promotional films for the likes of Nike, Adidas, and Stella Artois. Following a taped welcome from Mayor Charlie Hales (“We’re a city of innovators, designers, creators, and collaborators. It’s in the fabric of our culture.”), the video unfolded in sweeping, drone’s-eye-view shots of downtown, Forest Park, and Sauvie Island, spliced with interviews of bubbly new Portlanders from Boston, DC, and Tehran.

One by one, the interviewees elaborated on the city’s many virtues: coffee shops, parks and nature, food carts, bikes, and (everyone’s favorite) the OHSU aerial tram. “My husband and I moved here from the Bay Area,” gushed Carla Nichols, a senior Smarsh VP, on screen. “And here for less money, you can afford more. We instantly fell in love with Portland.”

“There’s such a creative energy here,” continued Tom Kobayashi, a product manager from San Mateo, California, who came here in 2011 to work for Viewpoint Construction in Southeast Portland. “There’s a collective sense of purpose that really makes Portland stand out.”

Sure, the scripted lines felt canned, and the shots evoked a city where the biggest problem is deciding where to brunch. (The video’s drones seemed to obey a no-fly zone around our homeless camps and underfunded schools.) But its sales job was effective, and the video’s origin story is, in its way, as compelling as any of the urban perks it documents. TechTown consists of a bunch of companies, supposedly fierce rivals for talent, that have banded together to recruit skilled migrants, to all of their mutual benefit regardless of who makes specific hires.

It’s a very Portlandian solution, but there is a strategy: make the place look as good as possible, and sell those coveted people not on an individual job, but on a whole city.

“Candidates may like a particular company,” says Jared Wiener, the Portland Development Commission’s software industry liaison, “but when they’re looking to uproot their lives, they want to make sure there are additional opportunities. That’s the whole impetus behind TechTown—selling the industry as a whole.”

This collaborative approach makes sense for a local sector only beginning to forge a national reputation, in a city where tech salaries trail those in more established industry hot spots. According to Business Oregon, the state average salary for a job in the industry was $93,000 in 2013. In San Francisco, as of last year, the average was more than $156,000. And while the cost of living is still roughly 40 percent lower here than in the Bay Area and 35 percent lower than in New York City, tech companies are wary of an unsustainably rapid increase in salaries. Smarsh’s founder, Steve Marsh, who has watched Portland’s tech scene grow and finally flourish over the course of the past decade, recalls when some specialized technology salespeople could command almost any salary they wanted because of the intense local bidding war for their services. The TechTown members’ focus on expanding the city’s total talent pool represents a conscious reaction to those situations.

“There’s a unique collaborative culture here,” Marsh says. “At times you are competing for the same employees, but it’s not like a cutthroat battle. I think everybody realizes that no one wins if that becomes the norm.”

Portland’s tech sector, long a domain of giants like Intel, HP, Tektronix, and Mentor Graphics, is now a bracingly diverse scene of start-ups, midsize players gobbling up venture dollars, and international brands planting local roots. Last year, mobile banking app Simple was acquired by BBVA for $117 million; this September, Amazon bought cloud video service Elemental for a reported $300 to $500 million. Privately owned software developers Act-On, Puppet Labs, and Jama have each raised tens of millions in investment capital. Over the past several years, eBay, Google, and Salesforce have set up significant outposts here, straining an already tight talent market. Portland boasts about 66 percent growth in software industry jobs over the past five years—from about 7,200 to more than 12,000.

Heady news indeed for a city that suffered a 10 percent unemployment rate just five years ago. “The critical mass of tech companies has arrived in Portland,” says Bruce Kenny, Viewpoint’s VP of product development. “It’s not one-trick town anymore.”

Major problem: Portland’s high schools, universities, and coffee shop code schools can’t produce anywhere near enough qualified people to fill those jobs right now. In fact, Portland’s tech ranks could theoretically grow substantially overnight—if new Portlanders materialized to fill jobs now sitting empty. A quick glance at one of the industry’s leading help-wanted boards,, reveals more than 3,400 open positions at about 330 separate companies (as of press time), ranging from junior developers (frequently found locally) to experienced engineers and senior project managers (frequently brought in from outside). Intel and Nike account for about 1,000 of those open positions. But beyond those established megaemployers, the need appears inexhaustible. When eBay expanded its local presence last year, the company hired 200 people in one fell swoop.

“We’re hiring at a breakneck speed,” says Amela, “constantly recruiting. ” To be sure, the city’s tech firms do hire locally—Jama, for instance, says about 88 percent of its hires are already in Portland. But as a long-term producer of tech talent, the city is, at the moment, weak at best.

For some, our gap begins with a statewide on-time high school graduation rate under 69 percent—the nation’s worst. In Portland Public Schools, three out of every 10 high school freshmen fail to get their diplomas in four years. Of course, high school alone rarely creates a senior software engineer, but dismal stats speak to the talent pyramid’s shaky base. The state’s colleges and universities have so far not proven equal to building upon that foundation. Oregon State University, the state’s largest generator of computer science grads, only graduates 100 students from that program per year. Closer to the eye of the storm, Portland State’s Cooperative Education Program, which has rotated skilled interns among 16 downtown tech firms since 2012, is a promising model. But while the program will expand to 40 students by January—many expected to land full-time jobs after graduation—those interns barely scrape the edge off the demand.

“We’re just not producing enough grads,” says Nitin Rai, a longtime tech entrepreneur and investor who moved here in 1989 to work for Mentor Graphics. “And the straight-A, 98th-percentile SAT students, they don’t stay. That we know. And once they go, they’re not coming back.”

“In the near term, we’ll be looking at attracting people to Portland,” says Jama Software’s “VP of People,” (no one just says “HR” anymore) Susy Dunn. “But the long-term focus is on building the pipeline from within the region: investing in education and really trying to increase the diversity of the pipeline. What can we really do to help with skill development?”

Meanwhile, unaccredited boot camps like Epicodus, PDX Code Guild, and Portland Code School offer instruction in common programming languages like Javascript and Ruby on Rails in loose, night-school environments, training junior software developers and entrepreneurs—perfect hires for the city’s many bootstrapping start-ups. But for the midsize players with substantial hiring budgets and empty seats for experienced engineers and senior managers, those programs won’t fill the gap.

“A lot of very junior candidates come through code schools,” says Christine James, a recruiter at Elemental. “We’re 260 people, and we have 45 open positions. We don’t have the training programs in place for people brand-new to programming.”

The effort to solve Portland’s personnel shortage comes in forms direct—the TechTown video, get-to-know-Oregon cocktail parties in other cities—and indirect, like the arms race in office perks. New Relic (which is headquartered in San Francisco but does most of its engineering in Portland) has bike storage and fully equipped bike repair, hanging chairs, and a gorgeous view of the city from the US Bancorp Tower. Puppet Labs offers four revolving beer taps, beanbag chairs, and a retro arcade. Workers at Airbnb’s sumptuous downtown office can take shelter in hammocks and miniature forts and houses. In this world, kegerators and Ping-Pong tables come standard—emblems of a kicked-back, quality-of-life-oriented urban culture that is Portland’s chief selling point. (And must be, since the money’s not always as good here.)

“Silicon Valley is always going to be Silicon Valley,” Darin Swanson, engineering VP at New Relic, says. “But as tech takes root in other areas, how do those regions tell an authentic story? Each region has certain strengths, and we’re trying to do the same here.”

The tech industry’s hiring practices, cultural leanings, and paychecks have transformed many places. New York is now a start-up town, and has been handing out tax breaks to make sure it stays that way. Austin’s crackling tech scene has helped drive a property boom there. Even Boise is now a corporate hub of some significance.

But San Francisco has changed the most radically and, to many, distressingly. Since 2001, that city’s housing prices have quadrupled. The resulting tension over gentrification—synonymous, in many minds, with Silicon Valley’s raging success—has included rocks thrown at Google’s chartered commuter buses, angry city hall protests, and a whole genre of embittered “Why I Left San Francisco” diatribes.

San Francisco is the city Portlanders fear becoming. Certainly, the Bay Area’s boom has had local ramifications. For talented young software engineers looking to settle down and start a family, for instance, a move north is seductively affordable. The real estate website Zillow reports median rent in San Francisco at about $3,330, versus $1,650 here. A study by the real estate listing site Redfin found that a full quarter of Bay Area residents were actively looking for homes in other places—and that the number of their searches in Portland had nearly tripled since last year. Our secret admirer to the south grows bolder.

“It’s relatively easy to convince the right demographic to move to Portland,” says Viewpoint’s Kenny. “The person who has worked in the industry for a while and may be entering the next stage of their life looks outside their postage stamp–sized apartment in San Francisco and realizes it’s not a great place to start a family.” 

It’s quittin’ time in the Upper Lip, the not-so-secret upstairs bar of Bailey’s Taproom. The bar peeks over a corner, the intersection of Broadway and alley-wide SW Ankeny Street, that looks about as “Old Portland” as it gets—Tugboat Brewing, Mary’s Club, and a voodoo-themed burrito dive. (For years, this spot was home to the 24-Hour Church of Elvis, archetypal shrine of Portland oddity.) The Upper Lip also sits conveniently within a block or two of Jive Software, New Relic, Lytics, and Elemental. This evening, the tables in the room’s center have been pushed together, creating a long, raucous communal circle of immediately identifiable tech bros—some, yes, sporting company T-shirts. (To be fair, more than half of these particular “bros” are women).

For decades, the city and state have promoted high technology—the very phrase “Silicon Forest” alludes to a long-held hope that tech could take timber’s old place as our economic prime mover. (The practical details have always been a little fuzzy, but the tax breaks and economic development incentives have been very real.) Now, that dreamed-of industry is thriving, but with it comes reality: if we want the people around the future versions of this convivial table to be native Oregonians, our schools and university system need big help, for starters.

Meanwhile, there’s another side to the scene—at the Upper Lip, these shock troops of Portland’s transformation are, after all, partaking of the treasured local ritual of microbrews in a repurposed back-alley dive.

“The companies that find success in Portland acclimate to Portland,” Rick Turoczy says. “There was a time here in the ’90s when people thought we needed to be another Silicon Valley. It wasn’t until about seven years ago that folks said, we need to figure out how to live within the culture of Portland.”

Either way, the talented hordes are already at our gates. As invaders go, we could do a lot worse. And maybe those of us who have loved Portland for a while should welcome these bright newcomers. That, after all, is what a great city would do.

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