The startup ecosystem here, particularly relating to software and information technology, has benefitted from the emergence of remote and hybrid work, making way for Spokane-based companies to draw on talent from anywhere in the world, some entrepreneurs here say.

In addition, as tech giants like Google LLC, Amazon.com, and Microsoft Corp. carry out headline-grabbing layoffs, it’s also possible for Spokane’s startups to benefit from highly skilled talent that’s becoming available. Tom Simpson, CEO of Spokane-based startup accelerator Ignite Northwest, cautions however, that while Spokane-based companies are not experiencing large scale layoffs currently, some workforce reductions are occurring locally at angel—and venture—backed companies. 

Kris Bliesner, CEO of Liberty Lake Cloud Inc., which does business as Vega Cloud, says it’s difficult for the cloud-computing company to find locally based workers with the required skillsets. However, after deciding to open up his search to remote work, he’s been able to find talented people from across the country.

“If you decide you’re going to be remote-first, you can hire from anywhere,” says Bliesner. “And we have, from all over the U.S., because a lot of it is finding the right folks with the right skill sets.”

Bliesner says he’s starting to see more interesting tech talent become available as a result of the tech layoffs. He also says he sees a secondary effect of the layoffs as some currently employed star performers at these giant tech companies also are starting to look elsewhere.

“I think it’s spurring a lot of tech talent not laid off to look for other opportunities and other cultures to be a part of,” he says.

Bliesner founded Vega Cloud in 2019, his sixth startup in a decades-long career. He says that during the early days of Vega Cloud, he hired as many people as possible locally to work on concepts to get the startup off the ground. At that time, remote workers made up a small portion of the workforce.

In the last year, however, Vega Cloud grew to 35 employees from 12, and most of its employees work remotely.

"We can really go after the best in the industry and find folks who can hit the ground running without having to spend six months or two years (in) technology training,” he says.

Bliesner says he plans to double Vega Cloud’s staff in 2023. He declines to share his projected annual revenue but says his hope is for Vega Cloud to produce $100 million in annual revenue in the next five to six years.

“We have a lofty target in terms of what we are shooting for. So far, we are on that path,” he says.

Shane Johnson, president and CEO of Spokane Valley-based CarbonQuest Inc., says his 3-year-old company employs a combination of remote and on-site workers, with a small, fully remote software team.

“The lead that has been running the program and product management has been running it from his RV for the last three months,” says Johnson. “We’ve set it up so he can call in.”

Johnson says that over the last 20 years of his involvement in entrepreneurship, he’s noticed startups generally have been more accepting of flexible work environments, with a recent shift toward remote work. About 50% of CarbonQuest's Spokane team works on site, and the rest are a mix of hybrid and fully remote workers based in Seattle and New York City.

This year, CarbonQuest most likely will hire four to eight workers, about half of whom will report to the office here every day, he says.

While recent headlines are about layoffs at large tech companies, the Spokane area has been seeing growth in tech sectors.

Mike McBride, business and industry analyst for Spokane Workforce Council, says the IT industry has grown a lot in Spokane in recent years, which he believes is a result of smaller firms or startups going into business.

Citing December 2022 data from the Washington state Employment Security Department, McBride notes that professional business services, which includes the IT industry among a wide variety of other professions, grew by 2,300 jobs year-over-year in the Spokane-Spokane Valley metropolitan area, which includes all of Spokane, Stevens, and Pend Oreille counties.

“That was the biggest gain of any sector,” he says.

In the Spokane area, software publishing positions grew by 273 jobs between 2017 and 2022, a 108% increase. Data processing, hosting, and related services jobs increased by 74% over the same five-year period, while management, scientific, and technical consulting services jobs increased by 75%, and computer systems design and related services jobs increased by 28%.

“You can see the extremely strong growth over the past five years for these specific sectors,” says McBride. The number of such jobs, however, remains low for the population base, as Spokane doesn’t have a strong concentration of IT jobs locally, compared to the national average.

While growth is occurring in the Spokane technology industry, Simpson notes that startups might have a more difficult time securing investors’ funds.

In the current economic climate, investors in early-stage companies are being more discerning than they were in recent history, and angel and venture capital is more difficult to secure, he explains.

“Accordingly, many early-stage companies are reducing headcount to extend their cash runway,” says Simpson.

Bliesner, who is an angel investor himself, says that in a tough economic market, people are looking for entrepreneurs who have had a successful business before. In September, Vega Cloud completed a $9 million fundraising campaign that Bliesner says was one of the toughest investing rounds he has done in terms of length of time and the scrutiny from investors.

“Because of the macroeconomics, people were concerned with investing,” says Bliesner. “But we proved our business, and people were eager to invest.”

He adds that people are investing less in ideas and more in proven businesses, and the days of asking investors to invest on a picture or unproven idea are over.