Thursday, May 17, 2012

The Best-Kept Secret in Tech is in Utah

In late February Ryan Smith was having a private dinner with venture capitalist Mike Moritz, who backed Google, Yahoo and PayPal at Station 1, an upscale restaurant in Silicon Valley’s verdant burb of Woodside. Moritz’s firm, Sequoia Capital, wanted to invest in Smith’s company, a data-collecting software firm called Qualtrics, based in Provo, Utah. But Smith had in hand a $500 million offer for the business he spent the last ten years building with his father and brother. It was the moment to make his family richer than their wildest dreams.

For days Smith tossed and turned between a sure $500 million and the idea of “going big.” A week later he made up his mind, called the bidder and turned down the offer. “Moritz got me,” Smith says. “The second act is never as good as the first. I want to go big now.”

Ambitious tech startups have a playbook these days: Set up shop in Silicon Valley or New York and issue scads of breathless press releases for even the slightest product tweaks in hopes that your “news” will be amplified ten times by a chorus of bloggers. So it’s rare to unearth a firm that’s beginning to dominate its software niche (online survey-taking), doubling its revenue annually, turning a healthy profit and scoring capital from elite VCs, yet is a family-owned business nowhere near Silicon Valley that has never issued a single press release. Forbes