Rob Armstrong, co-founder of Bombora, was looking to expand R&D operations westward from their Manhattan headquarters. Where Bombora landed might surprise many. But it shouldn’t.
The company, founded in 2014, is a startup in the AdTech sector providing B2B demographic and intent data for marketers worldwide. By aggregating users into demographic segments, it deploys tracking mechanisms across various actions to include search, white paper downloads, webinars, trade show sign ups, article reads, videos, social content, IPs, and more.
Started in January of 2016 with four desks located within the Reno Collective, by the end of the year Bombora was sixteen strong and occupied a 2,000-sq. ft. open floorplan space in a Class A building, with spectacular southwestward views of the local mountains.
When Rob began his search for a new R&D tech team office he was faced with a dilemma. With proximity to the greater Bay Area being key due to their business segment and availability to resources, how could they find a beneficial strategic location as well as gain agility and operate more quickly in launching new products and services into the market? This was no easy task, and thus the search on the road west began. Boulder perhaps? What about Salt Lake City? After all, both lie on a major corridor in route to the Bay Area. Might Boise be an option? Perhaps. And what of the return on investment benefits relative to all up-cost modeling and the balancing act between the varying aspects of access to resources, cost of living, quality of life, and culture? Rob had some serious vetting to do.
What about the “Biggest Little City in the World” he was beginning to hear more about?
If Reno wasn’t advantageous to my family, and if I weren’t able to indulge my passion for the great outdoors, the conversation would have stopped there; but it didn’t” – Rob Armstrong
Northern Nevada, specifically Reno, is quickly becoming the place companies are looking to as a strategic location to increase their bottom line by taking advantage of a business-friendly environment for some of the their most crucial business functions. The question for Rob was, as an emerging startup community, would Reno’s expansionary ‘near shore’ opportunities be big enough to close the midcap gap for companies like his, in much larger markets, to build new and/or satellite operation centers? Rob is highly outspoken when he states that, “Reno is undergoing a renaissance of sorts, is highly underrated and largely misunderstood.” As others continue to follow, that perception has begun to, and will continue to change.
Expanding to Reno allowed Bombora to gain agility and launch new products more quickly.
Ask almost any business owner why Northern Nevada is prime for continued economic growth and almost unilaterally you’ll hear two key words; “business friendly.” But what does that mean exactly and is it easy to take advantage of?
With a population base approaching roughly 500,000, Washoe County (Northern Nevada’s most populous and influential county) encompasses a big attitude and a big ambition to be a vibrant hub for growth, entrepreneurship, and broader economic development. When speaking to the greater Reno-Sparks area itself, over 100 companies have relocated in the last three years and Reno itself is ranked as one of the 14 best startup cities in America.
As recently as August, 2016, an EDAWN (Economic Development Authority of Western Nevada) report stated that the region is on track to meet the projected 52,000-plus new jobs and 47,000-plus new residents by 2020. EDAWN continues to be successful in drawing new and retaining expanding companies in our region. Per EDAWN’s new and expanding company reports, in 2014, EDAWN brought in 21 new and 11 expanding companies to our area creating more than 4,200 jobs in five years. In 2015 alone, EDAWN relocated 28 new and five expanded companies with an additional 3,000 new jobs forecast within a five-year period.
Note: The full EPIC report can be found here.
Bill Anderson, chief economist for Nevada’s Department of Employment, Training and Rehabilitation, recently said that, “As of the second quarter of 2016, Nevada has the sixth fastest growing private sector in the nation with a growth rate of 3.2 percent.” Only Utah, Idaho, Florida, Oregon and Georgia realized stronger job growth than the Silver State during the first half of the year.
In a recent article for Northern Nevada Business Weekly, Nancy Fennell, president of Dickson Realty stated that, “Companies and individuals are moving to our area for many reasons, including our top 10 ranking for having the best business tax climate and business incentives in the country.” She went on to say, “When comparing California to Nevada state taxes across the board, it’s not surprising that most new job projections from 24 of the 49 companies EDAWN assisted in relocation over the past two years originated in California.”
Speaking specifically of business tax advantages, the comparative data points speak volumes. Rob noted that, “Our move to Reno didn’t primarily start as a tax related conversation, but as we conducted our due diligence on the topic, it became abundantly clear that the benefits went far deeper than we initially anticipated.” When looking at the high-level benefits and incentives, what follows serves as a Northern Nevada snap shot:
(*) Many Reno lessors will cover Triple Net for the lessee (monthly taxes, insurance, and maintenance expenses)
Additional tax benefits and state incentives:
- Sales & Use Tax Abatement on eligible machinery and equipment; reduces rate to 2%.
- Modified Business Tax (Payroll Tax) Abatement 50% for 4 years on new jobs.
- Sales Tax Deferral setting up interest free payment plan for taxes in the equal monthly payments over 60-month period (5 years).
Note: Stated additional tax benefits are state incentives offered to companies that meet at least 2 of 3 criteria and require approval from a state agency. (Source – Economic Development Authority of Western Nevada)
Beyond tax incentives, there are also substantial operating advantages that Northern Nevada offers. Located centrally among the 11 western states, greater Reno-Tahoe enjoys a strategic location as a hub for distribution materials throughout the Western United States. With direct access to 1-80 East-West and US 395 North-South, the region lies amid an extensive transportation network, enabling travel to a large percentage of the Western population within a one to two-day period. Greater Reno-Tahoe’s strategic location provides proximity to ten large metros and creates a significant cost and time savings for many companies.
Reno also offers connectivity related benefits. There are currently over 550 fiber lit buildings which offer over 1,400 miles of fiber by way of an easily integrated Ethernet-based service, and that’s just the beginning of what’s to come via access to the Switch Data Center. An expansion is currently underway for Switch’s “Superloop” coverage to a larger area within the Silver State and California for its clients. A recent Reno Gazette Journal article noted that, “Speeds between Reno and Las Vegas, for example, will be reduced to a zippy 7 milliseconds. Add the San Francisco and Los Angeles areas to the mix and the result is an expansive fiber optic network.” Switch’s Adam Kramer went on to say, “We’ll have 50 million people within 14 milliseconds of the world’s largest technology systems.”
Additionally, Switch worked with the University of Nevada, Reno on the “InNEVation Center” located downtown. In addition to helping design the site, Switch also donated half a million dollars for the center’s interior build out. The InNEVation Center features creative spaces to encourage collaborative work between students, faculty, businesses and entrepreneurs. Reno also offers a wealth of room for new and expanding companies with over 72 million square feet of industrial and commercial office space and much more to come by way of exciting large scale commercial projects on the horizon.
What of access to human capital and resources? With the University of Nevada’s flagship campus based in Reno (UNR), the city is training the next generation of high-tech workers. UNR alone has more than 21,000 students (including data science degrees), and there are other nearby upper education resources to tap into easily as well. “With plenty of qualified and talented individuals, Reno offers a diverse labor market and we’re getting three times more inbound job requests to join our tech team here than we did in New York, and that’s huge.” Rob continues, “Less wage competitiveness equates to less recurring costs to recruit (and/or relocate), train, and better retention rates.” Not to mention that Reno is ranked in the top 35 best cities for millennials to work based on a recent EDAWN study.
A “business friendly” environment isn’t where the benefits to the “Reno equation” ends either. There aren’t many places that can offer 300+ days of sunshine a year coupled with an average commute time of 22 minutes. Add to that affordable living, modest median housing costs, high quality of life, a thriving & continuously evolving culture, and it’s quite the compelling argument. Rob made the point that, “If Reno wasn’t advantageous to my family, and if I weren’t able to indulge my passion for the great outdoors, the conversation would have stopped there. Fortunately, I can have my cake and eat it too.” The Northern Nevada cost of living deltas speak volumes:
Note: Cost of Living is based on $100k salary in Reno – Thus NYC and San Francisco deltas show the
relative income needed to have an equivalent lifestyle.
Relative to cost of living all-up, Reno is 76.1% less expensive than New York City, and San Francisco is 79.9% more expensive than Reno. For Bombora, given that statistic, there really are no benefits to traveling further west than Reno.
As they say in real estate, location is everything, and adding to Reno’s attraction is its proximity to the great outdoors; having access to Lake Tahoe and skiing within 30 minutes of downtown for starters. Having a strong sense of community, four vibrant seasons, endless recreation opportunities, and a balanced life pace, Reno truly is a diamond in the rough and has been overlooked by too many for far too long. Wanting a weekend getaway, should 320+ days of sunshine not be enough, a quick jaunt over the hill brings you to Sacramento at 132 miles, Napa Valley in 192 miles, and finally San Francisco in 219 miles.
Should your chosen destination take you a bit further away, the Reno-Tahoe International Airport (RNO) has 9 Airline Partners with 96 daily flights (inbound and outbound) 17 of which are non-stop destinations. With significant access to global airline hubs, most major international markets can be reached with only one-stop. Rob explained, “Should I need to get back to NYC with short notice, I can jump on the Jet Blue red-eye and be at our offices by mid-morning the next day.”
As with any prospect of a relocation, there is an unspoken “vibe” or sense of community that a city offers both corporations. From Reno’s Midtown food and bar scene, to sports team expansion, to the nationally recognized Nevada Museum of Art, Reno’s cultural landscape is in continuous transformation and the future is only looking brighter. Throw in easy access to hiking & mountain biking trails, farmer’s markets, the Reno Balloon Races, July’s Artown, the yearly Rib Cookoff, Hot August Nights, and the list expands with each passing year. It’s abundantly clear that Reno is off to the races and isn’t looking back.
Beyond a weekend destination or the gateway to Tahoe, Reno is rapidly becoming is a place that more and more people are calling home. Nancy Fennel hit the mark when she said, “As we continue our work to attract companies and talent to our region, we need to remember what matters most to companies. It might first be the business climate and tax incentives, but they won’t move unless many of their talent will follow. A company makes the decision to move to our region because it’s the whole package.” Ultimately, it’s the lifestyle options which serve as the bow on the overall package and it’s this ‘new” Northern Nevada which will continue to attract the next generation of entrepreneurs, the next midcap Bombora, and the next Tesla.
Did Reno hit the mark for Bombora? “In a word, absolutely!” says Rob. “The results we’ve seen, and the soft benefits we were able to realize far exceeded our expectations. From a fiscal perspective over our NYC headquarters, we’re saving close to $40k a month in lease costs, and Reno landlords seem more willing to work with us by way of lease flexibility and build out costs. We’re paying employees roughly $15k less a year for entry level salaries, and $25k+ less for mid-level developers. Not to mention VCs and financiers clearly want to see the efficacy story, and we have the real-world data to prove it. We’re able to show both the flexibility and out of the box thinking which translates to the fact that the perceived risk was indisputably a solid business decision. I’ll take that win, win all day long.”
By choosing to locate their new offices in Reno, Bombora has created an opportunity to position themselves as entrepreneurial leaders in the Northern Nevada market. Coming from NYC they could easily fall victim to the “big fish in a small pond” syndrome, but they don’t see it like that. Rob summed things up nicely when he said, “Yes, the numbers make the case and tell the story but, beyond a fiscal discussion, Reno has become the home I was hoping to find. It met the criterion we had and I look forward to seeing momentum gains realized by others looking to do the same. What strikes me is that Reno isn’t trying to become the next Austin or the next Portland. Reno, in fact, is aiming to become the next Reno; Reno 2.0 if you will and that’s what excites me the most.”