Notes from a Sandpoint startup: The opportunity in disruption

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“In the midst of chaos, there is also opportunity,” is an oft-referenced quote attributed to Sun Tzu, the 6th century Chinese military strategist and philosopher. “Disruption,” one of today’s favorite business buzzwords, is a force that inevitably creates some chaos and almost always creates opportunity.

This term, disruption, has come up a lot in our conversations at Kochava lately, as our founder and CEO, Charles Manning, was nominated in September by Mobile Marketing Magazine for their “Disruptor of the Decade” award for our industry. In addition, The Idaho Technology Council selected Kochava as one of the top three companies “achieving disruptive prosperity” in northern Idaho in their 2019 ITC Knowledge Report. Let’s look at why innovation has been a hallmark of our company’s operational history and why disrupting the status quo can have such a positive result.

Almost too good to be true

We collectively, as a team, are smitten with our headquarters hometown of Sandpoint, and this particular honor from our state means a lot to the company for a few reasons: 1) We chose to build our company here with great intention, 2) We strive to effect positive change in our community while achieving success as a company, and 3) It’s exciting to see the results of the experiment.

In 2005, Charles and I purposely targeted a move to a small town in the mountains, after spending nearly a decade living and working in big cities like San Francisco and Washington, DC. We selected Sandpoint from the list of carefully reviewed towns in the book Life 2.0 by Forbes editor Rich Karlgaard. The combination of an enormous alpine lake and a boutique ski resort quickly put Sandpoint at the top of the list.

Charles had already started and run several technology companies and knew that another one was impending. He really believed that it was possible to avoid the challenges of operating in the Bay Area by building a company away from that mecca of technology, traffic, expensive real estate and competition for resources. His sheer determination is possibly the single greatest reason the company survived its first few years. Many were the ethnocentric Bay Area pundits who told him, in person, in their conference rooms overlooking the city, that what he was trying to do could not, would not, succeed unless he moved into their neighborhood. Little did they know how much this would steel his resolve!

Building a company in Sandpoint kept it out of the competitive spotlight, a factor that had both benefits and drawbacks. Traveling from Sandpoint isn’t easy, and there isn’t a large pool of tech talent to draw from; recruiting takes a lot more effort. But offering tech jobs in Sandpoint certainly is a disruptor to the local economy. The addition of STEM-based careers and training in a rural area like ours is an enormous benefit to local area young people and students who are interested in tech careers. And it offers ideal relocation opportunities to a certain type of person looking to exit a major metro area. Turns out, it’s the type of person with a pioneering spirit and a dream of a better life, and that combination of optimism, gratitude, hope and thirst for adventure creates a pretty incredible team. Just the kind of team that revels in building cutting-edge solutions and isn’t afraid of hard work. Our turnover is low, and our team is one of our greatest assets, but acquiring those team members has been a long and arduous process indeed.

Change happens slowly, and despite many years of Bay Area tech workers complaining about the lack of affordable housing and the endless hours of their lives spent commuting, only in the past year have we seen a significant shift in the attitude and urgency of job applicants for positions at our headquarters in Sandpoint, Idaho.

We’re not alone: In the spring of 2018, one company put up a billboard along the commute route of highway 101 with this message: “Own a home. Work in tech. Move to Pittsburgh.” A recruiter with that company received 50 calls in the first week the billboard went up. Similarly, when we ask our job applicants if they understand how small Sandpoint is and how far it is from a major metro area (we don’t want anyone moving here without eyes wide open), in the past year the response unanimously shifted to the affirmative. Not only do they know, they are seeking such a situation. We’ve hit a tipping point where the lifestyle and cost-arbitrage opportunities we offer outweigh the status quo of living in the Bay Area if you want to work in tech, and our recruiting capabilities are powerfully impacted.

A disruptive model, ripe with opportunity

Running a tech company in the beautiful resort town of Sandpoint, Idaho, means less expensive (and more interesting) real estate for office space, truly outstanding lifestyle opportunities for our employees, more freedom and less cost in running projects and hosting events for employees and customers, and the chance to work hard in a less distracting environment.

All of those benefits that we enjoy as a company also trickle over to the local economy. For example, in February of 2019, one of our events boosted the local economy by $250,000, impacting hotels, restaurants, caterers, event space, Schweitzer Mountain Resort, food and beverage suppliers, event rentals, gas stations, and much more. Our headquarters is in the heart of downtown, which gives local shops and restaurants a bigger market at lunchtime (and happy hour). Kochava has 110 employees in Sandpoint (we’re the second largest employer there, right behind Litehouse Foods) with another 40 in regional sales, marketing and customer success offices worldwide. They rent apartments, buy homes, patronize stores and restaurants, support and protect local recreation resources, spend money on schools and daycares for their children, workout centers and health care, and contribute in countless ways to causes they care about.

In addition to the disruptive prosperity this brings to a small resort town, our drive to innovate and compete keeps us aggressively serving our global customers and striving for growth. To the extent we are successful, our impact will naturally increase.

As a self-funded startup, Kochava doesn’t have corporate backing or institutional investment to keep it afloat; we are reliant only on our customers when it comes to keeping the lights on. For this reason, our dedication to customer-driven innovation is imperative to remaining competitive on the global market. When things are going well, we are able to help fund causes that we believe will make Sandpoint better for everyone. We invest in education, social services, and enhancing our natural resources and access to recreation. We have been significant supporters of an accredited school of performing arts, an education alliance that funds teacher grants outside of state funding, our local soccer club, our annual music festival, and an organization that provides a safehouse for at-risk children. Our employees champion their own favorite causes and enthusiastically invest their time and resources into making this community they love a better place for their families and everyone. It’s a truly rewarding experience, and not something easily felt in a big city where these efforts feel like a ‘drop in the bucket.’

When Charles started Kochava, amidst all the declarations that it couldn’t be done, there was always the risk that it would prove impossible in the end. Our relocation to Sandpoint was in 2005, about a decade ahead of when defecting to smaller towns began to take hold as a real thing that people do. Today, the Inland Northwest is one of the fastest-growing regions in the country, and our area enjoys an estimated 84% lower cost-of-living rates than the Bay Area (depending on who’s statistics you read). We have passed the “will it work?” time frame, and secured our position among global, funded competitors in the adtech industry. It’s exceedingly gratifying to see all the hard work produce great things, including a fabulous quality of life in a beautiful small town in Northern Idaho. Sandpoint turned out to be an excellent choice after all, and while we continue to open and expand offices in Dublin, Tokyo, Seoul and other strategic international locations to fuel our growth, those of us who work in the Kochava headquarters office consider ourselves very lucky indeed.

Kimberly Manning is senior director of brand at Kochava.