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Bolstered by sports and tech, Portland start-ups thrive

VC funding in Portland is at a five-year high, but more mature entrepreneurs are also flocking to the city.

In the Portland, Oregon, backyard of athletic powerhouses Nike, Adidas and Columbia Sportswear, 27-year-old Lynn Le was inspired to launch a sportswear business of her own.

Le, a former kickboxing instructor and a brown belt in Krav Maga, the self-defense style used by the Israeli Defense Forces and U.S. law enforcement, came up with her big idea when she noticed a problem among her fellow female fighters.

"I was hearing frustrations or complaints from students and peers about finding gear that actually fit," Le recalled. "I was wearing men's stuff, and all the women's stuff on the market is pink crap. I was seeing students get injured wearing gear that wasn't right for them and thought, Would you wear shoes that didn't fit you if you were training for a marathon?"

So Le decided to do something about it. In 2015 she launched Society Nine. The start-up sells boxing gloves specially designed to fit female fighters, along with clothing and accessories that mark a stark departure from the neon, shiny spandex found on the market for women athletes.

Lynn Le launched her start-up Society Nine in 2015 to cater specifically to female fighters.
Source: Tom Bender
Lynn Le launched her start-up Society Nine in 2015 to cater specifically to female fighters.

Le drew on local resources to get off the ground, including the Portland Seed Fund, where she was formerly an associate, to raise capital. Society Nine was also one of the winners of the 2014 Startup PDX Challenge, run by the Portland Development Commission, an economic development arm for the city. As part of her winnings, she received a $15,000 grant and in-kind services, along with co-working space alongside fellow winners. So far, Society Nine has sold nearly $500,000 of product online and in local stores and has raised just under half a million dollars.

"We believe in the sport heritage and culture of this city — sport innovation thrives here with Nike, Adidas and a new Under Armour research-and-development hub opening here soon," Le said of why she was drawn to launch in Portland.

Le also cites quality of life and cost of living for her start-up as reasons to stay. "I firmly believe we have been able to accomplish a lot more as a result of having a lower cost of living and lower cost of square feet."

Those factors are drawing other new companies to settle down in Portland as well. In 2015, venture capital funding hit $283.4 million, the highest level seen in five years, according to Dow Jones Venture Source, proving investors won't shy away from an idea outside of major start-up hubs on both coasts.

But it's not just start-ups calling the Rose City home. Established businesses beyond Nike and Adidas have laid down roots in and around Portland, including Intel and Airbnb. Data from the Kauffman Foundation's metro area rankings for 2015 placed Portland and its surrounding metro area at No. 5 for established small businesses, with 1,113 small companies for every 100,000 residents in the city.

Google has said it may bring Google Fiber services to Portland in the future. The superfast internet has spearheaded entrepreneurship in other locations around the country, with innovators flocking to make use of the connection. Beyond tech and athletics, Portland has also become a hotbed for food and retail establishments, helping to bring new residents into town.

"For a long time, we have been a place that attracts a lot of 22- to 34-year-olds," said Sandra McDonough, president and CEO of the Portland Business Alliance, greater Portland's Chamber of Commerce. "What we've seen in the past five years is that we are getting more tech entrepreneurs and people moving from California because the cost of living, relatively speaking, is much lower here. Early pioneers are calling friends and saying, 'This is where you want to be.'"

"We are getting more tech entrepreneurs and people moving from California because the cost of living, relatively speaking, is much lower here. Early pioneers are calling friends and saying, 'This is where you want to be.'" -Sandra McDonough, president and CEO of the Portland Business Alliance

One early pioneer, blending two of Portland's banner industries— sports and technology — is APDM Wearable Technologies. The acronym stands for Ambulatory Parkinson's Disease Monitoring. The company was launched in 2007 by Dr. James McNames, who was searching for a wearable movement sensor capable of logging high-bandwidth data for people who suffer from Parkinson's disease. Today that technology has expanded into gait and balance analysis and into the world of high-performance sports. APDM even worked with the U.S. men's gymnastics and diving teams ahead of the 2016 Olympics in Rio.

"We like to say we were in wearables before it was cool," said general manager Matthew Johnson. "We differ from others on the market, like FitBit, in that we focus on the quality of movement. Coaches can treat athletes with interventions on how to improve their behavior" using APDM's technology, he said.

APDM came through the Portland University Business Accelerator, recognized as a Top 25 university-related incubator in the world by UBI Global. Companies have raised more than $150 million and generated $97 million in revenue, creating more than 200 jobs in the past 12 years. APDM has relied on grants from the National Institutes of Health and Department of Defense, as well as self-funding to get off the ground. Today it is entirely self-supported by its revenue stream.

"The combination of talented employees and culture in Portland fits the wearable industry more precisely than Silicon Valley," Johnson said. "If our focus was raising capital, we would immediately be in San Francisco. But since that is not our need, we focus on developing our employees and making the best product in the world."