RAPID CITY, S.D. (AP) - Nick Hutchinson and Ed Valdez brainstorm ideas for Hutchinson Car Audio in a 400-square-foot space above their workshop with plain walls save for two whiteboards filled with questions to answer and ideas to pursue.
The 2,500-square-foot facility hosts four machines to produce components and build prototypes for their competitive subwoofers.
“We started out of our garage in our place in Box Elder,” said Hutchinson, co-founder and owner of Hutchinson Audio. “We had one machine then and we kind of manually manufactured all the subwoofers.”
Hutchinson said he and co-founder Tom Vobreilt, who is no longer with the company, and Valdez used to manually manufacture their subwoofers. After three years or work, they will start manufacturing their subwoofers in China, beginning with their newest subwoofer The Origin.
Hutchinson Car Audio isn’t the only tech startup in the Rapid City area to see success, and Elevate CEO Tom Johnson announced in November that there could be more companies on the way, the Rapid City Journal reported.
He said Elevate hopes to announce the new arrivals in the coming months, and the companies add to the continuing growth the area has seen in the tech industry.
“What you’re seeing is a conjunction of several factors,” Johnson said. “The Black Hills has an amazing quality of life that attracts people. You think of mountain biking, hiking, rock climbing, fishing, world class outdoor recreation - that’s going to draw people here.”
He said that paired with other areas the city and region invests in - like arts and culture, the downtown area and green spaces - the Black Hills draws in companies and workers.
“You know you’ve arrived when you see a ton of coffee shops, a ton of beer pubs, a ton of people biking downtown and sometimes a lot of dogs,” Johnson said.
He said the combination of what the region has along with the state’s tax benefits for starting new businesses creates a robust community that attracts businesses and the 22- to 35-year-old demographic that’s been missing.
DakotaShine Consulting president Todd Gagne, who also mentors School of Mines students and startup companies, said he’s an example of just that. Gagne moved to South Dakota in the early ’90s for work and then attended the School of Mines part-time.
He said once he and his wife finished school, there weren’t any jobs for them in the area.
“I think we both wanted to stay in the region, but we kind of had to go,” he said. “I think this is a story of most School of Mines grads, there’s no place to go and what we’re trying to do is find an opportunity to create good jobs and career paths.”
Gagne said they moved to Seattle after they graduated. In 2004, they moved back to the Black Hills to raise their family.
He said he thinks if the region is able to retain the late 20- to early 30-year-olds, it could bring a vibrancy to the area as well as bring in a professional environment to the community.
“Those are people with more disposable income,” he said. “Basically we start to round out areas that maybe we don’t have as strong an offering for those kinds of urban professionals that want to grow and build a family here.”
Bill Trevillyan, CEO of HomeMetrics and product manager for Property Meld, said he came to the School of Mines because it was a cheap option for school, but stayed because he was able to get experience working while at Property Meld.
Trevillyan also said it allows him to learn about the needs of a company.
“If it wasn’t for Property Meld, I’d be in California,” he said. “It also would probably mean the company I currently have wouldn’t have the team that it has.”
HomeMetrics sells home health monitoring technology that allows property owners to keep an eye on their homes while they’re away. Trevillyan said his team is filled with students currently enrolled at the School of Mines.
“When you hire people on your team, you’re not hiring them based on their technical abilities or being able to create and invent technology,” Trevillyan said. “You’re hiring them on their ability to learn, you’re hiring on their mindset, do they have a growth mindset or a fixed mindset.”
Joseph Wright, associate vice president for Research-Economic Development at the School of Mines, said he’s seen an increase in the number of start-ups in the area, particularly from School of Mines students, over the last 20 to 30 years.
“It’s starting to be a critical mass of start-up companies that really give students an opportunity to find a job,” Wright said. “When it was one or two, it was more the luck of the draw. If a student wanted to stay and was hungry enough, they could find a spot in one of these tech companies.”
He said the quality of life contributes to retention and bringing companies, especially those in the tech sector, to the area, but it also has to do with the people he calls boomerangs, or the people who leave and then come back to the area and support companies.
Netflix engineer Michael Paulson recently moved to Rapid City with his wife because of family in the area and the quality of life. He also said the standard of living is also much less expensive than in Silicon Valley, the Bay Area and San Jose, California.
Paulson said it’s a goal of his in the next six months to set up a sort of mentorship program with students at the School of Mines.
Wright said there are a number of investors and mentors in the area willing to help see these businesses grow. The School of Mines also offers the CEO Business Plan Competition, which helps students turn their ideas into a business and could result in $3,000 for the overall winner.
“The kids attracted to the School of Mines have some kind of incredible innovative bent to them,” he said.
Wright also said School of Mines students have won the Governors Giant Vision competition six years running. Students submit a written business plan outlining their idea for the contest and have the chance to win $5,000.
Hutchinson said his company competed in some of the business competitions at the School of Mines and was later able to find funding through the Black Hills Angel Fund and other sources that helped them purchase machines and start payroll.
Wright said students staying in the region is becoming a viable option because of the number of startups and the number of tech companies coming to Rapid City.
Johnson said the kind of tech companies he wants to see come to the region are those that can employ graduates not only from School of Mines but those at Black Hills State University, Western Dakota Tech and others.
“Hopefully we continue to see those graduates want to come back but also people that want to put them to work once they’re out of school,” he said.
Please read our comment policy before commenting.