Beyond the Bay: New Mexico Tech Rising
How opportunity, deep science, art, and diversity are making Albuquerque and Santa Fe promising tech hubs of the future
In the land of enchantment, opportunity abounds.
From 365 days of sunshine to low living costs and an environment that’s friendly to cultural diversity, New Mexico really does seem to live up to its nickname. That ostensibly easygoing lifestyle, along with the state’s rich network of deep science and academia, has helped to generate a strong entrepreneurial ecosystem ensuring its promise as a hotbed of opportunity for startups and investors for years to come.
“I like New Mexico because it has this greenfield reality to it. There’s not a lot of pre-definition here … [and] there’s a lot of potential.” — Travis Kellerman, Albuquerque futurist and Coronado Ventures Forum Chair
With a median rent hovering between $3,000 and $4,000 a month in San Francisco, the cost of living is record-setting in the Bay Area. And if the cost of living is that high, you can bet the cost of doing business isn’t cheap either. That makes the Bay Area particularly challenging for bootstrapped or lightly funded startups. It’s no surprise, then, that entrepreneurs building sustainable companies are increasingly setting up shop in places like Albuquerque or Santa Fe.
“[New Mexico] is attracting very young entrepreneurs and very young investors, because it’s much less expensive. That’s where New Mexico has a very significant advantage.” — Francine Sommer, founder of Oculus Media & mentor at Santa Fe-based Creative Startups
“The lifestyle offers a very attractive environment — very attractive for companies because of lower prices — and where you are is very important,” Sommer added.
However, “location,” according to Sommer, “is replaced by people.” That is, location is only important insofar as it facilitates the right entrepreneurial environment for the right entrepreneurs, transforming that environment into a self-sustaining ecosystem.
“The people who live here are walking on a goldmine and don’t even realize it.” — Charles Ashley III, president/founder of Albuquerque-based educational coding bootcamp, Cultivate Coders
Ashley is one of the many young entrepreneurs who have tapped into New Mexico’s growing tech network.
One of the perks of Cultivate Coders in particular is that Ashley isn’t limited to just one locale. He offers the same coding bootcamps in rural America that he does in inner-city neighborhoods. However, the same is increasingly true of the tech industry at large, which makes minimizing the overhead costs associated with bigger markets that much more realistic.
“Tech is such a worldwide industry, you can charge the same rate [in New Mexico] for a client that you would in the Bay Area, but the rates of rent or mortgage or cost of living are so much lower,” Ashley said.
As a result, Ashley “can have an office building, pay great salaries, and charge under market value” for his services. Not only does that give him a competitive edge, but it also allows him to bring computer science education “free of charge to students — plus, every student gets a laptop,” he said.
That exciting potential for a higher standard of living and the continued influx of young, bright minds make New Mexico very attractive for investors, but it’s been a decades-long process to reach a tipping point where a sustainable ecosystem seems possible.
New Mexico tech didn’t happen overnight.
New Mexico’s tech ecosystem has been under construction for the last two decades as part of a concerted effort involving local business owners and outside investors, state programs, and companies with deep roots in the fertile history of the state.
According to Sommer, who came to New Mexico with Village Ventures in 2004, “At that point, venture capital and entrepreneurship [in New Mexico] was at a very early stage. There were only a handful of venture capital funds and equally a small number of fundable early stage companies.”
“Over the last five years, the infrastructure supporting entrepreneurship has improved and evolved in significant ways in terms of funding, actual capital, and angel networks,” Sommer added, distilling New Mexico’s tech market as follows …
1) Angel Investors: “One of the interesting aspects of New Mexico is you have two types of angels. You have locals who have been successful building their own businesses and have a lot of experience and are familiar with real estate but are beginning to transition to tech investments. Then, you have people who come to New Mexico who have had very successful careers, and they add another dimension to that angel tapestry. Those two groups in the last three years have gotten more engaged than ever before.”
2) New Mexico Catalyst Fund: “Using state monies and federal monies to fund very early stage catalyst funds, you get a catalyst capital and you have to match that two to one…. It’s been good, because it’s hard to get early stage seed money.”
3) Spinoffs: “You have a number of successful early stage companies that have very good visibility; you have some companies that are spinoffs from the labs, cyber-securities spun out from New Mexico Tech and Sandia and Descartes from Los Alamos…. [In Santa Fe], Meow Wolf [who we featured in our Creative Tech Roundup: SXSW Edition] is reinventing what entertainment is today. All three have received very significant funding from significant investors in and out of state. The next thing you’ll start seeing is spinoffs from those companies as they get larger.”
That development certainly comports with Kellerman’s futuristic impulses, which involve “looking outside of the initial industry signals [and] looking at other things that affect humans and human tech,” according to him.
“There’s a lot of signals and indicators that capital can be used efficiently and successfully here,” Kellerman said.
Whether that’s true is largely up to how the network continues to develop, but New Mexico tech has a fascinating history of deep science and art working in its favor.
Los Alamos County has the most millionaires and PhDs per capita in the country.
While not Albuquerque or Santa Fe per se, Los Alamos lies just north of both cities and has served as a sort of funnel for deep science, research, and an unparalleled academic network—not to mention capital.
That’s why, according to Kellerman, “Deeper science plays can definitely exist here.”
It’s only natural that 50+ years of the highest caliber of underground governmental research would find its way to the topsoil and eventually trickle down to Albuquerque and Santa Fe to nourish the seeds of the tech markets there.
Sommer agrees with Kellerman’s emphasis on deep science and big data — in fact, they both have close ties with Descartes Labs — but she also sees a future in creativity for New Mexico’s tech industry, and that’s a future that’s bound up in New Mexico’s artistic past.
Taos: small art colony to global arts destination.
Like Los Alamos, Taos lies just north of Albuquerque and Santa Fe and it’s served—both figuratively and practically—as a creative filter for those bigger cities.
In the early 20th century, Taos attracted patrons and artists like Mabel Dodge Luhan, Helmuth Naumer, Ernest L. Blumenschein, Bert Geer Phillips, and Joseph Henry Sharp, who formed the Taos Society of Artists. Throughout the 1900s, more prominent artists like Andrew Dasburg, Georgia O’Keeffe, D.H. Lawrence, Nicolai Fechin, and Ansel Adams would call Taos and its surrounding areas home—or creative retreats, at the very least.
Dasburg would go on to mentor a group of artists in the ‘40s called the Taos Moderns, who were mesmerized by both New Mexico’s landscape and also its cultural heritage. For them, it offered endless fodder and inspiration for artistic experimentation.
Today, Meow Wolf is carrying on that legacy into the 21st century. The collaborative arts installation company is charting new territory by putting a heavy emphasis on VR/AR and immersive artistic experiences.
According to Sommer, “Meow Wolf is a purely creative business that represents big, big ideas.”
“Meow Wolf is reinventing what entertainment is today,” she added.
The company, which had a significant presence at SXSW this year, is a Creative Startups alumnus. Not only has Sommer been instrumental for Descartes’ ability to procure investments, but she also just joined the board of Creative Startups, indicating the existence of a foundation for New Mexico tech to continue to build a meaningful and interconnected infrastructure.
“This is going to be a national expansion.… We just have to make it more of a snowball effect,” Sommer said.
Continuing on the road to community and commercialization.
As with any young market, there are still challenges ahead of New Mexico as it emerges out of its nascent stage of “tech-onomic” development and starts refining its identity.
“There’s a lot of old industry and manufacturing struggling to convert into something future-oriented,” Kellerman admitted.
As such, there are “a lot of gaps in general economic development” and “there are talent gaps,” he added.
But the state is “not far behind most places in terms of bandwidth” and “you can build things here,” according to Kellerman.
“There’s beginning to be a community where entrepreneurs know one another; it’s not fully developed now, but it’s beginning to happen. Venture capitalists are broadening their visions of where they want to invest,” Sommer said.
According to Sommer, the real question for New Mexico’s big data and deep science companies (Descartes, Sandia, etc.) is: “How do they apply within a startup environment as opposed to expanding the tech capability of a large corporation?”
“New Mexico is going through that shift: commercializing that deep science out of these research laboratories like Los Alamos,” Kellerman said.
It remains to be seen how New Mexican economic development will transition and adapt in a way that fits the needs of an increasingly diversified and ever-evolving tech landscape. But as a startup culture emerges centered around the commercial applications of deep science and creativity, New Mexico’s tech ecosystem is at least rooted in a nutrient-rich history that has sprouted an impressive network of entrepreneurs, academics, and creative thinkers.
Using cultural heritage for guidance.
But there’s another piece to this puzzle, and it involves what New Mexico is learning from the missed opportunities of bigger markets—especially when it comes to diversity and inclusion.
“The beauty of New Mexico is that we are diverse—from Native American to Spanish to Mexican—there’s all of that influence in this state. You’re starting to see a younger generation of more diverse backgrounds in a state that does embrace cultural diversity and has gotten better at inclusivity.
“In a place like Silicon Valley, I don’t think it [exclusion] was on purpose. What I feel was happening in our education system is we weren’t exposing kids of all backgrounds to the joys of a STEM background. In New Mexico, since we’re a minority majority state, it lends itself to a diverse and rich culture when it comes to tech,” Ashley said.
Cultural diversity could be the real goldmine for Albuquerque and Santa Fe, and New Mexico tech can learn as much from the missed opportunities of Silicon Valley as it can from Coronado Ventures Forum’s pioneering namesake, who failed to strike gold in 1540.
“Everyone learns from the pioneers — all of the mistakes being made in Silicon Valley are lessons everyone is going to learn from to hopefully create solutions,” Ashley said.