Jul 25, 2013 · 5 minutes

Vivint's HQ

Last year was a pretty decent time to be a tech business in Provo’s Riverwoods Business Park.

May 15: Qualtrics, an online surveys company that has been profitable since 2002, raises $70 million in a growth round from Accel Partners and Sequioa Capital. While $100 million was on the table, the founders decide they need only $70 million. The company’s valuation is said to be north of $1 billion.

September 18: Home automation company Vivint is acquired by Blackstone for $2 billion.

October 22: Genealogy giant Ancestry.com gets picked up by European private equity firm Permira Advisors for $1.6 billion.

The three companies, all Utah born and bred, are literally right next door to each other. To walk from one end of Qualtrics to the far end of Ancestry, taking in Vivint on the way, would take no more than 10 minutes. And those are some pretty big office buildings – each holds hundreds of employees.

“We have a well that we dug here and the three companies drink the same water,” says Alex Dunn, president of Vivint, when asked why three tech powerhouses would happen to congregate in one office park on the outskirts of a city of 115,000 people in the mountains of Utah. “We’re selling monthly subscriptions to the water.”

Dunn is joking, but if you were looking for a common element to the three companies, you’d just need to drive 3.5 miles down the road, to Brigham Young University. The college, which is owned by the Church of Jesus Christ of Latter-day Saints, is well-known for its business school and for its stringent entry critieria. You can’t expect to get in with a GPA lower than 3.9 – but you also have to agree to abstain from extramarital sex and the consumption of drugs and alcohol. Consequently, it has ranked “most stone-cold sober” school for 15 years in a row.

What it lacks on the “Seriously, what is college all about?” front, though, BYU seems to be making up on the “Holy shit, is this what happens if we don’t drink?” front.

Ancestry, which started life in 1983 as a company that distributed Mormon publications, first in print and then on floppy disks, was founded by Paul B. Allen (no, not the Microsoft guy) and Dan Taggart, who were both BYU graduates.

Vivint was founded by Todd Pedersen, who dropped out of BYU to found the company, which started off as a door-to-door pest-control sales company bankrolled by his mother to the tune of $5,000.

And Qualtrics went for the BYU double-play. The founding team is made up of BYU professor Scott Smith and his two sons, Ryan and Jared. While Jared went to the London School of Economics, Ryan is a BYU alum. Well, actually he dropped out just two credits shy of an undergraduate degree in business – but his company, now numbering about 350 people and having just opened a Europe office in Dublin, Ireland, did over $50 million in revenue last year, so he might not care so much about the lack of letters after his name.

BYU is also an enormous talent feeder for the companies, all of which rely heavily on sales, which the Mormons, thanks to their missionary work, are expert at. (More on that in a later article.) Drive the same distance in the other direction from the gilded office park, meanwhile, and you’ll find Utah Valley University, another important workforce factory.

Unlike tech companies in Silicon Valley, these outfits aren’t the result of venture-heavy, business algorithms. They all grew organically and were bootstrapped with an early focus on profitability. There aren’t a lot of options for venture capital in the region – and there especially weren’t when these guys got started – so that obsession with early dollars was kind of a must. Hence the aggressive pivoting.

Before it settled on online genealogy, Ancestry was a disk and CD distributor and publisher.

Before it eventually moved into home automation – which in Silicon Valley is called the “Internet of things” – Vivint did pest-control sales, then burglar alarms, then more comprehensive security systems, and now home automation, energy management, and solar-as-a-service (the company does the installations, the customer just pays for the power).

Only Qualtrics, which started off delivering its enterprise-grade survey tools to universities, has stayed the course with the one business model, although it has a new product that focuses on solutions for human resources and has expanded beyond schools to reach big businesses.

Just as important as starting, however, has been staying. None of the three companies has felt the need to move beyond Provo because they get everything they want right here. First, there are the universities, which keep the talent pipes running hot. Then, there’s the lifestyle that the area offers. Within 10 miles of Provo, you can be water skiing, snow skiing, mountain biking, hiking, fly-fishing, or rock climbing, so many people are happy to live here. The workers, too, don’t tend to jump around too much. Because the area is predominantly Mormon, people like to stay near their families and live stable lives. That might mean that they leave the office relatively early in the evenings, but they are also faithful workers and not constantly being lured away by competing tech companies, as you often get in Silicon Valley.

“If we were in the Valley, we would be in the middle of a talent war for engineers,” says Jared Smith, co-founder of Qualtrics. “We are not here.”

There is also, of course, the cost of living and doing business, which is just not comparable to Silicon Valley. Qualtrics, for instance, pays $18 per square foot for its Google-like three-storey building, which the company has decked out with a basketball arcade game, a band stage, over-stuffed couches, massage chairs, and expansive open-plan kitchens. Vivint’s multi-building complex looks like a giant Apple store and has its own indoor basketball court.

In his book “The New Geography of Jobs,” Enrico Moretti, an economist at the University of California, Berkeley, has written about the importance of “clusters” in driving innovation and fostering tech ecosystems. There appears to be something of a micro-cluster effect going on in the Riverwoords Business Park. Part of the reason is that one of Provo’s seminal tech companies, the Josh James-founded analytics company Omniture, also used to be based here, before it was acquired by Adobe for $1.8 billion in 2009. There have been spin-off effects from that company and acquisition, with talent and entrepreneurs splintering off from the company and feeding back into the fledgling startup ecosystem. Now Qualtrics, Vivint, and Ancestry are doing their part to nurture that system.

But why did all three end up not only in Provo, but in this specific office park?

Well, the answer to that is a tad disappointing. Downtown Provo doesn’t have a lot of space to accommodate thousands of tech workers, so the heavyweights have to look beyond the main drag. Vivint’s Dunn sums it up in true Provo-pragmatic fashion: “There’s not tons of business parks here.”