Jul 31, 2013 · 16 minutes

On a sunny summer's day in Provo’s North Park, hundreds of children are out with their parents, lining up for pretzels, lining up for face painting, and lining up to pet sheep. On a stage set up in front of a children’s playground, a folk band entertains a crowd of smiling people in shorts and T-shirts. At the park’s north end, men and women dressed in period costume sit on wooden chairs and embroider cloths by hand, spool yards of wool on a knitting wheel, or guide visitors around a pioneer village.

It’s July 24, Pioneer Day, a state holiday in Utah. It marks the 166th anniversary of the arrival of Brigham Young and the first group of Mormon settlers in Salt Lake Valley. Pushed out of Illinois and Missouri by suspicious locals, the group of 1,600 pioneers established a new colony in an inhospitable region of mountainous scrublands. To survive, the pioneers had to show resourcefulness and determination that would withstand the elements – the dry, dusty summers, and the frigid winters, when lakes turn into ice cubes.

Pioneer Day celebrates that resilient spirit. Today, there have been parades. Tonight, there will be fireworks.

Reporting from Provo this week, I have spent a great deal of time trying to figure out why Mormons are so exceptionally entrepreneurial. It's a phenomenon that can be traced back to those pioneers. "Everyone here can feel it,” Provo Mayor John Curtis had told me the day before Pioneer Day, speaking of the area’s entrepreneurial streak. “It’s hard sometimes to articulate it.”

The results of that "feeling" are becoming apparent. During my trip, I have reported on three billion-dollar tech companies sitting side-by-side in a Provo office park, almost unnoticed by the rest of the world. Those companies – Qualtrics, Vivint, and Ancestry.com, which all have strong ties to the Church of Jesus Christ of Latter-day Saints – grew partly in response to the success of previous generations of local tech companies, including Novell and Omniture, which were also founded by Mormons.

Today, the Utah Valley in which Provo is situated is home to ambitious startups such as business intelligence firm Domo, founded by Omniture’s Josh James and backed by $123 million in funding, and digital interviewing company HireVue, backed by $25 million of venture money. WordPerfect, which later sold to Novell, also originated in the area, and other tech companies such as Property Solutions and DrivingSales grew here organically. The Utah Valley is home to about half a million residents, most of whom are Mormon.

Then there’s the business rankings. Utah is the No. 1 state in the country for economic competitiveness, according to the American Legislative Exchange Council; the best state in the country for business, according to Forbes; and in its report on “Enterprising States,” the US Chamber of Commerce ranked Utah No. 4 for entrepreneurship and innovation, third in exports and international trade, sixth for business climate, eighth for talent pipeline, and fourth for infrastructure. It was the only state to finish in the top 10 for every category.

While not all of Utah’s business success should be attributed to Mormonism -- low tax rates, a business-friendly government, and the affordable cost of living all play important roles -- everyone I interviewed over the course of four days in Provo and Salt Lake City said the pioneer spirit and the Mormon culture’s emphasis on self-reliance are key forces that distinguish the state when it comes to entrepreneurialism.

Mayor Curtis summed it up succinctly: “Our pioneer heritage is a big deal.” People in Utah compete to one-up each other with stories of how impressive their ancestors were.

The Mormon religion, however, stresses more than just self-reliance. Its emphasis on hard work, staying focused, and giving back to the Church also stirs entrepreneurial inclinations. The almost-mandatory missions carried out by its young men and women before they start their careers forge an ability to withstand rejection and disappointment while also fostering communication skills that help not only with sales jobs but also in starting companies. All the while, an unrelenting focus on the family means that Mormons are incentivized to “follow the rules” and earn money to feed many mouths, while maintaining a healthy work-life balance.

And so the US is riven with examples of what appears to be a disproportionately high number of business and entrepreneurial success stories to emerge from the Church of Jesus Christ of Latter-day Saints, whose members account for just 1.7 percent of the US population.

There’s not only Josh James, who sold Omniture to Adobe in 2009 for $1.8 billion, or Todd Pedersen, founder of home automation company Vivint, last year acquired by Blackstone for $2 billion, but there’s also JetBlue founder David Neeleman, one-time Presidential hopeful and Bain Capital co-founder Mitt Romney, and Clayton Christensen, author of “The Innovator’s Dilemma,” heralded by the Economist as one of the most important business books ever written, and a kind of bible to startups.

In the Mormon culture, there is also no shame in getting rich, which provides people with the ability to help others. The Church itself is extraordinarily wealthy. It is the beneficiary of tithings that amount to 10 percent of all its members’ income. As a religious organization, it is also exempt from taxes on real estate and donated funds and holdings. Two years ago, it built a $2 billion shopping mall in downtown Salt Lake City, just across the street from Temple Square, the Church’s spiritual center. While it keeps its books closed, recent estimates by Reuters and University of Tampa sociologist Ryan Cragun put the Church’s annual tithings at about $8 billion and its total worth somewhere in the order of $40 billion.

The riches, the drive, the emphasis on self-reliance, the entrepreneurial spirit: It might well be said that, fitting for the country from which it sprung, Mormonism is the world’s most capitalist religion.

An American religion inspired by the American Dream.

On a mission

Temple Square, Mormonism's spiritual headquarters. Temple Square, Mormonism's spiritual headquarters.

Around lunchtime at the Mission Training Center, a block of imposing low-rises near Brigham Young University, young men dressed in crisp white shirts and ties walk purposefully back to the 35-acre campus where they’re learning how to spread the word of God. A boot camp for missionaries, Provo’s MTC hosts 3,500 teenagers and young adults for training programs that last anywhere between two and nine weeks. Upon graduation, they’ll be sent to countries and cities across the globe on two-year assignments (or, for women, 18-month assignments) to convert as many people as possible to the Mormon faith.

In the interests of better understanding the Mormon missionaries, I tried to get into the MTC to observe proceedings. My requests to the Church were politely declined. The Church grants media access to the MTC only rarely, because it tries to minimize disruptions to the missionaries’ training. “Their sole purpose is to prepare to serve and to teach others about Jesus Christ,” a Church spokesman told me.

The Church is serious about keeping that focus. Most young Mormon men -- from 18 and up -- choose to serve  on a mission, as do many young women, who can start from the age of 19. It’s not compulsory, and most people actively want to go, but it is a deeply-ingrained rite of passage for Mormons.

As soon as they enter the MTC, the young Mormons are in mission mode, which lasts until they return home two years later. During that time, they wake up at 6:30 am every day and dedicate themselves to their training or their work until 10:30 pm each night. They’re allowed to call their families only twice a year -- once on Mother’s Day, once at Christmas. While on their missions, they’re expected to make 140 "contacts” a week, meaning they have to approach people on the street, on the train, at home -- wherever -- to open up a dialogue about Jesus Christ. As you might imagine, they experience a lot of rejections, and sometimes abuse.

These young missionaries also learn skills that translate well to business. At the beginning of each week, for example, they set goals with their mission presidents -- senior men from Mormon society who voluntarily serve three-year stints in the role -- and then report back at the end of the week on whether or not they met those targets.

If they’re working in a foreign country, they must learn that country’s native language, which means you end up with a lot of Mormons who can speak even obscure languages such as Malagasy or Swahili. They also develop a formidable work ethic.

Austen Allred, co-founder of a soon-to-launch startup called Grasswire, describes the process as “learning the grind.” On his mission in the Ukraine, he went door knocking every day from 11am until 9pm with only a one-hour break for dinner.

“Nine hours of a 19-year-old American boy mustering all the Russian and courage he could to knock on the door of an old Ukrainian Communist and strike up a conversation about God,” Allred writes in a yet-to-published blog post. “You come home absolutely exhausted -- mentally, physically, and emotionally -- and realize the next day will be the exact same thing.”

Scott Weinert, the 26-year-old cofounder of a Provo-based startup called PingPlot, says his mission to Spain was a test of character. His group would be lucky if it converted one person a month. The work was so tough, so dejecting, that in the early days of the mission he would often return to his bunk at lunchtime and cry into his pillow. Ultimately, however, he decided to steel his will and just get on with the job. It ended up teaching him a lot about business, not to mention the ability to communicate with strangers in foreign cultures.

“I'm okay with rejection,” says Weinert, “and I’m not going to change my pitch at the next door.”

The mission experience, in whole, teaches the importance of hard work and dedication in the face of adversity, but it also dovetails neatly with Mormon doctrinal beliefs about the necessity of self-reliance. One theory holds that the earliest Mormons were so ostracized from mainstream America that they needed to be able to fend for themselves. Those values have been passed down throughout the generations. Even today, for instance, there is a preponderance of young Mormons who want to start their own businesses so they can get rich, not only to support their large families -- Mormons are encouraged to start baby-making early, and to have as many children as they can support -- but also to give back to the Church.

“I can’t tell you how many friends I have whose goal it is to become millionaires by the time they’re 30,” says Jordan Wright, Weinert’s co-founder at PingPlot, also 26. “One reason I want to be successful is so I can retire and serve the Church in some way, shape, or form.”

These values are carried into the university setting, too. Scott Petersen is the managing director for the Rollins Center for Entrepreneurship and Technology at Brigham Young University, which is owned by the Church of Jesus Christ of Latter-day Saints and attracts the religion’s best and brightest students. In 2010, Petersen’s department adopted the Lean Startup methodology for its teaching, and for the last three years it has hosted the International Business Model Competition, an annual gathering that attracts more than 1,300 universities from 10 countries.

Petersen says Mormon culture in general is highly motivated. “God expects great things of us, so we expect great things of ourselves,” says Petersen, who also serves as a mentor at Provo’s new startup incubator, Camp 4. While those great things can include lots of money, that’s not really the point of all the hard work. “Wealth is the byproduct but not the main objective,” says Petersen. “The main objective is to give back."

By the book

Elder Cunningham preaches his gospel in "The Book of Mormon". Elder Cunningham preaches his gospel in "The Book of Mormon".

While it is to be expected that members of the LDS Church will extol the virtues of their own faith, Mormonism is simultaneously vulnerable to criticism. In a consideration of the Mormon ideals that lend themselves so well to entrepreneurialism, it’s only fair to also examine the shortcomings of the religion and the culture, many of which are intrinsically tied to the way Mormons do business.

The creators of “South Park,” Matt Stone and Trey Parker, for instance, make sport of mocking the most credibility-stretching aspects of the religion’s beliefs in their award-winning musical, “The Book of Mormon.” I made a point of seeing the play in Washington DC the week ahead of my trip to Utah. In the play, the writers make light of the Mormon belief that the religion’s founder, Joseph Smith was spoken to by an angel after finding buried gold plates on his farm in upstate New York; and they milk for laughs the religion’s belief that Jesus made a posthumous visit to America, and that he plans on returning to Missouri when he eventually makes it back to Earth. There is also, of course, a lingering stigma attached to Mormonism that dates back to the days when it accepted polygamy, a phenomenon the Church officially renounced in 1890 and from which it has sought to distance itself.

Those beliefs, however, don’t materially affect how Mormons conduct themselves in the business world, apart from the fact that Utah-based companies sometimes find it difficult to attract talent to the area because of the stigma. And anyway, every religion has its own set of questionable, often mystical, beliefs that can be easily dismissed by skeptics.

More serious when it comes to business, however, are criticisms that influence how Mormons are perceived by potential clients, partners, and consumers. In that sense, the LDS Church might be concerned about criticisms that it has a past of racism, sexism, and homophobia.

Infamously, the Church refused to allow black men to join its priesthood until God apparently changed his mind about the issue in 1978. The priesthood is now open to men of any race (but not women).

It has also been accused of sexism and gender bias thanks to the traditional Mormon familial set-up of the man being the breadwinner while the woman stays at home to raise the kids. (For more, see Salon’s take on former Presidential hopeful Mitt Romney as “the ultimate Mormon male.”)

And in 2008, the Church met fierce opposition for its aggressive support, and indirect financing, of “Proposition 8,” which until recently blocked gay marriage in California.

On the individual autonomy front, Mormonism runs into more criticism. Parker and Stone’s musical also mocks the Church’s attempts to enforce its puritanical values on individuals. When a character in the play feels attracted to other males, for instance, he is implored to simply “turn it off.” (Sample line: “When you start to get confused because of thoughts in your head / Don’t feel those feelings / Hold them in instead.”) Mormons are similarly instructed to never have sex before marriage and not to masturbate (only a few, according to Mormons I spoke to in Utah, manage to adhere strictly that last rule).

Just as frequently mocked in “The Book of Mormon” musical is the notion that Mormons must abstain from alcohol, tobacco, and coffee. (To clear up confusion about whether or not Mormons are allowed to drink Coke and Pepsi, the LDS Church last year issued a statement that says the faith’s health code does not prohibit caffeinated drinks beyond tea and coffee.) At his lowest point in the play, the protagonist Elder Price is found dishevelled and disoriented after downing 12 cups of joe.

Such repressive attitudes have social consequences. For example, the LDS Church-owned Brigham Young University, which asks its students to abstain from extramarital sex, drugs, and alcohol, came in second from the bottom in the latest Trojan Sexual Health Report Card. Stories of disillusioned ex-Mormons, meanwhile, litter the Internet, including in a Reddit category set up as a kind of support network for lapsed members of the Church. Affirmation, a website for gay and lesbian Mormons, published a letter from by a gay Mormon just before his suicide in 2000, in which he wrote: “Straight members have absolutely no idea what it is like to grow up gay in this Church. It is a life of constant torment, self-hatred and internalized homophobia.”

While the religion’s emphasis on puritanical ideals, however, may take a personal toll, it turns out that such strict adherence to “the rules” is advantageous from a business perspective, and it can make for great entrepreneurs. Mormons are encouraged to live cleanly and honestly and to not be lazy. They’re also told that if they behave well on Earth they will be rewarded in eternity, as well as in the short term. An oft-repeated phrase from the scripture is: “If ye will keep my commandments, ye shall prosper in the land.”

In an entrepreneurial context, that emphasis on discipline, integrity, and trustworthiness ultimately trumps the negatives associated with the faith. And, hey, even if you think Joseph Smith was making it all up, you have to give him credit for his entrepreneurial approach to fostering a large “userbase” and starting a pretty successful movement. Certainly, if he were around in this century, you could picture him advising startups to build a “product” that people really love -- instead, that’s something Y Combinator founder Paul Graham preaches. I’ve encountered people from many religions, but few openly exude such love for their faith as do Mormons.

Indeed, the LDS Church even exhibited its business acumen in its reaction to “The Book of Mormon” musical. Not only did it turn the other cheek to the needling, but it also bought three full-page ads in the play’s program, complete with a URL, QR code, and an instruction to “Text BOOK to 3373” to learn more. “You’ve seen the play,” read one of the slogans, “Now read the book.”

Ultimately, even the blasphemous musical ends up highlighting the strengths of LDS religion and culture. (And, yep, here’s a spoiler alert.) The play's other protagonist, Elder Cunningham, a bumbling misfit Mormon who can’t stop telling lies, eventually finds himself leading a group of previously desperate Ugandan villagers towards hope, happiness, and the beginnings of prosperity, even though his teachings, which hold that people can cure their AIDS by copulating with frogs, are somewhat questionable.

As it turns out, Elder Cunningham’s self-reliance, resilience, perseverance, unrelenting positivity, and self-sacrifice in the service of a higher power -- whether it be God or family -- prevail in “The Book of Mormon.” They happen to be the same qualities possessed by the pioneers who first arrived in Utah 166 years ago.

These qualities explain not only why that society has been able to flourish in an inhospitable land, but also why it has been so abundant in its productive output, and in cultivating a flair for entrepreneurialism that is evident in the modern day.

For entrepreneurs, it seems, there is wisdom in "The Book of Mormon" -- both the text and the play -- but perhaps not exactly in the way the LDS Church would have it read.

[Photos from the play "The Book of Mormon," except the one of Temple Square, which is by Robert Cutts]