On paper, Justin Miller was the man sitting in his seat. He and his partners sold Pillow, a San Francisco startup that operated short-term rentals through Airbnb and sites like VRBO, to Expedia, and Miller wanted to do something similar again. Airbnb was right there in the South of Market area, practically down the street. Easy, right?
So why is a 34-year-old man sitting 1,250 miles away in Denver?
The answer, he says, is that his new company Showplace will benefit from what he sees as the emergence of a small tech cluster for travel companies, many of which are focused on short-term rental properties in the Rocky Mountains. The first was Exclusive Resorts LLC, which is now 20 years old, and the biggest startup is probably the closed company Evolve, which has raised $224.2 million in venture capital but does not publicly disclose its sales and earnings. There’s AirDNA, which does business intelligence for short-term property investors and was sold to a private equity firm in March, and Inspirato, a luxury vacation club that went public in February through a special acquisition company, or SPAC.
And now there’s Showplace, which has raised $2 million in venture capital in a deal announced on June 7th. The so-called seed round, the earliest round of venture capital, will allow Showplace to add engineers and start building a sales team, Miller said in The Interview.
“We see Denver as a hub for tourism technology,” Miller said. “By being in Denver, Showplace has access to industry mind-sets to collaborate and share best practices. Denver is also home to many short-term rentals, so it’s a good testing ground.”
Tech clusters are hard to create, and when they do, it’s good for young companies, says Natty Zola, a Denver-based venture capitalist at Matchstick Ventures who led the Showplace investor group. They tend to promote a virtuous hiring cycle, as people with the right skills live close to each other, and the generation of ideas that lead to growth and job creation.
And they are the holy grail of economic development leaders across the country. William Kerr and Frederick Robert-Nikou of Harvard counted 25 different attempts by government officials to label their local tech clusters as Silicon This or That and 238 cities applying for an Amazon HQ2 proposal, all of which combined had little impact on Silicon Valley’s dominance. The Valley still receives 48% of US venture capital compared to Denver’s 1.1%, which sits between Miami and Austin and ranks ninth among US tech clusters overall, Kerr and Robert-Nikud say.
It’s not hard to imagine why cities try so hard. According to a 2019 Harvard Group report, Seattle has four times as many high-paid R&D-intensive workers per capita as Denver.
Although Zola’s last job was running a business incubator in nearby Boulder, he says there has been no organized effort to turn Denver into a Travel Tech company…