A wide-ranging group of Utah business community voices waxed overwhelmingly bullish on the state’s future prospects at a Friday economic conference in Salt Lake City, though many also shaded their forecasts with a handful of critical near-term concerns.
Growth management, housing availability and affordability, labor shortages and supply chain challenges are all issues on the minds of those running companies or working toward building continued growth in a state that’s leading the country when it comes to economic fortitude.
But some presenters at the Utah Business Magazine Economic Outlook Summit believe the best is yet to come.
Serial entrepreneur and angel investor Scott Paul had some of the most audacious ideas about what’s in store for the Beehive State in the coming years, including expectations that the biggest-yet, Utah-born company may already be among us.
“Utah needs a household brand name,” Paul said. “We’ve got to start doing moonshots. We can’t keep living off WordPerfect forever.
“We need to actually have a campus here the size of Facebook or Netflix. I don’t care what it is, but it’s going to be in Utah and it’s going to happen. That founder, that company is probably already in one of your portfolios,” Paul said, earning applause from the crowd of about 400 at the Grand America Hotel in downtown Salt Lake City.
Paul also put a personal stake in the ground on heralding the coming of Web 3.0, a widely interpreted vision of the next evolution of the internet that sees a decentralized network driven by open-source blockchain systems and powerful artificial intelligence and machine learning engines that elevate transparency and security while democratizing data ownership down to the individual level.
“Remember this moment,” Paul said. “Remember that I said Web 3 and watch what happens in the next five years.”
Paul has started multiple tech businesses, is the current CEO of word-of-mouth commerce platform Wooly and now helps startups get off the ground with very early stage investments. He said he is an enthusiastic advocate of the state, describing himself, with a sly grin, as a “Porter Rockwell-style” mascot for all things Utah.
Oh, and if you’re interested in hearing about his latest investment, it’s in a company building an online marketplace for cremation services, an idea he sees as prescient amid a world population aging at record levels.
The decision to take on outside investors is, in itself, a decision Utah startup founders should ponder deeply and avoid as long as possible.
That was the advice from Neighbor co-founder and CEO Joseph Woodbury. Woodbury and some chums from BYU founded the company in 2017, connecting people with extra space to rent with people who have things to store through an easy-to-use digital platform. Neighbor has since grown into a powerful digital marketplace with a presence in all 50 states.
“Raise as little money as humanly possible because really what you’re doing is giving your ownership away,” Woodbury said.
But, he also acknowledged that startups can hit a wall where continued growth is best fueled by investment capital. And, indeed, Neighbor did reach that point pretty early on in its lifecycle and has since drawn some $65 million in venture investment. That includes enticing legendary Silicon Valley investment firm Andreessen Horowitz to lead its first-ever Utah funding round, Neighbor’s $53 million Series B last spring.
Stifling the growth cycles of some Utah interests are ongoing issues with the complicated world of business supply chains.
A panel of Utah experts speaking at the summit noted that the current bottlenecks, including scores of ocean-going container ships queued up outside many West Coast ports, are a visual representation of a system that has broken down. And, it’s one they say may not return to proper working order without wholesale changes in regulatory policy.
Jason Fowler, president and CEO of Utah-based import/export specialist Air and Sea International, said part of the problem traces back to some U.S. mega companies using offshore cargo freighters as a temporary solution to maxed out land-based warehouses. That ploy, he noted, is now earning a response from U.S. authorities who are set to assess fines for “dwelling.”
“The (shipping) terminal operators just came out with a fee system for ships dwelling outside ports,” Fowler said. “Anything sitting longer than nine days gets assessed $100 per container. Then the next day, it’s $200, and then $300.”
The problem is, a smaller company from Utah or elsewhere may have one or two containers blocked by hundreds that are destined for a big U.S. warehouse business. But, their boxes are stuck until all the containers get moved through. And the longer things hang out, the more expensive it gets for both the businesses and consumers holding down the end of the chain.
Charlie Freedman, deputy counsel for Utah’s Malouf Companies, said the logjam has led to record-high prices for using the container themselves, which has soared from around $4,500 just a couple years ago to current rates that can range from $20,000 to $25,000 per container.
“You don’t need an economics degree to understand how that reverberates through the markets,” Freedman said. “Covering those increased costs eats up cash reserves, gets tacked on to the consumer or puts a company in a crisis point.”
Utah Sen. Mike Lee appeared via video at the conference to tout a handful of proposals he said will help address some land-side supply chain tie-ups.
The Republican senator said he’s working on legislation aiming to relax the current hours of service limits on truck drivers; lower the minimum age of obtaining a commercial driver’s license to 18; easing the expensive credentials process for port workers; and waiving tenets of the Jones Act, which forbid foreign freight vessels from moving cargo from one very busy U.S. shipping port to a less busy domestic port.
Utah Business also took time at the summit to honor four Utah-born companies that have long and successful histories in the state.
Legacy Award recipients included burger chain and fry sauce inventor Arctic Circle, founded in 1950; employee recognition and workplace culture innovators O.C. Tanner, founded in 1927; home furnishings and appliance giant RC Willey, founded in 1932; and Zions Bank, which opened for business on Oct. 1, 1873, with accompanying reporting from the Deseret News that day that predicted “Zions Savings Bank and Trust Company promises to be one of the most important institutions ever established in the Territory or in this part of the Union.”