While Colorado’s world-famous ski resorts and breweries still attract thousands of tourists and transplant residents, it’s the technology industry that has taken hold of the local economy.

Colorado is headquarters for prominent technology companies like Level(3) Communications, J.D. Edwards, Qwest Communications, StorageTek, and EchoStar. Fortune 500 companies such as IBM, Intel, Sun Microsystems, Hewlett-Packard, EMC, Oracle, Nortel Networks and MCI have opened large campuses in the state — helping Colorado rank second in the nation in concentration of high-tech employment.

Colorado is a hotbed for technological innovation, housing a plethora of startups in areas ranging from storage and software to optics, semiconductors, microdisplays and wireless. According to the PricewaterhouseCoopers MoneyTree Survey, Colorado ranked fifth in the nation in venture capital funding in 2000, with more than 150 local companies raising more than $4.6 billion.

So how did this “convergence corridor,” gain such prominence in the technology industry? And what role do entrepreneurs from the Indian subcontinent play in this transformation?

Cable

Since the 1950’s, cable has been a prominent sector in Denver’s tech scene. Some of the city’s earliest technology ventures were pioneered by cable television tycoons such as Bill Daniels, Bob Magness and John Malone.

Daniels’ interest in cable was sparked upon his return from the Korean War in 1952. On his way back home to Casper, Wyo., Daniels saw television for the first time in a Denver diner. He was determined to bring TV to Casper and accomplished that goal within a year, using a cable and microwave relay system to carry Denver TV stations’ signals into Casper.

Daniels wasn’t the only cable visionary inspired in Denver. Bob Magness founded and built Tele-Communications Inc. (TCI) into the nation’s largest telecommunications company. In 1973, Magness recruited John Malone to head TCI, luring the maverick businessman from a well-paying position. Malone led TCI on a rocket-like growth spurt throughout the 1980s and 1990s, adding subscribers and programming. By 1990, TCI was the biggest cable firm in the country, with 8.5 million subscribers, and John Malone had developed a reputation as a highly regarded businessmen. AT&T acquired TCI in 1999 for $48 billion.

While cable is still prominent in Denver, perhaps the cable industry’s greatest contribution was developing a well-trained workforce with the business and technical skill set needed to spur the local economy into new, growing areas of technology, such as telecommunications. The cable and telecom industries share some important characteristics — a focus on expanding fiber-optic lines and creating strong “subscriber” bases — that created a great synergy among Denver’s entrepreneurs, business leaders and tech workers.

Telecom

Following the divestiture of AT&T in the 1980s, Colorado’s local phone company, Mountain Bell, became U S West, headquartered in Denver. The city served as the telecom hub for a 14-state region, creating a pool of talented executives and engineers who have attracted additional telecom companies and spawned new companies to serve the telecom market.

“Denver has a very talented, well-trained and educated workforce that not only helps bring national companies into this region, but also creates a pool of innovative entrepreneurs who really understand the telecom market,” explains Dilpreet Jammu, corporate business development and ventures at Nortel Networks.

One such rising star in the Denver technology scene is Sureel Choksi, CFO and executive vice president of Level(3) Communications. In 1997, Choksi was recruited by Jim Crowe, CEO of Level(3), as a key member of the management team. Since that time, Choksi has been instrumental in helping to raise more than $12 billion to complete Level(3)’s fiber optic network. The company holds bragging rights as the first company to build an end-to-end IP network from the ground up.

Ironically, one of the biggest telecom entrepreneurs in the state did not have a technical beginning at all. Phil Anschutz owned Southern Pacific Railroad but perhaps more importantly, he owned the rights-of-way alongside the railroad tracks. Just as telegraph lines once cropped up beside the nation’s railways, Anschutz decided to build a fiber-optic communications network alongside the tracks in 1988, a move that formed Qwest Communications. In June 1999 the company sealed its place in Denver’s telecom history when it launched a successful $40 billion bid for US West. Recently, Qwest Communications attracted Al-Noor Ramji, former CIO of Dresdner Kleinwort Wasserstein. The experienced Indian executive is the new CIO of Qwest and will spearhead the merging of the day-to-day operations of Qwest and U S West.

Not only have market-leading companies like Qwest and Level(3) helped put Denver on the telecom map, they also have created a lucrative environment for local entrepreneurs starting related businesses in areas such as fiber optics, infrastructure software and telecommunications services. Picolight, Telseon, Network Photonics, Aerie Networks and WINfirst have each raised more than $100 million from the likes of Intel, Charles River Ventures, Cisco Systems, Goldman Sachs, New Enterprise Associates, Morgan Stanley and Crosspoint Venture Partners.

Wireless

While the cable and telecommunications services industries were developing roots in Colorado during the latter half of the twentieth century, a competitive company with an innovative technology began to emerge.

One of the satellite industry’s most cutting-edge companies, EchoStar, got its start in Denver more than 20 years ago. The company was the first to develop UHF remote control, the first to offer a satellite TV receiver with an integrated Internet browser, and the first to offer two-way, high-speed Internet access via satellite.

When it comes time to deploy its satellites, EchoStar calls upon Director of Space Programs Rohan Zavari. He is responsible for the design, construction and testing of EchoStar’s satellites. Zavari has integrated EchoStar’s satellites with the major launch vehicle providers around the world including China, France, Russia and the United States.

In addition to EchoStar, Ball Aerospace, which designs fixed wireless and mobile-asset tracking antennas, Qwest Wireless, and Agilent Technologies, which manufactures wireless testing equipment, all call Colorado home for their wireless operations.

These large companies have helped cultivate a ripe market for newer wireless entrants, such as Boulder-based SignalSoft and Denver-based TensorComm. SignalSoft, which was founded in 1995, provides a platform for location-based wireless applications. The company went public in 2000.

TensorComm, which has developed breakthrough technology funded by the U.S. Department of Defense, is an example of one of the area’s most compelling wireless startups. The company was co-founded by Indian entrepreneur John Thomas. Its technology seeks to increase capacity, coverage area and data rates of wireless CDMA networks by a factor of three to 10 times.

Local Resources
Venture funding flows into the state from marquee names such as Battery Ventures, and Benchmark Capital, but Colorado is also home to several prominent venture capital firms. Centennial Ventures, Softbank Venture Capital, Telecom Partners and Sequel Venture Partners currently have an aggregate of approximately $3 billion under management. It is this strong combination of local venture capital firms and creative entrepreneurs that helped Colorado companies raise $1.9 billion and $4.6 billion in venture funding in 1999 and 2000, respectively.

Denver boasts a wealth of educational institutes that have helped the local economy flourish. More than one in three adults in Denver has a college degree — second only to Boston — and the city ranks first among the nation’s major cities for the number of people holding at least a high school diploma (more than 90 percent).

Business programs and engineering programs alike are very strong at local universities, including the University of Colorado at Boulder, CU-Denver, Colorado School of Mines, Colorado State University and the University of Denver. In addition, the area is host to numerous research institutes that continue to spark new technologies and visionary leaders.

Recognizing the booming local optics industry, the State of Colorado created the Colorado Advanced Photonics Technology Center, a nonprofit organization that provides technical services and training for corporate and educational partners. Founded in 1988, Cable Television Laboratories (CableLabs) is another nonprofit research organization that helps drive local innovation.

Networking organizations also abound to provide support to entrepreneurs. TiE, the Internet Chamber of Commerce, the Denver Telecom Professionals, the Colorado Software and Internet Association, First Tuesday and the Rockies Venture Club are all active.

And if this wealth of opportunity and innovation is not enough, Denver boasts more than 300 days of sunshine per year, five professional sports teams and the nation’s largest performing arts center under one roof.

“Selling Denver is one of the best jobs in the world,” said Tom Clark, president of the Jefferson Economic Council and former head of economic development for the Denver Metro Chamber of Commerce. “The area really has it all — strong corporations, a talented workforce, abundant recreation, natural beauty — and really great beer.”

Vipanj Patel is managing partner of iSherpa Capital, a Denver-based seed-stage venture capital firm focused on wireless and supporting technologies.