Some Young Tech Companies Are Thriving

Small business is often referred to as the job-growth engine of the US. Particularly at times when the country is rebounding from recession, persistent innovators emerge as the next business cycle leaders.

An area’s laid-off workers frequently are just the catalyst for innovation, says Paul Jerde, executive director of the Deming Center for Entrepreneurship at the University of Colorado. In a recession, "A lot of that talent gets thrown into the marketplace," he says, "the vibrancy and talent of innovators turned loose is large."

One place this is playing out today is in the Bay Area of California where major tech firms have cut jobs, but promising young companies have accelerated their business plans in order to add positions and grow market share.

For example, Lithium Technologies which creates online communities for its clients' customers, almost doubled its staffing levels in 2008. It further grew its workforce by 15 in Q1 of this year and plans to hire another 30 to 40 staff by year-end. Last year’s revenue, in the range of $10 million to $20 million, doubled from 2007's gross.

Another fast-growing bay area firm is Responsys, an email marketing service from San Bruno. The employer, with 240 staff, plans to hire 45 more workers by the end of the year. "We’re looking at this market as a real opportunity to invest big." says CEO Dan Springer.

And the Bay isn't the only place where board rooms are planning to win in today's market. Atlanta-based Cbeyond focuses on the voice and data network needs of small business. The firm expects 2009 revenue to grow about 20 percent. It recently invested tens of millions of dollars and added more than 600 jobs in an aggressive headquarters expansion -- a extremely bullish move in the face of a big bear. "We’ll likely double the size of our business over ... the next three to four [years]," says CEO James Geiger. "We’re not just surviving in this economy, we are thriving in this economy."

Mark Lupa is a managing partner for High Country Venture, an investment firm focusing on early stage Colorado-based technology startups. "The nature of people in these startups is that they’re innovators and they persevere," Lupa says. "If they've got really good technology and good people, they will eventually get funding and they will survive."