About 45 minutes away from the Denver airport, there is an island in the middle of Colorado. Not by the literal, geological definition, but Boulder is an island in almost every other sense of the word. It is about as far removed from the rest of Colorado as you could get in both its attitude and focus, oh and it’s surrounded by a swath of land on which nobody is allowed to build, which has affectionately become known as “the moat”. It’s a little bit Silicon Valley, a little bit Seattle and a whole lot of nothing you’ve ever seen before.

I was in Boulder for 7 days that included Boulder Startup Week, Ignite: Boulder, a trip to TechStars and entirely too much of the best coffee I’ve ever had. The short story? “The Boulder Bubble” is an incredibly friendly, cooperative place in which startups thrive. The longer version of the story is what I want to tell you here.

What’s Right?

Let’s start at the beginning. I had checked out the Boulder Startup Week events on Plancast and chose to attend a few. But what I really wanted to find was what was in the water that made Boulder the unlikely home to more entrepreneurs per capita than anywhere else in the world. To do that, I needed interviews. Typically these are a bit of a pain to get, but a simple email to my friend Elaine at Trada resulted in no fewer than 10 invitations only a couple of hours later.

That fact is important — Boulder is a city where people want to help others succeed. According to Foundry Group managing director Brad Feld, it’s a city that doesn’t appear to believe in a zero-sum way of life.

“I went to school at MIT. Boston was great, but it wasn’t home. It wasn’t where we [Feld and his Alaska-native wife] wanted to make a life.”

It didn’t take long to figure out where home would be. According to Feld, his wife said that she was moving to Boulder and “you can come with me if you want to”. Six months later, they knew it was home, but Feld didn’t have any expectation of doing business there. After seeing the spirit of the city’s entrepreneurs, Feld knew that he had to change his mind.

Boulder’s dreadlock-friendly, left-leaning, free-thinking culture is a bit hard to explain. The running joke, according to Feld is that “this is where the hippies on their way out to the Bay ran out of gas.” Looking around the city, that’s not hard to believe. There is, however, an inordinate amount of financial success in Boulder and that success seems to cause new ventures to thrive.

For a city that has only 100,000 residents, property values have been driven through the roof by the city’s unwillingness to allow new construction within the downtown area. Yet it is that very fact that can be a driving force in the city’s entrepreneurial explosion. When you have limited space, you force people to be in the same areas. As such, you’re putting everyone in the face of everyone else and any entrepreneur will tell you that it’s an impressive site to see a room full of like-minded people. Now imagine that on a city scale and you have Boulder.

That sense of collaboration became a recurring factor over my next few days in Boulder. If Omaha was trying hard to do everything that Silicon Valley wasn’t, then Boulder was priding itself on offering what the Valley can’t.

First off, there’s a quality of life issue. The food is amazing, you’re literally a 10 minute walk from being deep into the mountains, an hour from skiing and you have a temperate climate that keeps things balanced. While there are outdoor activities within the Valley area, it isn’t nearly as much of a focus as what it is in Boulder.

Beyond activities though, it’s surprisingly easy to live in Boulder. For businesses, there’s a near-constant availability of educated talent from the university. Also, in contrast to having Standford in your backyard, CU graduates don’t necessarily come out with such a sense of entitlement.

“We have a $10,000 bounty on hiring in San Francisco” says Neil Robertson of Trada, a startup that works specifically with those trying to leverage Google’s AdSense. “That’s just the ante to play the game. Hiring in San Francisco is like trying to date hot people in LA. You absolutely have to have money to play that game. Sure, you can get them, but then you spend so much money trying to keep them.”

What’s Wrong?

The resounding issue that people seemed to have was one of growing pains. There are human supply constraints, landlords who would rather take a loss on 10,000 square feet than to rent it for cheap and the near-constant supply issues with mid-level investment.

According to Colorado University professor Brad Bernthal “we have a robust Angel scene, and we continue to grow that, but we also need to attract back VC funds. Brad Feld [of Foundry] is amazing, he’s arguably the leading VC, period. But he also has a strong regenerative streak. For long-term viability, we need more than 1 or 2 funds. If we’re really as good as we think we are, we should be able to attract that.”

Bernthal isn’t just speaking from an educational standpoint, either. While he is a noted professor, he’s also the Director of the Entrepreneurship Initiative at Silicon Flatirons Center, an entrepreneurship effort at the University of Colorado named after Boulder’s notable flatiron rock formations that are visible from nearly any point in the city.

But it doesn’t stop at the money.

“If we’re going to systematically have a university that is an engine for entrepreneurship then we have to have more meaningful and regular touches with faculty and the entire community. We have to bring the geeks to the campus. Faculty has to think about sending their best and brightest into this system. Have them sit on advisory boards, learn from them and exchange information with them.”

Then there is the matter of cross-regional relationships. Bernthal points out that Silicon Valley has strong ties to Israel, Taiwan, Singapore and India. “We don’t have a rich tradition of immigration in Boulder. The tech and creative class talent in the future is going to come from outside of the US.”

What Everyone Knows

There are a couple of proverbial elephants in the room that is Boulder. First, there is TechStars (more on that in my piece from this past weekend). Having an incubator/accelerator in your backyard makes for a pretty handy conversation piece and it also encourages the continuation of that spirit of community.

Aside from TechStars though, almost everybody knows of the Foundry office on Walnut Street. You could walk past it and never know that it’s there, much like every other startup in Boulder, but you absolutely can’t get away from the talk of it. While not many of the startups to which I spoke note Foundry in their investors, they do still mention the name. Whether it was a meeting with Feld or one of the other Foundry members or perhaps just advisement from someone that Foundry has funded in the past, the name is on a near-constant repeat in every circle of the city.

Yet as good as having these resources nearly at your disposal may seem, there’s a shadow that hangs over some of the people to whom I spoke. It’s not an emotional thing — Boulder seems to also have more happy people per square foot than anywhere else I’ve been — but rather one of business. With so much success all around, small failures can seem larger than they might appear elsewhere.

In the end, the city still thrives. As Neil Robertson would later divulge, both the Boulder and San Francisco offices of Trada were started for the same amount of money — $850,000. But the Trada office accomplished considerably more with the funds, simply due to the cost of doing business in Boulder versus the Valley.

The city has, in the past 18 months or so, started to take a vested interest in its startup capital. While the city’s influence will neither make nor break the life that Boulder is living, its involvement with landlords, infrastructure and incentives can certainly help a solid business to grow.

Boulder still has its share of difficulties. There is a desperate need for space above a certain square footage, and a conference center is sorely lacking. But with a spirit that continually pushes the city as a whole forward, these are problems that aren’t likely to last long.

I’ll be heading back to Boulder in August for the TechStars Demo Day, and then with any luck I’ll be back next year for Startup Week 2012. Until that time, if you’ve packed up your bike and have an affinity for altitude, I’d like to suggest that you spend some time in the coffee shops, offices and market squares that make Boulder a unique choice for startup success.