Column: Entrepreneur muses about Hawaii as a tech economy

Can Hawaii meaningfully diversify its economy with a technology sector? With the collapse of our hospitality industry, this question has never been more important.

I sought the opinion of Ho‘ala Greevy. If you were seeking a poster child to represent a successful Hawaii tech entrepreneur, he is the one. A Honolulu native, in 2014 Greevy founded Paubox, which specializes in encrypted (HIPAA-compliant) email solutions for the health care industry.

He moved the company from Honolulu to San Francisco in 2015 to grow it. It wasn’t easy to rip his roots from Hawaii soil, but to acquire customers, capital and top talent, it was necessary.

With 33 employees, Paubox has more than 3,000 customers in all 50 states and is profitable.

Question: Do you think it’s possible to gear up a Hawaii startup without having to relocate to the mainland to access talent or financing?

Answer: Yes, it’s always possible to have success as a tech startup in Hawaii. Relatively recent examples that come to my mind are Volta, FloWater and Hobnob.

For us at Paubox the more important question was, Is staying in Hawaii the best business decision?

It didn’t take us long to reach a conclusion.

Aside from access to talent and financing, for us it was a matter of brand and recognition. The market did not accept that a HIPAA-compliant email startup in Hawaii was believable. If we wanted to execute on the vast opportunity before us, moving to San Francisco was imperative.

Q: Is there an opportunity to do this in the current economic meltdown/COVID-19 environment in Hawaii?

A: While many businesses have encumbered devastating losses this year, other industries have accelerated. Cloud, e-commerce, certain areas in health care, and remote work collaboration are easy examples. A new portfolio company from Blue Startups, RendezView is a company in the remote work collaboration space that has potential.

Q: What about bringing tech companies to Hawaii? Is that realistic given our remote location, cost of living, lack of tech workers, etc.?

A: I think a wiser proposition is what’s being done at the Mana Up accelerator, which is building up Hawaii’s next 100 product companies earning $10 million or more in annual revenue. By focusing on authentic Hawaii consumer brands, Mana Up flips the B2C e-commerce dilemma on its head and turns Hawaii’s weakness into strengths.

Q: The Honolulu Star- Advertiser ran a piece on Nov. 4 about bringing in highly skilled, well-paid remote workers to Hawaii. Could this be a viable component in a tech economy?

A: Yes, the more tech workers living in Hawaii, the better.

Q: Cost of living and doing business here is so expensive. Should there be a tax break for tech entrepreneurs who want to relocate from the mainland?

A: No, I don’t think this is a good idea. I think this sets a bad precedent for Hawaii and is not necessary. In addition, the abrupt demise of Act 221 in 2010 decimated investment activity in Hawaii for the next five years, ironically achieving the opposite of its intended purpose.

Q: Years ago Guy Kawasaki suggested the state invest in the University of Hawaii by bringing in professors who can train software engineers and the like. Does that still make sense?

A: I strongly agree with Guy. If we can agree that software is eating the world, then we should endeavor to expose students to careers centered around software development.

There is a dire shortage of software engineers in the world.

Being a software engineer is the equivalent of becoming a doctor or attorney 40 years ago: It’s an in-demand, live anywhere, high-income, honorable profession.

Q: Any other comments or thoughts on growing a new economy in this state?

A: In the early days of Paubox, we had a map of the U.S. in our San Francisco office. For each customer we signed up, we’d put a pin on the map. It didn’t take long to realize just how many customers were coming from the Eastern Time zone. In fact, nearly 48% of the U.S. population lives on Eastern Time.

Fielding calls in Hawaii for a market with half its customers five to six hours ahead of you is difficult long term. It’s a tough slog being chipper at 3 a.m. Monday morning for someone wanting to know about your product at 9 a.m. their time.

If Hawaii aligned its time zone with Alaska’s, which is four hours behind EST, it may yield more opportunities. Hawaii and Alaska share similar longitude coordinates, so it’s not that far off the mark to consider.

Rob Kay, a Honolulu-based writer, covers technology and sustainability for Tech View and is the creator of fijiguide.com. He can be reached at Robertfredkay@gmail.com.