Seven years ago, Reed College graduate Luke Kanies founded a tech start-up called Puppet Labs. He aimed to develop software that automates computing tasks, thus saving his future customers time and money. And then ... well, by the hyperactive standards of high-tech start-ups, not much happened. In a field where entrepreneurs typically rush to convert promising ideas to huge piles of cash at warp speed, Kanies took it slow. Very slow. 

The company put early versions of its software online, where anyone could tinker with it, spurring a massive collaboration among 4,000 amateurs. As word spread over the years, Puppet attracted $16 million in investments. Last year, it started actually selling a product for the first time. Today, the firm has a steady income, but Kanies has publicly said he’s not in any hurry to cash out. 

His molasses-like approach to the world’s most effervescent industry would seem strange in other tech towns, but it’s starting to look typical in Portland. Of late, the city has found high-tech success at its own quirky pace, by sticking to collective convictions that might seem more small-town than Silicon Valley.

Portland start-ups landed a near-record $238.6 million in investments last year. The famed national Under the Radar conference, a past launchpad for big names like LinkedIn and Pandora, awarded its top prize to Puppet Labs in 2010 and to another Portland fledgling, Cloudability, this year. A corps of young companies now cut sharp profiles around town, from Urban Airship’s 91-and-counting employees to the gleaming Jive Software logo on a hulking office building in the West End. Ryan Carson, the Internet-renowned CEO of the online training company Treehouse, who recently moved here from England, is just the latest in a growing list of powerhouse executives lured to the city.  

As with coffee, food, and beer—seemingly unrelated fields that people in the local tech industry nonetheless tend to hold in high regard—Portland is doing things its own way. The traditional Silicon Valley start-up aims to grab investor cash, attract customers, and then go public or sell out. Microsoft and Amazon catalyze Seattle’s potent start-up scene. Portland, according to many, nurtures a more organic, bottom-up ethos, shaped not by fast money or corporate goliaths but (and maybe you saw this coming) our own distinctive values and aesthetics, and even the layout of our streets. 

“In Silicon Valley, everyone wants you to raise more money, build quicker, scale as fast as possible,” says Joe Stump, former lead architect of Digg, the well-known link-sharing site. “It’s like when you’re in fifth grade, growing an inch a night and waking up every day in pain.” After stints in San Francisco, Seattle, and Boulder, Colorado, Stump moved to Portland last spring, attracted by what he calls “small-batch start-ups”—by which he means, roughly, companies more concerned with quality than a short-term payoff. Stump’s latest project, Sprint.ly, software to help programmers manage complex projects, boasts advisers and investors from Twitter, Facebook, and YouTube, but for now has only five employees and a deliberate growth plan.  

Just as some Portlanders exalt the perfect hand-stitched bag or well-pulled espresso, many local start-ups aim to make commonplace tasks beautiful. Simple, an online banking system, closed its New York and San Francisco offices to move here last summer. The company designs software that allows customers to analyze transactions down to a particular cash register at a particular store, all garbed in a minimalist look that überblog TechCrunch calls both “sexy” and “thoughtful.” The year-old Cloudability takes a job that sounds crushingly dull—tracking computing costs—and executes it with software praised by critics as “drop-dead easy to understand” and “visually appealing.”

WE DON’T HAVE CORROSIVE COMPETITIVE ISSUES. PEOPLE KNOW IT’S EARLY. THEY HAVE TO WORK TOGETHER.” —RICK TUROCZY

The city’s treasured dense urbanity also plays a role. Nearly every notable start-up in the city clusters within a few Pearl District and downtown blocks. A two-block stroll from Urban Airship’s new headquarters on NW 11th Avenue and Flanders Street takes you past a gaggle of promising companies with de rigueur quirky names—Chirpify, ShopIgniter, Perka. Contrast this with Silicon Valley’s 450-square-mile sprawl, and it’s easy to see how an “incredibly collegial community” (in the words of local blogger Rick Turoczy) took shape.

Turoczy, whose Silicon Florist blog serves as the scene’s news digest and who cofounded the influential start-up school Portland Incubator Experiment, decidedly does not envision Portland as the next Silicon Valley. Instead, he foresees a local industry in which “everyone plays to their strengths,” informed by the city’s abiding character as much as the latest innovation.

“Portland is having its moment in the sun,” Turoczy says. “Now, we have to make it sustainable.”