Seattle's Third Act: Lake Union's Tech Scene — Ascend.vc
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By: Nate Bek & Ben Eisinger<br>Lake Union is a small lake that tells a big story.<br>Gouged out by the Vashon glacier some 12,000 years ago and filled with meltwater, it later became crowded with shipyards, then hundreds of houseboats. Just 580 acres, the lake is home to both the oldest wooden tugboat in the world and a warehouse that'll soon build autonomous drone boats for the US military. Boeing's first airplane, a spruce-and-linen seaplane, lifted off from these waters in 1916. A century later, a stargazer at Gas Works Park can watch Redmond-built Starlink satellites streak across the night sky.<br>For all that progress, Seattle’s oldest industries are still very much open for business. Each new industrial age grows outward like rings on a tree, without replacing the one before it. On Lake Union’s banks, physical AI startups share buildings with family-owned maritime firms, and software engineers commute to work by seaplane.<br>For the past few months we’d been developing a thesis about where Seattle’s tech economy is headed. It goes like this: Act I was maritime and aerospace. Act II was cloud computing and enterprise software. Act III is the baby of the two, intelligent machines built from software-enabled hardware.
At some point, though, you have to leave the office and see it for yourself. So we did, from two rented kayaks on Lake Union, which turned out to be the ideal place to test it.<br>On a warm June afternoon, we slid into the water beneath the Aurora Bridge. The plan was a loop — up the east side, around the top of the lake, back down through the middle, then west along the Ship Canal. A tour, we told ourselves, of three Seattles.<br>The first company we floated past was the Fremont Tugboat Company . And across the water in Eastlake we spotted Lake Union Dry Dock , or LUDD, one of the oldest continuously operating shipyards in the country, which has been hammering on hulls since 1919. This is the old lake, and it is very much alive and well.<br>After rounding Gas Works Park, we trained our kayaks east, towards the future.
The plan was a loop — up the east side, around the top of the lake, back down through the middle, then west along the Ship Canal. A tour, we told ourselves, of three Seattles.
The first stop on our tour was the dock of Endurance Energy , a Seattle-based subsea geothermal startup founded just last year. Endurance’s office is a converted fishery, and its dock is still home to a retired fishing boat destined for the scrapyards. Just feet away, a team of former rocket engineers are designing a first-of-its-kind power plant to siphon energy from mile-deep hydrothermal vent fields. This fall, the team plans to deploy a 100-kilowatt generator, Adelie, to the Juan de Fuca ridge off the Oregon coast.<br>Aditi Bhatt, the company’s Chief of Staff, came out to greet us. We asked her to take our photo and doubled back in the direction of the Fremont Ship Canal.<br>Behind Endurance sits AI2 , the nonprofit institute Paul Allen founded to push AI research into the open. Next door is Cobot , where Amazon’s former robotics chief is building robots meant to work alongside people, and next to that is Dunn Lumber .<br>Returning to Gas Works park, we found ourselves in the middle of one of Seattle’s so-called float raves, a loose archipelago of inflatable flamingos, pontoon boats, and paddle boards lashed together around a barge with a DJ and projector. On the lake, at that moment, the vibes couldn’t be better.<br>Touching grass — or water in this case — was part of the reason we felt we needed to leave the office. Across the national press, Twitter, you name it, the story about Seattle in 2026 isn’t necessarily a positive one. Downtown office towers sit mostly empty, while sweeping layoffs culled tens of thousands from the workforce. Policymakers fought employers over a head tax and won, then lost, then passed another one. And Starbucks, the hometown company, is leaving the hometown.
But none of that was on our mind during the Float Rave. So we kept pushing west against the lake’s current, sliding under the Fremont Bridge. We made it to Seattle’s second act, the Fremont shoreline colonized by Google, Adobe, and Salesforce — the enterprise-software waterfront!<br>It’s becoming more common to hear people refer to this Seattle, and software more broadly, in the past tense. AI is making traditional software development cheaper and easier, and it’s increasingly hard to see enterprise software as defensible businesses. But it’s hard to overstate the importance of Act II to the region: they still represent the engine of our economy, continuing to churn out record earnings and employing more Seattleites than any other industry. Second-act Seattle is the aquifer the third act drinks from.<br>Just a few blocks east of this cluster, Overland AI occupies a waterfront corporate office. The robotics startup spun out of the University of Washington in 2022, led by robotics...