A loose network of central Maine colleges sparks enthusiasm for startups

At a time when jobs are scarcer than they've been in generations, states must look to grow their economies from within. That's the message from key figures in the Obama administration on down, and the drumbeat for entrepreneurial education has found a committed advocate in Mike Duguay, Augusta's longtime director of economic development.

Together with other leaders in central Maine — including Ken Young of the Kennebec Valley Council of Governments and George Spahn, president of Thomas College in Waterville — Duguay is attempting to encourage new, homegrown businesses in the Augusta-Waterville area through programs at colleges and high schools.

"I've been in this business a long time," says Duguay, "and I'm convinced that conventional economic development doesn't hold the answers for us. "Expecting Maine to grow by convincing companies from away to move here isn't realistic," he says, particularly since virtually every state is trying the same strategy.

The answer, he believes, is to change expectations among young people. "Our parents' generation was much more entrepreneurial than my generation," Duguay says. "Our parents expected to work for themselves, but the next generation was trained as employees, and we expected to work for someone else."

Entrepreneurship is much celebrated in business circles, but creating it on the ground takes patient, step-by-step efforts, Duguay believes, and it's best created within the educational system. Getting students to think they can translate their ideas into actual businesses is the focus, and the earlier the better, he says.

The key is understanding how entrepreneurship differs from traditional business education where accounting and finance is emphasized. "Relatively few business students learn about wealth creation," Duguay says. "That's the lesson that will benefit them most, personally, but also help their communities grow."

One tangible result of these efforts is the Kennebec Valley Entrepreneurship Network, by design a loosely organized group of like-minded officials at Thomas College, Colby College and the University of Maine at Augusta, along with members of the business community. This fall, the region's entrepreneurial programs will expand to the high school level as part of the Business Careers Academy at the Capital Area Technical Center in Augusta, which serves Cony High and eight other public secondary schools from Monmouth to China.

One of the qualities Duguay prizes about KVEN is its informality. "Too much structure doesn't help this kind of effort," he says. "We don't want to be like a government economic development program. The emphasis is on creativity, not on rules and regulations."

One of the most successful efforts of the two-year-old network is a recurring series of workshops featuring local business owners who got their start with an original idea — a niche they developed into a successful small, and sometimes not-so-small, business. Some of the featured businesses have included Kennebec Technologies, Kenway Corp. and the China Dine-ah.

Duguay says business owners present both the opportunities and the risk of starting a business, including telling students that only 10% of restaurant startups will become sustainable long-term businesses. "That's why the business plan becomes such an important part of the process," he says. "Finding your niche, doing something unique, those are the keys to success."

Students turned entrepreneurs

The most compelling workshops for interested students may be those that come from student-founded business themselves, according Roger Woolsey, career center director at Colby. The co-owners of Blue Reserve, Brandon Pollock and Nick Friedman, recent Colby graduates, returned to campus to discuss their "non-bottled water" business. They use an advanced filtration system to bring purified water to clients throughout the Portland area.

Colby's entrepreneur program, sponsored by the career center, and not an academic department, attracted 40 students in the fall of 2010, and Woolsey expects 60 signups this fall. Preserving it as a program independent from the formal curriculum is important to long-term success, Woolsey believes. New ideas are best incubated without a lot of structure around them, he says.

"Some people think that a liberal arts college like Colby wouldn't be good at encouraging students to start new businesses and try their ideas," he says. "It's the interdisciplinary nature of the campus, though, that makes it work."

With the support of alumni donors, Colby offered $15,000 in seed money last spring for business plans involving for-profit and nonprofit startups. The competition attracted nine business plans that included written presentations and a live sales pitch. Duguay says, "These were nine of the best business presentations I'd ever seen, not just from students, but anywhere."

The for-profit winner, My Fresh Maine, an online distributor of Maine agricultural products, has now launched in Maine and Massachusetts markets. The nonprofit winner was the author of a plan to encourage community vegetable gardens in Chicago with high school students supplying the labor, a venture also getting under way this fall.

Woolsey says the college plans to repeat the competition next year with more ventures receiving seed capital. Entrepreneurial programs are "a perfect fit for a liberal arts college," he says.

Colby's community workshops featuring area business owners attract not just college students, but high schoolers and adults. "Anyone who ever had an idea they thought might work is welcome," he says.

A recent spinoff has been an entrepreneurship club, with 70 members, which gets involved with community activities, such as using its initial profits to help fund a local homeless shelter. Students, Woolsey says, are looking to combine "good deeds with sustainable businesses."

Networking for startups

At Thomas College, which specializes in business education, entrepreneurship is established in the program, not just as another subject, says James Libby, who chairs the Department of Business Administration.

One of the things that convinced him Thomas should emphasize entrepreneurship involves the college's longstanding job guarantee for each graduate, provided that certain conditions are met. Students must maintain a 2.5 GPA and complete a yearlong internship at an area business.

"It isn't really as difficult as you'd think to place graduates," even in a stagnant economy, Libby says. Thomas students earn a good reputation from potential employers, and many return after completing their degree.

But he also noticed that relatively few students were starting their own businesses; most focused on potential employers right away. The answer, Libby says, wasn't more formal courses, though entrepreneurship is taught regularly, but engagement with the community. The KVEN partnership with UMA and Colby has been especially valuable, he says.

"We'd never had that much direct contact with Colby, despite our proximity," Libby says. "Now, we find that the community workshops are a real opportunity to make connections with the other colleges."

The Thomas program includes all the elements prospective business owners need, not just the business plan, but hiring and financing, the latter being the biggest hurdle for students who don't enjoy personal or family resources. "Our students tend not to come from families who can finance startups on their own. But there are ways to get loans and grants, and the networking is really helpful about opening up some of those possibilities," he says.

When a student focuses on a project, the college does everything possible to show them the ropes, Libby says. He recalls one student who wanted to launch a limo service in the Bangor area who got personal attention and advice from the CFO and human resources director at Hollywood Slots.

"The emphasis is on getting out into the community," Libby says. "That's where they're going to make the connections they'll need to test their abilities and decide where to put their efforts."

Raegan Larochelle is an Augusta native who earned her BA from Bowdoin and her MBA from Yale. She spent four years at venture capital firms in Philadelphia, but always intended to return to Maine. She's now done that, balancing motherhood with consulting, and also helping launch the entrepreneurship program at the Capital Area Technical Center. She says CATC director Scott Phair "is always looking for something students are interested in," and homegrown business ideas have boomed since the center launched its Business Careers Academy that ties into various parts of the existing curriculum. One of its early ventures was a plan for a student-run bank, which ran into some state and local regulatory hurdles, but is now projected for a December startup.

Some of the traditional business courses CATC once offered were eliminated by budget cuts, but Phair thinks the shift to entrepreneurship should generate plenty of student interest. Larochelle will launch her classes in the fall, but has already mentored students who have written business plans. She describes some of them as "ready to launch" rather than just school exercises.

Some of these students have close relatives running their own businesses and see their own involvement as natural. But her favorite students are those "who'd never heard the word entrepreneur before, but now see how they can become one." When she gives classroom presentations about the program, she's "always surprised how many hands go up" when she asks who's thought about creating a business. "There are some great ideas from students who are eager to get started."

And there may be even more venues for creating student entrepreneurs. On a recent visit to Maine, David Kappos, undersecretary of the U.S. Department of Commerce and director of the U.S. Patent and Trademark Office, expressed satisfaction with a federal liaison with four-year colleges and universities. But the Obama administration would like to see community colleges and other two-year programs join the movement as well. Kappos told a group in Bangor that he'd be happy to help establish "a beachhead" in Maine. He's visited here several times and has praised Mainers' creativity.

When he was looking for a model of how to revitalize business creation in Maine, Mike Duguay was particularly impressed by Colorado. "There isn't one sector, one particular big business that's fueled their growth," he says. Rather, encouragement of startup businesses by a small army of graduates from public and private colleges has turned the state into a magnet for young people, along with growing prosperity for all.

"They talk about the Denver-Boulder-Colorado Springs triangle, but it's really more about the educational institutions than the traditional business sector," Duguay says. To him, the analogy for Maine is obvious. Rather than focus on the high costs of doing business, look instead for the opportunities that any community provides.

At Colby, Roger Woolsey says the homegrown entrepreneurial focus is the most promising effort he's seen to solve Maine's growth riddle. "We've assumed that students who come to Colby from out of state want an education and will work elsewhere," he says. "But many of them are interested in staying right here, and using their skills to start a business is attractive to them." He thinks the entrepreneurship program can make that result more the rule than the exception.

Douglas Rooks, a writer based in West Gardiner, can be reached at editorial@mainebiz.biz.