🔒Growing up with UpStart: Orono incubator on a shoestring produces wide range of firms

At the UpStart Center for Entrepreneurship in Orono, researchers in the lab of Cerahelix Inc. are heating and mixing test solutions for the manufacture of specialized filtration materials using nanotechnology.

In another lab, Anin Maskay, lead engineer for Environetix Technologies Corp., is overseeing development of harsh-environment sensors that can withstand conditions up to 3,000 degrees Fahrenheit and extremely high acceleration while wirelessly transmitting real-time data.

In the office of Activas Diagnostics, clinical coordinator Chris Gilbert is reviewing data from the startup’s diagnostic sleep monitoring system, which uses biotechnology to evaluate mild cognitive impairment. Elsewhere in the building, Daniel Finnemore, owner of the startup Box of Maine, is working the phone to expand marketing and website optimization for his gift-box business.

Run by the University of Maine, the incubator program at UpStart has a diverse mix of companies. But they share characteristics.

“This incubator focuses on companies that typically have some kind of innovation,” says Renee Kelly, assistant vice president for innovation and economic development for the University of Maine and a business advisor at UpStart. “The tenants want to grow significantly, so they have scalability in common. While that might look a little different for a biotech company versus a chemicals company versus an IT company, a lot of the challenges are exactly the same. We customize our resources to help those companies.”

Early pivot

The UpStart Center was developed by the Bangor Target Area Development Corp. in partnership with the University of Maine, the state and the town of Orono. Located in a one-story, 20,000 square feet in an industrial park, UpStart, opened in 2002, originally as the Target Technology Center. Initially, its mission was to spur innovation in the information technology sector by sustaining commercialization of R&D.

Early on, it was clear the startups were going well beyond IT. “We pivoted early to focus on scalable, innovation-oriented businesses,” says Kelley.

Proximity to UMaine has provided an important pipeline to resources, expertise and talent.

“That’s a big advantage for startups that locate here,” she adds.

UpStart offers reduced lease rates to startups in the incubator, as well as a market-rate leasing program. A separate affiliates program helps companies that don’t need office space but benefit from business development and facility services.

It offers fast internet, video conferencing and services like lunch-and-learn seminars. For incubator tenants, additional services include hands-on management assistance, access to financing and orchestrated exposure to critical business or technical support.

Recent improvements include an $850,000 build-out of two laboratory spaces, completed last year and occupied by Cerhelix and Environetix, which had previously retrofitted lab space elsewhere in the building.

“That had a dramatic impact on the facility,” Kelly says. “Being able to have laboratory space of more significant size is something that was missing in this region.”

Emma Wilson, the center’s entrepreneurship events and marketing coordinator, has performed other space upgrades that speak to the incubator’s networking nature.

“Everybody learns a lot from one another, so Emma has been working on creating spaces in the building where people are comfortable hanging out,” says Kelly.

“People think of entrepreneurs as lonely. But it’s really a team sport,” says Martha Bentley, Maine Department of Economic and Community Development’s small business and entrepreneurial development manager. “It’s about building a local entrepreneurial ecosystem.”

Making ideas real

UpStart addresses challenges faced by small entrepreneurs looking to make their ideas real, says David Milan, director of Orono’s office of community development and Bangor Target Area Development Corp.’s board chair.

“Maybe they’re working in their garage but they want to go to full production,” he says. “That’s a huge step. The UpStart Center is a stepping-stone facility.”

That stepping-stone, notes Bentley, is part of a continuum of resources in the Bangor-Orono region. The center is one component of UpStart Maine, a nonprofit that brings together all of the region’s entrepreneurial programs, including the pitch competition Big Gig, the accelerators Top Gun and ScratchPad, coworking space, UMaine’s Foster Center for Student Innovation, and the Bangor Innovation Center, where companies that outgrow UpStart can move into large manufacturing space.

The incubator is primarily driven by companies with University of Maine connections.

“We’re attracting smart minds who do interesting things,” says Kelly. “That helps spin off all kinds of activities.”

Environentix, for example, was founded by UMaine faculty members Robert Lad and Mauricio de Cunha. Their lead engineer holds a UMaine PhD.

At Cerahelix, two of the three co-founders, Susan MacKay and Karl Bishop, met while they were fellow scientists doing postdoctoral research at UMaine. They founded Cerahelix in 2011 to commercialize a unique filtration membrane made in part by using DNA. Now fully commercialized, Cerahelix moved production to the Bangor Innovation Center, raised $2 million in venture capital, and more than doubled their staff. R&D, sales and customer trials teams remain at UpStart.

MacKay, a 2010 Mainebiz Women to Watch honoree, manages operations. But in the beginning, she had no experience as an entrepreneur. The relationship with UpStart was essential to the company’s growth.

“For someone like me, who has a science background, you need someone to teach you about finance, about how to get your business set up,” MacKay says. “I would ask questions. For example, I wanted to apply to an accelerator early on, so I got advice about what to look for in an accelerator.”

Early on, even basic assistance was useful, like choosing a logo and shooting promotional video.

“We got some of our early videos shot by people at the University of Maine,” she continues. “We connected with student interns. I got the coaching I needed.”

Proximity to UMaine is useful, she says.

“We have a very educated workforce,” MacKay says. “I’ve hired both from the University of Maine and Husson. Our new chemical engineer just graduated from the University of Maine.”

She’s also found the local workforce is loyal because they want to be in the region not just for a job, but for the lifestyle.

“That benefits a company like mine,” she says. “I can invest in training. It’s not trivial to make what we make. So you need people to commit.”

Mini Silicon Valley

Marie Hayes and Ali Abedi, co-founders of Activas Diagnostics, are UMaine professors.

“UpStart is a modern-day kind of Silicon Valley, which was a spinoff of Stanford University,” says Hayes.

They moved into UpStart last year, after receiving a $1 million Small Business Innovation Research Award to bring its patented product — a fitted mattress undersheet instrumented with 16 wireless sensors — to market as a new approach to diagnostics and monitoring in early-stage neurological disease. The move allowed them to form a commercial entity and provided space for research and development, as well as routine business functions like video-conferencing.

As it was for MacKay, entrepreneurship was new to them. Hayes participated in SBIR commercialization training that complemented coaching provided by Veena Dinesh, director of business incubation at the University of Maine’s Foster Center for Student Innovation, who also serves as an UpStart business advisor.

Hayes appreciates UpStart’s interactive environment.

“Other people there have the same problems I have,” she says. “I’m exposed to strategies that other people use to kick-start their companies.”

Other benefits? UpStart’s information technology capability, laboratory infrastructure, storage and a base of student interns. For students looking toward spin-offs of their own work, UpStart adds credibility to their resumes, Hayes notes.

But UMaine isn’t the only generator of tenants. Finnemore was working out of his basement in Old Town to get Box of Maine off the ground. Launched in 2017, Box of Maine allows customers to custom-order Maine-made items. He moved operations to UpStart last summer to take advantage of coaching he’d need to scale up.

“I’m getting lots of opportunities to talk with other businesses, create standard procedures” and figure out things like branding and marketing.

Michael Lessard, founder of WingsReality EDU, an aviation training company, was pleased to find a permanent base for his growing enrollment plus high-performance online capability for online instruction.

Challenges

Not that there aren’t challenges. “Funding can be a struggle,” says Milan. “We have to be at about 90% occupancy in order to break even on our costs.”

A capital campaign covered the creation of the two labs last year. But generally, funding to run UpStart comes from lease income. Without full occupancy this summer, the center was barely covering costs.

“It’s hard, when you’re dealing with startup companies,” he says. “You can’t make it cost-prohibitive for them to be there. So a challenge we have is, How do you we continue to stay open and provide services? We’ve been successful in doing that by partnering with the University of Maine.”

Overall, Milan says, UpStart is a great fit for Orono.

“Our economic engine is really made up of smaller entrepreneurial companies and individual employees of larger companies that are located elsewhere,” Milan says. “The UpStart Center provides them with quality space that they need to do work that might not be best to do on on the kitchen table. It’s not about creating a company that’s going to employ a thousand people. It’s about creating a thousand businesses that might have one or two people.

"That’s the success we’re seeing. It’s creating jobs that provide a livable wage for folks to live in a place where they want to be.”