Maine entrepreneur helps companies with high-growth potential succeed
PHOTo / Tim Greenway
Des FitzGerald, the 'entrepreneur-in-residence' for the Maine Venture Fund, visits Sea Bags in Portland, one of the fund's portfolio companies.
Long before Des FitzGerald had achieved the successes that have earned him the title of “entrepreneur in residence” for the Maine Venture Fund, he was simply a small business owner working on a dream and hoping it would pay off. He freely admits it didn't happen overnight.
“I think the word 'entrepreneur' has been overused,” he says. “The reality is, I was a small business owner and then it really took off. Certainly, doggedness is one trait I have. Energy is obviously important, as well as luck. Fearlessness, too — although I'm not sure if that's always healthy. All of those traits are part of being a small business owner — not just part of being an entrepreneur.”
FitzGerald's first company, Ducktrap River Fish Farm Inc., grew steadily from its 1977 founding in Lincolnville through 1999, when he was named CEO of ContiSea, the holding company that merged Ducktrap and Atlantic Salmon of Maine to create a firm with 200-plus employees and more than $50 million in annual sales. In 2002, he left the company and sold his remaining shares to ContiSea.
Since then, he's been involved in several startups as a partner, founder, employee — including a land-based wind power company, an HD video company and a stint as vice president of business development for the Seattle-based deep-water wind power company Principle Power Inc., which recently beat out the University of Maine's Aqua Ventus 1 project for one of three $46.6 million grants from the U.S. Department of Energy.
John Burns, fund manager of Maine Venture Fund, says FitzGerald's track record of success — as well as his two years of management consulting experience with Camden-based Brimstone Consulting and several years of co-teaching a business leadership class at the University of Maine's School of Business — led to his hiring as its first “entrepreneur-in-residence” in December 2012. The fund, which invests exclusively in Maine companies, has invested $15 million in 50 companies since its creation by the state legislature in 1995 and lists 23 companies in its current portfolio.
“When we decided to hire Des, we knew he could help our portfolio companies with all manner of operational issues. He's an experienced C-level executive who's very highly respected in Maine's business community,” Burns says. “One of the things Des has done already is to help us recruit some really top-notch people in Maine to help some of these companies and move them along, to frame out some of their issues and start to implement best practices.”
FitzGerald says he typically works with only five or six companies at a time, most often advising them on governance and marketing issues.
“We are far more hands-on and patient than the average venture fund,” he says, explaining that Maine Venture Fund balances the classic fund's focus on investing in companies demonstrating a potential for high growth with a mandate of also investing in companies that contribute to Maine's prosperity.
“I don't have all the answers,” FitzGerald says. “My big challenge, as a former owner and a manager, is to go from being somebody who is there to find the answers to being someone who's there to ask the right questions. It's not my role to solve the problems for them.”
Early lessons
FitzGerald is the first to admit that his own success in business was anything but assured when he started Ducktrap. “I didn't really know what I was getting into,” he says. “In many ways I was ill-suited to be in business.”
His interest in farming trout dates to the early 1970s when, as an undergraduate at Harvard University, he decided to take a year off to travel to Alaska. Along the way, he worked at a trout farm in California where he sampled smoked trout for the first time. He couldn't believe how tasty it was. An inkling of a dream took hold of him. “I loved the idea of selling a natural food product,” he says. “It was very appealing to me.”
After returning to Harvard and earning his degree in biology, his next stop was the graduate program in aquaculture at the University of Washington. He already had set his sights on heading to Maine, where he'd spent summers in his childhood, with a dream of raising trout for sale to local restaurants. After purchasing 30 acres of suitable land on Kendall Brook, a tributary of Ducktrap River, Fitzgerald created his company with the idea that he would raise trout to supply local restaurants and markets.
FitzGerald built pens for the fingerling trout that would take six to seven months to reach maturity. He built raceways that simulated streams of moving water, which he pumped from Kendall Brook and from a well that had been dug on the property. A lot went wrong during those early years, including serious predation from herons, osprey, raccoons, minks, otters and a great horned owl. A news article in the Lewiston Journal describing his early troubles paints a vivid picture of FitzGerald blasting his shotgun into the air before dawn to scare off herons that were snacking on trout, worth $1 apiece, 20 at a time. He even resorted to erecting a 10-by-10-foot poster of a bald eagle near the fish pens, hoping it would scare off the predators. The 1982 article suggests he never completely won that battle.
What those early challenges taught him, he says, is that any successful small business owner must have, first and foremost, a strong passion for their products or services to keep them going during those times when failure seems more likely than success.
“You have to pour your heart and soul and energy into your product,” he says. “If you have had only successes in business, you only know one part of business. It's bloody difficult. I had a lot of naivete in my 20s, but that and a lot of passion can take you places you couldn't even imagine going — if you stay with it.”
Willing to pivot
FitzGerald says it took him several years to realize just how difficult and complicated it actually was to run both a fish farm and a food company. Recalling the exquisite smoked trout he had enjoyed so much in California, he began to explore how he could smoke his own trout. He first built a homemade smoker, tested recipes and sought feedback from friends.
Encouraged by their positive reactions, he built a smokehouse the size of a small icehouse on his Lincolnville property and started smoking trout for sale to local markets. He began to smoke mussels and salmon as well, traveling to England and Scotland to see and taste firsthand how European smokehouses made their products. He experimented with different types of native trees (and wood smoke) to obtain a distinctively Maine flavor.
By the mid-1980s he was ready to pivot and focus his company solely on selling smoked fish and other seafood purchased from local, national and international vendors.
“From top to bottom we were devoted to 'continuous process improvement,'” FitzGerald says. “If you get everyone working in one direction and continuing to focus on quality, everyone gets involved in your product and they will feel they're a part of its success.”
Even so, he acknowledges luck can play a role in a small business's path to success. In Ducktrap's case, he says, when the company's customer base began to expand beyond local markets in Maine it coincided with Federal Express's explosive growth in the 1980s. Just when he needed it, an innovative shipper providing next-business-day delivery service enabled Ducktrap to sell its smoked products coast-to-coast.
“Timing is important,” he says. “I was lucky at many points along the way.”
Honesty is integral
A few years after closing the trout farm to concentrate on smoking, FitzGerald's business had outgrown its Lincolnville location and moved in 1991 to a new state-of-the-art facility in Belfast. With growth came new challenges and lessons to learn, including how to build a team.
It's in this area that FitzGerald says he spends much of his time mentoring business clients as Maine Venture Fund's entrepreneur-in-residence. Much of his advice is based on guiding principles he picked up during his time with Brimstone Consulting Group, which tended to reinforce the hard-won lessons he'd gained during more than two decades as Ducktrap's founder/owner/CEO.
As a business grows, he says, its owner or top leader must clearly communicate the company's goals and align everyone from top to bottom with them, as well as stress the importance of continuous improvement as the best way to achieve those goals. Equally important is making good hiring decisions, which FitzGerald says requires introspection and self-honesty.
“What are you good at? What are you not good at?” he says. “You need to answer those questions of yourself because those initial hires are going to be pretty critical to the success of your business.”
Related to that, he says, is forming an informal group of trusted and knowledgeable advisers to serve as a reality check and an additional management resource — i.e., people who'd be willing to function in a similar role on a large company's paid board of directors or trustees.
“I couldn't afford a board of directors, so I assembled a group of people who knew me,” FitzGerald says of the advisory team who helped him during his ownership of the company that now goes by the name of Ducktrap River of Maine. “It can be attorneys, political folks … whatever your mix is, make use of their talent. The only requirement is that they are fearlessly honest and willing to ask hard questions.”
“The temptation and natural tendency of a CEO is to show the company in the best light possible,” he says. “But that's not going to serve you in the long run. It's better for the CEO to admit 'I really messed up on that budget' and then say, 'We're going to understand where we failed and why.'”
At every level, he says, honesty is integral to a business's chances for success.
FitzGerald cites a nationwide survey of 500 middle managers, who'd been asked which of three traits best fit their definition of an ideal leader: Honesty? Energy? Intellect?
“Resoundingly,” he says, “people chose 'honesty' — for a very good reason. You want a company to be built on honesty. The lack of that in any business can cause tremendous problems.”
Noting that Maine Venture Fund's website at www.maineventurefund.com offers a comprehensive business library of resources compiled by Fund Associate Jayme Okma Lee — including a detailed step-by-step guide on “key performance indicators” designed to help owners and CEOs “understand, monitor and improve” their business performance — both Burns and FitzGerald dispute the notion that Maine is a business-unfriendly state.
Expertise and funding assistance, they say, is available for virtually any type or size of business — if the owners or top leaders make the effort to tap those services.
“You have to be a 'sponge' in whatever you are doing,” FitzGerald says. “Snatch up good ideas, expel the bad ideas that don't work for you. You've got to go out and learn and listen. To work in a vacuum is to put yourself at a disadvantage.”
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