Alaska’s ‘Chief Encouragement Officer’
Allan Johnston has a theory about the cyclical attempts at new business ideas.
Institutional knowledge tends to turn over every eight years. Then the knowledge disappears — maybe in the form of a discouraged entrepreneur moving on to a new idea or to the Lower 48.
Alaska attracts talented people possessing good ideas who seek to set a plan in place, but few have the longevity to know what’s already been tried.
“An idea will come up and someone will say ‘it’s never been done before. No one is aware of it,’” Johnston said. “In reality, it has been done. But nobody who’s working there was part of it or is aware of it.”
Whether rescuing orphaned business plans or finding new connections, nearly every recent Alaska investment program to help entrepreneurs has seen the stamp of Johnston in one way or another, his champions say.
As far as encouragement and institutional memory, Johnston supplies both. Since retiring in 2012 from a 36-year career as regional manager for Wedbush Securities, he’s become a CEO, but not of any particular company.
Instead, he’s the Chief Encouragement Officer for a whole lot of people and projects involved in a modern-day ecosystem for startups.
The ecosystem isn’t restricted to an Alaska pond, either. Global entrepreneurship helps Alaskans look outward — or in that Alaska lexicon “Outside” — where their true markets may be located, he says.
“If all we do is look inside Alaska, there may not be much of a market and the idea won’t realize its potential,” Johnston says, in what sounds like a walking TED talk to journalists, investors, business strategists, technologists, planners and public officials.
“If we can identify the ‘been there, done that’ people and pair them with a new entrepreneur that has the same idea, there’s an opportunity,” he says.
Shake down the former plan that didn’t work, take it apart and figure out why. Usually, the infrastructure and logistics weren’t complete.
But to say it’s never been done here before or it’s been tried and failed is another way of discouraging hopeful ideas.
“We have to get these ideas into a positive environment,” Johnston said. “In a negative environment you feel like nothing works or it will never work or you can’t do anything right.”
Alaska has critical reasons for trying. Third World countries are usually extraction economies and most decisions impacting them are made outside of that country with their wealth based on a single resource.
“Alaska is like a Third World extraction economy since we receive 80 percent of our revenue from oil. That is a real danger,” Johnston said. “You would never invest in just one type of stock.”
He believes oil was a godsend, but the future of Alaska will be built on the dreams of innovators and entrepreneurs.
Making his own history
A college-age Johnston spent the summer of 1968 in Alaska, by then not even a decade into statehood. The Trans-Alaska Pipeline System hadn’t been built. He and a friend drove part of the Alcan Highway in a Volkswagen Bug thinking they would commercial fish in Ketchikan.
But they arrived too soon for the season, and decided to take the ferry to Haines. On the drive toward Delta Junction, a huge forest fire broke out.
“We were conscripted to fight fires,” he said, “and never did get out on a fishing boat.”
At the University of Vermont, Johnston was studying finance, destined toward what he thought involved corporation finances. That summer in Alaska “lived up to my expectations as a good place to raise a family, and it had everything to make for a good quality of life here,” he said.
In St. Johnsbury, Vt., Johnston’s dad was an internist/cardiologist whose practice was about 30 feet from the house. He didn’t see the East Coast as offering the same types of wide-open opportunities.
The town of his birth was established in 1760, a “shire” town or county seat for Caledonia County. St. Johnsbury is famed for Thaddeus Fairbanks’ 1830 invention of the platform scale and as the center of manufacturing candlepins, better known as bowling pins. Maple syrup is a primary industry.
“You’re always living someone else’s history,” he said. “In Alaska you’re creating history every day. There, people ask: ‘Where did you go to school? Who were your parents?’ Without saying anything about yourself, you’re pigeon-holed.”
In that part of the country, if the “dad’s a U.S. senator and the son is a jerk, he’s still considered someone special,” he said. “If your dad’s a senator here and the son is a jerk — he’s still a jerk.”
Several things interrupted Johnston’s return to Alaska. He was drafted during the Vietnam War in February1970. First at Fort Monmouth in New Jersey, then in Germany, Johnston worked Army communications for two years. His education had also been interrupted, so upon discharge he returned to his finance studies at UV.
“I found that I got really restless and wanted to come back to Alaska. I never finished my degree,” he said.
In the summer and winter of 1974-75 in Fairbanks, Johnston worked for Bechtel as a payroll timekeeper a few months, then took a construction job out of the Labor’s Union in Happy Valley. By the time he married his wife Jennifer on Jan. 2, 1976, the couple was ready to move permanently to Alaska.
The newlyweds drove a Dodge pickup truck-camper from Vermont cross-country and up the Alcan Highway, carrying not much more than a few duffle bags of clothes, wedding gifts and a “bit of maple syrup,” as his wife puts it.
They settled in Fairbanks where Johnston was the regional manager for Wedbush Securities, a position that brought them to Anchorage in 1988. He retired in October 2012 after a 36-year career.
After they raised three children, Jennifer Johnston was voted to the Anchorage Assembly where she served three terms. Now she represents District 28 in the Alaska House of Representatives.
The impetus for his retirement, Johnston said, was to assist the Municipality of Anchorage in creating the $13 million State Small Business Credit Initiative or the SSBCI, awarded to Anchorage in 2012. It is now known as the Municipality of Anchorage 49th State Angel Fund and has attracted more than 20 investors who help set startups on their way to success.
Angels and accelerators
The major programs Johnston is credited with launching include the Alaska Business Plan Competition in 1999, the 49th State Angel Fund in 2012, the Global Entrepreneurship In Residence Program in 2016, Startup Weekend in 2012, The Alaska Energy Prize contest (now set to take place in 2018) and the Alaska Innovation and Entrepreneurship Support network. He also helped develop Launch Alaska.
The Alaska Business Plan Competition was one of the first projects of The Entrepreneurs and Mentors Network, or TEAM, which Johnston formed with like-minded innovators and investors such as Mike Haines and Eric McCallum.
“Not a single one of these would have been started without Allan Johnston,” wrote Forrest Nabors, a UAA Political Science professor, in an email. “He has been helping to shape Alaska’s innovation and entrepreneurial culture for over 15 years. A lot of the opportunities and networks have in some way been seeded by his efforts.”
Nabors is a co-founder of Alyeska Venture Management and the Alaska Accelerator Fund, a firm that now has four partners and 19 investors.
“Allan was instrumental in helping us start our fund. Without him, AVM and AAF would not exist. I have also worked with him on the Alaska Business Plan Competition. He has been a tireless advocate for new business startups in our state,” Nabors wrote.
Nabors credits him not only as Alaska’s Chief Encouragement Officer but also as “godfather of Alaska entrepreneurship.”
One of Johnston’s visions was to set up a funding pot for well-vetted business startups.
Lucinda Mahoney was the chief fiscal officer for the Municipality of Anchorage under former Mayor Dan Sullivan when she sought the $14 million in funding from the federal government for establishing the 49th State Angel Fund.
“Allan and I worked long hours together to create an application for Anchorage. He guided me through the entire process,” Mahoney said. “We received the money and finally Anchorage had some funds to create a culture of angel investing in startups. This would not have happened if not for Allan.”
The programs may sound Alaska-centric, but Johnston is active nationally in a network of entrepreneurial mentors.
He taps international mentors to help Alaskans and is a financial supporter of the new Global Entrepreneur In Residence at UAA, Nigel Sharp.
“As you know diversification of our economy is critical and startups play a critical role. I attribute this new community’s existence to Allan. It was his vision, his tenacity and he made it happen,” Mahoney said.
Isaac Vanderburg, the executive director of Launch Alaska, said he met Johnston about a decade ago.
“I’m sure he reached out to me because he’s a connector. I don’t remember the exact moment, but it was back when I was running the UAA Small Business Development Center,” Vanderburg said. “He’s always working behind the scenes to put together the right people.”
Johnston’s vision for how the community should look in the future “is pretty compelling,” he said. “He thinks at a pretty high level.”
Somehow, entrepreneurship ties everything together.
“He is like a classic community builder: Extremely selfless as he gives his time and his money and his expertise to a lot of people. He’s also got a pulse on events and people coming together – it’s almost uncanny,” Vanderburg says.
At Launch Alaska, Johnston was able to see a business accelerator program put to work after he invested some of his own money toward the $25,000 grants that go to each company chosen to participate.
This is how Launch Alaska works for those accepted into the program: “We give them $25,000, they sign a note, and the investors have a right to convert the note into stock or equity in the company if they chose for a possible return on the investment,” explained Lance Ahern, a business advisor for the Alaska Small Business Development Center.
In the “accelerator,” the company commits to four months of intensive training and contact with mentors. At the other end of the training, they emerge as investment-ready companies that are looking to scale quickly, Vanderburg said.
The first graduating class of the Launch Alaska program are Aquilo, which provides drone services for large companies; Kwema, a team marketing “Smart” jewelry; and Heather’s Choice, which developed a line of dehydrated organic foods for outdoor adventures.
Back before there were these programs though, Johnston’s original work setting up the Business Plan Competition in 1999 provided a place to start a good business plan.
To get it launched, Johnston went to university business professors at the Schools of Business at UAA, University of Alaska Fairbanks and Alaska Pacific University.
In the contest, entrepreneurs from across the state vie to attract investors, validate their business ideas and win prizes.
Teams pitch their startups to a panel of judges and attendees for a chance to be named creator of the year’s Best Business Plan. It’s supported by a network of businesses, such as Northrim Bank, First National Bank Alaska, Wells Fargo Foundation, Team Network Inc., Alaska First Community Bank and Trust, Anchorage Economic Development Corp., UAA College of Business and Public Policy, APU Hickel Leadership and Entrepreneurship Fund, and the Anchorage International Rotary Club.
“It started out as being for business students, an act of learning, or experiential learning,” Johnston said.
Gradually, the competition became a welcome mat for the winning business plan — and for the runners-up — into that community ecosystem that would nurture a new entrepreneur.
Most of these programs also have connections to the University of Alaska Schools of Business, both at UAA and UAF, as well as the Business Enterprise Institute, said Director Christi Bell.
Universities have long played a role as economic engines, Bell said. Johnston has seen the value of connecting university expertise with community business leaders to expand the network: the Global Entrepreneur in Residence Program just welcomed its first faculty member June 19.
“Universities have their research arms and they partner with industry so it’s commercialized that way,” Bell said.
Industry can benefit the university as a funding mechanism as well. Johnston and Bell point out that all these programs are paid for from private funding – not through the beleaguered state budget allocation to the UA system.
A great example of a university generating its own funding comes out of the University of Florida.
Gatorade was created in 1965 by a team of scientists at UF, College of Medicine, Bell noted. “They’ve received $12 million a year in recent years from royalties.”
The money goes back into the school through a foundation. A holy grail for universities, ever since Florida’s success, is to find their own “Gatorade” by nurturing the intellectual talents of faculty and students.
“If enough seeds are planted in nourishing soil,” Johnston said, one day we may see a successful venture that will allow the university to self-fund to some extent.
For Johnston, seeing these developments come to fruition has made his job as a CEO rich and rewarding.
“It’s fun getting up in the morning if you think you can make a difference,” he said.
Naomi Klouda can be reached at [email protected].