Gretchen Fauske

Could small-scale nuclear power be a part of Alaska’s future energy mix?

As parts of Alaska hit new record lows for April — blizzard conditions, negative 70 degree wind chill, and temperatures more than 40 degrees below zero in some parts of the state — we’re reminded, as we often are during winter months, to be grateful for the comfort of warm shelters that stand up to even the most wicked of weather events. That comfort comes easier in some places than others. Hundreds of villages, spanning the state across miles upon miles of wilderness, are powered by microgrids, which are self-sufficient energy systems that act as individual controllable entities. Alaska’s microgrids depend primarily on high cost imported diesel fuel to bring electricity to rural homes, businesses, and community buildings. As a result, rural residents pay much more than residents in Alaska’s more populated areas in the Railbelt or Southeast. These expenditures on imported heat and fuel for electric power generation represent a significant drain on local households. Finding a consistent, lower cost source of energy — including both electric power and heat — would mean that instead of spending income on utility services, rural Alaskans could invest additional funds in education, technology, new businesses, savings, and more. One way to reduce the cost of power and increase reliability is through innovative new energy solutions. An emerging technology, micro-nuclear reactors, is being considered as an option for powering remote microgrids. Micro-nuclear reactors, approximately the size of a shipping container or small house, offer consistent, nearly maintenance-free power for 10 to 20 years before requiring refueling. At the University of Alaska Fairbanks Center for Energy and Power, Gwen Holdmann and her team are dedicated to applied energy research and technology testing focused on lowering the cost of energy in Alaska. Known by many as one of the top global experts in microgrid energy systems, Holdmann thinks nuclear energy has the potential to replace diesel fuel in rural communities but recognizes that concerns exist. “The nuclear energy industry has really evolved over time. The last 10 years have seen a new, much more flexible approach to how nuclear energy can be deployed. Systems are smaller, modular, and with more inherent built-in safety features,” says Holdmann. “That said, many people have a sort of visceral reaction to the idea of radioactive materials potentially contaminating the environment and that is legitimate. When you’re thinking about energy sources, it’s important to evaluate potential risk as part of a broader decision-making process. “That includes understanding the technology, how the technology functions under a variety of operational and environmental conditions, and consideration of the full life cycle including fuel management. Then you have to balance all of those concerns against the potential to reduce costs or create new economic opportunities.” Richelle Johnson, lead analyst at the University of Alaska Center for Economic Development, or CED, just wrapped up a year-and-a-half long project funded by the U.S. Department of Energy and Idaho National Labs researching potential use cases for small scale nuclear power. “Alaska’s future energy landscape is going to look a lot different than it does today,” says Johnson. “It’ll be a mix of renewables and fossil fuels, but realistically it could also include nuclear.” Johnson and other UA CED researchers interviewed a number of potential energy users, ranging from small villages and hub communities to remote mining projects and military installments. “The people we interviewed for the report were experts in their field, and were very aware of the limitations of renewables in Alaska — you can only gather wind resources when the wind is blowing, you can only collect solar power when the sun is up — you still need a consistent baseload, and right now that comes from diesel,” Johnson said. Despite interest in the benefits of nuclear power, researchers found skepticism about operating a new nuclear technology in remote areas and a preference to see it proven out elsewhere first. “When it’s -20 degrees outside, you have to know how to fix something, and right now it is still unclear what that looks like for micro-reactors,” says Johnson. Silicon Valley-based Oklo, a venture-funded company founded in 2013, is poised to deploy its first project in Idaho Falls on the Idaho National Labs campus. As the sole company with a license application to build and operate a small-scale nuclear power plant, they are leading the industry in new technology. Large players like General Electric and Westinghouse are not far behind with designs of their own, however. Co-founder and CEO Jacob DeWitte, says that Oklo’s microreactors are a far cry from what most people picture when they think of nuclear energy. “We look different and operate different because we’ve been able to incorporate technology that’s been developing for decades,” he said. He’s looking for an Alaska site for his second deployment project, and has spent time in the state as a portfolio company for Launch Alaska, an Anchorage-based nonprofit dedicated to energy innovation. “Right now we’re in the process of finding partners and end users for our system. Alaska offers so much diversity in culture, climate, and geographic regions,” DeWitte said. “From a technical perspective, making something work in Alaska would help us evaluate our capacity to deliver in the most demanding environments in the world, to really prove out what we can do. If we can do it there, we can do it anywhere.” The deployment at INL is planned for sometime in the early 2020s if everything goes to plan, and an Alaska project would follow. The company is already pursuing multiple leads in Alaska, and is actively seeking additional customers in the states. DeWitte says that although he understands concerns, he’s hoping to help people shift their thinking about nuclear energy. “Our microreactors are inherently safe, self stabilize, are able to shut themselves down, and stay cool without a lot of operational involvement,” says DeWitte. “These are simple, safe systems.” That’s not to say nuclear energy shouldn’t continue to be treated with care. Holdmann referenced a floating Russion nuclear power plant (with more, such as a 35-megawatt barge, being planned to serve Russia’s Arctic communities) noting that if there were an accident on it, it would negatively impact Alaska’s fisheries. Other countries, like Canada and China are deeply engaged in research, testing, and deployment of small modular reactors. “There’s been a significant increase of nuclear installations across the world, especially in regions with more friendly permitting and licensing,” says Holdmann. “As a country, if we want to maintain our leadership in this industry, we need to pay attention to what’s going on. There’s a balance between caution and progress.” Gretchen Fauske is a marketing-minded economic developer fueled by a passion for innovation and entrepreneurship. She is the associate director for the University of Alaska Center for Economic Development, Board President for Anchorage Downtown Partnership, and a Gallup-certified CliftonStrengths coach.

Hybrid events as the future of community gathering

A year after the COVID-19 pandemic forced many businesses to temporarily close their doors to in-person customers, owners are preparing for a return to business as (mostly) usual, and in some cases, better. Many learned lessons about how to reach their customers virtually and don’t intend to let them go to waste. Here’s what three different Alaska businesses have planned as they begin to re-open:  Toast of the Town When COVID-19 hit Alaska and the first emergency order was issued, Crystal Biringer, President of Anchorage-based events company Toast of the Town, or TOTT, remembers thinking “Holy cow, everything we have planned for the foreseeable future is no longer an option...what are we going to do?”  She knew that her team needed to make some quick decisions to continue serving their clients and for the business to survive.  Pre-pandemic, only about 10 percent of TOTT’s businesses was virtual, consisting mostly of the occasional live stream or post-event recordings shared on social media. Regardless, the team was confident they could make the transition to focusing mostly on digital events for the next two years… and they were right, to the rate of a 57 percent increase in the number of events in 2020 from 2019. Biringer notes that the company also saw an increase of at least 50 percent attendance at virtual events, and credits part of their success to enlisting the services of Upper One Studios to partner on virtual production work. She also says thoughtful touches like hospitality boxes — themed packages sent to attendees pre-event to create a shared experience and tie into the event — along with chat functionality and interactive two-way app integrations allowing people to connect digitally with each other went a long way to differentiating TOTT’s events from just another Zoom call. A key lesson learned during the last year was that while in-person events are often successful because the attendees look forward to seeing and interacting with each other, virtual events are successful because of high quality content and relevant subject matter. Fortunately, access to high-end speakers is better than ever, Biringer said. “You don’t have to worry about housing, travel, and developing a full-fledged Alaska experience for each speaker you bring up. Instead you’re just asking for a couple hours of their time,” she said. “That cost difference has been a blessing to event budgets.” As businesses begin to open up and it’s safe to gather in crowds, Biringer intends to make use of everything she learned this year. “We discovered what virtual events can deliver — increased attendance, higher sponsor impact, speaker accessibility — and so I believe the future of events is to go hybrid. This isn’t a solution for all events, some have an in-person value that shouldn’t be replicated digitally, but if you’re producing a conference or fundraiser, there’s no reason it shouldn’t be a hybrid event. In fact you’re really missing out on a big opportunity if you stick to just in-person.” Despite changes, Biringer says the purpose behind TOTT’s work hasn’t changed.  “We’re still bringing people together through shared experience and an immersive atmosphere,” she said. “We’re still helping people engage, the environment in which we do it is just a little different now.” The Pub The Pub at the University of Alaska Fairbanks is a 30-year-old institution well-loved by students, staff, and alumni, and self-described as “a little bar on the flagship campus of the coldest state, and we like to party.”  Manager Mike Willis says that pre-COVID-19, The Pub had a Facebook page that wasn’t used much. That quickly changed as he and his staff scrambled to figure out how an in-person drinking establishment on a now closed college campus could stay connected to the community during the midst of a pandemic. The answer? Virtual Pub Trivia.  “We knew trivia was something we could offer online, that would help people stop feeling so alienated and alone,” Willis said. “Natilly and Melissa on our staff quickly figured out how to do it via Zoom, there were a few kinks at first but now we’re rocking and rolling!” Trivia has been a mainstay of The Pub for nearly a decade, featuring topics like Alaska History, Black Histroy Month, Sex Ed, Inaugurations, and Alaska Beer Week. When it shifted to virtual delivery, Willis said that alumni and former staff now living out of state started joining the Zoom and the team soon had “celebrity hosts,” like former pub manager Donald Crocker who joined in to host a couple sessions. A few student clubs also stepped in to host as well. Recognizing the value in creating digital content for their customers, The Pub also partnered with Telesomm, a startup company headquartered in Fairbanks offering custom wine experiences with sommeliers via Zoom. Last week they hosted “The Arts and Beats of Wine” with Chris McCoyd, a “Hip Hop Somm” with a degree in music business.  Facebook Live tours and Q&A sessions with breweries like the Alaskan Brewing Co., Black Spruce Brewery, and Midnight Sun Brewery also proved popular. Willis says they expect to continue offering similar content even as they begin to re-open. “Our big takeaway from all of this is that now we have a strong social media presence, we have some momentum, and we’re going to invest more time, energy, and resources into keeping it going,” says Willis. “Because of social media we were able to connect with regulars, stay relevant, and communicate with our patrons. We don’t want to lose the ground we’ve gained just because we’re starting to re-open for in-person visitors.”  Willis is excited about exploring a hybrid model for Pub Trivia after The Pub re-opens for in-person customers. Mind and Mountain  Sarah Histand is the founder of Mind and Mountain, a woman-centered training program for winter (“Ski Babes”) and summer (“Summer Strong”) outdoor recreation. Although most of her work pre-pandemic was in-person, she had already developed an existing online platform meant to complement sessions in Anchorage. “Because I had the technology, it was a pretty easy decision to pivot to all online delivery,” Histand said. “There was a learning curve working with people who hadn’t done online workouts before, helping them see that they could get the benefits of going to the gym from their living rooms, but overall it went well.” Her response to the pandemic quickly paid off, as she nearly doubled the number of people signed up for her program in 2020. As Histand built up the digital Ski Babe and Summer Strong experience she made sure to emphasize both physical and mental health, as a lot of her clients were struggling with disconnection and isolation. “I heard from a lot of people that they appreciated having a way to interact online that wasn’t social media,” she said. “The support of our community was a big benefit for people, and helped them manage their stress.” Despite her success this year, Histand is looking forward to a return to in-person training and hopes to bring it back as soon as the summer. “As a teacher it’s really different to interact with people in-person, and I’m excited for it to be an option again,” Histand said. “But I’m definitely going to keep the online platform going; it’s so easy for people to access at any time and is an incredibly effective way to get strong from anywhere, plus now I really believe in the possibility of creating community connections online.” Histand says there’s balance to find between in-person and online experiences, across industries. “The pandemic showed us that it’s possible to operate online but emphasized how valuable and irreplaceable in-person time is,” she said. “There’s a hybrid, a place in the middle that’s the way of the future.” Gretchen Fauske is a marketing-minded economic developer fueled by a passion for innovation and entrepreneurship. She is the associate director for the University of Alaska Center for Economic Development, Board President for Launch Alaska, Vice Chair for Anchorage Downtown Partnership, and a Gallup-certified CliftonStrengths coach.

Alaska Angel Conference connects entrepreneurs with investors

Ana Kaiser and her co-founders Alexa Daniels and Jordan Bolton had their sights set on selling their keto/paleo/vegan donuts in the Lower 48.  They launched Fossil Fuel in 2018 after running a successful Kickstarter campaign, and quickly established a solid market base in Alaska. But to reach more customers who embraced the kind of lifestyle their products support, they knew they needed to grow into new markets, which required expertise and capital they didn’t have.   Kaiser had recently heard about a new funding opportunity, the Alaska Angel Conference, or AAC, and she and the team decided to give it a shot.  AAC is a collection of events designed to educate Alaska startup founders and new angel investors over the course of 12 weeks. Startups learn how to position themselves for investment and pitch their companies, while investors learn the ropes of angel investing (many are new to this level and type of investing), pooling their funds and making a group decision as to which participating company will receive their joint investment.  The term “conference” is a bit of a misnomer since the event spans several weeks where the investors conduct due diligence on each company participating, and while the companies simultaneously perfect their pitches, work on their business plans, and learn about tools of the fundraising trade like ‘term sheets.’  The decision to participate in angel investing — when an individual provides financial backing for small startups or entrepreneurs, typically in exchange for ownership equity in the company — is a serious one for both investors and entrepreneurs. Investors are putting dollars on the line in what is a traditionally very high-risk type of investment, and entrepreneurs are potentially giving away ownership in their company in return for receiving funding.  The conference supports both through the process, with the goal of increasing the number of investors in Alaska to spur entrepreneurial growth. Only one company is chosen at the end of the AAC to receive the pooled investment, which averages $100,000.  Previous AAC winners include Sitka-based Ramper Innovations, which developed a compact motorized folding conveyor system for baggage handlers, and Anchorage-based Pandere Shoes, a company making expandable footwear. Gaining financial savvy...with funding at the end Now in its third year, 2021 AAC organizer Mark Billingsley says that although the opportunity to secure funding is a driver for many entrepreneurs to participate, the true value is in the education and the network.  “There’s an incredible amount of access in the conference,” Bilingsley said. “If an entrepreneur wants to sit down with an investor, they’ll get that meeting. If they need help with something, they’ll get it. The mentorship opportunities alone, from people who are experts at building businesses, are immeasurable. There’s money at the end, but it’s more about growing your financial savvy for your business.” Billingsley is the University of Alaska Fairbanks Director for the Office of Intellectual Property and Commercialization, as well as the UAF Center for Innovation, Commercialization, and Entrepreneurship and sees AAC as a foundation of the state’s entrepreneurial ecosystem.  “There are a couple ways to get a startup off the ground; bank loans and bootstrapping are great, but not always viable options, same with borrowing from family and friends,” Billingsley said. “That’s where angel investors come in; they provide that seed funding that can make a real difference for a company. Basically, the AAC helps investors get more savvy, connects them with startups looking for funding to grow, and in the process helps startups reach their goals.” Billingsley is quick to say that AAC is not an Alaska version of Shark Tank, a notoriously cutthroat television show featuring investors and entrepreneurs looking for funding and sparring over dealmaking. “This is a really friendly experience, and I think of it as more a tool for teaching,” he said. “Founders can spend as much time as they want debriefing on their pitches and will have someone walking them through what it means to seek and obtain funding. They’ll gain a network of investors, and receive a lot of really specific feedback on whatever they need, whether that's their financial documents, business model, pitch...whatever is most relevant to the company.” Navigating funding options — especially the diverse and nebulous world of equity investment — can be challenging for entrepreneurs. Resources to help them negotiate, understand deal terms, and make the best decision for their company and themselves are key. Although Ramper Innovations beat out Fossil Fuel for the overall conference investment in 2019, the company used the feedback from AAC to pitch other private investors and successfully obtained funding. “We love to see ‘sidecar’ investments happening because of the conference,” Billingsley said. “It’s happened the last two years and I expect to see it again, especially with such a large pool of investors already signed up! People like to invest in industries they know, so even if a company isn’t the best fit for the overall investment, it might be a really exciting opportunity for one or two people on their own.” Kaiser says that one of the best parts of AAC was learning how to do market research, knowledge that was essential as the company achieved their goal of  expanding into other states. Currently, Fossil Fuel is in grocery stores in Alaska, Colorado, Montana, Utah, and Wyoming, with more to come. The company is currently negotiating with a fairly large supermarket chain.  From entrepreneur to investor to organizer An unexpected benefit of AAC for Kaiser was finding a community she wanted to continue to be part of.  “Entrepreneurship is a solitary road, it’s nice to meet people going through similar things and swap ideas and knowledge with them,” she said.  That community is part of the reason she and her husband signed up to participate again in 2020, this time as angel investors. “The world of starting a business is so interesting, you meet so many passionate people, and from participating in 2019 we realized that we just really wanted to invest in Alaska business. AAC seemed like the best way to get started, there is so much to understand, it’s like drinking water from a fire hose.” Kaiser is participating again this year, this time as an organizer with Billingsley and others. “Each time, the value for me is the learning...and I can’t wait to see what I learn this year!” Alaskans interested in applying to the 2021 AAC  — either as investors or on behalf of their companies — must do so by March 3. It is free to participate as an entrepreneur; investors must commit to making a $5,000 investment. Both entrepreneurs and investors should commit to spending 2 to 4 hours per week on the conference during the finals. Gretchen Fauske is a marketing-minded economic developer fueled by a passion for innovation and entrepreneurship. She is the associate director for the University of Alaska Center for Economic Development, Board President for Launch Alaska, Vice Chair for Anchorage Downtown Partnership, and a Gallup-certified CliftonStrengths coach.

Much more than a cup of coffee

Back in 2014, Katherine Jernstrom was in Kansas City, Mo., attending events at the Kauffman Foundation, the largest foundation dedicated to supporting entrepreneurship in the country, and had a free morning.  She decided to stop by the city’s 1 Million Cups gathering, an event where a local entrepreneur gives a six-minute presentation about their idea or business, followed by feedback and questions from attendees. “The event was held in the largest auditorium at the Foundation; there were probably a couple hundred people attending, a mixture of entrepreneurs, investors, community leaders, and they were super energetic and excited to help out this one entrepreneur on stage,” recalled Jernstrom. “It was such an inspiring event and I knew right away we needed to start a 1MC chapter in Anchorage. Highlighting and giving a stage to local entrepreneurs felt really needed at the time.” Just a couple months later, she and a few local entrepreneurs launched 1MC Anchorage, holding weekly gatherings at The Boardroom, a coworking space she co-founded.  The event quickly took off, becoming not just a platform for entrepreneurs, but a place to see and be seen, and a way to stay connected to the entrepreneurial community. Deals were done during the informal networking after each presentation, investments were made, future co-founders connected, and opportunities for collaboration abounded. Pandere Shoes, an early Anchorage presenter, won a national 1MC competition in 2016, which included prize money of $10,000 and training opportunities. A community-based program 1MC is based on the notion that great ideas are discussed over coffee (their goal is one million cups of it, in fact!), and the gathering takes place on Wednesday mornings at 9 a.m. in more than 160 communities across the globe. Anchorage organizers estimate that over the years approximately 250 people have presented locally; mostly entrepreneurs, but also artists, nonprofits, investors, researchers, and community organizers.  Jernstrom thinks that the supportive community vibe has much to do with the program's success.  “This isn’t Shark Tank,” she said, referencing the famously cutthroat television investment pitch show, “this is a space offering entrepreneurs an encouraging environment. The most valuable thing for someone in the early stages of entrepreneurship is feedback, and sometimes it’s scary and hard to find people to talk to. 1MC provides an open and welcoming experience that allows them to get the feedback they need, while making connections and learning about available resources.” Not everyone who presented is still in business. After all, 52 percent of small businesses in Alaska fail during the first five years. But many others — Kicksled Alaska, Fossil Fuel Donuts, Heather’s Choice, The Launch Company, Paper Peony, and Trickster Company to name a few — are going strong and have loyal followings. Connections help entrepreneurs grow their businesses Pulling off a weekly event for crowds ranging from 15 to 55 is no small feat, especially when the organizing committee is composed of volunteers, as it is in 1MC communities everywhere. The current iteration is made up of mostly staff from the University of Alaska Center for Economic Development along with a local entrepreneur, Sarah Katari. Like most people who attend regularly, Katari has a 1MC connection story.  After launching their business, Katari Creative, they were searching for community and connection. Katari began attending 1MC, and one of the first presentations they saw was Megan Militelloof Elevated Oats, a company making handmade, small batch granola. Katari quickly struck up a rapport, which led to a couple copywriting gigs, and evolved into a long term communications contract.  Each 1MC event concludes with a question posed to the presenter: “What can this community do for you?” Militello initially found the question surprising. She was new to the state, hadn’t met many people yet, and didn’t expect to find a community ready to help her endeavor. “California was a totally different, more competitive place,” she said. “I didn’t feel like I had options or support before, and to encounter such a welcoming community was really meaningful.” Since her 1MC presentation, Militello has grown Elevated Oats from operating under a cottage food license to include a commercial kitchen, steadily increasing wholesale clients and sales, and a team experimenting with new flavors and revamping their packaging. She said that the introduction to the community and connections with fellow entrepreneurs provided by 1MC were key to her growth. As for Katari, they presented their own business at 1MC earlier this month.  What’s next? Over the years the event location has moved a few times, first at The Boardroom when it was located on 5th Avenue in Downtown Anchorage; then the Anchorage Museum’s Muse Restaurant, which included a monthly artist presentation; and later at the Writer’s Block Bookstore and Cafe in Spenard.  Currently, 1MC is conducted entirely via Zoom and streamed on Facebook Live due to the pandemic. For those who miss the live event, presentations are saved on the 1MC Anchorage Facebook page. This has allowed for presenters and attendees alike to tune in from across the state and even the country, something that was technically challenging pre-pandemic. Like many entities, COVID-19 changed 1MC, and while organizers navigated the challenges associated with moving an in-person event to streaming only, they also identified the opportunity to serve more of Alaska. Later this week, the 1MC Anchorage organizing committee is hosting a statewide information session to drum up interest statewide in the weekly event. Anyone who would like to join the conversation, whether as a future presenter, potential member of the organizing committee, or just to listen and learn, is welcome to the open call on Friday, January 22 from  2:00 - 2:30 PM (Zoom information here). The call will be recorded and saved on the 1MC Anchorage Facebook page for people who aren’t able to attend at the time scheduled.  And as always, organizers recommend joining the gathering with a cup of coffee in hand. Gretchen Fauske is a marketing-minded economic developer fueled by a passion for innovation and entrepreneurship. She is the associate director for the University of Alaska Center for Economic Development, Board President for Launch Alaska, Vice Chair for Anchorage Downtown Partnership, and a Gallup-certified CliftonStrengths coach.

From the Last Frontier to the Final Frontier: An opportunity for Alaska

Forty miles from the City of Kodiak sits the Pacific Spaceport Complex-Alaska, only one of four places to launch a rocket into orbit from the United States, and where, just a week ago on Dec. 15, California-based Astra became the third private company in the country to send an orbital-class rocket into space.  The recent launch is a sign of a changing industry. With the advent of liquid-fueled rockets carrying smaller payloads (in rocketry a payload usually means a satellite, space probe, or spacecraft carrying people, animals, or cargo) than traditional solid-fueled rockets, launches are occurring with increasing frequency nationwide. Last year 235 payloads were launched into space by the United States, compared to 49 just five years earlier. This means greater demand for launches and more opportunity for launch operators like Alaska Aerospace Corp., operator of the Pacific Spaceport Complex-Alaska, or PSCA, to generate revenue; more jobs for Alaskans in the aerospace industry; potential for startup companies to develop new and innovative technology and processes; and opportunities for the University of Alaska system to train, research, and help lead innovation.  AAC President and CEO Mark Lester says that Alaska is at the cutting edge of the industry, and considers offering space services a kind of natural resource development.  “Much like the (Ted Stevens) Anchorage International Airport’s success as a global cargo hub, we're taking advantage of our geography. PSCA’s unique location offers tremendous access to a broad range of orbits and the expansive Pacific Ocean.”  Although the AAC is a corporation owned by the State of Alaska, it hasn’t received state funding for the last five years. The corporation spends about $16 million per year on Alaska-based goods, services, and labor, and has created over $78 million in economic activity at Kodiak since its inception.  As the number of launches increase at PSCA — Lester is shooting for two to three commercial launches a month with government launches scheduled when requested — there could be an even greater return on investment for Alaska.  With teams of five to 50 launch personnel regularly visiting Kodiak island for stays ranging from a few days to a couple months, there’s opportunity for businesses like logistics companies, rental car agencies, restaurants, and lodging adjacent to the PSCA to start up and grow.  A 2011 report by McKinley Research Group (formerly the McDowell Group), found that a single launch puts nearly $3.5 million into the Alaska economy (counting indirect and induced effects), with employees spending time at local restaurants, buying gifts for family members, going on sightseeing tours, and taking guided fishing trips. The economic impact has certainly increased since the report was authored, and Lester expects the trend to continue.  “We’ll see growth in logistics, moving rockets and support equipment into Kodiak. We either need to ship up propellant, fuel, and satellites or start manufacturing our own. UAF is already building small satellites and I know of at least one outside company considering Anchorage or Fairbanks to integrate rocket and satellite operations in Alaska,” Lester said. Beyond this, Lester notes the opportunity to grow the state’s own aerospace workforce. “Two years ago, about 75 percent of our launch team was from the Lower 48 because we were only operating about one launch a year,” he said. “During the past two years we’ve flipped that. Now that we’re launching more, about 75 percent of our staff are from Kodiak, 95 percent are from Alaska, and we’ll continue to need people joining the industry.” Fortunately, the University of Alaska Fairbanks is graduating people like Ben Kellie, founder of Anchorage-based The Launch Company.  After earning his bachelor’s degree from UAF and master’s degree from Ohio State University, both in mechanical engineering, Kellie got his start in the industry as a launch and test engineer working at Elon Musk’s SpaceX. While there, he helped lead the design, construction, and initial operation of the west coast launch site at Vandenberg Air Force Base, serving as lead engineer during the first launch from that facility.  Next, Kellie helped lead the development of two SpaceX landing platforms, two large barges modified to catch rockets at sea, and since has worked on every launch pad in the country, along with helping design and operate more than a dozen iterations of launch sites for a variety of space companies.  “It takes a lot of work to launch a rocket. It can be hard to imagine everything that goes into it until you’ve done it,” Kellie said. “But a helpful analogy is to think about being at an airport. There are tons of people running around trying to load the plane with fuel, air condition the interior so it’s a comfortable temperature, check the engines, file paperwork with the FAA, load cargo, and finally prep for takeoff by rolling back from the gate. There are similar steps in rocketry, and they are even more involved.”  Traditionally, each launch site has been a one-off, requiring unique design and set-up, suitable for only one type of rocket; the process is akin to building an airport each time an airplane takes off. That’s where The Launch Company is shaking things up.  Kellie and his team are working toward what they call the “Third Wave of Space,” which is the world's first multi-user, mobile launch site designed to service the widest range of launch vehicles. “Currently, there are over 100 rocket companies working towards launch in the U.S. and around the world. Simultaneously, there are only around a dozen ‘on-ramps’ to space — potential launch sites — and even fewer that are fully operational,” said Kellie. “If new companies have to continuously reinvent the wheel to stand up new sites, we will never get reliable, cheap access to space. We need to move past a world where launches are a major event. If every flight of a 737 were televised and met with applause, we wouldn’t be doing a lot of flying.” Although The Launch Company has only been operating since 2019, the team attracted the interest of Voyager Space Holdings, and the two companies are currently negotiating an acquisition where Voyager will be the majority stakeholder. “We’d been collaborating and Voyager really saw our capabilities, our projects, our vision, what we believe in, and what we’re building here,” Kellie said. “And, they have deep connections in aerospace and can really help us have a bigger reach and get to our goals of building standardized launch hardware faster.”  The Launch Company’s potential acquisition is part of a national trend, where young companies are driving innovation and attracting venture capital. In 2019, investors poured $5.8 billion into space related companies across 198 investment rounds, the most ever for the industry. In Alaska, McKinley Capital Management’s Na’-Nuk Investment Fund recently invested in Astra. One of Kellie’s conditions for the acquisition is that The Launch Company stay in Alaska. He is committed to growing the aerospace industry here. “Space is a huge challenge and is something that stretches the imagination,” he said. “It makes sense for it to grow here; exploration is in our roots, we’re used to logistics and planning, and doing hard things is at the core of our identity. Alaskans are well-suited for working in dynamic environments like rocketry.” For those looking to follow in Kellie’s footsteps, opportunities abound. Through the NASA-funded Alaska Space Grant Program at UAF, students can enroll in the Space Systems Engineering Program, or SSEP, access the Space Lab, pursue funding for education and research, and receive assistance when applying to internships or jobs. Students in the SSEP learn to design and build small satellites and control systems, and launch suborbital rockets from the Poker Flat Research Range, the world’s only scientific rocket launch facility owned by a university.  The University of Alaska Anchorage offers a rocketry club, and recently members competed in the annual Space Grant Midwest High-Powered Rocket Competition by building rockets capable of exceeding the speed of sound. Lester says that an online spaceport operations certificate may soon be available through UAF as well, and that not all jobs in the industry require highly specialized education.  “To work in aerospace, you don’t have to be a rocket scientist. A certificate program, combined with on the job training, can help people learn about space transportation technology, and be qualified for jobs that don’t require engineering. A lot of our operations are similar to working at an airport.” Both AAC and The Launch Company regularly host interns, and Kellie makes a point of hiring them afterward as staff if budgets allow. “It’s super viable to work in space systems in Alaska now, or found a space startup,” he said.  “Of the 11 people who work at The Launch Company, 10 either grew up in Alaska or went to college here. And if anyone out there wants to start their own company, I’ll give them space in our shop to do so.” Both Kellie and Lester think aerospace will be a big part of a diversified Alaska economy. “My personal passion, and the reason I moved back to the state, is working with entrepreneurs and building Alaska’s future economy, and aerospace is how I’m doing that,” said Kellie. As for Lester, he moved here from Colorado two years ago because he was so excited about the potential. “The opportunity to build a new economy, define the future of spaceports...it’s all happening right now from Alaska. Together, we are creating the future of commercial space transportation.” Gretchen Fauske is a marketing-minded economic developer fueled by a passion for innovation and entrepreneurship. She is the associate director for the University of Alaska Center for Economic Development, Board President for Launch Alaska, Vice Chair for Anchorage Downtown Partnership, and a Gallup-certified CliftonStrengths coach.

STARTUP WEEK 2020: We need each other, now more than ever

The Techstars Alaska Startup Week op-ed series features entrepreneurs and entrepreneurial ecosystem builders sharing their thoughts and ideas on a variety of  topics related to startups and innovation. Techstars Alaska Startup Week is a week-long series of events hosted by entrepreneurs and business leaders from across the state. In 2020, all events are virtual, and you can find them here: Startup Week Schedule. All are welcome, please join us! As I look back on Techstars Alaska Startup Week 2020, the first fully virtual startup week in Alaska’s history, my biggest lesson — one that I learned again and again — is how much we need each other, now more than ever. Entrepreneurs, investors, consultants, ecosystem builders, dreamers, community champions, and more, despite being physically distant from one another, none of us exist in a vacuum.  This week we’ve seen subject matter experts share their knowledge in marketing webinars, business owners give a tour of their spaces, entrepreneurs tell the stories of their experiences with failure and resilience. We’ve met people who have been in the startup world for years, and people who are just getting started. We’ve “traveled” from Juneau to Kodiak to Anchorage to Fairbanks and more, all within the span of a few days. And through it, we’ve learned, we’ve celebrated, we’ve challenged, and we’ve grown.   Most of all, we’ve connected. When I was organizing the Facebook premier of The Failure // Resilience Project, Ben Kellie — a seasoned entrepreneur whose startup, The Launch Company, is being acquired by Voyager Space Holdings — wrote me a note that said, “I’m starved for community right now so I was stoked to get the email invitation for the event.” Earlier this month I collaborated with HairVoyage, a beauty tech startup that offers paid peer mentorship experiences to beauty professionals around the world. Founder MaryAlice Turletes told me that, “In the process of building HairVoyage we learned that connectedness drives everything — you can be a part of many communities but igniting individual connections is what brings to life the power of any community.” HairVoyage most likely wouldn’t exist, and certainly not in its current iteration, without this community. It was born during a Startup Weekend, and gained investment during the Alaska Angel Conference. Along the way, Turletes and her business partner Dana Herndon have built relationships with and learned from numerous local entrepreneurs and engaged with ecosystem building organizations like the University of Alaska Center for Economic Development, 49 State Angel Fund, Juneau Economic Development Council, and the Alaska Small Business Development Center. On Wednesday, I had the privilege of being invited to Spruce Root’s Master Class as a mentor, and “speed dated” a handful of Southeast Alaska companies. My major takeaway was how much each founder cares about and invests in their community, and how in turn, their community cares about and invests in them.  Launch Alaska, a startup accelerator in Anchorage, held the second session of their Tech Deployment Tract, where panelists open up their figurative roledexs to help startup founders make connections with subject matter experts and potential customers in Alaska. This is motivated in part by excitement around innovative new solutions to challenging problems, but mostly out of a genuine desire to help, to share in someone else's success.   At each event, whether a webinar where experts freely shared information that they could charge hundreds of dollars for, or founders excitedly touring us through their workshops and explaining the many, often laborious, steps they’d taken to ensure their spaces were safe for employees and customers alike, the investment in each other was clear. We’re not going to make it out of the pandemic unchanged, nor should we. As we move closer to what appears to be a successful vaccine, I hope that a return to “normal” does not mean a return to “same.” Instead, may we all learn from our experience and emerge stronger, smarter, and better - as a community. There’s still time to join Startup Week! November 20 4:30 PM - Business and Brew: The Uncle Leroy’s Coffee Story November 21 10:00 AM - Alaska BIPOC Business Development Summit 10:30 AM - K-12: One Tree Alaska Participatory Action Research Collaborative  Details: Techstars Alaska Startups Week 2020 Gretchen Fauske is a marketing-minded economic developer fueled by a passion for innovation and entrepreneurship. She is the associate director for the University of Alaska Center for Economic Development, Board President for Launch Alaska, Vice Chair for Anchorage Downtown Partnership, and a Gallup-certified CliftonStrengths coach.

Alaska Startup Week goes online Nov. 16-22

Alaska Startup Week is back for 2020, although it looks a bit different this year: all events will be 100 percent online! From Nov. 16-22, Alaskans interested in entrepreneurship and innovation are invited to attend events ranging from marketing webinars and a master class for the new economy to an opportunity to identify problems and solutions North of the 60th Parallel and 1 Million Cups featuring Triverus! Co-chaired by Erin Baca, Director of the 49th State Angel Fund and Jake Carpenter of AppCare, events are being developed with an eye to the times: a number of sessions focus on helping businesses learn digital marketing tools to reach customers and organizers are planning a watch party for a mini documentary featuring entrepreneurs sharing their experiences with failure and resilience. Alaska Startup Week coincides with Global Entrepreneurship Week, giving participants access to 40,000 events occurring in 180 countries across the world. Additionally, a series of op-eds exploring topics related to entrepreneurship and innovation will run in the Alaska Journal of Commerce. “Startup Week has always been an opportunity for our community to come together,” Baca said. “And this year’s no different - we’ll just be spending time together virtually! It’s actually a great opportunity for people across the state to connect; usually we’re limited by geography, but this year we’ll all be in the digital realm.” A sense of community is more important than ever; entrepreneurship can often be an isolating endeavor, and pursuing a business in the midst of a global pandemic is even more challenging. If you’re looking for connection to Alaska’s startup community, join us! All are welcome. Find more information about Alaska Startup Week at alaska.startupweek.com, and on the Alaska Startups Facebook page. Events will be added daily until Startup Week commences! ^ Gretchen Fauske is a marketing-minded economic developer fueled by a passion for innovation and entrepreneurship. She is the associate director for the University of Alaska Center for Economic Development, Board President for Launch Alaska, Vice Chair for Anchorage Downtown Partnership, and a Gallup-certified CliftonStrengths coach.

The rise of Alaska’s gig economy

When Lesli Olson moved to Anchorage from New York City in 2006, she was happy to find a community with its own distinct style, one that she was inspired to celebrate, document, and participate in via Instagram and a blog. Thus, Far North Fashion was born. Although her account began as a creative outlet, when Olson started using LiketoKnowit, a social-based shopping service, she started making commissions when followers purchase items she links to. Small at first, her income from Far North Fashion grew steadily and now makes up a good share of her family’s income. “My husband is starting a new job soon and taking a pay cut,” Olson says. “But when I looked at the numbers, I realized Far North Fashion would actually make up the difference for us.” Olson invests a considerable amount of time each week in her Instagram account, getting up two hours early to search online for deals to share with her followers. Throughout the rest of the day she responds to comments, spends time styling her daily look, and poses for photos to share to her account — all when she’s not working at her job as a music teacher at Bayshore Elementary School or caring for her family. Although being compensated for her time is a welcome benefit, Olson says she’d continue even without the commissions. “I’m such a nerd when it comes to fashion,” she said. “And I have a heart for bringing people together. Fashion blogging through a social network allows me to blend two things I love.” Olson is considered a gig worker, someone who earns income via activities outside of traditional, long-term employer-employee relationships. This definition spans workers like Olson who perform gig work in addition to a full-time job, to those whose entire income is gig-based. Gig workers can be thought of as a cross between business owners and wage-earning workers. Nationally, more than a quarter of U.S. workers participate in the gig economy in some capacity. Of those, about 1 in 10 relies on gig work for their primary income. About 1 in 6 Alaska workers are self-employed, according to Nolan Klouda of the University of Alaska Center for Economic Development. These are business owners without employees, and can be considered gig workers. Drawing on U.S. Census Bureau data, Klouda notes that these individuals earned $2.8 billion in revenues in 2018, or about $49,000 each. “The average varies considerably by industry,” said Klouda. “It ranges from $104,000 for self-employed individuals in real estate to less than $15,000 for educational services.” Revenues are not necessarily the same as personal income for these individuals, who may have expenses to pay from their revenues. Gig work offers more ways for people to be productive and earn money while creating value and increasing options for consumers. It also provides an opportunity for people to find work that suits their skills or schedules, or like Olson, follow a passion. Those that have extra time and want to add to their incomes can deliver groceries for Instacart, walk dogs via Rover.com, or turn extra rooms or family cabins into vacation rentals on Airbnb. Home bakers can organize pop-up markets or deliver directly to customers, crafters can set up an Etsy account, and countless more can pursue their dreams of becoming social media influencers. However alluring, Klouda cautions against romanticizing gig work. “People’s experiences will vary hugely,” he said. “For some it’s simply a new opportunity to make money on top of whatever else they were doing. For others, gig work might force them down a pathway of having to earn a paycheck without the normal protection of a traditional job.” Gig workers go without employer-sponsored health insurance or 401k retirement plans, do not pay unemployment insurance, or have paid vacation or sick leave. They are not protected by the Family Medical Leave Act or Workers Compensation, and don’t have a union to advocate for them. Gig work can also be lonely or isolating, without an opportunity to to build meaningful relationships with colleagues, clients, or customers. The Anchorage Chamber of Commerce might have the beginnings of a solution to some of the challenges facing gig workers. In September, the Anchorage Chamber announced a new way for gig workers to connect and find support through the Anchorage Gig Economy Network, or AGEN, and committee. Led by Dr. Jocasta Gee Olp, the Anchorage Chamber’s diversity coordinator, and Olson as chair, the committee intends to spend the next year building the network and learning from its members. In the future, Olp says that the Anchorage Chamber may advocate on issues facing gig workers, but only after they fully understand what’s needed to support the sector. She is particularly interested in learning more about full-time gig workers. “I’m curious about how they made that decision: was it out of passion or necessity?” Olp said. “I also want to know how sustainable gig work is for people and what kind of resources they’d like to see offered.” The Anchorage Chamber’s focus on the gig economy comes at a time when workers in the sector may need increased support. Although it’s too soon to tell how COVID-19 is affecting gig workers, Klouda says that just as wage-earners have been subject to layoffs and business owners have faced closures and falling revenues, self-employed individuals have almost certainly suffered from a poor economy, despite being eligible for unemployment benefits offered through the CARES Act. He’s recently noted a trend in an increase in business applications during the pandemic, indicating that more Alaskans are starting business, which is consistent with the trend of self-employment and increased entrepreneurship during recessions. “Economists talk a lot about creative destruction during recessions,” says Klouda. “Businesses fail at high rates, but new businesses get started. When it comes to gig workers, we can’t be sure yet whether the creative part really balances out the destructive part.” During the course of the next year, the Anchorage Chamber may be able to address some of the unknowns surrounding the gig economy. “We want our membership, our board, and our leaders to really get to understand the gig economy, the needs of the network, and learn about any challenges they might be facing” said Olp. “Gig workers are part of Anchorage’s business community, and with that comes the opportunity to have a voice.” ^ Gretchen Fauske is a marketing-minded economic developer fueled by a passion for innovation and entrepreneurship. She is the associate director for the University of Alaska Center for Economic Development, Board President for Launch Alaska, Vice Chair for Anchorage Downtown Partnership, and a Gallup-certified CliftonStrengths coach.

Redesigned BuyAlaska program seeks to bolster state economy

In February this year, Katie Ashbaugh excitedly accepted the position of sustainability coordinator at Allen Marine Tours, a Southeast Alaska day-cruise operator. She was looking forward to helping the company mitigate its environmental impact. “This was the beginning of my dream career,” says Ashbaugh. She recently earned an MBA that focused on balancing profitability and sustainability, and was eager to get started. “Simple changes — like making sure that cups and containers are compostable, sharing information about the cycle of trash, and helping passengers connect that to how we can be good stewards of our environment — make a big difference,” she said.  She worked for Allen Marine Tours for six weeks, and then the pandemic hit.  Like many Alaskans, Ashbaugh was furloughed in March and eventually laid off at the end of April. She remembers walking through downtown Juneau in the spring and noting the uncommon quiet. Usually teeming with visitors from all over the world, the streets were mostly empty and shops were closed. Once businesses started re-opening, the difference between locally-owned and non-locally-owned businesses was starkly apparent. “Local businesses quickly got creative about finding safe ways for people to come in and shop,” says Ashbaugh. “But we have a section of downtown called the ‘tourist trap’ that’s mostly owned by cruise ships; all of those shops are shuttered. They didn’t reopen, they aren’t thinking about reopening, and it’s really unfortunate to see this part of town underutilized… imagine if the shops there were local instead?” Katie Ashbaugh browses the inventory at Kindred Post in Juneau. Ashbaugh joined BuyAlaska after being furloughed from her new job with Allen Marine Tours amid the coronavirus pandemic. (Photo/Courtesy) Ashbaugh’s sustainable business experience, combined with her desire to champion local business, made her the top candidate for the Alaska Small Business Development Center’s BuyAlaska staff position at the University of Alaska Anchorage. Originally launched in the early 2000s to help businesses get online at a time when developing a website was prohibitively expensive for many owners, BuyAlaska has been mostly dormant in recent years. With the onset of COVID-19 and the upswell of support for small businesses across the state, the initiative was ripe for a refresh.  “People want to help each other out right now, and buying Alaska products or services is a good way to do so,” says Ashbaugh. “Once you purchase a locally-made product or choose a local service, it’s all part of a compounding cycle. You’re keeping money in your community, supporting jobs, benefiting the environment, and fostering a community culture.”  Nationally, studies show that locally-owned stores generate nearly four times as much economic benefit to surrounding areas than non-locally-owned stores, and local retailers return an average of 52 percent of their revenue to the local economy. Additionally, dining at a local restaurant produces more than twice the local economic impact of a chain restaurant.  Locally-owned businesses make an outsized impact on the economy because they tend to purchase more goods and services from local suppliers, increase the local tax base, and are more likely to donate to local charitable causes. BuyAlaska relies on a group of stakeholders from across the state representing numerous industries, using their expertise to advance the initiative. One of those stakeholders is Heather Rhodes, a marketing manager at Alaska Communications. Early on during the pandemic, Rhodes wanted to host a virtual breakfast for her team to help them feel connected while working remotely. She called a dozen different restaurants until she found one that was open. “It was heartbreaking,” she said. “Some of the restaurants were longtime favorites, and a couple of them still haven’t re-opened. I want to help keep businesses from closing, get them online, and show them how to access new customers so that they can start to thrive again.” The recently-launched BuyAlaska website encourages Alaskans to shop local while also helping businesses connect with more customers and each other. It also offers links to business directories, resources for business owners to navigate going digital, and information about accessing COVID-19 support. The site is complemented by an e-newsletter and Facebook, Instagram, Twitter, and LinkedIn profiles. Rhodes is using her marketing and business expertise to help reach Alaskans and change the way they make purchasing decisions.  “On one side we’re making it easy for customers to find the local products they are looking for, and on the other we’re amplifying businesses’ marketing efforts and providing them with technical assistance. By supporting both sides we can make a bigger difference, faster.”  Heather Rhodes picks some Alaska Grown produce at Pyra’s Pioneer Peak farm in Palmer. (Photo/Courtesy) In Anchorage, where Rhodes lives, a recent report released by the Anchorage Economic Development Corp. says that 70 percent of businesses saw their revenue decline during the pandemic and 43 percent made employment reductions. She hopes the Buy Alaska initiative will motivate more people to buy local first to help businesses recover. “Instead of just clicking to order supplies, go see if the mom and pop shop down the street has what you’re looking for. Instead of getting your coffee from a national roaster, pick up something from a local roaster; we have so many great options!” she said. “And so many businesses are offering curbside pick-up, or delivery now. They’re making it so easy for us to support them.” Both Rhodes and Ashbaugh are putting their money where their mouths are; in Rhodes' case, literally. “My family and I are frequent fliers at Middle Way Cafe for cupcakes,” says Rhodes. “And then we rotate our coffee bean purchases between Kaladi Brothers, Steam Dot, and Black Cup.” Ashbaugh recently took advantage of a travel package for Alaskans, and visited Denali National Park for the first time. “We originally planned on camping, but there were such great discounts we were able to stay at some really nice places in the area.” She can’t stop buying local jewelry, and loves to support artists. “We’re voting with our pocketbooks,” says Rhodes. “And we want to see other Alaskans follow suit, and shop local first!” Gretchen Fauske is a marketing-minded economic developer fueled by a passion for innovation and entrepreneurship. She is the associate director for the University of Alaska Center for Economic Development, Board President for Launch Alaska, Vice Chair for Anchorage Downtown Partnership, and a Gallup-certified CliftonStrengths coach.

‘Nothing is for certain’ amid operating restrictions

In October 2013, Fat Ptarmigan opened its doors. After years spent working at bars and restaurants in Anchorage, co-owner and head chef Guy Conley was excited about bringing a “fast casual” dining option to the downtown scene. “There were a lot of fine dining options, but not many for someone looking for something casual,” says Conley. “No one was doing wood fired pizza when we opened and I couldn’t find a decent meatball in this town to save my life.” The restaurant opened to positive reviews and an overnight following. Diners loved the simple but delicious fare as well as the inviting ambiance of warm wood, exposed bricks, and a front row seat to watching Conley work the pizza oven. Less than a year later, the recession hit Alaska. “It definitely wasn’t an ideal time to open a restaurant,” says Conley. An opportunity, and a challenge Fast forward to early 2020. Fat Ptarmigan was still going strong, but downtown had changed since the restaurant’s early days. On the positive side, apartment buildings and condos being constructed were attracting new residents to the area and Conley felt like the Anchorage Police Department’s relocation to 4th Avenue was leading to decreased crime. New businesses were opening or expanding. On the negative side, Nordstrom, a downtown retail anchor since 1975, closed in 2019 and much of downtown business still depended on the visitor season and events that brought locals to the area. Conley says that even when the economy rebounded after the recession, people just weren’t eating out as much as they did pre-recession. Always on the lookout for ways to strengthen Fat Ptarmigan’s business model, a collaboration with the Double Shovel Cider Co. seemed like a good opportunity to diversify the restaurant’s offerings and co-mingle clientele, while taking advantage of underused space. For Double Shovel, it was a chance to have a downtown presence and easily connect with locals and visitors. Anchorage Cider House launched in February 2020 in Fat Partmigan’s south room, offering cider from Double Shovel on tap and in cans. Galen Jones, co-owner of Double Shovel, says that the collaboration with Fat Ptarmigan is grounded in shared values and a mutual appreciation of downtown. “A vibrant and thriving Downtown is good for Anchorage, and fortunately it’s on the upswing. We want to be part of developing an even more popular scene with increased activity, mixed use and residential buildings, help it be a place people want to hang out at all hours of the day,” Jones said. Jones’ plans for Anchorage Cider House included featuring ciders from around the world, educational tours spanning the cidery (located in Midtown) and the cider house, live music, special release parties, and Spain-inspired events serving cider directly from casks. Any other summer, and the Anchorage downtown restaurant scene would most likely be booming. But summer 2020 is unlike any other summer in living memory: it’s the summer of a global pandemic. A twist called COVID-19 By Anchorage Municipal Emergency Ordinance, restaurants and bars were closed to indoor dining from March 18 to May 11, and then again in August for a four-week reset meant to slow the rising numbers of COVID-19 in Anchorage. The closures have been brutal for businesses. “One bad week is hard to recover from,” says Jones. “And we’ve had months of bad, with no sustainable revenue. It was a big investment for us to open Anchorage Cider House, and if something were to happen to Fat Ptarmigan, we’d be up the creek without a paddle.” To get through the closures, Jones, Conley, and the rest of their team are focusing on new ways to reach customers. Conley says that third party apps like GrubHub and DoorDash are essential, but terrible in terms of revenue. “When we have a full dining room and can sell cider, wine, and beer, they’re okay. But now, when we’re relying on them, the fees they charge are devastating.” (Pro tip: if you connect to delivery apps from a restaurant’s website, the app waives the fees.) Both Jones and Conley say the federal Payroll Protection Program, or PPP, has helped, and are hopeful that State of Alaska CARES Act funds will soon be made available to businesses who received more than $5,000 from PPP (this has been proposed and will likely be approved soon). Conley says options like rent relief or delayed property taxes would be welcome. During a time when the Independent Restaurant Coalition estimates that as many as 85 percent of independent restaurants across the country may permanently close by the end of 2020, restaurateurs are looking for creative solutions. Getting creative Conly says that the Open Streets ANC initiative, organized by the Municipality of Anchorage and the Anchorage Downtown Partnership, is helping. “Downtown is like a ghost town, without the tourists and with the small number of people who live here. We’re not seeing a lot of foot traffic. But, we’re trying to get people to the outside seating and right now we’re only down 25 percent of our annual revenue, which is good compared to other restaurants I know.” The State of Alaska’s decision to allow to-go and delivery for alcohol is also helping. “We really focused on people picking up cans and growlers when we were first shut down,” says Jones. “Now with the ability to pick up cider combined with the open streets, we’re seeing revenues grow.” Conley found another way to reach customers, too: the Migrating Ptarmigan, a food truck selling Fat Ptarmigan fare. “It’s going well, and it’s another way to promote the business.” What does the future hold? “Right now we’re so preoccupied with the day-to-day and how to get people to come downtown, we haven’t really thought about how to get through the winter,” says Jones. “I wish I had a plan, but between running Double Shovel and keeping our full-time jobs, it’s tough to look further than a week into the future. But I know downtown in the winter is going to be really tough for everyone.” Conley hopes that indoor dining will return at least at 50 percent indoor seating capacity in the fall. Both like the idea that initiatives like Open Streets ANC and the EasyPark’s recently launched Operation Downtown Dine Out, which provides restaurant seating in parking spaces, might return next summer. “It’s so cool that there are all these options now with seating and shops, and it feels like a safe and fun place to be. You can get food and see live music, see friends while staying distanced, support local businesses,” says Jones. Neither is keen to predict too far into the future though. “If there’s one thing I’ve learned,” says Conley, “It’s that nothing is for certain.” Gretchen Fauske is a marketing-minded economic developer fueled by a passion for entrepreneurship, innovation, and small business. She is the associate director for the University of Alaska Center for Economic Development, Board President for Launch Alaska, Vice Chair for Anchorage Downtown Partnership, and a Gallup-certified CliftonStrengths coach.

‘Nothing is for certain’ amid operating restrictions

In October 2013, Fat Ptarmigan opened its doors. After years spent working at bars and restaurants in Anchorage, co-owner and head chef Guy Conley was excited about bringing a “fast casual” dining option to the downtown scene. “There were a lot of fine dining options, but not many for someone looking for something casual,” says Conley. “No one was doing wood fired pizza when we opened and I couldn’t find a decent meatball in this town to save my life.” The restaurant opened to positive reviews and an overnight following. Diners loved the simple but delicious fare as well as the inviting ambiance of warm wood, exposed bricks, and a front row seat to watching Conley work the pizza oven. Less than a year later, the recession hit Alaska. “It definitely wasn’t an ideal time to open a restaurant,” says Conley. An opportunity, and a challenge Fast forward to early 2020. Fat Ptarmigan was still going strong, but downtown had changed since the restaurant’s early days. On the positive side, apartment buildings and condos being constructed were attracting new residents to the area and Conley felt like the Anchorage Police Department’s relocation to 4th Avenue was leading to decreased crime. New businesses were opening or expanding. On the negative side, Nordstrom, a downtown retail anchor since 1975, closed in 2019 and much of downtown business still depended on the visitor season and events that brought locals to the area. Conley says that even when the economy rebounded after the recession, people just weren’t eating out as much as they did pre-recession. Always on the lookout for ways to strengthen Fat Ptarmigan’s business model, a collaboration with the Double Shovel Cider Co. seemed like a good opportunity to diversify the restaurant's offerings and co-mingle clientele, while taking advantage of underused space. For Double Shovel, it was a chance to have a downtown presence and easily connect with locals and visitors. Anchorage Cider House launched in February 2020 in Fat Partmigan’s south room, offering cider from Double Shovel on tap and in cans. Galen Jones, co-owner of Double Shovel, says that the collaboration with Fat Ptarmigan is grounded in shared values and a mutual appreciation of downtown. “A vibrant and thriving Downtown is good for Anchorage, and fortunately it’s on the upswing. We want to be part of developing an even more popular scene with increased activity, mixed use and residential buildings, help it be a place people want to hang out at all hours of the day,” Jones said. Jones’ plans for Anchorage Cider House included featuring ciders from around the world, educational tours spanning the cidery (located in Midtown) and the cider house, live music, special release parties, and Spain-inspired events serving cider directly from casks. Any other summer, and the Anchorage downtown restaurant scene would most likely be booming. But summer 2020 is unlike any other summer in living memory: it’s the summer of a global pandemic. An twist called COVID-19 By Anchorage Municipal Emergency Ordinance, restaurants and bars were closed to indoor dining from March 18 to May 11, and then again in August for a four-week reset meant to slow the rising numbers of COVID-19 in Anchorage. The closures have been brutal for businesses. “One bad week is hard to recover from,” says Jones. “And we’ve had months of bad, with no sustainable revenue. It was a big investment for us to open Anchorage Cider House, and if something were to happen to Fat Ptarmigan, we’d be up the creek without a paddle.” To get through the closures, Jones, Conley, and the rest of their team are focusing on new ways to reach customers. Conley says that third party apps like GrubHub and DoorDash are essential, but terrible in terms of revenue. “When we have a full dining room and can sell cider, wine, and beer, they’re okay. But now, when we’re relying on them, the fees they charge are devastating.” (Pro tip: if you connect to delivery apps from a restaurant's website, the app waives the fees.) Both Jones and Conley say the federal Payroll Protection Program, or PPP, has helped, and are hopeful that State of Alaska CARES Act funds will soon be made available to businesses who received more than $5,000 from PPP (this has been proposed and will likely be approved soon). Conley says options like rent relief or delayed property taxes would be welcome. During a time when the Independent Restaurant Coalition estimates that as many as 85 percent of independent restaurants across the country may permanently close by the end of 2020, restaurateurs are looking for creative solutions. Getting creative Conly says that the Open Streets ANC initiative, organized by the Municipality of Anchorage and the Anchorage Downtown Partnership, is helping. “Downtown is like a ghost town, without the tourists and with the small number of people who live here. We’re not seeing a lot of foot traffic. But, we’re trying to get people to the outside seating and right now we’re only down 25 percent of our annual revenue, which is good compared to other restaurants I know.” The State of Alaska’s decision to allow to-go and delivery for alcohol is also helping. “We really focused on people picking up cans and growlers when we were first shut down,” says Jones. “Now with the ability to pick up cider combined with the open streets, we’re seeing revenues grow.” Conley found another way to reach customers, too: the Migrating Ptarmigan, a food truck selling Fat Ptarmigan fare. “It’s going well, and it’s another way to promote the business.” What does the future hold? “Right now we’re so preoccupied with the day-to-day and how to get people to come downtown, we haven't really thought about how to get through the winter,” says Jones. “I wish I had a plan, but between running Double Shovel and keeping our full-time jobs, it's tough to look further than a week into the future. But I know downtown in the winter is going to be really tough for everyone.” Conley hopes that indoor dining will return at least at 50 percent indoor seating capacity in the fall. Both like the idea that initiatives like Open Streets ANC and the EasyPark’s recently launched Operation Downtown Dine Out, which provides restaurant seating in parking spaces, might return next summer. “It’s so cool that there are all these options now with seating and shops, and it feels like a safe and fun place to be. You can get food and see live music, see friends while staying distanced, support local businesses,” says Jones. Neither is keen to predict too far into the future though. “If there’s one thing I’ve learned,” says Conley, “It’s that nothing is for certain.” Gretchen Fauske is a marketing-minded economic developer fueled by a passion for entrepreneurship, innovation, and small business. She is the associate director for the University of Alaska Center for Economic Development, Board President for Launch Alaska, Vice Chair for Anchorage Downtown Partnership, and a Gallup-certified CliftonStrengths coach.

Local lenders make the difference in Payroll Protection Program

“Have you heard that (insert name of local business) is closing?”  This is an all too common refrain in 2020, repeated as we’ve watched restaurants, fitness studios, tour companies, retailers, and more, shut their doors for good. Researchers estimate that between early March and early May 110,000 small businesses closed across the country. In Alaska, the number of open small businesses decreased by 29 percent and consumer spending is down by nearly 12 percent in comparison to January 2020 numbers.  Considering that the median business has more than $10,000 in monthly expenses and less than one month of cash on hand, it’s no surprise that many have been unable to stay afloat during the pandemic. “We have months of economic pain still to come,” says Nolan Klouda, Executive Director for the University of Alaska Center for Economic Development. Paycheck Protection Program: $669 billion for small businesses nationwide The economy would probably be faring far worse if the federal government hadn’t acted quickly and authorized the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act on March 27.  The CARES Act is the largest economic stimulus plan in U.S. history, and includes the Paycheck Protection Program, which provided a total of $669 billion in forgivable loans for small businesses. The program was so popular the initial $349 billion ran out in two weeks, necessitating the authorization of a second phase. Slated to close on June 30 with $130 billion unspent, the PPP was recently extended to Aug. 8.  Although highly utilized, PPP presented a host of challenges for business owners, ranging from changing guidelines and concerns that loans would not be forgiven as promised, to establishing eligibility and finding a financial institution to apply through. In the future, business owners will need to calculate the forgivable amount of their loan and track allowable expenses to ensure program compliance, which may be difficult for some. Lenders also experienced challenges, including restrictions on the asset size of eligible lenders, unclear guidelines, and using a federal website not built to withstand the program’s heavy traffic. Going forward, lenders will need to manage servicing the unforgiven portion of loans, identify how to categorize the debt, and potentially deal with audits. Did PPP work? And did Alaska get a fair share? The Small Business Administration, which manages the PPP program, recently released detailed data regarding businesses nationwide that participated in the program. “The first question everyone wants answered is ‘Did it work?’ And the second question is ‘Did Alaska get its fair share?’” Klouda said. “Although it might take years to find out how effective PPP has been, it’s clear from reviewing the data that the program was used extensively in Alaska, by employers from just about every industry and region in the state.” When Klouda analyzed the data, he discovered the following: At 53 percent, Alaska entities received a smaller number of loans compared to the total number of small businesses and nonprofits, but a higher average loan amount of $112,000, versus $107,000 nationwide.  Employers in the state received $1,692 per capita, which is slightly better than the national figure of $1,594. Urban population centers like Anchorage, Fairbanks and Juneau received a greater proportion of PPP loans relative to the number of businesses than less populated rural areas. For the most part, Klouda’s findings about PPP in Alaska matched his expectations. One in particular though, surprised him: the top five PPP lenders were largely made up of local institutions. Wells Fargo was the only national bank ranked among the top five; the other four — Northrim Bank, First National Bank Alaska, Alaska USA Federal Credit Union, and First Bank — are all smaller in-state lenders.  Alaska’s leading PPP lender  Northrim alone was responsible for approximately one in four loans in the state, which translated to nearly 2,600 new business loans between April and June. For reference, there are only about 20,000 businesses and nonprofits with employees in the whole state. “We made a decision to assist as many businesses in Alaska as possible, regardless of whether they were an existing Northrim customer because as a community bank, we recognize the importance all our small businesses have within our community,” said Northrim Executive Vice President and Chief Lending Officer Mike Huston. To manage the high volume of applications, Northrim created a loan processing assembly line and brought staff from departments like IT, Accounting, Marketing, and others into the lending process.  “There were times when work was being done every minute of the day,” said Huston. “People stayed up late, got up early, and worked during the weekends. A significant portion of our staff were working remotely, and knowing that we were making a difference for our communities made us feel connected during this challenging time.” Although flexibility isn’t often a word associated with banks, Huston says it’s something Northrim prides itself on.  “One of our takeaways from this is that change is constant, and it’s coming at us quicker than ever. Tomorrow is not going to be what we expect and we have to be ready to adapt.” Disruption creates opportunity, and businesses that can pivot or identify new consumer needs can be successful despite a challenging economy, something Northrim knows well. The bank opened its doors in 1990 on the heels of a devastating recession, and has grown significantly since its origin in two trailers in a parking lot. Despite dire forecasts about Alaska's economy, Huston remains optimistic.  “We’re continuing to invest, Huston said. “We opened a loan production office in Kodiak in early March, and are planning to open a second community branch in Fairbanks this winter. We are committed to powering the businesses that power Alaska.” Gretchen Fauske is a marketing-minded economic developer fueled by a passion for innovation and entrepreneurship. She is the associate director for the University of Alaska Center for Economic Development, Board President for Launch Alaska, Vice Chair for Anchorage Downtown Partnership, and a Gallup-certified CliftonStrengths coach.  

How internships offer opportunity for students and startups

Meet John Boren, a 2020 graduate from the University of Alaska Anchorage’s Computer Science and Engineering program. He’s been piecing together his college education for the last 20 years.  The first in his family to pursue a college degree, Boren enrolled at UAA and began paying for each class out of pocket, working multiple jobs during the school year and spending summers in his hometown of Seward serving Alaska’s busy visitor industry. Boren made it through two years of college, but the more he worked to afford tuition, the less time he had for classes and studying. “I just started taking fewer classes, dropped others, and eventually stopped going,” Boren said.  The next two decades in Boren’s life were marked by living overseas in Europe and South America; a stint at the University of Colorado Denver; a brief return to UAA; internships at high profile companies like Lipper Analytical Services — a division of Reuters — and IBM Research; and jobs as a deckhand, assistant project manager for a boilermaker servicing company, bar manager, and a longshoreman. In 2015, Boren was working as a floorhand for Doyon Drilling and making more than $100,000 per year when oil prices fell to $27. He remembers watching as colleagues lost their jobs and thinking, “Is this my future? When I’m 50 will I lose my job if the price of oil drops again?”  The experience inspired Boren to quit his high paying job and use his savings to finally finish his degree at UAA. Although Boren knew he wanted a future in computer science, he didn’t know that he would also get a taste of the startup life. John Boren at his internship for Legalverse. (Photo/Courtesy/John Boren) Shortly after beginning his final year of his undergraduate program, Boren saw a poster advertising a new program called Upstart Internship. Offered by the University of Alaska Center for Economic Development , or UACED, as part of the ARCTIC Program funded by the Office of Naval Research, the program pairs students with local startups to learn about entrepreneurship and what it means to be a founder. Intrigued by the possibility of working for Anchorage-based Legalverse, a startup offering electronic document management for legal teams, he applied and landed the job. “Of all the internships I’ve had over the course of my college career, the Upstart Internship was the best,” Boren said. “My boss, Jeff Levin, gave me relevant, cutting-edge SaaS (software as a service) work with time for me to research and understand what I was working on. More importantly, Jeff really focused on being a mentor and dedicated time to building our relationship. It was a great way to learn, and was especially rewarding because I knew my work was making a difference in growing his company. That kind of experience is hard to find in the software industry.” Margo Fliss, Upstart Internship program manager at UACED, says the time spent on mentorship and professional growth is intentionally built into the program. “Companies say that students apply for jobs but don’t have the experience or soft skills needed, and students say there aren’t opportunities for them to get experience or develop soft skills because companies won’t hire them,” Fliss says. “This program bridges both challenges — it gives students hands-on experience and professional development before graduation to ready them for the workforce.” The program also provides Anchorage startup companies — often operating on a shoestring budget and hungry for talented employees — the opportunity to work with some of Alaska’s brightest students. Companies must apply to the program to be considered for each cohort, and the number of applicants continues to increase. After companies are selected, prospective interns apply and go through an interview process. Startups participating in the 2019-20 cohort included Gennaker Systems (autonomous aircraft software); The Launch Company (commercial space/rocket launches); The Boardroom (a coworking space serving numerous startups); Launch Alaska (a startup accelerator); Alpine Fit (outdoor apparel); and Legalverse.  Fliss says that the Upstart program differs from what some might consider a typical internship that often includes filing or coffee runs.  “Startups who apply to be part of our program know that students need to be engaged beyond basic tasks — they are part of work that is critical to the success of the company,” Fliss said.  “Because of this, students are a valued member of the team and they learn firsthand what it's like to start and run your own business.” The Upstart Internship program emerged from UACED’s work in the entrepreneurial ecosystem, Fliss says.  “Rates of young entrepreneurs in Alaska are low and falling. Although over 60 percent of 20-somethings say they want to own a business, few of them actually do, and only six percent of Alaska’s businesses with employees are owned by someone under 35. By helping students engage in our startup community, we’re helping them visualize entrepreneurship as a career path,” she said. For some, launching their own company might come sooner than expected. Boren started applying for jobs in February, hoping to find a computer engineering opportunity that would utilize his degree. Initially, he felt like his prospects were promising. The onset of COVID-19 changed that. “All of a sudden there just weren’t jobs to apply for anymore,” Boren said. “The day I graduated, Doyon Drilling — my former employer — laid off more than 300 people. There are less jobs out there, and more people competing for them, for less money.”  He began evaluating other options. During his last semester of college, Boren participated in another one of UACED’s programs, the Upstart Alpha Startup Accelerator, which is also part of the ARCTIC program. Accelerators offer intensive mentorship and experiential learning over a period of 3 to 6 months to a cohort of entrepreneurs. When they “graduate” from the program, participants have ideally compressed years of startup learning into months.   “I was already drawn to be part of Alaska’s startup scene because of my internship,” he says. “And I thought it would be like a mini business school. I wanted to learn from people who had already launched a company, figure out who the players are, and understand business aspects like product market fit.”  During the program, Boren worked on an app called GIF Dat, which creates GIFs using voice recognition. It is the first app in a series that Boren is developing relating to voice recognition.  Other participants pursued concepts like an all-in-one family communication platform, financial literacy programming for businesses, an alcohol-free third space for young adults, a website for concert-goers, a hydroponic food production company, a digital banking service for Nigerians, and bilingual, early-childhood education resources.  The accelerator focuses on building entrepreneurial skills and relationships within the startup community. Not all participants will continue on with their businesses, having learned that their concepts weren’t feasible or sustainable. Boren is one of them. “I realize I probably won’t make any money with GIF Dat, but now I have the tools to work faster on the next product I launch, for myself, or for a company,” Boren said.  Currently, he’s working on a project automating a data mining pipeline for UACED and says that if he needs to he will focus more on launching his own company instead of seeking employment at a company. Over the years, he’s learned a lot about how plans can change, and is comfortable with uncertainty.  “You just never know what’s going to happen, but opportunities will always present themselves,” said Boren. “But what I do know is that I’m always going to be working hard to better myself and my family. And someday, whether it’s sooner or later, I’m going to be my own boss.” Gretchen Fauske is a marketing-minded economic developer fueled by a passion for innovation and entrepreneurship. She is the associate director for the University of Alaska Center for Economic Development, Board President for Launch Alaska, Vice Chair for Anchorage Downtown Partnership, and a Gallup-certified CliftonStrengths coach.

Pandemic startups: Two Alaska entrepreneurs take the leap

At a time when businesses across the state are forced to close their doors or are scaling back operations, it seems counterintuitive to launch a business. But is it? As our economy dives back into a recession caused by the combined global forces of COVID-19 and the low price of oil, new businesses are more important than ever. High rates of business closures leave gaps in the market for newcomers ready to fill them, and for those that find themselves suddenly unemployed and facing an uncertain future, launching a business may be a good option. Startups have long been an essential part of Alaska’s economy, responsible for 89 percent of net employment growth in the private sector. Over the last decade, startups in our state consistently added 4,000 to 6,000 jobs to the economy each year. Although experts caution that accessing traditional capital will be more difficult than ever, many founders can launch lean, test the market, and look for funding in the future when they’re ready to grow. And, with unemployment rates at an all time high, there’s no shortage of workers looking for new jobs. Nationally recognized startup accelerator Y Combinator is reporting 15 to 10 percent increase in applications for its summer program, which serves early stage entrepreneurs launching and growing their businesses. In Alaska, the opposite is true: economists are seeing rates of businesses hiring for the first time (most likely startups) declining by a third when comparing April 2019 to April 2020. Entrepreneurship comes in many flavors, but can be sorted into two primary categories: necessity and opportunity. To date, 85 percent of entrepreneurs in Alaska are “opportunity” entrepreneurs, which is about average compared to other states. However, economic downturns are associated with more necessity entrepreneurship, and rates of startups launched because of need may begin to increase. Entrepreneurship born of necessity Like many Alaskans, Seth Stetson was laid off from his job in March. Although returning to his position as director of Marketing and Business Development for Kaladi Brothers Coffee in Anchorage might be a possibility in the future, he didn’t want to wait to find out. Instead, Stetson launched Anchorage Grocery, a special order, bulk food delivery service. Customers place online or phone orders throughout the week, and Stetson delivers their groceries to their doorsteps every Friday. Anchorage Grocery is Stetson’s first business and is a direct result of the pandemic: he needed an income and a way to satisfy his creative drive. While watching consumer behavior change during quarantine, he determined that delivery is the future of grocery shopping. Along with bulk online ordering and delivery, Stetson provides packaging and sanitation services with each order. “I’m giving customers peace of mind by limiting the risk that their food is exposed to COVID-19 and other infectious diseases, bacteria and germs found in traditional public grocery stores,” Stetson said. Before launching, Stetson thought that starting a business took years of planning, saving capital and working with banks. After he was laid off, he decided he was just going to launch and figure it out. It took him 2½ weeks to create a Shopify website, set up an LLC, get an EIN number, open a Sysco account, figure out product margins, and populate the website. “It was really interesting to start a business this way, without having prior experience and doing it in such a short time period,” Stetson said. “I just keep moving forward and getting things done, picking off what I need to do next. And, I’m still adjusting to the fact that if I stop, the business stops. It’s just me keeping it going.” Stetson says he’s getting a lot of feedback from customers that want more Alaska Grown options, which he intends to explore in future. Currently his local partners include Arctic Harvest, Copper River Seafoods, Kaladi Brothers Coffee and Molly B’s Bingerz cookies. He also closely tracks website activity to discern customer interest. “Right now it’s all about the meat — ribeye, ground beef, seafood — along with rice, and some fruit and vegetables,” Stetson said. “These aren’t your grocery store quantities, this is stocking up: 15 pounds of ribeye, 50 pounds of rice. My customers want to fill their freezers and their pantries.” Entrepreneurship born of opportunity When Ross Johnston of Anchorage noted images of sourdough starter and bread flooding social media during quarantine — combined with a nationwide shortage of packaged yeast — he quickly launched a new venture: Ötzi Premium Sourdough Starter. Sourdough, made by the fermentation of a flour and water mixture using the flour’s naturally occurring yeast, is a lengthy process of “feeding” the starter with additional flour and water for hours or days before mixing in other ingredients and allowing several hours of rising time before baking. When store-bought yeast is unavailable for bread, sourdough provides a tasty alternative and has captivated home bakers’ attention in recent months. “I got really into sourdough sometime near the end of summer 2019, and toyed with the idea of selling starter at a Saturday market booth,” says Johnston. “But then I started thinking about how people pay more for unique and novel products, and how sourdough bakers are fascinated by the origin story of their yeast.” Hence Ötzi, named after a mummified man who lived between 3400 and 3100 BCE discovered in a glacier in the Ötzal Alps between Austria and Italy. Ötzi’s stomach contents included processed wheat brain, believed to possibly have been eaten in the form of bread. Johnston thinks the market is ripe for a premium product and likens sourdough to wine, with many varieties and prices points available. Hoping to tap into a customer segment attracted to a high-end product, his starter sells online for $24.99 on its own, or $49.99 for a kit that includes starter, water from glacial ice melt, and stone ground flour, along with instructions for upkeep and how to bake sourdough bread and pancakes. Johnston hopes his products will appeal to people in the Lower 48, hungry for a taste of Alaska’s wide open spaces, pristine wilderness and good bread. He’s already reached a few out-of-state customers and continues to refine his product based on their purchasing preferences and product feedback. Ötzi is one of Johnston’s many entrepreneurial endeavors. As he gauges whether or not the market opportunity he suspects exists is real, he’ll scale the company accordingly. “This specific type of business is fantastic for right now. People are finding time to engage in lengthier rituals like baking sourdough bread and seem to have a greater affinity for the creative process,” says Johnston. “But any time you launch a business, whether you’re in the midst of a global pandemic or not, it’s risky.” Both Johnston and Stetson are gambling that their risks will pay off. For Johnston, that means seeing an idea scale to outside markets. For Stetson, it’s being in control of his future and providing for his family. And for Alaska, it’s the beginning of an economic rebuilding, the glimmering hope of a prosperous future. You can watch Seth Stetson and Ross Johnston present more information about Anchorage Grocery and Ötzi on Wednesday, May 26, at 9 am via Zoom: https://alaska.zoom.us/j/92204612024. Gretchen Fauske is the associate director for the University of Alaska Center for Economic Development, Board President for Launch Alaska, Vice Chair for Anchorage Downtown Partnership, and a Gallup-certified CliftonStrengths coach.

A day in the life of an SBDC advisor and a small business owner

On March 28 at 5 p.m., Alaskans across the state retreated to their homes as Gov. Mike Dunleavy’s Health Mandate 011: Social Distancing went into effect. In a mere four weeks, the quickest spike in unemployment in Alaska’s history ensued, with more than 50,000 jobs lost. About one in seven previously employed Alaskans are now out of work. Those numbers are expected to increase as efforts to flatten the COVID-19 curve continue and businesses keep making cuts to stay afloat. Many small businesses are turning to the Alaska Small Business Development Center for assistance as they apply for federal aid and try to plan for an uncertain future. The Alaska SBDC estimates that requests for assistance increased 250 percent from an average month. Meet the Alaska SBDC’s Julie Nolen, Assistant State Director and Matanuska Susitna Director In July 2020, Julie Nolen will celebrate 11 years as an SBDC Business Advisor. She was born into small business; her family owned The Bagel Factory and Deli in Anchorage during the 1980s. Nolen grew up learning day-to-day operations from her parents while developing the beginning of a lifelong love for small business. “They’re the lifeblood of our communities,” Nolen said. “Not only do they provide jobs and essential services, they create our culture. And there’s a sense of pride that goes along with owning a business, a sense of working together for the common good… I love being able to contribute to that.” At the SBDC, Nolen excels at taking the complicated parts of running a business — from applying for loans to writing a business plan — and turning them into simple, achievable steps. Along with her full-time, busier-than-ever job, she is helping her second-grade son Alex finish up the school year at home and navigating the challenges of settling into a new working from home routine with her husband, Andy. 7 a.m. As soon as the alarm rings, Nolen grabs her phone and checks email. She begins writing responses as she makes her first cup of coffee, relishing her quiet time and the chance to get some work done before the rest of her family wakes up. 7:45 a.m. Nolen makes her son Alex’s breakfast. He likes “toad in the holes” (a slice of bread with a fried egg in the middle) and after he finishes eating she gets him started on his schoolwork. 8:15 a.m. Despite working from home, SBDC’s advisors communicate regularly. Each day begins with a visit to Google Chat’s “water cooler” feature that the team uses for internal conversations. Nolen says the morning check-in is the easiest way for them to share knowledge and stay up-to-date regarding the news of the day. One of her colleagues calls into a 4 a.m. Small Business Administration briefing every morning and updates the rest of the team on changes to federal relief programs. 8:30 a.m. Nolen checks in with the other members of the SBDC leadership team to discuss staff’s remote work schedules and how to meet the increasing demand for their services. SBDC is in the process of hiring temporary administrative staff and business advisors to serve clients. “Our advisors are working all day every day — previously we worked a standard 8 hours, but now we have to take a different approach to everything: the hours we work, the way we advise, the content of advising, how we communicate with clients and the public,” Nolen said. Pre-COVID-19, client meetings lasted 45 minutes to an hour, sometimes longer. Now, advisors try to get their clients the information they need in as short amount of time as possible without losing a personal touch. “Our clients know we’re slammed,” Nolen said. “They don’t expect the same kind of conversation we normally have, but they also know that if they really need us, we’ll give them the time. Some people are struggling right now, and if we can help them through, we will.” Many clients are facing bankruptcy and the permanent closure of businesses they’ve spent years pouring their time, money, and passion into. SBDC advisors are doing their best to help them access federal relief programs, which many business owners have found challenging to navigate. 9:30 a.m. Nolen spends the next few hours meeting with clients and following up on emails. She says she hasn’t helped someone with a business plan — previously a focus of her work — in six weeks; now, 95 percent of her time is COVID-19 related, helping businesses prepare to apply for the SBA’s Paycheck Protection Program or Economic Injury Disaster Loan Program. On Friday, April 17, the SBA announced these programs are no longer accepting applications due to expended funds. Shortly afterward, the Alaska SBDC posted on Facebook that they are confident Congress will pass another relief bill, and encouraged businesses to prepare the documents they will need to access federal relief programs, reduce operating costs and take advantage of any existing financial programs they qualify for. 1:15 p.m. Switching gears to “mom mode,” Nolen makes ham sandwiches for lunch and checks Alex’s progress on his schoolwork before diving back into advising work. 2 p.m. It’s time for dueling Zoom meetings! Nolen says Zoom meetings are a bit of a challenge when working and parenting simultaneously. “When it’s time for Alex’s second grade class Zoom meeting, it’s his chance to see his friends and teachers and he’s really excited for that kind of attention. I do my best to block out the noise,” Nolen said. “When it’s my Zoom meeting, sometimes he pops in and out — I was in a meeting with MTA executives and he was in the background, but everyone just laughed. We’re all going through it together.” Nolen says that the balance between working and teaching is really hard. She feels guilty about not being able to give him more of her time but is operating in “crisis mode” for her clients. “I feel better when I see my husband Andy coming up with fun lessons like ‘shop class’ when they work in the garage together. I don’t know how single parents can do this,” she said. 3:30 p.m. Nolen joins a meeting with Mat-Su Assemblywoman Stephanie Nowers to discuss a survey of borough businesses that will help guide COVID-19 recovery efforts. Both women serve on the Assembly’s recently revitalized economic development committee. 4 p.m. After quickly checking the news and social media to see if there are any updates about SBA programs, Nolen is ready for more client meetings. 5 p.m. While getting dinner started, Nolen tunes into the State’s COVID-19 briefing and continues to check email on her phone throughout the evening while her family settles in for movies on the couch. “I’ve been feeling a lot of anxiety, and it’s hard for me to unplug and relax; the lines between work and home feel really blurred,” says Nolan. “And, anything I don’t get done in the evening is waiting for me in the morning…we’re so busy that I’m barely able to keep up with the number of inquiries that come in overnight.” Despite her own tendency to work long after 5 p.m., Nolen has been encouraging staff to minimize overtime. “It’s not easy talking to small business owners who are worried about their futures, especially people who own seasonal businesses and might not be able to open,” says Nolen. “We’re business advisors but quickly become informal counselors. Clients talk about their troubles and we witness their suffering. A lot of clients call us in tears. We’re glad we can be there for them but we have to preserve our mental health too.” For Nolen, that means making the occasional escape to her cabin near Skwentna. “We went out last weekend, it’s snowmachine-in only and it felt so good to be out there. I put in my ear buds piping with John Prine tunes, got some fresh air… it was beautiful and I had so much fun. Just leaving work behind really recharged me.” 9 p.m. Nolen is in bed, trying to get rest before starting another day serving small businesses in Alaska. Work has been challenging, but Nolen’s overarching feeling is pride in the SBDC team. “Everyone is stepping up, everyone is helping out. When one center is overloaded another center jumps in to help. We’re meeting this challenge head on, together.” Meet Seward Brewing Company’s Co-Owner Hillary Bean Hillary Bean and Erik Slater purchased Seward Brewing Company from its original owners in 2014. Longtime members of Alaska’s hospitality industry, Bean leads operations while Slater oversees the brewery and culinary side of the business. Together they serve hundreds of visitors and locals during their five month season that runs May through September. Boasting four flagship beers — Rockfish Red Ale, Inked Out Stout, El Jefeweizen Chile Wheat, and Pinbone IPA — along with other specialty brews and what Bean says is the best burger in Alaska, more than 850 people visit the brewery per day at the height of the season. “The income we generate in the summer months sustains us for the whole year,” says Bean. “Starting two months late is a real kick in the gut when you are only open five months total.” Although they prefer to be seasonal workers, for the last three years Bean and Slater operated another restaurant in Seward, Chinooks, which is open year-round. The couple also operates employee housing for some of the brewery’s seasonal workers as a separate business. “We were planning to use the income from Chinooks to tear down the old employee housing and build something eco friendly that can be shut down in the winter,” says Bean. “Instead we’re using our savings to stay financially stable this year.” Although putting their plans for the housing project on hold is disappointing, Bean feels fortunate that she’s able to stay operational for the foreseeable future. Many businesses are facing a much more dire situation. According to a survey by the U.S. Chamber of Commerce, nearly half of businesses nationwide say they have less than six months until a permanent shutdown is unavoidable. 8 a.m. The first thing Bean does in the morning is grab her phone to read the news and scroll through Facebook, looking for COVID-19 updates, the latest from the White House, and a bit of pop culture for levity to balance a general sense of anxiety. “It’s like I’m going through the stages of grief — mad, sad, scared, resolved — but you can’t really get resolved because everything keeps changing,” says Bean. “Will we be able to open our dining room? How much is tourism going to drop this year? What does this mean for next year? I can’t even speculate right now, but I’m not banking on pulling in nearly the amount we did last year.” 9 a.m. Bean heads out for a walk around her neighborhood to keep her stress levels down, and then home to check on her 16-year-old daughter, Rowan. After answering emails, Bean logs into her bank account to see if any federal relief funds have been deposited. She applied for the PPP loan earlier this month through First National Bank Alaska, with assistance from Nolen. “I’ve limited myself to checking once a day,” says Bean. “But I’m monitoring it closely because we usually have income and without it the balance can get really low. I have about four different business plans in my head depending on what happens with coronavirus.” Although she hasn’t received federal funds yet, she knows they are on their way. “The bank’s branch manager, Melissa Schutter, called me to let me know we were approved! My husband texted our chef right away; she said she had tears of relief in her eyes knowing she would get paid in May,” Bean said. 10:30 a.m. Along with New York-style bagels for breakfast (obtained by trading flour and banana bread with a neighbor) Bean makes Slater a French press of coffee, which he drinks before heading to Seward Brewing Company. Earlier this year, a sprinkler in the brewery broke and three floors flooded, necessitating repairs to electrical panels and the elevator shaft. Bean spends some time on insurance paperwork and checks in with the brewery’s general manager. “I’m glad we’re able to take care of repairs now, during shoulder season while the town is on lockdown,” says Bean. “The busiest part of the season hits June 15 and we have 90 days to make money. The Fourth of July is definitely our busiest day of the year. It’s crazy to think we won’t have Mount Marathon and the crowds of the people coming to town for it this year, but I know the Race Committee thought long and hard before making that call.” 2:30 to 3 p.m. Bean’s daughter finishes school for the day, and they have a snack and hang out. 3:30 p.m. Bean balances the checkbook for both businesses — Seward Brewing Company and Employee Housing — as well as her personal checkbook. Once she’s done, she spends some time on her newest hobby, puzzles. “In a normal year, employees would be coming into town, I’d be getting all their paperwork going, getting the house ready for them,” says Bean. “We would be getting the brewery cleaned and ready for opening. Instead, I’ve become a puzzle nerd.” Seward Brewing Company typically employs 52 people during their operating season. Although Bean is unsure of how that number will change this year, she said it will definitely decrease. 6 p.m. “My husband is a chef and makes dinner every night, so we’ve been eating really well,” says Bean. “We try to do one big store run every two weeks and a quick trip for fresh ingredients once a week.” 7 p.m. After dinner, the family plays board games — Scrabble, Scattergories, Trivial Pursuit, (Monopoly was banned after games got too cutthroat) — and then watches a movie. 12 a.m. Bean goes to bed but lies awake until 2 a.m. watching Ancient Aliens, which she says keeps her from thinking about more somber subjects. To other business owners facing the same challenges as the Seward Brewing Company, Bean’s advice is to throw out previous years’ business plan. “I’ve heard it might take three years or more to build back up. You have to think out of the box. Keep your overhead low and payroll down to survive the next couple seasons. Whatever you are feeling right now, I can validate it. I’ve felt it myself.” Gretchen Fauske is a marketing-minded economic developer fueled by a passion for entrepreneurship, innovation, and small business. She is the associate director for the University of Alaska Center for Economic Development, Board President for Launch Alaska, Vice Chair for Anchorage Downtown Partnership, and a Gallup-certified CliftonStrengths coach.

How COVID-19 is impacting Anchorage’s small business — and what you can do

A few months ago, Jasmin Smith closed her longtime venture The Business Boutique to focus on Baby Vend, her startup business offering supplies for babies and children via vending machines. As if launching a startup wasn’t enough, in January she also opened a co-working space, Umoja, in Mountain View. Smith poured her extra income into each of these ventures, confident that a steady revenue stream from teaching entrepreneurial classes and hosting the occasional event would keep her cash flow stable until her startups started to turn a profit. That quickly changed as the impacts of COVID-19 swept the globe. Smith’s teaching contract was canceled when the program and events she was planning were put on hold. As a single mother of young children, her options for temporary work are limited by the need for childcare. “Even if it’s just for a short time, the impacts are scary,” Smith said. “My monthly income is dipping but home and business bills are due at the beginning of the month. I have some savings, but those will start to go quickly.” Todd Grebe, a local musician, is similarly worried. He is already feeling the impact to his various income streams, which include performing, selling his music online, teaching, running an Airbnb, and driving for ride sharing apps. “I’m torn between making money in order to provide security for my family and being morally/ethically responsible to society at large,” Grebe said. Grebe also just invested in recording a new album. Typically, he would release it alongside live shows, but he worries if online presence alone will be enough to pay it off. “I’m trying not to stress too much, but at some point this is going to get really bad,” Grebe said. Looking outside for guidance In Seattle, “really bad” has already arrived. Currently the epicenter of the COVID-19 outbreak in the U.S., small businesses are reeling from the impacts. A Seattle survey published on March 12 showed that 80 percent of small businesses are reporting a drop in demand. Additionally, 60 percent of small businesses are considering wage reductions and staffing cutbacks, and 35 percent say they may be facing closure. The majority of respondents noted that they expected circumstances to worsen, and on March 16, they did. Washington Gov. Jay Inslee signed a statewide emergency proclamation to temporarily shut down restaurants, bars, entertainment, and recreational facilities. Restaurants are still able to provide take-out and delivery services, and the ban does not apply to grocery stores and pharmacies, but the business losses will be substantial. To help mitigate the impacts of COVID-19, the City of Seattle is working to help workers and families, deferring payment on business taxes and utilities, setting up a Small Business Stabilization Fund and providing assistance to access federal aid. Restaurants On March 16, Anchorage Mayor Ethan Berkowitz followed Inslee’s lead and signed an emergency order to require bars, breweries, and restaurants to halt dine-in service for food and beverage. Drive-thru, take-out, and delivery services are still allowed, and grocery stores are not impacted by the emergency order. “By making sacrifices now, we reduce the likelihood that we will pay a larger cost later,” Berkowitz said in a statement. “These closures are consistent with CDC recommendations and with our strategy of doing what we can to reduce the possibility of transmitting COVID-19. As a friend told me, ‘It will be impossible to know if we overreacted or did too much, but it will be quite apparent if we underreacted or did too little.’ ” Many restaurants were already offering increased pick-up and delivery service. Here’s a sampling: • Fire Island Bakery and Market Juice are taking phone orders for pickup and staff will deliver your order to your car. • Kincaid Grill is offering a 20 percent discount on pickup orders. • 49th State Brewing Company has an online order and pick-up option that includes crowlers. • The Chicken Shack, which was already using third party delivery apps GrubHub and DoorDash, added a private delivery option to limit the number of people who come in contact with your order. Retail Although retail stores have not been given a mandate to close, business is slowing. Kim Stalder, owner of downtown Anchorage clothing store Circular Boutique, says she didn’t have a single customer walk through her door on March 13 when the first case of COVID-19 was announced in Alaska. “I think they were all at Costco stocking up,” Stalder said. On March 14, foot traffic increased to seven shoppers, but she’s unsure how long people will continue to come. “One of my regulars came in today, like she does every Saturday,” Stalder said. “This time she let me know she wouldn’t be visiting for a while.” Stalder says she doesn’t want to temporarily close and is trying to make sure her customers feel comfortable by providing hand sanitizer upon entry and taking extra care to wipe down all hard surfaces after each shopper leaves the store. “I’m also offering private shopping by appointment, and will ship orders to people or deliver directly to their homes,” Stalder said. However, if the Fifth Avenue Mall closes, as a tenant she’ll be forced to as well. Another mall tenant, the Alaska Salt Company, announced on March 15 they will be closing until further notice. “This was not a fun decision to make,” owner Britni Siekaniec wrote in an Instagram post. “It seems like we JUST got this place put together, fully staffed with wonderful people and ready for a booming summer. Now, it feels like the first day of winter. As a small business that is sustained by a seasonal, tourist market, our future is looking quite uncertain.” Siekaniec is encouraging customers to shop online until their retail space opens again. Health and entertainment The Anchorage ban also included gyms and entertainment facilities like theaters, as well as prohibiting gatherings of 50 people or more through March 31. Courtney Lyons, an instructor for Anchorage Yoga and Cycle and a bartender at Spenard Roadhouse, will be out of work for at least two weeks. She supports Berkowitz’s decision to issue the emergency order. “I’m not really upset about the impact that it will have on me. It’s more important to protect vulnerable people in our community, and if this is the step we need to take to prevent the spread of the virus, if this saves one life, that’s what’s most important to me,” Lyons said. Skinny Raven Sports postponed the Shamrock Shuffle — a popular annual foot race — and put Pub Runs on hold until the end of March, but is keeping retail locations open. They’ve also updated their website for online shopping with direct shipping, and will make deliveries to Anchorage residents placing phone orders. Owner Daniel Greenhalgh says that he’s planning to temporarily close if necessary. For now, people needing gear to get outside for fresh air and exercise have options for shopping. How the federal government is helping The U.S. Small Business Administration is working directly with state governors to provide targeted, low-interest loans to small businesses and nonprofits via the Economic Injury Disaster Loan program. These loans may be used for fixed debts, payroll, accounts payable and other bills that can’t be paid because of COVID-19’s impact, and offer long-term repayment options. In an unprecedented move, the Federal Reserve announced that it would be dropping interest rates to zero and buying at least $700 billion in government and mortgage-related bonds, as well as giving generous loans to banks so they can offer small businesses and families loans to keep financial markets stable and support businesses. Additional updates include: • The Centers for Disease Control and Prevention has compiled a list of recommendations for employers, ranging from capital access and workforce capacity to inventory and supply chain shortfalls and insurance coverage issues. • The U.S. Department of Labor Occupational Safety and Health Administration prepared “Guidance on Preparing Workplaces for COVID-19” based on traditional infection prevention and industrial hygiene practices. The document focuses on how employers can implement entering, administrative and work practices controls. • Congress is working to pass the Families First Coronavirus Response Act to provide a number of resources to individuals and businesses. How individuals can help Alaskans wanting to support local businesses while staying home can shop online or purchase gift cards to use later. Those with the financial means may want to consider tipping extra or opt to pay for services they choose to cancel — like babysitting, house cleaning or hair appointments — or continuing to pay their membership dues for gym membership and exercise classes. Regardless of circumstance, gratitude always makes an impact; send a thank-you note or leave an encouraging comment on social media. Practicing social distancing can end up isolating us when we need connection the most; fortunately, technology that can help bridge the gap. Despite the uncertainty, Stalder feels confident in her community. “As a lifelong Alaskan, I’ve seen firsthand how Alaskans support each other in times of need. I feel certain we’ll see that during this crisis.” And, as Grebe says, “This is Alaska after all, and if there is anywhere in the world with a better can-do attitude than ours, I’m not aware of it.” ^ Gretchen Fauske is a marketing-minded economic developer fueled by a passion for entrepreneurship, innovation, and small business. She is the associate director for the University of Alaska Center for Economic Development, Board President for Launch Alaska, Vice Chair for Anchorage Downtown Partnership, and a Gallup-certified CliftonStrengths coach.

Small Business Survey results show uncertainty amid recovery

Economists generally agree that Alaska’s recession is over, but small businesses — often the first to feel a downturn — are still recovering. The Alaska Small Business Development Center Annual Small Business Survey, to be released this week, measures the overall health of small businesses in the state and offers a look at how they are fairing post recession. Alaska SBDC Executive Director Jon Bittner says that he’s particularly interested in how the survey results identify barriers to business. “Considering that 99 percent of business in Alaska is small business, things that slow or hinder their growth really impact our economy,” said Bittner. “During a recession or times of economic uncertainty, small businesses are hit first, and hardest.” The top three barriers to small businesses remain the same as previous years: 1. Operating costs 2. Finding capital 3. Finding employees Operating costs Dawn Walsh, who co-owns Anchorage retail shop ShuzyQ with her daughter, Shawna Rider, is well acquainted with the cost of doing business in Alaska. She’s been a boutique owner for the last 15 years, and says that operating expenses present the biggest challenge to their business, specifically shipping costs and logistics. For a company that orders inventory — shoes, handbags,and other accessories — from across North America and Europe, the balance between paying bills and receiving freight is a delicate one. “We have some vendors who require us to pay our bills within 30 days, but it can take up to three weeks for freight to arrive and process,” she says. “This week, deliveries are delayed — Span Alaska called to give us a heads up that storms were impacting shipping from Seattle. You can’t always plan for that kind of thing.” She also says that high costs of shipping make special orders for customers prohibitive, especially when many online retailers offer fast, free shipping. Bittner agrees, noting that shipping costs, which become increasingly expensive the farther you travel from Alaska’s urban centers, are consistently cited as a major challenge by businesses across the state. “This is the kind of issue that needs a solution on a larger level; solving the shipping challenge is a very difficult thing for the private sector to do on its own,” Bitter said. “If the state of Alaska wants to grow the economy, this is the kind of fundamental work that could really change the landscape for small businesses.” Finding capital Access to capital is a consistent barrier for small businesses. Twenty-five percent of Alaska SBDC survey respondents said they were seeking funding, with fixed capital for new equipment and building renovations being the greatest need followed by working capital for operations. Of those 25 percent, only half of them received funding, and more than half of survey-takers expect it to be difficult to obtain financing in 2020. Bittner says that he sees an interesting shift in the sources of funding. “This year, friends and family were the No. 1 source of funding for businesses; in prior years it was bank loans. We’re also seeing a surge in people seeking other non-traditional forms of finance like online lending, angel investing, and crowdfunding.” Although bank loans are generally considered some of the best funding for a small business because of their low interest rates and dependable process, they can be difficult to attain, especially for businesses just starting out or those with an uncertain financial future. Capital from friends and family, online lending, and crowdfunding aren’t as strict in their lending requirements, but can also carry more risk for the business. Bittner notes that angel funding is also difficult for businesses with uncertain prospects to obtain. ”This year we saw a huge jump, percentage-wise, in applications for angel funding but no increase in actual investments.” Finding employees Recent Department of Labor data shows that Alaska’s population is shrinking due to a combination of outmigration, decline in birth rates, and increase in death rates. Less people means less workers, making the competition for qualified employees fierce, and a strong economy in the Lower 48 makes it hard to attract new talent to the state to fill the gap. Fifty-six percent of survey respondents say it is very or somewhat difficult to hire employees, the biggest reason being a lack of qualified applicants. “During the last three years, lack of qualified applicants has been split evenly between applicants that lack technical skills and those that lack soft skills,” says Bittner. “Lack of technical skills is hard to address. There’s only 700,000 of us in Alaska, and we can’t have homegrown specialists in everything, but the strong economy in the Lower 48 is making it harder to attract what we don’t have to the state.” He sees the lack of soft skills as a fixable problem that can start to be addressed during K-12 education, and identifies it as one that the state could solve by partnering with the private sector to invest in helping students become career-ready. Hiring qualified staff hasn’t been an issue for Walsh. “We’ve been really fortunate that people want to work for us,” she said. “When I ask my employees what they like about working at ShuzyQ, it’s always the customers. Plus, people come in because they want something to make them happy, and helping them find it is very rewarding.” Additionally, Walsh says that ShuzyQ pays competitive retail rates and offers bonuses and flexible schedules to attract and keep employees. Confidence in Alaska’s economy The survey also measures business owners’ confidence in the economy. In general, business owners are more optimistic about their own businesses than they are about the economy as a whole. When it comes to the economy, respondents are split roughly into thirds: they are equally likely to think the economy will improve (31 percent), worsen (33 percent), or are just uncertain (36 percent). However, the number of businesses marking “yes” to whether or not they have confidence in the state economy dropped 16 percent from 2018. “It’s interesting that we’re seeing declining confidence in the economy while at the same time most economists are agreeing that we’re coming out of the recession,” says Bittner. “For this level of pessimism, there must be another factor contributing to business owners uncertainty.” Walsh thinks she might have the answer, for some retailers at least. “This year was really challenging for us,” Walsh said. “We had the heatwave, and we ran out of sandals but couldn’t sell other shoes. BP announced they were leaving Alaska, Nordstrom closed which wasn’t good for retail overall, and online shopping is always our biggest competitor. “But the biggest impact was when the budget came out at the end of June. People came back to the store to return their shoes, they were frightened and worried, some of them got pink slips. Politics definitely plays a role in stability, and we’ve been told that election years are harder on retail.” Economic uncertainty is a sizable barrier to small business. “You can plan for good times and you can plan for bad times, both are acceptable and viable parts of being a small business,” says Bittner. “But the hardest thing for a business to deal with is uncertainty.” He sees businesses not planning for growth and instead focusing on trying not to contract. “Instead of working to increase market share, people are using their capital to pay for operating costs to try to hold the line,” Bittner added. “The state needs to provide them with a clear vision on what’s to come, and offer stable taxes, a clear regulatory environment, and a strong economic plan for the future.” Walsh says her team had to work harder than ever before just to keep the numbers similar to years prior. Despite the challenges, ShuzyQ finished 2019 within $1,000 in gross sales of 2018. Profits are still down 10 percent from pre-recession, but now Walsh considers these numbers her “new normal.” Signs of economic opportunity “Last summer I was very distraught, very concerned about the future of small business in Alaska because of the economy. It’s scary being a business owner,” says Walsh. “But now I have a lot more confidence than I did six months ago.” Along with a strong quarter, she’s seeing more people get involved in their communities and local politics, and points to efforts in Anchorage to invest in downtown along with new housing developments — meaning more small stores and coffee shops springing up nearby — as signs that things are turning around. Bittner is also optimistic. “I still think that the Alaska economy has a lot going for it. There are strong growth opportunities in health care and tourism, and to a smaller extent in manufacturing. There are also interesting new prospects in the resource extraction industry as well as in renewables and energy efficiency. Military/federal spending is also going to be a boon, especially in the interior and rural Alaska,” he said. “All of this could lead to more economic opportunities for those who are willing to take advantage of them. If anyone has the wherewithal to overcome the barriers to doing business in Alaska, it’s Alaskan entrepreneurs.” Gretchen Fauske is a marketing-minded economic developer fueled by a passion for entrepreneurship, innovation, and small business. She is the associate director for the University of Alaska Center for Economic Development, board president for Launch Alaska, and a Gallup-certified CliftonStrengths coach.

An entrepreneur’s journey: Failure and resilience

Editor’s note: The following includes excerpts from the University of Alaska Center for Economic Development’s The Failure // Resilience Project brief, which explores elements of entrepreneurial failure via a combination of storytelling and research. The full brief is available at ua-ced.org/reports-and-projects. A companion film featuring 10 Alaskan entrepreneurs sharing their stories of failure and resilience will be shown at the Bear Tooth Theater as part of the One Course Discourse series on April 17 at 12 p.m., followed by a Q&A session with entrepreneurs. Bill Popp had a stable job at Safeway and was on the management track. If he stayed the course, he was well-positioned to climb the company rungs—except he didn’t want to. He wanted to stay in Soldotna and own a music store. After consulting with his wife (who also worked at Safeway) in October of 1990, Popp cashed out his 401(k), applied for and received an SBA-secured loan, and opened Toonz: an 800 square-foot music retail store with two employees. Success happened fast. “We hit a nerve with consumers, and blew out our inventory that first Christmas season. There wasn’t a piece of music left on the shelf after New Year’s Eve. We definitely found a market need that wasn’t being met until we came along,” Popp says. Within three years, Toonz had grown to nearly six times the size of the original store, filled with music and books in Soldotna. Popp opened an 1,800 square-foot location in Homer, and between both stores, he employed 23 people. In 1992, Popp was named the Soldotna Chamber of Commerce Small Businessperson of the Year and received a legislative citation for his work and philanthropy. Gross sales exceeded $1.1 million three years later. “I was the Toonz guy,” says Popp. “The guy people went to for community contributions, the go-to music and books guy. It was happening.” Then, it wasn’t. Caught in a price war between box chain stores, Toonz was out of business by the end of 1996. In retrospect, it ended quickly, but Bill remembers it as a long and painful descent. “We tried every marketing tactic, everything,” Popp says. “It staved off the inevitable but the sales volume kept going down and I didn’t recognize the truth in front of me. I kept thinking, ‘Tomorrow is another day, customers will see our value…’ but they didn’t.” After closing, Popp made his final payroll and paid his taxes, but had to break his lease, resulting in filing for personal bankruptcy. He helped the banks liquidate his business and sell the assets, and was able to restructure debts to keep his home. “It was crushing, and I was damn near clinically depressed. I invested every part of my being into the business, poured my blood, sweat, tears and passion into it. Toonz was inextricably intertwined with who I was,” Popp says. “And then after we went out of business I felt about two inches tall. I didn’t want to go out in public or see friends.” Life went on, and Popp returned to work — this time for Fred Meyer. “I may have failed in business but there’s no shame in honest work and I needed to do my part with my wife to take care of our family,” he says. Working at the grocery store gave him a steady income and time to grieve his business closure until he finally made peace with it. “I embraced the fact that I had just failed spectacularly, owned it, and wasn’t ashamed of it any more.” Popp’s story is not unique; in fact, research shows that half of businesses fail during the first five years. Alaska Business Failure Rates 27% of new businesses fail during the first year of being open 35% during the first two years 42% during the first three years 47% during the first four years 52% during the first five years. Source: Business Dynamics Statistics, CED calculations Businesses close for a number of reasons. CB Insights analyzed 101 startup failures and identified the top 20 reasons startups fail. The Top 20 Reasons Startups Fail 42%: No market need 23%: Ran out of cash 23%: Not the right team 19%: Get outcompetes 18%: Pricing/cost issues 17%: Poor product 17%: Need/lack business model 14%: Poor marketing 14%: Ignore customers 13%: Product mis-timed 13%: Lose focus 13%: Disharmony of team/investors 10%: Pivot gone bad 9%: Lack of passion 9%: Bad location 8%: No financing/investor interest 8%: Legal challenges 8%: Don’t use network/advisors 8%: Burn out 7%: Failure to pivot Source: CB Insights A pivotal point Failure is a pivotal point in an entrepreneur’s journey. Their response to failure — and their experiences immediately following failure — will influence whether or not and how they pursue new ventures, as well as impacting the success of those ventures. Studies show that “[I]f the costs of failure (i.e., financial, social, and psychological) are too high compared to the benefits of learning from failure, entrepreneurs may choose to exit their entrepreneurial careers.” Other entrepreneurs take failure in stride, applying the lessons they learned to their next startup, or funding a way to pivot in pursuit of their dream. Anchorage restaurateur Laile Fairbairn vividly remembers the disappointment she felt when she narrowly missed out on securing a location on G Street in Downtown Anchorage for her first restaurant, Snow City Cafe. “I was crushed… I had to walk away from that space and I was convinced that it was over, that was it. I still remember walking across the street with my attorney and crying. He had to stop in the middle and give me a hug, then Mom came over that night to give me a hug, friends were reaching out to commiserate. My dream was dead at that point. It felt like it was time to move on, this is not going to work out.” But instead of giving up, Fairbairn took some time to readjust her vision and eventually opened her restaurant at Fourth Avenue and L Street. Today, it seems almost laughable to think of Snow City and failure in the same sentence. After all, the restaurant has been voted “Best Breakfast” by Anchorage Press readers since 2003 and Anchorage Daily News readers since 2006. The line to dine regularly stretches out the door, and even President Obama stopped by for cinnamon rolls when he was in town. And yet, if Fairbairn’s response to that first failure had been to give up, Snow City wouldn’t exist today. Since then, Fairbairn has continuing expanding to open other restaurants, including Spenard Roadhouse and South Restaurant and Coffeehouse. Most recently, she became part owner of Crush…located in the very spot on G Street she missed out on all those years ago. Learned optimism According to research, serial and portfolio entrepreneurs are less emotionally attached to their businesses, and posses an adjusted optimism bias and with more resistance to psychological costs. A former professional athlete, Andre Horton says that though he dealt with failure every day, each time was an opportunity to learn what to do better. The experience helped him develop “learned optimism.” Entrepreneurs displaying this trait are more likely to make sense of failure as a useful experience, motivating them to engage in future entrepreneurial activity and to see adversity as a challenge. According to Horton, “Ski racing can be a gamble, but winning the race is worth it. The irony is that I lost more races than I won. I have also failed at business more than I have won. Then again, in athletics, losing just makes you a better winner…the same goes for business. They key is that the athletic ‘losers’ have to be optimistic to keep trying, as eventually they will win. Same for business.” Horton has launched six businesses to date, with two still operational: Haka LLC a bespoke business consulting (and sometimes lobbying) agency and Andre Horton Photography. He also is currently a firefighter for the Anchorage Fire Department. Using lessons learned to help others As for Popp, he eventually moved on to a job developing the Challenger Learning Center of Alaska, served as a Kenai Peninsula Borough Assembly member from 1996 to 2002, and later worked as the oil, gas and mining liaison to the KPB Mayor. Today, he is the president and CEO of the Anchorage Economic Development Corp., where elected leaders and members of the media often seek his opinions on issues about the economy and business community. Popp says his experience as a business owner — from the high of rapid growth to the low of bankruptcy — informs his work as an economic developer. He takes pride in offering businesses the kind of impartial counsel he could have used back in the ‘90s, providing data, perspective, and advice on possible paths to pursue to local entrepreneurs. Gretchen Fauske is a marketing-minded economic developer fueled by a passion for entrepreneurship, innovation, and small business. She is the associate director for the University of Alaska Center for Economic Development, Board President for Launch Alaska, and a Gallup-certified CliftonStrengths coach.

Understanding the military’s role in Alaska’s economy

On May 13, 2005, Fairbanks residents awoke to a startling possibility: the loss of as much as a third of the borough’s population. The reason? The Department of Defense Base Realignment and Closure Commission, also known as BRAC, proposed to withdraw 2,821 troops from Eielson Air Force Base and transfer the aircraft of the 354th Fighter Wing to Nevada, Georgia, and Louisiana. This would mean an exodus of families, civilian employees, contractors, and the closure of untold numbers of businesses. BRACs are used by DoD to reorganize its bases for increased operational readiness and efficiency; Eielson made the list because of high operating costs. But Alaskans had long been told that our bases play an essential role in the nation’s defense strategy for the Pacific Region due to the ability to rapidly deploy to hotspots and were surprised that the military was changing course. The idea that Eielson AFB, which at the time of the proposed closure had been part of the Fairbanks area for 60 years, could be reduced to a skeleton military crew with what felt like a swiftly-made and ill-reasoned decision, was shocking. It spurred the community to action. Fairbanks Economic Development Corp. President and CEO Jim Dodson helped lead the effort. Back then, he was a local businessman who had been raised with an appreciation of the military, attending “in the home” military appreciation dinners as a young man and eventually hosting his own. He also served in the Special Forces during the Vietnam War, giving him perspective about how the military functions as an organization. Recognizing that his hometown’s economy would be devastated by the BRAC, Dodson and then-Mayor Jim Whittaker created a team to fight the closure, and enlisted Sen. Ted Stevens, Gen. Mark Hamilton (retired from the military, Hamilton was the president of the University of Alaska at the time), and other Alaska leaders in the fight. “I knew that if the BRAC went through, you’d see this community dry up and go away — 30 percent of the population, 38 percent of our payroll — that’s just too much of our community to lose,” Dodson said. “You would see businesses close, homes being foreclosed on. I didn't want that to happen to Fairbanks.” As part of the BRAC process, the commision in charge held a series of public meetings in communities with military bases on the realignment and closure list. The first meeting was in Fairbanks, where the commissioners were greeted by a crowd of more than 3,000 people, all wearing red T-shirts emblazoned with “America Needs Eielson.” The Pentagon, under intense pressure from the community and the congressional delegation, announced that fall that Eielson AFB would remain open. “We changed their minds,” Dodson said. Today, it’s a victory to look back on —  a story told to show how a small community fought for their future —  and won. Dodson says that the borough changed for the better after 2005. “Before, Senator Stevens was really the one making sure the military was in Alaska,” Dodson said. “But after the ‘Save Eielson’ campaign, we all recognized that Eielson AFB, Fort Wainwright, and Clear Air Force Base are a huge part of our economy. Since then, we have been very proactive in supporting the military’s presence in Fairbanks.” Although many Alaskans have been slow to recognize the importance of the military to Alaska, the economic impacts stretch back before statehood. During World War II and the early-Cold War, Americans migrating to the territory of Alaska reshaped the pre-statehood economy. By the mid-1950’s, as much as 40 to 45 percent of Alaska’s population was tied to defense operations as active duty, civilian support, contractors, and dependent family members. The military built roads, airfields, and ports still in civilian commercial use today, and invested heavily in scientific research at the University of Alaska. Prior to North Slope oil production, the military’s economic role dwarfed all other private industries, including mainstays like mining and fisheries. “The military drove the economy of Alaska in the ‘50s and ‘60s to an even greater degree than oil and gas does today,” says Nolan Klouda, Executive Director for the University of Alaska Center for Economic Development. “The economy completely centered around military in those days. People who came for mining and fishing lived the sourdough lifestyle — off the grid, single men for the most part. The military brought families to the state, and with them, mainstream America came to Alaska. They wanted housing, neighborhoods, schools, places to shop, and entertainment.” Today, Alaska’s economy and population are more diverse, but the military still plays a major role. The roughly 29,000 active duty, National Guard, reserve, and defense civilian personnel is the equivalent of about nine percent of the state’s workforce, though official employment figures do not generally count service members. In the 2017 Fiscal Year, the DoD spent more than $4,000 in Alaska for every resident — more than double the amount of the 2019 Permanent Fund Dividend. And yet, there’s still opportunity to grow the relationship for the benefit of all involved. Klouda is leading a study funded by the DoD Office of Economic Adjustment to better understand the role of the military in Alaska’s economy, and the opportunities on which Alaskans have yet to capitalize. The Alaska Defense Industry Resilience Initiative will identify barriers and vulnerabilities to defense sector firms; help decision-makers and community leaders better understand community sensitivities to changes in defense activity; identify types of assistance needed by defense firms; and identify assets, resources, and stakeholders to support resilience of defense firms. “"The military is a huge investor and employer in the state, and we need to remember that when we think about economic development strategies." says Klouda. Dodson agrees. “It’s one thing to get a military mission, but then you have to figure out how to make the most of it economically,” Dodson said. Although past military impacts were often seen in funding large-scale infrastructure improvements — rebuilding the railroad after WWII and building the Parks Highway to connect Anchorage and Fairbanks — today, technology offers additional economic opportunity. Nationally, the military has been a patron of technology development; the first computers and the internet are just two critical examples. More recently, military technology focused on unmanned aircraft systems, or UAS, has spurred business and educational opportunities in Alaska, along with the creation of the Alaska Center for UAS Integration at University of Alaska Fairbanks. Similarly, military research can spur innovation. Dodson points to the new Long Range Discrimination Radar, or LRDR, at Clear Air Force Station as an example. An LRDR is capable of detecting ballistic missiles en route to targets in the US or allied nations. It will also be gathering non-missile information, 99 percent of which will not be classified, according to Dodson. “There’s an opportunity for UAF or others to use that information to help Alaska understand weather patterns in the Arctic, migration of waterfowl, and more,” says Dodson. “It could have tremendous impacts to aviation. What if someone in a remote part of Alaska knew what the weather was going to be before they took off? It could really increase safety.” The DoD also provides funding to incentivize new technology, like the Small Business Innovation Research, or SBIR, grants for research and development, a boon for tech entrepreneurs. Alaska company Triverus has been part of the Navy R&D process for more than 15 years, beginning with a SBIR grant award in the early 2000s to develop a Mobile Cleaning, Recovery and Recycling System, or MCRRS. With support from the Navy, multiple iterations of the product were designed and tested before the final design was approved. Today, the Palmer-based company employs 22 people and was awarded a contract from the Navy to deliver 43 MCRRS units, each valued at $850,000. In addition to the military, the company also serves the aviation, oil and gas, and construction industries. “The military has to stay at the cutting edge, and constantly look for new solutions. That's a great thing if you're a tech-focused entrepreneur in Alaska,” says Klouda. Dodson also sees opportunity in increasing the number of Alaska companies supplying the military with goods and services, especially with two squadrons of F-35s (46 aircraft) coming to Eielson AFB. The first F-35 is scheduled to arrive April 2020, with the rest following over the course of two years. He estimates an increase of around 5,000 people once families and civilian contracts are factored in. Almost 15 years after the fight to save Eielson AFB succeeded, the future is bright. Instead of a dwindling population and crippled economy, the borough is buzzing with activity. “Eielson is going to be 50 percent larger than it was,” says Dodson. “That’s good economic impact, but you have to manage it right,” Dodson says. “It’s pretty huge.”

Startup Week 2019: Entrepreneurship transforms economies, communities and individuals

It’s hard to know what’s going to change your life. Decisions like choosing a spouse, becoming a parent, or purchasing a home will obviously make an impact, but sometimes an innocuous-seeming choice can reroute your trajectory, spinning you into a world you didn’t know existed.  Take Erin Baca, for example. She was working at a project management firm in 2017 when she decided on a whim to sign up for Startup Weekend.  Startup Weekend is a 54-hour weekend event during which participants pitch ideas for new startup companies, form teams around the ideas, and then work to develop a prototype to present at a demonstration event on Sunday evening. Some of Alaska’s best known startups — Pandere Shoes, Attently, and 60 Hertz — originated at Startup Weekends.  Baca says her participation was a pivotal moment in her career. “It took me supremely out of my comfort zone and introduced me to an entirely new group of people I never would have met otherwise,” she said. “I also discovered previously untapped talent and passion in myself, which I’ve been able to convert into a career path where I can live my values every day.” Countless participants have gone on to apply lessons learned as they launch companies, work for startups, or support them in other ways. Today, Baca is an associate at the 49th State Angel Fund, a venture capital function run by the Municipality of Anchorage that invests in high-growth businesses. She helps organize the Alaska Angel Conference, volunteered at a recent Startup Weekend, and is the 2019 co-chair of Alaska’s Startup Week, which is November 18-24.  People holding jobs like Baca’s are considered “entrepreneurial ecosystem builders” — those who help develop opportunities, make resources available, and build a supportive community to advance entrepreneurship.  If Baca’s job sounds like fun, it is. But it’s also vitally important to Alaska’s economy. Over the last decade, startups in Alaska consistently added 4,000 to 6,000 jobs to the economy each year. Firms that are aged five years or younger accounted for 89% of Alaska’s net employment growth in the private sector, making a compelling reason to support high-growth entrepreneurship in Alaska. “People succeeding in the state is fundamentally good for everyone, but it goes beyond financial returns and economic returns. It’s also good for community returns,” says Baca.  Continuing to grow Alaska’s entrepreneurial ecosystem is one of the reasons Baca signed up to co-chair Startup Week.  Startup Week brings entrepreneurs, local leaders, and friends together to build momentum and opportunity around entrepreneurship in Alaska. Similar celebrations happen across the world, and Alaska’s Startup Week is timed to coincide with Global Entrepreneurship Week to leverage international connections. Baca is joined by Pamela Parker, founder of Everything Bagels located in Soldotna, as co-chair. A math teacher turned entrepreneur, Parker always knew she wanted to start her own business. It look a move across the country and the search for a bagel to suit her East Coast cravings to inspire the launch Everything Bagels. Pamela Parker, Co-chair of 2019 Alaska Startup Week and founder of Everything Bagels. (Photo/Courtesy/ Alaska Small Business Development Center) A little more than three years after opening, Parker is immersed in Alaska’s startup scene; she led Startup Week for Kenai and Soldotna in 2018 and she stepped into the statewide role this year. Parker says she noticed that other communities, like Anchorage and Fairbanks, had strong and developing entrepreneurial ecosystems, but didn’t see something similar on the Kenai Peninsula. After discussing with other local business owners, she says they decided to find opportunities to engage with each other in more meaningful ways.  “Startup Week gives me an excuse to step out of my business for a moment and learn about the amazing things that are going on in our community. It allows me to get tips from other small business owners and inspires me to try new things,” says Parker. “You just get this feeling being in the room with other movers and shakers that you just want to go out and do something. It reminds you why you’re doing the whole crazy entrepreneurship thing in the first place. It makes it even better knowing that I can help others in their communities achieve this same feeling by helping to coordinate the statewide effort.” Venture capitalist Brad Feld, known for co-founding Techstars, his work at the Foundry Group, and writing a series of books about entrepreneurship (Startup Communities: Building an Entrepreneurial Ecosystem in Your City is particularly well known) says that communities should offer a myriad of events that appeal to the interests of a wide-range of entrepreneurs.  Accessing community is an important component of entrepreneurial development. Entrepreneurs can grow their networks and connect with collaborators, mentors, investors, and more. Additionally, events offer the opportunity for participants to gain new knowledge or skills, test out ideas, and meet future customers.  “Any one of these events may seem trivial by itself, but the combination of all of them happening continuously over a long period of time and being inclusive of anyone who wants to engage in them and being led by entrepreneurs is what empowers,” says Feld. Although there’s still a lot of growing to do, through Startup Weekend and Startup Week — along with weekly 1 Million Cups pitches, numerous idea or business plan competitions, conferences, and other events — Alaska is on its way to providing the rich landscape of events described by Feld.  If you’d like to be part of Alaska’s entrepreneurial ecosystem, consider participating in a Startup Week event. It’s an easy and fun way to get involved as an entrepreneur, an ecosystem builder, or someone who’s curious and wants to learn more. You never know — stopping by might just be one of those choices that changes your life! Gretchen Fauske is a marketing-minded economic developer fueled by a passion for entrepreneurship, innovation, and small business. She is the associate director for the University of Alaska Center for Economic Development, Board President for Launch Alaska, and a Gallup-certified CliftonStrengths coach.

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