Entrepreneurship in Fairbanks
Earlier this summer I was invited up to Fairbanks, Alaska by the Fairbanks Economic Development Corporation to talk about entrepreneurship. I decided to swing up to Fairbanks at the end of our Alaska trip to check things out. Amy grew up in Fairbanks and we’ve been there plenty of times to visit friends, but I’d never gone with view toward the entrepreneurial activity going on in town and really had no clue what was going on.
I was hosted for the day by Charlie Walker – the executive director of the Fairbanks Economic Development Corporation – and his intern Olga – a wonderfully smart student at University of Alaska Fairbanks (UAF) who grew up in Russia and has a dream / vision of starting a venture capital firm in Eastern Europe.
After a 5am run (I somehow convinced myself that it’s never really dark in Fairbanks in the summer and – even though it was pre-dawn at 5am – I had a super run) I was picked up by Charlie and Olga. Charlie immediately apologized that he was going to be tangled up all day in a “political thing” that had come up – it turns out that the Mayor of Fairbanks was trying to fire Charlie and – if unsuccessful – effectively shut down FEDC. While I probably don’t have the whole story, it sounds like classic small town politics that ultimately hurts the town. The issue being raised is one of conflict of interest over $28,000 so it’s getting plenty of local air play. I told Charlie not to worry about me and go deal with this issue in front of him as I was sure that Olga could help me out for the day (which she did a superb job of.)
We started off at a 7am at the Fairbanks Sunrisers Rotary Club meeting. Now – I’m not a Rotary Club kind of guy, but I go where they take me, and had a nice time with this group. I gave a short talk on entrepreneurship and venture capital, listened to the various announcements, and smiled a lot. I got a pen as a speaking gift which I’ll add to my Rotary Club pen collection (I now have two of them.)
Olga then took me to Rogers Software Development which appears – at 25 people – to be the largest software company in Fairbanks. Rogers has a proprietary software product for barber shop / beauty salons and appears to be on a tear as they’ve leapfrogged a number of incumbent companies with older applications (DOS and Windows / non-Internet). They’re growing 100% yoy, have 5,000 customers, are self-funded, clearly profitable, and – well – exactly what you’d expect from a scrappy 25 person software company. Fun, surprising, and delightful.
We then wandered over to the Office of Electronic Miniaturization (OEM) at the University of Alaska Fairbanks (although OEM is off campus on the second floor of a Wells Fargo building.) OEM is a DMEA (US Government Defense Microelectronics Activity) sponsored electronic miniaturization program composed of a design development and production facility – the giveaway that it was started in the Internet-bubble is its website – www.silicontundra.org. The program includes a 1,500 square foot class 10,000 clean room which is located on the UAF campus. The building OEM is located in also houses the Nanook Tech Accelerator – an attempt to build a local incubator (which is the source of the conflict issue that is causing Charlie and FEDC so much grief.) OEM was funded about 5 years ago and was supposed to be self-sufficient by now but isn’t (although they continue to make progress toward the goal, including a new recent deal with Tessera Technologies).
Lunch was at Pike’s Landing and included Wayne Marr (the Dean of the UAF School of Management), John Dickinson (the CFO of OEM), Cynthia Adams (the CEO of GrantStation – which appears to be the second largest software company in Fairbanks), and Terry Aldridge (consultant to FEDC who is part of the conflict of interest issue described above.) We had a vigorous conversation about entrepreneurship and venture capital, which predictably started off with the question “Do you think venture capital will come to Fairbanks?” to which I responded “that’s the wrong question – you should be asking what you can do to accelerate entrepreneurship in Fairbanks – the money will follow the activity.” I liked Wayne, John, Cynthia, and Terry and the fried halibut burger was great.
I finished the day with a talk to about 50 people at UAF on venture capital and entrepreneurship. The first hour was standard stuff, but the second hour got exciting as we started talking about how entrepreneurship can grow in a modest sized town (85,000) like Fairbanks that doesn’t have much of an entrepreneurial culture. Fairbanks is fortunate to have a huge intellectual asset in UAF (which is the premier science / technology school in Alaska.) Fairbanks is also the northern-most major city in North America (at least I think it is) which gives it another unique characteristic that it could capitalize on. A recurring negative theme was the difficulty of keeping young people in Fairbanks after they graduate from college due to a perception of limited opportunities as well as a hatred of the brutal winters. I spent much of the time focusing the group on several ideas that I thought they should pay attention to if they wanted to expand entrepreneurship in Fairbanks:
- Determine your unique competency and concentrate energy on it.
- Rally around UAF – use the university as a focal point for all entrepreneurial activity in the area.
- Celebrate the successful entrepreneurial companies – make sure that Rogers, GrantStation, and others are visible to the community.
- Build peer groups of entrepreneurs and make sure they the community builds a culture of both giving and getting as part of generating a positive feedback loop.
- Don’t be discouraged – entrepreneurship is hard – you have to work at it.
Overall, I had a very stimulating day. While I don’t expect I’ll be doing any investments in Fairbanks any time soon, it was fun to explore entrepreneurship in a town like Fairbanks.