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A paleo bar 2 million years in the making: The GROK story

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Bryan Capitano of Portland had been in the web design industry since the late 1990s, running a number of different web companies and software startups, when a few years ago, he wanted to try something different.

He needed a new challenge, and before too long, assisted by a recent lifestyle change to a paleo diet, he found one.

Bryan recalls, “I had experimented with super low-carb diets and things like that. And I just wasn’t healthy on those kinds of things. But I noticed that when I was off of grains and wasn’t eating bread, I lost weight easier. I had tons more energy, and I felt better in general. It was just figuring out what worked for me, and then I saw the paleo diet and it was like, ‘Well, that seems like sort of a low-carb thing, but much healthier.’ So I tried that and it just really rocks. It works for me.”

After starting the diet, “I’d go into grocery stores and look for paleo bars or snacks on the shelves, and there was nothing. There was an empty space for it, and it was like, perfect. This is what I’m going to do. I’m going to make a paleo bar.”

The crazy thing was, Bryan had absolutely zero food product making experience.  But there was something intriguing about it. “I loved the learning experience of diving into something that I know nothing about. It was a fun challenge.”

Two weeks (and seven months) to a paleo breakthrough

So he and his wife did some internet recipe research, went to their kitchen, and started to make bars. That wasn’t a scary proposition for Bryan. “I love spending time in the kitchen cooking. It’s one of the things that I kind of do for de-stressing. So coming up with recipes didn’t scare me at all.”

Over the course of an intense two weeks of baking “My wife and I made probably a half a dozen batches of different bars and were like, ‘I like this one, I don’t like that one’, winnowing it down to something that we did like.”

With a winner selected, Bryan needed to find some willing outside taste-testers and initial buyers.  He had a friend competing in cycle races who suggested to him that the races would be a perfect place to pass them out and get some feedback.

But he still needed to come up with some packaging, and true to his fearless spirit, he simply put the bars in brown parchment and wax paper, wrapped them in garden twine and wrote “GROK Bar” on them.

The name came from the paleo community. As Bryan explains, “I’d been following some paleo bloggers, and that community had adopted the name ‘grok’ as a nickname for ‘ancient caveman’”.  That was the catalyst. He started kicking around names in his head, “Grok, caveman….the caveman bar……the GROK Bar. Perfect, that’s it. The GROK Bar!”

CVPGQNqUsAAkqk2Bryan started attending the cycle races and got a lot of positive feedback, leading to a return to the kitchen and a few tweaks to the recipe, and a need to take the packaging and the brand messaging up a few notches.

Like most enterprising startup founders short on cash but rich in connections and know-how, he was able to work a few trade deals with graphic designers, getting them to do logo and packaging design in exchange for web design work.

After more success selling bars direct to consumers at cycle and running races, Bryan hit an inflection point – to generate the sales necessary to really make the business work, he needed to outsource his manufacturing and distribution.

“I looked for a co-packer, and that was a bit of a challenge, because most co-packers want you to buy like 50,000 to 100,000 units. I didn’t have the check to write for that. I didn’t have the market to distribute 50,000 bars to people. So I had to find a small batch co-packer.”

By reading the back of similar locally-made bars at his local New Seasons, he was able to track down a small-batch company in Salem, Oregon.

As Bryan recalls, “I called them up and said, ‘Hey, I got a bar. You guys want to make it?’, and they said ‘Come on down. Let’s talk about it.’  So I brought some samples, and they said, ‘This is a great bar. We’d love to make it.’ They could make anywhere from 1,000 to like 30,000 a month, so it was a great stepping stone.”

So for just a “few hundred bucks” of upfront capital he was able to generate a template to stamp out the bars, and after adding in the cost of the ingredients and labor, Bryan put in his first order of 500 – a mere 7 months after baking that first GROK bar in his home kitchen.

Soon after, GROK bars were found on the shelves at New Seasons Market, Made in Oregon stores and some local food co-ops.

The challenges and struggles of the food startup

Getting on those crowded shelves looks like a daunting task, but Bryan noted that “At first I was a little nervous, because I’m not really a cold-call salesman, but I had some other friends in the food industry, and they’re like, ‘You know, this is really easy. You just contact their food buyers, and say hey, I got a product. I think you might be interested in it.’ So I did that once or twice, and after that, I wasn’t nervous anymore.”

In the future, Bryan would love to get into national chains like Whole Foods and Costco, but at present he’s focusing more on direct-to-consumer sales because those margins lead to better profitability.

CTZnZYYW4AA99e4Also, like any product producer concerned about margins and brand, he’s constantly thinking about issues like price, shrinking the bar size (their 2.4 ounce bar is currently one of the largest in the market), upgrading the packaging, and expanding the flavors (right now there are just two – almond cranberry and hazelnut almond).

And as the business grows there’s always the hurdle of getting the appropriate capital and financing.  Bryan noted “The struggle has always been funding because I don’t want to take on investors. I’m just self-funding and growing organically, and my wife and some family members have helped out a little bit. So funding has been a bit of a barrier, but I think it could also be considered a good thing because it hasn’t like exploded the business to the point where I don’t know how to manage it. It’s allowed me to grow with the business as a manager, as the business grows itself”.

But in any case, GROK bars have quickly made their mark on a Oregon health bar market that was looking for great tasting paleo alternatives, exceeding Bryan’s originally modest expectations when he was cranking out bars in his kitchen.

“You know, when I first started, I’m like, ‘Well, I’ll make a handful of bars and see if some friends and family will buy them’, and, it would be so wonderful if I got into New Seasons and the Made in Oregon store. I achieved those goals much faster than I thought, and easier than I thought. So it kind of surprised me.”

“Although there were a couple of periods during the summer of last year where I was spending several days in the kitchen, making bars one by one, and then driving out to a lot of sporting events. I said ‘I can’t do this. I’m getting tired of this. I want to quit.’ But then once I transitioned to the co-packer and that weight got lifted, and the sales started going up, and I started getting into stores, I said ‘Okay, this is going…I like the trajectory of this”

Just get started: sharing perspective

Bryan also offers great advice to someone thinking about starting a food or product business of their own.

CTULYmwUYAA_LyE“I have a lot of friends and other people that dream about starting businesses, but they draw up a lot of roadblocks on why they can’t do it. And my advice is just to get started. You’ll find that once you get the ball in motion, people are willing to help you, and you overcome the roadblocks faster and easier than you thought you would, just with like any startup.”

And for this native-born Oregonian (he’s from Beaverton), his community, and the state’s reputation as a collaborative and helpful place to have ideas blossom, have also been a great plus.

“Oregon, and Portland in particular, has a really creative maker ethos behind it, and I’m sure that that helped tremendously. The colleagues that I leaned on, my graphic designers, my PR and marketing people and other people that helped me along the way, they’ve all started businesses as well. And so, here it’s ‘I scratch your back, you scratch my back.’ I have to believe that that spirit is much stronger here in Portland than it probably is in other places.”

Indeed, where else can a web designer with no previous experience in food products blend a personal lifestyle and diet choice with a strong desire to launch a product, come up with something as unique and flavorful as the GROK bar, and get it into the stores within 7 months of whipping up the first bar in his home kitchen?

Only in Oregon.  With thanks to the caveman, of course.

To find out more about GROK bars, visit their website, or find them on Facebook, Instagram or Twitter

The science of the soil: The Abacela story

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Earl and Hilda Jones — medical scientists with a predilection for research — never thought their explorations would lead them to studying grapes. But sometimes, that’s how curiosity and creativity work, especially here in Oregon.

The hypothesis that drove a winemaker

Earl Jones grew up in the Midwest and graduated from Tulane University in 1965. Engaging in a career of Academic Medicine and research at Emory expanded Earl’s worldview through conferences; travel expanded his discovery of food and wine. Exploring European wine culture was mesmerizing, and Earl gravitated toward the Spanish varietals that he found compelling.

Regional experts said that there was only one region that can properly grow Tempranillo grapes, and the underlying reason was the soil. World Tempranillo experts said the grape couldn’t be grown anywhere else, only in a specific region of Spain. It had been this way for centuries. However, during one of their trips to Spain, Earl met Alejandro Fernandez, a wine expert whose grandfather made Tempranillo 100 miles from the region where the soil was said to be perfect.

That wine was excellent, yet not in the same soil area.  World wine critics raved about this wine in 1982.

Earl tasted the first bottle in 1986 and was enchanted.  Earl was intrigued about this outlier, a good wine from a different soil in a country where a very specific soil was attributed to the best Tempranillo – and yet he was experiencing a wonderful bottle from a different soil base.

That was what convinced Earl that there was opportunity elsewhere, that the soil wasn’t the only contributor to good wine. If there are other variables such as climate that could enable another location in Spain to grow terrific Tempranillo, why not similar climate elsewhere?  Earl formed a hypothesis that he wanted to test; the climate was the actual key to great Tempranillo, more than a single soil type that wine experts extolled for years.

This was a turning point in Earl and Hilda’s lives; they loved medicine and science but were becoming disenchanted with the business, politics and systems emerging in medicine at that time.  Their passion for wine and for research supported work on their evolving hypothesis that they could grow great Tempranillo beyond one small area of Spain.

Earl and Hilda and their family made a tremendous leap based on his hypothesis. It was a big decision to move away from solid positions in medical research and move with their family, whereby uprooting their lives to plant new roots for themselves and the Tempranillo grapes.13501842_10154515837267697_3217463125475619899_n

Climate Science is the Key

Guided by science, Earl started collecting data and knowledge. Grapes are fastidious, needing a correct growing season and the proper amount of solar generated heat, and Tempranillo grapes needs hot weather for their 6 1/2 to 7 month growing season.

Earl investigated locations knowing that Tempranillo had been grown in California, but had not performed well. The wine was inferior in CA, often blended; no one had produced a single bottle of Tempranillo that says “vintage” on the label. Earl also looked into the Southern Regions of Spain where it’s hot too long, and Tempranillo doesn’t do well. Armed with that knowledge, he was confident that he could find a similar ideal climate such as Spain’s Ribero del Deuro.

In Earl’s mind there was always  a major professor’s mentoring: “When you get an idea the idea enables you to develop a theory, read everything you can…but don’t make the mistake of trying to find the answer. Do the experiment.”

With his mind full of data and science Earl started with New Mexico but there were too many undesirable variables like high levels of frost, a short growing season, too much heat in the middle of the summer, and a suboptimal altitude level.  They read about Colorado and the Pacific Northwest, and although the South of France was an early candidate, Earl and Hilda didn’t want to leave their family of five children far away and move overseas.

Their son Greg wanted to study climate science and aspired to a PhD in hydrology. Greg changed his focus to atmospheric science in part because of the passion his dad had about climate.  Decisions about climate and soil characteristics were dichotomous; books were available, but not helpful. So Greg became the first viniculture climatologist, which proved to be  pivotal during the early data collection. With Greg’s help they found the perfect plot of land in Roseburg, Oregon.14258212_10154737794462697_7185350856267408466_o

Finding a home in Douglas County

The climate envelope is a near perfect match in Douglas, Jackson and Josephine counties, east of mountains. The question was where, within that climate envelope, was the best piece of land.

Earl delved into the problem systematically with topographical maps in order to learn where there would be minimal fog. He realized local airplane pilots knew the climate better than most, and he hired them to fly him over the areas where it’s always sunny, and the fog clears in the morning.

Armed with both topographical maps and his recently acquired knowledge from the flights, Earl drove to find the perfect location- a plot of land near Roseburg, Oregon.

In the early 1990’s, due to the economic conditions, land in and around Roseburg was more affordable than Earl had anticipated. Thus, he purchased more than initially planned, which was great, but they arrived operating on a shoestring. The shoestring budget was a result of the 3 year discovery into the right growing region, plus the additional 9 months to identify the land, all the while having no income. Yet they drove on, based on a great deal of belief that they were on the right track based on the tremendous amount of research they had done.

With the location acquired, Earl turned his focus to finding the perfect vines.

The only source of Tempranillo grapes was California, a place where the grapes had not grown well. Earl asked a winery for all the Tempranillo cuttings they could sell him. And since no one wanted them, he secured them all – 4 acres’ worth in the first year.  It was a great accident of timing that the vines were available. Earl increased his planting to 12 acres, and then added 3 more.

Starting small, they nurtured each vine, learning as they grew.  It is said that entrepreneurs work 100 hours a week or more, and Earl, Hilda and their children can certainly attest to this.  But the land and vines they cared deeply about allowed them to start a new chapter in their life.14560207_10154827370052697_7664395588902437960_o

Building a Winery

With the vines planted, Earl began to focus on developing the winery.  They were welcomed as the 7th winery in the Umpqua valley and the 13th winery in Southern Oregon. Many wineries were starting blends, and some made wine from their own grapes or purchased grapes.

No one but Earl grew Tempranillo at the time, and they chose the name Abacela. Few in the area had heard of Tempranillo, much less grown the grapes.

Coming from the Eastern US, Oregon was new to the family, but from a wine standpoint they were early founders in Southern Oregon. They dove in by learning all of the different valleys and varieties specific to each area in Southern Oregon. In the early years, the land and the winery drained the money reserves, and as with all new wineries, didn’t give back a return on the investment for several years.

To ease the financial burden, Earl secured a part time job practicing dermatology in Roseburg. There wasn’t much managed care and private practices, like the partnership he joined, were still available. Balancing a job while nurturing the vines to a point where they could produce enough grapes to make wine, and bringing this new wine to potential buyers, was tough going.   Eventually the demands of balancing both the medical career and the growing winery led to  Earl making the decision to devote all of his time to the Abacela.

The town of Roseburg was very accepting of Earl. His patients loved him and it was a bittersweet time at noon on July 22, 2004, his last day in practice, when a particular patient wanted to be the last patient he saw. That person is currently 97, and still remains in contact with Earl.

By their third year on their land in 1995, and all the vines were in the ground. In 1997 Abacela produced 238 cases of Tempranillo, and that wine was excellent.  Earl had planted vines that for 100 years didn’t produce good wine in California, but by bringing them to the right climate, his original hypothesis was validated.14100518_10154697759957697_1742172008539755320_n

Chances and Challenges

There were obstacles and difficulties along the way. When they first planted, people couldn’t pronounce Tempranillo, not even the wine people who thought Earl was “temporarily” planting something. At Abacela he also planted Albarino, a Spanish white, as the climate is permissive for those vines as well. In Spain the Albarino is grown in cooler climates than Tempranillo.  Recognizing that the hills on his land have a north side that is cooler, they chanced planting Albarino on the North side of the hills, and are now gathering acclaim for their Albarino wine.

The operations side of being a vintner was new to Earl and Hilda as well. They had to learn business, make hundreds of decisions, study and learn from experts and trial and error. The Abacela exclusivity provided a cash flow allowing them to learn the business.  The winery was also unique at the time, and continues to be.  They did some marketing for Abacela and the wines, however sadly a big potential opportunity for publicity was missed as Earl’s parents passed in 2001, the same summer Abacela entered a SFO international competition and took first place for all Tempranillo. Earl and Hilda could not take advantage of the accolade.

As of last year there are 57 Oregon wineries that grown Tempranillo, Earl started the Oregon Tempranillo alliance and 45 of the 57 vintners have joined. A new national association has over 100 members ,and currently there are about 250 Tempranillo producers in the USA.  Earl and Hilda host interns from US, France, Spain, and New Zealand that come to Abacela for harvest and to work the summer.

As elder statesmen are heralded in medicine, in wine, Earl is the grandpa.  Abacela has 5 interns now from Burgundy, Bordeaux, the Aranda del Deuro, a Sister city to Roseburg, and students from OSU and UCC.  While 57 producers mean a lot of competition, the increased knowledge and collaboration are big positives. Organization members get together in growing numbers to talk about the wine, network and collaborate. Greg travels to wine conferences and educates vintners while he runs his own consulting business, and teaches at Southern Oregon University.

Decanter magazine in December 2016 listed the 50 most influential people in wines, and Greg Jones was given accolades in many issues. Someday his son Greg will take over the business of Abacela, keeping it a family corporation. The experiment is an ongoing learning process, and a wonderful success. That sip of wine from an outlier winery in Spain led to the question – why was the wine so good in a different soil?

That question and the eventual answers led to a life change for Earl and Hilda, but one that has led to a remarkable success in the Umpqua Valley.

For more information, visit www.abacela.com, like them on facebook and follow them on twitter12705166_10154139485167697_1601066802562160725_n

Passport Oregon And Its Bold Quest To Close The Urban-Rural Divide

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Kevin Frazier, the founder and ED of Passport Oregon, never met someone with a degree in ‘Problem Solving’ or a Masters in ‘Moving Past Ideation.’ But soon after he graduated from the University of Oregon with a B.S. in Economics an opportunity to build, refine, and hone those skills quickly appeared. Eleven months later, he is now the Executive Director of a growing nonprofit, Passport Oregon. We sat down with Kevin to learn more about his journey and the mission for Passport Oregon.

How did the concept for Passport Oregon come to be?

When I started Passport Oregon, I didn’t know the first thing about establishing a nonprofit. I didn’t let that stop me from taking action. Why? Because I knew that if I didn’t act, Omar and kids like him across our state would continue to spend their weekends inside, evenings online, and free time doing something familiar, regular, and all together un-outdoorsy.

That bugged me. It nagged me when I went hiking and only saw people that looked like me. It frustrated me when I perused my Facebook feed, full of people adventuring throughout the state. It filled my thoughts as ads about Oregon’s outdoors played on the TV. Omar showed me the Nature Gap in our state. I needed to figure out how to construct a bridge across this burgeoning divide.29951608324_de94e54d41_k

You mention Omar, who is he, and how did your interaction with him lead to an enhanced focus around the Passport concept?

Who is Omar? For two years, I mentored Omar at his school, Spencer Butte Middle School in Eugene. Our weekly gatherings over PB&Js usually sparked conversations about grades, girls, and the Giants – his favorite baseball team. Eventually, I started to ask him about his weekend plans. They didn’t vary much. He played Call of Duty, walked to the arcade seven blocks down the street, and saw the occasional movie. Week after week, I queried him. Week after week, only the titles of the games and names of the movies changed. Week after week, I grew more and more despondent.

I told my roommate, Kyle, about my concerns. Over a patio beer – a weekly ritual during which we drank one of Oregon’s fantastic brews on our patio – he told me to channel my curiosity. If I thought there was a problem, then I should find a solution or help someone who already has found an answer.

With Kyle’s wind at my sails and Basecamp S’more Stout inducing confidence, I embarked on a weekend assignment to study the Nature Gap Adhering to my collegiate habits, I treated this inquiry like a good student would – as a formal opportunity to implement the scientific method. This homework would soon become so much more.

The ‘Scientific Method’ does not sound like the typical entrepreneurial process, expand on how you followed this method to determine the need and opportunity

So, first, I outlined my questions: Is Omar’s indoor-intensive schedule and relatively small radius of exploration the exception or the norm? If the latter, why, and what strategies can be used to remedy the chasm between Oregonians and their outdoors?

The background research came next. I uncovered loads of literature on the Nature Gap, Nature Deficiency Disorder (NDD), and Vitamin N (short for nature). Authors such as Richard Louv introduced me to all of this jargon and more. Like an onion, each chapter read and term googled peeled off another layer of the larger puzzle, until I was left with facts and figures pertaining to Oregonians like Omar. Thankfully, people from across the nation and the Pacific Northwest were aware of NDD and shockingly low levels of Vitamin N in our communities and, even more, our schools.

But, I did not find any foundation, organization or individual addressing my largest qualm with Omar’s rare excursions: not only was he not getting outside, he was also not seeing all that Oregon has to offer. Ski trips to Mt. Hood, learning to surf at Seaside, wake boarding at Wallowa Lake, hiking Smith Rock, and gazing into the endless blue of Crater Lake had an indelible impression on me as a child. Each trip outside of my own Shire exposed me to an unfamiliar setting.30198783224_0d235a6268_k-1

How did your outdoor experiences affect you, and how did these experiences shape the initial Passport Oregon mission?

I encountered new people with views far different than my own and perspectives as varied as our state’s regions. I exercised my brain and body through learning new skills and failing and face planting regularly. Although I was pleased organizations were connecting students with the parks within their neighborhood, I wanted to go a step further and connect these youngsters with all of Oregon’s natural wonders – the coast, the Gorge, Mt. Hood, Smith Rock, the Painted Hills, Wallowa Lake, and Crater Lake – while also introducing them to the economic, cultural, and historic significance of these sites.

My love for Oregon and its people drove me to move to the next steps in the scientific method – developing 30198749844_2bfde8d435_za hypothesis and testing with an experiment. Here’s the hypothesis: if a nonprofit empowered students to travel across the state, meet its people, and learn its history, then they would later make nature a norm in their lives and, as a result of having a stronger sense of place and vastly expanded horizons, contribute to closing other gaps in our society such as the urban-rural divide.

Surely, no science professor would have accepted such a broad, open-ended hypothesis. Thankfully, I didn’t need any professor’s approval. Instead, I simply needed people to help me execute an experiment – start a nonprofit called Passport Oregon with a clear mission: Exploration for All. Passport Oregon would form cohorts of students that would embark on regular trips around the state. Trips would include a different parent on each trip, perspectives from all Oregonians, and facilitate exposure to the unknown and unbelievable. This experiment induced the trying times, chaos, and wicked problems I mentioned earlier.

Starting a nonprofit is similar to starting any business, so once the experiment was concluding, how did you go about the organizational formation?

For a chemistry question, you call chemists. When launching a rocket, you dial up rocket scientists. Who do you convene when you start a nonprofit or, more broadly, when trying to address any novel, complex, and entrenched problem? Earlier, I said that no book could completely ready you for inciting change. However, I have learned that one book is a necessary condition for a successful experiment – a phonebook or at least the 21st century equivalent, Siri. I called people in the public and private sectors, had coffee with educators and entrepreneurs, spoke to executive directors and volunteers, and skyped friends who share my affinity for a particular Robert F. Kennedy quote: “There are those that look at things the way they are, and ask why? I dream of things that never were, and ask why not?”

We jointly asked, “Why not break down the barriers to nature? Why not leverage the love so many hold for our environment to propel students out of Portland and across Oregon?” During each call, I listened intently. I listened, asked lots of questions and took notes. Each conversation shaped the settled-upon solution: a school principal told me about the importance of engaging and interactive content wherever we took the students; an elected official introduced me to members of Oregon’s Native American tribes that would happily introduce our students to their stories, culture, and challenges; other nonprofit leaders informed me of the dos and don’ts of the trade and connected me with others who ran organizations with overlapping aims; and, of course, my parents, family, and friends gave me tips and leads to follow.

Running an experiment requires the right equipment. Ideally, your tools and materials will be perfectly suited for the ensuing steps. In this ideal world, you could purchase the finest implements and not worry for a second about the cost. That’s not possible when starting a nonprofit, especially one that is all volunteer based. From my aforementioned chats, I started compiling a list of folks that would want to join me in closing this gap. If they indicated interest, my first question was, “If you could do anything for Passport Oregon, what would it be?” This question reflects my belief that people work best and work happiest when doing something they love, when they feel challenged, and “in the zone.” This was yet another example of listening – compiling as much information as possible so that those who did opt to volunteer their already limited free time would see their involvement with Passport not as draining, but as inspiring.30466512332_8cf3f9e1a2_k-1

How did you put together your team and organize the first official Passport Oregon trip?

Slowly, but surely, we built a team and readied our first trip. Our background research and extensive networking connected us with a principal of a school with a high rate of NDD. When we met with him and his leadership, we were open about the fact that we did not have all the answers, but would meticulously solicit feedback from them, the students, and their parents to refine and improve our efforts to make Oregon an even more wonderful place. In the same way, we prioritized meeting the parents and the students before we commenced with their cohort. We outlined our plans, answered a myriad of questions, and took the first steps toward making nature a habit in their homes. We did not shy away from labeling this initial group of explorers an experiment. Our honesty facilitated greater communication and shortened the time period between an issue being raised and a response being implemented.

A case in point: Our first trip (what could also be labeled as our first experiment) to Trillium Lake and Mt. Hood was a typical fall day in the Oregon Cascades: wet, windy, and with woefully limited visibility. Our video and photos attest to the misty conditions. Even from Timberline Lodge, we couldn’t see the cloud-enveloped peak. Outfitted in running shoes and winter sweaters, our students, like the paths we trekked on, absorbed quite a lot of water. In short, they were not dressed for the occasion. Although we had asked parents to ensure their explorer had gear for less than great weather, our team recognized that our assumption – that all Oregonians magically have Columbia Sportswear gear tucked in their closest – was ill advised. Thankfully, the wet weather only damped the cohort’s sweaters and not their spirits. We think the hot chocolates at Huckleberry Inn in Government Camp may have helped as well.

What did that first trip teach you?

Needless to say, our first trip/experiment revealed some errors, opportunities, and successes. Our proactive pursuit of finding these shortcomings meant that we started planning how we could do better on the drive back to Portland. With our next trip already on the horizon and more inclement conditions surely ahead, we knew that better preparing our students for Oregon’s notoriously surprising and significant showers meant quickly reaching out to that same web of kindred souls that helped the project get off the ground. By the next trip, each student donned a Tested Tough Columbia Sportswear jacket, which made the gusty conditions in the Gorge feel like a light Portland breeze.

How many trips have you done to this point?

Six trips (Mt. Hood, the Gorge, Cannon Beach, Mt. Pisgah, , and a service day in Portland), 210 hours of kids exploring nature, and 42 hot chocolates later, Passport Oregon has an initial answer to our hypothesis – it is correct. Per their teacher’s reports, the students look forward to each trip, fastidiously analyze the itinerary for the coming adventure as soon as it is available, and frequently share their stories with classmates.

30583150135_84ac3d8991_zLikewise, the parents that have joined us regularly ask to come along again as soon as possible. While we are pleased with these initial results, we are not yet satisfied.

Passport Oregon is looking forward to a 2017 filled with even more exploration, empowerment, and education. In March, we will launch two new cohorts that will embark on their tour of Oregon. Approximately three months later, another new set of cohorts will begin their time venturing around the state. These explorers will kickoff a new round of experiments. We will be ready, prepared to assess how we can do better, and continue to make exploration for all possible for all.

The organization is still young, but how has what you’ve done to this point helped to shape how you see it evolving?

We’ve already encountered new obstacles to Portlanders and Oregonians getting outside: parents and families commonly don’t have the time to plan for a day in the outdoors – mapping out locations, finding affordable meals, and determining the best gas and rest stops; and, the rising costs of going on an adventure – park fees, gas, food, and admission to places like museums. Accordingly, we are launching two additional experiments in 2017.

The first is simply making our trip itineraries publicly available on our website. To track their usage, we ask that those who use the sample trips as a foundation for their own hike, trek, or exploration send us a picture of their time in the wild. Second, in the coming year we will introduce our Adventure Fund. This resource will be available to all Passport Oregon families. The fund will enable families with financial difficulties to apply to have the cost of their excursion entirely covered, just as their child’s trips are covered currently through Passport Oregon. Again, all we ask is that those who utilize the fund send us a photo of their expedition. Stay tuned for more details on the Adventure Fund and how you can reinforce this essential effort to reduce disparities in access to nature.

Also,  we are still listening – if anyone has suggestions, ideas, or comments, please send me an email at kevin@passportoregon.org.  We are always looking for volunteers, and those  interested in Passport Oregon volunteer opportunities can shoot ariel@passportoregon.org an email to learn about the variety of volunteer roles we have available. Finally, please check out our website passportoregon.org and spread the word – Oregon’s outdoors must be available and accessible.

You can find Passport Oregon on its website, and on Facebook and Twitter.

Little Boxes celebrates the vibrant Portland small business community with its black friday/small biz saturday promotion

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Editor’s Note: We profiled Little Boxes last year, and once again this annual Portland small business promotional event and prize raffle, featuring over 200 local and independent merchants, will take place on November 25th & 26th , 2016. You can find out more and download their app on their website, and you can also follow them on Twitter and on Facebook. Built Oregon is happy to be one of the sponsors of this event, and we’re reprising our 2015 profile below. 

It was early November 2011. Portland jewelry makers Betsy Cross and Will Cervarich were only 3 months removed from opening their first Betsy & Iya brick and mortar retail location in the northwest part of the city, on 24th and Thurman.

It had been a hectic and exhausting 3 months for this couple, who before opening the store had built a thriving wholesale business in Portland making and distributing their handcrafted jewelry to more than 100 locations around the country, and not surprisingly, Cross ended up getting ill and got her first day off at home in a long, long time.

She decided to camp out on her couch and watch TV. That was a decision that changed Cross & Cervarich’s lives.

As Cross explains, “There were already commercials happening for promoting Thanksgiving and Black Friday. And instead of just spacing out like you normally do with commercials that you don’t care about, I got mad. I thought, ‘What is it with Black Friday that every year, it gets worse and worse?’ It’s like, ‘Completely kill yourself to buy the best presents ever at the cheapest prices by staying up all night or waking up at four in the morning…’ ”

The anger generated a big question.

10805674_732905163466667_3671726183326341710_n“I felt a real sense of empowerment to focus on the shops that had given us so much support and business throughout the years”, Cross added. “I’d been in Portland for a long time. How come there’s nothing existing already for these kinds of shops? Why isn’t there a focus? We’re not going to be able to put our shops 50% off, or 40% off. But we don’t have to. Why? Because we have great shops, with a different experience.”

That night, Cervarich came home to hear a new idea for a group retail event on Black Friday.

Cross recalled, “Will came home and I said, ‘What do you think?’ And sometimes in our business relationship, one of us will have an idea and the other one will say, ‘Oh, that’s not a good idea. No way we can pull that off.’ ”

This time, he says ‘That’s genius’, and gets on the computer and immediately comes up with the raffle part of it.”

They also immediately emailed a few of their friends in their retail network to test the idea. “People wrote us back that night” Cross noted, “and said, ‘That’s a great idea and I’m in. So tell us what we need to do’ “

The event also needed a name. Cross recalls, “We were obviously thinking about ‘big box’ stores. And what is different (with the smaller stores)? What is special about gift giving? Little, special boxes wrapped in a particular way. That’s something that smaller shops are really good at.”

So it would be called “Little Boxes”, and something transformative was born.

Betsy Cross & Will Cervarich and their Betsy & Iya Retail Store in PDX

A different way to shop Black Friday

Just a few weeks later, the pair pulled off the first Little Boxes, pulling together the retail network, promoting the event all over town and in the press, and distributing paper booklets that recorded raffle entries for cool prizes to all who visited the 100 stores on that Black Friday and Small Business Saturday.

It was a huge success. Cross added “We had shops telling us that they previously had horrible days on Black Friday, because people didn’t think to shop there. They put their energy into the bigger stores.”

And it had the added benefit of being a community experience, something actually enjoyable on a typically hyperactive shopping day. Cervarich notes, “Our whole idea is that shopping, especially on these two days where you’ve just spent time with family being thankful, and celebrating a year with family, shouldn’t about rushing to the store and getting coffeed up, and killing yourself to shop.”

In 2012 they did Little Boxes again, with an even larger network of stores, nearly 200. They also added the ability to gain extra raffle entries by buying merchandise at the stores – the more the person shopped at Little Boxes stores, the more chances they had to win.

The raffle is the big draw. Notes Cross, “It creates a light, fun-filled, game aspect. And I think our main thing was always not just the importance of supporting local, which is an important movement and an important part of our economy, but that our main messaging would be that our shops are just something special, and something different than the alternative shopping experience on Black Friday, especially.”

LB_Budd-+-Finn03By 2013 they topped 200 stores and added an iPhone app to make it easier for customers to find the stores and tally their raffle entries. Last year they tweaked the app with more features, and had even a few more stories participating, and now, in 2015, they are introducing an Android version of the app.

Through the years, Cervarich and Cross have made sure the messaging and tone of the event has was not about being negative about the big box experience on Black Friday and Small Business Saturday. It’s meant to be an additive experience. Says Cervarich, “It’s always been important to us to stay positive. Our messaging never is negative on the big box stores.”

An act of leadership in an environment of trust

And, the couple has always made it clear that big profits were never, and still are not, the aim of Little Boxes. Cervarich notes, “It wasn’t about making money off of this idea. It was about doing something that we felt was going to be good for our shop, of course, but also going to be good for Portland shops. Especially shops that we had worked with (and continue to work with) for a number of years”

These two entrepreneurs were uniquely positioned to create this event because there are few other makers in Portland that have the kind of reach of the Betsy & Iya retail distribution network. And by being inspired, almost by divine providence, by a bad Black Friday TV commercial, they answered the call to pull that network (and many other retailers) together under a common banner, to generate a big local economic benefit that otherwise wouldn’t have existed without it.

It was an act of leadership, supported by a communal sense of trust. Says Cervarich, “There is an innate sense of trust (in the Little Boxes network), so when we came to a shop-owner, they weren’t being solicited by somebody who was only doing ads, or only doing something where it was taking money. We had worked with them, so we had a personal relationship, and we also were on their side.

1475786_732905446799972_2431213108730702047_n“And so I think that really helped our credibility. And people felt like, ‘Okay, well, these guys get it. It’s a promotion where it’s coming from the inside out.’ ”

The unique sense of collaboration and cooperation that distinguishes both Portland entrepreneurs and consumers also plays a huge role. Cervarich notes, “I give a lot of credit to Portland. If not in Portland, where else (could it have been successful)?

“Portland shoppers, they get it already. And so we just needed to give them a little push of a reason to go out on Black Friday. And that sense of community has been a huge reason why Little Boxes has become successful.”

And yes, Cross isn’t angry any longer. “It’s brought a ton of joy to our lives in the shop, and just the sheer excitement that we see on shoppers’ faces”, says Cross. “We’ve had a few people say, ‘I never even knew your shop existed and now I’m coming every year. I’m going to participate in Little Boxes every year’ “

You can find out more and download their app on their website,

Swallowtail Spirits leverages passion, hustle, and fortitude to build a growing distillery

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Kevin Barrett was spending hours upon hours researching and experimenting with home brewing and distilling, and consuming any content on distilling that he could find. He did all this while only putting a fraction of his time researching geography for his degree from the University of Oregon.

Given how he was focusing his time it only made sense that if he was to carve out a career, one that he loved, it should be around something he was passionate about. Thus, the journey from home distiller to Swallowtail Spirits began.14379769_568685866675742_4984882555288960865_o

Early Beginnings

Kevin started making home brewed beer around six years ago, and did so knowing that it would be the first step to making whiskey. The first spirit he made was a brandy, from 5 gallons of leftover wine from Silvan Ridge Winery in Eugene.

And so began his journey in the distilling craft, characterized by much experimentation.

“ I made a couple of stills and talked with local distillers about the production and permitting process. I made a few whiskeys, brandies and vodkas. Some were good, but most were bad so I researched more to find out how to make them better.”

But through trial and error, the whiskies started to taste better. The taste improvements led to people inquiring if Kevin could make special batches for weddings and one of a kind gifts. But the demand for the early batches led to a bit of dilemma.

“ The aging process is the toughest part though because no batch of whiskey that I have made has lasted for longer than 6 months on oak. Everyone drank it.”

The initial interest in the spirits he was making provided him with the validation needed to pursue starting a spirits brand. But in a crowded market, having a strong brand upon which to build is critical, and Kevin had help from a close supporter in creating it.

“ I wanted to link the distillery to the state in some way. I threw around a few names, but then my girlfriend suggested Swallowtail Spirits after Oregon’s state insect, The Swallowtail Butterfly.”

swallowtail-2With the brand locked in and the distilling process fine tuned, it was time to move past small batch production and bring Swallowtail to a larger market. But ramping up liquor sales is not simply about having a solid marketing plan, it’s about having the fortitude to grind it out.

“ Liquor sales in Oregon are all about the hustle. You or an employee have to be out there with the consumer, engaging with them, explaining the process and getting feedback. Nobody will sell the product better than an owner. We know every detail of the process and are passionate about the business. It’s why I am still out there doing the tastings in the liquor stores. Customers like talking with the owners and when they see how engaged we are they get pretty engaged as well. If you can get them engaged and passionate about the product then you now have a customer for life.”

Kevin and his team hustled. They met customers at markets and stores, and talked about the brand to liquor shop owners. The consumers really liked the Swallowtail vodka, with many folks comparing it to top shelf brands. But Kevin was conservative as he entered the market, and even though he believed passionately that their vodka was as good as many highly regarded brands, he entered the market at a lower price point, a move they looked to remedy as they scaled up.

“ We actually listed it at too low of a price initially. Price point reflects a lot on consumer opinion. If you don’t have a premium price, you don’t have a premium product. We’ve increased the price twice over the last year and have seen no drop in demand.”

The premium level of spirits that Swallowtail produces can be traced back to their distilling process. A process that begins and ends with an intense attention to detail.

The water used in the distilling process comes from the lowland Willamette Valley Aquifer System, which has been filtered over many years through the volcanic sediment. Kevin and his team continue that filtration process to an incredible degree. The vodka is filtered through activated carbon sixty times, which produces a very polished vodka and helps to eliminate the by-products of the distilling process.

“ By-products like congeners and fusel oils are left behind in small amounts in vodka. They are what’s responsible for off flavors, odors and colors. They are also responsible for hangovers. Activated carbon pulls these by-products out of the vodka like magnets, with positive and negative charges. We filter our vodka an insane amount of times to get the cleanest product we can in a reasonable amount of time.”

Given the bounty within Oregon, Swallowtail has a vision to use as many locally sourced raw materials as possible in the making of their spirits. But with scaling up fast, finding those sources takes time, and they are actively searching for local suppliers to make that goal a reality.dsc_0082

Connecting to the community and putting down roots

The distilling process, especially with vodka and whiskey, takes a very particular equipment setup to produce. Swallowtail recently purchased a 300 gallon pot still to make their whiskies. The new equipment will allow them to produce about a half a barrel of whiskey a day. The goal is to effectively ramp up sales and production, and purchase equipment to the point where they can produce at least a barrel of whiskey per day. In addition, they also now have a tasting room where they can really connect to the community and consumer.

In addition, the new equipment allows them to ramp up production of their gin, and Swallowtail is taking steps to expand their offerings even further.

“ We will be producing our own single malt (Scotch style) whiskey and bourbon. November marks the launch of two gins as well; a Navy strength (114 proof) London Dry gin and a American gin (90 proof) as well. A goal of our tasting room is to start sampling 2 different products each month to get input from our consumers. Once we find out what they like, we will produce those liquors as well.”

In addition, Swallowtail has partnered up with fellow Eugene-based Ninkasi Brewing to produce a whiskey based on their OATIS Oatmeal Stout. They recently launched a Kickstarter campaign to raise funds to purchase the oak whiskey barrels and necessary equipment needed to produce the collaboration.

The time Kevin has put into building the brand to this point has been immense. But he has also connected to, and worked with, a diverse mix of organizations.

“ From the start I have never stopped asking questions. Anyone who would give me their time was on my list. I started with NEDCO in Springfield then moved to SBDC at Lane Community College for help with the business plan, forecasting and strategy for funding.”

The SBDC’s feedback around Swallowtail’s business plan was a huge asset. Multiple people took the time to go over a series of revisions, and as Kevin notes, it still changes every month.kevinbarrett1-300x216

In addition to the help NEDCO and the SBDC provided, Kevin was also accepted into the RAIN Accelerator program. Just like he did with the SBDC, Kevin continued to ask questions, which led him down the accelerator path.

“ I talked with Joe Maruschak at RAIN in February of 2015 about what I was doing. In September I met with Joe and Shane Johnson and finally convinced them that I really had no idea what I was doing. They let me into the program in September and it was one of the most amazing experiences. It’s like taking an MBA crash course in 12 weeks, but you get to focus in on where you really need to.”

But even a crash course MBA program and support from a myriad of business resources can’t speed up the time it takes to launch a craft spirits company. The wait time for permitting can put a serious dent into any solid plan, as the distiller continues to pay rent and insurance without revenue coming in during that time period. Luckily Kevin planned in advance, which allowed him to save close to $60K.

“ I started contract bottling a year and a half before I applied for a permit at my own facility so I already had a foothold in the Oregon market and had revenue coming in.”

That forward thinking and the hustle to get the product onto shelves has led to a 10% monthly growth rate in the state of Oregon, and with the addition of new products, their local growth will continue to grow while also looking towards distribution in other states.

So we’ll certainly keep seeing Oregon’s state insect on shelves in Oregon and beyond over the next few years.

For more information, visit www.swallowtailspirits.com.

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Linking the physical and digital worlds: A conversation with Sce Pike of IoT startup IOTAS

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Recently we chatted with Sce Pike, CEO and founder of Portland tech company IOTAS, an Internet of Things (IoT) application designed to deliver the smart home experience to renters and the smart building experience to property owners. Pike caught the entrepreneurial bug in college and since then has started 4 companies, all leveraging her vision of IoT as a transformational technology with societal and environmental impacts that go well beyond profit. To that end, Pike will be a panelist talking about the New Clean Tech Economy at the upcoming GoGreen Conference in Portland on October 5th (Built Oregon is a sponsor – tickets available here).

I always like to ask about that particular moment in an entrepreneur’s career when the light goes on and they take the leap? What was that moment for you, and can you expand a bit on how your career journey brought you to that inflection point?

rtemagicc_iotas_sce_pike_web-jpgI’ve always been entrepreneurial. Perhaps it’s because my parents were immigrants and ‘owning a business’ was the only way they knew to provide for the family and also believed that was the American dream. They borrowed money from their family and friends to start a business, this was the only way they knew how to work. I suppose they instilled in me similar values. In my Senior year in college, 1997, I started a web development company. I started another company in 2000, then again in 2007, which was very successful, and IOTAS in 2014. I guess I have the 7 year itch for starting businesses.

Why such an interest in IoT?   You saw this as a “next big thing” well before most of us nearly 10 years ago.

Good question. My interest with IoT peaked when I was in the mobile telecom industry with Palm back in 2000. I saw mobile, specifically smart phones, as the next big thing and I knew that software, (applications and services) for mobile devices would be so much more valuable than just selling the hardware. In 2007 the iPhone showed everybody how to do that well. Seeing that change in the telecom world: from selling hardware to selling services to generate revenue, I wanted to take that same change to the real estate industry. The shift from selling only hardware to hardware + software yields exponential value. This is true for the real estate industry as well, instead of selling just 4 walls and a roof, if they can digitize their homes they can sell services and software that would generate limitless revenue. IoT is the only way to digitize buildings. It’s a way to create that layer of interaction between the physical and the digital worlds, and that’s where it becomes really interesting.

What role has Oregon (and Portland) played in developing your ventures ?

Portland has been great because it’s a place where people really care to experiment and connect, and they’re not financially motivated as long as it makes a valuable difference in people’s lives. It makes for a really good environment to innovate; you can find people who are passionate and willing to connect with you, and they’re willing to take a risk and do something different. We were lucky that Capstone Partners was willing to do this with us, and experiment with their building. It’s the people, they make a bigger difference than capital ever could.

Let’s talk about IOTAS – what led you to start this IoT venture, and what problem are you solving with this service for apartment developers and owners?

The typical age group for early adopters is 18-35, which fits the Millennial demographic. With this group, home ownership was only at 35%, since most of them were renting. They also live in the ‘Subscription Economy,’ where access to value is more important to them than ownership – e.g. the death of CDs and DVDs and rise of Netflix and Spotify. So what would be the perfect product for these Millennial early adopters?

I believed that the perfect product for early adopters would be an elegant Smart Home product which would be the gateway drug for IoT. It would not cost them thousands of dollars and should not be DIY. This product shouldn’t require them to install bunch of hardware, set it up, and then when they move next, force them to uninstall it, pack it, move it, reinstall it, and set it up again in their new rental.

A true Smart Home would also be a complete home. Rather than just one thermostat, a couple of lights, random devices, or outlets, a smart home would be 100% of lights, 100% of outlets and thermostats, with sensors throughout.

Luckily for me, at the same time that this was going through my head, Capstone Partners, an innovative Real Estate Developer in the Pacific Northwest, reached out to me to ask about a technology differentiation that they could market to their residents in an upcoming building. They made me realize that the Multi-Family-Home (MFH) industry is ready for a radical tech overhaul.

The next step was evaluating the MFH market size and understanding trends in the market. Based on my research, there is a trend towards Urbanization, where cities are the next big deal because resources are limited, and it’s more effective to share resources in cities versus a spread-out inefficient infrastructure like suburbs. This urbanization is a global trend and that means that Multi-Family-Homes will be growing in volume.

For developers and owners we hope to accomplish four things: 1) Get more people to the buildings. 2) Use the technology to show units faster and spend less time between showings. 3) Rent apartments for more because of the value added by our technology. 4) Make buildings cheaper to manage by automating tasks that are currently done by walking around the properties.

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There’s a big “green” piece of IOTAS – the electricity savings. Have you scoped the potential impact in reduced energy use as your company scales and its use is more widespread among the 24 Million apartments in the US? I bet that number is pretty big.

We actually only count 18 million apartments as our target market, because we focus on buildings with 5 dwellings or more. In our testing, we’ve found that our technology will save a minimum of 1.36kwh per sq. ft. per year, up to 6.74kwh per sq.ft. per year. On average, those apartments are 982 sq.ft. which totals 17.7 billion sq. ft. That comes to a potential energy savings of 119,000 gigawatt hours every year, which is enough to power all of New York City over that same period of time. That’s also $7.3 billion dollars of potential savings at 8 cents per kilowatt hour, the going rate for the northwest.

What does this social impact factor (the energy savings) mean to you relative to the “making money” side of the business? In other words, how will you personally define “success” for IOTAS?

aaeaaqaaaaaaaao5aaaajdnlmtnhmdvmltnjnzgtndjmyi04njdhlwexzjvhymvkmdy4oqFortunately for us, the two are completely linked. The more success we have, the more energy we save, and the more money we make. Personally, the more social impact we have the greater my satisfaction will be with IOTAS and what the team has created.

What’s been the biggest lesson you’ve learned as an entrepreneur you can pass along to our readers?

People. Surrounding yourself with the right people is critical to success, not just in business but in all aspects of life.

Look into your crystal ball and give us your prediction as to when what you’ve called the “huge promise of IoT “ will finally be fulfilled? What needs to happen?

I predict that this will only take about five years to happen. But before the promise of IoT can be realized, there needs to be a standardization of IoT protocols across different industries. That is to say, once industry standards have been established for every step of the way from design, to manufacturing, to sales, to installation and implementation. For example: most smart technology companies have no idea that installation is even an issue because most of their products are currently only being installed one or two at a time. Technology moves fast, and our culture is so entwined now with technology that our acceptance rate for technology is moving just as fast.

You can find out more about IOTAS on their website, on Twitter, and on Facebook.

Protecting Our Data Blind Spots: Senrio Brings Needed Visibility to IoT Vulnerabilities

260f88b-1Not long ago, we sat down with Portland startup founder Stephen Ridley, the founder of Senrio. Senrio is an entirely new approach to data security, a Software as a Service product that easily scales to protect all kinds of companies, from small businesses to major medical, critical infrastructure, and financial institutions.

But because of Stephen’s research on data security and his understanding of technology and consumers issues, we hung around a little longer than usual, and asked a few more questions about recent developments—things we hear a lot about in the news.

For this edition of the Making Oregon podcast we bring you one interview divided into two episodes.  In the first half, we ask Stephen to tell us about his path from teenage hacker to working for the Department of Defense, Wall Street banks and social media companies. He’ll tell us how his love of research eventually lead him to become an entrepreneur—two pursuits that require very different skill sets.

He’ll describe Senrio, how it works, and what makes it different from other security applications. We’ll learn how it addresses the vulnerabilities found in embedded systems. And yes, we’ll explain how ubiquitous embedded systems are—and here’s a hint—they exist in your cell phone.

And, if you’ve never heard of a USB Condom (also called Syncstop) and what it can do to keep your data safe, Stephen will explain what the device he designed and produces in Oregon can do for you.

In our second episode, we back track for a couple minutes and make sure everyone is on the same page with understanding how Senrio works. Then we dive into a discussion about best practices for protecting data, especially if you are a small business.

Stephen will also talk about the vulnerabilities he and his developers find in consumer electronics and how Senrio can play a role in providing solutions. Plus, we’ll get his take on data privacy, metadata and what social media giants like Facebook are doing with the information users supply, whether they know it or not.

network-4Finally, we’ll ask whether data privacy really exists in today’s world and how Stephen balances his awareness of security issues with his own personal practices in daily life.

We want to congratulate Stephen Ridley and the entire Senrio team on their recent launch, and for spending time with Making Oregon. For those who want to read some of the early reviews about the company, you can check out Silicon Angle,  or the Oregonian.

Links to the Senrio video and comic mentioned on the podcast:

Video: https://player.vimeo.com/video/147295095

Comic: http://senr.io/comic

Part 1:


Part 2:

Treading the access to capital waters: A Q&A with Noah Brockman, Oregon SBDC Network, Capital Access Team Lead

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Noah Brockman is the Oregon SBDC Network, Capital Access Team Lead. In this role, he has engaged founders and companies of all industries and sizes and amassed a great deal of insights into how capital flows through the various channels. We had the chance to talk with Noah about the work the Capital Access Team (CAT) does around the state and also some of the challenges and opportunities in Oregon.

Give us a brief overview of the CAT program here in Oregon –

The Oregon Small Business Development Center Network’s Capital Access Team (CAT) got started five years ago as a business advising “special team” dedicated to working with SBDC clients on getting their projects funded. Since then, over 5 years the CAT program has grown into 4 regional teams which have engaged over 600 small businesses. The resulting impact has been to fund 175 (30%) of those businesses projects, worth over $78M in capital.

How did the CAT team help the other 70% – companies that did not end up receiving funding?

The client process the CAT team has developed enables us to engage a wide variety of companies. But the process does take time to complete, and there is a commitment needed by the company founders. About 36% of the 600 small businesses who inquired about CAT assistance over the past 5 years finished the entire CAT process. Of those clients who completed that process, about 75% on average get their projects funded.

For those who do not end up getting funding, a myriad of reasons can play a role including: (1) they changed their mind about doing the project which eliminated the need for funding; (2) they found funding elsewhere without having to work through our process; (3) they didn’t finish the work; (4) or they finished the process and are still in the process of seeking funds.

Talk about the statewide presence your team has, and how you help companies in every corner of the state. That seems like a daunting task given you have only 4 advisors listed on the website.

To grow the program and expand our capacity in 2012, we recruited three of our other SBDC colleagues from around the state with a special knack for getting deals funded to lead regional CAT teams made up of other SBDC Business Advisors focused on funding. We then hosted a statewide SBDC CAT training to share tools, exchange best practices and divide the state into four “CAT regions”.

This regional model has allowed the CAT program to provide advisory resources throughout the state, with each regional team supporting 4-5 SBDCs, in addition to the client referrals we receive from state and regional economic development partners, lenders, investor groups, etc.

Does every state have a CAT?

While each state has its own SBDC state network and any SBDC can assist small business with access to capital, from what I understand through Mark Gregory, our Oregon SBDC Network State Director, there are only a few (maybe 2 or 3) other SBDC state networks that have organized teams of specialized advisors working on capital access. That said, it’s probably fair to say that the Oregon SBDC Network has been an innovator within the American SBDC Network with its CAT program.

What’s something that people might not know about the SBDC CAT?

We are one of few different “special teams” of highly specialized Business Advisors operating within the Oregon Small Business Development Center Network. Our state Network has been operating in Oregon since 1983. The Network currently has 19 Small Business Development Centers, hosted by Community Colleges and Universities around the state.

The Oregon SBDC Network is funded in part federally by the SBA, by the state via Business Oregon, and locally by our host institutions. Our mission is to facilitate economic development from the ground up, meaning we work with entrepreneurs starting or growing a business by providing business advising and entrepreneurial training programs.

In 2015, the Oregon SBDC Network worked with more than 5,200 individual client companies, provided more than 24,000 hours of business advising, helped with the creation of 981 jobs, and aided clients to gain access to $62.1M of capital.

Talk about how the CAT engagement process looks for new businesses/founders, and provided ongoing support for the businesses you have already helped.

We work with a wide array of founders and companies from rural to urban. In order to keep everyone in the funnel and moving on the same path, we ask folks to complete our online “new client readiness assessment” at BizCenterCAT.org. The assessment provides us some basic info about the business and their project, from which we do an initial 40 minute call to review the assessment together and fill in some gaps.

The primary objective of the assessment form and phone call is to figure out where they are at in their process, what’s left for them to complete to be ready for funding, and ensuring they have a solid business plan and financial projections with cash flow. In order to fill in some of those gaps, we provide them templates to work off of, but also engage on a personal level to talk through a finance strategy that makes sense for their particular project.

Once they have their business plan and projections squared away, we work with them to be ‘funding ready’. But like during the initial engagement process, we work closely and collaboratively to develop a finance strategy or source of funds that might be a good fit. Since the funding landscape is pretty broad, this is an essential part of the process.

From there we provide coaching on how to pitch to lenders and investors, and if necessary help to get them connected with funders by way of introductions. We are a resource as needed through the funding process for our clients, and celebrate together at the close of a successful funding raise. Throughout the process, we get to know the entrepreneurs well and usually have a sense as to whether or not they might benefit from additional small business management education offered through one of the SBDCs, or another small business technical service provider. We stay in touch as the business grows and continue to be of service as needed.

I think many times when people think “Capital”, by default they think money, but isn’t there’s some “Human Capital” you put to work for your clients too?

While access to capital is a core component of what we do, getting founders and businesses to the stage where that makes sense involves engaging personally on various levels. Business planning, feasibility, market research, financial analysis, thinking through different finance strategies, and connecting clients with different sources of capital are all key cogs in what we do at CAT.

Does the SBDC CAT program charge clients for services?

Up to this point we have not charged for our services, and while this is such a benefit to early stage companies, I suspect the 60-70% of the folks we talk to who don’t complete the CAT process is based on not having some skin in the game.

We are evaluating the idea of charging a nominal fee for CAT client engagements that will enable us to add access to customized training on financial literacy. By adding a condensed training curriculum, our clients will be better prepared to seek funding and hopefully the program will have an even bigger impact.

Everyone always talks about the challenges around access to capital, but that can mean different things for businesses in certain industries and regions – what are some of the biggest challenges and opportunities around access to capital here in Oregon?

That’s the same question that the Oregon Capital Scan, published by the Lundquist College of Business at UofO (guided by Business Oregon) attempts to explore every two years. The most recent report is due out later this year.

Nonetheless, here are a few thoughts on current challenges and opportunities:

CHALLENGE: (1) Getting a new business less than 2yrs old funded when the founders may or may not have credit issues, have limited personal assets, limited sales, and the business has limited business assets that provide inadequate collateral coverage for a loan.

OPPORTUNITY: (1) Thanks to Oregon’s new Oregon Intrastate Offering rules, small businesses registered in Oregon have a new avenue to raise up to $250,000 of unsecured debt or equity from other Oregon residents investing up to $2,500 each. The rules allow business owners to essentially write their own deal terms, as long as they make sense for the business and investors dig it. This is one new way to raise capital in Oregon for projects that before, would probably not get funded, except perhaps by way of friends and family or accredited investors. To be clear, I’m not saying this is for everyone, but in some cases it’s a good fit and we’re excited to have this as new tool in the small business finance “toolbox”.

CHALLENGE: (2) Helping those newer fledgling small manufacturing businesses operating in Oregon’s maker economy (anyone that makes or produces any kind of stuff), that have yet to obtain (a) expansion capital to increase production capacity or (b) working capital required to fulfill big purchase orders. Sometimes these folks will be paying on an existing start-up loan and have limited personal or business assets, often making it hard for them to qualify for expansion capital or working capital lines of credit even as their business grows.

OPPORTUNITY: (2) (a) Expansion capital to buy equipment or hire employees to increase production capacity is critical to growing a small manufacturing business. One pilot program that was well-suited to meet this need was introduced by Governor Kate Brown and Business Oregon in Q3 of 2015, and seed funded with $250K called the “Small Manufacturing Business Expansion Program“. This program provided micro-loans up to $50K (for up to 50% of the actual project cost) to existing businesses (minimum 2yrs) seeking expansion capital to assist with a building purchase, construction or renovation costs, equipment purchases and employee training. In some cases, the loans were forgivable if jobs were created and retained over a period of time. As you can imagine, it was a popular program and it didn’t take long to blow through the $250K. I’d like to see this program funded again and with another zero, such that $2.5 Million would be earmarked to help Oregon’s small manufacturers “grow our own”.

OPPORTUNITY: (2) (b) Oregon’s small manufacturers also desperately need access to working capital for big purchase order fulfillment. We see this all the time with food entrepreneurs that get picked up by distributors. What’s needed is a seasonal working capital line of credit product designed for newer businesses just to cover production costs (labor and materials) needed to produce and fulfill big production orders. While there are a few Purchase Order Factoring companies out there that do this, it is often expensive money to borrow. A seasonal working capital line of credit program could be setup to cover only the working capital required for purchase orders on an as-needed basis. The problems with this kind of funding are: (1) the collateral for the loan is inventory and receivable that have yet to be produced, making it extremely risky to lenders; (2) newer businesses without much of a track record are higher risk than a manufacturer with a longer track record; (3) and sometimes customers cancel purchase orders. While those are definitely inherent challenges, there’s some room here for non-traditional lenders to step-up and create a program with lender protections in place to address the need without businesses having to resort to a high interest merchant cash advance kind of program.

CHALLENGE: (3) For many Oregon small businesses, it’s hard to know what types of capital are available and how to best access them. This in fact was one of the take-aways from the 2014 Oregon Capital Scan. I imagine that when small business owners apply for traditional capital and get denied, they may not know what else to do and then become part of that group of frustrated entrepreneurs that say “there’s no access to capital in today’s economy”.

OPPORTUNITY: (3) Sometimes it is the case that a company just can’t get funded while the business works to clean up its balance sheet or improve their personal credit situation. However, from what we’ve seen, the problem is oftentimes a combination of the business not being ready to make a capital request and also not knowing the best sources of capital to pursue for their project – so they go a traditional route and sometimes get denied. In other words, by being ready for seeking funding and having a solid business plan and projections with cashflow and then working with an expert on crafting a finance strategy that fits their project and their situation, the results can be much more positive. As I mentioned earlier, those clients that complete the readiness process we take them through have a much greater chance of eventually getting funded. Oregon has lots of business technical service providers across the state that receive funding to help “grow our own” local economy. I’d say the real opportunities lie with those entrepreneurs savvy enough to seek out assistance on the aspects of business management where they have gaps.

What are some of the biggest gaps you see in capital these days – whether it’s around debt for consumer companies or in say rural areas in Oregon?

While I don’t claim to be an expert on the needs of rural Oregon, I understand from colleagues who spend a great deal of time learning the needs of entrepreneurs in rural Oregon, that gaining access to the same talent and resources we have in the metro areas is something that folks talk about not being equal. I also understand that folks are looking at ways to create more access to metro area talent and resources through the use of technology – I hope it works out. I can also imagine that in rural areas there truly are less local sources of capital, and if a local request for capital is denied, that entrepreneur really needs to be resourceful enough to look outside the pond at other options or know where to get assistance.

Discuss how you help clients make the tough decisions around their business and financing, providing advice that may sometimes not be what they want to hear but with your support, is the right advice to give.

It’s always interesting to work with folks on their finance strategy, since the results are not always what we expect up front and tend to evolve as we take them through the process. For instance, a company may be able to whittle down a bank loan request by asking their existing vendors to partner with them and extend vendor terms for an initial inventory fill for a new store opening. While this may not often be considered as a traditional capital source like a bank loan or angel money, vendor terms can be a huge help to get an expansion off the ground when a business has already proven itself to its vendors, and they are willing to do it.

It seems like capital is about outreach to these entrepreneurs, gaining awareness/insights into the companies, and having relationships with funding sources – can you chat a bit about how the CAT builds the relationships at each of those steps since we know how important those relationships are from a support/mentor standpoint.

CAT clients find us many different ways. Some find us on their own or meet us at an event, however the majority are referred to us by word of mouth, both “internally” from within the Oregon SBDC Network, or “externally” from an economic development partner, past clients, or directly from lenders or investor groups – all folks we nurture relationships with.

But no matter how they end up contacting the CAT, the engagement process is the same. Starting with our initial new client call, we ask a ton of questions to gather info about the client and their project to assess if we can assist them and determine any next steps if they decide to move forward with us. As we go deeper in the work together, we narrow down the finance strategy for the project. This narrowing down on the strategy many times allows us to unearth potential ways our network can help, which was evident during a recent client meeting. After learning that the client intended to export and do business in Canada, we were able to suggest they consider leveraging the SBA International Trade finance programs for working capital to support inventory purchases, which lowered the overall amount of equity they were considering raising – helping them keep more ownership in the company.

Working on access to capital requires maintaining awareness about what types of capital are out there, matching sources with uses, knowing when to use special programs earmarked for certain types of projects as appropriate, and nurturing relationships with lenders and investors. To maintain awareness of what’s changing in the landscape, for years we have hosted monthly professional development calls for our SBDC colleagues across the state, featuring guest presenters with updates on new and existing programs from different facets of Oregon’s capital landscape. These calls are a great opportunity to connect with those program leads as well as give us insights on the types of projects they can fund. In addition to the calls, we host networking events regionally to get to know local funders and we often co-host educational workshops around the state for clients, often combined with lender round table discussions hosted by SBA.

What do you enjoy most about your position on the CAT?

It’s a blast working with some of Oregon’s most innovative and talented entrepreneurs.  The best part is watching client projects get funded and knowing that our work is helping Oregon grow a sustainable local economy.

On a daily basis, it’s a combination of working in the office, meeting onsite with clients, representing the Oregon SBDC Network at events, participating on panel discussions, meeting with community partners, and facilitating aspects of this SBDC program like professional development, event planning, marketing, communications and strategic planning.

I’m really fortunate to work with great people across the state including our clients, SBDC colleagues, EcDev partners, lenders, investors, groups, etc.

For more information on the SBDC Capital Access Team, please visit http://www.bizcenter.org/services/capital-access-team/capital-access-team

 

Sounding like a great idea: Q&A with Audibility

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Portland startup Audibility is closing in on the end of a successful campaign on Kickstarter, designed to help fund the first production run of their personalized headphones. The company is also part of the current cohort of the Portland Development Commission’s Startup PDX Challenge, a program designed to help early stage founders from communities of color. We took a few minutes to sit down with Audibility cofounder and chief operating officer Gilbert Resendez to hear more—ahem—about this young Oregon company.

What was the genesis of Audibility?
Long story short, we worked together on projects for our respective programs at the University of Portland. We wanted to develop a business model that worked to address a lack of access to hearing aids for those with hearing loss. With this in mind, Audibility was born as a consumer headphone company that aims to improve everyone’s listening experience through well designed custom fit headphones for everyday listeners, and access to hearing aids through our partner foundation.

How did you go from just an idea to where you are today?
We started with form in this concept while we were students at the University of Portland in our respective academic programs. From there, we applied for and received the Dean’s Innovation Challenge award at UP. This allowed us to begin working on product development. And after winning a spot in the Startup PDX Challenge, we began to receive the resources to carry out our vision for Audibility. Because of all of that combined support, we’re happy to see our Kickstarter campaign meeting our goal.

The headphone market seems like one that is extremely crowded. How is your product different? Who are you initial target customers?
Everyone’s ear is different. Just like a fingerprint. But the majority of earphones and headphones are not made to fit a generic ear shape.

At Audibility, we recognize the need to customize headphones to ensure comfort and quality. While other custom-fit options do exist, they often require excessive time and money as they require users to visit an audiologist for fitting, or to send images of their ears. Audibility headphones are a “one-stop” solution to achieving an affordable and custom fit.

audibility-boxingTalk a bit about the concept and design of the earphones. Was there a lot of trial and error around the engineering?
Our earphones are uniquely designed to accommodate our custom molding material. The molding material is a silicon-based putty that comes in two parts. Upon mixing the molds, the user will have approximately ten minutes to secure the mold to our earbuds before the material cures into a flexible rubber that maintains the contours of the users EarPrint. In our development process, it was fairly easy to find the right molding material, considering that material very similar to ours is used regularly in audiology for fitting ear-molds for hearing aids. Our cofounder Brian Carter wears hearing aids and was very familiar with this process. The challenges in development came in our industrial design of the earbuds. Our earbuds are designed with gaps in the casing that allow the custom molding material to form in and around the earbud to secure the earbud and become one unit. We used 3-D printing, amongst other rapid-prototyping tools, to iterate several designs and find the best, most fool-proof design possible for our Audibility Customs.

I assume human error is built into the model. People will mess up the fitting. Will you send replacement material if they reach out and say that it doesn’t fit exactly right?
Yes we will! We also provide enough molding material in our initial package for the user to do their fitting again if needed. In the coming months we will also provide instructional videos on our website to assist this process.

Talk a bit about the commitment to give back to the Hear the World Foundation.
For every product that we sell, we’ll give 10% of our revenue to Hear the World Foundation. From the beginning we’ve been strong believers in making sure people have access to hearing aids. Again, with Brian wearing hearing aids, we feel like we have a personal connection to that cause. This is our way of supporting that mission of giving hearing aid access around the world.

Where do you see the company in one year? Three to five years?
In a year we want to develop our online sales strategy and develop our ecommerce platform. In three years, we want to have multiple products surrounded by this idea of having a custom audio experience. By five years, we hope to have been acquired or developed some kind of larger partnership that allows us to eventually exit.

For more information, visit Audibility, follow Audibility on Twitter, or like Audibility on Facebook.

Verifying the Offers: A Q&A with Jake Weatherly of SheerID

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SheerID is an eligibility verification service for online commerce, based in Eugene. Co-founded in 2010 by CEO Jake Weatherly, President David Shear and CMO Marci Hansen, the company currently provides its service to companies like Spotify, Foot Locker, PGA TOUR, and Costco.  We recently sat down with Jake Weatherly to talk about the company and its history, and find out how it’s been able to gain such great market traction in just a few years.

What was the initial genesis of SheerID?
Living in a college town, everywhere we went, we kept noticing how hard it was for students to verify their eligibility and redeem discounts they deserved. We saw that at the airport, in the University library, and even at the college bookstore. As the pattern started to emerge and the pain point became obvious to us, David and I conducted extensive research to uncover what solutions existed. We were stunned that there weren’t companies already verifying eligibility for exclusive student discounts.

Once you had that initial idea, how did you go about developing, testing, evolving, and growing the concept?
I tapped Alex Boone, our EVP of Technology, and sold him on the idea. After hours of testing, Alex confirmed that it was possible to build an API that could perform a binary verification against data sources. From there we spent a lot of time researching data options until we found the right partner for authoritative student data. Upon starting to do TAM research for students, we uncovered there might be an even bigger opportunity around military discounts, so we began developing those two products in parallel.

What were some of the initial hurdles that you encountered as you were entering the market and lining up new clients?
When looking at the classic product life cycle, we realized that we were at the extreme end of the introduction and education phase. So while it was great to not have competition, there was a lot of education to do in the marketplace before we could sell our product.

What were the key pain points that SheerID looked to solve in the market when you launched and how have those evolved as you’ve scaled up?
At our core, we have always been a verification company. We set out to streamline the eligibility verification process for our clients and their customers. Along the way, we have been surprised at how our clients integrate our solutions. For example, we knew from the beginning that we had the capability to host our clients’ verification, but we thought they would be more interested in our API and hosting it themselves. However, because we frequently work with decision makers on the operations and marketing side of the house, the fact that we can get a SheerID-hosted verification solution up and running in six business days with minimal IT support has been a big advantage.

SheerID started with Students and Military, which seems like a great group based on retailer promotions/deals – was there a focus on lining up these two groups first?
There are 34 million members of the military community and 21 million college students. That made them the biggest opportunity for our target prospects.Hurry_bg_img

Was there a measured approach to growth after Students and Military, or more of a database/records access reason for how SheerID has entered the market?
We’ve always gotten a positive response from data partners we’ve approached because our API is designed to ask for a binary response and doesn’t see or transmit PII (personally identifiable information).

As we gained traction and on-boarded new clients, we uncovered two new pain points. Many software companies and other business that offered student discounts wanted to offer academic discounts so adding teacher and faculty satisfied their criteria. We also discovered that several of our clients who offered military discounts to show their appreciation also wanted to extend their offers to first responders. Both new products were client-driven.

Talk a bit about founding and growing the company in Eugene from a community standpoint.
Eugene has been a terrific place to start our company. The cost of living is affordable and the quality of life can’t be beat. Founding our business in Eugene has allowed me to maintain a healthy work/life balance and spend time with my family.

jake_david_2How important is it to maintain a great company culture as you scale up?
Maintaining our company culture is super important to us. We’re a family-friendly, environmentally conscious company. Once a month, we host a family movie night at our office. We encourage our employees to bike to work and stay active by organizing hikes and other outdoor activities. When we opened our new office in Portland, there was definitely a look and feel we wanted to replicate. For example, our desks in both offices are made from recycled doors, and we made it a priority to create comfortable seating areas where our employees can relax and brainstorm. We want our remote employees to feel like they’re a part of the SheerID family. We supply our offices with healthy snacks and high quality coffee, and we’ve signed our remote employees up for Graze subscriptions and coffee subscriptions so that they can enjoy those perks too. We try to create an environment that is very inclusive.

What do you think the biggest opportunities and challenges are on the horizon?
Our core business will always be verification, but our API is so flexible that there are many products we can create and different directions we can take. We’re very aware that in order to meet our goal of doubling revenue this year, we need to scale with focus and choose our next products and opportunities in a calculated fashion.

If your present day self could go back in time and tell your former self some advice, what would it be?
Don’t waste time worrying about the fact that every business planning professional out there says you should never start a business that doesn’t have competition. This idea has legs, so relax, dig in, and enjoy the ride.

For more information, visit www.sheerid.com, like them on facebook and follow them on twitter.