Nolan Klouda

Entrepreneurs inventing Alaska’s future

Like so many kids, Ben Kellie wanted to be an astronaut. He may not be going to outer space himself anytime soon, but Kellie knows more than a few things about launching rockets into orbit. As co-founder of The Launch Company, an Anchorage-based startup, he thinks Alaska could become a leader in the commercial space industry. Working for Elon Musk’s SpaceX after college, Kellie was part of the engineering team for several commercial launches. He noted that each launch pad had to be built almost from scratch for each company sending a rocket into space. “Imagine if every airline had to build its own airport, the cost to fly anywhere would be astronomical,” he says. Much of this young industry focuses on creating newer and better rockets but overlooks the inefficiency and complexity of the launch itself. That’s where The Launch Company comes in. Kellie and team use a standard set of operating principles gained from past experience helping design and build multiple sites to simplify the process. As an example, the company designed fueling fittings (now built in Palmer) that can be used across many different sizes and types of rocket. They are robust, reliable, and prevent the companies from having to design their own custom hardware, saving time and money. He likens these to USB chargers for phones as an improvement over the first generation of cell phones that had a bewildering array of different cord types. As I write these words, entrepreneurs like Kellie are working on the next Alaska economy. In addition to commercial space, Alaskans are developing marine and aviation technologies, renewable energy systems, virtual reality and augmented reality startups, innovative food and drink businesses, and products used in outdoor recreation — to name just a few. We have a community of specialized investors who understand the risks and dynamics of putting cash into startup companies. Our ecosystem of support organizations includes an engaged university system, all levels of government, and — most importantly — entrepreneurs who help other entrepreneurs through collaboration and mentorship. Fortunately, Alaskans are a very entrepreneurial group. In 2017, Alaska ranked third among the states for the number of businesses launched per capita, according to the Kauffman Foundation. We also lead the way in closing the gender gap in business ownership, traditionally a male-dominated pursuit: Alaska has the highest percentage of women-owned firms of any state. Altogether, startups in Alaska create 4,000 to 6,000 jobs each year, accounting for the overwhelming majority of net private sector employment growth during most years. There is still work to be done to empower Alaska’s entrepreneurs, however. Workforce shortages in key areas like software development limit the growth potential for high tech startups. The state ranks near the bottom for knowledge jobs, as defined by the New Economy Index. Despite being a national leader in launching companies, Kauffman ranks Alaska fourth from the bottom in scaling up, defined as growing to 50 employees within 10 years. We start plenty of businesses, but they tend to stay small. Yet Kellie sees unrealized potential in the Alaskan spirit of adaptability and ingenuity. His father ran an air cargo business throughout Bush Alaska, and he learned early to adapt and improvise, to patch things together with proverbial duct tape. The same kind of on-the-fly critical thinking helps him resolve some of the complex engineering problems that arise in planning for a rocket launch. “I’d like to catch that in a bottle,” Kellie says of the Alaskan entrepreneurial mentality. We rely on entrepreneurs to glimpse over the horizon and see what’s next. How might self-driving cars change the way we get to work and run our errands? How will virtual reality-based training change the way we learn? What jobs will the new high-tech industries bring? We may not know exactly what that next economy will look like, but we can be reasonably sure that entrepreneurs will be the ones who usher it in. Alaska Startup Week is an opportunity for entrepreneurs to connect across the state and is a collaborative effort by multiple organizations to diversify Alaska’s economy, largely led by entrepreneurs. This year, Alaska Startup Week has grown from three communities to ten, with over 70 events in Anchorage, Fairbanks, Juneau, Sitka, Kenai, Soldotna, Palmer, Bethel, Homer, and Seward. Alaska Startup Week is on Facebook. Nolan Klouda is the Executive Director for the University of Alaska Center for Economic Development. Nolan’s areas of professional interest include feasibility analysis, rural economic development, entrepreneurship and innovation policy, and engagement between the public and private sectors. He is a Certified Economic Developer (CEcD) through the International Economic Development Council, is a board member for the University Economic Development Association, and serves on the Municipality of Anchorage Budget Advisory Commission.

COMMENTARY: When the economy gives you lemons, support Lemonade Day

The childhood experience of setting up a lemonade stand and engaging with customers brings back memories for many of us; perhaps it was your very first business transaction, customer service experience, or the first time you learned the correct lemon-to-water ratio for that perfect batch of lemonade. The lessons gained from an early introduction to business can provide young people with an enthusiasm for entrepreneurship that has the potential to grow with them, developing into a passion for business that could spark a dream. Now, more than ever, we need to help plant these dreams of entrepreneurship within our children. As most Alaskans are aware by now, our state is in an economic downturn, spurred by the plunge in the price of oil. We’re seeing the growing impact of this across industries. But as we move forward, addressing the economic challenges that our state faces, we must continue to advocate for programs that instill financial literacy and business skills that prepare Alaska’s future leaders. By making a long-term investment in Alaska’s future entrepreneurs, we are in turn creating new business opportunities, generating employment and a more diversified economy. Lemonade Day Alaska is an example of one such investment. On Saturday, June 11, more than 3,400 youth in urban and rural communities across the state will participate in Lemonade Day Alaska — a record number for our state. Children from all socio-economic backgrounds are currently learning how to build a stand, operate it and then determine what to do with the money they make. Lemonade Day — a free, experiential program with participants nationwide — encourages students to save a little, spend a little and share a little, giving a portion to the charity of their choice. An average of 80 percent of participants deposit a share of their earnings in a savings account while 60 percent also donate to a nonprofit. This year, the community of Bethel will join more than 30 other participating communities across Alaska, when it holds its Lemonade Day on July 4. I am encouraged and excited to see this program grow, especially among the state’s remote and rural communities. Inspiring entrepreneurship among our youth in rural areas of the state is known to foster economic development and healthy, sustained communities. Entrepreneurship can generate employment and can help encourage residents to remain in Alaska. Lemonade Day also instills community and civic mindedness — characteristics that are crucial for the next generation of business, local and state government leaders, and ultimately, all citizens. A 2007 study of businesses in rural Alaska, conducted by the University of Alaska Anchorage’s Institute of Social and Economic Research, found that many successful entrepreneurs learned about business as children, whether from commercial fishing or stocking shelves at their local store. This reinforces that entrepreneurship is a learned behavior; risk-taking as well as falling and getting back up again, in the business sense, are difficult behaviors to learn as an adult. The University of Alaska Center for Economic Development, which coordinates the statewide effort every year, not only encourages participation in Lemonade Day, but also assists children through all aspects of managing a small business. With the help of Wells Fargo, a Lemonade Day Alaska sponsor, the program offers financial literacy workshops that provide participants with a guide for managing their money—from pricing out raw materials to paying back investors to saving for the future. We all can agree that diversifying Alaska’s economy will require creativity, long-term thinking and action right now. The creation of new businesses, with the potential to grow quickly and create in-state jobs, must be part of our plan for a healthy state economy. And the entrepreneurial efforts of Alaska’s young residents could turn out to be the major employers in our state in the years to come. From small villages to the state’s capital, lemonade stands will pop up for one day, June 11, in most participating communities across Alaska. To see a map of locations in your area or to “Brand your Stand,” visit https://alaska.lemonadeday.org/stands-on-the-map. Not only should we encourage our youth to get involved, but all of us can support the program as Lemonade Day consumers, helping Alaska’s youth gain valuable life skills and experience in entrepreneurship that can set our children up for success and perhaps even spark a dream. And with the fiscal challenges our state faces today, that’s more important now than ever. Nolan Klouda is the executive director for the University of Alaska Center for Economic Development.  
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