Will SOAR be a new beginning, or just more talk about Appalachia?

December 8, 2013

You have to wonder: Will the Shaping Our Appalachian Region summit Monday in Pikeville be the start of something big, or just another feel-good effort that doesn’t amount to much?

More than 1,500 people have registered to attend the conference called by Gov. Steve Beshear and U.S. Rep. Hal Rogers, who said they wanted ideas from throughout Eastern Kentucky for strategies to diversify the region’s economy.

There have been dozens of conferences on this topic over the years, but this one offers some hopeful signs. For one thing, it is the first high-level, bipartisan effort. Politicians who usually dance to the tune of the all-powerful coal industry are actually asking other people what they think.

But once the talking is over and the reports are written, will leadership, public investment and private capital get behind the good ideas? Will anything really change?

soarlogoCreating a sustainable, broadly prosperous economy in a region that has never really had one will be a monumental challenge.

Eastern Kentucky has never lacked for intelligent, hard-working people. But it has been handicapped by isolation, lack of education and opportunity, corrupt politics and powerful economic forces beyond its borders and control.

Since the late 1800s, the region has gone from subsistence farming to large-scale timber extraction to increasingly destructive methods of coal mining. The result has been a classic colonial economy, where most of the wealth flowed out of the region, or to a small local elite, while a large underclass survived on welfare and charity.

This cycle of poverty and dependence has led to hopelessness, drug abuse and other social problems, as was outlined in the most recent chapters of the excellent series Fifty Years of Night, by Herald-Leader reporters John Cheves and Bill Estep.

Can a new and different chapter be written for Eastern Kentucky?

In calling this summit, Beshear and Rogers cited the loss of more than 6,000 coal jobs over the past two years. But they wisely avoided their usual “war on coal” rhetoric, which blames the industry’s problems on long-overdue environmental regulation and enforcement.

The main reasons for declining coal production are cheaper Western coal and even cheaper natural gas. Besides, coal employment in Eastern Kentucky has been falling for three decades, from a high of 37,505 in 1981, primarily because of industry mechanization and a shift from deep to surface mining.

Eastern Kentucky’s current coal employment is 7,951, the lowest in generations, and that is unlikely to improve much. Coal will continue to be a presence. But because the large, easy-to-mine reserves are gone, most of the coal jobs will never return.

There are no “magic bullet” solutions to replacing Eastern Kentucky’s coal-based economy. (Not that coal itself was ever a magic bullet. Even when coal employment and production were at their peaks, the coal counties were still among the nation’s poorest.)

The citizens group Kentuckians for the Commonwealth has some good ideas about what a new Eastern Kentucky economy should aspire to. Those principles would be a good starting point for Monday’s conversations.

KFTC’s vision calls for a “just” transition that promotes “innovation, self-reliance and broadly held local wealth.” It urges more citizen participation in decision-making, and calls for restoration and protection of the environment and public health. It also urges leaders to “consider the effects of decisions on future generations.”

Tourism and outdoor recreation are often mentioned as potential economic opportunities, but that will require cleaning up some of strip mining’s environmental damage. Kentucky should lobby for money to do that work from the federal Abandoned Mine Lands fund, which could keep thousands of former coal miners employed for years.

Home-grown entrepreneurship and technology jobs are other often-mentioned possibilities to building Eastern Kentucky’s middle class, but they will require serious state investments in education and infrastructure to attract private capital. Kentucky’s tax-phobic politicians and the citizens who elect them have never been willing to make such serious investment, and that must change if anything else is to.

Shaping a new Eastern Kentucky economy will require a lot of creativity, commitment and hard work, not to mention leadership, inclusion and accountability.

There will be many obstacles to overcome, not the least of which is cynicism. It will be a long process. But Monday in Pikeville is as good a time and place to start as any.


Lexington has come a long way in just a few years

December 2, 2013

Lexington changed a lot between the time I went away to college in 1976 and returned in 1998. But I think it has changed even more profoundly since then.

The earlier changes were mostly physical — vast tracks of rural land turned into subdivisions and strip malls. Recent changes have been more about attitudes.

Kris Kimel, president of the Kentucky Science and Technology Corp., talked about some of those attitudes in his interview with Tom Martin. They discussed how Lexington can attract innovative talent for the 21st-century economy.

Kimel understands the power of innovation and ideas better than anyone I know. If you haven’t read the interview yet, grab a highlighter and mark the attitudes he mentions.

Here are some I noted: Self-starter. Creative problem-solving. Imagination. Tolerance for risk and failure. Embracing diversity.

Lexington isn’t as open to new ideas as it needs to be, but it has made considerable progress. This city is less buttoned-down than it was just a few years ago, and that has made it a much more interesting place to live, work and play.

I don’t know why it happened, but I have a few hunches. One is that technology has empowered more people, making it easier for them to innovate and succeed. At the same time, social media has made it easier for them to connect with one another.

Technology has made the structures of Lexington power and influence younger and more diverse. People feel less pressure to conform, less need to seek “permission.” This is especially true in arts and culture, which are leading indicators of social and economic shifts.

131108Mural0025For example, consider the positive buzz created recently when a Brazilian artist was invited to paint a giant, psychedelic Abe Lincoln mural on a big blank wall downtown. It is an amazing piece of art, sure to become a Lexington icon.

Had that happened a decade or two ago, many of Lexington’s powers-that-be would have scoffed. Most likely, such a mural would never have happened at all.

The mere suggestion of it would have spawned high-level discussions where caution would have outweighed creativity. If anything at all resulted, it would have been a “safe” mural that would neither offend nor inspire anyone — perhaps a pretty field of horses, none of which would be blue.

A Lexington Tattoo Project in the 1990s? No way.

Lexington’s economic creativity can be found in low-rent office space all over town. For example, there are dozens of innovative technology companies such as Cirrus Mio, Medmovie and Float Money, plus biotech firms whose market niches are as hard to understand as their names are to pronounce. There are two tech startup incubators on Main Street, Awesome Inc. and Base 163.

Of course, all innovation isn’t high-tech. Sometimes, it’s simply looking around at what makes a place unique and wonderful and finding new ways to develop and market it. Alltech gets it. So do chef Ouita Michel and the “Kentucky for Kentucky” guys. The once-stodgy bourbon industry has become a hotbed of innovation, and business is booming as a result.

Here’s one of my favorite examples of new Lexington creativity:

Four young entrepreneurs wanted to start a craft brewery. But they didn’t just want to sell beer; they wanted to build community. Their West Sixth Brewery has been wildly successful by breaking all of the old “rules.”

Rather than locate in an affluent suburb, they bought an abandoned 1920s bread factory in a transitional northside neighborhood. An old-style developer would have bulldozed the factory and built a faux-fancy brewpub. Instead, these guys hired Lexington developer Holly Wiedemann, a master at turning old buildings into cool, functional spaces.

The once-abandoned factory, now called The Bread Box, houses West Sixth’s brewery and pub, plus other tenants including artist studios, a nonprofit bicycle shop, a coffee-roaster, a women’s roller derby team and a seafood restaurant.

Smithtown Seafood gets some of its fish from Food Chain, an urban agriculture nonprofit that raises them in tanks in the next room. Brewery waste is fed to the fish and fish waste fertilizes greens grown under artificial lights and served in the restaurant. Win, win, win.

The Bread Box is an example of innovative talent in action, and it creates the kind of community where innovative, talented people can see there is opportunity to realize their own dreams.  


From granola to beverages, entrepreneurship runs in this family

July 14, 2013

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Wayne and Sandra Marlowe, center, and their five children, left to right, Caton Marlowe, Susannah Marlowe-Galan, Byron Marlowe, Daniel Marlowe and Rachael Bullock. Photo by Stephanie Lyell

 

Wayne and Sandra Marlowe of Nicholasville and their five grown children share many active pursuits: biking, hiking, swimming, running — and entrepreneurship.

Wayne is a family practice physician. Sandra, whose ancestors included several inventors and engineers, raised their children to always be on the lookout for opportunities. Three of them have since created their own businesses.

At a family get-together two years ago, they decided to do something they had talked about for years: start a multi-generation family business to develop and market healthy foods.

“Mom sort of groomed us for this,” said Daniel, 32. “She always told us that if you really want to get ahead in life, create your own business.”

The family’s first product was a granola mix that Sandra had been making since her children were little.

“We became famous among our friends for Marlowe Granola,” said Susannah Marlowe-Galan, 26.

When I met the Marlowe clan in early 2012, they had gone through all of the processes to develop and market two flavors of Marlowe Granola. They manufactured it in rented commercial kitchen space and sold it at Good Foods Co-op. It also was on the menu at Della’s Diner near Cheapside.

But efforts to find a large-scale manufacturer who met their quality standards and business model proved unsuccessful. After 15 months, Marlowe Granola left the market. The family then focused on Plan B: a grain-based energy drink.

The Marlowes have spent the past 18 months developing six flavors of a beverage they call Grūv, made from three grains — Barley, amaranth and quinoa — and natural fruit juices. Grūv was inspired by lemon barley water, a classic drink in Great Britain, and contains no artificial flavors or preservatives.

“We have learned a lot about the food industry in this process,” Sandra said. “You can’t just have a good recipe; you have to know the science behind it.”

And there have been a hundred other issues to deal with, from trademarks to nutrition labeling to finding a manufacturer and retailers.

“Getting something from concept to market is not quick and takes some capital,” Sandra said. “But we’ve also gotten a lot of help along the way, much of it for free.”

Before launching the company, Sandra got advice from the Central Kentucky Inventors Council, which she has been a member of for years, and took classes from SCORE, a non-profit organization that helps small businesses get started.

The Marlowes worked with counselors at the local Small Business Development Center to develop market research and financial models.

Some of their biggest help came from the Food Systems Innovation Center at the University of Kentucky’s College of Agriculture, Food and Environment.

Angela Anandappa, the center’s program coordinator, set up meetings for the Marlowes with UK faculty members who had particular areas of expertise. She also put them in touch with Flavorcraft, a Louisville bottler they have secured to produce their first commercial test batch. UK also helped the family with sensory studies, nutrition labeling and many other issues.

“I can’t say enough about what a resource they are for food service entrepreneurs,” Sandra said.

So far, Sandra said, the Marlowes have invested about $50,000 of their money in the company. They recently launched a crowd-funding campaign on Indiegogo.com, hoping to raise an additional $23,000 by July 25 to fund an initial production batch for sale in Central Kentucky and the Denver area, where Daniel lives.

The Marlowes have been able to do a lot of work in a relatively short amount of time by dividing up responsibilities according to each family member’s skills and interests. Daniel works in food service in Denver and Susannah operates her own commercial photo studio in Fairfax, Va. The other three Marlowe siblings live in Central Kentucky: Caton, 24; Byron, 29; and Rachael Bullock, 34.

“It has brought us closer than we’ve ever been as a family,” Rachael said. “But we try to be really intentional about separating family time from business time.”

Two of Wayne and Sandra’s four grandchildren — 10-year-old twins Micah and Malachi — also have been active in the business. They were important taste-testers, Sandra said, and they star in a promotional video produced for the Marlowes’ Indiegogo campaign.

“They now have a list of companies they want to start when they grow up,” said Rachael, their mother. “They say inventing is in their genes.”


Greek immigrant hopes food truck is path to successful restaurant

May 6, 2013

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At Thursday Night Live, Dave Floyd watches Ilias Pappas of the Athenian Grill food truck prepare his gyros sandwich. Pappas started his business as a food truck last September and plans to transition to a small Greek restaurant in Chevy Chase this summer.  Photos by Tom Eblen

 

Since food trucks and stands started popping up in Lexington a few years ago, they have become popular with customers but created tension with bricks-and-mortar restaurants.

Some restaurant owners have fought efforts to make food trucks more accessible, saying their low overhead makes them unfair competition. So far, the city has only permitted them to operate on private property or at special events.

Council member Shevawn Akers chairs a food truck ordinance work group, which has streamlined the permitting process. Last week, the group came up with a proposal that council should approve. It would allow a pilot project to let food trucks operate in designated downtown parking areas.

What will be interesting to see is how many food truck operators go on to start restaurants.

Ilias Pappas, owner of the Athenian Grill food stand, is well on his way.

Pappas, 33, was born in Lamia, Greece, and emigrated to this country to attend college at Lexington Community College, the University of Kentucky and Florida International University. After working in technology in Miami for a year or two, he returned to his first love: food. He worked in several Miami restaurants.

Pappas is now renovating a former bakery on South Ashland Avenue to be his Greek restaurant and market.

Pappas is now renovating a former bakery on South Ashland Avenue to be his Greek restaurant and market.

Pappas had grown up living over a bakery and eating traditional Greek food prepared by this mother and grandmother. While attending college in Lexington, he had helped his aunt and uncle, George and Louiza Ouraniou, a welder and a chef. They also were caterers and became popular fixtures at community events over the years, serving barbecued lamb and Greek gyros.

Then tragedy struck: George Ouraniou, 71, died in a car wreck in September 2011. Pappas returned to Lexington to help his aunt. Then he moved back for good a few months later.

“I never imagined I would end up living here,” Pappas said of Lexington. “But I realized this was the place I wanted to stay.”

Pappas said his uncle had always dreamed of opening a Greek restaurant, but never did. Pappas had the same dream, and figured a food truck would be an affordable way to start.

Last September, he created Athenian Grill, a food stand serving four types of gyros, Greek salad, spinach pie, Cypriot meatballs, hummus and baklava. With help from several friends, it became a popular fixture outside Country Boys Brewing and West Sixth Brewery and at Thursday Night Live on Cheapside.

“I didn’t have a business plan; I learned on the job,” Pappas said. “The (brewery) owners have been very good to me. The exposure I got as a food trucker provided opportunities for exposure and allowed me to introduce myself to people.”

That has led to catering and event opportunities. But Pappas wants to do much more than he can do now cooking on the street and preparing things in advance in commercial kitchen space he rents in Nicholasville.

“The food truck doesn’t allow me to give people a good exposure to a traditional family-style Greek dining experience,” he said. “It’s very limited what you can do out on the street.”

So Pappas has rented the former Belle’s Bakery building in Chevy Chase — an old two-car garage set back off South Ashland Avenue between Euclid and High streets— and has begun renovations. He hopes to open the restaurant in July.

In addition to a few inside and outside tables, the non-mobile Athenian Grill will have lunch delivery and a Greek market upstairs, which can be booked for small private dinners. In addition to traditional Greek food, Pappas plans to offer some of the flavors he grew to like while working in Miami.

“Ninety percent of the menu will be things you cannot find in Lexington at the moment,” he said.

Pappas is financing the venture with his own savings, plus loans from family and friends. He also has launched a campaign on Kickstarter.com, as much to attract community involvement as financing.

“Because of my food truck, people have given me the chance to take the next step,” Pappas said. “My uncle worked very hard in the food business. I want to dedicate my restaurant to him.”

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Kentucky Mudworks has succeeded by thinking outside the wheel

April 22, 2013

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Link Henderson of Kentucky Mudworks makes one of the ceramic pint glasses that will be part of her fundraiser for Seedleaf on April 27 at West Sixth Brewery. A $15 donation to the community garden group will come with a beer in one of her handmade pint glasses. Photo by Tom Eblen 

 

Link Henderson moved here after college in 1997 because her best friend got married, got a teaching job in Lexington and bought a duplex where Henderson could rent the other half.

“I always wanted to own my own business, ever since I was a kid,” said Henderson, who grew up in North Carolina and majored in Latin and ceramics at Dickinson College in Carlisle, Pa. “I just didn’t know what it was or how it would happen.”

After working as a waitress and baker, Henderson got a job teaching ceramics classes at the city-owned Loudoun House.

When it was closed for a major renovation, she rented studio space in an old carriage house downtown, offered her own classes and made pottery to sell.

As the business grew, she moved to larger quarters on Jefferson Street. One thing led to another, and Kentucky Mudworks LLC is now a full-service ceramics studio, school and store at 825 National Avenue.

130416KyMudworks0085The company will have one of its two annual charity fundraisers April 27 at West Sixth Brewery. Called Pints for Plants, the event benefits Seedleaf, a nonprofit organization that works to provide affordable, nutritious food for people at risk of hunger in Central Kentucky.

Henderson is hand-making more than 300 ceramic pint glasses. Donors get a pint of beer in a glass for a $15 donation to Seedleaf, from 3 p.m. until they are all gone.

Henderson said Kentucky Mudworks’ success has been all about diversification.

“Knowing my market and being willing to have a toe in every facet of the business,” she said.

When Henderson began making pottery and teaching classes, she was frustrated that there was no good place in the region to buy clay. There are fewer than a dozen ceramic clay manufacturers in the country, and mail order is expensive.

“A box of clay is only $30, but it costs $20 to ship it,” she said. “So, if you have a local supplier, it’s a really great thing.”

Henderson started selling clay to potters, schools and universities. Kentucky Mudworks now stocks 80 kinds of clay in its 11,000-square-foot facility, along with kilns, wheels and a full range of pottery materials and supplies.

130416KyMudworks0049When online retailers started taking a bite out of her margins several years ago, Henderson created her own line of tools.

“Instead of trying to compete with 30 or 50 online stores, I wanted to have products in those stores,” she said.

Dirty Girls Pottery Tools now has about 40 distributors in the United States and Canada. Henderson also sells them at her shop and website: Kentuckymudworks.com.

Henderson and her five employees make commissioned pottery, such as trophies and awards. They also offer ceramics classes for adults and children. Kentucky Mudworks recently partnered with Zig Zeigler, a stained-glass artist whose studio is down the street, to offer stained glass classes.

The hardest thing about building the business was financing.

“In the beginning, it was credit cards, which is an absolute no-no,” Henderson said. “But I was 25 and had no collateral.”

As the business grew, she was able to get a conventional loan, which she plans to pay off in September. Henderson owns 90 percent of the business. Eight percent is owned by a friend and investor, and a longtime employee owns 2 percent.

But, for many years, much of Henderson’s capital came from living simply and plowing most of her earnings back into the business.

“I probably lived on 700 bucks a month for I don’t know how long, literally living above the shop,” she said. “Ramen noodles: that’s how I financed my business!

“I didn’t have a family or a mortgage,” added Henderson, 38, who now lives on a farm near Lawrenceburg. “I started when I was so young because I figured if I don’t do it now, I’ll never do it if I have something to lose.”

In addition to constant financial discipline, Henderson said she does a business plan every five years to stay on track.

Kentucky Mudworks has been a lot of work, but it has been worth it, she said.

“I wish more young people would start businesses,” Henderson said. “I was very, very lucky. I found a niche, a hole in the market that I was able to capitalize on.

“But it takes so much more than you think.”

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One entrepreneur hopes to educate, another to be educated

April 1, 2013

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Rosetta Lucas Quisenberry just published her fifth black history book. Photo by Tom Eblen

 

Not all entrepreneurs are in it for the money. As two very different entrepreneurs from Lexington show, business can be a good way to achieve personal and social goals as well as financial ones.

Rosetta Lucas Quisenberry, a retired Fayette County Public Schools teacher, just published the fifth book in her Black Saga series: Things, People and Places We Must Always Remember.

Like her first four books, this one has a fascinating collection of images of racist postcards, advertisements, coin banks and other ephemera from the 1890s to the 1940s, followed by images from that period that show a more positive reality of black Americans.

Quisenberry was a 24-year-old graduate student at the University of Kentucky in 1975 when she went to Turfland Mall to look at a visiting antique show. She noticed a couple of white women giggling at old postcards.

After they moved on, she walked over to see what was so funny. What she found shocked her: depictions of black people eating watermelon, picking cotton, posing as “alligator bait” and otherwise being made objects of ridicule.

“Nobody had ever told me this material even existed,” she said, adding that she bought every one of the postcards “to take them off the market. I was ashamed of it.”

Collecting such artifacts became an obsession with Quisenberry, who went to antique shows all over the country and accumulated more than 1,000 of them.

After a few years, though, she realized that rather than being hidden and forgotten, these racist relics should be seen and remembered. Only then, she thought, would black and white people understand the depth of past racism and how it continues to affect society in subtle ways.

130401Eblen-Book001Quisenberry photographed a sampling of her collection of negative and positive images and published her first book, A Saga of the Black Man, in 2003. Over the years, she came out with three more similar books, focusing on black women, children and families. The new book ties them all together.

The former teacher would like to see her books used in public school history classes, but she doubts it will happen.

Modern parents might be offended by what were once commonplace examples of racist humor, she said, and school systems themselves were once complicit. For example, the new book’s images include the program from a black-face “minstrel show” put on by students of Lexington’s all-white Picadome Elementary in 1947.

Quisenberry’s books cost $15 each and are available in many Central Kentucky bookstores or directly from her: (859) 299-7258.

Kids for Kids

Logan Gardner, a senior at Henry Clay High School’s Liberal Arts Academy, has known since he was little that he wanted to go into business. He figured one good way to learn about business would be to start one.

130401Eblen-LoganGardner realized that few adults might be willing to do business with a kid. But he saw an opportunity in the charity projects many of his friends were involved with. He created Kids for Kids Youth Social Ventures, a nonprofit organization that would teach him business skills and help his friends jump-start their fundraising efforts.

“Running a charity is similar to running a business,” he said. “It’s a lot of the same skills.”

Gardner, 18, wrote a business plan, filled out the voluminous paperwork to seek nonprofit tax status, created a website (Kidsforkidsysv.org) and set up a presence on social media. Then he partnered with the crowd-funding site Rockethub.com.

Gardner got mentoring along the way from his father, John Gardner, a financial advisor for Wells Fargo Advisors, and Erin Budde, who leads Wells Fargo’s national charity efforts and will soon become executive director of stl250, the group planning St. Louis’ 250th anniversary celebration in 2014.

Kids for Kids’ first project raised $2,000 to help Ellen Hardcastle, 17, a family friend in Nashville, produce a CD of her piano solos. The CDs will be sold to raise almost $5,800 to build a new well for Ulongwe Model School in Malawi.

Kids for Kids’ current project on Rockethub.com is halfway toward its goal of raising $900 by April 17 for Lusi Lukova, a Henry Clay junior, to help the Lexington-based International Book Project ship textbooks to schools in Uganda.

Gardner soon will be turning over Kids for Kids to his brother, Austin, 17, as he heads this fall to the University of Pennsylvania, where he has been accepted into the prestigious Wharton School of Business. Did starting Kids for Kids give him an edge?

“Absolutely,” Gardner said. “I think that’s what got me into Penn.”


Two Kentuckians turn their passions into business opportunities

February 18, 2013

Alex Brooks left Lexington for two years of graduate school in England, where he studied book conservation. He has returned and started what may be Kentucky’s only company that conserves old books for individuals and libraries. Photo by Tom Eblen

 

Work is more rewarding when you find a way to turn your passion into a business opportunity. Kentuckians Alex Brooks and Debra Koerner are doing just that, at different points in their lives and with technology from different centuries.

Brooks, 31, grew up in Louisville and discovered creative writing in high school. He made his first book for poems he wrote. As a Gaines Fellow in the Humanities at the University of Kentucky, he earned a bachelor’s degree in creative writing.

While at UK, Brooks discovered the King Library Press and learned letterpress printing, which led to him creating block-print art. He also worked in UK Special Collections, which interested him in book conservation.

After college, Brooks acquired some antique printing equipment and operated Press 817, a one-man company that produced everything from wedding invitations to his own block prints. His career took another turn when he won a Fulbright Scholarship to study in England. While there, he earned a master’s degree in book conservation at West Dean College.

Brooks returned to Lexington in October and started Alex Brooks Conservation to restore and conserve old books, from rare library specimens to family Bibles.

“The idea in my work is to keep as much of the original as possible,” Brooks said as he showed me a leather-bound volume from the 1830s about horse care that he is repairing for the Keeneland Library.

What he doesn’t try to do is make old books look new, by bleaching pages or replacing old bindings that still have a lot of original fabric. That might make them look good for a few years, but their historical value would be diminished.

“I’m not trying to make a book look like it was never damaged in the first place,” he said, “but to prevent it from further damage and make it usable.”

There is a lot of need for book conservation in Kentucky, yet there are few conservators.

“That’s one of the reasons I chose to move back to Lexington,” Brooks said. “I know the need is out there, but I’m not sure that the finances for that need will be out there.”

Brooks charges about $300 to refurbish a family Bible. Other work is $30 an hour, plus materials. (For more information, email Brooks at alexbrooks@gmail.com.)

In addition to doing work for institutions and collectors, Brooks hopes to build a client base from industries such as Thoroughbred horses and bourbon that realize heritage is important to their brands.

Brooks will be sharing his skills at the Carnegie Center for Literacy and Learning, where he will teach bookbinding classes March 2 and 16. Learn more at Carnegiecenterlex.org.

Debra Koerner has started a mid-career television production company to make a health and wellness series for Public Broadcasting called “Journey Into Wellbeing.” Photo provided

Koerner, 45, had written a book about success, been executive director of a spa organization and started a wellness education company. But she had always dreamed of a television career.

“That got me to thinking: if I was going to have a TV show, what am I most passionate about?” she said. “Where can I make a difference?”

Koerner describes herself as a “pudgy insomniac” and former stressed-out working mother. So she decided to borrow from her own experiences to show viewers how they could use local resources to make themselves healthier and happier.

She started a production company and created a self-funded pilot episode of Journey into Wellbeing. The show is planned as a state-by-state series, focusing on creative local wellness initiatives and resources. She gives viewers tips for healthy eating, exercise, natural health care and sustainable living.

The pilot episode focused on Kentucky and will air Tuesday on KET2 and 10 more times through March 21 on Kentucky Educational Television.

In the pilot episode, shot in October, Koerner interviews several Kentucky health experts and travels around the state. She visits an organic farm in Oldham County and Frontier Nursing University in Leslie County. She consults with a doctor and a fitness expert from Lexington and gets advice from a Louisville chef about how to prepare healthier versions of two Kentucky favorites, the hot Brown and corn pudding.

“Every state has great health initiatives, but they are not getting the focus they deserve,” Koerner said. “I also hope my story impresses (viewers) to attempt something they’ve been thinking about and wanting to do. It can happen.”

 

 


More small Lexington businesses are ‘doing well by doing good’

February 4, 2013

West Sixth Brewery partners, left to right, Ben Self, Joe Kuosman, Robin Sither and Brady Barlow made community improvement part of their business plan. Photos by Tom Eblen

 

As so many businesses become consolidated and conglomerated, the only things that seem to matter are profit, shareholder value and excessive executive compensation. Communities, like employees, become expendable.

But the trend with small, locally owned businesses seems different, at least in Lexington. You don’t have to look far to see it.

Since its creation in 2008, Local First Lexington, a non-profit alliance of locally owned and independently operated businesses, has made community enrichment a priority. And many business people do things on their own, such as insurance agent Debra Hensley, who spends a lot of time on public service and community-building.

These business people are doing great things for Lexington. But they are quick to tell you that their efforts also are good for their businesses. There’s a term for it: “Doing well by doing good.”

Stella’s Kentucky Deli does regular “dining for a cause” nights, donating 15 percent of sales to a local charity. Thai Orchid, Nick Ryan’s Saloon and many other restaurants do similar fund-raising nights and events.

Lexington retailers often donate merchandise or gift certificates for charity auctions, or they sponsor events and non-profit organizations. Some examples: Joseph-Beth Booksellers has book fairs for organizations, giving them as much as 20 percent of sales. The Morris Book Shop sponsors several local non-profits, makes donations and opens its store for events.

“I think you’re seeing a lot more of it,” said Ben Self, one of four partners who opened West Sixth Brewery in April. “I think people are starting to understand that it’s not a one-way street. It’s beneficial all the way around.

“That’s the future of building communities: businesses and non-profits working together for common goals.”

West Sixth Brewery has some of Lexington’s most ambitious community outreach efforts, beginning with the 90,000-square-foot former bread factory the partners bought for their brewery and tasting room.

They rent space in the rambling building to artists, writers and a variety of community-minded businesses and non-profit organizations. Those include Broke Spoke Community Bike Shop, Magic Beans Coffee Roasters, Roller Girls of Central Kentucky, and FoodChain, a sustainable urban agriculture non-profit started by Self’s wife, Rebecca.

“It’s nice to see the synergies and cooperation among the different groups,” said partner Joe Kuosman, noting the Roller Girls have after-hours events at the brewery, where its resident artists’ work is displayed.

“We committed from the very beginning to giving 6 percent of our profits to local charitable organizations,” Self said of the brewery, “and we far exceeded that the first year.”

In addition, the brewery sponsors an event for a different local non-profit each month, donating 6 percent of sales that night. The next one, on Wednesday, benefits the Community Farm Alliance.

The events often bring in people who have never been to West Sixth, but then come back again and again, partner Brady Barlow said.

West Sixth’s partners also set sustainability goals for their business, from rehabilitating an old building with reclaimed wood fixtures to recycling waste, and canning rather than bottling their beer since it’s easier to recycle.

Bourbon n’ Toulouse restaurant owners Will Pieratt, left, and Kevin Heathcoat.

Bourbon n’ Toulouse, a Chevy Chase restaurant that serves good, cheap Cajun food, has made community outreach the core of its marketing strategy since it opened in 2004. Partners Will Pieratt and Kevin Heathcoat give away a lot of gift certificates for charity and frequently sponsor events where as much as 25 percent of that day’s sales go to a non-profit.

The restaurant’s two biggest annual events are Empty Bowls, a partnership with Kentucky Mudworks pottery studio that benefits Moveable Feast, which provides meals to local people living with HIV/AIDS; and one for the Race for the Cure, which benefits research into breast cancer, which killed Heathcoat’s mother.

Other events have focused on disaster relief, such as Bow to the Brow day last March that honored University of Kentucky basketball player Anthony Davis and raised money for Eastern Kentucky tornado recovery.

“Some of our very best customers came here for the first time for a charity event,” Heathcoat said. “We just can’t believe more businesses don’t do this.”

Beyond growing their business, though, Pieratt and Heathcoat think community support is simply the right thing to do.

“We opened on seven credit cards and $10,000 I borrowed from my brother,” Heathcoat said. “If it wasn’t for this neighborhood, we wouldn’t have made it. Our philosophy from day one has been that the community supported us so we have a responsibility to give back.”

Wyn Morris, owner of The Morris Book Shop, feels that sense even more acutely. His father, lawyer Leslie Morris, was among the 49 people killed when Comair Flight 5191 crashed on takeoff from Blue Grass Airport on Aug. 27, 2006.

“Lexington truly came through for all of us,” said Morris, who opened his bookstore two years later and decided to put community engagement at the core of his business plan. “I just realized I hadn’t done much of anything for the community. It was a kind of a wake-up call.”


New program to nurture Kentucky’s young entrepreneurs

January 28, 2013

Thirty years ago, Kentucky created the Governor’s Scholars Program. Twenty-six years ago, the Governor’s School for the Arts. Now, the Governor’s School for Entrepreneurs.

The idea for this new summer program is the same as with the other two: identify high-potential high school students and bring them together to boost both their development and Kentucky’s future.

The Governor’s School for Entrepreneurs is now taking applications for the first class of 50 students who will attend a free program June 9-29 at Georgetown College. The deadline to apply is Feb. 15. For more information, go to: Gse.kstc.com.

Kentucky’s economy needs more entrepreneurial thinking, said Kris Kimel, president of the Kentucky Science and Technology Corp., which is creating the program.

“Increasingly, people are going to have to create their own jobs, figure out how to create their own value,” he said. “Entrepreneurship is a way of thinking. It’s a different mindset.”

More young Kentuckians need the skills and mindset to start their own businesses, rather than assuming they will always work for somebody else, Kimel said.

This three-week program will include tours of innovative companies and talks by Kentucky entrepreneurs. Students also will hear from lawyers and other professionals who help entrepreneurs make their companies successful.

There will be a lot of teamwork time devoted to students’ ideas for products or services that could be turned into companies. That will include learning about business plans, iteration, investment capital, production, sales, marketing and long-range strategy.

“The program will be all about creative thinking, critical thinking, innovative thinking,” said Kimel, who in 2000 started the Idea Festival, an international creativity festival now held each September in Louisville.

The program is open to 9th, 10th and 11th graders in Kentucky’s public or private schools. Students may apply as individuals or in teams by filling out an online application and submitting adult references.

They also must create a two-minute video explaining their idea for an innovative product or service, or why they would be suited to become part of a team that comes up with one.

One criteria that will not be considered for admission is a student’s grades. After all, some of America’s most brilliant innovators — from Thomas Edison to Steve Jobs and Bill Gates — didn’t do well in school.

“Just because you’re a ‘C’ student doesn’t mean you’re not incredibly smart,” said Laurie Daugherty, the program’s director. “Sometimes the personality types and thinkers who make the best entrepreneurs are the kids sitting in the back of the class not really engaged in the stereotypical classroom style of learning.”

Daugherty has been traveling around Kentucky, speaking at high schools to attract applicants and raising money for the program among business people.

“There has been a lot of excitement about it,” she said. “The first application was from a student in Louisville who already has a company and wants to learn more about how he can grow it.”

KSTC has a $50,000 seed grant from the state Economic Development Cabinet. The rest of the estimated $200,000 needed for the program is being raised from businesses. There will be no cost to students.

Gov. Steve Beshear kicked off the fundraising effort recently by bringing 40 entrepreneurs and corporate leaders to Frankfort for a presentation.

“Business people get it,” Kimel said. “I think they realize this is an important part of our future, our ability to create these kinds of people and companies and jobs.”

Randall Stevens, who has started several companies in Lexington to develop innovative technology, is one of the entrepreneurs who will be teaching at the program.

“I’m a big believer in the educational process of how to become an entrepreneur,” he said.

Part of that process is learning to be comfortable taking the calculated risks needed to succeed.

Part of the program’s value will be creating a network of young Kentucky entrepreneurs going forward, Stevens said. He is trying to organize that kind of network among his fellow 24,000 graduates of the Governor’s Scholars Program.

“I want them to leave with a good education,” Kimel said of the first class of students in the Governor’s School for Entrepreneurs, “but also with a sense of empowerment that I can do this, or I can think differently.”


Olive oil entrepreneur started over after dramatic rise and fall

November 11, 2012

Stuart Utgaard, president of Stuarto’s Olive Oil Co. Photo by Tom Eblen

 

Since moving to Lexington in 2010 to start Stuarto’s Olive Oil Co., Stuart Utgaard has grown his business from one store in Hamburg to a second in Chevy Chase. Sales are up nearly 60 percent this year, he says, and his startup debt should be repaid within two years.

But this isn’t a typical entrepreneur’s success story. It is more of a comeback tale. Utgaard’s career could best be described by an old saying: The bigger they are, the harder they fall.

Minnesota’s Twin Cities Business magazine once described Utgaard as a master of mergers and acquisitions, that region’s biggest dealmaker in the 1980s and 1990s. Utgaard said he put together 108 deals worth more than $1.7 billion.

Already a multimillionaire, he bought a sporting goods store called Sportsman’s Warehouse in 1996 and built it into a chain of 73 stores in 33 states. Utgaard acquired all the trappings of success: luxury homes, fancy cars, even a Learjet. Then, he lost everything.

“I went from owning a private jet to sleeping in my car in cemeteries and church parking lots with no food,” he said.

How did Utgaard climb so high only to fall so far? It is a long and complicated story, which he can describe in great detail. The dates and numbers are seared into his memory. He even wrote a self-published book about it: The Sportsman’s Warehouse Story.

Here’s a short version: Utgaard built his company on debt. That worked until a new computerized inventory control system failed and made it difficult to track orders, deliveries and customer purchases. That caused sales to plummet as the economy slowed. Sportsman’s Warehouse violated loan covenants at the worst possible time in 2008. When Wall Street’s house of cards began collapsing, credit markets evaporated.

Unable to borrow more money, Utgaard lost his company to his lenders. Because he had personally guaranteed some of the debt, he was forced into personal bankruptcy and lost everything he owned, about $15 million of assets.

Utgaard even lost the Wisconsin farm where his family had operated a chicken hatchery for more than a century. It was there, as a boy, that he first learned about business and hard work, cleaning equipment and boxing chicks for sale.

He went through a messy divorce and was unable to find work as an executive. So the former Ernst & Young regional Entrepreneur of the Year decided to move to Lexington and become an entrepreneur again.

Why Lexington? Utgaard said he had gotten to know developer Patrick Madden when he was negotiating to build Sportsman’s Warehouse store No. 63 in the Hamburg development. Madden was willing to lease Utgaard a small retail space behind that store as a place for him to start over in business.

“When I came here, I literally had $20 in my pocket,” Utgaard said. “But some of my friends were still crazy enough to loan me money after I went bankrupt.”

He thought there was a good retail opportunity in premium olive oil. People are using a lot more olive oil because of its health benefits, but, because of lax international labeling laws, much of it is of low quality, diluted with less-healthy oils.

“This will become a good business and generate a good cash flow,” Utgaard said.

But he doesn’t expect to become America’s olive oil king; he just wants to get back on his feet. Utgaard is doing some business consulting, and he said he might take a corporate job again one of these days.

Utgaard has reflected on the hard lessons he learned at Sportsman’s Warehouse, which he shares in his book and in speeches to university business students.

Among those lessons: have ample cash reserves to carry your business through lean times; don’t personally guarantee business debt; minimize bank borrowing; if you need outside equity, a large number of small shareholders is better than a small number of larger ones; even when things are going well, assume you could lose everything; set up an independent income stream or trust fund to provide for your family if your business fails.

But this was Utgaard’s biggest lesson: Never give up.

“I’ve been blessed with a good mind and business skills, and I’m not afraid to work,” said Utgaard, 67, recalling how Harland Sanders was about his age when he started franchising Kentucky Fried Chicken after his Corbin restaurant failed.

“You have to assume things will get better,” he said. “You have to try.”

 


Entrepreneur groups hope to make Lexmark’s loss Kentucky’s gain

September 17, 2012

What if Lexington had the opportunity to attract more than 500 highly skilled technical workers, many of whom suddenly had the flexibility and motivation to start their own companies?

The good news is that Lexington doesn’t have to attract them; they’re already here. The bad news is that many of them are getting ready to leave.

Lexmark’s decision last month to lay off 350 employees and 200 contractors as part of closing its inkjet printer operations has prompted entrepreneur support organizations and state and local officials to scramble to find ways to keep them in Kentucky.

The Kentucky Science and Technology Corp. is marshalling resources across the state for a project called “Another Path.” It is inviting workers being cut by Lexmark to a free informational meeting Sept. 24 from 9 a.m. until noon at the Embassy Suites Hotel, 1801 Newtown Pike.

Meanwhile, a non-profit group called Startup Advantage has scheduled another free event for the Lexmark people to meet local technology entrepreneurs and investors at 5:50 p.m. Sept. 26 at West Sixth Brewery, 501 W. Sixth St. Learn more at Meetup.com/Startup-Advantage.

“We see this as an exciting positive reaction to an unfortunate situation,” said Kris Kimel, president of the Kentucky Science and Technology Corp., a private, non-profit organization working to develop the state’s high-tech economy. “This is a unique infusion of experienced technical knowledge and creativity, and we need to do whatever we can to keep it here.”

Kimel said many of the people Lexmark is letting go are engineers and senior-level designers with expertise and experience in microfluidics, the precise manipulation of tiny amounts of fluids. That specialty has many valuable applications besides inkjet printing.

“There’s a lot of knowledge and talent that we think has adjacent uses,” Kimel said. “There are new companies there, without a doubt.”

Kimel said several of the people leaving Lexmark have already contacted KSTC for information and advice about starting their own companies.

Kimel said he has enlisted help from the offices of mayors Jim Gray of Lexington and Greg Fischer of Louisville, the University of Kentucky, University of Louisville, state economic development officials and even private insurance companies.

Among the things they’re looking at: Could state unemployment insurance be extended to these entrepreneurs while they get new companies started, the way it would be if they were simply searching for a job with an established company? Could health insurance companies figure out creative ways to extend coverage to these startup entrepreneurs and their employees until they get going?

Another Path will not just be a “one off” meeting, Kimel said. KSTC staff members plan to set aside at least three or four hours a week to work with those leaving Lexmark to help them navigate the complexities of starting a company or working for a startup.

“We’re trying to design a pretty comprehensive process to mine that talent and see how many companies we can grow from this,” said Kimel, whose organization already runs several entrepreneur-support programs as part of its work.

“It’s a different mindset than just going to work for another big company,” he said. “Starting your own company isn’t for everyone.

“This effort is about creating an ecosystem to support those people who want to try.”

Randall Stevens, a Lexington technology entrepreneur involved with Startup Advantage, said the group wanted to reach out to those leaving Lexmark to help them get to know local entrepreneurs, investors and those who provide support services for startup companies.

“If you get people in a room together, you have more of a chance of things happening,” Stevens said. “A lot of being a startup is being around others who can encourage you.”

The Lexmark workers also might be able to find some short-term work opportunities or entrepreneurs they could help mentor with their expertise and experience.

Kimel believes Kentucky’s economic development future will depend more and more on entrepreneurship, rather than enticing established companies to relocate to the state.

“Lexington has never had this big a pool of technology talent suddenly available,” Kimel said. “And if we don’t do something, most of that talent will leave.”

 


Awesome Inc.’s Demo Day gives a look into local business future

September 10, 2012

There are basically two kinds of economic development strategies: import new businesses and jobs from elsewhere, or grow your own. Kentucky’s leaders have long focused on the first strategy, with a lot more misses than hits.

Awesome Inc. — a startup-business accelerator in downtown Lexington run by a bunch of smart, young techies — works with local investors and entrepreneurs to create home-grown businesses and jobs.

Last Wednesday, I joined about 100 other people at Awesome Inc.’s offices for Demo Day to watch five groups of young, local entrepreneurs make presentations about the companies they are working to create.

Before the presentations, Nick Seguin, a former manager of entrepreneurship for the Kauffman Foundation, discussed why this work is important for both communities and individuals.

“If we want more jobs, startups are what matter,” Seguin said, noting that most net new jobs in America are created by businesses less than six years old. But, he cautioned, “Success is built on a lot of failures.”

Entrepreneurship requires more than individual effort, he said. It needs a supportive community with the right kind of mind-set, funding, business services and employees.

The five companies that presented last week are all trying to harness online or mobile technology to create profitable new ways of solving problems or adding value.

Three of the teams were chosen earlier this year for an intense 14-week development program. In return for office space, a little seed money and a lot of advice, Awesome Inc. (Awesomeinc.org) and its investors get a small stake in each company, a common model for such accelerator organizations.

TagaPet is developing a pet tag system that uses electronics, including GPS and mobile phone technology, to reunite lost pets with their owners. Michael Ward said he and his two business partners love animals, and their idea grew out of that passion — an important motivator for many entrepreneurs.

Tags would be sold through pet stores and veterinarians, and customers then pay a monthly subscription fee for online tracking services. While a competitor already offers a similar product, Ward said he thinks there is room for more players in a nation with millions of pets.

Rate My Rental  is a Web site that its developers hope to launch in Lexington at the end of the year to let college students rate properties where they have lived as a guide to future renters. So far, they have gathered listings for 800 properties and 400 reviews of them from former tenants, partner Sam Blake said.

The company’s business model allows landlords to list a property on the site for free, then pay 10 percent of the first month’s rent if it is rented through the site. Blake and his two business partners, all University of Kentucky students, developed the idea to help others avoid the rental nightmares they experienced.

Fanbouts is a Web site being developed to aggregate fan-generated sports content — videos, photos, tweets, etc. Partner Jim Wombles said the site would make money through premium subscriptions and advertising.

Presentations also were made by an “alumni” team, which had been through Awesome Inc.’s program earlier, and an “associate” team that has ties to Awesome Inc. investors.

Crowded is a mobile app developed by an alumni team that allows fans at professional baseball games to use their smart phones to play trivia games and participate in predict-the-play contests at the stadium. The app is now in beta testing. The company would make money from advertising.

Crambu, the associate team, seemed to be furthest along. It provides an electronic platform for hotels to collect feedback and requests from guests, who use their own smart phones or iPads furnished by the hotel.

Partner David Booth said an initial version of the software has been in testing in three hotels in Kentucky and California, and the latest version will soon roll out to 11 hotels in several states. Hotels pay $1 per room per month for the service.

Will all of these companies succeed? Probably not. Will some of them? Maybe.

With the right culture and support, Seguin said Lexington entrepreneurs can develop the companies of the future, just as Kentuckians developed such success stories as Kentucky Fried Chicken and Alltech.

“It doesn’t need to just happen in Boston, Austin, Boulder or the Bay,” he said.

Awesome Inc. founder Brian Raney put it more bluntly: “Step 1 is do something. Step 2 is keep going. Most people get lost at Step 1.”


Lessons from two of Kentucky’s top entrepreneurs

May 28, 2012

More than 400 local business leaders packed a Lexington Center ballroom last Tuesday to hear lectures encouraging entrepreneurship in Kentucky from two of the state’s most successful entrepreneurs.

Jim Host, the founder of Host Communications and now chief executive of iHigh.com, and Pearse Lyons, founder and president of Alltech, told their personal stories, talked about why Kentucky needs more entrepreneurs and offered their personal tips for success.

I know how much business people love lists of success tips, so I will share those later. First, though, I want to discuss why, beyond their obvious success, Host and Lyons are worth your attention.

Both are classic, hard-charging entrepreneurs. They are keen observers of business and society. Not only do they embrace change, they try to anticipate and drive it. They know that people always want better ways to satisfy their needs and desires, and in that space are great business opportunities. They know how to make things happen.

Jim Host

Host is a home-grown success story. He moved to Ashland as a boy and has spent most of his life in Kentucky, including serving in state government and running unsuccessfully for lieutenant governor early in his career.

Host created world-class companies in travel, sports marketing and communications. Now he is trying to create the future of television. Host never felt he needed to move elsewhere to succeed. More importantly, he never allowed his vision to be limited by Kentucky’s cultural aversion to change.

Most recently, Host led the effort to build Louisville’s KFC Yum Center arena, despite being a blue-bleeding University of Kentucky alumnus and fan. Working in Louisville underscored for him the foolishness of allowing intrastate rivalries to obstruct progress.

Host, 74, has become an evangelist for Louisville-Lexington cooperation. He was founding chairman of the Bluegrass Economic Advancement Movement, a new effort led by both cities’ mayors to bring more advanced-manufacturing jobs to Kentucky.

Lyons’ story is different. Born, reared and educated in Ireland, he came to Kentucky in 1974 because he thought it was a great place to start a business.

Pearse Lyons

Alltech began with the idea of developing and making all-natural animal nutrition supplements. Now, the company’s goal is no less than figuring out how to feed the world using natural ingredients and breakthrough technology, not to mention making good beer and whiskey on the side. Privately held Alltech now has 3,000 employees in 128 countries, including more than 500 in Kentucky.

Part of what makes Lyons worth watching is that he has figured out how to embrace and build upon Kentucky’s strengths without feeling limited by its traditional shortcomings. He is bullish about Kentucky’s potential. He took a “Kentucky Proud” road show to England’s Windsor Castle. Alltech is selling Bourbon Barrel Ale in China and, soon, in Ireland. Alltech just launched the Lyons Farm brand of premium meats, which have a distinct Kentucky marketing flavor.

“If you can’t sell Kentucky as a place to do business, then you’re not in any shape or form a salesman, because it’s an easy sale,” Lyons said. “I’ve been around the world I don’t know how many times, and I’ve never found a place as conducive to doing business or rearing a family as Kentucky — y’all.”

Now, about those success tips. Both entrepreneurs stressed the importance of having a positive attitude, passion for your work, a willingness to take risks, a confidence in self and a good sense of humor.

Among Host’s success tips:

■ Be prepared. Eighty percent of any sale is preparation; 20 percent is presentation.

■ Under-promise and over-deliver.

■ Do not lie or misrepresent to a client about anything. “You build great companies on integrity and character,” he said.

■ Write down the five most important things you need to do each day, and do the hardest one first. That will clear your head for creative thinking.

■ If you focus on creating excellence, profits will follow.

Among Lyons’ success tips:

■ Take a chance, any chance, to start a business. And, if possible, go it alone. You can never truly align partners’ dreams with your own.

■ Be curious and add to your expertise, both through your own education and by hiring great people.

■ Avoid negative people, whom he called “energy vampires.”

■ Be prepared to change your business, but not your core values.

■ You have two ears, one mouth; listen more than you talk, and take notes.

 


Fark.com founder planning his next steps

February 13, 2012

When Drew Curtis started Fark.com, he was a 26-year-old smart aleck who thought there was money to be made by collecting the world’s funniest and weirdest news stories on one Web site and letting readers comment on them.

Now, Curtis is a 39-year-old smart aleck looking for bigger opportunities.

Not that he plans to change Fark and its often-crude brand of humor. Far from it. The site gets bigger and more successful all the time, Curtis said.

Fark now gets 56 million page views a month, said Curtis, the company’s sole owner. Revenues from advertising, merchandise, premium subscriptions and conference generate enough income to support 10 employees in addition to Curtis, his wife and their three young children.

“We’re operating at only about 10 percent of what the full potential is,” he said.

But the Lexington native, who lives in Versailles, has ambitions to become a deal-maker, connecting other Internet entrepreneurs and helping them turn crazy ideas into profitable reality.

“I really like Fark, but it’s not a billion-dollar idea,” Curtis said. “I want to help people with 95 percent of a good idea achieve the other 5 percent. My great strength is that I see patterns in stuff.”

Curtis is now in his third of five semesters in the prestigious Berkeley-Columbia Executive MBA program, a joint venture of New York’s Columbia University and the University of California at Berkeley. “You have these two massively different ideologies, and you get flavors from both of them,” he said of the program.

Why get a master’s degree in business administration? “It fills in the gaps,” Curtis said. “Besides, it removes certain questions from the table when you propose crazy ideas. Like, ‘Who the hell is this guy?’”

While Curtis wants to branch out, he has no plans to leave Central Kentucky.

“I don’t think there’s anything I would fix about the place, to be honest,” he said of living here.

But over lunch at Stella’s Deli on Jefferson Street, Curtis was frank about some things he would fix about Central Kentucky as a place for technology entrepreneurs.

The biggest problem, he said, is the lack of enough venture capital.

“There are a lot of talented people with good ideas, but the funding environment is really weak,” he said. “If a (startup) company got traction, they wouldn’t know what to do next.”

Curtis funded Fark on his own, but it took 13 years to build the company to what it is today. That’s much too slow for entrepreneurs with ideas big enough to shape the global business landscape.

Many Kentucky investors want a controlling interest in companies they put their money into, Curtis said, and that isn’t attractive to entrepreneurs with the best ideas.

“They’re not doing it wrong on purpose,” he said of investors. “There’s just an experience gap.”

Many Internet startups have died because investors pushed them to grow too quickly, Curtis said, adding that could have happened to Fark had investors been pushing him for quick returns.

“There’s a reason why most Internet companies with financial backing last no longer than five years,” he said.

Curtis said that creating Fark has given him a good sense for how to succeed online. It is different than most people imagine — even good business people.

For one thing, he said, companies must learn that using social media is more of an art than a science.

“You can’t successfully develop a social-media strategy because they don’t exist,” he said. “Post stuff that’s good. Done!”

New media, like old media, is a reflection of what consumers want, and that changes every day. For example, you can’t make a video go viral on the Internet.

“The trick is knowing what to do when it happens,” he said.

One thing is to request a response from viewers to keep the wave of attention going.

Curtis said Fark has been successful for the same reason The Daily Show with Jon Stewart has been: they both contextualize news and highlight stories people care about.

“Putting stuff online is easy,” he said. “But figuring out what people care about is key. It’s editing, basically.”

 


Party showcases Lexington’s startup businesses

February 6, 2012

The Lexington Venture Club’s annual celebration of local entrepreneurs last week had a ’70s disco theme, but it was all about the future of economic growth in Central Kentucky.

As a couple hundred people mingled beneath glittering disco balls at Buster’s Billiard & Backroom on Manchester Street, Warren Nash, director of the University of Kentucky’s Lexington Innovation & Commercialization Center, reported some encouraging statistics.

The 78 early-stage companies surveyed by the Lexington Venture Club reported receiving $69.9 million in funding last year, the most since statistics started being kept in 2005. The biggest source of that funding was so-called angel investors — people willing to risk their own money on other people’s good ideas.

Those 78 companies produced revenues of $127.2 million in 2011 — up 35.3 percent from the previous year. And they employed 780 people (605 full-time and 175 part-time) with an average annual full-time salary of $65,651. Those employees included 279 people (182 full-time and 97 part-time) hired last year — a 16.2 percent increase over 2010.

“You represent the future of Lexington and our country,” UK President Eli Capilouto, one of the few people in the room wearing a tie, told the entrepreneurs.

What is always fascinating about this annual event, organized by Commerce Lexington, is the diversity and creativity of these entrepreneurs and how most of them are trying to leverage new technology to solve old problems.

Nearly half of the 78 companies the Venture Club focused on are in biotechnology and health care fields, with the next largest clusters involving software, information technology and advanced manufacturing.

The program included videos highlighting three companies:

■ Seikowave uses special optics to make quick, three-dimensional measurements for applications as diverse as auto parts, dental implants and video games.

■ CoPlex Therapeutics is developing therapies that the company thinks can prevent Alzheimer’s disease. Like Seikowave, CoPlex Therapeutics grew out of technology developed by UK researchers.

■ SoJo Studios, an entertainment company that creates social games on Facebook to finance real-world development projects in the United States and Haiti. The company’s Wetopia game recently received endorsements from entertainers Ellen DeGeneres and Justin Bieber.

Many other local start-ups are just as fascinating. Rick Gersony of Medmovie.com told me how he has combined his interests in art and medicine to develop online medical animations for doctors and patients. And Subodh Das of Underground Recovery LLC is developing technology to recover valuable metals from urban landfills and industrial sites.

Wes Keltner is a local marketing guy whose company, Gun, has become one of the nation’s largest consultants for video-game makers. “That’s right; we play video games for a living,” he said. Michael Hartman’s Frogdice has become a leading independent developer of video games and virtual environments.

Mayor Jim Gray told the entrepreneurs that he wants Lexington — like Austin, Texas, and Boulder, Colo. — to become known as a city that nurtures out-of-the-box thinking and the entrepreneurial companies that result from it.

Gray read from an email he received recently from Ezra Roizen, a California investment banker on the board of the University of California at Berkeley’s Haas School of Business who spent some time in Lexington recently.

“Lexington has many of the key ingredients for being a hub of entrepreneurship and innovation: a great university, comfortable college town environment, access to capital and a draw for global leaders through the horse community — those are real strengths, and it means you will grow great people, and great people like to come here,” Rosen wrote.

“Entrepreneurs like to be around smart people, they need to be around money, and they enjoy being in a nice place. San Francisco has these things, but it’s not the only place. Cities like Austin and, more recently, Boulder have built world-class entrepreneurial ecosystems,” he wrote.

“But it’s in the ecosystem. It’s not one thing; it’s not a single person or a shiny, new tech park or a loan program. It’s a community and a way of life.”

 


5 Across helps entrepreneurs focus their pitch

March 7, 2011

Many entrepreneurs think their business ideas are the greatest things since sliced bread. They think they have the vision, and their companies have the growth potential, to attract investors.

So make your pitches. And make them quick.

That’s the challenge five local entrepreneurs face every other month when they come to Awesome Inc. on Main Street to play a real-life game called 5 Across.

The concept is simple: Five entrepreneurs are chosen from applicants to make a presentation before an audience, as well as three experienced business people who serve as judges. Contestants must make a pitch in five minutes or less, using no more than five PowerPoint slides.

The winner of each 5 Across session in February, April, June, August and October receives $500 cash. Those five winners then compete in December for $2,500. But the learning is often more valuable than the prize money.

“It’s just phenomenal to have opportunities like this in our own hometown,” Anthony Schmidt, last year’s 5 Across champion, told players, judges and about 50 spectators during this year’s first competition on Feb. 23.

When Schmidt made his first pitch last year, he didn’t grasp his business’s potential. He had developed online management software for Alpha Phi Omega, a coed service fraternity he was president of at the University of Kentucky. “I was just playing on the Internet,” he said.

His AOPonline software is now used by more than 50 chapters. His 5 Across experience helped prompt him also to start GreekTrack.com, which creates customized online systems for any campus organization to use for everything from social networking to recruiting.

The Lexington Venture Club and Awesome Inc., which provides workspace and other services to startups, created 5 Across to help connect entrepreneurs with each other and potential investors. They also wanted to raise the visibility of local entrepreneurship.

“It’s a way of keeping in touch with the future of Lexington,” Lou Allegra, a business consultant, said when asked why he serves as a judge. “I don’t know that many people are aware of the vibrant entrepreneurial culture that’s in Lexington now.”

After each contestant makes his or her pitch, judges ask questions. Judges score the presentations on creativity, feasibility, profit potential and how far the entrepreneurs have taken their ideas. “What I look for is whether the entrepreneur has a view beyond a year or so,” Allegra said.

Although judges pick the winner, audience members rate each business concept and presentation by texting a score, which shows up on a display screen.

While some potential investors come to watch 5 Across, the main purpose of the game is to give entrepreneurs practice, coaching and feedback, so they will do a better job when they make more detailed pitches in the future.

The first 5 Across session of 2011 included a diverse group of local entrepreneurs: A man whose company organizes social sports leagues for adults; three partners who design video games that can be played on a variety of devices; a man whose company uses online software to organize virtual golf tournaments; and a man and woman who have an online coupon service.

The fifth presenter and winner was Michael Hartman, a video game developer whose 15-year-old company, Frogdice, has published two games and will soon launch a third. He is looking for perhaps $1 million in capital to hire more developers to help his company grow faster.

“It was stressful, but the practice was valuable,” Hartman said after his pitch. He will be making a more detailed presentation this month to the Lexington Venture Club.

Randall Stevens, a 5 Across judge whose Base 163 on Main Street rents space to startups, thinks the game is a good way for entrepreneurs to get advice.

“One thing Lexington has been missing is the mentoring aspect,” he said. “So this is one way I try to practice what I preach.”

If you go

What: 5 Across entrepreneur pitch contest

When: 5 p.m. on April 27, June 22, Aug. 24, Oct. 26 and Dec. 7 (finals)

Where: Awesome Inc., 348 East Main St.

Learn more: 5across.org or (859) 494-9302

Anthony Schmidt, the 5 Across winner for 2010, developed online management software.  Photo by Tom Eblen

Anthony Schmidt, chosen the best presenter at 5 Across during 2010, developed online management software. Photo by Tom Eblen


Advice for Kentucky from business guru Saul Kaplan

February 14, 2011

Wait for others to do it, and it won’t get done. That old saying might not have the same ring to it as “United we stand, divided we fall,” but it could just as easily be Kentucky’s motto.

Increasingly, technology- enabled entrepreneurs are taking a different path. Rather than waiting for big companies, government or established organizations to figure out how to build a 21st-century economy in Kentucky, they’re trying to do it themselves.

They received some encouragement last week from one of the nation’s popular entrepreneurship gurus, Saul Kaplan of the Business Innovation Factory in Providence, R.I.

During a whirlwind 28-hour trip, Kaplan met with city and business leaders in Lexington and Louisville. He talked to entrepreneurs and business students in both cities, and to some who drove in from as far away as Cleveland, Columbus, Pittsburgh and West Virginia.

Kaplan created the non-profit Business Innovation Factory in 2005 as a laboratory for entrepreneurs working on “areas of high social impact,” such as health care, education and energy. Before that, he was a strategy consultant in the health care industry and executive director of the Rhode Island Economic Development Corp.

Kaplan’s trip to Kentucky was organized by Eric Patrick Marr of The Lexenomics Group, a non-profit economic development organization. Kaplan donated his time, and Randall Stevens of the Lexington business incubator Base 163 paid for his travel.

“The visit was fantastic,” Kaplan told me as he was leaving to fly home Tuesday. “I was pleasantly surprised by the momentum here. There’s definitely the makings of a very entrepreneur-oriented economy.”

Kaplan’s message was that innovation and entrepreneurship must be central to any economic development strategy. And like any consultant, he loves buzzwords. His favorites are: connect, inspire and transform.

“You need to get innovators from across all the silos in your community to communicate and collaborate more effectively,” he said. The next step is inspiring creative people with stories of successful entrepreneurs. Finally, he said, dramatic transformation is required to create a robust, sustainable economy and address many of society’s biggest challenges.

“Incremental change isn’t going to create the economic future that this community wants and needs,” he said. “How can you turn your community into a real-world lab oratory, a place that celebrates experimentation, where people are willing and able to try new things, to try new ideas … to determine what works and what doesn’t work?”

Elder care in Kentucky is one area ripe for innovative problem solving and entrepreneurship, Kaplan noted. The state has an aging population and a growing health care infrastructure. Plus, Louisville is home to the nation’s largest elder-care companies.

“We know that the majority of the elder population want to age in place in their own homes with dignity, but the system wasn’t designed that way,” he said. “How can we create a new set of solutions and new approaches to do that? Those solutions could create new jobs and businesses.”

Kaplan said he sees several assets Kentucky can build on. First, the Lexington-Louisville-Northern Kentucky region is big enough to have a critical mass of important assets, but it isn’t too big.

Second, he said, “It has incredible quality of place. I could see it the minute I left the airport. And quality of place is the best asset any community can have. Everything should be viewed through the lens of how do we enhance and protect that quality of place, and at the same time figure out how to unleash entrepreneurial innovation.”

Finally, Kaplan said, the recent elections of Lexington and Louisville mayors with innovative business backgrounds offers a unique opportunity for economic transformation.

“Having spent time with both mayors, I think they get it,” he said. “I think they want to catalyze the kind of entrepreneurial economy and community we’ve talked about here over the past couple of days. If I were living here, I would be optimistic.”

Kaplan said top-down economic development planning — the “bring in the big outside company” incentive strategy that Kentucky has failed at more often than it has succeeded — isn’t the way of the future.

“Bring the entrepreneur and the innovator to the center of the economic development conversation,” he said. “And tie that conversation to solving real social challenges within the community.”


UK frat brothers find a niche: The Bourbon Review

August 9, 2010

The four University of Kentucky fraternity brothers didn’t know much about writing or photography or advertising or marketing or magazine publishing. And all they knew about bourbon was that they enjoyed drinking it.

Sitting around a Lexington bar one night in late 2007, the Delta Tau Delta alumni were trying to come up with ideas for a business they could start together. They kept talking about the California wine magazine where one of them had done financial work.

“Wine magazines are a dime a dozen, so we were thinking, ‘What could be our niche?’” Seth Thompson said. “How about bourbon?”

That discussion led them to start The Bourbon Review, which is both a fan magazine for Kentucky’s native spirit and a visitors’ guide to the distillery region between Lexington and Louisville, where 95 percent of the world’s bourbon is produced. The Bourbon Review will soon publish its 10th quarterly issue.

Thompson said the four scraped together enough personal savings to print 10,000 copies of the magazine’s first issue in May 2008. The business has grown steadily since then to a press run of 25,000 copies.

Most copies are given away through advertisers and at selected shops and bars, or they are sold at Liquor Barn and Joseph-Beth Booksellers. The Bourbon Review also has more than 2,000 paying subscribers in 48 states and two foreign countries, Thompson said.

The four young men have earned respect within the bourbon industry, where distillery executives have started calling them the Bourbon Boys.

“We’ve been very impressed with those guys,” said Eric Gregory, president of the Kentucky Distillers Association. “The magazine is pretty well done.”

Bill Samuels, president of Maker’s Mark distillery, said the magazine is becoming an important player in efforts to leverage Kentucky’s bourbon industry into a major tourism phenomenon.

“What The Bourbon Review did early was give a focus to that content beyond just distillery tours,” he said.

Thompson said the magazine appeals to aficionados who want to know more about bourbon, including new ways to mix, drink and cook with it. Readers also want to know more about the people who produce bourbon, and how and where they do it.

“We want somebody to look at our magazine and say, ‘Wow, this is beautiful. How do I get there?’” he said.

Thompson, 28, who grew up in Powell County, handles much of the advertising and marketing. His brother, Justin, 30, is the magazine’s chief editor. Their fellow co-publishers, Lexington natives Bob Kenney Eidson, 30, and Brad Kerrick, 26, help manage the company. All four write and take pictures, with help from several freelance contributors.

Art director Josh Rubin designs the magazine, which is printed in Shepherdsville. All but Eidson now live in Lexington and work out of their homes full-time for the magazine. Eidson lives in California, where he also does financial management for other companies.

Distilleries are the magazine’s biggest advertisers, followed by restaurants, bars and other hospitality businesses. But as the partners try to make The Bourbon Review more of a lifestyle magazine, they are appealing to other advertisers, too, including real estate agents, physicians and even firearms dealers.

The partners say they put a lot of emphasis on social responsibility. The magazine’s masthead reports that the company contributes at least 50 hours of manpower and 1 percent of profits each year to philanthropic work, and it donates advertising space to promote Kentucky land and water conservation.

Thompson sees a lot of growth potential. Bourbon is developing the kind of national and international following that wine and Scotch whisky have had for decades.

The magazine’s current cover story is about bourbon culture in San Francisco. An upcoming issue will feature bourbon bars in Chicago.

The partners are redesigning their Web site, which they hope to turn into a major e-commerce destination for bourbon-related merchandise.

“It is an interesting and scary world in publications these days,” Thompson said. So far, though, The Bourbon Review’s success has exceeded the partners’ expectations.

The three who still live in Lexington are supporting themselves with the magazine. The partners own all of their company’s equity, and, so far, Thompson said, “we haven’t had to borrow a dime from a bank.”

The Bourbon Boys know a lot more about writing, photography, advertising and marketing than they did three years ago. And they know a whole lot more about bourbon. After all, frequent sampling is now just part of the job.

Maker's Mark Master Distiller Kevin Smith, center, poses with The Bourbon Review founders (left to right) Bob Eidson, Seth Thompson, Brad Kerrick and Justin Thompson. Photo Provided

Maker's Mark Master Distiller Kevin Smith, center, poses with The Bourbon Review founders (left to right) Bob Eidson, Seth Thompson, Brad Kerrick and Justin Thompson. Photo Provided


Contest, center hope to boost KY entrepreneurs

July 26, 2010

There are three basic approaches to building business in Kentucky: attract ‘em, keep ‘em, grow ‘em. Success requires all three. But over the years, state officials often have focused so much attention on the first two that they have neglected the third.

Kentucky Highlands Investment Corp. has worked on that third approach since 1968, helping home-grown entrepreneurs create more than 10,000 jobs in its 22-county Appalachian service area.

Now the corporation’s efforts are turning it up a notch. Kentucky Highlands is opening a new business- incubation center this fall beside its headquarters near London, and it is sponsoring a contest for Kentucky entrepreneurs who have big ideas that could become successful companies.

“We’re hoping to bring some of these entrepreneurs out of the woodwork,” said Jim Carroll, executive director of the new center.

Kentucky Highlands announced six winners last week among 47 entrants in the first phase of its Big Idea Competition. Each winner received a $1,000 cash prize based on a one-page outline of the idea and a business model.

Kentucky entrepreneurs and small business are now being solicited to enter the second phase of the contest. That involves submitting a three- to six-page executive summary of an idea along with business, marketing, sales and financial plans. Three winners of this phase will receive $2,500 cash prizes. Entries are due Aug. 20.

The final phase will involve oral presentations this fall. The winner will receive $10,000 cash and 12 months of free rent in the Kentucky Highlands Business Innovation and Growth Center. Two runners-up will receive prizes of $5,000 and $2,500 and offers of free work space in the center for six months.

For more information, go to Kentucky Highlands’ Web site.

Winners of the competition’s first phase were a diverse group:

■ Awesome Labs of Lexington has created technology to turn store windows into interactive touch-screen displays.

■ B2 Solutions of Somerset has developed software to manage documentation required for new products to be approved by the U.S. Food and Drug Administration.

■ Monumental Builders of Jamestown makes a patented product that uses recycled materials to create a cultured-stone concrete block system for construction.

■ NuForm Thermal Management of Sadieville turns coal ash into a ceramic material that can replace chemical flame retardants in insulation.

■ Olde Kentucky Logs of Corbin makes concrete wall facing molded to look like 150-year-old construction logs.

■ STATShift.com of Versailles has developed Web-based software to match health-care facilities with qualified workers.

“We were glad to see that diversity,” Carroll said. “We all tend to gravitate toward techy-type things, and it was good to see that (the judges) saw that more traditional types of business have an opportunity to be successful and create jobs.”

The competition, which is open to entrepreneurs or businesses with 20 or fewer employees, is being judged by a panel of investors, economic development professionals and representatives of the contest’s supporters. Among those supporters are the state Cabinet for Economic Development, Kentucky Science & Technology Corp., Lexington Venture Club, Silicon Hollow Association and Mountain Association for Community Economic Development.

Among the criteria that judges were asked to consider was each idea’s ability to create jobs in Kentucky and generate revenue from outside the state. Those factors have always been a key to Kentucky Highlands’ approach to entrepreneurship.

The new-business incubator hopes to help do that by providing office space, technical infrastructure and mentoring to entrepreneurs. The 9,700-square-foot center will rent private suites, cubicles and “rough” work space, and it has two dry labs and two wet labs.

In addition to providing start-up companies with office space, printers, fax machines and other technical support, the center offers mentoring from experienced staff members and a network of volunteer professionals in the region.

“Entrepreneurship is the future of our economy,” Carroll said. “We have to focus on growing local companies.”


Young entrepreneurs don’t let economy stop them

March 8, 2010

Oh, to be young, ambitious and just starting your own business — in the worst economic downturn since the Great Depression.

Nobody ever said being an entrepreneur would be easy.

While many of their classmates hunt for jobs — or give up and go to graduate school — Seth Hill and Michael Rumpke last week launched a grocery shopping and delivery business they call Lose Your List.

It wasn’t a casual endeavor. The 24-year-olds said they spent months planning logistics, developing marketing strategies, writing a business plan, creating a Web site, designing a logo and having it painted on Hill’s SUV and embroidered on their green gingham shirts.

And while they were preparing for orders — they got four their first week — they were thinking ahead. They want to create relationships with groceries and partnerships with local farmers to supply produce. And they’re planning for a time when orders are so numerous they must buy vehicles, hire college students to shop and deliver and, if they’re really lucky, franchise their concept in other cities.

For now, though, Hill and Rumpke are just looking for enough customers willing to go to their Web site (www.loseyourlist.com), submit a grocery list and pay them at least $15 to do the shopping and deliver the goods. They figure they’ll need 100 to 150 orders a week to keep themselves in groceries.

Rumpke, a University of New Orleans graduate, and Hill, a University of Kentucky senior on break from his studies, said they were raised on business and entrepreneurship. They always believed they’d work for themselves.

Rumpke’s mother, Linda, a former banker, is Lexington’s commissioner of finance and administration. His father, Rob, is president of the regional planning group Bluegrass Tomorrow. Hill’s parents, Jenny and Chuck, started Interior Yardage, a specialty fabric company on Southland Drive.

“I grew up watching them grow the business from our basement to flea markets to a company with (significant) sales,” Hill said. “Entrepreneurship was all I knew. My parents are my heroes, so it seemed like the thing to do.”

Rumpke and Hill see a good business opportunity in performing a necessary, time-consuming chore that many people hate. “It’s a business model that’s working in other areas,” Hill said. “We didn’t see why it wouldn’t work here.”

They said they researched the concept thoroughly and talked to dozens of people, including a lawyer, a banker and a small business development consultant. The approximately $3,000 in startup money came from their personal savings because they want to avoid taking on debt. “Everything we could do on our own we tried to do to keep costs down,” Hill said. “We also have gotten help from friends.”

Their biggest expense, they said, will be newspaper and online advertising. They also envision an ambitious social-media marketing strategy, from daily health tips on Twitter to a blog with information like that from a Harvard Business School study on the high-cost of impulse buying for people who do their own shopping.

One of the young entrepreneurs’ first deliveries was to a friend, Tara Wilkerson, a single mother. “I work 13-hour days at two jobs and have a 2-year-old,” she said. “I like not having one more chore to do.”

Hill and Rumpke hope to find more people like Wilkerson, whatever their reasons for wanting someone else to do their grocery shopping.

“At the end of the day, it’s just getting orders and delivering groceries,” Hill said. “If we’re really good at it, and manage our business well, other things will take care of themselves.”