Beating the odds: Can local entrepreneurship programs prepare new business owners to overcome the 50% fail rate?
One 250-pound pile of Legos plus two sons who don't play with them as much as they used to equals one quandary for Erin Laundry: What do you do with a room bursting with building blocks?
Start a business.
This fall, in Adams, the Laundry family will open Bottomless Bricks, a Lego party and events business. Bottomless Bricks brings boxes and boxes of Legos to children's parties, as well as to corporate and other events, but with a storefront, the Pittsfield family will be able to host parties at the store and hold regular building block nights.
Laundry has experience with promotions: She and her husband, Shane, were musicians who hustled to create a buzz for their band, but entrepreneurship is a bit foreign. Laundry said Bottomless Bricks is a whole-family company and its goal, in addition to making money, is to teach her youngest son, Liam, 11, about business.
Laundry went looking for help and found Entrepreneurship for All (EforAll), a new business launcher that touched down in September in the Berkshires.
"We've dabbled, but this will be the first full business. We're getting all the insurance, register with the fed and the state, all that expensive stuff," Laundry said.
She is hopeful that her application is accepted by EforAll.
"It will be nice to have mentors to help guide us through all these murky waters of unfamiliarity," she said.
The Berkshires has reached a new level of excitement around entrepreneurship, with more new business owner training and mentorship opportunities than before.
This fall, the county will host three pitch contests for people in various stages of business development. Two of them are new to the area: TechStars and EforAll. Lever, which holds several contests to support entrepreneurship, was founded in 2014.
Also planned for this season is the opening of the Berkshire Innovation Center in Pittsfield, a community organization that provides resources to grow businesses.
Jeffrey Thomas, executive director of North Adams-based Lever, said that there is an inaccurate perception of the Berkshires that, since General Electric, Sprague Electric and SABIC left the area, there isn't much left to the innovation economy.
"It's just not true," Thomas said. "What happened was, all that innovation got pushed out into smaller companies, some of which are having a huge amount of success but are flying under the radar."
Entrepreneurship contests and programs "are a celebration of what's happening here in the county," Thomas continued. "It underscores the fact that Berkshire County is not only a great place to live, with its arts, culture and education, but it's a great place for innovators, too."
A successful economy grows over time, most often driven by entrepreneurship and innovation, explained 1Berkshire's Ben Lamb, director of economic development.
"The key to sustained growth and capacity is, we can't silo ourselves," Lamb said. "We have to look at the full-region perspective, coming together in a tangible way to use resources and opportunities."
Meanwhile, Pittsfield Mayor Linda Tyer announced this past week that Electro Magnetic Applications Inc. intends to install a space environment test facility in the city, and online retailer Wayfair has started hiring for a new 300-employee call center in Pittsfield.
"There's this electricity in the city, it's exciting, you can feel it," he said.
Starting a new business is risky. The success-failure rate of new businesses is up for debate, but most professionals say that about half of all new businesses won't still be operational five years after their start date. The Berkshire County entrepreneurship programs run by 1Berkshire/EforAll, Lever and BerkShares aim to beat those odds, and there's some evidence that they are doing just that.
EforAll says 83 percent of alumni from its program are actively pursuing their business, according to a company survey that looked at graduates, from 2014 to 2018. Nearly 350 businesses started by EforAll alumni.
Laundry has applied for the EforAll pitch contest. The top winners will receive grants of $500 to $1,000 and be accepted into a free one-year business accelerator program that includes pairing participants with local business mentors.
"Our overall goal is to turn a bit of a profit; we're doing this mostly to help save for our kids' education, and this is something we can do as a family," Laundry said. "I'm really hoping we're accepted."
Support for new businesses
In addition to the three pitch contests, the Berkshires boasts entrepreneurship support programs that include BerkShares' Entry to Entrepreneurship (EtoE) and EforAll's business accelerator.
The programs don't seem to be in competition with each other. Instead, they connect, like a proverbial pipeline.
BerkShares' EtoE is open to students and adults interested in entrepreneurship and teaches how to develop an idea into an action plan. TechStars' Berkshire County program, Startup Weekend, is aimed at the same audience, but it includes a mini-pitch contest in which participants give presentations and then vote on which 15 or so ideas attendees will develop over the weekend into something ready for a business plan.
EforAll is a traditional pitch contest for people who have a business idea that they want to make a reality. The Lever pitch contest also is traditional, but it is aimed at supporting startups that are operational but need some help.
If all this weren't enough, Berkshire County's Small Business Development Center continues to offer counseling, and the Massachusetts College of Liberal Arts will hold its second Entrepreneurship Challenge in 2020.
How to support local business owners and support new businesses long has been on the agendas of the Impact Council of Berkshire County Leaders, Economic Prosperity Impact Council, MassHire Berkshire Workforce Skills Cabinet, Berkshire Comprehensive Economic Development Strategy Committee and Berkshire Taconic Community Foundation's Capital Flow Analysis project.
"We're focused on community entrepreneurship," said Rachel Moriarty, BerkShares' executive director. "We want to know how do we foster a sense of community entrepreneurship and keep it going."
The community goal to support entrepreneurship was laid out in the winter release of the 1Berkshire Blueprint 2.0 — it's No. 3 on the blueprint's six-point vision for the county's future economy.
It's no secret that General Electric isn't employing thousands of people in the Berkshires anymore and that when the company left Pittsfield, it took some of the economy's steam with it. A concentrated effort to fill the hole left by GE and other corporate giants in the innovation or paper industries that shrank or left the county has focused on retaining and attracting businesses around sectors that include advanced manufacturing, engineering, health care, creativity and culture, food and agriculture, and hospitality and tourism.
All that can't come from outside the Berkshires and still have the county retain its unique spirit, so, local entrepreneurship is key to maintaining a healthy community and an economy that looks attractive to businesses that want to expand or relocate.
And although it is not as high-tech as some of the county's anchor corporations, Bottomless Bricks is the kind of new business the Berkshires is seeking to support. The Lego activity business is new, local and fills a niche.
It takes all kinds, said Deborah Gallant, the EforAll Berkshire County executive director. To encourage participation in EforAll's first pitch contest in Berkshire County, Gallant has organized a "caravan" for Oct. 7. She and members of the EforAll team, as well as community supporters, will visit South, Central and North counties all in one day, providing information about the program and getting potential new business owners interested in the October competition.
"We're taking our show on the road, and by the end of it, everyone will know about EforAll," Gallant said. "Our competition is open to everybody."
Gallant said she had been in touch with Laundry about entering the competition. She said Bottomless Bricks is the kind of "grassroots business idea" EforAll wants to help.
"It's not a groundbreaking, new, multimillion-dollar business, it's just a business doing the best it can for the community," Gallant said.
In five years, Laundry said, she hopes Bottomless Bricks consistently will have scheduled dates for parties and events.
"Legos bring us joy," she said. "We're trying to spread that joy around."
How it works
There are several entry points for people who want to get a better idea of whether they could be entrepreneurs, including BerkShares Entry to Entrepreneurship, Startup Weekend, and EforAll — all of which still are accepting applications.
To get into BerkShares' program, a person needs to send a request; just about all of them are accepted, Moriarty said. Classes started Sept. 25, but Moriarty said there still is room for more participants.
To sign up, go to Berkshares.org/E2E. The course costs $50 and meets for seven weeks. Participants are matched with mentors at various successful Berkshire County businesses and learn how to develop a business plan. Moriarty said the lack of competition to enter the program helps it stand out.
"It was a conscious decision," she said. "We're open to everybody, even if you don't have a business idea yet."
Anyone can register to go to Startup Weekend in November. For $25 to $45, participants attend an intense weekend, Friday to Sunday, of panels and group work. All meals are provided with the price of admission.
At the end of the weekend, participants will have had the opportunity to attend 54 hours of programming and learned how to work with a group to develop a business idea. Techstars Vice President of Sales Jeremy Rawitch, who lives in Monterey, said that Startup Weekend is a "baby step" into entrepreneurship.
"We know there are entrepreneurs in the Berkshires, and this is one step to get to them and draw them out," Rawitch said. "People can get a lot of out this: access to mentors that they didn't have ... and opportunities to enter a [business] incubator like EforAll."
To get into EforAll, a person needs to apply. If accepted, participants enter a pitch contest. The winners of that contest earn cash prizes of up to $1,000 and can go on to take EforAll's free, one-year entrepreneurship accelerator program that provides mentorship, training and development of business skills. The one-year course also can be taken by people who apply for the course who did not win the October competition.
"EforAll is going to support you, that's what we're all about," Gallant said.
The Lever contest isn't an entry point for entrepreneurs, it's for established startups — and it also still is accepting applications. Lever offers the biggest reward, a $25,000 grant to the winner of its October pitch contest. Pitch rehearsals were in mid-September, and the final competition will be Oct. 3.
"We focus on high-growth startups, the kind of companies that can attract investor companies that will grow quickly and attract revenues from other places," Thomas said. "It helps raise the tide that lifts all the boats of Berkshire County."
The Berkshire Blueprint identified a stack of obstacles that new business owners face locally. They include the geographic market, referrals not coming through, business accelerators that are needed. Berkshire developers and business folk do not have easy access to government financing. The entrepreneurship programs attempt to get new business owners over the hurdles.
"It's worth the time and energy," Gallant said. "We're basing everything on a proven model. Whatever it is someone wants to do, we're going to get them the equipment they need and the know-how to beat the odds."