Making it on your own

Businesses founded during an economic downturn are just as likely to succeed, if not more so, than those started during times of economic prosperity, according to research recently released by the Kauffman Foundation.

The foundation, which is based in Kansas City., Mo., and is devoted primarily to entrepreneurship, found that more than half the companies in the 2009 Fortune 500 list were launched during a recession or bear market. In addition, nearly half the firms on Inc. magazine's 2008 list of fastest-growing companies in the United States were started during similar economic conditions.

In Omaha, the level of interest in starting a business is higher than ever, said Ken Moreano, executive director of the Scott Technology Transfer and Incubator Center. For many aspiring entrepreneurs, the perceived threat of layoffs by their current employer actually fuels a desire to work for themselves, he said.

“It's self-preservation,” Moreano said. “They have control over their own future success or failure.”

The number of people starting service and technology-based businesses in Omaha over the past year has increased, said Tom Chapman, director of entrepreneurship and innovation at the Greater Omaha Chamber of Commerce.

Layoffs were the impetus of some of those businesses, he said, but other entrepreneurs just want to pursue a hobby and turn a pastime into a business.

Moreano and Chapman said the perception of a 20-year-old, bluejeans-clad entrepreneur starting a technology business in his parents' basement doesn't describe most of the aspiring business owners they've encountered.

Many are in their 40s and 50s and worked for other people, they said.

Forty-two-year-old Karen Bothwell of Bellevue left her job at a cardiologist's office last year to develop her idea for a new kind of medical gown for patients undergoing echocardiograms, or ultrasounds of the heart. She designed a gown that was shorter and included a built-in bra for women, making it more comfortable for the patient.

Bothwell produced a prototype and in July applied for a patent for her design. She plans to sell the gowns over the Internet until she can find a medical supplier with whom to partner for distribution.

Bothwell, who invested $25,000 of her own money into the venture, said the economy wasn't a factor when she decided to start the business. It resulted from finding what she believes is a solution to a problem she regularly encountered during her 24 years working in the medical industry.

Development of other medical products could follow, she said.

The fact that Omaha is home to two major medical centers translates to a big opportunity for medical startups in Omaha, said Anne York, director of Creighton University's entrepreneurship programs.

The Intellectual Resources Management office at the Creighton University Medical Center assisted Bothwell with applying for a patent, and she now is working with Creighton entrepreneurship students on a business plan.

Demand for entrepreneurship education at the university level has increased in the last few years along with public interest, York said. There were only about 15 entrepreneurship majors at Creighton when she arrived three years ago, York said, and now almost 100 students are enrolled in the program.

The press and organizations such as the Omaha chamber, business incubators, the National Science Foundation and Kauffman Foundation have fostered a “huge groundswell of support” for the entrepreneurial community here, she said.

Chapman said attendance is up at events held by the Midlands Venture Forum and Cornstalks, two local groups that promote entrepreneurship. There is increased interest from potential investors as well, he said.

Moreano said there is growing interest among local investors in launching a multimillion-dollar fund to target early-stage innovative companies that are located in or have customers in Nebraska. Such a fund could be operating by early 2010, he said.

Changes to a loan program offered by the Small Business Administration increased some loan guarantees to 95 percent and has encouraged banks to lend, which has helped local entrepreneurs, Chapman said.

Also, the recession has meant it's easier for startups to get a deal on equipment, rent and other necessities, reducing the amount of capital needed to get started, he said.

Creighton University senior Ben Schaechter launched his technology startup with less than $1,000. Schaechter created a Web-based polling software that provides data about survey respondents. GoPollGo.com can track responses by geographic location and tracks results in real time.

Schaechter, a management information systems major, received an initial investment from Brightmix, an Omaha firm that develops Internet-based software applications. He worked at the company as an intern as they helped him implement his idea.

He plans to officially launch the business in October.

Chapman said a number of new college graduates have come to Omaha because of its growing reputation as a hub for new “cool” businesses. Many people in their 20s are looking for career opportunities outside the corporate sphere, he said.

Omaha offers a low cost of living and high quality of life, which is important to entrepreneurs, York said.

“You're not going to start a company somewhere that you don't want to live,” she said.

Schaechter, a native of the Silicon Valley area in California, said he could have started his business there, but it would have cost more and he wouldn't have had as much community support.

“There's never a good time unless you make it a good time. You just have to go for it.”

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