What do a hotdog cart, a flower-planting robot and a preschool have in common? They're all Humboldt County businesses that got a leg up by winning Economic Fuel.
Established in 2006, the annual Economic Fuel competition has attracted local entrepreneurs hoping to win start-up cash for their businesses. In each of the last eight years, $117,000 in prize money was awarded to the eight teams judges thought had the best business plan and best elevator pitch, among other criteria. But last week, Economic Fuel coordinator Rachel Callahan announced that the competition will not be coming back next year.
Rob Arkley's Security National, the corporation that launched the competition and provided much of the prize money, will no longer be funding it, Callahan said.
In a January radio interview on KINS, Arkley said Security National was moving its headquarters from Eureka to Louisiana because of California's high business taxes. Arkley didn't respond to phone calls or an email.
Of the 48 teams than won prize money before 2012, at least 19 are still in business. The fate of the others couldn't be determined with Google searches for the names of the winners. (One website listed in the business plan of a runner up is blank except for the word "success" typed small in the upper left corner.)
Only two of the successful businesses have left Humboldt County, leaving at least 17 local businesses that got help from Economic Fuel — a financial boost, feedback on business plans, advice from experts and other resources.
During its eight-year run, judges awarded $936,000 in seed money to 64 teams. Each year saw four $25,000 grand prize winners, a $10,000 runner up, a $5,000 second runner up and two $1,000 honorable mention winners. Of the 24 teams that won the grand prize prior to 2012, at least 14 are still in business, all but one of them in Humboldt County.
BrainGrooves, T. Aaron Carter's business, is not among them. He envisioned it as a "Blackboard killer," he said. Blackboard is a software company that makes a learning management system for teachers, which to Carter always felt like an "unfinished product." In 2004 he came up with the idea for BrainGrooves, a system that could compile web links to class materials, which teachers could then bookmark in their browsers and share with students — or anyone — around the world.
Carter and his partner, Brooks Call, wrote a business plan and entered the 2006 Economic Fuel competition, eventually winning the $25,000 grand prize, which they used to buy computers, software and other equipment. Then they started hiring computer coders for their website. "That's when we started to learn we needed a lot more money," Carter said. With all the features they wanted BrainGrooves to have, they would need at least 20 employees and 10 times the money they'd won from Economic Fuel.
Meanwhile, Blackboard was patenting technologies Carter needed to run his site. "Anything that offers education through the Internet, Blackboard tried to patent," he said. This created a major roadblock.
BrainGrooves officially went out of businesses in 2011, but Carter doesn't consider it a waste. "It was a learning experience," he said. Now he's the marketing director for Pacific Outfitters and works at Spiderboldt, a company that contracts with small local businesses for marketing advice. "[BrainGrooves] led to better things," he said.
Also in 2006, Ken Owens, an associate professor of math at Humboldt State, entered the competition with one of his students, Paul Burgess. They'd been working to build a landmine-clearing device under the company name Cognisense Labs. After presenting at Economic Fuel, they walked away with $25,000, and they went on to win another $250,000 in grants from funders such as Intel and the National Science Foundation. Now they're developing a robot that plants flower bulbs. "It's backbreaking, dirty, repetitive work," Owens said. "It seemed like a good thing for a machine to do." They hope Sun Valley Floral Farms will be interested in buying the technology.
Cognisense Labs has now been in business for eight years. "We're still alive. That's a miracle for startups," Owens said. "I wouldn't have the company if I hadn't won Economic Fuel."
When Cory Fitze won $25,000 in 2010, the prize was worth more than just the cash. He was 19 when he entered the competition with Sherlock Records Management, a company that stores records and manages documents for other businesses. Because of his age, businesses were hesitant to trust him. "[Winning Economic Fuel] gave me instant credibility," Fitze said. "I owe Rob and Cherie Arkley a lot."
Owens laments the end of the competition. "Our area sorely needs economic development," he said. "We need these young people coming up with ideas and turning them into businesses."
Economic Fuel was "sort of a ray of sunshine in our economic climate," he said. "I looked at it as a North Coast institution." •