“This is the most entrepreneurial activity I’ve seen since I’ve been paying attention to it in the last 20 years,” says Molly Cernicek, Los Alamos native and founder of online athletics channel SportXast.
Cernicek's office at the Santa Fe Business Incubator on Airport Road is joined this year by some 18 other new businesses, about 15 percent of which are operated by new residents of Santa Fe. "Right now the sky's the limit," she says, "which is kind of exciting for entrepreneurialism in New Mexico."
Incubator companies are among 359 businesses that have registered for new licenses in the city of Santa Fe so far this year. According to data from the city, the number of new businesses upticked by about 3 percent between calendar year 2013, when 614 new businesses signed up, and 2014, which logged 632. But with an overall 8 percent decrease in the number of licensed businesses—from 11,303 to 10,383—over those same years, there's no clear growth trend.
Even entreprenuers who are making an optimistic go of it report labor challenges along with money woes and other obstacles of a small marketplace.
Still, Marie Longserre, the incubator's CEO, says those figures show promise that the city can continue diversifying its economy. Especially, Longserre adds, in areas of technology development.
"When I started [in the incubator] 17 years ago," Longserre says, "if there was a company created around a technology from a lab or university, they left town. But more and more of them are staying here in this community…and that's a shift."
Along with Santa Fe Business Incubator, economic development services SCORE Santa Fe, Startup Santa Fe, WESST, Northern NM Connect and the Santa Fe Business Ombudsman's Office have been credited for assisting in the creation and expansion of startup companies and new businesses like Cernicek's.
The idea that Santa Fe should focus on startups isn't a new one. More than a decade ago, a target industry report identified the main challenge with the local economy as being "overly tied to the fluctuations in the tourism and government sectors." In the economic and demographic overview reported by AngelouEconomics in 2003, the city was warned that "without a more diverse business base, Santa Fe will struggle to recruit young people and skilled workers."
And how to get to the target? Apparently, one answer is to throw money at it. The Economic Development Division estimates that since the adoption of a strategy in 2009, the city has distributed $4 million to entrepreneurship in Santa Fe, a majority of which went to the incubator, the city's primary local startup hub.
For the 2013-2014 fiscal year, for example, the city gave $200,000 to its operations, an investment that city Housing and Economic Development Department director and former BBC reporter Kate Noble says makes Santa Fe a participant in a national trend.
"There has been a lot of work that has gone into looking at Santa Fe's economy that has always come back to diversify," Noble says. "And in pursuit of a more diverse economy, there are only two ways to do it: grow your own or bring them in. Santa Fe has focused more on what is growing things locally in many senses, but a business development is no exception."
Within the last six years, Noble, along with her colleagues monitoring recession recovery, has observed an encouraging amount of local business activity, especially among those who lost employment with major companies and are deciding to start their own.
"It's weird because recession is really good for the startup scene," Noble says. "I think we definitely saw an increase of new business in the wake of the recession."
Even little things signal support for momentum, including programs like bizMIX, a business plan competition spinoff of the MIX networking program that distributes grants from the city and private investors to entrepreneurial finalists. This year's winners will receive $50,000 in cash and prizes.
"This is how America stays prosperous," says Noble: "It continues to renew and update through startup businesses." And while her department continues to measure progress by going through a "data rabbit hole," she says that in the end, the greatest measure of success is actually the softest one: "It's the perception that there is a startup scene in Santa Fe. We've moved the needle on how Santa Fe is perceived by people thinking about starting up a business."
Yet the focus can't let up there. The city has a lot of work to do in accumulating capital to reach its overall economic goal, which is not only starting businesses here, but keeping them here.
"I think there's a hunger here for people who want to work and rise above what's currently happening," says Mark Johnson, co-founder of Descartes Labs, a startup working with image recognition technology. A five-month resident of Santa Fe, Johnson operates in Los Alamos, calling the area "one of the gems of this country" and the work coming from it a big step toward "amazing next-generation technology."
In comparing Los Alamos and Santa Fe to his previous workplace in the Silicon Valley, where Johnson says there is a constant draw of "hungry young entrepreneurs," the business owner observes that what New Mexico lacks in population, it makes up for in passion. Not to mention, Johnson explains, there's a focused atmosphere that can't be found among all the socializing of San Francisco. Johnson now believes that he and those still arriving have the chance to be "ambassadors" of the area by encouraging the benefits of doing business in Santa Fe.
"People want to see that spark of entrepreneurship here," Johnson says. "If you're really passionate, it's not just about getting people here excited about it, it's about getting people from the outside excited."
And while appreciating the draw of culture and art, Johnson also warns against getting "too stuck in our past." In San Francisco, for example, Johnson describes an influence of entrepreneurism that inspires forward thinking. He shares his advice through the perspective of an artist. "Don't get stuck," Johnson says, "in the model of 'Oh, I'm basically going to work at a gallery for a few years, some day I'm going to own my own gallery, and my gallery is going to look exactly like the one that I work at.' That's no fun." Instead, Johnson poses the question, "What's the future gallery going to look like?"
But there's a bigger problem than lack of imagination—workers.
"Here, it's a very risky move to leave a stable, well-paying job to go take a risk in a startup, and we've had some challenges luring people out of the labs," he says. Unlike the Silicon Valley, Johnson explains, "stability is more prized here over taking risk." As a result, the company owner observes that there aren't enough young risk-taking entrepreneurs in New Mexico to fill the empty slots, which forces him to hire people from out of state.
"This state isn't used to startups yet, and it's just going to take some time," says Cernicek. "It's not an 8-5 job. There's not that many people who feel comfortable on their own or with so few people. They're used to bigger organizations, and they have their little box in [an] organization, and if something happens outside the box, they call another box."
Experiencing firsthand the instability of startup companies, Johnson says, "You have ups and downs all the time. But frankly, that's what you sign up for. We might screw the pooch, as they say, but you've got to put your faith in a few startups like ours, because if one of us goes big, it could be a real game changer for entrepreneurship in New Mexico."
And changing the game, according to incubator CEO Longserre, is key to keeping the economy afloat.
"A lot of younger people will leave a community seeking a highway to career paths," Longserre says, noting those with college degrees want to branch out into other opportunities beyond tourism and government.
The goal of the incubator, then, is to capture innovation by supporting new business, particularly those circulating money from outside New Mexico.
"The more we have this diverse economy, the stronger and the healthier the economy is," says Longserre. "And that of course is the basis of paying for taxes and roads and libraries and all that other stuff you need to have a healthy working economy. And it helps not only retain young professionals but [attract] young professionals."
And as the ecosystem builds, a key factor, according to Cernicek, is finding more ways to support new companies.
"You may not be able to write a check to a startup or a fund," she says, "but you can volunteer to help with one startup a year, by trying out a product, or by giving user feedback. The key thing is numbers. You need to get key people involved at all levels [because] this whole new network is going to turn out to be very helpful for the state and especially for the next generation of startups."
Read more about the ups and downs of four new Santa Fe businesses:
Wake up Motivated
s a graduate of the University of New Mexico’s mechanical engineering program, Andrew Halasz relocated VIZZIA Technologies from Atlanta to Santa Fe last year, with the intent of improving state hospitals and developing sensor technology labs for future engineers.
Working with 20-some other employees from outside New Mexico, Halasz currently operates his company as a one-man show in Santa Fe, but he explains that most of his clientele are out of state. While those partnerships continue, Halasz says his company move presented a unique research opportunity, one that would have him partnering with his old alma mater at UNM and receiving help from New Mexico Angels, state-based investors focused on early-stage companies.
"It's a little different because there's a lot of stories about companies starting here and moving away," says Halasz, "but I want us to be an important part of building a new business infrastructure here in New Mexico." And with the additional help of a Venture Acceleration cash award, Halasz is confident that his infrastructure can expand to building a new lab for the engineering program at UNM.
"I want my company to participate in a new curriculum at the school," Halasz says. "The sensor lab is the first step, but then we build a curriculum around the sensor systems, and then we, as a business, will continue to fund it." Essentially, Halasz explains, while the students do the research, the company will improve their simulation data, which will "differentiate us," Halasz says, and "fund more students to do more work."
Meanwhile, Halasz says he and his team have already approached University Hospital and Presbyterian Hospital in Albuquerque in hopes of bringing in their sample simulations to improve hospital efficiency.
The company's goal is to "improve how health care is delivered," says Halasz, and that starts with asset management, or the tracking of medical equipment in a hospital. Next is environmental monitoring, which uses sensors to monitor freezers, humidity, pressure and heating. Patient flow, the third area, helps in the tracking of patients, and the fourth and most important area is hygiene compliance, or the simple reminder to wash hands. "We don't want this to be a Big Brother kind of thing," Halasz says. "We want it to be a process improvement thing. So what we try to do is give people information in an automated way to help them do what they want to do, which is the right thing."
Overall, the business owner says he really hopes in the end to make a difference. "I think the part that is essential for anyone to do well in a young business is you have to be a self-starter, and you have to wake up motivated to do what it is you're seeking to do."
No Insurmountable Obstacles
n a balanced ecosystem, very small businesses also have a role to play, and what better business in Santa Fe than recreational events along historic terrain?
Last year, married couple Lisa and John Alejandro started Ridgeline Racing, a health-promoting company that offers biking and racing events in Santa Fe. As a previous resident of Washington DC, John wanted to return to his native state of New Mexico with his family. He began work as a renewable energy planner for the city, while Lisa took a position here related to her Washington job as an international trade analyst.
Once settled, the outdoor enthusiasts felt like their schedules allowed for a second project. The couple submitted a business plan to the 2014 bizMix competition and were selected. Soon after, racing plans began.
Although the nation's capital offers a lot in recreation, Lisa says Santa Fe's mountainous terrain, amazing trail systems and other outdoor resources aren't matched on the East Coast.
"So we got out here and [felt] like there was more room, more opportunity to do additional kinds of races," she says. "Our background isn't putting on these events, but we've participated in enough of them that we know what we like, and as participants we know what to expect."
Despite business "moving a little slowly," Alejandro describes some of their first events, like the Twilight Trail Run and the Community Glow Ride last year, as "really fun and different."
Yet such a minor slate of events isn't a sustainable model. "They're not insurmountable obstacles," she says, "but part of it is that Santa Fe is a very small city, so you know we're not ever going to be drawing crowds of thousands. There's an intimacy there that's nice, and people have been really enthusiastic and supportive." From a business perspective, she explains, "it's hard to make money if you only have consistently small crowds. But you know, that's something we can work with. I think it's not uncommon to go in with very lofty ideas of what you're going to do, then kind of recalibrate your expectations."
The business owner adds that a great deal of support has come from higher levels of government. "They're really pushing for business to come here and form and build up the outdoor economy. [The city] really seems to want to make it happen," she adds, noting that she hopes that also means officials are willing to ease trailhead and parking fees for some future events.
For the summer and fall seasons, the Alejandros hope to coordinate a mountain bike racing series, an adventure race and urban scavenger hunts. "Then a little later on down the road, as we get better established," she says, "we'd like to do some bigger events, things that we can advertise outside of Santa Fe to try to make this not just a local thing, but something that can really benefit the economy."
Video Made the Sports Star
e know we’re pushing the forefront,” says SportXast founder Molly Cernicek, whose 2-year-old app has introduced a new kind of social media to sports-watchers and athletes. However, in order for SportXast to survive in New Mexico, Cernicek says, they must
find more early adopters, or as she puts it, “people willing to try things out.”
A former employee at Los Alamos National Laboratory, Cernicek explains that when she switched her focus from an international startup on fiber-optic lasers to a team working on Los Alamos technology, she became interested in the "social side" of the project and then decided she wanted to break away and create her own startup.
SportXast, the resulting app, taps into video captured on fans' personal devices and allows moments on the field to be shared easily and quickly.
"I've always been interested in sports," says Cernicek, describing her active history in soccer, swimming, tennis, skiing and coaching Los Alamos youth. Her question then became, "How can you bring new technologies in sports that can be useful and fun?"
Though Cernicek had several ideas before SportXast, she says her small development team had to scale back due to lack of funding. Instead, Cernicek utilized the feedback coming from sports fans and athletes to develop automatic and convenient 8-second video clips. Viewers recording with the SportXast app can capture a soccer goal, for example, on their device and simply tap on their screen to edit the video to its last eight seconds. The clip can then be categorized and shared through Facebook, Twitter and other digital means.
But SportXast didn't stop with the app. Cernicek was soon approached by athletes wondering if SportXast could compose highlight reels, moments of talent that can be compiled into one continuous video in order to show prospective coaches.
"If you've ever done a highlight reel," Cernicek says, "it's a lot of work." The benefits of creating an athlete highlight channel with SportXast, Cernicek explains, are that there is less editing involved and other users can add to the channel so coaches can easily scout for their next players by watching the clips.
"College coaches are making decisions within one or two minutes of a highlight reel," says Cernicek, "so if you don't have a good one, and you don't catch their interest in the first minute, you're done."
And the biggest user of SportXast's highlight reels has been the Albuquerque Sol, a semi-pro soccer team, which Cernicek says is attempting to grow into a National Soccer League franchise. "So marketing is really important," she says, "not only for fans but for would-be investors."
Despite investors like the Sol, Cernicek admits that New Mexico has proven to be the wrong kind of demographic for SportXast. Early efforts to partner with high school teams in Santa Fe and Los Alamos went unnoticed. Cernicek says, "There's not that many younger players that end up playing beyond high school. Population-wise, it's second to the bottom in terms of Division 1 athletes in the country. So there's not that many parents or kids who want media, just because there's not that many going to the next level."
On top of that, Cernicek observes that many coaches and athletic directors in New Mexico don't even own a smartphone. The business owner says that too much effort would have to be put into teaching the technology before exploring the app.
While Cernicek's team has accomplished a lot while in Santa Fe, her story here is heading for its conclusion. The SportXast founder says she's planning to relocate soon to a place that "has a much more dense population and a lot more younger athletes in order to improve the concept."
ith products on the market for three years, Awesome Harvest owners Sattva Ananda and John Cross have already been recognized for their agricultural ingenuity and for the impact their growing manufacturing company has made on the city.
Awarded first place in the city's 2012 bizMix competition, Ananda says the recognition helped a lot, but they still "had to jump many hurdles" to get where they are and will have to jump many more to get where they're going.
"What we sell is an agricultural product, so we fit into an agricultural model," says Ananda, who describes his and Cross's container technology as economically efficient. "But since we're not actually agriculture in the [Small Business Administration] laws, assistance is not as readily available. Everyone really wants to help us out, I just don't think there's a mechanism to help a manufacturing company. And at the end of the day, that's what we are."
But chasing after funds has been an educational process, one which has led the entrepreneurs and their CEO, Dennis Carter, to the conclusion that they need to connect with brokers and their pools of investors for the future.
Still, Ananda says there is a value to the struggle. "I think that it's frustrating as an entrepreneur not to have the resources," he says, "but what it forces is an internal structuring and, if you will, a certain type of research and development that you just don't get if you're funded. It gets you to really focus on your efficiencies. I think it builds a certain sense of humility."
And humility and hard work has gotten Awesome Harvest's products into Costco and Amazon as well as hydroponic stores across the country. "We self-distribute, we manufacture everything in-house, we source all our materials in the United States," says Ananda. "And we are courting federal environmental reclamation projects."
Awesome Harvest has also donated some of its fabric planters to Santa Fe Public Schools to support their gardening programs and will be partnering with the city's Parks and Recreation Division to assist in a new park on the southwest side. And thanks to additional grants from Los Alamos National Laboratory, the company is involved with new research for future agricultural technology.
"We've been philanthropic before we were ever profitable," says Ananda. "We have philanthropic intentions still in early development, cooperative food programs that can be implemented in impoverished environments in the US and globally that will help people grow food."
With such plans in mind, the business owner says that Awesome Harvest has the potential to function as an international cottage industry. "That would mean we could afford to hire more people," says Ananda. "That would mean we would be doing greater sales and bringing in more money to our community."
With more in their future, both Ananda and Carter say that Awesome Harvest is here to stay.
"I think what really excites us about what we're doing," says Ananda, "is we're giving people the ability to grow food or to tend a plant, and in this world and with the technology advancing as fast as it is, I feel people have less and less of a connection to the earth."
And while the key players in the business are open to partnerships and investors, they have no plans to sell the company or step aside. "This is a capitalist venture, but it's not solely about the money," Ananda claims. "It's about the social impact. What we're really interested in is growing a better world."