Washington state ranks second for entrepreneurs
August 2, 2011 at 4:24 pm by John Cook 8 Comments
The venture capital totals may be falling, but Washington state is still a great place to start a new business. That’s the
latest finding from the The State Entrepreneurial Index, which measures a state’s percentage growth and per capita growth
in business establishments, its business formation rate, the number of patents per thousand residents and gross receipts of
sole proprietorships/partnerships per capita.
According to the study, conducted by the University of Nebraska-Lincoln, Washington state ranked second in terms of
entrepreneurship.
Oregon also fared well, rising from 45th in 2008 to fifth in the latest study. New York state was at the top of the list, with
Massachusetts and New Jersey rounding out the top five. We certainly have a number of entrepreneurs in the GeekWire
community, so what do you think of the results?
Here’s a look at a graphic showing how the states performed.
Liberty Orchards
Life, liberty and the pursuit of Cotlets.
Often, the true measure of success in the business world is how
many times you try and try again before you finally succeed. In the case, of Armen Tertsagian and Mark Balaban, two young
immigrants, their first ideas were good, but their last one was nothing short of brilliant.
The two American immigrants made their way to Seattle at the turn of the 20 th century, back when the Northwest was still a rough and
tumble place to be. Their first two businesses, a yogurt business and Armenian restaurant were about a hundred years ahead of their
time.
So they packed up and headed for Eastern Washington. There, nestled in the shadows of the Cascade mountains, they found a place
that felt like Armenia, both in appearance and climate.
Their new farm, named Liberty Orchards in honor of their new homeland, was hardly an overnight success. Being an orchardist was
hard back then and unpredictable. Wanting to reduce the spoilage of their growing apple harvest, the men started to diversify, opening
up a cannery called Wenatchee Valley Foods and creating Applum, an apple and plum jam.
Still faced with an oversupply of the fruits from their labors, Mark and Armen put their entrepreneurial spirit to work. Modifying a
recipe for Rahat Locoum, an eastern European candy, the men created the first apple and walnut candy, Aplets®, joined a short time
later by Cotlets®, which are made from apricots and walnuts.
Aplets and Cotlets became a very popular item as people visiting the state brought the confections back as gifts. To keep up with
demand, the company started a mail order operation, which in its online incarnation, is still going strong today.
Marketing these Northwest favorites has always been a low key affair. After being a big hit at the 1962 World’s Fair in Seattle, the
company continued to promote their products at world’s fairs and their Grapelets® was the official candy of Expo ’74 in Spokane.
The family operated company has continued to build its reputation and fame over the last century, adding new products to keep up
with changing times. And while Aplets, Cotlets and the rest of Liberty Orchard’s line of fruit candies are still locally loved, they have
gained national fame, shipping their products throughout the U.S. and even abroad and their candy kitchen in Cashmere continues to
draw 80,000 visitors a year
Brown & Haley
The sweet taste of success.
Even if you know the name Brown & Haley, the makers of Almond
Roca, you may not know that there really was a Mr. Brown and Mr. Haley. Harry Brown and J.C. Haley met in church in 1908. Harry
had a passion for creating confectionery delights; J.C. worked for Shilling and Company, the spice folks, and had a gift for selling.
And if it weren’t for that chance meeting in a Tacoma church, the two may have never achieved such sweet success in the business
world. After becoming friends they decided to go into business together, starting their small candy making company in Tacoma in
1912.
By 1916 Brown & Haley was producing a full line of candies, including a favorite known as the Mt. Tahoma Bar. With its vanilla
cream center and chocolate and nut covering, it was a local favorite. Its fame spread as far as Seattle, and to recognize its new regional
fame, the company changed the candy’s name to Mountain Bar, a name that continues to this day.
Business boomed during the “war to end all wars,” World War I. The bulk of Brown & Haley’s sweets went overseas to give soldiers
a taste of home. With the end of hostilities, sales flagged and the two men did what Washington State companies seem to do best –
innovate.
They began to experiment with a new signature candy and in 1923 they hit pay dirt, well, to be more precise, Roca, lots of it. The logshaped buttercrunch candy was called Almond Roca, a name a local librarian chose for it.
One of the best parts about Almond Roca was the fact that it not only tasted delicious, but also traveled well. With the outbreak of
World War II, Brown & Haley candies went to war once more. Troops were more than eager to share their little piece of heaven from
back home, so much so that the fame of Almond Roca continued to spread far and wide.
Foreign markets started to ask about the candy, and today 35 countries were importing the familiar gold-foil wrapped candies in the
pink container. Approximately 40% of the company’s products are exported.
While the company is still headquartered in the same building it was founded in, Brown & Haley has continued to expand, introducing
new products and adding facilities to keep up with demand while ensuring that the candies stay true to the vision of their founders in
terms of quality, freshness and flavor, whether the candy is sold just down the street or halfway across the globe.
And true to their roots, Brown & Haley continues to innovate, adding new products to the line. Joining the company’s flagship
Almond Roca are Cashew Roca, Mocha Roca, Macadamia
Roca, Candy Cane Roca and Sugar Free Almond Roca. Cherry and peanut butter fillings have been added to the original vanilla
Mountain Bar.
The company celebrated its 100th anniversary in 2012. Though the Brown &Haley has changed greatly over the years, it still honors its
humble origins. The granddaughter of the founder, Anne Haley, and Almond Roca connect a rich past with a bright future, one that is
based on continual innovation and experimentation tempered by good old fashioned business sense.
Starbucks
A double tall tale
Today it can be pretty difficult to imagine what a simple cup of coffee once looked like.
Before there were cappuccinos, espressos and lattes, coffee was something you’d pick up for a dime at the local café, a lifeless
caffeinated affair that went well with a blue plate special or a slice of pie.
In 1971 a quiet revolution began. In Seattle, a single store opened for business in the Pike Place Market selling premium roasted
coffee beans culled from the far reaches of the globe and exotic coffee machines to brew them to perfection. The company’s name was
pulled from the pages of Herman Melville’s Moby Dick – Starbucks. The logo, a bare breasted siren of the sea.
Starbucks may have remained a local purveyor of fine coffees if weren’t for a trip to Italy by the company’s new marketing director.
Howard Schultz had been a plastics salesman who noticed that the coffee company was selling an awful lot of Hammarplast dripbrewing thermoses, a product he represented. Joining the fledgling coffee company, one of Howard’s first tasks was to travel to Milan
to the international housewares show. It was there that he enjoyed his first caffe latte. He was hooked. It wasn’t just the coffee that
caught his attention and imagination, but the environment in which it was consumed.
Patrons in the Italian café were chatting and relaxing over their coffee, not just chugging a cup of joe and moving on down the road. It
was Howard’s big “aha” moment. He thought that such a place could catch on in the United States, a coffeehouse where news and
ideas were shared, where the pace was unhurried, and the product consistently fresh, delicious and uplifting.
Unfortunately, Starbucks’ owners Jerry Baldwin, Zev Siegl and Gordon Bowker weren’t interested in selling coffee drinks. They were
happy selling great beans and coffee making equipment and after a brief test, they decided coffee drinks were not their thing. Howard
wasn’t deterred. He started his own chain of coffee bars in 1986, Il Giornale, using Starbucks beans. A year later, he and some
investors purchased Starbucks, embarking on a mission to create a new culture, a coffee culture, in communities throughout the United
States and later, the world.
Like most visionaries Howard knew that there were a lot of places where you could get a good, even great, cup of coffee. But the
secret to Starbucks’ success was creating that magical third place, a place that existed between the office and the home, one where you
felt right at home, no matter where your home was. Whether you were at your neighborhood Starbucks just down the street or sipping
on a cup of Sumatra in India during a business trip, the experience was consistent, comfortable, and most important, familiar and
welcoming.
The company’s mission is simple, to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time.
Riding a wave of success, Starbucks went public in 1990 and has gone on to become an international sensation. While the vast
majority of Starbucks stores are located in the United States, the company has more than 6,000 locations in 55 countries, including
Chile, Romania, Bahrain, Bulgaria and most recently, India.
More than 40 years later, Starbucks continues to reinvent and innovate, not only with its existing coffee stores but with new concepts
in merchandising and retailing, including the release of their new single cup Verismo coffee machines in 2012.
Costco
From zero to $3 billion in six years.
The business model is deceptively simple. Keep costs low and pass the
savings onto members. Since 1983, Costco has been offering brand name merchandise to businesses and individuals at substantially
lower prices to members. It’s been a strategy that has been duplicated, but never quite equaled.
Though Costco Wholesale Corporation began in Seattle in 1983, their roots stretch back to 1976. That was the year Price Club opened
their first warehouse store in an old airplane hangar in San Diego. It was originally open only to businesses, but company executives
soon figured out that extending shopping to individuals could get them even more buying power.
How does that fit into the Costco story? Well, fast forward for a moment to 1993. That’s the year Costco and The Price Company
merged. Six years later, the company completed its reorganization, creating Costco Wholesale Corporation, a Washington State
company based in Issaquah. The company is traded on NASDAQ under the ‘COST’ symbol.
The company is truly a Washington success story and one of our business legends with an international reach. It is the first company
ever to grow from zero to $3 billion as quickly as it did. By 1993, the company had 206 locations with $16 billion in annual sales. As
of the end of 2011, the Costco had grown to 592 warehouses in the U.S. and Puerto Rico, Canada, Mexico, United Kingdom, Taiwan,
Korea, Japan and Australia. Today, sales are in the neighborhood of $64 billion and climbing and the company employs
approximately 155,000 people.
What’s the secret to their success, besides $5 roasted chickens and $1.50 for a hot dog and a soda? According to the company’s cofounder and director, it’s the ability to keep costs low, eliminating frills such as fancy buildings and salespeople, keeping overhead
low and maintaining business and individual membership levels that the company can leverage into remarkable buying power.
Learn more about Costco.
And if you’re keeping score, the company sells approximately 30 million rotisserie chickens and 100 million hot dogs a year.
Microsoft
Creating a revolution bit by byte.
With 94,000 employees worldwide and annual sales of nearly $74
billion, Microsoft is truly an American success story. Headquartered in Redmond, Washington their line of flagship products, from the
various releases of Windows and Internet Explorer to the Office suite of productivity tools, can be found on an estimated 95% of all
personal computers.
Chances are good that you know the names Bill Gates and Paul Allen, founders of the multi-billion dollar company. But you may have
never heard of Traf-O-Data, their first attempt at starting a business. The company created a computer system that read the data from
roadway traffic counters in order to automate reporting. The idea never really caught on and Traf-O-Data closed its doors after a few
thousand dollars in sales.
Undeterred, the pair of twenty-somethings cast about for the next big thing. They found it in a 1975 issue of Popular Electronics. The
magazine had a feature on the new Altair 8800 computer, and Gates boldly contacted its maker to let them know that his team was
working on a BASIC program for it. In truth, they weren’t, but the president of Micro Instrumentation and Telemetry Systems, didn’t
know that at the time. They landed the project.
In November of that year, Gates and Allen started their company, Micro-Soft. A year later, the hyphen was gone and a legend was
born.
Not overnight, of course. But, pretty close. The company made $16,000 its first year but by 1978, sales had soared to $1 million with
the release of their new computer languages, FORTAN and COBOL.
The company’s big break was yet to come. IBM was in the process of creating the first personal computer and asked Microsoft to
develop the language for it. The result was MS-DOS, which was sold to IBM in a non-exclusive arrangement that would serve as the
foundation of a computing empire.
A string of new products soon came online, including Word 1.0, which along with its companions PowerPoint, Excel and Outlook,
went on to capture the vast majority of the productivity market. Working closely with Apple on the first Macs, the company saw the
future in graphical user interfaces for computers. Windows, released in 1985, was their answer.
It was hardly an overnight success, but with time, Windows caught on and the latest incarnation of Windows, Windows 8, offers users
a revolutionary interface that could be applied across the spectrum of computing products, from smart phones and tablets, such as the
company’s new Surface, to laptops and desk tops.
Along the way the company continued to expand into new ventures, joining forces with the NBC network to form MSNBC and
launching the Xbox video game system.
Gates and Allen certainly weren’t one hit wonders. Bill and his wife Melinda went on to establish the Gates Foundation in Seattle,
funding a range of global health and wellness initiatives. Allen has been involved in numerous business ventures and civic projects,
including owning and operating the Seattle Seahawks, building the Experience Music Project museum, and redeveloping the South
Lake Union area through his company, Vulcan Real Estate.
Nordstrom
A miner who struck it rich in retailing.
If there was ever a retailer who achieved legendary status for its
customer service, it would have to be Nordstrom.
There’s the story of the customer who wanted to return a set of tires in the Anchorage store. Of course, Nordstrom doesn’t sell tires,
but they still allowed the man to return them.
Then there’s the tale of the woman who lost her diamond from her wedding ring while trying on clothes. An alert security staff
member spotted her crawling under the racks on the sales floor. Discovering her plight, he summoned two of the workers from
building services. They checked all the bags in the company’s vacuum cleaner bags, and voila! – out pops a sparkling diamond
looking for a ring.
No, these aren’t urban legends, just examples of the reputation Nordstrom has created in the industry over the years and why
customers of the company are so fiercely loyal.
Lost diamonds and returned tires were the farthest thing from John W. Nordstrom’s mind when he came back from the Klondike gold
rush with $13,000 burning a hole in his pocket. Landing in Seattle, he and business partner Carl Wallin decided to open a shoe store,
Wallin & Nordstrom, in 1901.
From the very start, Nordstrom’s focus was on exceptional service, selection, quality and value. It was a recipe for success.
The company soon became the biggest independent shoe chain in the country and by the early 1960s, it was looking to expand its
operations even further, adding women’s, men’s and children’s apparel and accessories to its lineup of shoes.
Today, Nordstrom is a highly respected national brand, focused on meeting the needs of its customers, often with that “whatever it
takes” philosophy that has become part of its lore. From the one flagship store in downtown Seattle, the company has grown to more
than 240 stores in 31 states, including its discount store format, Nordstrom Rack.
While the company has grown tremendously over the years, it still follows the same credo John W. Nordstrom established back in
1901: “Offer the customer the best possible service, selection, quality and value.”
Famously, their employee handbook is said to be just 75 words long:
Welcome to Nordstrom
We’re glad to have you with our Company. Our number one goal is to provide outstanding customer service. Set both your personal
and professional goals high. We have great confidence in your ability to achieve them.
Nordstrom Rules: Rule #1: Use best judgment in all situations. There will be no additional rules.
Please feel free to ask your department manager, store manager, or division general manager any question at any time.
REI
Climbing to the top.
If it weren’t for the superior quality of Swiss ice axes and other mountain climbing equipment, REI’s 11,000+ employees may have
never found nirvana in a company that has been ranked in Fortune magazine’s “100 Best Companies to Work For” since 1998.
Back in the 1930s, mountaineer Lloyd Anderson’s quest for an ice
axe, one that was of top quality but didn’t break the bank, looked hopeless. After a lengthy search, he finally found what he was
looking for in an Austrian alpine catalog, a Swiss axe for $3.50, including shipping. Learning of his great deal, others in the climbing
community wanted in on the action too, and before long, Lloyd, his wife and 21 fellow climbers joined forces to create the first
outdoor gear co-op in 1938.
Like the axes, inspiration for REI came from overseas. While researching models for the business, Lloyd happened upon the Rochdale
Equitable Partners Society, the originator of the modern cooperative movements. Some of the hallmarks of REI – open membership,
equal votes, one-time membership fees and a rebate on purchases – were inspired by the Rochdale model.
REI didn’t rise right to the top. For its first six years the company was run out of Lloyd’s West Seattle shop until there was so much
demand for product that the cooperative opened its first store. By today’s standards, three shelves in the back of a downtown Seattle
gas station isn’t exactly something to write home about. But for the fledgling co-op, it was a start. It was nine more years before REI
hired its first full-time employee to run the store. Sales were at $72,000 by now and two brothers by the name of Whittaker took over
the operation of the co-op. If the name is familiar, perhaps you heard of Jim Whittaker who was the first American to reach the
summit of Mt. Everest.
It was Jim and his twin brother Lou who shepherded REI into the retailing giant it would become. The Whittakers expanded the
company, creating a product testing subsidiary and opening additional stores in Oregon and California to join their flagship Seattle
store, which had moved out of the gas station. Though Whittaker eventually left due to a disagreement about the direction the
company was going, REI continued to follow his lead, entering a period of unparalleled growth and expansion, including branching
into new lines of equipment, apparel, and even gourmet popcorn.
Though REI has grown to more than 125 stores in 31 states employing more than 11,000, it made a major commitment to its
birthplace when it broke ground on its Seattle flagship store in 1996. The 100,000 square foot store has more than twice the space of
the old store on Capitol Hill, including 21,000 square feet set aside for native plants and flowers, a pond, an outdoor trail for testing
mountain bikes before they are purchased, a Rain Room to test waterproof clothing and a glass enclosed 65-foot rock wall with views
of downtown, the Olympic mountains and Puget Sound.
Today, REI is the largest consumer co-op in the country, with 3.5 million active members and customers, providing expert advice and
trusted products to weekend warriors and experienced outdoorsmen who challenge themselves and the elements in REI gear. As a
custodian of the environment and the marketplace, the company gives back to its community through volunteer projects involving
money, equipment and “beads of sweat” to outdoor-focused community organizations. It is a retailing and stewardship model that
Lloyd Anderson would have been proud to be part of. Washington State certainly is.