Maine State Pier, Portland
Founders: John and Brendan Ready
Ages when founded: 24, 22
Startup costs: $100,000
Maine Street, Brunswick
Founders: Josh Davis and Bruno Tropeano
Ages when founded: 24, 23
Startup costs: $300,000
Baxter Brewing Co.
Bates Mill, Lewiston
Founder: H. Luke Livingston
Age when founded: 24
Startup costs: $1.3 million
Turtle Love Co.
Founder: Adrianne Zahner
Age when founded: 28
Startup costs: Did not disclose
Industrial Drive, Houlton
Founders: Scott Galbiati and Jessica Jewel
Ages when founded: 23
Startup costs: DND
Fore Street, Portland
Founder: Becky McKinnell
Age when founded: 23
Startup costs: $4,200
Don Gooding of the Maine Center for Entrepreneurial Development says he believes the age of 35 is ideal for starting a business, because it's a great intersection of experience and energy. But how does one truly know if they're in a position to take a big risk on a startup venture?
Steve Hafner, founder of Orbitz.com and CEO and co-founder of Kayak.com, explained risk calculation, known as the drag coefficient, on Startupatwork.org. To calculate your drag coefficient, add one for each of the following areas:
"Once you get to a drag coefficient of four or five, it's highly unlikely you will do anything entrepreneurial," Hafner says.
Back in 2004, John and Brendan Ready had a decision to make: pay rent for an apartment, or make a $3,000 monthly lease payment for warehouse space on the Portland waterfront.
In their early 20s, the aspiring entrepreneurs and recent college graduates chose the latter — a decision that forced them to take turns sleeping on a mat on a concrete floor for the next 18 months while they built what has now become a multi-million dollar global wholesale lobster business.
"There was no other option," says John Ready. "Hobson's Wharf wasn't very clean. When I say there were rats, you could hear the [expletive] things down below."
The brothers, originally from Cape Elizabeth and included in Inc. magazine's 30 entrepreneurs under 30 in 2008, would take turns hauling lobster while the other manned the warehouse. Instead of selling their catch to a local dealer for cash on delivery, they "sold it" to the business, sometimes waiting 30 days for payment — a decision made easier by the absence of spouses, children and mortgages.
Mainebiz caught up with several successful young entrepreneurs to learn more about their experiences. Most said their decision to start a business at a young age meant detaching themselves from their social lives and delaying plans to start families. But it also allowed them to work harder and learn more quickly to achieve an exceptional level of success at a relatively early age.
In 1970, Janice Joplin famously wailed, "Freedom is just another word for nothing left to lose."
That sentiment is echoed among several young entrepreneurs, including Josh Davis, who started the Brunswick-based Gelato Fiasco in 2007 at the age of 24, along with his business partner Bruno Tropeano, who was 23.
"We always took the approach we had nothing to lose," says Davis, who is now 29. "We didn't have any assets they could take away. We could afford to take a big risk."
Gelato Fiasco now employees 31 people and its products are available in more than 150 outlets, ranging from Hannaford supermarkets to small scoop shops. This year, the company opened a new retail store on Fore Street in Portland.
Further north in Lewiston, Luke Livingston, who founded Baxter Brewing Co. at the age of 24, says the death of his mother in early 2009 to breast cancer prompted him to re-examine his life, give up his career and set out on an uncertain future.
Despite earning a $32,000 salary with benefits, Livingston says he wasn't happy being a college admissions counselor, so he quit with no plan other than to work for himself, doing something he was passionate about.
"I realized life is too short," he says. "The entrepreneurial spirit clicked on before the brewery idea did. A few short weeks and nervous breakdowns later — I kept trying to think of things other than the brewery — eventually, I said to myself, 'Why am I beating around the bush?'"
Livingston, who had been a home brewer since his parents bought him a kit and took him on a tour of the Samuel Adams brewery for his 21st birthday, got to work. Through a beer blog, he educated himself about the West Coast brewing industry, looking to import ideas to the East Coast, where there is a strong demand for microbrews. When he saw the rise of canned craft beer, it clicked.
"That's when the marketing light went off," he says, realizing he could capitalize on the portability, environmental and, most recently, the flavor benefits of canned beer.
Livingston, who owns 50% of the company, says he got lucky in terms of financing, getting investments from families and longtime friends. In hindsight, he didn't know that would be the case, but he took the leap anyway.
"I thought, 'If it doesn't work out, I have the rest of my life to pay my bills,'" he says.
So far, the risk has been rewarding. Livingston was named one of Forbes magazine's 2011 30 under 30 in food and wine. He recently doubled his brewing capacity at the Bates Mill, where he can produce 8,000 barrels annually. His beer is currently available in Maine and Massachusetts, and Livingston says he plans on hitting the shelves in New Hampshire and Vermont in the coming years.
Being young doesn't mean launching a business carries fewer risks. Take Adrianne Zahner, for example.
At age 28, Zahner was pulling in $230,000 a year working as a real estate attorney in Boston, but the money — as well as the potential career growth — was not enough. "I was sort of a cog in the machine," she says. "I'd be sitting in this fancy office with the fancy clothes on, but not really feeling like I was participating in the economy."
So Zahner left to follow her dream to sell unique artisan jewelry, which in hindsight she traces back to a childhood book, "Anne of Green Gables," which she read at age 7. She was drawn to the protagonist, a young orphan and wild dreamer, who was greatly disappointed when she learned that diamonds were not purple, but clear.
"She was so disappointed, she cried," recalls Zahner. "That was one of the first things that stuck in my head: a diamond as a disappointment."
In Boston, Zahner noticed how the expensive diamond rings worn by her fellow female attorneys were often the topic of conversation. One day, a co-worker came into the office wearing a simple gold band after breaking her large diamond solitaire wedding ring.
Zahner says she was surprised to hear that her co-worker had no sentimental attachment to the expensive ring and actually preferred the simpler one. Intrigued, Zahner did some research and found there was a lack of unique ring suppliers.
That prompted her to leave law and start Turtle Love Co. in 2008, an online business based out of Portland specializing in unique artisan, eco-friendly and vintage jewelry.
"[A ring] is a symbol of your relationship, but it's an external expression," she says. "So choose something that is really authentic to you, rather than what the guy at the jewelry store told you to get and what you're supposed to spend. It turns out that [my] concept has really resonated with people."
Scott Galbiati and his wife, Jessica Jewel, took a similar risk, leaving behind a comfortable life in Rumford, where they owned a home and pulled in an annual household income of more than $120,000 to move to Aroostook County to start a vodka distillery.
Galbiati says he had been toying around with the idea since college. When his grandfather gave him a check for a couple thousand dollars, he decided to ditch a web design company.
"That was the moment to act, or get off the pot," Galbiati says.
Alcohol is a highly regulated industry, says Galbiati, making it a risky venture. To secure federal permits, he first needed to purchase and install his distilling equipment, so regulators would know exactly how much vodka he could produce.
"There was a lot of risk involved," he says. "So [it took] a lot of faith, a lot of pitching, a lot of convincing and a lot of hand shaking."
By the time Galbiati was ready to pop the top off his vodka project, he thought he had it all figured out. His 75-page business plan was ambitious, calling for the ground-up construction a facility, for which he purchased building plans. He wanted to outfit it with the "Nike of distillery equipment" next to a potato farm in his wife's hometown of Monticello.
"Potato vodka was the intent," he says.
But that plan quickly ran into problems. First, he says, there wasn't an adequate water supply, nor was there enough room for a sufficient septic system. Secondly, he would have owned a building that cost him more to construct than it would have been worth. He could not line up financing.
So Galbiati pivoted. He scrapped the building plans, as well as the idea of using potatoes, and decided to rent a space in Houlton. He and his wife, who is a chemical engineer, built their own distillery equipment, creating a unique micro-distilling process for grain-based vodka.
"It was a total godsend," Galbiati says of the inability to get funding. "When I was trying to get money from shareholders, our debt service [would have been] astronomical. It was crazy. It was actually crazy knowing what I know now."
Galbiati printed 175 copies of his new, 10-page business plan and set out in his Jeep Cherokee on a three-state mission to secure private funding. Nineteen months and 39,000 miles later, he secured investments from 15 people, who agreed to fund the project on "an abundance of faith."
Getting private funding suddenly made it easier to secure a bank loan, which he says he couldn't get with only 20% down.
"We brought $4 to the table for every $1 we borrowed," he says. "The inherent risk of a startup like this modified the terms of the loan."
Now, more than two years and seven awards later, their product is available in Maine, New Jersey, Washington, D.C., and Maryland. He is currently working on getting into New Hampshire, Massachussets New York and Florida.
Don Gooding of the Maine Center for Entrepreneurial Development says one advantage of being an older, more experienced entrepreneur is making fewer rookie mistakes.
"Those mistakes and 'failures' are a vital part of learning," Gooding says. "So the challenge of young entrepreneurs is that they are making more first-time mistakes on their own dime, rather than on someone else's dime."
It's a scenario that Davis of Gelato Fiasco knows all too well.
Davis says he once had vision of operating a gelato cart in Freeport. On the surface, it seemed like a great idea, especially in the quaint little shopping village. Davis got town approval to operate the cart, and signed a $700 a week lease.
But Davis says the venture lost $3,000 in the first month. "It was a total disaster — a total failure," he says.
Rather than getting discouraged, he repurposed the cart, marketing it for special events, such as weddings. Now the cart is generating revenue for the company.
"I'm proud of my mistakes," says Davis. "You have to learn how to treat them like trophies."
The Ready brothers, meanwhile, were able to turn a near tragedy into a triumph, when a power outage nearly killed up to 10,000 lobsters, just as the company was picking up steam. The outage happened on Christmas 2006, a busy time for orders, so the brothers started cooking lobsters and picking the meat. They missed Christmas, but their friends and family came to the warehouse to help out — a gift that saved the venture.
"We went from an all-time low to an all-time high," Ready says. "It's the battle scars that make you who you are."
Galbiati has a trophy, too: Those original building plans, which cost five figures to produce.
Many young entrepreneurs rely on their knowledge, expertise and passion to win over older industry peers and potential clients.
Becky McKinnell started iBec Creative, a Portland-based graphic and web design company, when she was 23 years old. Using a $4,200 Libra grant geared toward helping entrepreneurs under the age of 29, McKinnell says she bought her computer, software and marketing materials, and she was in business.
At that point she had a clear idea about what she wanted to do; all she had to do was get the word out.
"It took me a while to find confidence in being young," says McKinnell, now 28 and with a new venture, iKNO, an intranet system for companies. "I used to give myself pep talks."
Even then, she was constantly reminded of her youth. When she attended her first networking event, McKinnell said she built up the courage to extend her hand toward a complete stranger to introduce herself and talk about her company.
"I went to go introduce myself to someone … and they were like 'Oh, are you with the high school students that were here today?'" she says, in a high youthful voice. "It took me a while to get over that, but now I'm really confident in being a young entrepreneur. I think it works to my benefit in my industry, because people often look to the younger generation for advice on the web and marketing."
John and Brendan Ready also had difficulty earning respect in the early going. Their business hinged on getting lobster dealers in small coastal towns to sell them lobsters. Cantankerous lobstermen are skeptical of a young man trying to get too big, too fast, says John. And if you're not a local, things can be even more difficult.
"You have to earn your reputation," he says. "You have to earn the respect of the fishermen and the people you've dealt with."
Ready says last year his company marketed 10% of the state's total lobster catch, which weighed in at record setting 100 million pounds.
Likewise, Galbiati says he is much younger than other distillery owners he meets at brokers conventions, events that are critical to get his product into new markets. Most distillery owners are "gentlemen wearing blue blazers," he says.
"People don't expect I'm the founder and owner," says Galbiati.
The MCED's Top Gun program is designed to pair young visionaries with mentors who have started and invested in startup businesses. Zahner is a 2010 graduate of the program, which taught her she didn't need to make the jewelry — she only needed to tap into an existing network of artisan jewelers.
Other startups have found mentors and partners through their natural growth. Davis relied on the owner of Wicked Joes Coffee for managerial advice, while McKinnell hired consultants. Livingston relied on his father and family friends with business experience.
Now, the Ready brothers, who are used to doing it themselves, are taking on high-powered partners so they can penetrate markets where fresh Maine lobsters can't be delivered. Over the last year or so, they have been working with former independent gubernatorial candidate Eliot Cutler, Tom Dunne and Dan Boxer on a new company called, Maine Seafood Ventures. The company is marketing frozen whole Maine lobster and lobster tails to faraway parts of the globe, including Dubai and China.
Ready says each partner brings a unique skill to the table. Cutler has international connections; Dunne, a retired partner in the global consulting firm Accenture, brings global trade experience; and Boxer, who was involved in Backyard Farms in Madison, brings state expertise.
But the company is looking to do more than capture a bigger piece of the market — it's looking to restore lobster processing on the Portland waterfront, an industry that has slipped northward into Canada.
"It can bring us to the next level for processed lobster," says Ready.