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February 10, 2014

Maine's retirees rejoin the work force as encore entrepreneurs

PHOTo / TIM GREENWAY
PHOTo / TIM GREENWAY
David Hulbert, president of Portland Pudgy, sits in a dinghy at his shop in Portland. After a career as an industrial designer, Hulbert moved to Maine and started his company rather than retire.
PHOTo / Jason P. Smith
Lenard Kaye, director of the University of Maine Center on Aging, is launching a project to apply engineering to products that extend and improve life for seniors.

On the surface, the numbers sound grim. Maine's work force is aging rapidly at the same time the ranks of younger people are shrinking as they search for opportunities outside the state. One in four Mainers will be older than 65 in the next two decades. By some estimates, Maine will need to attract 5,000 new people each year toward the middle of this decade to fill the gap. But the University of Maine, the Maine Council on Aging and others are trying to turn the aging population into a plus, encouraging people to work longer or retirees to return to the work force.

"We'll have to pay more for labor and get it from untraditional sources such as the disabled, attracting people to move to Maine and from the older population," Charles Colgan, professor of public policy and management at the University of Southern Maine's Muskie School of Public Service, told a recent Maine Summit on Aging conference in Augusta. Colgan provided the estimate of the annual influx of people needed to fill the labor shortfall, which he predicts will top 6,000 in 2020.

The University of Maine, for one, is starting a campus-wide effort to apply engineering to aging. The so-far-unnamed initiative follows the example of the Massachusetts Institute of Technology's AgeLab, which is focusing engineering expertise on developing new products that potentially could improve and extend the quality of life for seniors so they can remain in their homes or at work longer, and even spark their interest in starting their own companies or returning to the work force.

"We're following MIT's lead with the AgeLab," Lenard Kaye, director of the University of Maine Center on Aging, told Mainebiz in an interview. "MIT's idea is to engage engineers to think more directly about how engineering can influence the quality of life for older adults."

At the same time, a new breed of senior innovator, the so-called "encore entrepreneur," is coming out of retirement or extending his or her career out of boredom or a shortage of savings, or both. Some wish to fulfill the dream of owning their own business that they had while working for someone else. While there are no hard numbers on how many seniors are starting their own companies in Maine, there is a national trend for seniors to return to the work force. A 2012 MetLife Foundation study found that up to 31 million people ages 44 to 70 want encore careers that combine personal meaning, ongoing income and social impact. Another 2012 study by the Kauffman Foundation found that since 1996, Americans ages 55 to 64 had a higher rate of entrepreneurial activity than those aged 20 to 34.

That was the case for David Hulbert, 72. Following a rewarding career as an industrial designer in and around New York City, where he designed products as small as fountain pens to large airplane interiors, Hulbert and his family moved to Maine. He wanted to slow down and do the things he enjoys, like sailing. But he couldn't find work in his field here. Looking forward to a future of dwindling savings, he decided to start a new company.

"I didn't envision working this hard," says Hulbert, founder of Portland Pudgy, a maker of unsinkable dinghies. "I lost half of my money during the stock market plunge. We didn't have enough money to survive. And I didn't want to be idle. I needed something to do."

The Maine Technology Institute pulled together some data for Mainebiz showing that more than half of the founders of the 56 companies that received MTI development loans in the last three years were older than 50. Scott Burnett, director of marketing and analytics for MTI, says that's not surprising because Maine's business leaders tend to be older and the companies applying for the awards are usually in a later stage of growth.

Seniors in the driver's seat

Maine is following the national trends, especially by touting the importance of tapping skilled seniors to fill the expected shortage of trained professionals. The average retirement age nationwide rose to 61 in 2013 from 57 in 1993, according to Gallup, which expects that age to keep increasing as more non-retirees who it polled say they expect to delay retirement past age 65. Maine has the oldest population in the country by median age of 43.5 years, the highest concentration of baby boomers and the nation's third-lowest number of working age adults ages 20-64, according to the Maine Council on Aging.

The new focus places seniors as an ongoing, robust driver of the future work force. The goal is to create initiatives that will keep seniors healthier, longer. At UMaine, Kaye explains, "the idea is to create collective capacity, create a series of research laboratories that grow out of a successful aging incubator on campus. That will provide the resources and the venues where products and devices can be designed and tested and ultimately brought to scale so they can be made available to older Mainers and their families."

Following recent roundtable discussions and the summit sponsored by the Maine Council on Aging, he says the university has a commitment to bring together its resources in ways it has never done before. It plans to focus various sectors of the engineering community on campus, including computing, information science, civil, mechanical and electrical engineering, as well as the arts and humanities and health and social science, on thinking about how and in what ways they can make a difference in the lives of older Mainers.

To make the anticipated devices accessible, affordable and responsive to consumer preferences, the school plans to involve older adults throughout the research process. "That is our intent. We think this could be an economic driver," Kaye says, referring to new companies that may arise from the research, including those that senior participants might start.

The university is looking for business partners as well for the new program, which is in its infancy. "The next step is an open call to businesses and corporations… to anyone who feels their target populations are trending toward mid-life and older individuals. It they're looking to think outside the box and be innovative and entrepreneurial in terms of what they do to meet the needs of older adults, we want to talk to them," Kaye says. He adds that in a year from now, he hopes explicit projects will be under way. "We've had a great response from across campus from a number of departments," he says.

Kaye says he also expects that some of the older adults participating on campus in this initiative might discover a passion and start their own company.

In addition, the UMaine Center on Aging is currently running two programs, RSVP and ENCorps, to train volunteer seniors about revitalizing their communities. Kaye says several volunteers have transformed that work into jobs, including one person who started a company that designs thermal window inserts to retain heat and save energy. He says the overall impact of the programs on new jobs or startups still can't be quantified.

The gumption to try

There are some cautions for encore entrepreneurs to mull as well, according to the MetLife report. Those interested in encore careers said they needed transitional support through grants and scholarships for training and education, volunteer programs or hands-on experience. More than two in three polled who already are in encore careers experienced gaps in their personal income as they transitioned to their second career, with 24% saying they earned no money and 43% saying they earned less than their previous jobs. Of those who experienced time with little to no income, 79% say they had a gap of six months or more, while 36% say their income gap lasted more than two years. Most relied on personal savings to make ends meet.

Hulbert says Portland Pudgy still isn't providing a living wage — he needs to increase his current $250,000 in sales by 50% to make a modest living — although he is optimistic. The boat industry, which also was hard-hit by the recession, is coming back, he says. Besides, he enjoys the work. "To continue to work is very fruitful for the mind and body."

Hulbert credits the Maine Center for Entrepreneurial Development's Top Gun program with helping fill in the management and production experience he and his wife, who also works at the company, lacked. He also was awarded three MTI grants and one MTI loan.

"With many years of experience, including many years of making your own mistakes and learning from them, people in that demographic can avoid the mistakes younger entrepreneurs make," says Don Gooding, executive director of the Maine Center for Entrepreneurial Development. "But staying abreast of industries in rapid change, like social media, is more challenging for them. Some are trying to make pretty substantial changes, but not at the frenetic pace of social media. They're still being innovative. Innovation doesn't have to stop when you're 40 years old. In Maine you tend to be in the land of 1,000 niches."

Making a statement

For some entrepreneurs, starting a new company is personal. Randy Lord, 54, started Freedom Fin in Danforth after 9/11, when he saw injured veterans returning from war. Lord, a former carpenter and home builder who himself lost a leg in a job injury, wanted to improve on the swimming devices available for amputees.

"You don't see amputees on the beach," he says. "It's like dropping an egg into the water and expecting it to swim." He is referring to the difficulty of swimming with only one's arms. "When a person becomes an amputee, they miss walking in the grass, on the beach. What would you do to capture back some of that?"

Lord says the fins for amputees currently on the market don't work well, so he developed one he says has better propulsion and fits the remaining part of the leg better. The custom-made fin, made of rubber, will need to be fitted by prosthetic makers. He hopes to find a manufacturer in Maine to make the device, which currently is in prototype form.

"I dove for scallops as a kid on Mount Desert Island. I was in the water with this fin this summer and felt like a kid again. I forgot I was an amputee," he says.

The company is self-funded, and he has been able to apply some of the business knowledge from the custom house company he started and later retired from. But he's also sought advice from MCED, notably on patents.

For Dr. Daniel Mingle, 56, starting a new company was about contributing positively to the medical profession. After serving as a family physician and then as director of clinical informatics at MaineGeneral Medical Center, he started Mingle Analytics LLC, a South Paris health care informatics and strategic consulting company that applies the equivalent of lean manufacturing data analytics to health care.

Mingle says he grew up in a retail environment — his father owned a general store in central Pennsylvania — but he decided to go into medicine instead.

"I didn't want to define my success as selling people things they didn't need at prices they cannot afford," he says. "Not that my dad did that, but I found physicians did that."

He says his experience as a physician and in information technology played strongly into choosing a time later in life to start a company.

"I now have skills I didn't have 20 years ago," he says.

He also tapped MCED's resources as a Top Gun candidate last year.

"I was trying to learn at MCED whether to go forward with constrained growth or to take on investors, which tends to set you up for a series of equity sales and eventually to sell your company to another company. I'm trying to figure that out now," he says.

Mingle says that 10 years ago, he wouldn't have predicted he'd start a new company. "It was never my intention to open a new business," he says. But now, "I'm not working with the goal to retire."

Like Mingle, Hulbert is enjoying his encore company, though he admits of starting a company later in life, "I might have been a bit delusional, too."

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