The down low on Denver/Colorado

The national buzz is all about creating jobs nowadays, but is metro Denver and Colorado a hot commodity among people who sell cities and regions to worldwide companies as a place to expand or relocate?

Only one of nine business site selectors who were wined and dined over the past three days by Denver economic-development recruiters cited the metro area and Colorado as a current hot spot. And that recruiter suggested the alternative-energy industry -- shaky ground during the current economic downturn -- is Colorado's strongest calling card.

But the site selectors were not brought here to pat Colorado and Denver on the back. The Metro Denver Economic Development Corp.'s annual site-selection conference traditionally seeks out the weaknesses of the area's attractions to national and international corporations in order to improve regional prospects for recruiting a corporate expansion or relocation in the future.

And why should small business in Colorado care? Because big business generates small business growth in an area where it operates. When a big company comes to Colorado and hires 100, 400, or 1,000 new employees, it also must look for local suppliers, construction contractors, maintenance firms and other service businesses -- sometimes even venture partners and bankers -- to accomplish their work.

And new jobs put money in the pockets of dry cleaners, sandwich shops and caterers, landlords and professional sports franchises, gas-station operators, home builders, teachers and government workers.

So what was the lowdown on site selection shared by the experts?

• Outsourcing is being reversed. Companies that sent work to China and India are bringing it back to the U.S., using domestic call centers, data centers, and distribution centers to better serve their customers.
• Companies are collaborating with each other to reduce costs of business services provided by third-party vendors: human resources, legal, some information technology, employee retention.
• Consolidations and mergers and acquisitions are causing longer decision-making cycles, up to 18 months, but when a company decides to "pull the trigger" on a move or an expansion, they want a winning-city bidder to act quickly, sometimes within 30 days, to accomplish what they've promised in their bid.
• Tax breaks and other incentives to lure businesses are being eliminated by some states, mostly for budget reasons; adjusted for different industries by others; and supplemented with cash funds, often under the control of a governor, to close deals in the hottest recruiting states. So the competition among states for new business is fierce. Colorado incentives are still graded a C- to D+ by most economic developers.

And no economic-development organization should assume current local businesses are not being recruited by other states. That's another reason small- to medium-sized businesses should pay attention to what these business-recruitment experts have to say about Denver and Colorado every year.

"You need to be in touch with your local businesses all the time," said Ann Harts, a Kansas City principal of Hickey & Associates, a national and international site-selection firm based in Minneapolis.

Another of the experts, Angelos Angelou, of Angelou Economics in Austin, Texas, said he visits Colorado and other states frequently without notice and when he hears a company has not been visited by its local business-development specialists, he wonders how his own client might be treated by that state if it chose to move or expand there.

"Colorado has never won a project on incentives," Angelou said, based on his experience working within the state. But he said Colorado can compete with any other state based on the talent of its workforce. "Focus on talent. Focus on the business proposition," he suggested to the 400 people in the audience.

Then, referring to Gov. John Hickenlooper who had spoken to the crowd to open the breakfast meeting, Angelou said Hickenlooper's vision of Colorado as a "pro-business" state is as competitive as any of the arguments of hot-spot recruiting states.

"Take the governor to places," Angelou said, "and let him speak." He seemed to think that might be Colorado's sharpest tool in its shed.

Bank failures reflect badly on Colorado

Just as the penny-stock scandals reflected badly on Colorado's business community in the last decade of the 20th century, Colorado's bank failures in the first years of this century -- eight since 2008 -- will reflect badly on the state for some time to come.

You hear bankers in the state still complaining about over-regulation, but you don't hear many calls for crackdowns on the fast-money track records of the failed banks, or for reform of the wide-open-West, free-market philosophy that led to the failures.

In fact, whenever the state's political and business communities cross paths in the wake of such business scandals in Colorado, the word traditionally used is "mum."

The Denver Post's Aldo Svaldi has done some admirable reporting on the bank failures, documenting for instance that the eight banks that failed, between 2004 and 2008, averaged loan-growth rates of 900 percent, while the average of all U.S. banks' loan-growth rates was just 44 percent during that period. At 76.2 percent, all of Colorado's banks' loan-growth rates for the same four years also ran considerably higher than the national average.

Those figures show how fast leaders of the failed banks, and leaders of Colorado banks in general, were running and gunning during the free-market heyday for Colorado business during Gov. Bill Owens' administration. Neither of Owens' successors, Bill Ritter nor current Gov. John Hickenlooper,  have made any move to slow such unfettered risk taking, but to do so would offend the business community each has been dependent on for their election.

So don't expect much more response to Svaldi's reporting than continued "mum." I asked three prominent business figures in town to comment on my thesis for this piece -- that all of Colorado business bears some accountability for the business practices that led to the bank failures -- but none responded to my call.

One former banker told me he knew of several banks that laid off what they suspected were bad loans to some of the failed banks thinking that regulators would catch up with the banks eventually and the process would work itself out. It did. Svaldi has reported that the five banks that failed in Colorado this year will cost the Federal Deposit Insurance Corp. $1 billion.

If you recall, that's about how much Silverado Savings and Loan cost the federal government when it failed back in 1988, when I first came to Colorado. "Mum" never changes things anywhere. Speaking up and speaking out occasionally will. Let's hope Svaldi keeps on writing.

You may have noticed that I changed the name of my blog to The SchwabBlog. Nothing more has been changed about it, not its url address nor its tone. Hope you continue to enjoy.

Let the stock show roam

Copyright (c) 123RF Stock Photos

Let the stock show roam to Aurora and redevelop its current site for the 21st century revival of American manufacturing.

The city of Denver and Mayor Michael Hancock ought to be cutting a deal with the stock show to get a good return on letting the producers of the show out of their lease -- there's no reason not to make them pay for the privilege -- but then use city bond money for redevelopment of the show's near North Denver site to create a world-class manufacturing center.

Make it green as can be by introducing sustainable, environmentally friendly manufacturing plants that actually make affordable products that can be sold in the world market. Use the latest technology and create jobs middle-class men can afford to take and still support their families, and line up a business community that is willing to take a chance on Denver becoming a world leader in this new revolution.

Because it is a new manufacturing revolution. The Chinese are on to it. Barack Obama is on to it. Young men in America are ready for it. And our country desperately needs to lead the world through it.

In Denver, it starts with letting the stock show go. Let the stock show breathe: ride its horses, sell its cows, and sheep and chickens, and promote all of Colorado agriculture, which now includes organics and home-grown fruits and vegetables, wine and beer, flowers and spices, in the open air east of the city where the farm fields of Colorado actually do begin.

And while we're at it, let Aaron Million bring the eastern plains some water to irrigate the crops that can result from a statewide commitment to Colorado farm and ranch families. And let transmission lines be built to carry electricity from wind farms to the places where its needed.

The only things keeping all this from happening in Colorado are environmental activists and the political fear they wield over Democratic politicians who continue to court a liberal base that is no longer big enough for them to win elections here. Democrats need to feel the strength of their middle-class roots and start doing something for the people who have always considered them on their side: labor, teachers, police and firemen, other government workers, the middle-income earner.

Barack Obama knows it. Gov. John Hickenlooper wants to believe it. Our two Democratic senators wish it were true, but are too afraid to stand up against the liberal establishment. State Sen. Rollie Heath has pushed an initiative that might really start to do something for education finance in the state. That kind of political courage is just a start.

The ramshackle pens and muddy parking lots you'll see again at the stock show in January are another good place to start.

Let the stock show roam.

Build some high-tech, clean manufacturing plants, oil refineries and even power plants.

In the Chemo Room: 4 years and still crawling, LOL

I’ve been dying of Stage IV, metastasized colorectal cancer for more than four years now.

That thought occurs to me standing in the sun outside my house in the backyard where a bunch of croquet buddies gather once a week to play a game turned on its competitive head by a former Denver Bronco, Max Leetzow, who likes to sit on a plywood-cushioned bar stool and sing “Grown men playing croquet” as he waits his turn to beat us again, playing with only one hand.

The song, one Max made up, is meant to disarm his fellow players, making light of the play and any serious pursuit of victory. Every word said on the croquet course is meant to distract or dissuade a fellow player from playing to his own advantage. That’s how Max has changed the rules of the game for this bunch over the past twenty years, and everyone plays along.

It’s very competitive; Max Leetzow, is the most competitive human being I have ever met.

We began playing in my backyard before I was diagnosed. So my croquet buddies, in an odd way, have served as one of my first support groups, although many others have joined the fight with me through the years: my three sisters, my two daughters, a retired Chicago cop, two women friends, a formal, on-line support group called Colontown, my doctors and the nurses at Porter Hospital, and now a new cadre of doctors and nurses at University of Colorado Hospital Anschutz Cancer Center in Aurora.

On July 8, I joined a clinical trial for a drug known only by its non-name: MEHD7945A, made by Genentech, a big-pharma company out of San Francisco that wants to find out whether the drug helps, hurts or kills me.

So far, it seems to have helped a bit, but that’s not really the point of the clinical trial I’m enrolled in. It wants to know how bad it hurts at the dose I’m receiving now every two weeks.

The hurt, so far, has been surprisingly, if not pleasantly, mild. And the bit of improvement that I have felt from the symptoms of my cancer suggest I might survive through this fifth year and maybe even long enough to finish my novel.

I’m smiling as I write that.

I think it’s funny; or at least, as my daughters would say, it’s been fun. I have always taught them it’s a dangerous world outside your door, but if you’re careful and not afraid, you should always make sure you’re having fun. After four years of fighting cancer, I still believe that, and they keep asking me if I'm having fun!

Yes, my "fun" principle has been challenged, but as I write my the novel, and deal with the side effects of this new study drug, I cannot deny I’m still having fun. Croquet and Wild Turkey, of course, play their roles in that, too.

But to the clinical trial: I told my study doctor, Wells Messersmith, last week, as we looked over my preliminary scans since starting on the experimental drug, that within thirty minutes of my first infusion, I felt relief from a breathy kind of cough and shallow shortness of breath that my Porter oncologist, Tom Kenney, said would signal the continued growth of tumors in my lungs.

Kenney said eventually, within two years or maybe less, I would probably need to wheel one of those little green oxygen tanks around behind me, and that, generally I would “dwindle” to my death.

I told my sister-in-law as I started the clinical-trial appointments in July that I had no intention of “dwindling” to anything.  Was I being gruff and bombastic? Yes, perhaps an old lion’s roar, as I used to call the barking of old men against the fading worlds of their own times.

But I also am determined. More and more people are surviving cancer for longer and longer periods of their lives. I expect to get something accomplished during the last years of mine.

In fact, I’ve been monetizing this blog, and starting a separate business, www.PioneerHQ.com, with two partners since the New Year, and I fully intend to request my sponsors here to renew when the  calendar turns a full year on their support. But back to the clinical trial.

As I made my report of feeling better and looked at my initial scans, Messersmith smiled, a little too indulgently, and said, “We like patients to tell us when things improve for them,” he said. “We include it in our reports when we discuss efficacy.” You could almost hear “dwindle” repeated in his tone.

But efficacy is not the point of Messersmith's study. My scans backed me up; there was some initial, minimal shrinkage of the tumors lit up in the scans by radiation and a contrast they make you drink that always causes a dose of diarrhea.

The study is more concerned with side effects, and Genentech’s drug is no “spindly-armed,” weak hitter, as Max would call a poor shooter on the croquet court, despite the “mild or moderate” side effects described in the consent documents you sign to join the clinical trial.

After that first treatment, when I could breathe easier, I came home to a long night of fever, chills, crawl-into-bed chemo misery, and after a poor night’s sleep a bit of chemo-exhaustion and even a belated, three-day-later bout of chemo-diarrhea, which is when I’m told all the dead cancer cells get carried out of your body.

Later the next week, my fingers and hands started showing some tiny “splits,” a nasty side effect of Erbitux which has been one of my other chemical little buddies along the way.

The MEHD7945A splits, separations of the skin like thick paper cuts, were hardly as big, wide and painful as the Erbitux splits, so the drug lived up to it pre-consent reviews on that front, although those reviews did not mention splits at all. But again, the drug is being given to me to find out how my body reacts to it.

Also the nasal drip that came with all the other chemical cancer killers pumped into my blood stream over the four years returned within about a week of receiving MEHD7945 as well.

Overall, though, like I said, it's been fun. After a few days post-treatment, you actually do laugh about these minor discomforts, especially if your hope is still alive that the drug with no name might actually cure you.

And I have found that hope, if not LOL funny, still happens to be a lot of fun.

NIMBL, like Jack, jumps to $6 million in three years

"Be like Jack," NIMBL exhorts visitors to its website, www.benimbl.com. Its logo incorporates a man in a business suit jumping over the company name as if it were a candlestick, a necktie flying away as if the action were real.

The image is appropriate. Yosh Eisbart and Michael Pytel have built their SAP software boutique to an expected $6 million in revenues this year -- only its third in business -- by "being agile and being flexible and trying to break ... the previous paradigm of one size fits all," Eisbart said in an interview, where he spoke without a tie and without a suit for that matter.

NIMBL is one of the companies that populates 2,500 square feet in Taxi, the mixed-use commerical development west of the South Platte River near the RiNo art district that I wrote about in April.

Eisbart wanted me to come out and see what the company was doing because its early success brought it to the casual atmosphere of Taxi but also branded it as a local software-implementation company with a national customer base that specializes in SAP: "the largest business software package on the planet," Eisbart says.

That's right. SAP AG, based in Germany, rival to Oracle, IBM, Accenture and smaller computer giants, with $17 billion-plus of revenue, 53,000 employees around the globe, and an icon of  German international business interests. Which explains the well-suited figure in the NIMBL logo.

Michael Pytel and Yosh Eisbart

But if uptight is what you might expect from an SAP specialist, Eisbart doesn't bring that to NIMBL. Instead, he brings expertise. His is a "new-economy business," which is what Kyle Zeppelin called his Taxi tenants last spring, and Eisbart explains with conversational ease how that can save his clients money. Big money.

Big companies familiar with the software-implementation routine know the pattern for these transactions is to sign one of the big-company service providers to a sometimes millions-of-dollars contract, and have an army of consultants (or employees) of the provider descend upon your headquarters and work for months installing and "implementing" the new software.

Gambro USA, a medical-device manufacturer headquartered in Lakewood, signed up for an SAP installation whose end-users would be 400 North American employees spread across the continent from Daytona in Florida to Tijuana, Mexico and 12 other plants. The large provider had already spent nine months on the project but Gambro "didn't feel like they were getting the traction or meeting the goals  of their implementation," so, because of an earlier relationship with NIMBL, "they brought us in tactically," said Eisbart. Within a year, 10 consultants from NIMBL had reduced the 40 original implementation consultants significantly.

Eisbart and NIMBL leveraged that success by making presentations about it at several SAP-customer conventions as the company has grown: from $2 million in revenue in 2009, to $4 million in 2010 and an expected $6 million for 2011. Customers now include Exxon Mobil, Pepsi and Nestle, and in Colorado: Newmont Mining, ULA (United Launch Alliance), and Gambro.

With that list of clients, you would not expect a busy Eisbart to be leading his company's pro-bono work for a non-profit, the Center for Immigrants and Immigration Services, as it helps asylum seekers, torture survivors and war victims, and victims of human trafficking, mostly from Africa, stay in the United States and gain the computer skills needed to hold down jobs here.

"These guys are doing God's work," Eisbart said of the group which he discovered when it applied for a grant from the Rose Community Foundation.

Eisbart sat on the evalutation committee for the grant; after it was awarded, he went further to offer CIIS pro-bono help with setting up a data base for the group's clients, and recruited more pro-bono work from Evolution Marketing Group, which is housed within NIMBL's office space at Taxi. EMG remade the immigration organization's website and is teaching CIIS volunteers how to manage it. NIMBL is providing basic computer classes to CIIS clients.

Frederick Jayweh, the volunteer executive director of CIIS, said the free work Eisbart's companies have contributed to CIIS probably would be valued at $15,000 to $20,000; but more importantly it puts the group in a position to apply for a federal grant next year that might provide some of its volunteers with a bit of salary for the work they do.

A "new-economy business." Helping to get God's work done with computer software.

Chemo 101: a web success story

Kristin Gustafson started marketing Chemo101 even before she launched the website that keeps chemotherapy patients, nurses, doctors and caregivers abreast of the latest information available about life in the Chemo Room.

Gustafson says her Denver-based site has grown like a blogger's dream over the last year, landing a $25,000 ad schedule from Whole Foods because of the marketing buzz she created within its target audience by competing for startup funding in the Pepsi Refresh Project.

That's a fund-raising program run by Pepsi which gives away grant money to make innovative ideas -- anyone's idea, really -- into reality by winning the funds to make it happen through a contest.

KG, as Gustafson calls herself, entered Pepsi Refresh last September at the $250,000 level, but lost out to a much larger organization, the animal protector ASPCA, which was able to marshal many more voters to its cause than Chemo 101.

But soliciting votes for her project from all the people who might use it essentially put Chemo 101 in the minds of its audience even before it was available. The site launched in December, and besides her Whole Foods advertising program, KG is now averaging 30,000 unique visitors to the site per month. Like I said: a blogger or website developer's dream.

And that's as much a reason for writing about her here as the nature of her cancer-related website. Gustafson has started a small business on the Internet in the booming health-care industry which never seems to shrink even as the nation's economy falters.

So KG's business lesson is valuable to many of the readers of this blog whether they come from the blogging world, the cancer world, the small-business world, or even the politics and policy world. Chemo 101 is an example of a successful, small-business startup in a booming industry fueled by the Internet.

And Gustafson has gone about starting that business in an instinctively entrepreneurial way.

Her professional background is in human resources, having worked with health-care, and specifically oncology-related, companies in Minnesota, before moving to Colorado to work briefly with a medical-device manufacturer. She found herself drawn back to oncology and the fight against cancer, however, and so decided to start Chemo 101 as an outgrowth of what started as an HR consultant's practice.

She didn't win the Pepsi contest, so her funding came from her own savings and investments, and she was helped by a friend who volunteered his expertise not only in programming but also in sales and marketing because he had been touched by the fight against cancer in his own life and wanted to "give back" while waiting a few months to take a new professional position.

Chemo 101 was borne of KG's experience with her target audience: patients, nurses, doctors and caregivers from mostly community-based cancer clinics. "Our site is really augmenting what they do in the clinic every day," she said.  "A lot of times from the day that someone is told there's cancer, they're just rushed through the process. And the oncology nurse has fifteen people that she's trying to get set up." So a lot of patients go home from a first treatment with dozens of unanswered questions.

KG's website has the answers to many of those questions. "My idea," KG says, "was build a website for cancer patients to understand their drugs and dollars, ... a resource to understand your chemotherapy drugs, understand the different food and drug interactions, and how co-pays work, and what type of insurance you're on; what questions to ask."

But while cancer consumers were the target audience, Gustafson knew her target market for monetizing the site was big pharma, the huge pharmaceutical companies that test, make and sell drugs that help millions of people fight cancer across the globe.

"My business models started with the thought of I'm going after the big pharmaceutical companies; they are the ones that have drugs in the data base that I have built. They have branded, marketed products that we see ... advertised on TV."

Those companies' oncology products, the chemotherapy drugs pumped into patients all over the world, are the mystery meat of the cancer-treatment industry. Millions of patients, nurses  and caregivers are constantly seeking the ever-changing, latest information about drugs and their side effects in order to ease the patient's struggle to stay alive.
 
And Gustafson, through the website, keeps the information up to date. She uses what are called Food and Drug Administration-approved "package inserts" to describe the chemicals patients receive during chemotherapy. The inserts are the printed material included with any medicine sold to consumers.

But she also has a "resources" section of the site she says will be used to offer information about alternative treatments ranging from use of medical marijuana for nausea to nutrition and diet information geared to the cancer patient. That portion of the site is not yet very developed, but like any site on the Internet, Chemo 101 is a work in progress.

Nurses' desire for more nutrition information, however, is what drove Gustafson to seek out advertising from Whole Foods Market. Surveys she collected at a national meeting of oncology nurses in Boston earlier this year showed nurses ranked a desire for more information on nutrition as high as their desire for information about clinical trials.

"Wow, nutrition is really something I never thought of, and here we've got 40 percent of the nurses saying they would want nutritional information for themselves and their patients," she said. So she contacted a Whole Foods sponsorship program in Boulder and quickly signed up for the first $25,000 of revenue Chemo 101 has generated for itself.

At a later annual  meeting of the American Society of Clinical Oncology in Chicago -- "Kind of the Big Dance in oncology," Gufstason said -- "we met with just about any pharmaceutical company that sells an oncology product that you can think of" and were "walking on air a little bit" with the Whole Foods ads already up on the site.

When you are talking with pharma "Goliaths" like Pfizer or Merck, Gufstason said, "David at Chemo 101 didn't seem so small when you had a partner like Whole Foods."

KG is still working to land other advertising and sponsorship deals that carry Chemo 101 into the future of the fight against all kinds of cancers.

But her one-year fight to start the company: the pre-launch marketing campaign through the national Pepsi Refresh program; her visits to national meetings to build traffic and credibility among professionals "critical" to the care of cancer patients, her primary audience; her widening of her advertising market beyond big pharma to businesses on the periphery of the cancer-care industry; all make for text-book examples of how to build an online small business.

So, even if you don't have cancer, Chemo 101 is a website to watch.

How does government money create jobs?

A question that has lingered through the debt-ceiling debate fiasco, specifically related to the need for stimulating a weak economy, is how can government money actually create jobs?

Gov. John Hickenlooper's administration is working hard to find an answer. It has applied to the Treasury Department for $17.2 million it wants to spend with lenders in Colorado to break their reluctance to fund small-business growth.

Small businesses grow by hiring people to produce and sell more of their product or service, increasing a firm's revenue and profits. The longest running complaint small businesses have had with state and federal policy makers has been that banks refuse to lend businesses money to achieve that growth.

Alice Kotrlik, a long-time valuable asset of the Office of Economic Development and International Trade and director of its Business Finance Division, is in charge of Colorado's application to the State Small Business Credit Initiative, and expects to hear a "favorable" response from Treasury very soon, perhaps within days.

She said the 2010 Small Business Jobs Act, signed last September and so far apparently in no danger from projected deficit-reducing budget cuts, requires the programs using the federal money to be started by states within 90 days of receiving a grant. All of Colorado's $17.2 million, if it gets it, will have to be deployed within two years. So the money will be going to businesses fairly quickly once the state gets its check.

That's good because business finance is a top-of-mind issue in Colorado not only because of political pledges to get people back to work -- create jobs -- but also because past efforts to fund small-business startups with government money have been dismally unsuccessful.

Kotrlic's office crafted her application for the small-business federal funding through Hickenlooper's "bottom-up" economic-development process, resulting in the release last month of the Colorado Blueprint, a document that amounts to a master plan for state governance.

The application calls for distribution of the $17 million through three programs: an existing loan-loss/reserve program run through the Colorado Housing and Finance Authority (CHAFA); an expanded pilot program started last summer that offers angel investors a tax credit for investing in Colorado small businesses; and an altogether new program designed to distribute $14.2 million of the funds by depositing cash certificates of deposit in banks that want to loan money to a small business but are hesitating because of a borrower's shortfall in the value of collateral being used to support the loan.

Kotrlic described the program for me in detail, and it sounds like the only kind of government effort a Colorado bank would be willing to sign up for to loosen up its lending to small business: direct cash infusions of government money they can take if a loan goes sour.

The banks aren't crazy. The reason a Small Business Administration emergency loan program failed in Colorado and around the country in 2008 and 2009 was because the loans -- $35,000 max -- weren't large enough for the bankers to bother with, and because the people who needed them, small businesses already in trouble and at risk of survival because of the economic collapse, were too risky to lend to.

Kotrlic's new program will provide up to 25 percent of loans from $75,000 to $1 million in a cash CD that can be deposited in the lending bank and dedicated as collateral for the loan. The small business owner then can use the full amount of the loan to grow his or her business by hiring new workers and increasing sales and revenues, and pay back the bank over a three-year term.

The state will provide a collateral shortfall for loans up to $5 million, but the percentage of state-supported collateral will drop for bigger loans to the amount needed to cover the borrower's shortfall up to about 10 percent of the loan. Kotrlic points out that 10 percent of a $5 million loan would still amount to a $500,000 cash CD, and she seemed to think that was plenty for the state to give a bank to cover the risk of an otherwise credit-worthy borrower.

That's how government money can create jobs and stimulate the nation's lagging economy. It's government at its best, helping private small businesses break through big-business bankers' reluctance to help Main Street get back on its feet.