A burgeoning community of entrepreneurs and tech companies has chosen Maine to launch and grow their ventures.

Justin Hafner could have built his company anywhere. Freshly graduated from the University of Maine, Hafner had plenty of attractive options. He considered Indianapolis, where he already had relationships with potential industry partners. Boston would have made sense, as he’d be closer to MIT, with which the company had done some preliminary research. He could have returned to his native New York. And, like most young tech entrepreneurs, he was not immune to the allure of Silicon Valley.

Justin Hafner, CEO and cofounder of KinoTek, a body imaging technology startup in Portland.

Maine, though, won out. Hafner says he and his team were drawn to the entrepreneurial energy that he’d watched grow in intensity and visibility the last few years. “Unlike other locations, Portland, and Maine in general, provides a stress-free environment with an extensive support system for start-up companies and entrepreneurs,” the 22-year-old Hafner says.

Hafner and a few of his team members, also UMaine alums, moved to Portland and started building KinoTek, which spun out of Hafner’s research in kinesiology. KinoTek uses wearable sensors, augmented reality, and motion-capture technology to create visual images of the body’s muscles and the specific movements they generate. Its first commercial product is aimed at professional athletes, and Hafner’s already fielding inquiries from pro sports organizations and venture capitalists that want to be involved.

Hafner is part of a growing cadre of entrepreneurs who are finding that Maine is an attractive place not only to live, but to build technology startups. “There are so many people here who want to start innovative companies and startups,” he says. “It’s a tight-knit community and it’s really motivating to be part of it.”

Startups have a strong association with Silicon Valley, but national trends are feeding startup activity in smaller cities like Portland. One is the rise of remote work and the decoupling of jobs from physical locations. Today, an employee can work anywhere with an internet connection. All the elements that lent Maine the moniker “Vacationland” now work to attract remote workers and people in interested in technology—not just tourists.

Another is the reality that scaling a business in a place like San Francisco, New York, or Boston is becoming prohibitively expensive, so that smaller, dynamic cities like Portland are increasingly seen as attractive places to launch and scale technology businesses.

Moving back to Maine was a clear decision for Mike Nelson, who returned to the Portland area with his family in 2014 after a stint working in San Francisco. He brought his job as a software engineer at the startup TaskRabbit back to Maine with him. A year later he left to cofound a company called Guideline, which is leveraging technology to improve how companies and employees interact with 401(k) plans.

Guideline Technologies chief technology officer Mike Nelson helps companies and their employees engage with and optimize their 401(k) plans.

Nelson’s cofounders, with whom he had worked at TaskRabbit, remained in California, but it wasn’t hard to convince them of the benefits of growing a team in Portland. Labor and office costs would be less expensive than the Bay Area, and Nelson was convinced that Portland’s talent pool was up to the task. While there are a lot of software engineers in the Bay Area, not all of them are desirable employees, he says; many entry-level developers have nothing but a coding bootcamp on their resume.

“What we find here in Portland is that there’s actually a very high-quality pool of talent, but not the quantity,” Nelson says. “So then it becomes about becoming an attractive business in the area.”

Guideline has succeeded in attracting that talent. It now employs 50 people in its Portland office, including a significant portion of the engineering team. Several people have moved to Maine specifically for a job at Guideline, which is not done hiring.

Luke Thomas is another entrepreneur who made that decision. The Maine native and UMaine alum initially moved to Boston to pursue a career in technology. But he and his wife found living in the city “soul sucking,” and returned to Maine. The move was relatively easy because they were able to bring their jobs with them; Thomas worked for a Nashville-based startup, and his wife, Ali, worked for Thomas recently left his full-time remote job to launch his own software startup, Friday, which is developing a product to improve communication and engagement among teams.

“I moved back in 2015, and there’s a much more robust community of early-stage start-ups now,” he says. “The quality is much, much better. I know of several early-stage companies that have raised institutional investment outside of Maine. This indicates to me that the business quality has improved.”

Ten years ago, Nelson, Hafner, and Thomas likely would not have faced such easy decisions to launch their startups in Portland. They were all, in part, encouraged by burgeoning community of startup founders and tech talent that didn’t really exist 10 years ago.

There have always been technology companies in Maine—high-profile ones like WEX and IDEXX, as well as the under-the-radar ones like Kepware Technologies, which few people knew about before it was acquired for $100 million in 2015. Maine even had its share of startups during the first dot-com boom in the late 1990s.

Bob Neveu, CEO and founder of Certify, has deep roots in the Maine’s technology history and culture.

“It has changed an awful lot since then,” says Bob Neveu, who launched his first company in Portland in 1998.

At the time, Neveu had recently relocated from San Francisco to Portland, where he had previously lived with his family in the early 1980s. He rented a single room above Gritty McDuff’s on Fore Street for $300 a month and launched Recruiternet, one of the first applicant-tracking software companies in the country. It created career webpages for companies such as CVS, Dunkin’ Donuts, and T.J. Maxx, and scaled quickly. It had grown to about 120 people in its Portland office before he sold it for an undisclosed sum in 2002. Neveu and his brother, Alan, who also worked at Recruiternet, went on to launch Certify, which was a pioneer in cloud-based expense management software. Certify was acquired for $100 million in 2017; Neveu remains CEO.

“In almost every conversation I had in 1998–99, back when I started Recruiternet, there was a lot of encouragement in the community, but skeptical disbelief that a software startup could happen in Portland, Maine, and be successful,” Neveu says.

“Now it’s all changed,” he says. “You’d be crazy not to start a company in Maine.”

Today, Portland is home to a new crop of nascent and growing technology companies working in sectors like virtual reality (Driftspace, AMRO Systems, KinoTek), artificial intelligence (Introspective Systems, Omnic Data), fintech (Guideline, DAVO Technologies), software-as-a-service (Friday, VETRO FiberMap), cybersecurity (Defendify), education tech (FineTune Learning, Curriculum Engine), and health tech (MedRhythms, upByte, Shock Analytics, NavigatER).

Tech industry employment in the state has increased every year since 2012, including a 4.4 percent year-over-year increase in software and web development positions between 2017 and 2018, according to the 2019 Cyberstates Report by CompTIA. The economic impact of these jobs is significant, as Maine’s median wage for tech industry jobs is $71,994, almost double the state’s overall median wage of $37,120, according to the report.

Backing these early-stage companies with support and resources is a loose collection of organizations like the Maine Technology Institute, the Finance Authority of Maine, Scratchpad Accelerator in Bangor, Maine Center for Entrepreneurs, Maine Venture Fund, and Startup Maine, which just sent eight companies to TechCrunch’s prestigious Disrupt conference.

As president and chairwoman of Startup Maine, Katie Shorey’s aims to broaden and elevate the scope of the state’s tech offerings.

Katie Shorey, Startup Maine’s president, says Maine’s tight-knit startup community is the state’s competitive advantage. “People are well connected and want new entrepreneurs to succeed,” she says. “Because of this, information is shared, people are introduced to the right resources, which helps accelerate their growth, and there is a notion of helping—it’s not just transactional.”

Shorey points out that the community and energy growing around startups is happening outside of Portland, as well. “Today I see a more connected and dense ecosystem,” she says. “We’ve had Startup Maine’s annual conference for over five years, but now there is Blitz in Bangor, Converge and Create Week in Waterville. Organizations like Maine Community Foundation are including innovation and entrepreneurship in their strategic goals.

Ryan Wallace, director of the Maine Center for Business and Economic Research at the University of Southern Maine, has focused his research in the last several years on trying to better understand the economic implications of remote work. He has parsed federal labor statistics to better understand the migration patterns of remote workers. The region that tops the national list with the highest rate of remote workers as a share of in-migrants is the Bath/Brunswick area, at 6.8 percent. Also placing in the top 30 destinations for remote workers are Cumberland County and Saco/Biddeford, each with 3.5 percent.

Data to verify the apparent surge in local startup activity is hard to come by. Besides the aforementioned tech job numbers and Wallace’s remote work research, most of the national data that tracks things like new business starts and entrepreneur-ship doesn’t discern between a tech startup and a home-based plumbing business, so its use is questionable for these purposes. (Those stats show relatively flat results over the last 20 years.)

Despite the dearth of specific data, Cathy Renault, former director of Maine’s Office of Innovation who now runs her own consulting firm, Innovation Policyworks, cites research from the Center for American Entrepreneurship, a Washington, D.C.–based think tank, that shows entrepreneurship is expanding in smaller cities. “Now everyone is saying all the opportunities are in smaller, dynamic cities, and Portland certainly fits that category,” she says.

“I think there have always been entrepreneurial people in Maine,” says Renault. “Now maybe they’re more emboldened or encouraged by this community to take a shot, where maybe before they would have kept their day job.”

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