Local Focus: Duluth

A natural choice: Why Duluth is for many entrepreneurs the perfect place to plant a business

When Duluth mayor Don Ness rode a fat-tire Surly bike to his office in mid-May as part of Bike to Work Day, one wouldn't necessarily think economic development. Cycling, however, plays a key role in his vision for the city. "Duluth is as good as I've seen it in my lifetime," Ness says. He credits businesses making their way to Duluth, developers placing long-term bets on the city, and Duluthians themselves deepening their commitment to their scenic home.

But what particularly excites Ness about Duluth's future is the growing number of entrepreneurs who are drawn to a city that lets them build a business while enjoying nature, culture, and a more casual lifestyle than that found in a big metro. "Duluth has identified and is enhancing a culture that builds on our authentic strengths," Ness explains. That includes capitalizing on the surrounding natural beauty, well-placed green space within the city, and the strong artistic and creative community.

"In the past we used to measure ourselves against Fargo or Sioux Falls and come up short," says Ness. "But those cities aren't us." Instead, Ness has looked for inspiration to such cities as Asheville, N.C., and Bend, Ore. Like Duluth, those cities are in the 75,000 to 100,000 population range, far enough from a major metro that they can develop a unique sense of place, and successful in creating a strong culture for young entrepreneurs. Each is located near an ocean, unlike Duluth, but Ness has never doubted that a similar identity can be achieved next to Lake Superior.

The City of Duluth has invested accordingly. Its earlier support for the Superior Hiking Trail, which now has a 43-mile section running through the city, was followed by its commitment this spring to expand the current 28 miles of mountain bike trails to 100. And that's only the beginning. "This new generation of entrepreneurs doesn't want to spend an hour a day in their car," Ness notes.

Earlier this year, Outside magazine declared Duluth the second-best adventure hub in the world  and tops in the U.S., since the winning city (Kununurra) was in Australia.

Of course, some who grow up in Duluth still feel they can only find success elsewhere, even if they'd prefer to stay home. But many entrepreneurs are flourishing in Duluth, even as the city continues to grow its traditional strengths. "We're starting to see a return on our investment," says Ness. For now, it's a blend of old and new that appears to be working for the city.

Below, a handful of interesting entrepreneurial ventures that hint at the nature of Duluth's evolution.

Marketing moxy

From the heart of downtown Duluth, an online marketing agency has made a name for itself globally while remaining committed to Duluth's creative economy and natural beauty.

Offering social, search, PR, and display expertise, aimClear topped 800 percent growth in the past three years, even as other agencies suffered through the recession. It's projecting 25 percent growth this year and is expanding both its Duluth and St. Paul offices. Company founder and evangelist Marty Weintraub regularly keynotes at some of the largest conferences around the world, while his team circles the globe sharing their expertise.

Despite opportunities to relocate just about anywhere, Weintraub says aimClear remains committed to Duluth. "Winters can be a bit more intense, but we get more work done," he says. That work takes place in a newly renovated space that's focused on enhancing the employee experience. Staff can work at anything from a treadmill desk to a tent while having laundry facilities and a fully stocked kitchen at their disposal. The combination of this space and being in the heart of Duluth is something Weintraub loves. "I've traveled all over the world, and there is nothing more exotic," he says.

aimClear recognizes the value of investing in Duluth. This past spring it sponsored the second-annual Zenith City Social Media Conference, which brings in iconic, nationally recognized speakers and puts Duluth on the map as an online player. And the company draws 30 percent of its overall staff from college graduates within the city of Duluth.

Weintraub says that Duluth is rich with higher education opportunities and that by creating a solid partnership with local universities, he can draw from a pipeline of local talent. "With the right training and opportunity, these students excel," he says.

Brewery capital

As CEO of Duluth's newest brewery, Bryon Tonnis is gambling big on the area's noted high quality of water. This past spring, his Bent Paddle Brewing Company became the latest and largest addition to the city's growing craft brew scene.

Tonnis, once a student at the University of Minnesota Duluth, didn't necessarily see himself staying in the area. After graduation, he moved to Portland. But, he says, "once I left, I realized how much I loved Duluth and wanted to move back." His wife Karen, who he met in Duluth, felt the same - and encouraged him to pursue his dream of opening a brewery. "We like being outside, which makes this place perfect. Plus, the water here is wonderful for brewing."

Tonnis and his team felt that Duluth, with its area colleges, adventurous spirits, strong sense of community, and already-great reputation within the craft beer community, would make for an excellent base.

Since he's returned to Duluth, he says, the city and community have been receptive and worked hard with him and his partners to make Bent Paddle happen. The cost of the new facility topped $1 million, with financing secured from a variety of sources. Bent Paddle now boasts a 30-barrel brewhouse, a taproom, and a canning line operating out of a 10,000-plus-square-foot warehouse in west Duluth.

As for the company's name, it represents the passion Tonnis and his team have for canoeing and all things outdoors - and captures the spirit of adventure found just outside the brewery.

Eco chic

In the mid-'90s, two brothers and a friend, all originally from Bloomington, decided to make a living building skate parks from recycled materials. They initially located their company, TrueRide, near Hamel. But as the business quickly grew, it didn't take long to realize they could get more space for less money  and live in a more adventure-friendly city  by relocating up north to Duluth.

When they began networking with Duluth's business community, "we were very well-received," recalls Greg Benson, one of the brothers. "We were a startup in manufacturing, which there were a lot of resources for. We also received a lot of encouragement from the chamber and city."

Once headquartered in Duluth, the three looked for other ways to succeed in business while staying committed to the environment. They learned how to turn excess skate park material into cutting boards and founded Epicurean, today a maker of eco-friendly kitchen tools. They also started Loll Designs, which manufactures eco-friendly outdoor furniture.

In 2007, they sold TrueRide to a California competitor and focused more heavily on Loll and Epicurean. About three years later they started Intectural, a distributor of innovative architectural materials geared toward conservation and sustainability.

Today the three companies share a sleek space called the Hawksboots Sustainable Manufacturing Facility  designed with the help of noted Duluth architect David Salmela  and ship products to 50-plus countries, generating combined annual revenues of more than $15 million.

Benson sees no reason they'd ever leave Duluth. For one thing, the location is practical. "Being in the middle of the country makes great sense for our business," he says. Epicurean ships material in from the West Coast, Loll from the East Coast.

Beyond that, Benson says he can't imagine leaving Duluth because it offers everything his core staff loves. "The trails, rivers, lake, winter sports  that's why we like it here. We have easy access to all the things we love right in our backyard."

Sweet results

Jon Otis lives for exploring and trying new things. Once a smokechaser with the Department of Natural Resources, he now works as a Duluth firefighter by day and an entrepreneur by night. "Once I settled into Duluth, I got into gardening but wanted to add something special to it," he says.

That something special, it turned out, was honey. "Honey is treated as a commodity, but the truth is, local honey by a local farmer has a very distinct taste that is only available from that person at that particular moment in time," Otis says. It was this fundamental fact that inspired him to create the Lake Superior Honey Company.

Today, Otis has hives in six locations throughout Duluth, each offering a different flavor of honey based on what the bees can forage on in that location. Each location allows the bees to sample from a variety of community and urban gardens, he says, providing a higher quality than wildflower honey but something more creative than honey from a controlled single source.

So far his strategy seems to be paying off. The company is entirely sold out of product, with a waiting list of tourists and locals alike. Late last year, Otis completed a well-received Kickstarter campaign to grow his business. In the next few years, he hopes to add more hives along Lake Superior, providing additional lines of honey.

He's also focused on emphasizing the community aspect of his business; for instance, the company is offering a limited-edition honey that's accompanied by a limited-edition piece of artwork that showcases the honey's area of origin.

Regardless of how the business grows, Otis knows he'll only do it as long as he can stay in Duluth. "I've had other opportunities to do many things, but Duluth keeps me here because of the lake and the outdoor activities," he says. "We can keep bees anywhere, and I can find a job anywhere, but Duluth is special. The current city council and Mayor Ness have been working hard to turn Duluth around and make it shine."

They appear to be succeeding in those efforts, based on the deep enthusiasm for Duluth shown by Otis and other local entrepreneurs.