A Sitka couple has big plans to spur new business in Southeast Alaska

Sitka might not be the first Alaska city that comes to mind as a potential hub for new business innovation.

But a husband-and-wife team in the off-the-road-system community of about 9,000 wants to change that, launching an organization to spur new business and diversify the local economy.

Ken Sprague and Nickie Knight are the co-founders of Startup Sitka, a business incubator that's launching this month. It's a project of Alaska Small Business Innovators, a nonprofit organization the couple started last year.

"The idea is to really promote entrepreneurial ecosystems as the driver for the economy, to prevent the brain drain," said Sprague. "The idea is that it would be a hub for innovation and entrepreneurs, possibly for the Southeast."

What might that look like? Well, it's not clear quite yet, and the details need to be worked out. But Startup Sitka might eventually provide things like a shared workspace, seed funding, mentoring, business training programs and more for people interested in starting their own businesses in the community.

The incubator is set to launch July 25, as a part of Alaska Startup Week. Its goal is to eventually bring small-business development tools to rural Alaska but with a focus on just Sitka for now.

There's a need for such a business incubator, Sprague said, to diversify Sitka's economy. He said that it might eventually provide tools for other parts of the Southeast.

Sitka's economy is driven primarily by the fishing industry and tourism. Its health care and educational sectors also generate significant wages and jobs, according to a 2013 report from the Alaska Department of Labor and Workforce Development, and "Sitka has made a small-town niche for these services."

The City and Borough of Sitka, with 4,664 people employed in the civilian labor force, is tied with the City and Borough of Juneau for the lowest rate of unemployment in Alaska (not seasonally adjusted) at 4.2 percent. That's according to preliminary data for May from the Alaska Department of Labor and Workforce Development.

Despite all that, it can still be a challenging place to start a small business.

Rachel Roy, executive director of the Greater Sitka Chamber of Commerce, said it's been several years since the town had a business development program (she said there used to be one called Sitka Works).

"I think there is a need to have someone that their focus is knowing exactly who to talk to and what resources there are (for someone who wants to start a business)," she said. "Absolutely, there's a need for that in Sitka."

Sprague and Knight just relocated to Sitka in April from Homer, where they had created Homeric Traders — a buy, sell and trade retail shop — because "more people locally needed to have a space for a direct market," Sprague said. The focus there was on local makers or craftspeople, and the couple found themselves helping more than 20 businesses with things like consulting and networking.

"We really got that spark of, there needs to be a little more support, more networking of entrepreneurs, and that led us to pursue Alaska Small Business Innovators," said Knight. "People can be amazing craftsmen but not know how to turn it into a business."

They realized there was a larger need for business development support but both said it was too difficult to do in Homer. They closed the store due to "financial constraints," according to Homeric Traders' Facebook page.

So the pair moved to Sitka to "start from scratch."

"The challenges here in Sitka — it's a closed-off island," Sprague said. "It's hard for people to just move into town."

That's also a challenge when people are looking for business opportunities, Roy said. She cited the town's isolation as a blockade to entrepreneurship — "our location … creates a lot of challenges and costs" — and one of the biggest issues is transportation in and out of Sitka.

Startup Sitka's goal is to identify all kinds of challenges entrepreneurs might face in their attempts to create startups, and then try to create opportunities. That might include, for example, ways to connect makers in Sitka with ways to distribute their goods in places like Seattle or San Francisco.

"We want to be able to attract entrepreneurs and people on the ground getting things started up, get them an opportunity for a better channel to sell their goods," Sprague said.

Roy is excited for the chamber to work together with the incubator.

"This is kind of one of my dreams: finding ways of having educational programs for small business owners or managers, and even their staff, for those that want to learn about running businesses," she said. "It's expensive for us (in Sitka) to travel and go to trainings."

Alaska Small Business Innovators is pursuing official 501(c)3 status as a nonprofit, the couple said.

As for taking Startup Sitka from its conceptual stage to reality, a lot of work remains to be done. Sprague and Knight need to do a feasibility study that determines who might be interested in such an incubator, where it might be located and how needed and wanted an incubator in Sitka would be.

Startup Sitka also doesn't have any seed funding yet but Sprague said he and Knight are looking at federal sources for money.

Another new program aimed at setting startups into motion just got off the ground in Anchorage. It's called Launch: Alaska, an accelerator designed to help entrepreneurs build their companies. In May, according to the Launch: Alaska website, the first five startups to participate in the program were announced, from a drone company to a business that makes meals tailored for outdoor adventuring.

One part of Startup Sitka's vision is that, eventually, it will help make the area less reliant on importing goods.

"We want to be able to attract entrepreneurs and people on the ground getting things started up, and get them an opportunity for a better channel to sell their goods," Sprague said.

Right now, maritime and food industries seem to be a focus for Startup Sitka, including technologies that could support farming in rural areas. But the possible businesses supported by the incubator could also go much further.