A big Oregon unemployment-to-booming-startup success story
Kari Chisholm
The Oregonian's Mike Rogoway reports on an Oregon technology startup success story - made possible by an obscure but innovative state program. The Oregon Self Employment Assistance Program allows entrepreneurs to spend their time building a business while they're on unemployment, rather than forcing them to report in once a week about which jobs they'd applied for.
Adam Lowry and Michael Richardson were both unemployed when a tech startup called Vidoop went under. And while they were hunting around for work in 2009, they hit on a new business idea -- serving the booming iPhone app industry with infrastructure services to make apps easier and faster to develop. Along with two friends, Scott Kveton and Steven Osborn, they founded a company called Urban Airship.
While the Oregon program is the result of federal legislation authored by then-Congressman Ron Wyden, it turns out that only seven states have such a program:
The program dates to the original North American Free Trade Agreement legislation, through a provision pushed by the late Sen. Ted Kennedy, D-Mass., and by Sen. Ron Wyden, D-Ore., who was then a congressman. But only seven states opted to participate, and in Oregon only about 2,400 people have taken advantage of it since the program began in 1995. ...
The department reckons that the cost of benefits paid to participants isn't any higher than it would be without the program, since recipients would be eligible for jobless benefits in any case. Sanderlin said a rough estimate puts administrative costs at $100,000 annually.
In an informal "census" this year of enrollees since 2004, Sanderlin said that 77 percent are still in business. He also asked for their companies' annual payroll.
"I was gobsmacked," Sanderlin said. "It was $7,888,210."
Today, Urban Airship has 28 employees in the Pearl District - and powers iPhone apps from clients as wide-ranging as ESPN, the White House, Gowalla, the Democratic Party, and South by Southwest.
All because a few unemployed gents could create jobs for themselves, instead of handing out resumes.
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3:19 p.m.
Jun 8, '11
I should also note that Michael Richardson is a former employee of my firm, Mandate Media, and played a big role back then in conceptualizing and developing the infrastructure of the Facebook-powered BlueOregon.
4:46 p.m.
Jun 8, '11
This is a great program - I used it back in 2003 to start my business. It was definitely 'obscure' - no one in the employment dept really advised me directly about this program. I was laid off from my prior job, but didn't want to claim unemployment since I was NOT going to be looking for a job. I think it might have been someone at the SCORE association that actually told me about the program. Glad to hear it's still around helping people get a hand up instead of a hand out!
10:26 p.m.
Jun 8, '11
And an expansion of this program wasn't part of the Obama stimulus package because.....??????
1:38 a.m.
Jun 9, '11
How would you suggest expanding it? It has all the funding it needs.
10:14 a.m.
Jun 9, '11
More than just 6 months would be great, but you honestly know whether or not a company will make it by then.
Also, it's not nearly implemented in enough states - that's a big factor. This should be everywhere. Hard sell, and hard sell for Obama to put it in the package. It's such an obscure program, unfortunately.
3:56 p.m.
Jun 10, '11
Expanding it would require the other 43 states to participate. That's a state issue, not a federal one. (Unless they're going to mandate that every state do it.)
And yeah, more than six months would be good - but as you said, by six months, the startup should be paying those salaries, not the state.