Must Reads

An open source software company called Reductive Labs is coming to Portland with $2 million in venture capital and plans to create 10 jobs in the immediate future. The jobs are welcome, as is the trend behind them.

Reductive Labs specializes in open source software. Its main product, Puppet, helps organizations manage their networks. And according to Mike Rogoway’s Silicon Forest blog, the founders are a pair of Reed graduates who couldn’t wait to set up shop in Portland.

Which brings me to the trend. Portland has been hyped for some time as a Mecca of sorts for innovations with open source software, which has the advantage of releasing individuals and companies from the bonds of constantly paying for the latest Microsoft update. Most famously, Linus Torvalds, the great Linux guru, lives and works here. Oregon’s independent streak and open source software are a natural fit, and there are plenty of smart people out there passionate about putting it to work for the greater good. But for all the hype around open source and the mystique regarding Torvalds, real companies creating real jobs have been slow to develop.

Strike that last blog — the one where I drank the Kool-Aid and waxed optimistic about the coming turnaround. The new unemployment numbers are out.

By now, you have no doubt heard that Oregon’s jobless rate is the highest it’s been since the state began stacking unemployment consistently in 1976. You may also have heard that the job losses in May weren’t as bad as was expected, with surprising signs of life in construction (up 1,700 jobs over April) and leisure and hospitality (up 4,900 jobs over April). Does that mean we’re on the verge of bouncing back?

Wouldn’t it be pretty to think so. Construction and tourism are inherently seasonal, and summer has come to Oregon at last. It’s nice to see the new hires, but how do the numbers compare to a year ago?

Sunday was a day when you couldn’t tell if it was going to rain or shine, so maybe it was that atmospheric ambivalence that kept the crowds away from the Oregon Garden Resort.

I was hiking the exquisite Silver Falls State Park and decided to swing by the new operation to see how it was doing. The garden was quiet and except for a 50th anniversary celebration, the resort was also a subdued scene. Moonstone Hotel Properties of Cambria, Calif., took over management of the financially troubled Oregon Garden three years ago. Moonstone, which owns a network of about 10 inns, most of them in California and many with garden themes, then set about developing the resort, which sits adjacent to the garden, and opened it last September, a spectacularly bad time to open any new hotel.

The recession has hurt tourism around the state: the Coast is under water and even Ashland’s vaunted Shakespeare Festival isn’t immune. The lodging industry is seriously hurting. We reported in March that occupancy rates statewide were expected to drop below 59%, the post 9/11 figure, so when regional general manager Lynda Gill told me the resort was running at 70% occupancy for its 103 rooms, it sounded like good news. A lot of their business is coming from conferences (“We’ve been discovered by the state associations”), and they’re keeping business alive by focusing on the local market, and offering low-priced packages to lure customers.

News that the Oregon Senate passed two bills to raise almost $1 billion in revenue simply reinforces the conclusion that when it comes to taxes, especially business taxes, this state is clueless.

The new tax increase is the proverbial good news/bad news. The good news for small business especially, is that the tax is designed to effect individuals making more than $250,000 a year, and large corporations. Indeed, Senate majority leader Richard Devlin specifically stated that “This legislation protects the middle class by ensuring that households making less than $250,000 a year will not pay any additional taxes and it protects small businesses by focusing the increase on large corporations.”

Look, no one likes paying taxes, but it is equally true that 1) we are in a bad economy and revenue is drying up faster than ink at a newspaper, and 2) in a civilized society, we all have to pony up and pay our joint bills — for schools, roads, etc.

One of our super-talented interns is leaving us, and we hate to see her go, but I have to say I like the circumstances. She was on her second internship with us. The first time she left us because she was hired by a promising young company. Then she came back, after getting her hours drastically reduced at her new job amid fears the business would have to shut down entirely.

Turns out her company isn’t going under. They’re boosting her hours and expanding her responsibilities to keep up with new orders. And they aren’t the only ones climbing out of the abyss. Banks are paying back their TARP loans, markets are rebounding powerfully, the clean tech sector is taking off and even Oregon’s Index of Economic Indicators is showing signs of life, finally. Clean energy jobs grew by 50 percent in Oregon from 1998 to 2007. This doesn’t counter the losses in timber and manufacturing, but it helps. My last six face-to-face interviews have been with two CEOs, an Intel Fellow, a consumer watchdog, and a federally appointed administrator, and not one of them mentioned the economy in ominous terms. That wouldn’t have been the case a few months ago; what else was there to talk about then?

A year ago I was feeling more pessimistic than your average bear; now I’ve got the opposite feeling. The change might have something to do with my quest to find companies that plan to add jobs rather than subtract them over the coming year and beyond. Recent nominees include Bend’s PV Powered, which scored another round of financing this week, Portland’s Stalk Market, which may have solved the puzzle of the biodegradable coffee cup lid (hello? Starbucks?), the fast-growing flash video producer AngelVision and Chinese battery and car company BYD.

Legendary wine pioneer and sustainability advocate Susan Sokol Blosser, co-founder of
Sokol Blosser Winery, recently issued a provocative challenge to Oregon businesses.

“What if, instead of trying to return to the old system, we create a new one?” she asked the audience of nearly 300 at our recent celebration of the 100 Best Green Companies to Work For in Oregon. “Economic recovery doesn’t have to mean we return to over-spending, over-production, over-consumption and planned obsolescence. If we simply return to where we were, we’ll keep repeating the same growth and crash cycle. Can we revise our mindset and acknowledge that we’re moving into a world of scarcity to which we must adjust? Can we move from an ‘all you can eat’ and ‘bigger is better’ mentality to ‘quality over quantity’ and ‘small is beautiful?’’’

That’s a provocative question for Oregon businesses that, like most, measure success by how much they grow in revenue, employees, unit output or customers. Oregon Business magazine itself each year ranks the top 150 private companies in the state by revenue and analyzes who’s up and who’s down. Nearly every chamber in the state gives out annual growth awards to those companies that have grown their employee count and bottom line.

Want to make your small business greener, but, like so many of us, have neither the time nor the bandwidth to focus on it? Then check out Portlander Scott Ankeny’s great site, www.GoingGreenToday.com.

After spending the previous month delving into all things green, I’ve shifted my focus back to greenbacks, or lack thereof. More specifically, I have been analyzing the losses and gains of Oregon’s most important privately held companies. The big picture, as you may have guessed, looks bleak. But there are some encouraging surprises buried in there as well.

I don’t want to give away the results of our annual Private 150 survey, but since that list is ranked by revenues and this blog is devoted to jobs, allow me to tweak the results and offer some insight on who’s shrinking and who’s expanding.

The largest employers among the companies that participated in our survey (ranked by Oregon jobs) area: Avamere Health Systems, Jeld-Wen, Bimart, Roseburg Forest Products, Les Schwab, Harry & David, Shari’s, Swanson Group, R.B. Pamplin Corp and A-dec. Not one of those businesses added jobs in 2008. Jeld-Wen, formerly Oregon’s largest privately held employer, shaved 500 jobs, Ron Tonkin chopped 214. Les Schwab cut 206. Roseburg Forest Products eliminated 200. Leatherman Tool Group knifed 117. I’m running out of verbs here, so enough is enough.

When I heard over the weekend that Portland-based startup Vidoop apparently was shutting its doors, first reported by TechCrunch and then picked up by Silicon Florist’s Rick Turoczy, the first thing I thought was, “Damn, there goes the Next feature for July.”

Admittedly, that’s a pretty selfish thing to think, but we had a feature ready to go on Vidoop’s new CAPTCHA innovation (the company makes Internet security technology). Contributing writer Adrianne Jeffries had interviewed Vidoop software developer Benjamin Stover about using image recognition to fool the robots. It was a nifty idea: the CAPTCHA displays images and asks the user to click several of them in order, which is an easy instruction for a human to follow, but not so much for the web-trolling bots.

Well, sorry Vidoop. You’d been through two rounds of layoffs and it stinks to see another tree fall in the Silcon Forest. And that CAPTCHA idea sounded pretty good. But what about me? Each month we spotlight innovation in our magazine on our Next pages and it’s pulling teeth to get companies to tell us about their cool stuff. So here’s your chance once again. Got a great product, process or idea to share? Just reply here. And do it soon enough and you could be featured in our July issue. We have an opening.

Last week, when I was in D.C. covering the Small Business Administration’s annual Small Business Week for my USA TODAY column, I was fortunate enough to meet Oregon’s Small Business Person of the Year – Tara O’Keeffe.

Tara runs, and is the creative power behind, O’Keeffe’s Company, a line of fantasic, all-natural skin therapy products invented by Tara herself.

While Tara was recognized in D.C. as one of 50 state winners, it was Thursday night in Portland where she received her local honor when the Oregon SCORE chapter and the Portland SBA honored her at an award gala at the convention center.