November 11, 2011
Craig Settles, Industry Analyst
Connecting Communities: Fun and Games Drive Small Business Broadband Adoption in Vermont
Calendonia, Essex and Orleans Counties, Vermont
( http://vtrural.org/ )
When was it started?
The Northeast Kingdom (NEK) of Vermont (Caledonia, Essex and Orleans Counties) has had Internet access services for at least 10 years from Verizon and several cable companies, and for five years via small wireless projects in parts of the region.
How many miles, what technologies, what speeds?
The three counties comprise over 2000 square miles. Spotty coverage consists of some wireline and some wireless. Speed ranges from 10 – 14 Mbps to 256K from a wireless network using a T1 line for backhaul.
What do services costs to businesses? Individuals?
768K DSL: $20-$25/month for individuals, approximately $50 for businesses. Basic cable Internet service: approximately $45 for individuals, $80 for businesses.
Who owns the network?
Private-sector companies own the respective networks, including FairPoint, Comcast and Charter.
Who (what organization) was the primary driver of the project?
Laura and Al Duey of the Vermont Council on Rural Development (VCRD) have been the driving force for broadband for years and presented the e-NEK project to the organization.
Summarize the economic benefits of the network has brought
Difficult to determine since e-NEK broadband projects started as economy hit downturn. There is anecdotal evidence of businesses increasing sales because of Internet access, but formal analysis won't begin for several months.
The Northeast Kingdom (NEK) of Vermont consists of the three most northeaster counties in the state of Vermont that are also three of poorest with chronic unemployment higher than the state average. The economies in these counties have been stubbornly resistant to turnaround efforts.
When all else fails, maybe it's time for some fun and games. No, seriously. With conventional economic development efforts unsuccessful, and a bad situation getting worse, this is a pretty good time to think outside the box. So, in 2010 Al and Laura Duey of the Vermont Council on Rural Development (VCRD) developed a plan to execute a region-wide contest for the small business community.
The Duey's had been advocating for quite a while to get more businesses linked to the Internet as a way for struggling small enterprises to open up new markets via the Web and increase sales. But they were having an uphill struggle given the poor state of broadband: no coverage in many areas, 256K on a wireless network with weak backhaul, satellite Internet access that doesn't work in the winter (Vermont has really long winters, so how good is that).
For the areas that do have reasonably adequate access speeds and quality of service, VCRD faced other hurdles. As is the case with many small businesses everywhere, most small NEK business owners are incredibly busy with day-to-day operational issues, and often need a tangible incentive to plan and implement something new. The Internet definitely qualified as something new.
The e-NEK Project was started prior to 2010 to exert a concentrated effort on getting businesses connected to the Web, and then creating a test bed of activities, processes and applications that deliver broadband benefits to three or four towns. VCRD would then define best practices through these efforts that would be used in other communities throughout the region.
To overcome the "we're too busy to be bothered" syndrome, the Duey's turned to a tactic that had worked in 2007 for the Northeastern Vermont Development Association (NVDA), the Regional Development Agency for NEK. NVDA organized a region-wide contest for small businesses where contestants created and submitted formal business plans for their existing or planned small ventures, and competed for cash prizes. Laura Duey recalls, "Around 35-50 businesses participated in that contest. Not only did entrepreneurs launch businesses based on those plans, but participating also helped some realized before laying out money that their ventures likely would not be profitable."
e-NEK partnered with the Vermont Small Business Development Center to launch "Internet Biz – 2010: A Contest for you Future," that offered cash prizes to participants. Instead of requiring a comprehensive business plan as in the NVDA contest, small business owners entered the e-NEK contest by submitting a project plan for a new use of the Internet in their existing or planned businesses. In addition to the contest, e-NEK also offered seminars and Webinars region-wide to educate both contestants and non-participants about the value of broadband.
Particularly valuable was the contest "mentoring" forum e-NEK created. Laura states, "We built an online forum, seeded it with various categories (such as Technical Internet Questions, Financial Questions, etc.) and recruited mentors with knowledge in each area to respond to questions. All contest and education participants were enrolled in this forum. Several web developers attended the education sessions, and offered to speak with attendees offline. We encouraged contest participants to work with web developers to do their plans so they could come up with reasonable costs and outputs. Several contestants took advantage of these offers, but I don't have any specific statistics."
A steering committee was recruited to help guide the formation and the execution of the contest. The members included the Duey's and eight representatives from local businesses, the regional economic development agency, the Small Business Administration and the Vermont Small Business Development Center.
The e-NEK Project provided $15,000 in Web-related services as prizes for the best plans, which had to be used to help implement these plans. However, the steering committee felt strongly that cash prizes also were needed in order to attract more participants. E-NEK solicited local businesses and Internet service providers to become contest sponsors, and eight provided $7,000 to be awarded as cash prizes in addition to the services awards.
The contest and seminars were advertised in all the regional newspapers, as well as on the local radio. Local banks and agencies that deal with small businesses distributed flyers and brochures. Emails were sent to about 1,600 local businesses by the e-NEK project, and additional emails were distributed through local chambers of commerce and other business organizations.
Most of the ads and other expenses such as developing the education materials were paid for by a USDA Rural Development grant," Laura says, "and, since they were paid for by the US taxpayers, the materials are available to anyone who would like to try this elsewhere. The cash prizes could not be funded by the grant, and were donated by local businesses and telecommunications providers."
The outreach efforts paid off. 110 small business representatives participated in the program, either registering for the contest or attending the education, or both. Representatives from 65 small businesses attended one or more seminars. 51 businesses submitted a preliminary plan, and 43 of these plans were refined into final submissions.
Keys to Success
- The education helped prepare business owners for the contest, and also reached additional businesses that did not participate.
- The contest format and cash prizes were important for getting busy small business owners to participate and subsequently get online.
- Having a two-tier submission process helped. The initial Descriptive Summary, due about a month before the Final Plan, had simple requirements and was not judged. This ensured that the participants had a concept for their final submission with sufficient time to complete the work.
- Winners of all the service prizes had to use them within a few months of the award, forcing them to complete their plans and hire web developers quickly to implement.
- Most of the services awards were used to hire local web developers, which kept the funds in the local economy.
- Many of the contestants who did not win prizes used their own resources to execute the plan they developed for the contest.
As testimony to contests' power to boost small businesses' use of the Web and creating entrepreneurs, organizations in Kansas City, KS and Chattanooga, TN launched similar contests offering hundreds of thousands of dollars in prizes. The use of seminars and mentoring are value-added features everyone should consider when running contests. They draw entrepreneurs beyond participants onto the Internet, everyone going using the Web are better prepared for success, money spent for services stays in the community and service providers are drawn in by seeing a greater ROI.
Craig Settles is a broadband industry strategist, marketing expert, author and speaker. He helps municipalities and organizations use broadband technologies to improve operating efficiencies and boost local economic development. In addition, he is frequently called upon as source of broadband expertise by leading media outlets.