ORONO, Maine — American business lore is rife with the “garage startup” story – with companies such as Google, Hewlett-Packard, Microsoft and others going on to success after literally starting in a garage.
Now a local startup that focuses on the high-tech analysis of the safety of horse racing tracks is starting on the same storied path, moving out of the garage and into office space on Summer Street.
Michael “Mick” Peterson’s venture has two components, Biologically Applied Engineering LLC and the nonprofit Racing Surfaces Testing Laboratory. Peterson, a University of Maine professor, and former Colorado State University colleague Dr. Wayne McIlwraith researched thoroughbred and harness racing horses, tracks and horse injuries over the last 14 years. They invented a mobile robotic hoof tester that uses ground-penetrating radar to scan natural and artificial tracks for possible defects and trouble spots.
And now the plan is to use the technology, data and expertise as the foundation of a commercial enterprise aimed at the $25 billion horse racing industry, said Peterson.
The nonprofit lab doing the research and analysis came first, and the LLC was formed about a year ago, Peterson said. Between the lab and the LLC, they now handle everything done at the track, from the building of equipment to testing on-site, to teaching other people to use the technology. The lab’s role is the analysis of samples and data collected through the LLC. The end product is a report on a track’s surface, backed up by hard data.
Biologically Applied Engineering consists of Peterson and three part-time employees. Peterson said he expects the startup to be profitable this year. The lab employs two full-time employees and five part-timers. Both the lab and the LLC draw heavily on the local population of University of Maine students and graduates for a tech-savvy work force.
The new offices should be open in the next two weeks, said Peterson.
The eventual goal, said Peterson, is for the company to focus on selling services and information. The design for the tester is all open-source — anyone can download plans off the Internet and build one. In fact, a Swedish group just did that, and improved on the design. Peterson’s incorporating the improvement in the next version of the technology.
But the lab and LLC have a robust database of track conditions, readings, and other data, as well as the expertise. The concept would be to take in data collected at tracks around the world, analyze it and produce reports.
This past week, Biologically Applied Engineering signed a one-year contract to provide ongoing track monitoring and related services to the California Horse Racing Board. The company is in its second year of a similar two-year contract with Churchill Downs Inc.
There are several business conditions that would lend to the success of the venture, said Peterson. First, the industry is fragmented. There’s multiple racing jurisdictions across the country, and globe. There’s no one group that imposes track standards — there’s no National Football League or Major League Baseball for horse racing. So there’s an opportunity for someone like Peterson to fill that void, providing professional services based on research and consistency, he said.
And while it’s fragmented, the various groups, and players in the groups, all stand to benefit from track standards that ensure the health and safety of the horses racing on them, said Peterson. So there’s a business case that appeals to the groups’ best interests, as well.
And there’s a barrier to entry, blocking competition from doing the same sort of work, said Peterson. That barrier is essentially the technology itself, and the exhaustive database that Peterson’s group has put together.
To put together the technology that makes the venture work, Peterson has reached out to other small businesses around Maine.
“We have this little cluster of folks who can just get things done,” said Peterson. “And every dollar I’ve brought in is from outside the state — it’s all multiplier dollars.”
He has printed circuit board assembly work done in Ellsworth. Rainwise Inc. of Bar Harbor has supplied the weather stations for various tracks, providing up-to-date data that can be correlated with track conditions. Newport’s dbtelligence LLC built the database. RMBeaumont Corp. of Topsham provided design engineering services, and worked with Alexander Welding and Machine of Greenfield to actually build the technology.
“You can find technology from virtually every sector in this state,” said Curtis Meadow, founder of dbtelligence.
Ryan Beaumont of RMBeaumont, is a Cape Elizabeth native, and got his master’s in mechanical engineering from UMaine in 2007, having started his own company in 2006. He had Peterson as a professor. When Peterson was looking for engineering support for the track testing device, he started working with Beaumont.
Today, Beaumont has three people working for him as contractors, and he may hire his first actual employee this summer. The work with Peterson has been instrumental, he said, and has led to other work on coastal energy projects, as well. Beaumont recently returned from California, where he was doing service work on one of Biologically Applied Engineering’s testers.
Peterson said ideally, he will have companies like RMBeaumont doing service work, and will keep spreading out-of-state racing money among small, highly skilled firms in Maine. The contracts are part of the jigsaw puzzle of work that keep such small companies afloat in a largely rural state like Maine, he said.
“It’s a hard model to support with state policies, but I think it’s more sustainable,” said Peterson.