Concentrate - Blog

On leadership: What is the real cost of obstructionism?

Jeremy Peters — Wed, 03 Oct 2012 00:00:00 -0400

Is the price of leadership and results an aversion to gridlock? We ask leaders to find solutions and get things done, but lambast them when they're not done exactly to our liking. What, then, do we pick elected leaders to do? Do we pick them to obsess intensely over the minutiae or trust them to take a long view? Where does trust come in? Has the tenor of politics changed? Do we no longer trust our elected officials to make good decisions, irrespective of their history and background?

I don't pretend to have the answer to any of these questions, but they're worth pondering as our neighborhoods, cities, states, and nation meld and model into new forms.

As gridlock has beset us in Washington, and the pall of partisanship has eroded progress in Lansing, it seems that a vocal minority, some of whom who have managed to get themselves elected to local government, are bent on taking an antagonistic view to policy ideas presented. Indeed, how do we move forward if one of the four wheels on the car is intent on driving in the opposite direction?

Some choose to give up. In this, antagonism fails our citizens. We have bickered and been unwilling to compromise so long that some citizens choose to throw up their hands in disgust and remove themselves from civic engagement. What some may view as a failure to engage, or a failure on behalf of that individual, I view as a failure of our elected officials. The more one's heels are dug into the sand, the less likely we are to compromise, and thus exceedingly less likely to move policy forward to tackle any of the myriad of problems that plague our cities, nations, and state.

On the whole, Ann Arbor is a town that is fairly well off. Objectively, our standard of living is quite high. We have a university in our midst, up-sided property values, and public services that (though some complain), are active, effective, and ample. Not every community can say that. Whether or not we realize that we have much to work with becomes beside the point if there are loud elected voices bent on proclaiming the end is nigh: and as you go to the polls in November and beyond, remember the balance that must be weighed out.

The places we live in are forever changing: people move in and out of them. The dynamics of traffic, pollution, environment, commerce, retail, and everyday life are not static, nor should they be. The fact that humans live in spaces necessitates their fluidity. As one family outgrows an abode, another moves into it – and on the whole, there's a stasis – a balance, if you will.

If we build too many houses, the value decreases to the point where we cannot sell them for the cost of materials put into them. If there is high demand, however, to live in a certain area, then prices rise. Ann Arbor residents know this well, especially anyone who has rented. That's not wrong, it is just a matter of reality. Sure, we could seek to legislate our city back to the 1980s when things weren't so out of control, but that does little good to change the matter at hand: Ann Arbor is a desirable place to live.

It would behoove those in local government inclined to nitpick and place barricades in front of progress to realize the effect of their actions – I'm not advocating for unbridled development, just as much as I believe that a keen eye toward the specifics of policy is important, but there must be a means to an end.

I'll be honest, I tend to reject the arguments of folks who want to return back to something, or are interested in preserving what once was – not because I don't long for that past and simplicity, but because I understand the impracticality of it. We are now here, and thus we must try to find solutions to the problems that face us, not return back to the page we just read to revise our response.

What I hope for, however, is the real possibility that enough calm voices arise urging that we be pragmatic about things – if opportunities present themselves we should not simply shy away from them but embrace them for the future potential they withhold. It is, of course, appropriate to consider the risks and consequences, but I remain intensely optimistic that these voices maintain focused on not nitpicking for the sake of obstructionism, but try to find the good in proposals and work to improve them.

This simple, yet important change of mindset is key to the end goal of a government: bettering the lives of those who employ it and whom it represents. If we come to the table hell-bent on the goal of preventing a certain thing (be it a train station, an apartment complex, a structure, a park, or an improvement) from happening, then we cannot ever come to a point of understanding, and that is a disservice to us all. I don't pretend to think that each representative isn't doing what they think is in the best interests of all of their constituents (not just the vocal ones) but another head check would serve us all, and our futures (and those of our children) well.

On Place and Beauty: Or, Why I'm Voting for Proposal B, and You Should Too

Jeremy Peters — Wed, 03 Oct 2012 00:00:00 -0400

Places are living things, at once having an effect on the people who reside within them from day to day, and those who come across them in passing. The effect, however, that they have is completely up to the leaders, voters, and residents of a place. It comes down to deciding what exactly a community represents, how it represents itself, and how its citizens and visitors perceive it.

My hometown, Ann Arbor, is full of public places. In the city's long history, we've taken care to include ample parkland in the vision of our city, and have attempted to maintain this focus as we move forward. A walk around town yields small squares to gather and eat lunch, tree-lined parks, small vistas, and facets that the populace of a vibrant city deserves. Looking outward from the city's center, Ann Arbor not only has a large number of smaller neighborhood parks, but a series of larger, activity-focused spaces as well.

More than just green space, what are these things, these places, if you will? What makes a public place something memorable, that evokes a response, and that makes you want to return? For some, it is that space's usability: the number of park benches or ball fields, the quality of the grass or the height of the trees (yes, that pun was on purpose); for others, what the space means to them is more of an attraction: for me, my memories of playing softball in West Park, or seeing a play in the Bandshell there, or exploring the wetlands at Mary Beth Doyle Park, or eating lunch with a friend under the gaze of the Arch sculpture in front of the People's Food Co-Op. To some, these places are simply a line item in a budget.

In all likelihood, the most responsible way to think about these places is an amalgam of all the above. But when it comes time to make a decision about it, I'd argue that what makes our city memorable is its beauty. Ann Arbor is not just a city, but also a place that people are keen to visit, where we're proud to live, and a town longed for by those who've had to move away.

Part of that rose-colored vision is the memory of a city that imparted upon them good feelings, and I'd argue that a good deal of this comes from the care that we take as a community to create a welcoming atmosphere. That atmosphere owes much to the citizens of our town, and to our reputation as a place of learning and culture.

We are known across the state (and even outside of it too!), as a cultural leader, and it is a proud banner that Ann Arborites can bear.

For a city with a long commitment to the arts, welcoming illustrious artists such as Arthur Miller, Bob Seger, John Sinclair, and Ken Burns among our ranks; a storied Art Fair; numerous galleries and a downtown art center; performance venues that rival many major cities; and museums to match, it seems only natural for people in such a cultural center to decide that a commitment to the beautification of public spaces is important to them, and now there's a chance to put that commitment into action in the ballot box.

Ann Arbor has decided to join the ranks of countless municipalities across the country that have made a strong commitment to art in public places by placing a small millage on this November's ballot. The average homeowner will pay less than a dollar (yes, less than a cup of coffee at Sweetwaters) per month to invest in the beauty of the city we love so dearly. It is cheap, smart, and an investment not only in the future of our town, but your own property values as well, when push comes to shove.

So much of what we take for granted here is not found in other cities, and it pains me to think that being so blessed, we run the risk of missing an opportunity to build upon the great foundation available here and cement our reputation as a cultural mecca. I hope you'll join me in strengthening our city by voting yes, with me, on Proposal B, in November.

Making sense Out of "Greenalese"

Drew YoungeDyke — Wed, 19 Sep 2012 00:00:00 -0400

There is a popular saying in Michigan that state supreme court elections are usually decided based on the Irish-ness of the candidates' last names. Unfortunately, that's about all that many Michigan citizens know about their highest court. The Michigan Supreme Court, however, can have a significant impact on the land, air and water that defines our state.

With that in mind, the organization that I work for – the Michigan League of Conservation Voters (LCV) – partnered with the Environmental Law & Policy Center at the University of Michigan Law School to help Michiganders make sense out of the legalese and understand how their elected justices affect their environment.

Law students have researched and summarized cases dating back to 1982, and Michigan LCV applied an analysis to the summaries to help readers quickly understand the impact that the Court can have on Michigan's natural resources.

The finished tool is called Green Gavels and is hosted on the Michigan LCV website. It informs conservation-minded citizens on issues about which they care deeply. By going back 30 years, it surveys every conservation decision made by every sitting Michigan Supreme Court justice. Green Gavels shows the impact the Court can have on conservation. Justices have individual profile pages which list how they ruled in each case, and a scoreboard which shows all of their ratings together.

So that citizens need not be legal scholars to understand Green Gavels, Michigan LCV provided ratings and analyses on cases and judicial decisions, as well as a glossary of any legal terms used.

Aldo Leopold once wrote, "A thing is right when it tends to preserve the integrity, stability, and beauty of the biotic community. It is wrong when it tends otherwise."

While it was tempting to apply that standard to the cases, we recognized that many of them will be decided on legal issues which sometimes have little to do with their ultimate environmental impact. Therefore, we gathered an advisory panel of experienced Michigan attorneys - including a retired Michigan Supreme Court justice - to review our ratings and analyses to ensure that they are fair and objective.

Michigan courts often decide cases with conservation impacts. Few go before the Michigan Supreme Court each year, but those that do have significant impacts. Their decisions guide how all lower courts decide conservation cases, too.

Unfortunately, many Michigan residents know very little about our Supreme Court. Green Gavels bridges that information gap by providing citizens across the state with an objective tool to gauge the impact of sitting Supreme Court justices, helping Michiganders make sense out of the "green-alese."

People, Places and Politics

Drew YoungeDyke — Wed, 19 Sep 2012 00:00:00 -0400

It's easy to get turned off from politics during election season, unless you're a political junkie or policy wonk like me. Ads turn negative, rhetoric gets ridiculous, and candidates talk past each other with contradictory claims about what their platforms will or won't do. We can't afford to disengage, though; the action that happens in between elections is too important.

I track and analyze environmental legislation for the Michigan League of Conservation Voters, the Ann Arbor-based statewide political voice for protecting Michigan's environment. It's a perfect fit for a lawyer and outdoor enthusiast, because I can use my training to benefit the places I love. It is this first-hand look at how legislation proposes to affect those places, though, that makes me realize just how important elections are.

You see, very little of the legislation that gets introduced – or even passed – makes the news. Some of it wreaks absolute havoc on Michigan's environment. For instance, bills were passed this year to allow expanded development on sensitive sand dunes and limit the amount of land the state can own and protect. Just this past week, a bill was introduced to eliminate the Michigan Department of Natural Resources' ability to protect biological diversity and a new bill is expected to force land conservancies to allow motorized access, or else force them to pay property taxes.

You probably won't hear a lot about these issues between now and November, unless you subscribe to Michigan LCV's newsletter, of course. You'll hear about election shenanigans and accusations about candidates, but don't let that dissuade you from looking underneath the politics to look at how your candidates' policies will affect your favorite places.

Underneath all the mud-slinging, the ads and the rhetoric, there are real issues at stake which deserve your attention and your vote. After all, your ability to walk a quiet trail in a nearby nature preserve without diving out of the way of a four-wheeler might depend on it.

Does Your Customer Service Suck?

Steve Pierce — Wed, 22 Aug 2012 00:00:00 -0400

Several years ago I was in a meeting with an executive from a large computer company trying to resolve problems with a soon to be released software product. My job was final testing of the software and training their support staff. The release was not going well. In fact, it stunk.

The software was way behind schedule. Hardware that was supposed to be available wasn't and early adopters were up in arms threatening to withdraw contracts if we didn't get things fixed and fast.

I kept trying to explain to the head of tech support his staff wasn't ready. He kept saying he was and said it was my fault the software was late. That part was true, we were late. I wasn't helping things; every time we ran through our test suite, we kept finding bugs. Yet, I knew we would soon be ready with the software, and I also knew if we had crappy support, no matter how much better this new version, customers would revolt.

I was getting nowhere with the manager and was finally brought into the CEO's office for some talking to about my attitude and lack of team playing. Furious, I sat there as they ripped into me. After a while, realizing I wasn't saying anything, the CEO turned to me and asked me if I had anything to say.

I reached over to the conference phone on the table and called the 800 number for tech support for his company. The call was immediately put on hold. Two minutes passed; five minutes; then eight minutes. The tech support manager sat there glaring at me. At 10 minutes, the CEO said, "Alright enough, I get it."

I would love to say the company saw the light and fixed their problems. They didn't. They were bought out several years later by another large company that spectacularly went into bankruptcy this past year. Was their tech support problem part of the problem? Yeah, it was. They knew their support sucked, but never could figure out how to get it fixed.

What too many companies fail to understand is what happens when a customer calls for help.
Comcast, a company most people love to hate, has one of the worst phone systems in the world. As a business customer with multiple accounts, I dread having to call them because I know it is going to suck.

One of the problems is having to enter your 16-digit account code. Get it wrong, and you start all over. Then you have to enter it time and time again as your call gets routed without ever talking to a human.

One well known secret to calling tech support is to not enter any account numbers or phone number when you call. That way your call isn't ‘directed' by the interactive voice response system, or IVR. Instead you get to a human, describe the problem, and they transfer your call to the right department.

Comcast doesn't work this way. If you don't enter in a number, you are stuck in an endless loop. The system will never hang up, nor will it transfer the call to a human. However, while I work in the 734 area code in Michigan, when I need to call about one of my accounts in another state, the IVR just pukes. The computer looks at my area code and determines the call is coming from Michigan but I am calling about an account in New Mexico; therefore, that account can't be right. The IVR doesn't transfer me to Michigan or New Mexico; it transfers me to their New England call center which can't look up my account info. They then transfer me back to Michigan and the first thing it asks is, please enter your 16 digit account number.

Worse, after 5pm, my business call is not transferred to New England; it is transferred to residential tech support. They can't help either.

What I wouldn't give for just five minutes to show the head of Comcast tech support their IVR sucks.

Yet Comcast residential service has a very cool service, one where the IVR will call you back while still keeping your place in line. The process is simple. Instead of leaving you on hold for minutes or hours, the IVR system will record your name and number and then when your place in line is nearing the front, the IVR will call you back and after a minute or two, you are talking to a live person. Problem is this system isn't used for business customers because too many business customers have an internal phone system with extension numbers and the IVR has no way to direct dial extensions.

We all have these sorts of stories about other companies and bad support. From Sears to Bank of America, we can all tell you horror stories of calls left on hold for hours. My favorite is when the office is about to close and you are still on hold. You know the office has closed when suddenly your call is automatically disconnected.

Call back and the after-hours prompt says the office is closed, please call during regular business hours. I did call during business hours, your stupid #^)#%^)@ hung up on me. Grrrr.

OK, so we know other companies' support center sucks, but wait, have you ever called your own company's service department or help desk? If you haven't, reach over and call right now. I will wait for you. OK I am waiting … more waiting … still waiting …

OK, good, now you are back. While you are on hold, I will finish the story. Comcast's problem could be fixed if someone from their company would simply test their own phone system to see the hell their customers go through to reach a support technician.

The solution is simple: it is called Secret Shopping. You need to secret shop your own company. And not just once; it needs to be a regular part of your business. Executives and managers should regularly call into their customer service center or help desk. If you need an account number to get service, have them set up an account for you and fire anyone that flags the account for special treatment.

I am convinced if the CEO of Verizon had to call into tech support instead of handing his phone to his assistant and saying, "Here, fix this." Verizon tech support wouldn't suck.

Oh, by the way, this goes for internal help or services desks inside your company as well. You need to find out what happens when your own employees call for help. And don't call them from your office phone, they know your extension number. Call them from the front desk, the bullpen, and see how your employees are treated by your own support staff. You will be shocked.

We see some of this in the TV show, Undercover Boss, where the CEO of the company goes undercover in their own company, usually in a disguise. While fun to watch, you would think some junior guy just starting out probably doesn't rate a full-blown TV crew following them around. If you are one of the other employees, you have to sort of wonder if something is up. But the concept is good. If your company is in the burger business, taking off your tie and flipping some burgers is probably a very good idea. Tom Peters used to call this Management by Wandering Around, though some claim Abe Lincoln did this by informally inspecting the troops during the Civil War.

I think aimlessly wondering around is like a blind pig looking for a truffle. The pig might find a truffle, but he could just as easily starve. Wandering around looking for problems is probably not a good use of your time. However, I do agree that simply wandering around is a good way to better see your business in action. But unless you want to see what happens when your customers are wandering around looking for help, this approach isn't the best.

Costco uses a different approach. The managers come in and do a thorough walk around the entire store, with department managers in tow. It is a grueling couple of hours and it is tough on managers and staff that aren't prepared. I have been in enough Costcos over the years that whenever I see one of the hives making the tour, I go up and ask a question. Like, "How come you stopped carrying Doritos?" or "The O.J. used to be in aisle 12, but now I can't find it." And then I wander off looking lost.

So how is that call going? Are you still on hold? You are? OK, I will keep going.

Companies will also hire secret shoppers to routinely check up on the company and provide continual feedback. But you have to watch out. Employees will oftentimes figure out who the secret shoppers are. I have been in places where in the back room, they will post up a list of names or descriptions or patterns used by secret shoppers. I have even seen managers pay employees for spotting the secret shopper.

People are people. If you measure teachers' performance by the scores of their students, don't be too surprised that teachers will teach for the test. Employees will figure out a way to game the system.

Your job is to make sure employees and managers understand that instead of trying to game the system, the goal is to provide good customer service. Reward employees that excel at customer service, punish or retrain those that don't.

The first step to providing better customer service is answering the phone. If the IVR is the barrier between you and the customers, get rid of the IVR or make sure that it is programmed to handle all sorts of input so it doesn't loop the customer through phone help.

Now back to your call. Are you still on hold? If you are or have had to enter your 16 digit account number three times only to be asked by the support representative for your account number, well now you know you have some work to do. At least you know what your customers are going through and when you fix it, your customers will thank you.

Fire Your Employee

Steve Pierce — Wed, 22 Aug 2012 00:00:00 -0400

I was talking with a manager a while back and she was bemoaning the fact that employees seem to be getting worse and worse. She kept saying, "If I pulled that sort of crud when I was just starting out I would have been fired."

I asked, "When was the last time someone was fired for poor job performance?"

"In the last five years, never," she responded.

Are you kidding me? Never.

I asked, "Do you ever return things you buy?"

She said, "Yes, all the time." She had just returned a door handle that didn't fit to the hardware store.

So you are telling me that you made a mistake and bought the wrong door handle, but in five years you have never made a mistake and hired the wrong person?

Now I am not suggesting you fire someone for fun. And there is a big difference between a door handle and a person. If you start treating employees like door handles, the next person fired will likely be you.

But what this manager was complaining about was the lack of fear, and complacency by her employees. Fear is a powerful motivator, but if there are no consequences for failure, then why try? Worse, bad employees were bringing the rest of the organization down.

Using fear to stifle innovation and risk taking is bad. But a little fear is a good thing. If you aren't pulling your own weight you could find yourself collecting unemployment. Fear is a wonderful attitude adjuster and improves productivity.

In the world of a little is good, a lot is bad, don't do what one Silicon Valley firm does. They grade all their employees on a curve, which means during each cycle, 20% of the employees on a project get a failing grade. That means even on a great team with everything clicking, someone is going to get a bad review. That is dumb.

It leads to employees undermining each other and primping themselves up like peacocks whenever the manager is around. It also leads to higher turnover and good teams that are productive get broken up.

There has to be a balance between never firing people and cutting people simply because the rule says 20% of the worst performers have to go.

Never underestimate the power of a good firing. If you want to shake up the organization, fire the problem person.

Why is it that sports teams often times win a game after the manager is fired? I argue it is fear. It usually doesn't last very long before the team returns to its losing ways, so you can't fire your way into being a winning team and not change the things that are causing you to lose every year. If you want to destroy a team quickly, bring in a crappy employee and watch them bring the entire team down. Even a brilliant employee that is a jerk can be a disaster.

So launch the jerk, too.

At a real estate firm, I once saw one of the high-grossing sales people get launched by the broker. Though he led the office in sales, this guy was a jerk. He was abusive to other employees, stole deals, and there was chaos and dread every time he came into the office. The guy was a selling machine but he was a liability. So the broker said that he thought it would be best if he went out on his own, and within in a week he was gone.

The rest of the office was stunned. Part of it was a little fear; geez, if they whacked a top sales guy, who was next? But it also sent a message that jerks were not going to be tolerated. I checked back several months later and I asked how sales were. Sales volume was up and the office chaos and stress was gone.

When I was at my first real job, I was really raising heck over a deal that had gone south. My manager called me in and sat me down. He said, "Steve, I want you to imagine there is a bucket of water in front of you. Now put your fist into that bucket, splash around, make a mess and thrash about as much as you want. Now pull your arm out of the water and the hole that remains in that bucket of water is how much you will be missed."

OK, I got it.

Now if you are going to fire someone one, you have to document why. Work with your personnel and legal folks to make sure you do it right. Moreover, give people a chance to improve. I was glad to get the water bucket story. I was especially happy my boss gave me a second chance.

But when you are on your third and fourth chance and the employee still doesn't get it, throw them over board. Don't turf them onto a project where they can do little damage, and don't give them a glowing review hoping they will move to another department. If the employee isn't working out, fire them. Then learn from the mistake, figure out what went wrong or what you missed in the interview process, and move forward.

Your customers will appreciate it and the rest of your employees will appreciate it too.

What I Found in My Name

Steven Pierce — Wed, 22 Aug 2012 00:00:00 -0400

So, I'm stuck with "piercefinancial" as the name of my firm, though maybe I should have called it "Pierce Wealth Management". Which do you like better? Before you answer, you should know that I did wrestle with the naming. Since it became clear that abbreviating it helped me incorporate my passion for music, it's become nearly impossible to change. Because people don't work with me based on the name of my practice, I'm content with it. It seemed so critical at the time...

A few years after its inception, the logo came to me, not like a lighting bolt, but a passing glance in the mirror that helped illuminate my practice in a way I found both simple and elegant. When shortened to "pf" it evokes the musical dynamic markings piano and forte, and is a metaphor for the shared goal I have with clients – to make their investment grow from soft to loud, from small to large, or from less to more relevant in their lives.

I grew up in Ann Arbor and the birthing of my business let me share the torch carried by my grandfather, who started his first of three businesses in 1923, my father-in-law-who started his business with two children in college, and with my brother-in-law who started his own business a number of years ago. It seemed almost a birthright that I be successful. Think of it as: "Ann Arbor's native son returns from Wall Street to Main Street to help local individuals with investments."

Community involvement, which was once a blind leap of faith, has become my modus operandi. So, I was a sommelier for the Ann Arbor Art Center, where I sponsored an evening with local and world-renowned composer William Bolcom in the Art Center’s 2nd Floor Loft. I've been a table captain for Ele's Place (for bereaved children) for two consecutive years. I'm in the Rotary Club of Ann Arbor, the St. Paul School Board, and recently joined the Ann Arbor Symphony Board.

Once I found that it resulted in business, I determined that it was good and right that it should. When you give you get. When you're active in causes that are dear to you, you become acquainted with others you can help, and with whom you have things in common. Business also comes from the "law of attraction," that says people do business with people they like. It makes the business of business more enjoyable. When combined with community involvement and an optimistic attitude it lends confidence to the prospect of working with you.

Another thing that I'm passionate about is Ann Arbor. It's my hometown. Combine it with my passion for music and my growing confidence and you might find a lesson, be who you are and follow your passions and success will follow – like the saying goes, "do what you love, and you won't work a day in your life."

The Squelching of Self-Employment

Steven Pierce — Wed, 22 Aug 2012 00:00:00 -0400

The federal government should encourage policies that foster self-reliance, self-employment and new business formation. This would be especially helpful now, as the economy continues to suffer from high unemployment and constrained consumer spending that accounts for 70% of our economic output. Instead, "government" has been slow to adapt to the fast-changing, shrunken economy, and has dragged its feet on confronting bloat, entitlements, and personnel benefits. What some might argue are government's "best intentions", its laws have unintended consequences that hurt the very sector critical to creating and maintaining prosperity. Here are my thoughts on a couple things.

You should know that I'm self-employed with a bias towards self-reliance. Recently, my incentive to maintain my "consumer-driven," HSA-eligible, lower cost, higher deductible health insurance and its companion Health Savings Account (HSA) – was reduced twice. First, the effect of the "Patient Protection and Affordable Care Act (PPACA) of 2010" led to a 55% increase in my Blue Cross Blue Shield of Michigan (BCBSM) policy premium.

The passage of the Patient Protection and Affordable Care Act (PPACA) marked an historic occasion for our country... PPACA requires some changes to your MyBlue individual health care plan... As a result of these additional health care benefits, your rate will change. The new rate for your health care coverage will be effective January, 2011. Your next invoice will reflect the new rate. ?
–Excerpts from BCBSM notice, dated November 30, 2010

In late April, I received a second notice that my premium would increase again by an undisclosed sum. BCBSM attributed this second increase in five months to costs exceeding premiums. They either didn't know what the damage would be, or didn't want to say.

In 2003, the federal government passed a law that permits individuals to save their own money by purchasing less generous "HSA-eligible" high-deductible health care (HDHC). The personal cost savings that results may be invested in tax-advantaged Health Savings Accounts (HSAs) to pay the out-of-pocket costs of less coverage. Withdrawals from HSAs are made by debit card (or check) as needed. Deposits are tax-deductible and may be stored in cash or invested in mutual funds. Any remaining balances grow without tax liability and may be withdrawn at age 65 to help pay for retirement. The legislation is "win-win" because it encourages participants to seek cost-effective treatment to save their own money and keeps treatment costs honest. It also addresses Americans' epidemic nest egg underfunding.

However, as legislation drives up the price of lower cost plans (HDHC), the savings over higher cost plans shrinks, leaving less money available to deposit into HSAs and making more-generous plans more attractive. Thus, the personal incentive granted by this Federal legislation to shop for cost-effective treatment is greatly reduced, leaving us with no "skin in the game" and no regard for the cost of treatment save for the out-of-control premium costs that continue to result.

So, one of the initial barriers to entry, or disincentives to become self-employed, is health care costs. Right out of the gate my preferred provider organization (PPO) plan cost $1,000 per month for my family at a time when my business was very young and my revenue was low. At the same time, Michigan had a taxpayer-subsidized plan that cost around $200 per month.

You might imagine when paying 100% of health coverage costs at amounts such as these, it's hard to muster sympathy for those requested to pay just 10-12% of their coverage. Paying just 10-12% of my coverage would be a huge windfall for me.

It was also interesting to see Gov. Rick Snyder considering HSA plans for state employees. The thought was that Michigan would pay both the HDHC premium, or the insurance cost, and would put an amount equal to the employee's annual deductible in an HSA savings account. You might guess that my response was that the more removed a person is from the cost, the less they care about savings. And, if it wasn't their money going into the HSA, their incentive not to spend it would be greatly reduced. It's the same argument as "rent vs. own". If you rent an apartment, you'll care a lot less about the hole in the wall than you would if it was your own wall...

Another entrenched disincentive for self-employment is self-employment tax, which effectively punishes the self-employed by making them pay more as a percentage of their salaries, or nearly twice as much, in FICA (Federal Insurance Contributions Act) tax as an individual employee. FICA tax pays for Social Security and Medicare. It's crazy for the government to maintain such a tax policy that punishes personal risk.

I could go on, but let me say that I believe that our new shrunken economy and our present paradigm call for dramatic action by the government. I think that federal and state governments should pull out all the stops to create economic growth. They are so insulated from economic pain, that they've slowly simmered into economic crisis, and they're biting the hand that feeds them by punishing the self-employed and taking the little accountability that entered the health care system back out of it. With individuals without any "skin in the game", we should expect costs under new health care legislation to continue to rise unless drastic measures are adopted. "Desperate times call for desperate measures," and I don't know if governments have the business knowledge or the political will to take the bold action that's required.

What I Think of Our Financial Collapse

Steven Pierce — Wed, 22 Aug 2012 00:00:00 -0400

I'd like to offer my interpretation of our financial collapse and some of the local fall-out. We would all do well to understand that there's less money to go around, and reserve judgment on those charged with righting the ship. Like my father always said, "You cannot milk a duck."

The housing bubble that was financed through securitization of bad debt caused this Great Recession. Home values were thrust upward by relaxed lending standards. Banks made home equity loans based on the increasing market value trend for which they were responsible. When lending dried up, our economy shrank and is still searching for a level of activity consistent with a new paradigm independent from the value of homes.

Economic capacity was expanded to meet the higher demand resulting from increased home equity (home values minus mortgage debt). When the housing market crashed, spending imploded and took private sector profitability with it. Panicked businesses cut back over night. Corporate and individual donations evaporated. Tax revenue funding oversized government went away... and the stock market crashed.

Our Detroit Symphony Orchestra (DSO) is the poster child for this phenomenon. It was taking excess withdrawals from its endowment to meet budget shortfalls. It took two hits when the stock market crashed. Its decreasing endowment value was exacerbated by withdrawals. Further, the Symphony had taken out a large mortgage in 2003 to renovate the Max M. Fisher Music Center. As revenue decreased, it became harder to service that debt. Had DSO predicted the market collapse, it would have behaved differently. Our Ann Arbor Symphony Orchestra (A2SO) was not immune. It cut one full-time staff position, and Maestro Lipsky took a voluntary pay cut. We can take pride that A2SO's contract dispute is now resolved, its ticket sales are up, and its budget is in the black.

Consider, too, the Ann Arbor Public Schools (AAPS). Decreased tax revenue has starved our state government. Michigan has been forced to make difficult and unpopular decisions that include reduced school funding. The governor has cut higher education funding by 15%. AAPS has responded by proposing the sharing of school principals, the elimination of 70 teacher positions, and the removal of all high school busing. Exploding pension and health care liabilities erode an ever-increasing budget share of federal, state, and local governments, and agencies like the AAPS.

Used to be that lenders were responsible for the creditworthiness of their borrowers, but "securitization" offered incentives for volume over quality and abdication of responsibility.

Securitization is a process whereby lenders can send their loans into giant pools that shower monthly loan payments onto investors. In effect, investors who seek income become lenders without control or knowledge over the loans they've bought. Lenders receive fee income for the loans they send, take the loans off of their books, and absolve themselves from any financial liability that results from troubled borrowers.

Institutions that receive these pooled loans and package them for the financial marketplace include taxpayer-funded government agencies like Fannie Mae, Ginnie Mae, and Freddie Mac, as well as private for-profit investment banks that are well-known Wall Street heavyweights. You may have heard of "Fannie Maes" and "Ginnie Maes," who enjoy the implicit backing of the U.S. government. As a result of the crisis, they're left holding the bag, and possess many of our bad or underperforming loans. Now, there's a debate over whether or not the federal government that spawned these agencies should even be in the mortgage business.

Securitization was "win-win" until borrowers got in trouble. Borrowers got their money, investors got their income, and both mortgage originators and pooled-loan investment issuers collected fees.

When combined with among the less noble of human natures, this system triggered our economic collapse that began in late 2008. The market panicked when it woke up in complete ignorance of the collective credit-worthiness of its "mortgage-backed-securities". Many were even issued by the U.S. government and enjoyed the best of all credit ratings (as per Standard & Poor's, Moody's, etc). The system had been generating investment income for individuals, corporations, world governments, and even international banks on the backs of U.S. homeowners with mortgages.

So, the market didn't know how to put a price on its pooled loans. Nobody wanted to buy them. They were spread like a virus around the world. Nearly all sellers and no buyers populated the market. There was a slow and painful reckoning as individuals and institutions realized that they were infected. Mortgage lending came to a screeching halt that spread to all other types of lending and brought our great economy, as well as that of the entire developed world, to its knees. It was a vicious cycle that invaded every corner of our country, and it's still with us.

Mortgage lending and its increasing home appraisals had fueled all of our spending. It gave nearly everyone a false impression of the extent of our economic growth. It was a bubble that bought flat-screen TVs, new cars, home-improvements, and more until it popped and made these purchases into monuments of a by-gone era. The stock market struggled to "find a bottom", which meant determining how much economic growth to erase to determine when the bubble began blowing, so that we could start at that point and rebuild our economy in real, tangible and fundamental ways. The bottom, or close-of-market low of the Great Recession was reached on March 9, 2009. Not since January 8, 1997 had the Dow Jones Industrial Average closed so low.

Asking For It

Lauren London — Sat, 11 Aug 2012 00:00:00 -0400

If you weren't born a truly gifted marketer (and with some notable exceptions, few are), chances are you're afraid of fundraising. I am. And, I'd venture to say, I have good reason to be. It's terrifying to ask people for money. How dare we? How presumptuous to assume that people we know will part with their hard-earned cash just because we tell them to. And our fear turns to paralysis when it raises mindboggling questions: How great must an arts cause be to merit private funding? How great must our ideal be? Which of our plans do we share? What priorities do we make? And the showstopper: HOW MUCH DO WE NEED?

So what a comfort it was, two years ago, to happen upon an arts fundraising crutch: Kickstarter. Kickstarter.com (and now its somewhat gentler cousin, Indiegogo.com) is all the rage in tiny business proposals right now. For the uninitiated, Kickstarter is a website where you can post an awesome arts project you want to do, make a video about it that appeals to potential donors, and then publicize it to drum up the necessary funds. But it's an ingenious, public time-bomb: at Kickstarter, you state up front the amount of money you want to raise by a certain date, and you go out and try to get it done. But if you don't meet your goal by the deadline, you get Nothing. Not one red cent. No donor's credit card is ever charged, you are overtly hoisted by your own petard, and you don't get to do your project. It's a way to turn artists into responsible fundraisers and budgeters. And, I suppose, into realists. If the thing doesn't have legs, after all, you shouldn't be trying to do it. But the concept sounds a bit draconian. One pictures the dejected artist whose Kickstarter time ran out on him, snuffling sadly into his sleeve and hanging up his paintbrush with a heavy sigh.

(Alternatively, relating this, I'm reminded of that scene in Willy Wonka and the Chocolate Factory – the Gene Wilder version – when Charlie finally thinks he's won the year's supply of candy and Willy says, "WRONG, sir! WRONG! Under section 37B of the contract signed by him, it states quite clearly that all offers shall become null and void IF – and you can read it for yourself in this photostatic copy – 'I, the undersigned, shall forfeit all rights, privileges, and licenses herein and herein contained,' et cetera, et cetera... 'Fax mentis, incendium gloria cultum,' et cetera, et cetera... Memo bis punitor delicatum! It's ALL there, BLACK and white, clear as CRYSTAL! You STOLE Fizzy-Lifting Drinks. You BUMPED into the ceiling, which now has to be WASHED and STERILIZED, so you get NOTHING! You LOSE! GOOD DAY, SIR!" Thanks to Wikipedia.org for that fix.)

Of course, the whole point of the Kickstarter site is to create that dreaded image, and by it, encourage lively donation toward artsy projects. And it's worth noting that the hard-nosed rule of Kickstarter has been blunted more recently by more forgiving sites like Indiegogo, where you get to choose your type of fundraising: either you can keep what you raise, no matter what, or you can go the Kickstarter route. (To die-hard Kickstarter-ites, this "never mind, we'll take what we can get" approach must seem to defeat the purpose. After all, the yawning precipice ahead is what makes you go out and fundraise in the first place, right?)

Anyway, for a group like ours, Kickstarter was a great first-year fundraising step. We made a cute little video with us holding lots of signs, and we invited donations. It was fun. And with the energy of our first year, there was no way we were going to fail. And yes, out of a combination of our own panic and cheerful fundraising efforts, we met our goal in just over two weeks. That's what happens when you scare an artist.

But the other ingenious thing about Kickstarter is the fact that it boots you out of the nest rather rudely, so you don't get too comfortable. Lest you rest on your laurels, the minute you get funded at Kickstarter you instantly lose a bunch of your money in the form of fees. If I have this right, you have to pay 5% to Kickstarter, and another 3-5% to its third-party processor, Amazon Payments. Ouch. Indiegogo charges 4%, but if you don't make your goal and choose to, uh, "keep" your money, you owe them 9%. These numbers can add up pretty fast. So fast that, for our second year of fundraising, we didn't think seriously about Kickstarter. Instead, we thought, "we can do better on our own." And we could. And perhaps that is the point of it all.

I didn't mean this post to become a love letter to Kickstarter – I really think their fees are pretty high – but I do love the idea behind it. At bottom, it helps you get over that hump of starting something I talked about last Wednesday. Once you've gone out and conquered that entirely reasonable fear of fundraising you've always had, you can go out and try the something you really wanted to do. There's real value in getting kicked out of the nest.

On Friendship and Business

Lauren London — Sat, 11 Aug 2012 00:00:00 -0400

Everyone has a different opinion about going into business with your friends. Some take the consummate businessman's advice: A friendship founded on business is better than a business founded on friendship. – John D. Rockefeller. This is cute, but no one believes that, coming from someone whose name is synonymous with business. Some are more forgiving: All lasting business is built on friendship. – Alfred Montapert. I'm sure this is true in most customer-salesman relationships, but its usefulness may suffer in the generalization. Some go for the pithy leather-glove-to-the-side-of-the-face: In business, sir, one has no friends, only correspondents. – Alexandre Dumas. *Smack!* And some seem to have determined that the twain never should meet: It's not show friends; it's show business. – Bob Sugar (from Jerry Maguire). I'm very much hoping this last one isn't true.

We've heard it all before. Over the last two-plus years, our company has had a lot to think about in this regard. We were, after all, seven friends (now nine) who decided to go into business together. And yes, in the beginning we did all have that pie-in-the-sky excitement about forming the perfect little arts company. We did think, "we're all smart people. We're not hampered by an aversion to hard work or an inability to conduct business. We're business people, after all. We have business lives! We know how companies run. We know some law, and how to write things so they make sense, and how to treat people. We're highly adept, well-educated, cross-functional people. We'll break the mold of stereotypical artists' organizations that are only about the art." And we established some guiding principles, and knocked out the early legal work. We became a 501(c)(3) within a few months of existence (a choice I highly recommend, by the way). We held that first, cute Kickstarter campaign, celebrated our existence and each other, and started our work.

But inevitably, we learned that we had seven different ideas about what that company would look like. How it would be branded. What types of work it would do. How often it would do that work. Whom it would pay for what things. What kinds of partnerships it could agree to. What technology it would invest in. How it would spend the money it made. How fast it would grow. What we would print on the T-shirts. And, eventually, the questions got harder: Who would tell what to whom? How would we preserve our respective marriages/long-term relationships while doing this? What's our one-year plan? Our three-year plan? Our five-year plan? How do we want to be perceived? And things got complicated. Each board meeting now has its testier subjects. We have real disagreements. We've said hurtful things to each other. We've stopped having fun all the time. We've discussed our long-term differences and how they play into a long-term strategy for the group. No longer are we full of constant "yes" (see Post 2).

But I submit – and sure, I could be wrong – that fights amongst people with solid friendships can save a young venture from falling apart. If the relationship is already strong, if you understand each other's outlook on life and you know the underpinnings of all of it – the family constraints, the time sucks, the reasons for this person's involvement, the priorities – you might actually give a darn what they have to say, even if you think they're wrong. And that makes it harder for you to just push back from the table, stand up, and walk away. You care about the venture, and your friends, and what happens. You can yell and pound the table and cry and say terrible, honest things. You come this close to quitting. But much as you might like to do so, it's pretty hard to make a clean break of it. And many times instead, you stay, and you get through it.

But yes, without question, the friendships change. And that's the hardest thing. You don't have the comfort of occupying a little, cute, shiny, untrammeled friendship niche in each other's minds anymore. You're way more complicated. You have issues that you can't suppress, and they all bubble up and everyone sees them.

So trying to run a small business is a little bit like being sliced open and picked apart in public. All your motives show. You're exposed as the social fraudster you've always been. But I think if you're trying to run anything, that sort of happens anyway. It happens whether or not you're in business with friends. It's a function of the business itself. Because you don't know the answers to all the questions that come up, inevitably your weaknesses show. And showing your soft underbelly to your friends is, at least, better than showing it to total strangers. When a stranger calls you out on a weak spot, you're much more likely to get defensive about it, harrumph out of the fight, and write off both the comment and the person. When a friend does it, you can still get defensive, but eventually you've got to own it and move ahead. You can't just go to the comforting, small-minded place of I'm-right-and-you're-wrong. So, you grow a little. And as a result, the issue gets addressed. The company gets tested, but usually it recovers.

For us, at least, so far, so good.

Many, many thanks to Concentrate for having me this week. It has been wonderful. For better or worse, I'm not as scared of blogging as I used to be. And for more information about The Penny Seats, see www.pennyseats.org. Our next project is a cooperative effort with 826 Michigan, called "Five Bowls of Oatmeal". We perform a bunch of plays written by students in 826's writing programs. They are hilarious and fun and we love it. Watch for details and join us, Sunday, November 18th, at 2:00 p.m.

Let's Make a Deal

Lauren London — Fri, 10 Aug 2012 00:00:00 -0400

I may be wrong about this, but I've been saying a lot lately that I'm impressed with the value Ann Arbor seems to place on the social contract. Ann Arborites are such gamers. Social events really seem to attract interest here, in ways not apparent in some larger cities. Dancing in the Streets has its own festival day. So does a huge parade of papier mache puppets. So does shopping at night. Football is king on Saturdays in fall, but the other three seasons are full of people going out of their way to get together. We run in races, lecture each other, hold leisurely open-air markets, have concerts of every stripe, actually attend book readings, and have no problem blocking off Main Street many times a year, chiefly so people can mill about together for one purpose or another.

It's partially this sort of togetherness that made The Penny Seats ambitious enough to think we could start a new little arts company here. People come out for things. More that that: they actually walk around looking for things to do with each other. The Ann Arbor Chronicle even has a little section (my favorite) called "Stopped. Watched." And the Ann Arbor Observer enjoys a hallowed place in every household, a stalwart hold-in-your-hands paper that people keep for a whole month, bucking the cyber trend, just so that they can have something at the ready that will tell them what's going on in town on any particular day. Thankfully, these types of outings don't seem to have taken too much of a hit in the recent economic sadness.

Little local theater companies may owe their current livelihood to this adherence to socializing. Grant money – what there is of it – and well-meaning corporate donations wouldn't matter if no one came to see the shows. And I can wax a bit rhapsodic about how theater, in particular, counts on interactivity in ways things like movies don't.

But this summer, I learned that we benefit from AA's uber-social nature in other ways. Specifically, when you're looking for a way to get something done on a dime, and all you have to barter is an interactive event. People are willing to work with you here.

Over the years, many friends and mentors of mine have talked with frustration and malaise about the lack of cheap space to use if you're a small organization planning something in Ann Arbor. Small- to mid-sized rentable spaces are relatively few and far between, and their published rental rates may be out of reach for petite organizations whose annual budgets run in the low five digits and lower. For this reason alone, they may look outside Ann Arbor to set up shop, and as a result we miss valuable opportunities and ideas.

Optimistically, I think things are starting to change. While looking for space around town in which to rehearse and get organized and raise money, etc, we started to ask whether we could provide performance events to our rentee in exchange for a discount on space. And they agreed. Hallelujah. As a performer, it seems almost unfair to trade on performance. It's so fun to do; it's so the-reason-why-you-do-everything-else, it seems almost magical to get to put a monetary value on it in the first place. And to trade it for necessary services seems to be a good deal, to put it mildly. This year, it worked for us, and it helped us grow into this town, and get to know the business environment in a useful way. You get the services you want; they get to publicize a free show and attract people to their space. It works well. None of this is to say that rental rates aren't still too high. They're steep. But that doesn't have to kill the project. In a socialized town, interactivity can be a bargaining chip.

Finally, today, a quick plug: The Penny Seats' summer show, She Loves Me, closes tomorrow night! Tickets for tonight and tomorrow can be pre-ordered from www.pennyseats.org, or just procured at West Park. Shows start at 7:00 p.m. sharp. Picnic dinners are available for pre-order also, and will be waiting for you at the park. Come down and see us; we're really proud of this one.

Wanna Be Startin' Somethin'

Lauren London — Wed, 08 Aug 2012 00:00:00 -0400

11-Year-Old You: "Hey . . . We could form a rock band!"
Zealous Friend: "Yeah! I could play the drums!"
You: "Yeah! And I'll slick my hair back and sing! Now all we need is someone who knows how to play the guitar and write songs!"
Your Mom: "Come ho-ome! It's time for di-nner!"
You and Friend: "Awwwww. Maybe tomorrow."

Zach and I met in college, on the first day of my sophomore year. I was getting a tour of my new dorm, and suddenly there he was, flying through the air, having leapt gracefully over a couch from across a room to land in the doorway where I stood. He stuck out his hand to shake mine: "Hi, I wanna meet you! I'm Zach!" he bellowed. If only all introductions could go so well. For months I thought his exuberance at meeting me must have been due to some instant attraction between us. That he somehow knew we'd end up together. That he'd felt some indefinable connection. But then I realized, he treats everyone that way. He's a zealous, just-do-it person. He jumps and hopes for the best.

For years, I've tried to emulate Zach's verve for, and trust in, life, and the unbridled directness with which he attacks it. He's a neurologist by day, a prolific composer and studio musician by night, an incredible dad, and once a year he throws the world's best party (which by rights will someday have a blog all its own). But most people, like me, are hampered by what we deem to be the insurmountable embarrassment inherent in surrendering to our silliness – the sense that we shouldn't be humoring ourselves with the inane desire to do those things we always wanted to do when we were kids. We tell ourselves that, now that we're grownups, we should take our lives more seriously. And aren't we more tired than we used to be? And don't our bodies hurt more? And what would people think of us? And the kids, what about the kids?

This kind of chatter ran around in my brain for years. For ages I'd thought about starting a little, casual, malleable theater company. One that would do cool, fun things on a shoestring, and focus on clever methods and cool people. But I was completely paralyzed at the thought of it. What a ridiculous idea, I thought. And selfish. And heaven knows Ann Arbor doesn't need more theater. How will you fund it? Who will take care of it? What if it goes under? What about tax filings? Annual reports? Bookkeeping? Don't you have two kids and a day job? What will your friends think of you? When something is just an idea without any hard documentation to back it up, it's so easy to instantly give center stage to talk like this and let it win. I'm being self-indulgent, I told myself. Someday it will happen, but life is too busy with too many other practical, regular things to do.

Then, two years ago, I realized that if I were Zach, I wouldn't think that way. After all, life is for trying things. And one of the advantages of living in Ann Arbor is that we're a small, approachable town. We're relatively friendly. We're fairly sociable people (of which more later). Small companies can incubate in creative ways here, even in a tough economy. And, just as with any big decision - when to get married, when to have kids, etcetera - there's no perfect time to do anything. You just do it, and see what happens. And if it fails, fine. It's not like the world will look down on you, sigh, and shake its weary head at your unfounded gumption.

Starting anything is the very hardest part: turning the nebulous cloud of thought in your head into something everybody knows about. It was really hard, particularly in the face of certain economic realities, to convince myself that I might actually be able to do the silly thing I've wanted to do since I was twelve. But really, wouldn't it be even more awful if it never happened at all? People do lots of silly, stupid things. But if they didn't, we wouldn't have anything to talk about. So, we jumped. I had six conversations, with six of my favorite people, and it turned out to be surprisingly easy:

Me: "Heyyyy, wanna start a theater company? Like, a real one?"
Six Favorite People: "Yes, absolutely! Let's do it."
Kids: "Mo-om, I'm hungry!"
Me: "Kids, I'm on the phone starting a theater company. Go ask Dad."

Let It Rain

Lauren London — Wed, 08 Aug 2012 00:00:00 -0400

"For after all, the best thing one can do when it's raining is to let it rain."
Henry Wadsworth Longfellow

So, I was going to make this blog a kind of daily progression about how The Penny Seats got started, how our funding model emerged, and where we are today, but right now I feel compelled to skip to the end and comment on one of the most problematic aspects of our company's milieu – one of its occupational hazards – the weather.

We got rained out on Friday, and it was sad.

One of the coolest things about starting the company you've always wanted to start and working with some of your best friends is that at the beginning, you get to say YES a lot. Ideas flow fast, and everyone's got one. "What if we do casual outdoor theater in summertime?" YES! "What if we're 100% privately funded and only charge $10 per ticket?" YES. "What if we used the revamped West Park Band Shell?" SURE! "What if we partnered with a caterer and offer picnic-and-a-show packages?" ABSOLUTELY. What if we do a variety of shows for a varied experience? OF COURSE. What if we try an outdoor Broadway musical? WHY NOT?

Our company's tiny place in the local theater world took shape fast, and as we've grown and become a bit better known, we are figuring out how to handle many of the issues that go along with our business model: our vision and mission; our funding procedures; our division of production responsibilities; our yearly timeline; our recruiting practices. Handling all of these makes us feel like a grown up company, like we have the maturity to deal with issues in a civilized way.

But one good long rain shower or thunderstorm, or, as we learned a couple of Fridays ago, even the threat of a good long rain shower – reduces us to sniveling children, whining, cursing, and shaking our fists at the sky.

Outdoor theater can be magical, if it's right. The wondrous combination of evening light, a picnic basket, a park, an intrepid troupe, and maybe a pit orchestra, can be an utterly memorable, ethereal experience. But rain makes everything messy. The stage gets slippery and the set gets soggy. Rainfall on instruments makes them unplayable (and makes mad musicians). Rain can spoil good money spent on sound systems, mixers, microphones, and speakers. It makes the ground muddy and the actors unhearable. And it generally turns a relaxing experience into a stressful one.

Rain is a particularly frustrating experience for a young outdoor theater company because we don't get all that many chances to show off what we do, and when it finally comes time to do it, WE'VE GOT TO DO IT OUTSIDE. We rehearse for months with this unheralded, menacing elephant in the room: we don't know how many times we'll get to perform. We don't talk about it because, really, there's no point in doing so. We live under this Sword of Damocles every summer. And yet, somehow, I'm always surprised and disappointed anew whenever we have to cancel a show.

Our website says, "we aim to be hearty." We hope to live up to that. We schlep in tents for our sound system and musicians, and cute little umbrellas to tape to our speakers. But because we're still so small, and because we can't think of a better way to do it, canceling a show for weather is still a near-game-time decision for us. It's the one thing (okay, maybe not the One thing, but perhaps the most Prominent thing) we can't yet plan around, or solve. And it's frustrating. Someday, we'll rent indoor venues for rainout shows. But for now, all we can do is honor our rainout tickets at every other performance and hope we made the right call.

One recent Friday was sad. The sky looked dark and menacing, and as we set up our equipment, it began to pour. It was 6:30 p.m., and things looked bleak. We canceled the show and called all our patrons. And of course, at that precise millisecond, the sky cleared up and by 6:45 p.m. the sun was peeking through the clouds, smirking and winking at us. It didn't rain another drop all night. Oh, well.

But Saturday was magic. The weather cleared, our patrons filled the park, many came back, the mood was right, the play was strong, the music transcendent, and we had a blast. More than a blast. It was tremendous. And it reminded us why we do this. The good is so very good, a little rain can't stop it. Having your company's vision realized can do wonders for your spirits.

The $1 Billion Question: How to Leverage Michigan's R&D Capability

Jason Molesworth — Thu, 26 Jul 2012 00:00:00 -0400

Here's a straightforward question that a typical Jeopardy champion would likely struggle to answer: "What university has the largest R&D budget in the United States?" Any guesses? M.I.T., Stanford, Harvard? – Answer: Johns Hopkins University in Baltimore, Maryland.

This factoid is a little distorted though, as it's heavily influenced by the fact that Johns Hopkins hosts the Applied Physics Laboratory, which essentially serves as the federal government's anchor applied physics research center. Here's a tougher question: "If you strip out funding for the applied physics research center at Johns Hopkins, what university would lead the country in terms of its annual R&D budget?" – Answer: University of Michigan.

With an annual R&D budget that exceeds a billion dollars per year, and a world class research talent pool, U of M is producing innovative basic, translational, and applied research that few universities in the world can begin to compete with. U of M isn't alone either, with Michigan State, Eastern Michigan, Wayne State, and Oakland University all conducting material levels of R&D across a wide range of fields of study.

An interesting question then is, why when asked about academic R&D do most people immediately think of "the coasts"? M.I.T. springs to most people's minds, as do Stanford, Cal Tech and Berkley. This starts looking like a branding challenge, where a major gap exists in people's minds between the perceived and actual scale of innovative R&D that's taking place in the state of Michigan.

R&D is also clearly not an academic effort alone. Michigan firms in the automotive, life sciences, alternative energy, advanced manufacturing, and healthcare I.T. sectors (to name a few) are producing an impressive pipeline of innovative R&D efforts.

The key question facing Michigan policy makers, businesses, and all around general advocates is: "How can we leverage the impressive R&D capabilities and resources in the state to build a firm foundation for future economic and employment growth"? While this is a pretty straightforward question, the answers are a little more complex. In my opinion, some of the most important solutions should include:

-- Clearly defining R&D, and particularly the commercialization of market-viable R&D, as a state priority and a clear source of competitive advantage.
-- Actively increasing the scale of funds available within the state for early and mid-stage firms to effectively commercialize innovative R&D, particularly from private investment sources (See my previous post regarding the importance of increasing access to capital in Michigan.)
-- Developing a national branding strategy that specifically articulates the measurable advantages Michigan possesses from an R&D perspective
-- Conducting a targeted recruitment campaign that seeks to attract entrepreneurs with applied innovation experience and success to the state
-- Focusing on strengthening the R&D and innovation enablement "Ecosystem" across the state in a truly systematic manner, and
-- Perhaps most importantly, evolving our mindset as a state to realize that innovation, entrepreneurship, and responsiveness to rapidly changing market opportunities is the key to the state's future prospects

None of these ideas are particularly new or innovative, but they're important to continually articulate and position, as our future success will largely depend on our ability to successfully innovate and leverage the state's impressive R&D capabilities. The good news is that Michigan already has one of the most progressive and comprehensive approaches to public-private partnership-led innovation enablement and economic development in the country. Significant progress remains to be made, however, in translating the state's R&D strengths into economically viable firms capable of driving broad-based prosperity and job creation. We've got the right assets to compete; now we need to execute the vision and continue to evolve the necessary skill sets to realize sustainable success.

What Lets Us Buy Blueberries in February?

Jason Molesworth — Wed, 25 Jul 2012 00:00:00 -0400

Let's face it, even though we often don't like some of the outcomes, international trade and competition is here to stay... It's what allows us to buy blueberries in February, great coffee at your local coffee shop, and a range of products far cheaper than we would be able to produce them domestically. What many people miss in the exchange, however, is that it's also what makes it possible for Microsoft and Intel to be driving computing on 90%+ of the desktops in the world and for GM, Ford, and Chrysler to be selling nearly as many vehicles overseas as they do in the U.S. (and in many cases, more...). So, the question isn't so much one of getting rid of international trade, it's learning how to be successful in a context where competition is now regional and international in nature. Michigan's future economic prospects are going to largely be shaped by our ability to embrace competition, identify where we have structural talent, cost, and quality advantages, and continually evolve our capabilities.

This reality is going to require something of a mindset shift for many of us in Michigan. It's no longer going to be enough to ask ourselves if we're performing better than we did last year, but instead, we're going to have to understand how we're performing relative to our competitors. To do so effectively, we're going to have to look externally and work to continually innovate. When we talk about looking externally, it's not simply comparing ourselves to other midwestern markets.

Instead, we're going to need to understand what's going on in places like Brazil, Mexico, Korea, Japan, Germany, the Czech Republic, Russia, China, India, etc... Many Michiganders know this to be true, but we all need to embrace this reality and understand that those are the rules of the game, and they're not likely to change in the future. While the need to compete in regional and international markets is clear, so are a couple of significant negative impacts. The first is that the dynamic and volatile nature of international trade can result in some very real pain for people caught in a non-competitive industry. As firms struggle to survive, jobs are lost and families and individuals suffer. As a result, programs that offer transitional training and job placement assistance are critical in today's more turbulent employment markets. We all also have to be pretty flexible in terms of learning new skills and even be willing to relocate if the local employment opportunities don't match our skills or career aspirations. We also need to make sure to have some savings in the bank to help us make it through temporary, and sometimes extended, periods of displacement.

Secondly, competition needs to be fair. For countries that don't comply with international environmental, labor, monetary, and trade standards, Washington should use all the power at its disposal to attempt to level the playing field. Where their efforts fall short, U.S.-based firms are going to have to become even more productive to overcome the structural disadvantages of an uneven competitive landscape. There's a lot going on here, but the bottom line is that our future depends on our ability to continually "improve our game" and evolve as our competitors develop new capabilities. We've got the talent, the work ethic, and the resources to continue being successful and innovative. We need to make sure, though, that we expand our sense of who we're competing against, why, and what we need to do to remain leaders for generations to come.

Angels and Smart Zones Key for Capital Access for Early-Stage Firms

Jason Molesworth — Wed, 25 Jul 2012 00:00:00 -0400

Just as plants need water and sunlight to survive, new businesses need investment capital to grow and thrive. Needed capital can come from a wide range of sources, including: the entrepreneur(s) themselves, friends and family, angel investors, SBA loans, etc. Regardless of the source, virtually all early-stage firms need funding to pay for legal, strategic planning, marketing, technology, and product development assistance, to name but a few critical functions.

Here lies the dilemma for entrepreneurs in the state of Michigan… While there is a tremendous amount of talent and innovative thought leadership in the state, Michigan entrepreneurs often struggle to access early stage capital to commercialize their business ideas. The causes of this "Capital Gap" are many, including, but not limited to:

-- The lack of regional or national banks headquartered in the state (a real surprise for a state the size of Michigan)
-- A general risk aversion among Michigan investors regarding early-stage or alternative investment opportunities
-- A comparatively low level of angel, venture capital, and private equity industry presence (also an unfortunate byproduct of general investment-related risk aversion in the state)

The resulting sub-optimal level of investment capital for early-stage businesses represents a real risk for the state, as it limits the ability of innovative entrepreneurs to realize their business visions and create jobs over time. There are, however, a number of both private and governmental groups who are actively working to address these gaps. Groups like Detroit Venture Partners are playing a prominent role in increasing the visibility and market potential of Michigan-based start-ups. Government groups like the Michigan Economic Development Corporation (MEDC) and the 15 SmartZone organizations across the state also represent one of the most progressive public-sector eco-systems for entrepreneurial enablement in the country. Accelerate Michigan is another program that promotes entrepreneurial innovation in the state and is doing a great job of getting promising early stage businesses funded to open shop.

While progress is clearly being made, the needs and importance of this issue are significant. Small businesses are the most important engine for economic and employment growth over time, and they are truly the key to our future economic prospects. As a result, Michiganders with the resources to contribute to investing in early stage firms should seriously consider doing so. Not only do such investments often yield very attractive risk-adjusted returns, particularly if allocated and diversified by knowledgeable managers, but they also have the potential to play an important role in the state's economic future. For people interested in this issue, I'd recommend that you look into the Michigan Angel Fund, Great Lakes Angels, and the Grand Angels. Alternatively, any of the state's SmartZones would be happy to forward you to groups that can bring you up to speed on opportunities to play a role in this important area.

We Don't Pay You to Think, We Pay You to Sell

Angela Barbash — Wed, 11 Jul 2012 00:00:00 -0400

Ten years ago I was having lunch at a local Ypsilanti restaurant, reading Ayn Rand's The Fountainhead at the bar, when a gentleman next to me commented on the book. That comment sparked a conversation that sparked an apprenticeship that sparked a 10-year career as a financial advisor. At that tender age of 21, I had been set on taking my idealist "I want to change the world" mantra to local government, thinking that was the best way to make the biggest impact. Here, another avenue opened.

This mentor of mine was determined in teaching me that if one does not learn how the money system works, if you do not know how to generate wealth, how to protect it, how to grow it, then your efforts to better your world are fruitless. His solution was to become an advisor, as he had been for 30 years.

I initially thought that was crazy, but eventually relented. I remember having a revelation at the time that I could "change the system as a mole from the inside." In 2004, I became licensed and embarked on an experience that was shockingly difficult, appalling, but magnificently helpful in that original idealist aim of changing the world. Eight years later, that's what I'm doing.

This week I'll be sharing lessons I've learned from the inside, so to speak. They're coming from my direct experiences, and those I've worked with over the years. There is a whole flock of well-intentioned advisors who have turned whistleblower over the last five years as the industry became more and more grotesque and abusive to its clients and employees. Some advisors have had a better experience – I speak just for what I've seen and heard.

For this first post, let's tackle the most fundamental truth that is almost non-existent in the client-advisor conversation – financial advisors are paid to sell, not to think. This bears repeating – financial advising firms pay their advisors to sell…not…to…think.

You may be thinking that I'm making some gross generalization, but I pull this line from direct experience. Throughout 2008, I was informed exactly five times by various levels of management in the large firm I worked for that they "don't pay us to think, they pay us to sell," in questioning the "everything will be fine" party line (as the markets continued to tumble. When you hear an exact phrase more than a couple times, can't you officially call it a conspiracy?

So here's just one implication of this philosophy, an implication that I believe is at the heart of why the traditional financial advising industry is insufficient to meet the needs of a new generative economy.

If advisors are not paid to think, then who is?

This is what happens to your money when you hand it to an advisor – if you're like any of the 80 million other Americans whose advisors put their money into mutual funds. The advisor read the glossy sales materials for the funds, maybe they pulled a Morningstar Report and saw how many stars it has, what its performance has been and maybe what the top 10 holdings were in the fund. That's probably where your advisor's research stopped.

When your money was sent to the mutual fund company, they handed it over to a management team who is managing maybe $2 billion other dollars along with your $10,000. They split up the research among their team, so that each person is researching only specific types of businesses like transportation or consumer goods.

The board of directors for the fund also oversees 120 other funds, maybe even 170 other funds. They have to read an annual report larger than War and Peace on each fund, along with quarterly reports about its performance. How likely do you think it is that they're reading all this material?

Meanwhile the people that oversee the team of analysts, the investment advisors, are often paid based on performance and the board of directors hardly ever replace them (they are the ones with the power to do so). There is a built-in incentive for the advisors and their team to take on risk. Hence the multitudes of funds that had (and still have) mortgage backed securities, credit default swaps, and other such nasty things in their portfolios.

So if your financial advisor isn't watching your money, and the board of directors isn't watching your money, and the analysts are only watching their industry stocks, and the investment advisors are looking for the highest returns to keep money in the fund, then who is really watching your money? Is anyone watching your money?

If No One is Watching Your Money, Does it Make a Sound When it Crashes?

Angela Barbash — Wed, 11 Jul 2012 00:00:00 -0400

In my last post, I exposed a philosophy that exists in the financial advising industry – that advisors are paid to sell, not to think; a heinous accusation, to be sure, but one that I directly experienced.

In this post, let's talk about who should be watching your money and why.

I'm going to go out on a limb and say that it's you.

Previous to 1974, Americans didn't have IRA or 401k accounts because the laws to create them didn't exist yet. People bought stock directly from the companies they liked. People invested in their brother's mill business, or loaned their kids the seed money they needed to start their dry cleaner. People saved their money in safe deposit boxes and tin cans. They converted it to other currencies like gold and silver.

Fifty years ago people were far more connected with their money, and their community. Today we live in a bit of a twilight zone, where some of our actions don't match our other actions.

Here's a common example… (It's common, so don't feel too bad if this is you.)

If you've watched Food, Inc. or Fast Food Nation, you may have begun shopping at the local farmer's market for fresh locally-sourced produce or maybe you even set up a CSA with a local farm to get your meat from there instead. You just couldn't stand the thought of how chickens and cows were being caged into contained feeding arrangements that left them lame, diseased and dying. The thought of eating that food now makes your stomach turn. So you took action. And you spread the word to others.

I'm willing to wager a bet though – that you never checked your investment portfolio to see if you owned Tyson or Monsanto or any of the multitude of industrialized food companies whose cheap and nutrition-deficient products are directly responsible for the rise in obesity and other health related diseases – and chances are you do.

My colleagues and I have noticed, and are now part of, a groundswell of action that's centered on reconnection. If we want real change, we have to become reacquainted with our money, with our neighbors, with our businesses.

We have to learn how to think with a bigger perspective, especially when it comes to our money. If we abhor the industrialized food companies, then we shouldn't own them in our mutual fund portfolios. If we are concerned about a potential collapse in the global financial systems, then we shouldn't have all our money tied up in those systems.

Why is it your job to be reconnected with your money?

Because no one else cares about your assets as much as you do. I've had a lot of people tell me over the years as I've worked with them, trying to educate them and help them be good stewards of their money, that they simply don't have the time. "That's why I pay you," they say.

I think of money management as the same as working with healthcare professionals. I go to the doctor when I have an ailment, to get their opinion on what they think the cause is. I then do my own research, I read the materials they give me, I may even get a second or third opinion, and I make my own decision about what route to take.

When we go to doctors for an ailment, and they prescribe four medications with a short descriptive sentence on each one and a hefty book of fine print legalese about each one, how many of us would just take the meds and go on with our lives? Yet that's what happens with investments. Clients and advisors alike don't read the fine print. Reconnection starts with you.

How Reconnecting With Our Money is Revolutionary

Angela Barbash — Wed, 11 Jul 2012 00:00:00 -0400

In the last two posts I've made the case for how no one else is watching your money, and how no one else will care about your money the way you do, so you should ultimately be responsible for its care.

In this post, let's discuss what is happening as people begin to reconnect with their money.

Last year I attended the annual Slow Money conference in San Francisco. I had just found out about Slow Money and BALLE (Business Alliance for Local Living Economies) during the summer, and was astonished to see the action that people were taking in their pursuit to create a new generative economy.

There were over 800 people at that conference – financial professionals, entrepreneurs, film makers, activists, farmers. You could sense this energy throughout the event, in the workshops, in the small conversations huddled around tables in the after hour parties.

There were over 400 at the BALLE conference in Grand Rapids in May of this year – same outcome. You could taste the energy in the conversations.

There is something exciting happening in this country.

It turns out that when people take back control of their money, they start to take back control of everything else in their lives.

Talk of revolution became synonymous with redefining our financial systems. History supports this claim. Mayer Rothschild is often quoted as saying, "Give me control of a nation's money supply, and I care not who makes its laws."

The amount of power that is transferred to a people who control where their money goes, what their money is, how their money is created, is enormous.

I believe what we are witnessing with the local investing movement, with the sustainability movement, with the preparedness movement, with the local food movement, with the Occupy Wall Street movement, with the political independence movement – is nothing short of an awakening.

If these posts have gotten your attention, then I encourage you to turn that attention into action. Here's what you can do in your part of the revolution:

1.   Launch a family investigation into your investments. What do you own, why do you own it, and how do you own it.

2.   Take the time to educate yourself. Yes, we do provide education http://timetoreconsider.com, but you can learn on your own as well. Start with this book, and this book.

3.   Start aligning your finances with your values, dollar by dollar.

4.   Turn off the network news. CNBC is Wall Street's best buddy. Their job is to keep your money in the markets. Doing anything with your money that they are not involved in means no way for them to make money.

5.   Start talking to other people who share your values. Reconnect with your community, and lend a helping hand to the people in your life who want to take back control also.

6.   Spread these facts in particular: Less than 1% of our $30 trillion in investment dollars get invested into small businesses, but half of our GDP comes from small firms, and 2/3 of our jobs come from them.

I hope you the reader found these posts helpful. If ever there was a time ripe for action that can truly lead to a better future, it is now.

How Maggie's Organics Was Rooted

Ben� Burda — Wed, 20 Jun 2012 00:00:00 -0400

Maggie's Organics is thrilled to be hosting the Concentrate blog and getting a chance to reach out directly to our local community.

First, we would like to say that we had a blast earlier this month at the Green Fair and Mission Zero Fest with a2energy.org! Thank you to all who stopped by, we hope you are enjoying your free pair of Maggie's a2energy socks! (If you missed out, click here).

In the spirit of these great local events, we wanted to talk a little bit about why our Michigan community is so important to us. There is no doubt that Maggie's Organics has always been focused on the "big picture", establishing worker-owned cooperatives and developing fair trade and organic standards internationally. But as our business grows, it has been easy to lose sight of our local community and what it has meant to us throughout the years. A2 and now Ypsi have been incredibly supportive places for a company like ours to call home, and meeting old and new friends at various events over the past few weeks has inspired us to reflect on our recent 20-year birthday and the value of our local roots.

Maggie's beginnings can be traced back to a small condo on the west side of Ann Arbor in 1992, where orders were processed on the kitchen table and invoices were filed next to the bed. After moving to California for a few years and buying her partner out in 1997, Maggie's founder Bená Burda followed her heart and chose to come back home, first to Ann Arbor and now to Ypsi. Though an unpopular decision at the time, it turned out better than anyone could have expected. Maggie's loves calling Southeast Michigan home for the same reasons that many of us are drawn to live here year after year: a community of creative minds, a collective spirit of support, and a vibrant multicultural environment, all embedded within a grounded Midwestern atmosphere.

We are also particularly grateful for residents' passion for environmental sustainability and social consciousness, which is why we are so excited about our recent collaboration with the city's Clean Energy Coalition. We created a special Maggie's organic cotton sock with the a2energy.org logo, which was introduced at the Green Fair and Mission Zero Fest. The socks are being used to educate us all in conserving energy as we help our eco-city grow more green. What started out as a quick conversation with A2's Environmental Coordinator Matthew Naud has evolved not only into a cozy organic cotton sock, but it has also made Maggie's realize how crucial it is that we engage locally.

So while we appreciate that local residents may buy Maggie's products because they share our values of environmental sustainability and social responsibility, we don't want our interactions to be limited to an occasional purchase of our merchandise. Just as we have worked hard to develop personal relationships with the 2,000 farmers growing our organic cotton in Nicaragua and the families in North Carolina that knit each pair of our socks, we want to continue strengthening our connection to the vibrant Michigan community in which we live, work and play on a daily basis.

As we look forward to spending more time with the residents of Ypsi and A2 in the future, we want to pause and offer our heartfelt thanks to those that have supported us throughout the years. Sometimes it can be easy to lose sight of your immediate surroundings as a business, but we know that without this local encouragement, we would not be sitting here today. Our ultimate goal is to ensure that the connections Maggie's has built within this dynamic Michigan community remain an integral part of our values and our identity.

How Maggie's Organics Was Rooted

Ben� Burda — Wed, 20 Jun 2012 00:00:00 -0400

Maggie's Organics http://maggiesorganics.com/ is thrilled to be hosting the Concentrate blog and getting a chance to reach out directly to our local community.

First, we would like to say that we had a blast earlier this month at the Green Fair http://www.a2gov.org/government/publicservices/systems_planning/Environment/Pages/GreenFair2009.aspx and Mission Zero Fest http://www.missionzerofest.org/with a2energy.org http://www.a2energy.org/! Thank you to all who stopped by, we hope you are enjoying your free pair of Maggie's a2energy socks! (If you missed out, click here http://goo.gl/mRFAp).

In the spirit of these great local events, we wanted to talk a little bit about why our Michigan community is so important to us. There is no doubt that Maggie's Organics has always been focused on the "big picture", establishing worker-owned cooperatives and developing fair trade and organic standards internationally. But as our business grows, it has been easy to lose sight of our local community and what it has meant to us throughout the years. A2 and now Ypsi have been incredibly supportive places for a company like ours to call home, and meeting old and new friends at various events over the past few weeks has inspired us to reflect on our recent 20-year birthday and the value of our local roots.

Maggie's beginnings can be traced back to a small condo on the west side of Ann Arbor in 1992, where orders were processed on the kitchen table and invoices were filed next to the bed. After moving to California for a few years and buying her partner out in 1997, Maggie's founder Bená Burda followed her heart and chose to come back home, first to Ann Arbor and now to Ypsi. Though an unpopular decision at the time, it turned out better than anyone could have expected. Maggie's loves calling Southeast Michigan home for the same reasons that many of us are drawn to live here year after year: a community of creative minds, a collective spirit of support, and a vibrant multicultural environment, all embedded within a grounded Midwestern atmosphere.

We are also particularly grateful for residents' passion for environmental sustainability and social consciousness, which is why we are so excited about our recent collaboration with the city's Clean Energy Coalition http://cec-mi.org/. We created a special Maggie's organic cotton sock with the a2energy.org logo, which was introduced at the Green Fair and Mission Zero Fest. The socks are being used to educate us all in conserving energy as we help our eco-city grow more green. What started out as a quick conversation with A2's Environmental Coordinator Matthew Naud has evolved not only into a cozy organic cotton sock, but it has also made Maggie's realize how crucial it is that we engage locally.

So while we appreciate that local residents may buy Maggie's products because they share our values of environmental sustainability and social responsibility, we don't want our interactions to be limited to an occasional purchase of our merchandise. Just as we have worked hard to develop personal relationships with the 2,000 farmers growing our organic cotton in Nicaragua and the families in North Carolina that knit each pair of our socks, we want to continue strengthening our connection to the vibrant Michigan community in which we live, work and play on a daily basis.

As we look forward to spending more time with the residents of Ypsi and A2 in the future, we want to pause and offer our heartfelt thanks to those that have supported us throughout the years. Sometimes it can be easy to lose sight of your immediate surroundings as a business, but we know that without this local encouragement, we would not be sitting here today. Our ultimate goal is to ensure that the connections Maggie's has built within this dynamic Michigan community remain an integral part of our values and our identity.

How Maggie's Organics Was Rooted

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Operation Cooperative

Bena Burda — Wed, 20 Jun 2012 00:00:00 -0400

Having been a fair trade and organic company since our inception 20 years ago, we believe that what makes Maggie's Organics most unique is our involvement in every step of the complex apparel supply chain. From the day the 2,000 co-op farmers plant their organic cottonseed to the day the last color is added to our Tie Dye socks, we are constantly engaged with all of our producers. It is this collaborative effort among many voices that we believe characterizes us as a business. Our next goal is to take these efforts beyond our global production chain and work to develop more local collaborations with the many creative designers, innovators and entrepreneurs right here at home.

Since Maggie's began in 1992, we have helped to establish three 100% worker-owned cooperatives around the world: independent production houses that sell to a variety of clients (including Maggie's) and share all the profits among the workers. The first co-op (called the Fair Trade Zone) was formed in an economically ravaged area of Nicaragua, and it has since given over 50 hurricane refugees in the area a chance to earn an independent income in order to determine their own futures. Boasting tremendous success as the world's first worker-owned "free trade zone", the Fair Trade Zone now runs completely autonomously with a customer base stretching across several continents.

After also establishing cotton gin cooperatives and farmer cooperatives in Nicaragua, we helped bring the idea of worker-owned co-ops to the U.S. in 2008 by forming Opportunity Threads in Morganton, NC. Like the Fair Trade Zone, this is another 100% worker-owned business that is busy creating all sorts of products for Maggie's (and other customers), most notably our Tie Dye Chickens, which are handmade from irregular Maggie's socks.

As we continue to maintain strong relationships with these cooperatives and the integral role they play in Maggie's global production chain, we have begun to forge new partnerships here as well.

We recently met with former University of Michigan basketball player David Merritt, a talented 26-year-old who has already founded his own socially conscious fashion brand. Called "Merit", his company aims to create stylish clothing products that will, in his words, "help committed, disadvantaged youth attain a college education" by putting 20% of the brand's revenue into college scholarships for underserved communities. We are excited at the prospect of connecting with more local entrepreneurs like David, and it is inspiring to see young voices like his generating positive social change in our community.

We are also collaborating with Rachel Blistein of Original Moxie – an Ypsi-based line of natural hair products – to develop a new line of Maggie's hair accessories, which will be made from our signature organic cotton and are set to be released this fall.

Apart from collaborating with like-minded businesses and leaders, Maggie's latest project is to start a worker-owned sewing cooperative in Southwest Detroit. The Michigan Economic Development Corporation (MEDC), Detroit Community Cooperative, and Urban Neighborhood Initiative are already involved, and though this will no doubt be a challenging project, we are optimistic that it will happen. We are energized by the recent efforts taking place to revitalize Detroit, especially among youth. In fact, Maggie's most recent intern (and recent University of Michigan graduate) Alan Sedghi has moved to Detroit for Green Economy Leadership Training (GELT), a program run by our friends at Global Exchange. Check out Alan's work on Maggie's new homepage and videos!

Overall, we are very excited to begin a new chapter of collaboration at Maggie's, and translate what we know from our global efforts with worker-owned cooperatives into a dynamic set of projects within our local Michigan community.

Bená Burda and David Merritt photo courtesy of Maggie's Organics

Fair Trade Routes

Bena Burda — Wed, 20 Jun 2012 00:00:00 -0400

So what does the term "fair trade" really mean? Some of you might be surprised to learn that the leaders shaping the movement from within can be just as perplexed by this question as the consumers trying to understand it through news articles and packaging labels.

Many of us are increasingly aware of the labor exploitation that pervades all different types of global production chains, be it a plantation or a sweatshop. So it makes sense that when we buy something, we want to be reassured that our purchases are promoting fair wages and good working conditions for its producers. This attitude is the essence of fair trade, a movement whose growth over the last few decades has led to the creation of numerous third party certification labels, each with a different set of standards and goals. At the same time, growing awareness about the phenomenon of "fairwashing" (like "greenwashing") has made many people skeptical about the truth behind companies' fair trade claims. We may try to simplify our choices by seeking out familiar labels from a certification agency that we trust, but it is important to realize that fair trade products cannot be reduced down to a basic choice between "certified" or "not". No label is a panacea for worldwide labor exploitation, and there are many conflicts and compromises that underlie fair trade certification systems.

This idea has been given new prominence with the controversy surrounding Fair Trade USA's recent decision to allow large coffee plantations and private estates to apply for fair trade certification. While some believe that giving more coffee industry players the chance to adopt fair trade principles is ultimately a good thing, others argue that this will weaken both fair trade standards and the movement's original mission of empowering small farmers to compete in the global market. Many point out that the inclusion of coffee plantations will make it even easier for large companies to certify only specific product lines under their existing production facilities, a technique that is often resented by the 100% Fair Trade companies who take great care to ensure that each product is fairly produced.

These arguments over coffee certification standards are relevant for the rest of the fair trade movement as well, including the apparel sector in which Maggie's is involved. We have been very proactive in seeking out third party certification for Maggie's products, but in the process we have learned that earning a label is not necessarily the most effective way to adhere to our fair trade principles.

Over the last two years, Maggie's has spent over $60,000 in order to meet fair trade certification requirements – regulations that the farmers and producers who make our products have largely found to be cumbersome, restrictive, and not very financially beneficial for themselves or their organizations. This is why we have recently begun to use alternative methods of conveying our fair trade story, such as detailed step-by-step disclosures of our supply chains and thorough third party rating systems like free2work.org.

As a 100% Fair Trade company, we strive to stay connected with our producers and the reality of their working conditions, so for us being "fair trade" goes far beyond the presence of a certification hangtag. We want our brand's integrity and transparency to clearly show that Maggie's products embody the welfare and satisfaction of every worker in our chain.

After years of experience in the fair trade movement, Maggie's defines fair trade as an aspirational method of commerce that is still evolving as it seeks to level the playing field for all workers around the world. We hope to inspire more fair trade consumers to look beyond labels and to get to know individual brands and the producers behind their products. It is through this insight that the world can truly become fair.

Photo of co-op employee in Nicaragua courtesy of Maggie's Organics

TechArb's Summer Crop of Student Startups

Moses Lee — Thu, 07 Jun 2012 00:00:00 -0400

There is an entrepreneurial revolution happening in Ann Arbor, and it's being driven by college students. This summer, students from the University of Michigan (UM) are working on 31 startups around the clock in TechArb, UM's premier student startup accelerator.

This is a long way from the three teams in TechArb four years ago. Since that time, we've supported nearly 300 student entrepreneurs on 119 teams with notable startups such as Lecture Tools, Own Point of Sale, Are you a Human, Mobiata, Backyard Brains, and Shepherd Intelligence. Teams have raised collectively over $5 million in funding from outside sources and generated revenues in excess of $1 million.

Supported by the Center for Entrepreneurship, the Zell Lurie Institute, and the Office of the Vice President of Research, TechArb aims to empower student entrepreneurs across academic disciplines in their pursuit of their entrepreneurial endeavors through training, community, mentoring, networking, training, space, and grants.

TechArb runs two six-month sessions for students starting May 1 (summer session) and Nov. 1 (fall session). The accelerator supports teams in a variety of industries such as software, healthcare, clean technology, applied engineering and manufacturing, consumer products, etc. At the end of each term, we have a showcase where teams demo their products and services to alumni, entrepreneurs, and investors.

For our 8th session of TechArb, which started last month, select teams received grant awards between $5K to 10K to help drive their ventures forward. Some of the notable ventures in the summer session:

Brio Device, LLC | develops airway medical devices with technology to assist first responders who insert breathing tubes for patients in emergencies.

Fetchnotes | a note-taking application that helps get your to dos, ideas, grocery lists and anything you need to remember out of your brain and into your workflow

Legends Card | a college lifestyle card that gives you perks and discounts at all your favorite spot around campus

PicoSpray | develops an electronic fuel injection system with a low enough cost to convert the majority of the 70 million small engines produced each year

EXO Dynamics LLC | helps hospitals protect their surgeons' backs without restricting their performance, through a novel electromechanical brace.

SkySpecs, LLC | provides a low cost and automated solution for monitoring the health of public infrastructure using unmanned aircraft systems

The Beet Box | a restaurant with a purpose – a healthy fast-food service that supports and rewards a healthy lifestyle

Torch Hybrid Marine | revolutionizing the way boats are powered by supplying boat manufacturers with next generation hybrid electric jet propulsion

Warmilu LLC | spreads the warmth with nonelectric and instant heat technology to save infant lives

Wedge | designs for positive social impact with communities and companies in Detroit.

YourCall.F | a web and mobile service that delivers innovative, fan-to-fan sports broadcasting in styles not available on major networks

If you're interested in connecting with our community, follow us on twitter @umtecharb or visit our website.

Why I have a tech startup in Michigan

Moses Lee — Wed, 06 Jun 2012 00:00:00 -0400

Don't you love a good underdog story? We Americans love them. Why do you think Rocky is one of the most popular movies of all time?

As much as none of us like to be down and out, there's something inspiring about being on the "us-against-the-world" team. The woes of Michigan have been well documented. Michigan has high unemployment and apparently people are fleeing the state at a staggering rate. Michigan is often the butt of jokes on late night TV and political commentary. I, for one, am going to fight for this state and help restore it to its former glory.

How?

I'm going to roll up my sleeves and build an amazing startup in this state and encourage others to do likewise.Seriously, Michigan is a great place to start a company. We have great talent, universities, infrastructure, community, and culture. And the cost of living here is so much more affordable than the other tech hubs such as Silicon Valley and NYC. (While I was working in NYC, I spent $1,000 a month to share a studio on the upper west side. In Ann Arbor, $1,000 a month gets you a 1,200 square foot apartment!) And more risk capital is flowing into the state to help spur entrepreneurship.

Here's my story: I co-founded truApp with other alumni from the University of Michigan. We are a talented bunch with backgrounds in engineering, architecture, humanities, and business. We are housed in the new Menlo Innovations office space, where we get to interact with Richard Sheridan, CEO, on a daily basis!.

Before Menlo Innovations, we were in the Ann Arbor Spark Incubator for six months, receiving all sorts of help, including a microloan. (We quickly outgrew the space and had to move!) Every day I meet entrepreneurs, investors, and state officials who want to help us build and take truApp to the next level.

Our startup is closing in on a sizable seed round and we are thrilled with the experience that our investors and mentors are bringing to the table. And we believe our core concept will directly help keep collegiate talent in the state! We currently have over 1,300 college students and 140 companies on the platform, such as Under Armour, Compuware, Pay Anywhere, and SapientNitro.

But it hasn't all been smooth; there are definite challenges to starting a company in the state. For one, raising capital is not that easy, as there are fewer angel and VCs here (and specifically those looking to fund digital media deals) than elsewhere. In addition, we don't have many areas with a high density of entrepreneurs as say California, Colorado, or New York. And culturally, we as a state are still learning what it means to embrace risk and failure.

Despite this, I can't imagine starting truApp anywhere else. Will we succeed? We will. And I can tell you that just like many others starting companies in this great state, we are going to fight hard for it. Don't you want to be a part of this amazing story?

Reach Moses at moses@truapp.me or @mosesklee.

How to Recruit College Students to Your Company

Moses Lee — Wed, 06 Jun 2012 00:00:00 -0400

Campus recruiting is back, and it's as strong as it has ever been.

I recently had a conversation with a key executive at a mid-sized tech company in Michigan and he told me that at a staff meeting, the company announced it intended to actively recruit college students to fill positions because it was losing relevancy with the younger demographic and the company needed an injection of fresh ideas.

Lots of companies today are starting to figure out that college graduates can do a lot more than just make great coffee; if you empower them correctly, they can add significant value to product development, branding, marketing, sales, and culture. As one college student told me, "We can help make a company cool." And in a day and age when consumers and businesses are making purchasing decisions base on the reviews they read online, "cool" can go a long way.

But how do you successfully recruit the modern day college student? And more broadly speaking, how can we keep great collegiate talent from leaving the state of Michigan?

Here are some thoughts to consider:

Culture Counts
The college student today cares deeply about organizational culture. When deciding where to work, students want to know about the environment and what it's like to work with the people in a company. Do employees work in cubicles or in an open, collaborative space? (The latter is more attractive, btw.) Do people go out together after work? Is the workplace collegial or hierarchical? How open are executives to the opinions of junior employees? Is there any unique flair in the organization that makes it special? Culture can be a competitive advantage when recruiting college students. Make sure to emphasize it (or invest in it!).

Impact Driven
The college student today is very thoughtful about how his or her work impacts people and society. A failing campus recruiting strategy is approaching college students as cheap labor to do remedial tasks. College students are more skilled and accomplished than ever before and they aren't afraid to work long hours as long as they know it's for a good reason. As one student recently told me, "I don't want to work for the sake of working. I want my work to have meaning, even if it means making less money."

What will I learn? How will I grow?
Good or bad, most college students see their first job out of college as a transition and really want to make sure that wherever they end up, they are growing and learning. That is why it is so important to communicate what an employee will learn on the job and who they will learn from. If you haven't done so already, it might be good for your company to come up with a talent development plan. In the long run, it will pay dividends.

The Medium is the Message
College students are very web savvy and will do a lot of internet research on you and your company when deciding where to work. Does your company have a Facebook page, a Twitter account, and a website? Are you trying out various online tools to try and reach talented college students? Are your key employees and executives on LinkedIn? As much as you want to do research on potential hires online, young people are doing research about your company online. And the key question is: are you properly engaging and communicating the right message? A poor online presence could spell doom.

The above insights come from years of working with college students at the University of Michigan and my startup, truApp. These are also generalizations and won't apply to everyone. I am hoping that my reflections will help you better recruit talented college students to work for your company and #KeepTalentInMichigan.

Reach Moses at moses@truapp.me or @mosesklee.