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Ethics of entrepreneurship, Q&A with Chris Hall

Business and job growth are seen as paramount when it comes to the local economy, but where does developing a local set of business ethics for all of this new commercial activity fit in? Chris Hall has an idea or two about that and plans to make them public at Eastern Michigan University's Ethos Week today.

The president of RepairClinic.com, online appliance parts retailer, will speak about "Ethics and Entrepreneurship" at 5:30 p.m. in Room 114 at the EMU's College of Business. The former appliance repairman will elaborate on the ethical challenges facing today's entrepreneurs as they navigate a tough economy, while sharing his own experience as an entrepreneur for the last decade.

Hall recently answered some ethics questions for Concentrate via email. Think of it as a taste test of what you can expect to hear from him this evening.

The Ann Arbor/Ypsilanti area has a developing entrepreneurial ecosystem that is seen as crucial to the development of Michigan's new economy. What ethical issues will or should this ecosystem confront as it develops?

As we move further from our manufacturing roots in Michigan, and more into a service economy, I believe we need to relearn what it means to serve others - whether customers or employees. We, as a nation, have become too self-absorbed. Too often we put business interests ahead of the people those businesses are supposed to serve.

The line between university research and spinning off that technology for commercial purposes is not always clear. What ethical pitfalls should the local academia and entrepreneurial communities be in the new economy wary of while developing this relationship?

Michigan has a rare and unique opportunity. We have a strong manufacturing and technology base in our universities and businesses. And, we know that auto manufacturing isn't going to support Michigan single-handedly in the future. I believe we can become the leader in green technology. To do that, universities and businesses are going to have to share more of their research with each other. As a nation, we're leaning more toward protectionism. As a state, I believe we need to do the opposite. There are many entrepreneurs that would be able to move some of the green technology forward if they were given the chance.

When it comes to ethics and entrepreneurs, where should Ann Arbor/Ypsilanti look for guidance?

In our own backyard there are two large companies that I believe have been exceptional models of ethical leadership - Ford and Whirlpool. While they haven't been perfect, overall they have set a good example of how to do the right thing by their customers and their employees. On a smaller scale, Zingerman's in Ann Arbor sets a great example of how to do the right thing.

Name one thing would you change about the local business area when it comes to business ethics?

I would love to see the local communities get together and develop a code of ethics. Then, have local businesses opt in to be randomly audited for compliance to that code of ethics. Finally, build a website where local residents could check out the rankings of a business, and submit complaints for resolution. Kind of like the BBB but with a better resolution process and more transparency in the rankings.

Source: Chris Hall, president of RepairClinic.com
Writer: Jon Zemke

Ypsilanti, Ann Arbor start-ups take big bite of microloans

The Current Motor Co sees a promising future for its business, especially now that it has received a small-yet-significant chunk of change from the Michigan Microloan Fund Program.

The company and its staff of six makes electric mopeds and motorcycles. It will use the money to develop a new moped scooter, among other things.

"We're using it to help expand our market and protect our intellectual property by writing patents," says John Harding, founder of Current Motor Co.

The Ypsilanti-based start-up is one of four companies to split $155,000 in loans from the Michigan Microloan Fund Program. The other company's include Avicenna Medical Systems, Shepherd Intelligent Systems and TRIG Tires and Wheels. These companies will use the loans, which range between $10,000 and $50,000, to help further develop and market their products and build their core business.

Avicenna Medical Systems, a University of Michigan spin-off based in Ann Arbor, develops health-care software applications. Shepherd Intelligent Systems, another U-M spin out based in Ann Arbor, creates software that predicts arrival times for mass transit vehicles, like buses. Southfield-based TRIG Tires and Wheels is developing a anti-roll off and run-flat system for vehicle tires.

The $1.5 million Michigan Microloan Fund Program is made up of three distinct microloan funds, including the Eastern Washtenaw Microloan Fund ($225,000), Michigan Pre-Seed Capital Fund ($1 million) and the Ann Arbor/Ypsilanti Local Development Financing Authority ($275,000). The Michigan Microloan Fund Program, which is administered by Ann Arbor SPARK, has distributed $911,500 to 23 companies since last year.

Source: John Harding, president of Current Motor Co.
Writer: Jon Zemke

EMU start-ups win seed capital from Skandalaris Biz Plan Competition

Not all business plan competitions are for high-powered start-ups geared toward the new economy. Some, like the The Skandalaris Business Plan Competition, give opportunities for younger entrepreneurs or people who want to start a good, old-fashioned business.

The winners of the Eastern Michigan University Center for Entrepreneurship-based competition include Saline High School alumna and EMU student Carrie Eichler for her business plan called Carrie’s Consignments and fellow EMU student Deborah Merz who won for her plan called Healthcare Integrators. Both received $1,000.

Bill Shaffer took home $700 for his plan called The Shaffer Boys and its presentation. That business plan centers around a carpentry business for commercial buildings. The 23-year-old journeyman carpenter is a senior majoring in construction management at EMU. Shaffer was inspired by his father and uncles who once owned their own carpentry business.

"My whole family is in the carpentry business," Shaffer says.

All business plans were welcome to the competition, which presented its plans at the Sesi Midwest Entrepreneurship Conference. About 300 students, educators and future entrepreneurs attended the annual conference this year.

Source: Eastern Michigan University and Bill Shaffer, owner of The Shaffer Boys
Writer: Jon Zemke

Schoolpictures.com hires 7 in Ypsilanti, plans to add 7-10

Schoolpictures.com has a lot of room to grow in its new home near Eastern Michigan University, and the Ypsilanti-based firm is already starting to fill out the space.

The 5-year-old company hired seven people in 2009, rounding out its staff to 41 employees, along with 30 more interns and independent contractors. It expects to hire 7-10 people this year, and all of that is organic growth.

"We've increased the size of our business by growing our mission," says Skip Cerier, CEO of Schoolpictures.com. "Our goal is to continue to raise money for schools. As cuts came down from the state, schools are in such dire straits that they are looking for other revenues. Schoolpictures.com provides a unique business model that allows us to sustain and grow our business while we raise hundreds of thousands of dollars for schools."

That includes $540,000 for 180 schools in 2009. Cerier believes that number would have been much higher in a healthier economy. He has big aspirations for beating that number this year, partly because of an improving economy and partly because of the company's new home.

Schoolpictures.com took over the Ave Maria University campus, turning the old mid-20th Century elementary school and other even older structures into a silver LEED campus. It’s first pre-1950 building to reach LEED silver status in Michigan. Now the 21,000 square feet of space that was prime fodder to become building rubble stands as a shinning example of sustainability and economic opportunity.

The old Victorian house is being remodeled into a child portrait studio. The idea is the architecture provides a comforting feeling for both kids and families. The school's old gym is now a 2,400-square-foot photography studio that gives the firm's photographers and creatives a lot of freedom.

"There has been a monumental change in the attitude of my employees," Cerier says. "They are much happier when they have space of their own."

Source: Skip Cerier, CEO of Schoolpictures.com
Writer: Jon Zemke

Sesi Midwest to showcase Ypsilanti entrepreneurship

Eastern Michigan University is working to encourage more students to dip their toes into the entrepreneurship pool with it latest offering Sesi Midwest Entrepreneurship Conference. Joe Venuto, one of the conference's speakers, is already swimming laps.

Venuto graduated from Eastern Michigan in 2008 with a degree in communications and a minor in entrepreneurship. He started several small businesses in Ypsilanti, ranging from Mobile Consulting (which saves people money on their cell phone bills) to SoPlat, a start-up that runs social media for Varsity Ford in Ann Arbor and Ferndale.

Venuto, 27, credits Eastern Michigan and Ypsilanti with giving him "the platform to be great" when it comes to running his own business. Those institutions helped him go from a dead broke student with little to direction in life to becoming a business owner with five independent contractors under him.

"There are so many resources in Ypsilanti and Eastern Michigan," Venuto says. "SPARK is over in Ann Arbor. They provided all of the resources I needed to be great as a serial entrepreneur. Everyone had an open door, too."

The conference will spotlight other local entrepreneurs and their successes, including people from well-established firms like Zingerman's to new start-ups run by students, like IMU.

The conference will be held at Friday in the EMU Student Center. Call (734) 487-0902 for more information.

Source: Joe Venuto, serial entrepreneur and recent graduate of Eastern Michigan University
Writer: Jon Zemke

Ypsilanti's New Eagle plans to add 10 engineers

A little more than a year ago, Rich and Mickey Swortzel started New Eagle. Today the Ypsilanti-based start-up cuts paychecks for 12, including independent contractors and interns. It hopes to hire another 10 engineers by summer.

New Eagle specializes in creating electronic control modules (think of the computer systems that help make your car run) for hybrids and the engineering services that support them. The Swotzels started New Eagle after the company they worked for (MotoTron) was acquired and moved many of its operations to Colorado.

"We wanted to start our own company," says Mickey Swortzel, business manager of New Eagle. "We wanted to enter this market."

This company is building the brains behind electric and hybrid vehicles. New Eagle's principal product, MotoHawk, facilitates electronic controls. There are more than a dozen such brains in an average car today that control everything from the windows to the locks.

"Picture 20 laptops in your car measuring X and telling your car to do Y if Z happens," Mickey Swortzel says.

New Eagle plans to facilitate its growth this year by pushing its engineering service sales. The idea is they will spark more sales in its principal product.

Source: Mickey Swortzel, business manager of New Eagle
Writer: Jon Zemke

Successful ACE shows Mich ahead of the entrepreneurial curve

There is a new bit of conventional wisdom forming in local circles: Michigan (the Ann Arbor area especially) is way ahead of the rest of nation when it comes to building small businesses and cultivating entrepreneurs.

Some concrete evidence of that popped up last week at the Annual Collaboration for Entrepreneurship in Ann Arbor's Skyline High School. Attendance almost doubled, going from 550 last year to 917 last week. That helped create a buzz of optimism about the state's small business climate that seems to be hitting a tipping point.

"Michigan really does do certain things well," says Gerry Roston, chair of the planning committee for this year's ACE and owner of the Pair of Docs Consulting in Saline. "There are a number of organizations that support entrepreneurship. We seem to have a lot more of these than other states and they work together really well."

He points to newcomers like Ann Arbor SPARK as gaining traction and working well with established organizations, like the New Enterprise Forum. A main focus of groups like this revolve around the idea of what's best for the entrepreneur. It's ethos like this that have attracted economic development agencies from Delaware and California to this year's ACE.

"They come to Michigan to see how it's done," Roston says.

That's not to say the local entrepreneur community has arrived. There is a lot of work to be done to support these burgeoning small businesses. Chief among those is start-up capital in an environment where it seems lenders are frozen in carbonite Han Solo style.

"We need to grow our venture capital community," Roston says. "We have funds here. They're great funds but they're smaller funds."

Which might explain one of the reasons why ACE was so popular this year. The event holds several contests that feature cold, hard start-up cash for the winners. Some of those include $1,000 for Intercollegiate Business Idea Pitch Competition (won by Ken Lange of Saginaw Valley State University for a telescoping dock), a year of corporate membership for NEF and virtual incubator tenancy in Ann Arbor SPARK (won by Howard Brown of Franklin-based CircleBuilder) and even $140 for the Twitter Biz Idea Contest, which was won by Barbara O’Connell of Ypsilanti's WhereToFindCare.com.

On top of all of that, it was announced that Great Lake Entrepreneur Quest is partnering with the SmartZones/Michigan Economic Development Corp to offer a $100,000 pre-seed investment through the Michigan Pre-Seed Capital Fund, which is administered by Ann Arbor SPARK.

Source: Gerry Roston, chair of the planning committee for Annual Collaboration for Entrepreneurship
Writer: Jon Zemke

Medical marijuana biz leads to 30 new jobs in Ypsilanti

Medical marijuana isn't just a buzz word in downtown Ypsilanti, it's a business with the potential to boom in the near future.

The 3rd Coast Seed Co. (a compassion club for users of medicinal cannabis and their caregivers) and the Michigan Marijuana Chamber of Commerce have set up shop in 7,300 square feet of commercial space, bringing 30 new jobs with them. The organizations' space (where one can eat a marijuana cookie among other cannabis products legally) is ironically in an old Girl Scouts office next to Abe's Coney Island on 19 N Hamilton St.

Anthony Freed, the founder of both organizations, also has plans to open similar offices elsewhere in Michigan. He believes this could create 1,000 jobs in Michigan both directly and indirectly within the next year.

"The ability for this to save Michigan is a very real concept," says Freed, who is also a user of medicinal marijuana. He also was once owned a mortgage company and claims to have been the general manager of Dexter Chevrolet at the age of 23.

As an example he says he is working with a local company that makes air purifying machines that have been used in restaurants to abate second-hand smoke. Instead of that business just going away with the newly passed smoking ban, he hopes to help that company transition its technology to be used as an air filtration system for the grow process of marijuana.

He sees multiple spin-off businesses coming from the new medical marijuana laws. Business that can not only be used by existing companies but can help create new ones, and new jobs, in Michigan. It's part of the reason why he is starting the Michigan Caregivers Cup in Ypsilanti at the end of this month.

"This industry can replace the auto industry at a fast pace," Freed says.

He points to proof of that in California, which is celebrating its 12 anniversary of the enactment of its medical marijuana laws. The medicinal marijuana industry is worth 10 figures and growing. He thinks Michigan is even more adept to hosting such an industry with its abundance of farmland, manufacturing base and research facilities.

"That this industry exists is a fact," Freed says. "It's a billion dollar industry whether you want to recognize it or not."

Source: Anthony Freed, co-founder of the Third Seed Co. and the Michigan Marijuana Chamber of Commerce
Writer: Jon Zemke

Michigan Microloan Fund makes $170K in new loans

The Michigan Microloan Fund Program has struck again, continuing what promises to be a common occurrence in 2010.

The program made $170,000 in loans to CTC Holdings, Energy Management Devices, MemCatch and Motor City Wipers. All of the companies are from southeast Michigan and half of them are from the Ypsilanti-Ann Arbor area.

The micro loans provide funding for start-ups so they can either commercialize their product or accelerate their business growth. The $1.5 million program will make anywhere from 2-4 loans of a few thousand dollars each per month for 2010. That's another 24-48 fledgling local businesses receiving financing during a time when loans for small businesses are almost non-existent.

"I don't think the demand is going to decrease," says Skip Simms, fund manager for the Michigan Microloan Fund Program. "It has become a very popular way for start-ups to get a small amount of capital to get them to a significant milestone."

Ypsilanti-based CTC Holdings is commercializing advanced VOCs-to-Energy Products that convert VOC emissions into concentrated fuel. That fuel can be paired with a Stirling engine, fuel cell, IC engine or micro-turbine to create useful electricity or burned in a boiler to create thermal energy.

MemCatch is creating a social knowledge network that helps users build and share information. The Ann Arbor-based firm's system collects, collaborates, shares and enables sharing of information within a private network or an open database.

Commerce Township-based Energy Management Devices, a spin-out of Sterling Technologies, is commercializing its g-plug family of products. The g-plug monitors a computer’s power consumption, and when the computer powers down, it automatically shuts down computer-related peripherals such as laser printers, monitors, and amplified speakers.

Motor City Wipers is developing an advanced windshield wiper system that solves several of the shortcomings of today’s windshield wipers, including the build-up of snow, ice and other solid debris from the windshield wiper blade. It's based in Rochester.

Source: Skip Simms, fund manager for the Michigan Microloan Fund Program
Writer: Jon Zemke

Clean Energy Coalition hires 3 in Ypsilanti's Depot Town

Green jobs are being created in Ypsilanti's Depot Town now that the Clean Energy Coalition is going on a hiring spree.

Nineteen months ago, the 3-year-old non-profit had a staff one, its executive director, Sean Reed. Today it employs eight people, an intern and the occasional independent contractor in its newly opened retail and education space in Depot Town called the Energy Outlet. Three of those hires took place in January and another 2-3 people are expected to be on board by the end of February.

"Our organization has gone through an aggressive ramp up in staffing," says Sean Reed, executive director of the Clean Energy Coalition.

The coalition got its start helping find ways to make commuting in automobiles more sustainable. It has since grow to include things like energy audits for buildings and other sustainability-oriented projects thanks to a $15 million grant it received from the U.S. Dept. of Energy this summer.

Source: Sean Reed, executive director of the Clean Energy Coalition
Writer: Jon Zemke

ISSYS makes room for 10-20 new hires in Ypsilanti

ISSYS isn't just making plans to add to its staff of nearly 30 people. It's actually building out more space so that it can accommodate between 10-20 new people by the end of the year.

ISSYS is adding 5,400 square feet to its Ypsilanti offices in the industrial area by Willow Run. That new space would include a new clean room laboratory, bringing the company up to 16,000 square feet. Work is expected to be done by February.

"We got the clean room walls up," says Doug Sparks, vice president of ISSYS. "We're putting the piping in now."

ISSYS (short for Integrated Sensing Systems) spun-off from the University of Michigan in 1995 and uses micro fluids and sensors for research in products like fuel cells. It recently formed a partnership with Switzerland-based Endress + Hauser to license some of its microchip technology.

Source: Doug Sparks, vice president of ISSYS
Writer: Jon Zemke

Ypsilanti's RealKidz gets microloan, adds 4

A year ago the Detroit Free Press began following two Washtenaw County startups for a on-going series about entrepreneurship in Michigan. One was a high-flying internet company run by a Silicon Valley veteran based in downtown Ann Arbor. The other was a retail company focused on selling over-sized kids clothes run by a recent U-M grad in Ypsilanti's Depot Town.

Many businesses don't make it past the one year mark, especially in local and national economies widely considered to be among the worst in generations. If this writer had to bet on one of the two surviving, he probably would have put his money on the internet startup. And he would have been wrong.

Ypsilanti-based RealKidz is kicking off its third year with more employees and more funding, aiming for a year of more growth. It went from employing just its founder and CEO Merrill Guerra and one other employee at the start of 2009 to four employees this year.

It also just received a highly competitive loan from the Eastern Washtenaw Microloan Fund. That money is meant to pay for commercialization of its product and help get the company through its lean early years.

"It enables us to really get the product out in the marketplace," Guerra says.

RealKidz makes clothing that fits larger children, mainly girls. The Ann Arbor SPARK East tenant was started after Guerra was watching her own girl, then five, play with kids and talked about the inadequacies of kids clothing with other mothers there.

"I couldn't believe this market isn't being served," Guerra says.

Source: Merrill Guerra, CEO and founder of RealKidz
Writer: Jon Zemke

Ann Arbor area rings in new year with regionalism

Budgets are tighter in 2010 and that means more people from different places are playing nicer. It also means more regional cooperation.

"Clearly, we're in times where there is great pressure to be using your resources in an appropriate manner," says Mark Ouimet, a Washtenaw County Commissioner and chair of the Ypsilanti Chamber of Commerce.

In that spirit, the Ypsilanti and Ann Arbor chambers of commerce are joining forces, creating the Ann Arbor/Ypsilanti Regional Chamber. The new regional chamber is expected to expand its programs and benefits for members, create cost savings, increase networking opportunities and a form stronger voice for the Ann Arbor/Ypsilanti area. Ouimet also believes this could serve as an example for more regionalism in the county.

"This is an opportunity for the organizations to look at what they do and how they do it," he says.

More regional cooperation is also being broached just north of Ann Arbor in Livingston County. There, according to a story in The Detroit News, four of the county's five school districts are considering consolidating their bus service as a way of saving money. There the Livingston Educational Service Agency would manage the bus fleets for Brighton, Hartland, Howell and Pinckney public schools (which transport about 15,000 students), saving the districts an estimated $1 million.

Source: Mark Ouimet, chair of the Ypsilanti Chamber of Commerce
Writer: Jon Zemke

Venture capital, acquisition made headlines in 2009 (stories below)

There were some big deals made in the Ann Arbor area this year. 2009 saw venture capital deals worth eight figures and acquisitions worth nine figures. And the young and innovative continue to go for the brass ring with new start-ups.



Ypsilanti's Clean Energy Coalition lands $15M federal grant

This story originally ran: 9/2/2009

The Clean Energy Coalition will take a major step forward this fall now that it has roped in a $15 million federal contract, a hit that is expected to result in an expanded staff at the Ypsilanti-based non-profit.

"Obviously our staffing could grow significantly from this," says Sean Reed, executive director of the Clean Energy Coalition.

The non-profit currently has a staff of six full-timers and two part-timers at its offices in Depot Town. The staff normally handles six-figure state and federal grants that focus on sustainability projects.

The $15 million grant comes from the U.S. Dept. of Energy and is part of the $787 billion federal stimulus package. The money will be used as part of the $31 million Michigan Green Fleets project, a program that looks to integrate more alternative fuels and advanced fuel-efficient technology (think bio-diesel and hybrids) across Michigan.

The project will assist nine partners, such as the state, DTE Energy and the Ann Arbor Transportation Authority, in purchasing 271 alternative fuel vehicles. These include hybrids, electric vehicles and compressed natural gas vehicles. It will also install 19 alternative fueling stations across the state. The end goal is to save more than 5 million gallons of fossil fuels and 500 million pounds of vehicle emissions over four years.

"This is a very significant project for us," Reed says.

And it might not be the only one. The Clean Energy Coalition is still waiting on word for another $9-10 million in grant projects this fall to potentially be used to ramp up the non-profit's hiring.

Source: Sean Reed, executive director of Clean Energy Coalition
Writer: Jon Zemke
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