You've got a world-changing idea. And gobs of passion. Great! So, how do you attract investment? From concept to company Ann Arbor SPARK's boot camp is school for start-ups. Concentrate's Jon Zemke follows a pair of entrepreneurs as they learn to hone their pitch, strategize their growth and listen to those who have been there and done that.
Tucked away in a small retail space next door to the Colonial Lanes bowling alley is the newest environmental feather in Ann Arbor's cap – Bgreen.Daniel Stephens, of Ethnic Creations fame, started putting the business together about six months ago before opening in November. Now his new store sells environmentally-friendly home building and cleaning products, such as Low-VOC paint.Stephens has been a retailer for about 20 years (his Ethnic Creations store is still open in Petoskey). The Ann Arbor resident has worked in the environmental movement for year and was looking for a new product mix. He put two and two together and came up with Bgreen."We try to be very comprehensive and we're growing everyday," Stephens says.Low-VOC paint is one of the firm's main products, but it also offers sustainable flooring such as bamboo wood and countertops made of recycled materials. He also sells 100 percent biodegradable products, such as plates, eating utensils and cleaning products."There are very few cleaning products that you can let go down the drain," Stephen says.The store employs five people right now, but Stephens expects that number to rise as the mainstream America works more and more sustainable options into its life.Source: Daniel Stephens, owner and CEO of BgreenWriter: Jon Zemke
John Rubin is a good son. Seven years ago he was a management consultant working out of Ann Arbor while his mother ran an independent bookstore in Chicago. Rubin regularly advised her on how to modernize her 30-year-old business. It wasn't long, however, before Rubin realized that a number of other small bookstores needed similar advice on how to take advantage of new technologies, such as online sales. The CFL went off over his head and he started Above the Tree Line."They were all out there all alone and you can use technology to link them together," Rubin says.The idea is to give the broad range of independent booksellers and other retailers the same economies of scale as major chains. Above the Tree Line's software helps these little firms streamline their inventory and create other efficiencies.People didn’t beat down Rubin's door at first. He spent his first four years as the company's sole employee. But recently business at the Ann Arbor-based firm is really starting to take off. Revenue has doubled in the last year and the company added Borders as a client 18 months ago. This lead Above the Tree Line to hire five people in the last two years, so it now employs eight people and one intern."It's been an incremental spreading of the word, expanding the customer base and the services we offer," Rubin says.Above the Tree Line expects to grow its revenue 100 percent annually for the next two years. If it hits those goals, they anticipate adding another 5-6 people. Can't wait to join them? Right now, they're looking for 1-2 new program developers.Source: John Rubin, president and CEO of Above the Tree LineWriter: Jon Zemke
In 2000 Loch McCabe saw a need and started to fill it. Given the recent focus on sustainable industries, he was a bit ahead of the curve. McCabe's Ann Arbor-based Shepherd Advisors helps businesses and institutions either break into the clean-technology sector or helps them become greener."There was a huge gap between the potential for clean technology companies in Michigan and what was actually happening," McCabe says. "I started Shepherd Advisors to help the progress of clean technology companies in Michigan."Loch started as the company's sole employee at the beginning of the decade. Today the consulting firm employs nine people, including independent contractors and interns. Over the last year Shepherd Advisors added three people and it hopes to grow its revenue and employee base by 50 percent within the next year.The firm's projects include assisting the city of Wyandotte to green its energy production. Wyandotte is installing solar panels on its schools and looking to build wind turbines along its section of the Detroit River.The company also has clients across Michigan, from East Lansing to Midland to its own backyard in Ann Arbor. Even in this difficult economy, it's enough to make McCabe a glass-half-full guy about his company's future."There are lots of reasons to be optimistic and a couple of reasons to be cautious," McCabe says.Source: Loch McCabe, president of Shepherd AdvisorsWriter: Jon Zemke
Ann Arbor's Stout Systems is feeling its oats these days. Not only has the software firm almost doubled its staff since 2006, growing from 15 employees to 25 people and five independent contractors., it also recently opened an office in Detroit and expects to grow its staff by as many as six people by the end of the year. Oh, and it's also looking into starting an internship program. "There doesn't seem to be any lack of demand for software development services," says John W Stout, president and founder of Stout Systems. Stout Systems started 15 years ago with just Stout. The firm specializes in software development and helping firms with technical staffing such as computer programmers or project managers. Most of the company's recent growth comes from website customization and an expansion of its expert-level software development services."The only thing that limits us is if we decided we didn't want to get much bigger," Stout says. "Source: John W Stout, president and founder of Stout SystemsWriter: Jon Zemke
Tim Patton didn’t start out wanting to create a local airline but that's just what the veteran entrepreneur ended up doing with Flagship Private Air."It really started as a personal passion," Patton says.The chairman and CEO of Patton Holdings (based out of Domino Farms) bought a private plane a few years ago for his health-care company. He often needed to go to small, out-of-the-way places like Hershey, Pennsylvania, for business, places that were prohibitively expensive to fly commercially out of Detroit's Metro Airport.He wasn't alone. Plenty of local business people found flying either too expensive or too time inefficient using major airlines. And then the CFL went off over Patton's head."There is no one else doing this here in Ann Arbor," Patton says. "Why not make a business out of this?"Flagship Private Air is set to take off in early December. It has a handful of turbo-prop planes ready to fly from Ann Arbor's Airport to 47 locations throughout the continental U.S., but mainly focused on the Midwest. The chartered planes can carry private parties within 250 miles. Prices are usually kept under $1,000 per person with a minimum of two people. The company can also cater the flights food from Zingerman's as well as set up hotel or rental car reservations. And Patton plans to expand his business to summer resorts in northern cities, like Traverse City or Mackinac Island. The idea of hiring out a small plane for a few people at a reasonable price makes it worthwhile to local business people, especially those concerned with time efficiency. For instance, customers don't have to drive far, go through extensive security checks or fly at the whim of notoriously late airlines.The planes can be rented out on a per trip basis or customer can buy blocks of time at a discount. Flagship even allows clients to become fractional owners in a plane. Think of it like a private-plane timeshare.Patton has high hopes for Flagship Private Air as Ann Arbor's new economy business sector grows in both size and prominence.Source: Tim Patton, chairman and CEO of Patton HoldingsWriter: Jon Zemke
Ann Arbor SPARK's 2008 FastTrack reads like a who's who of innovative Ann Arbor-area start-ups.There are media darlings like Menlo Innovations and up-and-comers like LLamasoft. All in all, the 12 are companies any other Michigan community would sell the farm (and the cow and the tractor) to attract to their backyard.Washtenaw County's 'Gleaming Dozen' were recognized for their outstanding business successes. And that's during normal economic circumstance. They get an extra attaboy for surviving the current economic climate.Companies that were recognized must be headquartered in Washtenaw County, have at least $100,000 gross revenue and average 20 percent growth for three years running.One-year recipients include LLamasoft, Saline Lectronics and University Bancorp. The list of two-year companies reads like ForeSee Results, Latitude Consulting Group and Shepherd Advisors.AKASHA, Adaptive Materials, Online Technologies Corporation and Soft-Link International received three-year FastTrack. And at the top of the list, four-year FastTrack: HealthMedia and Menlo Innovations.Source: Ann Arbor SPARKWriter: Jon Zemke
In a small, old house on the northern edge of Ann Arbor's downtown is one of the big players in Michigan's new economy – EDF Ventures.The venture capital firm invests in numerous early-stage health care companies. Today it has about $170 million worth of assets under management. About a third of those are based in Michigan. Its latest investment, for example, is in Grand Valley State-based TransCorp, a start-up that develops surgical instruments and implants.EDF Ventures has organized four investment funds since 1987 and is getting ready to start a fifth worth up to $50 million. It's that growth that inspired the firm to expand to four full-time and three part-time (including one intern) employees. Two new hires have already joined the firm and the company expects to add yet more next year when it gets its fifth fund up and running. Source: Linda Fingerle, chief financial officer and principal of EDF VenturesWriter: Jon Zemke
NeuroNexus Technologies' products may look to get into people's brains but the Ann Arbor-based start-up is definitely in its investors' heads. The firm has just lined up $2 million in venture capital, including $1 million from Michigan's 21st Century Jobs Fund. The investment is expected to expand the company's employee base from 16 to 23 within the next few years. NeuroNexus designs state-of-the-art microscale neural interface products for research and clinical treatment of chronic neurological disorders. That's fancy prospectus talk for a company that creates technology that can monitor brain function and stimulate neurological functions. It can also be used to deliver treatments.The 4-year-old company is now self-sustaining and experiencing high growth. Well, growth fast enough to go from three unpaid personnel to a staff of 17 today. The company's revenues doubled between 2005 and 2007, and it is expected to double again this year.NeuroNexus is focusing its growth on four areas – research products, clinical products, engineering and manufacturing and innovation and IP development. Source: Michigan Economic Development CorporationWriter: Jon Zemke
In the bowels of Ann Arbor SPARK's downtown building is a company composed of a happy little band of Pfizer refugees who are not only trying to make it, they're beginning to make it big. Say hello to Velesco Pharmaceutical Services, a firm started by ex-Pfizerites Gerry Cox and David Barnes. The two worked at Pfizer's Ann Arbor campus until the pharma giant decided not to work there anymore. The move prompted Cox and Barnes to round up a few of their co-workers and begin Velesco earlier this year. Today their company stands six people strong. "We saw a real opportunity to provide high-quality pharmaceutical consulting services to companies," says Cox, who is now Velesco's Chief Operating Officer.The firm has taken on a number of clients in Michigan, and is now aiming for out of state contracts. Recognizing that most of the big pharmaceutical companies are located on the coasts, Velesco has aimed its focus east and west but remains committed to the Mid West. If all goes as planned, it expects to double the number of employees by the end of year. Source: Gerry Cox, chief operating officer for Velesco Pharmaceutical ServicesWriter: Jon Zemke
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