News

Small business news in 2012 wasn't dominated by individual start-ups as much as it was the places that let them grow. Here are the Top 5 enablers of Detroit's entrepreneurial ecosystem.

M@dison Building
Nothing has been grabbing headlines in Metro Detroit's business community like the M@dison Building. If there is a beacon for the region's emerging new economy, its the M@dison Building. Stoking the flames of that light are some of the building's top tenants, such as the Detroit Venture Partners and Detroit Labs. It's attracting out-of-town offices from the likes of Twiiter and TextFromLastNight, along with out-of-state start-ups like Stik and Quikkly.

D:Hive, DC3 and TechTown
Incubators and hives in Detroit are also helping drive the Motor City's entrepreneurial spirit, helping a growing number of aspiring entrepreneurs reach for their business dream. D:hive's BUILD program has graduated dozens of fresh entrepreneurs looking to launch life-style businesses. The Detroit Creative Corridor Center is pumping out creatively based companies and TechTown continues to be the go-to business incubator pumping out firms and jobs.

Talent Programs
Start-ups aren't the only things bringing in new college graduates to Detroit in 2012. Talent-attraction programs like Venture for America and Challenge Detroit have brought dozens of talented young people to the Motor City working for start ups and name-corporations, alike. Both organizations look to do the same thing again in 2013.

Coffee Shops Galore
Coffee shops popped up in Detroit in 2012 almost as fast as start ups moved into the M@dison Building. Of course one of those coffee shops, Chez Zara, opening up was in the M@dison Building. Other notable openings in the greater downtown area include The Bottom Line and the Great Lakes Coffee Roasting Co. in Midtown, the Roasting Plant in downtown and the pop-up Cafe Con Leche del Este in Lafayette Park. AJ's Coffeeworks, formerly of Ferndale, made the move to Highland Park and Always Brewing Detroit also opened in Grandmont Rosedale.

Accelerate Michigan
The Accelerate Michigan Innovation Competition, Michigan's premier business plan competition, spent its first two years in Ann Arbor. It made the move to downtown Detroit this fall, awarding $1 million in prizes to start-ups from across Michigan.

And here is a quick list of start-ups worth keeping an eye on 2013: Ubi Video, Glyph, LevelEleven, Fresh Corner Cafe, iRule, Corridor Sausage Co, LOVELAND Technologies, Detroit Bus Co, Rippld, Simply Suzanne, McClures Pickles, Are You a Human and Shinola.

Writer: Jon Zemke

Start-ups from Ann Arbor and those with close ties to the college town did quite well at this year's Accelerate Michigan Innovation Competition.

The top three finishers in this year's business plan competition all hailed from cities outside of Washtenaw County but they all have roots in the Ann Arbor area. Algal Scientific and nanoMAG (the first and second place finishers) both got their start in Ann Arbor before moving to Plymouth and Livonia, respectively. They both still work extensively with Ann Arbor SPARK. East Lansing-based InPore Technologies (the third place finisher) is headed up by Gerry Roston, a serial entrepreneur that calls Saline home.

Steve LeBeau, president of nanoMAG, praised the folks at Ann Arbor SPARK and at Accelerate Michigan with preparing his start bio-tech firm to do so well at the competition and be ready to raise a significant amount of revenue. He expects his start-up will be able to leverage its $100,000 cash prize from Accelerate Michigan into a seven-figure angel round.

"In the middle of this (competition) you're a venture capital fund saying, 'Send me a packet about what's going on,'" LeBeau says. "And you have a 12-page packet (prepared and peer-reviewed as part of the competition) to send them."

Other top placers at the Accelerate Michigan calling Washtenaw County home include:

- Eco-Fueling, the Saline-based business won the advanced transportation prize worth $25,000 for its fuel-efficiency technology built for diesel engines.
- Ornicept, the Ann Arbor-based start-up won the alternative energy prize worth $25,000 for its technology that monitors bird activity so wind turbine developers can make informed decisions.
- Protean Payment, the Tech Brewery-based company won the products and services award worth $25,000 for its software that can combine every creditcard in a consumer's wallet into one card.

Source: Accelerate Michigan Innovation Competition and Steve LeBeau, president of nanoMAG
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Ultra Electronics and the University of Michigan are two important aspects of Bill King's life, which is why the veteran executive decided to take the helm at the Ultra Electronics AMI, formerly Adaptive Materials.

King has spent 31 years working for Ultra Electronics and graduated from the University of Michigan in 1979. He is now the president of Ultra Electronics AMI, which is now a division of United Kingdom-based Ultra Electronics after it acquired Adaptive Materials.

"I am from Michigan," King says. "I want to retire in Michigan. I am 55 so I have another 10-12 years that I want to work. If I can give back to Ultra Electronics, which has been very good to me, and the University of Michigan, which also means a lot to me, that's what gets me excited."

Ultra Electronics AMI designs, tests and manufactures the future of portable power: solid oxide fuel cell technology. It's products are used by everything from military personnel to outdoor enthusiasts. The technology was spun out of Adaptive Materials, which was acquired by Ultra Electronics in early 2011. Ultra Electronics AMI currently employs 63 people and the occasional summer intern after hiring 10 people over the last year.

Source: Bill King, president of Ultra Electronics AMI
Writer: Jon Zemke

123.net is adding to both its staff and its business capacity.

The Southfield-based Internet firm has hired three people in 2012, expanding its office to 25 employees. It has also added 11,500 square feet of data storage space to its infrastructure with plans to expand much more rapidly in 2013.

"We have experienced quite a bit of growth," says Dave Curran, channel sales manager of 123.net. "Over the last two years we have experienced 66 percent growth. We will probably add 5-10 new employees over the next year."

123.net added 8,000 square feet of data storage space to its Southfield operations and another 3,500 square feet to its Grand Rapids-based facility. It plans to add yet another 100,000 square feet of data storage space in Southfield in 2013 for a total investment of $15 million. The addition would take place at 20,000 square feet at a time.

"That would more than double our current capacity," Curran says.

Source: Dave Curran, channel sales manager of 123.net
Writer: Jon Zemke

More tech and employment opportunities are coming to Michigan First Credit Union this year. The Lathrup Village-based financial institution has hired 10 people and is adding more mobile banking options for its growing member base.

The 86-year-old credit union has expanded its staff by 10 people over the last year, rounding out to 229 people and a few interns. Its newest hires include a digital marketing manager and social media professional.

Michigan First Credit Union has also expanded its mobile banking options. The credit union began offering banking options for smartphones in 2010 and has recently added a new feature that allows mobile deposit for iPhone, iPad and Android mobile devices. Users can take a photo of a check with their device and deposit it directly into their checking or savings account.

"A lot of people have been doing their banking through smart phones and other mobile devices so we thought it was very important to be in that space," says Linda Douglas, vice president of marketing for Michigan First Credit Union. She adds that these sort of options are popular with young, tech-savvy members the credit union is trying to attract.

Michigan First Credit Union adds about 1,000 to 1,500 new members each month in recent years. It now has a membership of 87,000 individuals and businesses in Metro Detroit's tri-county area, along with $630 million in assets.

Source: Linda Douglas, vice president of marketing for Michigan First Credit Union
Writer: Jon Zemke

ForeSee Results has experienced double-digit revenue growth (25 percent over the last year), which has allowed the Ann Arbor-based company to hire dozens of new employees in 2012.

The 11-year-old company has added 40 people over the last year, expanding its staff to 275 employees. It currently has 25 job openings right now and expects to keep adding to its staff at that pace in 2013.

"We should be to 300 in the next 30-45 days," says Larry Freed, CEO of ForeSee Results. "There is a lot of hiring going on right now."

ForeSee Results provides user-satisfaction surveys, primarily through websites. It leverages the American Customer Satisfaction Index, developed at the University of Michigan, to measure the results. This year it has expanded the reach of its surveys, making headway into social media, mobile, call centers, and in brick-and-mortar stores. Online surveys still account for 80 percent of the company's business, but the other avenues are gaining ground.

"It's been pretty diversified," Freed says.

All of the company's growth has been organic and Freed expects that trend to continue in 2013. More double-digit revenue gains are also projected for next year.

Source: Larry Freed, CEO of ForeSee Results
Writer: Jon Zemke

Tangent Medical Technologies has landed millions of dollars more in seed capital thanks to a $8.6 million Series B round. The seed-capital round was also lead by Ann Arbor Arboretum Ventures.

"We're getting ready to commercialize the product," says Jeff Williams, CEO of Tangent Medical Technologies.

The Series B round of venture capital comes on the heels of Tangent Medical Technologies receiving FDA 510(k) clearance for the NovaCath Secure IV Catheter System. Tangent Medical Technologies' product integrates a series of next-generation technologies designed to address IV therapy challenges including catheter stabilization, healthcare worker safety, tubing management and patient comfort. NovaCath's passive needle shielding technology and closed system design is meant to minimize risk of needlestick injuries and occupational exposure to blood to the lowest feasible extent.

Williams declined to comment on how many people work at Tangent Medical Technologies but did say the company "has hired a few people" over the last year.

Source: Jeff Williams, CEO of Tangent Medical Technologies
Writer: Jon Zemke

Accel Partners, a Silicon Valley-based venture capital firm, is investing $30 million into manufacturing software maker Plex Systems.

The Troy-based firm was acquired by Francisco Partners, also of Silicon Valley, last summer. Plex Systems plans to use the new investment capital to create more product features for its software, improve customer service and expand its sales capabilities.

"You name it, we have initiatives," says Mark Symonds, CEO of Plex Systems. "Growing at this rate things break and you rethink things from time to time."

The 17-year-old company creates Cloud ERP software Plex Online, which helps industrial companies improve and streamline the manufacturing process from product quality management to supply chain management. Plex Systems employs 280 people after hiring 90 in 2012. Symonds expects to keep growing at that rate for the next year.

"Manufacturing is one of the largest markets in the U.S.," Symonds says.

Source: Mark Symonds, CEO of Plex Systems
Writer: Jon Zemke

Algal Scientific recently walked away with not only the top prize at this year's Accelerate Michigan Innovation Competition but also $1 million in seed capital to commercialize the start-up's green-tech innovations.

The Plymouth-based company spent its first three years developing a wastewater treatment system that uses algae to remove nutrients from contaminated water. What's left over is the raw materials for biofuel production. That technology won the $500,000 grand prize at Accelerate Michigan but also helped the company lock down a $1 million Series A round, which include contributions from the Michigan Economic Development Corp, angel investors and Envy Capital in Farmington Hills.

"There are a lot of different things on our to-do list and that commitment will help," says Paul Horst, CEO of Algal Scientific.

Among those things are paying for animal testing the technology and hiring more staff. Algal Scientific has hired five people over the last year and now employs 10 staff. Horst expects that number to grow as the firm begins commercial sales in 2013.

"We hope to scale up our production to 100 tons per year capacity," Horst says. "We are currently in a pilot project."

Algal Scientific currently calls the Michigan Life Science & Innovation Center home, but plans to look for a new building to accommodate its projected growth next year. "Most likely very close to where we are right now," Horst says.

Source: Paul Horst, CEO of Algal Scientific
Writer: Jon Zemke

Data Driven Detroit now calls TechTown home, completing its move from the Barden building in downtown Detroit from earlier this year.

The 4-year-old organization dedicated toward collecting statistics and harnessing them for the greater good of Metro Detroit called the Barden building near Comerica Park home until earlier this year when Grand Valley University purchased it. The university planned to use the building for its own charter school operations, which sent Data Driven Detroit looking for a new home. That's when Leslie Smith, president & CEO of TechTown, began to roll out the red carpet for Data Driven Detroit.

"They bent over backwards to find us some space and help us along," says Kurt Metzger, director of Data Driven Detroit.

Data Driven Detroit now employs 20 people after making three hires over the last year. It was attracted to TechTown's New Center campus because of its high-speed Internet connections and collaborative atmosphere for startups.

"It's facilitating interaction with a lot of TechTown clients," Metzger says. "We are working with a lot of people who can use our services and whom we can go to if we have questions."

Source: Kurt Metzger, director of Data Driven Detroit
Writer: Jon Zemke

Atomic Object not only made the plunge into Detroit, opening a satellite office downtown last summer, but now the software firm is looking for a startup to join it.

"We believe very strongly in Michigan," says Bruce Watson, managing partner of Atomic Object. "We are a Michigan company investing in Michigan."

The Grand Rapids-based company specializes in custom software for both web and mobile applications. It opened its Detroit office in Harmonie Park in June on the third floor of 1407 Randolph. The company now employ 41 people after hiring 11 over the last year, including a contingent of five in Detroit. It expects to grow its Detroit staff to 20 within the next two years.

"It's a no-brainer choice to come here and invest," Watson says.

Atomic Object occupies 2,600 square feet at 1407 Randolph. It is looking to share that space with an early stage tech start-up. The free office space doesn't come with much in the way of strings attached. The chosen startup won't have to give up a piece of its ownership for the space. Atomic Object is looking to help a start-up grow that it can collaborate with.

"We believe that investing in Detroit is more than providing good wages and paying taxes," Watson says. "We believe giving back to the community is also part of it."

For information on the free office space send an email here or call 313-444-6010. Applications are due by Jan. 10 and the winner will be chosen within a week of the deadline.

Source: Bruce Watson, managing partner of Atomic Object
Writer: Jon Zemke

Organizers behind the Accelerate Michigan Innovation Competition planned to use downtown Detroit as backdrop for the Great Lakes State's emerging new economy. It worked.

Downtown Detroit's architectural gems (the Guardian Building lobby, the Westin Book-Cadillac Hotel and Orchestra Hall) provided a great contrast of the region's traditional economic might and character with the cream of the crop of Michigan's 21st Century startups.

"There is no time like now and no place like Michigan for innovation," says Dave Egner, executive director of the New Economy Initiative for Southeast Michigan, which has sponsored the competition in its first three years.

This year's top winners include Plymouth-based Algal Scientific (1st place, $500,000), Ann Arbor-based nanoMAG (2nd place, $150,000) and InPore Technologies (3rd place, $100,000).

Quicken Loans Chairman Dan Gilbert was also honored with the Spirit of Michigan Award. Josh Linkner, CEO of Detroit Venture Partners, accepted the award on Gilbert's behalf and spoke highly of downtown Detroit's new tech hub that is bubbling out of the M@dison Building.

"We will be studying this stretch of five years for years to come," Linkner says "It's because of the work and dedication of Dan Gilbert."

Source: Dave Egner, executive director of the New Economy Initiative for Southeast Michigan and Josh Linkner, CEO of Detroit Venture Partners
Writer: Jon Zemke

A Midtown-based start-up has created a new toothbrush that is strong enough to last for people to clean their teeth but biodegradable enough to compost a few months after it's done its work.

The Bogobrush is made of a combination of sculpted bamboo (the shaft) and the bio-plastic nylon (the bristles). The ultra-green-living toothbrush is made of not only biodegradable materials but also materials that are produced quickly (the bamboo).

"The toothbrush is something we use every morning and night," says John McDougall, chief creative officer for Bogobrush. "If we can get people to be more environmentally conscious at that moment it will help them be more environmentally conscious in their daily routine."

McDougall co-founded Bogobrush with his sister, Heather McDougall. Their father is a dentist. They are working with a team of seven other people to bring the toothbrush to market. The company is starting with a campaign that allows people to buy one for themselves and another one for someone in need. The company hopes to begin a pre-sale campaign early next year.

Source: John McDougall, chief creative officer for Bogobrush
Writer: Jon Zemke

Picking the right credit card to maximize your reward points has become a bit of an art in recent years as cards offering bigger point deals becomes more lucrative to the savvy consumer. Glyph is working to turn that into a science with its new, free smart phone app.

The downtown Detroit-based start up has developed software that helps consumers choose the best credit card to maximize reward points. It shows them what the best cards are in specific situations and also how much they're leaving on the table by not using the right credit cards. The software, which doesn't require any sensitive information like credit card numbers, also shows how much money they save through this process.

"We want to get you as close to 5 percent as we can," says Mike Vichich, co-founder & CEO of Glyph. "We think it's a really valuable opportunity."

Glyph is targeting points-conscious consumers and business travelers, among other niche groups. Most of these potential customers fall in the 20s and 30s age bracket. "We help people understand what the right portfolio of cards is," Vichich says.

The 10-month-old startup and its team of seven people just launched its iPhone app and is working on an Android version. The company has raised $500,000 in angel funding this year and plans to close a Series A round of investments in 2013. The company currently calls the Ford Building home and plans to build out its new economy business model in the Motor City.

"We're deeply committed to building this business in Detroit," Vichich says. "It's more than a passion. It's an obligation."

Source: Mike Vichich, co-founder & CEO of Glyph
Writer: Jon Zemke

North American Bancard enjoyed quadruple-digit growth in the last year and the Troy-based electronic payment processing firm attributes much of the expansion to PayAnywhere, its mobile payment arm.

"It's a huge initiative for our company," sys Marc Gardner, president & CEO of North American Bancard. "It's growing in a very accelerated fashion."

Fast enough that North American Bancard has hired 130 people over the last year, many of them in the PayAnywhere division. Gardner says his firm is hiring mobile software engineers and professionals as fast as they can find them, adding if 20 of those sorts of techies were laid-off tomorrow from another employer his company would hire all of them.

"We are constantly looking for mobile platform engineers," Gardner says.

PayAnywhere offers mobile point of sale solutions. It recently launch its nationwide retail channel for some of the country's biggest corporations such as Wal-Mart, OfficeMax, Sam’s Club and The Home Depot. Gardner sees a tremendous room for growth in mobile payments as smaller businesses look to harness the technology, even service-based businesses like landscaping and car-repair firms, make the switch from checks to mobile payments to accelerate their cash flow.

"They don't want to wait for the check in the mail," Gardner says. "They want to be paid now."

Source: Marc Gardner, president & CEO of North American Bancard
Writer: Jon Zemke