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Lenders would ask, "How is it your going to make money with Pfizer closing down across the street?". They didn't get that the store was just a face for their online store. As a matter of fact, Tree Town Toys wasn't wincing from the Michigan economy at all, it was growing on wealth from around the country.

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Filed under: Ann Arbor, MI | Financing | Tree Town Toys

Last time I wrote about Tree Town Toys, I mentioned how great their website functioned and how complete their toy selection was.  After speaking with Hans Masing (co-owner with his wife Tricia), I discovered that there is a lot more behind their store then just toys.

Spurred on the success of Brain Station, their online store, the Masings created a home base for their operations in Ann Arbor.  This is an area I feel that most entrepreneurs and business owners would feel missing if they operated solely as an online store.  With Tree Town Toys, Tricia and Hans had a home. 

As many return readers may note, Michigan Innovators has been spending a good portion of the summer on financing innovation.  With the departure of Pfizer from Ann Arbor, it's easy to envision large bags of money running out of Michigan's borders.  So when Hans came to investors trying to open his store across the street from the now nearly empty facility, they were skeptical.  What they failed to see was the huge potential of the online portion of the store.

So how did Hans get the investors to turn around?  While convincing numbers of their online sales always helps, managing growth is an important step as well.  If you know an industry well, there is always a void that needs filling.  Few other specialty toy stores had an online component to their stores.  This left an untapped market in the palms of the Masing's hands.

It also pays to have a unique perspective.  As an IT professor, Hans is far more business minded then the typical toy store owner.  Information technology is one of the fastest changing fields out there, so keeping up with the business world is simple for the couple.

Finally, in order to compete with the big guys, it helps to buy and sell like the big guys.  A new addition to their toy store family, Dragonfly Depot, brings the online store potential to other small mom and pop toy stores.  By managing inventories for multiple stores in one facility, all parties can benefit by splitting costs that would be too substational for each store to undertake on their own.  Stay tuned for more info on Dragonfly Depot.

While a great business plan and a smart approach towards investors always helps a business get off the ground, Tree Town Toys really taught me that when you have all of the pieces to your business puzzle set, everything will fall into place.  By starting with what you know best and expanding beyond your own experiences, you will find that there are more untapped pieces of business ideas that are waiting to be put together.

When creating a new product, there are so many things that can go wrong (many of which cannot be prepared for or are completely unexpected), so it only makes sense to use existing technology or ideas in your product to increase reliability.

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Filed under: Alphonse Anderson | Ann Arbor, MI | Charles King | Competing Globally | Financing | Innovation | Renewable Energy | Start-Ups | Velocity² Wind | Wind Power

When talking to Alphonse Anderson and Charles King of Velocity² Wind I found that one of the most interesting parts of their process to create a new product of small wind turbine was how much of their product was, essentially, theirs. King said, "we try to re-invent as little as possible. Use what's out there."

What is "out there" for small wind turbines? Again, King: "We've found ourselves taking ideas from aerospace to roller coasters." Roller coasters? Sure, the aerospace industry can easily offer some design ideas to small wind turbines, but the thought to look into how roller coasters are built (presumably regarding their light-weight structure; they wouldn't comment) is marvelous.

It turns out that Anderson and King have tapped in to a historically successful business plan: don't re-invent the wheel. When creating a new product, there are so many things that can go wrong (many of which cannot be prepared for or are completely unexpected), so it only makes sense to use existing technology or ideas in your product to increase reliability.

I posed this question to Alphonse Anderson and Charles King of Velocity² Wind: "what are some of the first things you should do when you first have an idea for a new business?"

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Filed under: Alphonse Anderson | Ann Arbor, MI | Charles King | Competing Globally | Financing | Innovation | Renewable Energy | Start-Ups | Wind Power

I posed this question to Alphonse Anderson and Charles King of Velocity² Wind: "what are some of the first things you should do when you first have an idea for a new business?"

King told me that it's necessary to make sure that the idea is original. He said to use "Google Patents and research databases of universities to look for Phd. topics" and to find where technology is now. There's no sense in spending your time on a product for which you cannot get a patent or a service that is already being developed by another (presumably larger) company.

He said that "you must look at your personal network to find people who are willing to help you." This goes beyond asking freinds and family for money. When starting a new endeavor, you need to know who can be a part of your program, or even who knows somebody who can offer advice or a service. It's much more efficient to utilise your network rather than the yellow pages for your entrepreneurial needs.

King followed up by saying "If you believe that you have no connections, then you're not trying hard enough."

They have chosen to use alternative materials in building small wind turbines in an attempt to increase efficiency and decrease cost. With only a few tweaks of materials, Anderson and King have a real shot at breaking into the fledgling industry.

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Filed under: Alphonse Anderson | Ann Arbor, MI | Charles King | Competing Globally | Financing | Innovation | Renewable Energy | Start-Ups | The MORE Program | Velocity² Wind | Wind Power

Recently, I met with Alphonse Anderson and Charles King, founders of Velocity² Wind and participants in the MORE Program. They have chosen to use alternative materials in building small wind turbines in an attempt to increase efficiency and decrease cost. With only a few tweaks of materials, Anderson and King have a real shot at breaking into the fledgling industry.

The fledgling industry of small wind power, that is. Large-scale commerical-grade wind power is already a huge market, making up most of the 5.2 thousand Megawatts of wind power that was installed in the U.S. just last year. However, the small wind industry is still struggling to take flight, mostly due to the consumer worries of cost efficiency, noise, and visual impact. Oh, and safety issues, too (although there have been no 'innocent bystander' casualties due to wind power. The only casualties have been to workers installing and repairing the large-scale systems, and an unfortunate parachuting accident).

When King had the idea for using alternative materials for a wind turbine, he realized that the only way to properly approach his idea was to attempt it in small wind systems, whether or not it would work in large-scale wind. He remarked that trying to pitch his idea to the large-scale wind companies would be futile, but small wind was a good bet since no company has jumped out to be the leader.

Anderson and King have been working with prototypes of their design and comparing it to existing designs from competitors. So far, their tests have given them great results. Since they decided to enter an industry that has not yet solidified may very well allow them to break through to the surface soon.

Bizdom U expects its graduates to not only succeed, but also to give back and provide opportunities for the next generations, and it gives them the tools they need to do just that.

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Filed under: Bizdom U | Detroit, MI | Education & Training | Financing | Start-Ups

As an entrepreneur, how does this opportunity sound to you? A free one-year program in Detroit city, with living stipends, that "teaches entrepreneurship and empowers its graduates to open successful businesses."

That's the "entrepreneurship boot camp" at Bizdom U, a non-profit organization in Detroit. It's a program founded by Dan Gilbert, Chairman and Founder of Quicken Loans, and led by a team of skilled professionals.

The Executive Director, Ross Sanders, told Crain's Detroit Business that "When we started with our initial class in January 2007, it was an entirely new initiative. Nothing the likes of it had ever been done." In fact, the organizers say that the program is unique in the United States. Sanders also says, "The program's goal is to create a new wave of entrepreneurs who will go out and start businesses within the city of Detroit."

Any adult with a high school diploma or GED is eligible. But as for the requirements, Bizdom U asks, "Are you ready to put your nose to the grindstone and perform at a high level?" It's a rigorous program, but the students have "free use of cutting-edge business technologies like Blackberries and notebook computers" in order to better help them succeed.

Upon completion of the program, each student is eligble for anywhere from $25,000 to $500,000 worth of funding towards their business, depending on whether or not they reach their goals. The students are expected to invest their time, energy, and/or resources back into the communities in and around Detroit.

Bizdom U represents a new way of thinking in this country. It expects its graduates to not only succeed, but also to give back and provide opportunities for the next generations, and it gives them the tools they need to do just that. When looking back at the first year, organizers have been pleased with the outcome. With any luck, Bizdom U can build on its successes.

What Spark does is, well, just about everything to help entrepreneurs to build a better business, or even to start one. Some of the services that Spark provides are the Business Accelerator, Online Business Planning, and, of course, Financing.

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Filed under: Ann Arbor Spark | Ann Arbor, MI | Education & Training | Financing | Start-Ups | Venture Capital

What's out there to help future entrepreneurs to succeed? As previously mentioned, there are many options available for students. As it turns out, there are also plenty of opportunities that aren't run by a university.

One organization that is trying to help innovation in the area is Ann Arbor Spark. The website says that "Ann Arbor Spark is a public-private partnership whose mission is to advance innovation-based economic development in the greater Ann Arbor region." It's an organization drawing from some of the businesses, communities, universities, and government resources in and around the Ann Arbor area.

What Spark does is, well, just about everything to help entrepreneurs to build a better business, or even to start one. Some of the services that Spark provides are the Business Accelerator, Online Business Planning, and, of course, Financing:

In addition to attempting to connect entrepreneurs with venture capitalists and Angel funds, whose mission "is to make equity investments in early stage and emerging growth companies," Spark also provides lots of information on credit enhancement and Tax-Exempt Industrial Revenue Bonds (IRBs).

Spark has received great press from Fortune's 100 best places to live and launch, particularly for its role in The Michigan Pre-Seed Capital Fund. Spark also runs a Regional Incubator for interested businesses.

Spark's network is very large, and there is much more information available on www.annarborspark.org. The website is a useful tool for anybody interested in getting help with their business. Also, as an added bonus, Spark keeps track of positive news regarding Michigan and its businesses. It's not surprising to see that Spark has received awards for all its tremendous, and necessary, services that it offers to everybody.

I asked Yue what he thought about that day when he had his meeting with Zell Lurie and entered in the Empowered Business Plan Competition. He said "it was at that point where the resources really started to pour in."

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Filed under: Ann Arbor, MI | Education & Training | Financing | Innovation | MPowered Entrepreneurship | Start-Ups | The MORE Program | Yue Fan | Zell Lurie Institute

One question remains from my series on Yue Fan, his Pattern Clock, and the MORE Program: How did Yue get involved in the first place? Obviously he had the idea for the clock, but how did he set the process in motion?

"I had the prototype and I was dressed up for a meeting [with the Zell Lurie Institute at the UM Business School]. The Business School runs a program where they invest about $100,000 in companies."

Yue continued, "I was in preparation for the meeting but I was walking through North Campus when I saw this [MPowered Student Organization] Business Plan Competition, so I thought 'I might as well do that.' A little bit later we found out we'd won, and we won a trip to California to learn more about starting your own company." A trip to California including the opportunity to give a pitch to a panel of respected Venture Capitalists and get feedback from them.

"That was really how I got started with entrepreneurship resources at Michigan and around Ann Arbor. Before that, I kinda just sat in my room and tried to get help online."

For those of you keeping score at home, that's 3 opportunities. He made a pitch to the Zell Lurie Institute at UMich. He was a winner of the MPowered Business Plan Competition. After he submitted his business plan to the MORE Program, he got involved in their summer internship, including receiving $5,000 in grant money.

I asked Yue what he thought about that day when he had his meeting with Zell Lurie and entered in the Empowered Business Plan Competition. He said "it was at that point where the resources really started to pour in."

There are tons of opportunities for University of Michigan students. Yue didn't even participate in the MORE Program's job fair earlier this year, designed to help students get internships with start-up companies. In future posts, I will tackle the issue of finding opportunities like the ones detailed here that are available to not just college students, but to the general public.

Yue needs some help applying for a patent for his Pattern Clock: "I wrote a non-provisonal patent by myself, so we know it's bad. We know it's really bad." Luckily, as MORE Program Director Jessica Pfeiffer explained to the Detroit Free Press, "We're here to be mentors and provide helpful connections between entrepreneurs in Ann Arbor and Detroit."

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Filed under: Ann Arbor, MI | Education & Training | Financing | Innovation | Start-Ups | The MORE Program | University of Michigan | Yue Fan

The MORE Program at the University of Michigan does more for young entrepreneurs than just give them grant money. Yue Fan said that "the MORE Program is a program that helps students get experience and get knowledge in starting their own companies."

Yue needs some help applying for a patent for his Pattern Clock: "I wrote a non-provisonal patent by myself, so we know it's bad. We know it's really bad."  Luckily, as MORE Program Director Jessica Pfeiffer explained to the Detroit Free Press, "We're here to be mentors and provide helpful connections between entrepreneurs in Ann Arbor and Detroit." Connections such as possibly finding a good patent attorney.

Yue told me more about his activities with the MORE Program: "We have weekly meetings and we get to ask the directors, Brian[Balasia] and Jessica [Pfeiffer] for advice at any time [...] during our weekly meetings we get to bring up what resources we need and what we're kind of getting stuck on that they'll work to find the resources we need to keep going."

"Every week we meet, one team gives a presentation about what they're doing so we learn a little bit more about eachother and we learn a little bit more about what we might run into as we progress along."

So where has Yue progressed to now? He's considering advertising the Pattern Clock on New York City radio. Although it would cost him $3,600, which seems like it would be a lot of money, the advertising would "make about 500,000 impressions." 

"It's amazing how effective radio advertising can be," said Yue.

Anybody can pre-order the Pattern Clock through the website. He's already gotten 1,000 pre-orders, of which "a few hundred" were in the first few days after being "featured on gizmodo.com, a tech blog, and other blogs." About the large amount of pre-orders, Yue said, "it's a pretty good indicator that people want to buy this."

When I asked Yue what he will do with his $5,000 grant from the MORE program, he told me: "right now, we're saving up for the possibly very expensive lawyer and attorney fees for pursuing a patent."

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Filed under: Ann Arbor, MI | Education & Training | Financing | Innovation | Start-Ups | The MORE Program | University of Michigan | Yue Fan

On Thursday I posted an entry called Michigan's MisadVenture Capital in which I detailed Michigan's poor venture capital and planned "to examine how universities such as the University of Michigan present opportunities for their students to navigate their way through the early stages of bringing innovation to market." Recently, I met with Yue Fan, who just finished his second year at UM, to talk about his invention, the Pattern Clock.

According to the website, www.patternclock.com, "Pattern Clock is an alarm clock that can not be turned off until the sleeper can repeat back a randomely generated pattern of lights." More information on how it works can be found here, and you can pre-order it (with no obligations) on his home page.

I remember talking to Yue about his Pattern Clock two years ago when we were both seniors at Ann Arbor Huron High. Of course, back then it wasn't much more than an idea. When I saw his picture in the June 23rd Detroit Free Press, I decided to ask him about the process that he has gone through with his innovation.

The Detroit Free Press article highlighted Yue and as one of the students run through the MORE Program. When I asked Yue what he will do with his $5,000 grant from the program, which is run through the University of Michigan, he told me: "right now, we're saving up for the possibly very expensive lawyer and attorney fees for pursuing a patent." He went on to say, "If you want to make a lot of money from [an idea] and have a successful company formed you should probably first check [...] to make sure you can get patent protection, because without it anybody can copy your product. If it's a consumer product it's very easy to copy and you will be forced out of the market by more experienced and bigger manufacturers."

I also asked him if he had ever searched Google for "How do I get money for my invention?" His reply was "Well, I think I might have searched for that exact phrase before. But mostly what you'll get is a site that tells you all the extents you have go through, and at the end it tells you that all of this, it's pretty unlikely to happen."

"We [Yue has gotten help from David Karlak and David Han, who attend Savannah College of Art and Design and Wharton School, respectively] did meet with a very nice banker at Comerica bank, and the problem with that is that we're still in school, and if somehow something goes horribly wrong, we're going to be graduating with more than $100,000, plus tuition, on our back. We don't feel that at this point in life its worth the risk."

As for getting monetary contributions from his family, he said, "I think I might have some rich, distant relatives, but I have no idea who they are."

Yue's opinion on what you should do to start a business? "If you go to the University of Michigan, you should contact [MORE Program Directors] Brian [Balasia] and Jessica [Pfeiffer], or go to the website, www.themoreprogram.com."

What's worse is that, of all the (meager) investments done by Michigan-based venture capital firms in the first three quarters of 2001, only 5.9% of those investments were given to Michigan-based companies!

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Filed under: Financing | Start-Ups | Venture Capital

When trying to bring an innovatoion to market, one of the largest issues is always money. True, there can be design, manufacturing and production issues, too, but those can usually be solved with time and money. And time can be bought.

So how does a fledgling company get money? There's always venture capital, right? Well, yes, if you live in California or Massachusets. Those two states accounted for 54.28% of the U.S.'s annual venture capital investments between 1999-2001. In that time period, Michigan was ranked a distant 22nd in the nation, with only 0.41% of the annual venture capital investments, slightly behind Arizona, which ranked 21st with 0.50%.

What's worse is that, of all the (meager) investments done by Michigan-based venture capital firms in the first three quarters of 2001, only 5.9% of those investments were given to Michigan-based companies! Michigan ranked 30th in in-state investments as percentage of total investments made by state venture capital firms. But, Arizona ranked 5th in that same time period with 57.0% of their VC investments staying in Arizona!

That same article reads, "While Michigan’s venture financing has grown considerably in recent years, the level of seed stage venture capital financing in Michigan is still weak." Its recommendations include to "continue efforts to encourage the development of venture capital and seed funds in Michigan," and to "encourage universities to create early stage funds to promote technology start-ups." In the very near future, I plan to examine how universities such as the University of Michigan present opportunities for their students to navigate their way through the early stages of bringing innovation to market.