Diversity : News

Detroit Bikes is now offering its first bicycles for sale online this month, but the company's founder would prefer his customers bought them somewhere else.

The firm is allowing its first customers to buy the bike (at $550 a pop) as part of a pre-sale. Once production is ramped up the company is going to push to have its sales done through local bike shops.

"The preference for us is for customers to be able to ride them that day," says Zak Pashak, president of Detroit Bikes. "We want them to be assembled when they buy them."

Pashak is a Calgary native who moved to Detroit from Vancouver a few years ago, buying a home in Boston-Edison and looking to launch Detroit Bikes. The company aims to create a classic American bicycle manufactured in Detroit. It has one model right now, the "A-Type", that takes pride in its streamlined design.

The bicycle has tires that are thinner and smoother than a mountain bike and thicker than a road bike. It has only three speeds and larger wheels. The frame is made of chromoly steel. The underlying theme is to create a bicycle made for riding in urban America.

"This bike will make city cycling as easy as possible," Pashak says. He adds that bikes "have sort of morphed into these gnarly beasts. We wanted to bring it back to that simple purpose. It doesn't have all those sorts of bells and whistles that doesn't help."

Detroit Bikes has already 60 prototypes that it is letting a select group of locals test out. They were built at the company's 50,000-square-foot facility on Elmira Street near Schaefer Highway on the city's far west side. Pashak and his team of 15 people are building out the factory for full production this summer. The company has hired eight people over the last year and Pashak expect to add even more soon.

"We need to get to the point where we can build 100 a day," Pashak says. "It takes quite a lot to get a factory at that level of production."

Unlike other startups in Detroit, Pashak is not making the strength of the Detroit brand a major part of his business plan. He moved here with the idea that entry costs were low enough in a place with a skilled manufacturing workforce that will help produce a product that will go up in demand.

"I believe in the city," Pashak says. "The city can produce a superior product. It's not just branding. It's the truth."

Source: Zak Pashak, president of Detroit Bikes
Writer: Jon Zemke

The winner of the student portion of the Accelerate Michigan Innovation Competition is now a venture-backed start-up, landing six figures in seed capital.

Covaron Advanced Materials (formerly Kymeira) scored $300,000 in a seed capital round, which was led by the Mercury Fund. The First Step Fund, Huron River Ventures and Two Seven Ventures are also participating in the round. The Ann Arbor-based firm is developing a new chemistry for ceramics, which brings the benefits of existing advanced ceramics to new parts and markets.

"It's going to help further the development of the technology and the intellectual property," says Dave Hatfield, CEO of Covaron Advanced Materials. "It will also generate the initial sales in the mold and pattern market."

The 1-year-old business employs four people and a few independent contractors. The team consists of founder Vince Alessi, co-founders Cam Smith and Reed Shick, along with Hatfield. That team took home first place in the student division of last fall's Accelerate Michigan Innovation Competition, a prize worth $25,000.

That prize usually goes to raw start-ups but Hatfield believes Covaron Advanced Materials' technology is far enough along that it can begin making sales in the molds and patterns market (think durable goods like those used by the automotive sector) this year. An expansion into the oil and gas industry and a Series A round of funding could also be in line next year.

"We're hoping to commercialize this as soon as possible," Hatfield says.

Source: Dave Hatfield, CEO of Covaron Advanced Materials
Writer: Jon Zemke

Savorfull, the healthy-eating start-up, recently wrapped up the Beta test of its software platform and is ramping up for its public launch later this year.

The New Center-based company is creating a platform where people can access information about making the best healthy choices for their diet. For instance, it will provide people sensitive to peanut allergies with information on recipes and a place to interact and trade ideas with other people. The same services are offered to people who are sensitive to gluten intolerance and other food-based problems.

Stacy Goldberg, a Bizdom graduate, launched Savorfull out of the M@dison Building last year before. She and her team of five employees and a handful of interns (found through Intern In Michigan) ran a Beta test on it in the latter half of 2012.

"We learned a lot about our customers," says Goldberg, founder & CEO of Savorfull. "We learned about how to serve them and our revenue model. We also learned about building the backend of our platform."

Savorfull is currently working with Quicken Loans to provide glutten-free and peanut-free eating options at events. That work is helping introduce more potential clients to Savorfull's platform. Goldberg is looking to line up a large strategic partner for the public launch of her business in the next six months.

"We have had some really great success in the business-to-business side," Goldberg says.

Source: Stacy Goldberg, founder & CEO of Savorfull
Writer: Jon Zemke

IROA Technologies (formerly NextGen Metabolomics) has a new infusion of seed capital to go with its new name.

The Ann Arbor-based life sciences start-up recently landed a sizable Series A round of financing. Felice de Jong, the firm's CEO, declined to give a specific number of the amount beyond saying IROA Technologies closed a Series A worth "over $1 million." Bloomfield Hills-based O2 Investment Partners led the round with Ann Arbor SPARK and InvestDetroit also participating.

IROA Technologies is developing tools to identify key metabolites that can be used to diagnose diseases such as cancer in samples including blood and urine. The start-up's technology is unique because it can cut through the clutter of information from the analysis of blood or other bodily fluids and tissues to find the critical metabolites that relate to disease and  illness. That cuts the diagnosis time from hours to minutes.

"Our tools make it easier to measure all of the metabolites in a person or any organism," de Jong says.

IROA Technologies plans to use its new seed capital to continue development of its software, expand its sales and marketing and add to its team. The firm currently employs two people and is looking to hire two more now to push forward the commercialization of its technology.

"We're hoping that within the year we will be able to launch our products," de Jong says.

Source: Felice de Jong, CEO of IROA Technologies
Writer: Jon Zemke

When local leaders talk about retaining talent, they probably have someone like Adam Leeb in mind.

The Metro Detroit native graduated from MIT with a degree in mechanical engineering and went to work for a private equity firm in New York City in the late 2000s. After watching a number of his colleagues lose their jobs in the economic downturn and a few other not-so-flattering things about the finance industry, he decided he wanted to move back home.

"I knew it wasn't something I wanted to make my career," Leeb says.

That was last year, roughly the same time he started working on his own company, SunDaily. The Royal Oak-based start-up is working to create a premium brand of vitamins and supplements. It's a hole in what Leeb sees as a crowded market.

"I saw a lot of different formulas and a lot of confusion on the consumers' end," Leeb says.

SunDaily and its team of four people began its soft Beta launch earlier this month and plans to go public with it this week. The new brand of vitamins offers traditional staples like a multi-vitamin, Vitamin D and a fish oil supplement. As many as a dozen different products are expected to be launched this year. Leeb plans to create some market separation with high-quality products that are easy to understand and come in aesthetically pleasing packaging.

Source: Adam Leeb, founder of SunDaily
Writer: Jon Zemke

Michael Evans is not only the type of entrepreneur Detroit wants to stake a claim here, he's the type of person who won't leave the Motor City.

He was a top employee at a New York City-based start-up that was recently acquired, splitting time between the Big Apple and Detroit. He is now here full-time building his own startup, PishPosh, in a Boston-Edison mansion he has turned into the latest version of new economy office space.

"It's a tremendous amount of space," Evans says. "We feel safe and people love to come here. Why move to Midtown or downtown when I can stay up here and have a great space?"

Evans ran community projects for Forrst, an Internet start-up that bills itself as "a community where (software) developers and designers improve their craft through design feedback." Evans became employee No. 1 in late 2010 and oversaw project and community management for the company. Forrst was acquired by COLOURlovers a year ago and Evans left the company in late February, ending a little more than two years of living in Detroit and flying to New York to work.

"I refused to move. It was too much traveling," Evans says, explaining why he chooses to stay in the Motor City.

During his time at Forrst, Evans was also working on his own startup in his spare time. PishPosh is a podcasting startup that focuses on making its own content (think podcasts and videos) and content for others. Its team of four people have worked with the likes of Moosejaw and Model D. It is now getting ready to launch its own software platform that will enable everyday people to make their own podcasts. It's currently in its private Beta and plans to launch it within a few weeks.

That launch will happen from the mansion in Boston-Edison that Evans currently calls home. His parents recently decided to move downtown into a high-rise apartment so they didn't have to deal with as much upkeep. Evans stayed in his childhood home, where he currently lives on the second floor. He is turned the third floor into the home base for PishPosh.

"We have multi-media setups, multi-lighting and isolation booths," Evans says. "We have the whole deal."

Source: Michael Evans, founder of PishPosh
Writer: Jon Zemke

Doodle Home is growing in more ways than one. The interior-design startup has not only hired 14 people over the last year but it's starting to grow into two distinctive parts.

The downtown Detroit-based startup calls the M@dison Building home, and got its start providing a software platform for interior designers that facilitates both manufacturers looking to sell product and designers looking to create the perfect living space. Doodle Home has also been landing more and more commercial interior design work, prompting it to start a Doodle Commercial division.

"It just started growing to the point that we started hiring people for Doodle Commercial and started separating the two," says Fernando Prieto, president of Doodle Home.

Doodle Home is part of the Quicken Loans family of companies. It has tackled a number of interior commercial projects in the downtown Detroit area that are part of Quicken Loans family of companies' buying spree, such as the M@dison Building and the Roasting Plant coffee shop.

Doodle Home now employs 23 people and just opened more office space in the Chrysler House, formerly the Dime Building.

Source: Fernando Prieto, president of Doodle Home
Writer: Jon Zemke

As the healthcare industry continues to evolve, one Ann Arbor-based company is capitalizing on the trend by staying ahead of the communication curve.

CareEvolution creates software that allows one hospital's data center to speak to another's, facilitating a sharing of electronic medical records and information that streamlines patient care.

"We help hospitals exchange information with one another or doctors with hospitals," Kheterpal says.

That process has become more complicated with new federal regulations in legislation like the Affordable Care Act (AKA Obamacare), prompting companies like CareEvolution to step into the breach.

"Much of what we do has come into sharper focus," says Vik Kheterpal, principal of CareEvolution. "That has fueled our growth."

That growth includes 15 new hires at CareEvolution, bringing the 10-year-old company's staff to 50 employees and a few interns. Kheterpal expects to hire another 15-17 people over the next year. That is being prompted by 60-percent-plus revenue growth.

"We expect to grow faster than that in 2013," Kheterpal says.

Source: Vik Kheterpal, principal of CareEvolution
Writer: Jon Zemke

Home-entertainment-start-up iRule is the newest Detroit Venture Partners' portfolio company.

The downtown Detroit-based venture capital firm led a Series B round of investment in iRule worth $1 million. Compuware Ventures, the namesake company's VC arm, made the initial investment in iRule last year in its $500,000 Series A round. The rest of the investors in the Series B round are all local.

"We have some pretty good partners in the area," says Itai Ben-Gal, CEO of iRule.

The 4-year-old company creates an app and accompanying technology that allows users to turn their smartphone into a universal remote for their home theater system. Ben-Gal and Victor Nemirovsky launched the company as a side project from their living rooms in Oakland County. The business quickly created a foothold in the home entertainment center enthusiast community, which garnered the attention of Compuware, a subsequent investment and a move to the tech firm's downtown headquarters.

Thirteen people now work for iRule, which is interviewing for summer interns. The company has hired seven people over the last year, including two software developers this month. The newly expanded team is working to make iRule's core home entertainment center technology even smarter so it can control all electronic facets of a home, such as lights and the thermostat.

"We're creating an interactive solution for everything in your home," Ben-Gal says.

Source: Itai Ben-Gal, CEO of iRule
Writer: Jon Zemke

Warmilu, the start-up creating a better blanket for infants, is now running a pre-clinical trial of its product. The Ann Arbor-based company is prepping for clinical trials later this year and commercialization in 2014.

"This is the first time it has been tested on infants, and it works," says Grace Hsia, CEO of Warmilu (formerly M-Wrap).

Hsia and her team of eight people (mostly University of Michigan students and recent graduates) launched the company last spring. The idea is to help premature infants retain and increase their body heat, which helps improve their rate of survival. The blankets would be used both in hospitals and homes.

Warmilu is targeting low-income groups with this blanket. Think families living below the poverty line in the first world or in third-world countries. Members of Warmilu have already taken an exploratory trip to India and is planning on a follow-up trip later this year.

Warmilu is also beginning the process of raising angel round to fund the clinical trials of the blanket. The group is aiming to secure $20,000 for the clinical trials this year.

Source: Grace Hsia, CEO of Warmilu
Writer: Jon Zemke

From Duo Security's launch in 2010, the Internet security start-up was built to scale. This is the year the downtown Ann Arbor-based company begins to accelerate its growth.

Duo Security specializes in creating two-factor authentication software, which enables its users to use their mobile phones to secure their logins. The idea is to add another layer of protection against account takeover and data theft for companies.

"These days passwords are not enough to really protect anything," says Dug Song, co-founder & CEO of Duo Security.

The market for Duo Security's software has a high ceiling. The company has watched its revenue grow by 400 percent over the last year as its customer base has doubled to more than 1,000 clients. Some of those users include a variety of big brand names ranging from Fortune 500 companies to large research institutions. Song declined to publicly name those firms.

"Probably half of our customers are first-time customers of two-factor," Song says. "We are helping grow the two-factor market."

That growth has allowed Duo Security to more than quadruple its staff to just under 50 people. To accommodate its growth, the firm moved from the Tech Brewery to a newly refurbished office on the northern edge of Kerrytown. It now occupies most of the 10,000 square feet of space there, which it is currently working to fill out. Duo Security currently has five job openings and expects to hire 10 new people in total by the end of the first quarter.

"We have grown pretty quickly," Song says.

Source: Dug Song, co-founder & CEO of Duo Security
Writer: Jon Zemke

Lotus Bank will open its second branch in Farmington Hills later this month, a move that will help the Novi-based bank expand its staff by seven people in 2013.

"We needed more retail locations and space from a personnel standpoint," says Neal Searle, president & CEO of Lotus Bank.

The 6-year-old bank has hired three people in the last 30 days and now employs 18. Another four employees will be added to the payroll when the Farmington Hills branch opens within two weeks.

Lotus Bank is a full-service bank with $82 million in assets and $71 million in deposits. It grew by 17 percent in 2012 and expects to continue expanding its reach in Metro Detroit this year. The bank, which is 80-percent owned by Indian-Americans, has a five-year strategic plan of opening one new branch annually and its sights are set on suburbs like Troy, which has a large Indian-American population, in the near term.

"This is an opportunity to take it to the next level," Searle says.

Source: Neal Searle, president & CEO of Lotus Bank
Writer: Jon Zemke

Lisette Poletes remembers her mother, Hortensia Albertini, working at their kitchen table to build a business. That was in the 1980s and little did they know the single mom would create a multi-million-dollar company called Global LT.

"It's something I saw my entire life growing up," Poletes says.

Poletes came on board in 2009 and started running the day-to-day operations. She has now bought the entire company, giving her mother the opportunity to retire and keep the business in the family and growing.

Global LT specializes in language services, cultural training, expatriate destination services, and workforce training courses for international locales. If it has something to do with facilitating international business, the Troy-based business probably offers a solution for it.

The company has gone from generating $9 million in revenues in 2009 to $20 million in revenues today. It employs more than 100 staff and three interns after hiring 19 people in the last year. It currently has six openings. The company also has about 1,500 to 2,000 independent contractors abroad at any given time.

"I give credit to the team," Poletes says. "They are why we doubled the size of the company."

She expects to keep growing the company for the foreseeable future and to expand more into government work. Language training will remain a mainstay in the company's bottom line. Poletes also expect to keep hiring to meet the work demand.

"A lot of times we promote from within," Poletes says. "We hire a lot of interns."

Source: Lisette Poletes, CEO & owner of Global LT
Writer: Jon Zemke

The folks behind Challenge Detroit are looking to build on the talent attraction/retention initiative's initial success by repeating it this year.

Challenge Detroit brings in a couple dozen recent college graduates to Detroit each year, giving them jobs and coordinating opportunities for them to live, work and play in the city. The nonprofit pairs the fellows from each class with local employers and provides them with a living stipend. Last year it welcomed 29 fellows that work for the likes of Compuware and Quicken Loans. This year it plans to bring in another 30 young people as part of its second class.

"It's a manageable number for us," says Deirdre Greene Groves, executive director of Challenge Detroit. "It's a number that allows a greater sense of comradery in the group. They can still get to know each other."

Challenge Detroit is part of a growing number of talent initiatives that looks to bring more recent college graduates to Detroit by matching them with jobs. Organizations like Teach for America and Venture for America pair dozens of young people with positions in local schools and startups, respectively.

Challenge Detroit pairs these graduates with jobs at a number of larger corporations, nonprofits and institutions, providing them with a living stipend of $500 per month. It asks in return that the participants live, play and volunteer in the city. This year, Challenge Detroit is working to make sure its participants more fully capitalize on its experiences.

"We want to make sure we are giving a great benefit to our partners," Greene Groves says. "How can we spend a couple more weeks on them?"

Challenge Detroit is currently accepting applications for its 2012-13 class, which are due by March 3. For information, click here.

Source: Deirdre Greene Groves, executive director of Challenge Detroit
Writer: Jon Zemke