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Detroit Trading Co. turns car buying into one-stop shopping

Detroit Trading Co. has made its way by simplifying the process of buying a car with technology. Now the Southfield-based business is looking to do so in a more traditional way by creating one-stop shopping.

"We're looking for ways to turn the car-shopping process on its head and make it fun at the same time," says Matt Clayson, vice president and general counsel for the Detroit Trading Co.

The 10-year-old company got its start creating technology platforms that gathered, analyzed, and organized Internet sales leads for car dealers. It sold them on an exchange to automotive dealerships. Now it's looking to bring auto buyers a more real-life experience.

Detroit Trading Co. is building out what it calls an experiential center. Essentially that means a showroom that features a variety of vehicle brands. Today auto buyers have to travel to different dealerships to see different brands of cars. Detroit Trading Co leverages its connections in the auto dealership world to bring all of those brands under one roof.

"You can see Chevy, Ford, Honda, and Mazda in the same area," Clayson says. "You can see what works best for you."

So customers can try out a variety of SUVs from different brands without going to multiple dealerships. If they find one they want to buy they are referred to a participating automotive dealership.

"The dealership is still the final destination," Clayson says.

Detroit Trading Co. employs 47 people between its Southfield headquarters and its new office in downtown Detroit. It has hired 20 people over the last year, mainly to staff its call center. It is also looking to hire seven more people in data analytics and digital strategies.

Source: Matt Clayson, vice president & general counsel for the Detroit Trading Co
Writer: Jon Zemke

The most interesting billionaire in metro Detroit you've probably never heard of

Manoj Bhargava is the 62-year-old, ex-ashram monk creator and founder of 5-Hour Energy, a company headquartered in Farmington Hills. 5-Hour Energy's 2-oz. bottles, now ubiquitous at party stores and gas stations around the country, revolutionized the energy drink market and made Bhargava a very rich man (he estimates his fortune at $4 billion).
But what's most interesting about Bhargava, however, is what he plans to do with his wealth. In addition to pledging to give 90 percent of it away to charity, he also runs a $100-million private equity fund called Stage 2 Innovations, which, according to the Wall Street Journal, is "dedicated to advances in water and energy technology."
Read about Bhargava's investments, as well as his daily routine, in this recent profile in the Wall Street Journal.

Ann Arbor's SkySpecs preps to launch drone technology

SkySpecs is gearing up to launch its drone technology early next year. It's on the brink of raising a significant amount of seed capital and already testing its product with customers.

The Ann Arbor-based startup is developing aerial drone technology that uses artificial intelligence to inspect infrastructure in dangerous locations, such as the blades of wind turbines. It's WingMan platform allows the aircraft to hover near an object without fear of hitting it. Check out a demonstration of the company's WingMan technology here.

"Our first field prototypes are working well," says Danny Ellis, CEO of SkySpecs. "We have customers who are working with them in the field. We’re planning a full roll-out in 2016."

SkySpecs got its start three years ago with aspirations of making drones in the rapidly growing industry. That focus shifted to creating technology that makes sure drones can avoid running into objects they are buzzing around, such as wind turbines or hard-to-reach parts of bridges.

Now SkySpecs has shifted again to offering an end-to-end solution for its customers, equipping drones with its technology so operations are turn-key for its customers. Ellis noticed many of SkySpecs potential customers loved the technology but didn’t know much about drones.

"It was extra work for us," Ellis says. "They would come to us and ask us which drones to buy."

SkySpecs won the grand prize worth $500,000 from last year's Accelerate Michigan Innovation Competition and is part of the Techstars accelerator in New York City. It currently has a team of eight people mainly based in Ann Arbor after hiring a couple of engineers and a business development professional over the last year.

The seed capital raise is expected to help SkySpecs grow out its team rapidly next year as it begins to roll out its technology on a national scale. It currently has two enterprise customers but Ellis doesn’t expect that his client list to remain that short for long.

"We have more in the pipeline," Ellis says.

Source: Danny Ellis, CEO of SkySpecs
Writer: Jon Zemke

Argus Farm Stop expands with greenhouse conservatory

Argus Farm Stop is becoming even more customer friendly, adding a greenhouse/convervatory space in downtown Ann Arbor.

"You can see all of downtown when you're sitting there," says Bill Brinkerhoff, co-owner of Argus Farm Stop.

Brinkerhoff and his partners took over an old gas station and turned it into a year-round all-local market and coffee shop called Argus Farm Shop. The 100-year-old building at 325 W Liberty, on the border of the Ann Arbor’s downtown and the Old West Side neighborhood, was an eyesore before Argus Farm Shop turned it into a hub of activity.

"It's been a great first year," Brinkerhoff says. "We want to expand the space to have more seating inside."

The expansion project will take the patio area of Argus Farm Shop and enclose it with a greenhouse-style space. The idea is to maintain the outside feel of the space but make it accessible to customers year round. It will have space for up to 15 people. Brinkeroff and his partners choose the greenhouse style so it would blend in with nearby architecture.

Work is expected to begin on the space before the end of the year. Brinkerhoff hopes to finish it in time for the spring.

Source: Bill Brinkerhoff, co-owner of Argus Farm Stop
Writer: Jon Zemke

Beal restores grandeur to 10 N Washington in downtown Ypsilanti

Another 100-year-old building is coming back online in downtown Ypsilanti, making room for five new businesses. 

The single-story commercial structure at 10 N Washington had been vacant for a couple of years before new ownership took over in the summer of 2014. It has since executed a complete renovation, filling it with five local small businesses, including Bodies by Yogi, Betty Green Organic Beauty, Paint Ypsilanti, Five Star Care Network, and Go! Ice Cream.

"It's all done with the exception of Go! Ice Cream," says Stewart Beal, construction contractor and property manager of 10 N Washington. Go! Ice Cream recently closed a successful crowdfunding campaign to build out a commercial kitchen and soda shop on the alley side of the building early next year.

10 N Washington had been used by a couple of office tenants before it went vacant. The whole building needed love but its exterior hadn't been improved in decades. Beal's team brought it back to its original design.

They team also subdivided the commercial space to accommodate Ypsilanti’s emerging small business scene. Originally Beal the ownership were looking for one tenant to occupy the 2,800 square feet on the ground floor and 1,800-square-foot basement.

"We never got any takers sop we decided to split it onto five spaces," Beal says. "In some cases it's easier to rent out five smaller spaces."

Source: Stewart Beal, construction contractor and property manager of 10 N Washington
Writer: Jon Zemke

Ghostly Records featured in NY Times

We here at Concentrate have long sung the praises of Ghostly Records, which was founded by U-M alum Sam Valenti. Heck, they even provided us with music for our videos. Now, the New York Times' business section is finally noticing this cooler-than-cool company.


"A diversified product line can be a smart survival strategy in a struggling business, which the music industry continues to be 16 years after Napster shattered the highly profitable model of selling CDs. But according to Sam Valenti IV, Ghostly’s founder, the nonmusical goods that it sells are not a hedge against declining record sales. Music, he said, is profitable and by far Ghostly’s biggest product."

Read the rest here.

Mountain Labs brings big data muscle to healthcare industry

Healthcare is known for its seemingly insurmountable bureaucracies and mountains of data. Mountain Labs wants to simplify that. The Ann Arbor-based startup recently launched a public health surveillance platform called "Symport" that helps hospitals and medical researchers simplify big data and complicated processes. The end goal is to streamline the healthcare system.

"We're tracking clinical data to alert hospital administrators what they are doing that works," says Alex VanDerKolk, president of Mountain Labs. "It also helps clean and classify data sets."

Mountain Labs counts the University of Michigan and Henry Ford health systems as customers, along with a smattering of other research health systems across the Midwest. It raised a $200,000 angel round last year and is in the process of securing more capital.

"We raised another $350,000 on top of the seed round," VanDerKolk says.

The 1-year-old company currently employs a team of eight people. VanDerKolk expects his staff to continue to grow as it targets more health systems as customers.

"We are growing quickly," VanDerKolk says. "I'd like to have a presence in every state in the Midwest by the end of next year."

Source: Alex VanDerKolk, president of Mountain Labs
Writer: Jon Zemke

Detroit Bikes offering limited-edition fixed-wheel bike exclusively through crowd funding campaign

Detroit Bikes is preparing to release a new model of bicycle, the C-Type, next year with the help of a crowdfunding campaign.

The Detroit-based bicycle manufacturer's newest product is a fixed-wheel bike with a diamond frame and drop handlebars. The frame is made of 100 percent U.S.-made lightweight chromoly that comes with a lifetime warranty. The C-Type also comes with knobby tires for use in all weather conditions. It will retail for $599.

"We want to keep it really simple and affordable," says Zak Pashak, president of Detroit Bikes. "It's a really good city bike."

It’s also Detroit Bikes' first fixie. Its earlier models, the A-Type and B-Type, came with a similar simplistic design but three gears. Those retail for $699. All three models are made in Detroit Bikes' factory on the city's west side.

The C-Type is available exclusively through Detroit Bikes' crowdfunding campaign. There funders will have a choice of choosing the color (hunter green, fluorescent yellow, flat black, royal blue and mint green) by donating the retail price of the bike. Detroit Bikes will manufacture 200 bikes of each color, which will be delivered in May of next year. Funders can also purchase just a frame for $300. People who give $1,000 will have an opportunity to buy a chrome edition, only 30 of which will be produced.

This project is part of Detroit Bikes' new strategy to boost sales, which are on track to exceed 1,000 bikes this year. To help reach its sales goals, the company opened a storefront in downtown Detroit and hired a national sales director. The company now employs 30 people after hiring 20 this year. Pashak expects Detroit Bikes' combined efforts to lift sales significantly next year.

"We expect to get up to 5,000 or 10,000 sales next year," Pashak says.

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

Fighting tax foreclosure, Recovery Park, and more: October development news round-up

It's been another busy month for development news in the city of Detroit. Let's catch up on some of the biggest stories from the past four weeks.

In just 14 days, a group called Keep Our Homes Detroit successfully raised $108,463 through crowdfunding, well over its goal of $100K. The group worked in partnership with the United Community Housing Coalition with the stated intent of buying foreclosed homes for the people still living in them, homes that were being sold through Wayne County's 2015 tax foreclosure auction. That auction, which ended Oct. 22, has been the subject of much analysis, with people like Jerry Paffendorf of Loveland Technologies offering a number of ideas on how to make the foreclosure auction process better for everyone involved. A potential 60,000 properties could be eligible for auction in 2016, a large majority of them in the city of Detroit.

The Detroit Land Bank has decided to attempt a more citizen-friendly approach in managing its own list of properties, a number of which are owned by the city yet have people living inside of them without the city's permission. Detroit will attempt a pilot program that offers the homes to those living in them at $1,000 each. If purchasing a home, that person will have to pay $100 a month for one year, stay current on their water bill, attend a home buyer counseling course, and maintain their property. If they satisfy those requirements, the deed is theirs. The land bank says the city gains nothing by driving people out of their homes.

The city has also agreed, pending city council approval, to a five-year, $15 million urban agriculture redevelopment plan with the nonprofit RecoveryPark Farms. The urban farms group will lease 35 acres of city land at $105 per acre per year. Officials expect 128 people to be hired as a result of the deal. The farm plots occupy areas between I-94, Forest Avenue, and Chene and St. Aubin streets.

Writer: MJ Galbraith

PawnGuru brings pawnshop business model into 21st Century

Many people see pawnshops as something that should be avoided. The guys behind PawnGuru see them as a big opportunity in the new economy.

"We knew there weren’t a lot of startups tackling the problem pawnshops face," says Jordan Birnholtz, director of marketing for PawnGuru.

The Southfield-based startup specializes in bringing pawn shops into the 21st century by digitizing their business model. Specifically, the company brings customer engagement for pawnshops online.

"We believed we could get shops to engage customers and make offers online," Birnholtz says.

That turned out to be much easier said than done. When the PawnGuru team started approaching pawnbrokers with the idea of online engagement a little more than a year ago, the nearly all said no. They wouldn't make an offer on an item over the phone, or via email with photos. It had to be in the store.

PawnGuru's team kept asking. Eventually they found a pawnshop willing to buck tradition and try PawnGuru's new platform. Today it has serviced 15,000 people, helping them choose between multiple offers from pawnshops.

"Mostly in Detroit, Houston, Chicago and Atlanta," Birnholtz says. "More than 1,000 pawnshops have signed up and more than 100 are very active."

PawnGuru's team of six people plans to continue growing across North American in 2016. It has landed a $600,000 convertible note earlier this year to help make that growth happen, including attracting seed capital from Invest Detroit.

"We're raising a $1.5 to $2 million seed round right now to grow more," Birnholtz says.

Source: Jordan Birnholtz, director of marketing for PawnGuru
Writer: Jon Zemke

Royal Oak tech firm Ambassador triples staff after raising $2.35 million

Jeff Epstein likes to call 2015 the "Year of Scale" when he's talking about the growth of his startup, Ambassador.

The tech entrepreneur can make a good argument for it. Ambassador landed a $2.35-million seed capital round last spring, moved to a bigger office in downtown Royal Oak, and has tripled its staff in less than a year.

"We had four people in the office interviewing today," says Epstein, founder & CEO of Ambassador.

Ambassador builds custom online referral campaigns that offer rewards to users who spread good word of mouth about companies. Ambassador’s software as a service platform automates enrolling, tracking, managing, and rewarding referrals. Some of its brands include PayPal, Spotify and T-Mobile.

The 5-year-old company was part of the Techstars New York accelerator program in 2011, raising a large convertible note from investors like Ludlow Ventures. Ambassador closed on a $2.35-million Series A in March. The round was led by Arthur Ventures with other early investors like Ludlow Ventures participating.

That money went toward expanding Ambassador’s operations. It moved to a larger, 11,000-square-foot office in downtown Royal Oak and grew from 13 employees at the end of last year to 37 today and climbing. Epstein expects this major investment will allow the company to continue to be cash-flow positive while expanding its revenue.

"We're going to more than triple this year," Epstein says. "We will at least double next year."

Source: Jeff Epstein, founder & CEO of Ambassador
Writer: Jon Zemke

Detroit dried milk manufacturer sees serious growth after expansion

VernDale Products made a big bet on itself last year, sinking several million into a new food production facility on the city’s west side. The family business is now reaping the benefits with more production, modernized processes, and lots of new hires.

"We had figured on hiring nine total people for our new place," says Dale Johnson, president of VernDale Products. "We have already hired 14 people. We had to staff up for a whole new operation."

The 57-year-old company and its team of 58 employees makes roller dried milk powder, which is primarily used by premium chocolate manufacturers. The firm got its start in the footprint of what is now the Renaissance Center before moving to the west side at 8445 Lyndon. Last year VernDale Products built out a new facility at 18940 Weaver St., north of Joy Road between the Southfield Freeway and Evergreen Road.

The new facility added 60 percent to VernDale Products' production capabilities; however, that extra ability to make more roller dried milk powder went more to reassuring the firm's customers that it could keep up with their needs.

"It was more a case of us needing redundant production." Johnson says.

The ancillary benefit to the expansion is what it did for VernDale Products that management wasn't expecting. The expansion enabled it to modernize the firm's backend processes, such as updating plant procedures, guidelines and logistics.

"The company has become more mature," Johnson says. "We have addressed a lot of issues we needed to address."

That came at a price. VernDale Products dropped $20 million into the new production facility, an investment that also came with the help of a $436,000 business development incentive from the Michigan Economic Development Corp. and tax abatement from the city of Detroit. The original budget was $12 million, but Johnson and his team decided to make the best long-term decisions with an idea of positioning the company for future growth, including a projected 5-10 percent jump in revenue next year.

"We had to decide to take shortcuts or do it right," Johnson says. "We did it right but at a greater expense."

Source: Dale Johnson, president of VernDale Products
Writer: Jon Zemke

Detroit City FC to kick off largest community-financed project in U.S. sports history

Detroit City FC is preparing to kick off what it's estimating to be the largest community-financed project in U.S. sports history, the renovation of its future home, Keyworth Stadium in Hamtramck. The popular semi-professional soccer team is releasing details of its community investment campaign at a Keyworth Kickoff event at the Fowling Warehouse in Hamtramck on Thursday, Oct. 29.

Since coming to terms on a ten-year lease agreement with the Hamtramck Public Schools this past September, the next hurdle between Detroit City FC and its new home is money. Detroit City FC is hoping to raise an estimated $750,000 to $1 million in renovations for its future home, a 1936 stadium that was the first Works Progress Administration project built in Michigan. In addition to believing it to be the largest community-financed project in U.S. sports history, the soccer organization also estimates it to be the largest community investment campaign of any kind in the state of Michigan.

To launch the campaign, the Metro Detroit Chevy Dealers are presenting Keyworth Kickoff at Fowling Warehouse. Free fowling lanes will be offered from 7 to 8 p.m. to registered participants. Registration is open to Michigan residents only.

The campaign launch and an interview session with Detroit City FC owners will occur following open fowling.

"The success of the 2015 season saw us turning away people at the gates. It was a clear sign DCFC is ready to take the next step, and grow as an organization," Detroit City FC co-owner Alex Wright says in a statement. "Come spring of 2016, Keyworth Stadium will be the home field both our supporters and the residents of Hamtramck deserve."

In moving from its current home at Cass Tech to Keyworth Stadium, the team will double its capacity from 3,000 to 6,000 spectators after the first wave of renovation. Hamtramck Public Schools retains ownership of the property over the course of the ten-year lease and its own sports teams will have access to the renovated stadium throughout the year.

Detroit City FC is set to open its season at Keyworth Stadium in April 2016.

Keyworth Kickoff occurs from 7 to 9 p.m. at the Fowling Warehouse, 3901 Christopher St., Hamtramck.

Writer: MJ Galbraith

Detroit urban ag startup raises edible insects

When people think of insects the initial reaction is often not a positive one. When the co-founders of Detroit Ento think of insects, they see opportunity.

The Eastern Market-based startup is working to build a business around turning locally sourced insects into food and other similar products.

"We are an urban sustainable protein R&D firm for food, feed and pharma," says Theodore Kozerski, co-founder of Detroit Ento.

Kozerski and Anthony Hatinger launched Detroit Ento six months ago. They both worked in urban agriculture before that, including Kozerski working in the farm-to-cafeteria program at Detroit Public Schools. They both were intrigued by the ideas of pushing the urban agriculture envelope beyond raised beds and fish farms.

They found an opportunity to do so in Detroit Ento, a startup is raising insects that are eventually turned into edibles. Insects can serve as alternative sources of protein in both human food (cricket tacos, anyone?) and animal feed. They can also be sold to pharmaceutical companies for research purposes.

Detroit Ento currently is figuring out how to create a product line of insects bred, grown, and sold in Detroit. It's currently researching how to create processes that will make that happen in an economical way.

"The main thing is to get production going," Kozerski says.

Source: Theodore Kozerski, co-founder of Detroit Ento
Writer: Jon Zemke

Midtown salon shutters, pop-up hub to open in its place

A familiar business in Midtown's Cass Corridor is closing up shop and will be replaced by a pop-up boutique.

Jen Willemsen opened Curl Up & Dye seven years ago. She is closing the non-toxic barber and beauty shop but will retain the storefront, instead launching a new concept.

Willemsen will open JoyRide: Pop Up Rendezvous by the end of the month, she says. JoyRide will utilize the former salon space to host rotating retailers for months at a time. The business at Curl Up was fine, according to Willemsen, and the change is being made to afford her more time as she enters the seventh month of her first pregnancy.

The pop-up has been a popular trend in Detroit, launching a number of what have become permanent businesses throughout the city. Used as an opportunity by what are typically first-time entrepreneurs, the pop-up allows for a brick and mortar experience without all of the up front costs of a traditional start-up. Cinema Detroit, Love Travels Imports, and Coffee and (___) are all recent examples of Detroit pop-ups that have made the transition from pop-up to permanently located businesses.

"I'm proud and thankful to be part of Cass Corridor," says Willemsen. "It's been my home for so long, and in so many ways. The changes I've witnessed in this community are immense, yet it's still a familiar friend. Change can be difficult, but that doesn't make it bad. I miss the old 'Corridor,' but I'm still looking forward to its future and being part of it."

The first JoyRide tenant will be Z Ballerini. The manufacturer of men's travel and everyday bags uses natural materials and makes them in Detroit. Z Ballerini is readying for the holiday season.

JoyRide: Pop Up Rendezvous is located at 4215 Cass Ave.

Writer: MJ Galbraith
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