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5 tips for growing a startup with Rocket Fiber's Marc Hudson

In the last three years, Rocket Fiber co-founder Marc Hudson has expanded an admittedly precarious and bold pitch for a high-speed internet venture into a successful, rapidly expanding Detroit startup in the face of major, multimillion-dollar competitors.
 
Hudson first pitched the idea for Rocket Fiber in 2013 while working as a software engineer for Quicken Loans. He says he thought of the idea while reading an article on Google Fiber in Kansas City, and the subsequent influx of technology and entrepreneurship following the launch.
 
Hudson says a light bulb went on, thinking it could be a "game changer" for Detroit. He pitched the idea through the Cheese Factory, Quicken Loans' internal ideas website where employees are encouraged to pitch concepts big or small that could improve the company.
 
This idea was definitely big and quickly caught the eye of Dan Gilbert, who backed the project financially.
 
The gigabit internet connection, which launched commercially in January, is 1,000 times faster than the average residential connection. The service is currently being used both homes and businesses in Detroit.
 
"Since January, we've been lighting buildings all over the central business district," Hudson says.
 
So far, Rocket Fiber has put down over 20 miles of fiber optic cable in Detroit. Various residential buildings in downtown and Midtown such as the Willy's Overland Lofts, Cadillac Square Apartments, and the Forest Arms Apartments already have Rocket Fiber connections available.
 
Hudson says Rocket Fiber is actively working to expand farther into Midtown, Brush Park, and New Center. They recently connected their first commercial customer in Corktown, as well.
 
“In 2017, we'll be setting our sights even bigger than just the downtown area," Hudson says. "We've always said that we want to expand, we want to grow, and we think there's a lot of opportunity to continue to build this company and network in the city of Detroit." 
 
Although solid plans aren't in place yet, Hudson says he hopes to eventually bring Rocket Fiber into the suburbs.
 
Beyond physical expansion, the company plans to soon break into the cable market, providing HDTV cable channels and on-demand services.
 
"We're still trying to work the bugs out," Hudson says. "TV is actually pretty hard to do, it's actually harder to do than the internet." Still, he says announcements regarding the new service will be made in the "not too distant future."
 
Hudson will be the keynote speaker at Southeast Michigan Startup's High Growth Happy Hour starting at 6 p.m. at Cafe Con Leche in Detroit. There will be time for networking and drinks, a casual chat and Q&A. The event is free, but advance tickets are required. Hudson will highlight Rocket Fiber's expansions and how the company has scaled an innovative tech startup across the city. To encourage this sort of growth from other ventures, Hudson has shared five of his tips for growing an innovative startup in the city.
 
Have partners
"I've been involved in a bunch of different startups, pretty much since I was in college, high school even," Hudson says. "One of the big difference makers for me in this startup environment was having partners. I tried to do a lot of it alone in the past, and it doesn't matter how well-rounded you are, there's always going to be some skill set that you just don't have."
 
Don't just have partners—have good partners
"For me, having Edi and Randy as my partners has been a huge part of the success of the Rocket Fiber story," Hudson says of Edi Demaj and Randy Foster. "They were the ones that we showing up, and doing things, and following through, and not just saying they were interested but showing they were interested. … So, to me, it's one thing if someone shows interest but if they actually jump in and roll their sleeves up and start building with you, that's a pretty good indicator that they want to be around for a while."
 
Trust the partners you put in place as you grow
"As a founder of a company, you have a vision, you have a dream, you have an idea and you want to do everything," Hudson says. "As you grow, you really have to trust in the people you put in place to pick things up for you because you can't be everywhere at all times. You have to have people you can trust to take and run with things. And you as a founder, a manager of those people, you need to be able to let go sometimes and let them go and build things. It might not be the exact same way that you would have done it, but that's OK."
 
Persevere
"Perseverance is one [tip] that is talked about a lot but is still understated," Hudson says. "There are so many times when this project, this idea, could have died along the way for different reasons. It was all about just rolling up our sleeves and just understanding, in our case, that this project was so important for the city of Detroit and for our organization that we weren't going to let the normal things that get in the way slow us down."
 
Ignore the noise
"We have a saying within our organization which is, 'Ignore the noise.' I think there's a lot of noise out there when you're building a business. It's other people trying to do something similar, it's your competitors dropping press releases, it's the naysayers telling you it can't be done. At the end of the day, it's really about putting the blinders on, focusing straight ahead on you, on your business, your dream, your vision, and shutting everything else out."
 
Lexi Trimpe is a freelance writer living and working in Detroit. You can find her on Twitter @LexiTrimpe or on Instagram @thewestvillageidiot.

A closer look at U-M's new driverless vehicle startup tenants

Peter Brink has thought a lot about cars that drive you places instead of the other way around.

"The day of the truly automated vehicle where you get in and say, 'Take me to this location,' ... might be 10 years off, but it's probably not as far as off we think it is," says Brink, director of engineering at the driverless vehicle startup PolySync.

University of Michigan students will begin working with Brink and other developers and engineers in the driverless vehicle field on research that could help make that forecast a reality.

The joint incubator program by U-M's Mobility Transformation Center (MTC) and Center for Entrepreneurship (CFE) is bringing three West Coast startups in to work with 11 engineering students for the fall semester. Portland, Oregon-based PolySync and San Francisco-based Zendrive and CivilMaps will move resources into the TechLab incubator at U-M's Mcity autonomous vehicle test facility. The initiative aims to help develop both students' careers and the startups' own new technologies.

Jay Ellis, director of the CFE's Michigan Translational Research and Commercialization program, and MTC deputy director Carrie Morton led the yearlong search for partner companies, narrowing over 30 candidates down to three. Candidates had to do work that either transfers drivership from humans to machines, or makes vehicles and infrastructure more connected. More importantly, they needed a program that put student development first.

"All three of these companies got that right away," Ellis says.

In the case of CivilMaps, students will help map and then localize the Mcity environment for a car's robot "driver" to read. The 3-D mapping company's focus is on making self-driving cars enjoyable and trustworthy for passengers, says Sravan Puttagunta, CEO and co-founder. Maps generated by sensor data and CivilMaps' technology are meant to replicate the human experience of navigating the physical world autonomously.

"Mcity is a great test bench for our technology stack," Puttagunta says. "A controlled environment lets us create very specific scenarios to stress-test our technology stack while having a captive audience that comes from the automotive industry."

Zendrive returns to Mcity this fall after a successful pilot run with the TechLab program back in February that led to summer internships for two students. The mobile technology company was founded by Google and Facebook veterans, and specializes in data and analytics for improving road safety.

Ellis says students will help identify and validate vehicle maneuvers using smartphone data and use that to quantify drivers' risk. They will also compare vehicle and phone data to confirm that they correlate—for instance, noting how a phone registers a hard right turn when a vehicle makes one on the road.

A driverless tech company for other driverless tech companies, PolySync's middleware platform collects and presents data from a variety of vehicle sensors. The software is meant to help developers easily obtain data useful for writing code for new autonomous vehicle applications.

Brink and the team at PolySync will work with students to produce an autonomous vehicle that can get to a predetermined destination. Part of the process will involve watching their calculations fail, which is harder to do in the real world.

"When you're driving out on the streets of Portland or Chicago or Ann Arbor, you don't want to drive the wrong direction on a one-way street, or constantly be crossing lane lines," Brink says. "Mcity provides us a captured enviroment where we can collect a lot of this 'driving badly' data, because that allows us to test the automatic drive algorithms."

Brink's initial interest in the program was to get involved with what students were doing while also exposing them to the work going on at PolySync. The research potential became apparent as something of a bonus.

"I realized after the fact what a great opportunity it was to do all this other stuff," he says. "I hesitate to use the term, but it really is synergy."

 

Ferndale doggie day care business caters to small dogs

Liz Blondy has seen it firsthand, that look of anxiety creeping over a dog owner's face as they go to board their three-pound Yorkie and a 120-pound shepherd walks through the door. Often it's the owners of small dogs, and not the small dogs themselves, that are afraid of the bigger breeds of dogs. It's why Blondy created Tiny Town, a day care and boarding facility specifically designed for small dogs.

Blondy is the owner of Canine to Five, the dog day care and boarding businesses located in Detroit and Ferndale. In June, she opened Tiny Town, a facility reserved for dogs 20 pounds and under. While it's located in the same building as the Ferndale Canine to Five, Blondy characterizes Tiny Town as a separate business.

The play area is designed for small dogs. The kennels are designed for small dogs. The small dogs receive more hands-on attention from a staff that is specific to Tiny Town. Blondy even has an HVAC system set so the small dogs can't sense the large dogs. And a separate entrance limits those anxiety-inducing encounters between small dog owners and the big dogs themselves.

"I'd say Tiny Town is about 50 percent for the dogs, 50 percent for the owners," Blondy says.

While space is currently unavailable for a Tiny Town at the Detroit location, Blondy says that she's working with a bank and architect to build an addition to that building.

Tiny Town is located at 1221 E. Nine Mile Rd. in Ferndale.

Got a development news story to share? Email MJ Galbraith here or send him a tweet @mikegalbraith.

Warmilu's blanket technology goes to Kenya, scales up

From deployments in Nairobi to clinical trials in Detroit to a new home in Ann Arbor, startup Warmilu continues to explore new horizons for its warming blanket technology.

Warmilu's IncuBlanket is a non-electric, reusable heating wrap that acts instantly. First developed by University of Michigan and Eastern Michigan University students as a way to keep newborns warm, the idea grew to include uses for the elderly and people dealing with pain or soreness.

In March, Warmilu team members traveled to Kenya, where they spent two and a half weeks working alongside Ann Arbor's Relief for Africa foundation to introduce Warmilu products to doctors, Ministry of Health officials, and potential distributors in and around the cities of Nairobi and Eldoret.

The Warmilu team brought 35 IncuBlankets with them to distribute and test at six different hospitals in Kenya. Grace Hsia, Warmilu's CEO and co-founder, calls the trip an "eye-opening" discovery mission.

"It really validated and helped us realize there was a challenge greater than we had anticipated and potential for acceptance larger than we had anticipated," Hsia says.

With letters of support from four hospitals on the way, Warmilu is finalizing a distribution deal that would allow the company to start processing purchase orders for about 20,000 blankets.

Closer to home in Detroit, the Warmilu team is working with Dr. Nitin Chouthai at the Children's Hospital of Michigan on planning and deploying clinical trials that could help make the IncuBlanket's case as a warming option for transferring critical-care and neonatal patients in emergencies.

Pending approval, the tests will last three to five months and rate the IncuBlanket for efficiency, effectiveness, and safety compared with current methods of transporting low-birthweight and premature infants.

With high hopes for new market opportunities, Warmilu also has another first on the way: its first home.

The company, which Hsia says was previously "nomadic," is moving into a new, 2,000-square-foot headquarters and production space on the west side of Ann Arbor. Hsia says the move will help the five-year-old business scale up while bringing all operations in-house, from administration to production to storing raw materials.

"It will allow us to produce the blanket volumes we're projecting for at least the next two to three years," she says.

Warmilu's team of six will expand soon too, as the company looks to bring on a quality and production manager and several sewers.

Motor City Match winner Mama Coo's opens in Corktown as Round 6 application window opens

A full year into its small business programming and Motor City Match is starting to see some brick-and-mortar results. Vintage clothing boutique Mama Coo's has opened up shop in Corktown and coffee shop Detroit Sip and Comb-N-Weave manufacturer Black Pride Beauty are reportedly nearing the opening of their own stores in the University District and Jefferson East areas, respectively.

Those three businesses were winners of Motor City Match grants ranging from $18,000 to $60,000 each. Entrepreneurs and small business owners looking for their own shot at small business assistance from Motor City Match, which can include anything from grant money to free architectural services, business planning to tenant-landlord introductions, are in luck.

Round six of applications closes Saturday, Oct. 1. Applications are available online.

"Now that we're a full year into the program, Motor City Match is really starting to show some positive results," says Rodrick Miller, CEO of the Detroit Economic Growth Corp. "Businesses are moving through the steps of the program and beginning to open their doors to serve our neighborhoods."

Lana Rodriguez, winner of an $18,000 Motor City Match grant, recently opened Mama Coo's in Corktown. In an earlier interview with Model D, Rodriguez spoke about the importance of the grant and how it allowed her to open Mama Coo's with less debt and more resources.

"I know that now I have a better chance of longevity and success and to keep this puppy going," she says. 

For those seeking guidance through the application process, Motor City Match has partnered with Wayne County Community College to host the Small Business Summit and Resource Fair, to be held Friday, Sept. 16 from 9 a.m. to 12 p.m. at the college's downtown Detroit campus.

The Resource Fair is not Motor City Match-exclusive and will feature a number of Detroit small business support services including the Build Institute, CEED Lending, the Detroit Development Fund, the Detroit Public Library, Detroit SCORE, Grand Circus, Ioby, and Lifeline Business Consulting.

Got a development news story to share? Email MJ Galbraith here or send him a tweet @mikegalbraith.

Report: Ann Arbor leads Michigan in entrepreneurial resources

A new statewide guide to entrepreneurial resources shows that Ann Arbor easily tops other Michigan cities when it comes to funding opportunities and other support for startups.

The 2016 Michigan Entrepreneurial and Investment Landscape Guide was released recently by the Ann Arbor-based Michigan Venture Capital Association. The document features more than 140 profiles on venture capital firms, angel groups, support organizations, and service providers active in the state's entrepreneurial and investment scene.

Ann Arbor is particularly rich in resources, with more than half of the state's 44 venture capital firms based here, as well as two angel groups and 17 entrepreneurial support organizations.

"Washtenaw County by far leads the charge in resources that are available for entrepreneurs," says Maureen Miller Brosnan, executive director of the MVCA.

The area is one of the fastest-growing entrepreneurial communities in the state, Brosnan says, thanks in part to work coming out of the University of Michigan in high-tech and life science industries.

Launched last year, the annual guide and companion interactive map helps connect young companies to funding and leadership with a focused approach that Brosnan says wasn't available before.

"The guide was designed to fill that hole we were seeing," she says. "This is the quickest way for startups to find partners."

Another key market for the guide is out-of-state investors, to whom Brosnan says Michigan presents a "vitality" of entrepreneurial activity not seen in other parts of the country.

"For every $1 invested in Michigan startups, $4.31 comes in from out-of-state investors," she says. "We are really good at leading the charge with deals and able to acquire partners from outside the state of Michigan."

The full guide can be downloaded as a PDF from the MVCA website. Printed versions of the guide will be available at MVCA events, including the organization's upcoming 2016 awards dinner in November.
 

Akervall Technologies makes Inc. 5000 list of fastest-growing companies

Akervall Technologies started out slow and steady, but a recent growth spurt has landed it a spot on Inc. Magazine's latest Inc. 5000 ranking of the fastest-growing private companies in America.

The Saline-based mouthguard manufacturer came in at No. 1,130 on the 2016 list, released last week, with a three-year growth rate of 342 percent and $2.5 million in revenue for 2015.

Sassa Akervall, CEO of Akervall Technologies, says the ranking helps tell the story of the business and its products.

"Getting recognition this way is beyond fantastic and a great way of getting the word out that we are a company in it for the long run," she says.

Akervall's husband, Jan Akervall, got the idea for the company's flagship product, the SISU mouthguard, while working his day job as an ear, nose, and throat specialist. Unimpressed with the guards used to protect patients' teeth in the operating room, he wanted to find something better and ended up designing his own.

After launching in 2008, the Akervalls kept overhead low early on by operating out of their basement and requiring payment up front from retailers and distributors. Sassa Akervall attributes the company's tremendous growth to a number of factors: recent award wins (including 50 Companies to Watch in Michigan in 2014 and Accelerate Michigan's advanced materials track in 2014 and 2015), creative marketing and sales efforts, and product research and innovations.

"I always say that we grew very slowly and very mindfully," Sassa Akervall says.

The Akervalls permanently relocated their family to Ann Arbor from Sweden in 2004. They fell in love with the area a few years before that, when they had moved here temporarily for Jan's post-doctoral work at the University of Michigan. A job offer in the area helped bring them back, but launching a startup wasn't part of the original plan.

Today Akervall Technologies is run from its own facility in Saline with a staff of 20 and openings for an electrical engineer, accounting assistant, and more production workers. There are also new products on the way, with the first of them launching this fall. Sassa Akervall says the company is planning to expand its facility in the near future to accommodate continuing demand for its product.

Foodjunky aims for presence in all 50 states with help of Yelp partnership

Travis O. Johnson runs the Iron Man, bikes to work on Detroit's riverfront along the Dequindre Cut, and pushes himself and his team to become the largest online food-ordering site in the country--Detroit-based foodjunky.
 
"Our name is going to become a noun," says the 37-year-old wunderkind who alternates between Chicago and Detroit to grow his firm at the rate of 1,000 restaurants a month and hopes to have a presence in all 50 states by the end of the year.
 
"Our business model is the only one that has the ability to accommodate 100 percent of the country's restaurants," Johnson says, declining to reveal revenue numbers for the privately held company. According to a previous story, he acquired $750,000 in seed capital and hoped to acquire more.
 
Yelp, the online resource for user reviews and recommendations on restaurants to other services, is the key to his dreams, Johnson says. In June, he inked a deal with the San Francisco-based company to power meal requests directly from Yelp business pages to foodjunky's online roster of restaurants. The deal gives more visibility to restaurants and makes online food ordering easier.
 
"Partnering with foodjunky.com allows Yelp to expand food order and delivery options for restaurants, one of our most popular categories for transactions on Yelp," Chad Richard, senior vice president of Yelp’s business and corporate development, says in a release. About 21 million unique devices accessed the Yelp app, drawing 69 million visitors to its mobile website.
 
Yelp is the plum Johnson has eagerly awaited. He has three business partners, Jeremy Jongsma, Andrew Waldman, and Phil Boardman, and sees Yelp as a way to attract investor funding in Detroit and Chicago. With more investors in Detroit he will maintain his presence here, but otherwise he’ll go back to his hometown and keep in contact through Skype.
 
"Raising capital in the Detroit area for a pure tech startup is extremely challenging, which draws our attention out of Detroit and out of the state to raise capital with outsider investors," Johnson says.
 
Much tinkering, failing, and handwringing went into the business model Johnson hosts today. Most food ordering companies, like the nation's leading GrubHub, charge restaurants a fee for every order it channels. Johnson had been unsuccessful trying to duplicate the model and disappointed early investors.
 
"How a company fails is as arguably more important than how one succeeds. If nine out of 10 companies fail, it is extremely important it fails quickly and everyone involved learn from that failure," Johnson says, who plays math Olympics games to keep his mind sharp.
 
He stays active in the entrepreneurial community, first as a student in Bizdom University, a now-defunct Dan Gilbert project, to launching the Bootstrappers Breakfast for founders of early stage technology startups, in Bizdom, then foodjunky's offices in the Elevator Building.
 
Bootstrappers is a monthly breakfast for entrepreneurs where Johnson and others share the best ideas and practices for helping someone launch/grow their dream project and network with other young business people. The $5 breakfast, which takes place on the third Thursday of every month, draws up to 30 guests and often has a waiting list.
 
"Travis has been incredibly helpful in suggesting ways to grow my yarn and crochet business," says Ashley Cirilli, a team leader for Quicken who will take over the Bootstrappers' host role when Johnson heads to Chicago. He suggested she get brand labels for her blankets and shawls and invest in a display station. "Honest advice can go a long way to helping a person steer clear of expensive mistakes,” Cirilli says.
 
At a recent breakfast, Johnson advised a few entrepreneurs against paying $30,000 or more for a software application without testing the market sensibility of the idea on prospective customers.
 
"A startup doesn't have to be profitable, but it has to have clear, delineated goals,” Johnson says. “Keep communicating with your customers, find out what they want, and how you can fulfill that need." Johnson found his own business jumped measurably when he changed his business model from charging restaurants with a small profit margin for food orders and putting the cost onto consumers.
 
Wherever Johnson lives, he expects to sustain foodjunky to greater profitability and challenge himself to better outcomes in Ironman competitions. "Our bodies have so much more abilities than most realize," Johnson says. "I say 'can't' is the most overused swear word. I removed 'can't' from my vocabulary so things like the Ironman become possible. The most difficult thing is finding the next goal."
 
Cirilli and other monthly patrons of Bootstrappers Breakfast hope the goal can be realized in Detroit.
 
Maureen McDonald is a Metro Detroit freelance reporter who writes for Issue Media Group, Detroit Neighborhood News Hub, Crain's Detroit Business, and many other publications, and taught journalism at colleges around Metro Detroit.

German tech company opens first U.S. office at Ann Arbor SPARK

A German tech company specializing in streamlining business apps and digital processes says opening its first U.S. office in Ann Arbor was a simple decision.

iTiZZiMO, creator of a tool called the Simplifier, recently expanded its operations into the United States, setting up shop in Ann Arbor SPARK's business incubator.

"Ann Arbor really is the next hot spot when it comes to high tech," says Anne Prokopp, a spokeswoman for iTiZZiMO. "People are highly educated and talented. In addition, Ann Arbor is a great place to live."

Having a nonprofit business development organization like SPARK as a resource to get started here also helped.

"The mix of great support, family-like attitude, and great potential of the Ann Arbor area convinced us," Prokopp says.

So what is the Simplifier? Prokopp describes it as a tool for bringing together the different systems and data that a company uses and builds up over time, without having to program code to make them talk to each other, so to speak. She says conventional programming requires hundreds of hard-coded interfaces between those systems that are difficult to change.

"With the Simplifier, you connect all systems to the platform itself, so you can use all data from every source you want," Prokopp says. "This can be systems, but also machine sensors, geodata from mobile devices, and everything else."

Today the company's U.S. presence is modest, with one employee in Ann Arbor and a CIO in Germany charged with establishing the company's operations here. Once settled in, the company hopes to eventually hire more staff—sales and account management to start, and eventually a small team of developers—from the Ann Arbor area.
 

New workforce development opportunities available, thanks to regional partnerships

Metro Detroiters looking to pursue careers in fields as varied as nursing, machining, IT work, and more are being offered a new path to job training and workforce development, thanks to a recent partnership between Focus: HOPE and a handful of local educational and business organizations. Two Oakland County institutions, Oakland University and Oakland Community College, are among the organizations offering training for Focus: HOPE participants.

The Steps for Success Program, a partnership between OCC, Focus: HOPE, and the Detroit Regional Chamber Fund, offers students continued academic and social support throughout their schooling. Students attend the first semester of school at the Focus: HOPE campus and transition to OCC for their remaining courses. A Focus: HOPE Student Success Coach/Case Manager will follow the student throughout their studies, offering tutoring services, workshops, and additional support.

Steps for Success is available to current and newly enrolled students at OCC as well as students already involved with Focus: HOPE.

For students wanting to get into the nursing field, Focus: HOPE has partnered with Oakland University for a workforce training program. Focus: HOPE's program, the Machinist Training Institute, is also currently forming new classes. That program has graduated hundreds of students into the manufacturing and automotive sectors.

To qualify for any of the programs, students must pass both math and English assessments administered by Focus: HOPE.

More information is available through Focus: HOPE by website, email, or (313) 494-4300.

Motor City Match completes first year of programming, 11 more businesses awarded grants

Detroit continues to grow its base of entrepreneurs through its Motor City Match program, awarding 11 more grants ranging from $15,000 to $75,000 to area businesses. The awards complete the fourth round of Motor City Match, marking one full year for the quarterly program.

That pipeline of entrepreneurs, as Detroit Economic Growth Corporation CEO Rodrick Miller calls it, consists largely of Detroiters. According to figures released by Motor City Match, 64 percent of MCM winning businesses are owned by Detroiters, 72 percent are minority-owned, and 68 percent are woman-owned.

In the program's first year, Motor City Match has awarded $2 million in grants to 40 small businesses, leveraging over $13 million in total investment in the city.

This round of grant winners include:
  • Twisted Roots, a beauty supply retailer in Eastern Market
  • Block Party, a building on Livernois that will house two restaurants and the Live6 Alliance
  • Detroit Vegan Soul, a West Village restaurant opening a second location on Grand River
  • Norma G's, a Caribbean cuisine food truck opening a brick-and-mortar location on East Jefferson
  • Live Cycle Delight, a cycling studio opening in West Village
  • Amaze-Enjoyment, an early childhood center at 20067 John R Street
  • Guadalajara #2, a butcher shop expanding into a full-service facility in Southwest
  • Lil Brilliant Mindz, an east side daycare and Head Start facility
  • Beau Bien Fine Foods, an artisanal jam, fruit preserve, chutney, and mustard maker expanding in Eastern Market
  • Meta Physical Wellness Center, an affordable holistic spa opening in Corktown
  • Third Wave Music, a music instrument retailer opening in the Forest Arms building in Midtown
"These are the kinds of businesses that help to create complete neighborhoods where people want to live," says Mayor Mike Duggan. "Motor City Match is helping dozens of Detroit entrepreneurs live their dream owning their own business while being a real part of our city’s neighborhood comeback."

In addition to the 11 businesses awarded grants, seven others will receive free design and architectural services, 26 have been connected with landlords, and 50 more will receive free business planning support.

The next round of the Motor City Match application process begins Sep. 1 and closes Oct. 1.

Got a development news story to share? Email MJ Galbraith here or send him a tweet @mikegalbraith.

Landline Creative Labs receives $56,000 grant from Ann Arbor SPARK

Landline Creative Labs' plan to create a complex of nine low-cost creative studio spaces in Ypsilanti has received a big hand from Ann Arbor SPARK in the form of an Innovate Ypsi grant.

Mark Maynard, co-founder of the $650,000 mixed-use development in downtown Ypsi, says the $56,000 performance-based grant will help with the costs of getting the project up and running. The Landline team has completed demolition in the former Michigan Bell building the project will occupy, and is now turning towards building out studio spaces.

“It'll help tremendously, and it's really helped us to move quickly,” Maynard says. "Today we have carpenters in the space, a historic window restoration team, plumbers, and electricians."

Expected to open in early fall, Landline will complement the SPARK East Incubator in Ypsi, according to Jennifer Olmstead, a senior business development manager at SPARK who oversees the Innovative Ypsi program.

“In order for downtown Ypsi to be successful, it needs to develop a critical mass of successes and a mix of businesses, retail and residents,” Olmstead says.

SPARK's support for the project isn't necessarily limited to providing funds. SPARK has also helped Landline secure a tax incentive from the city of Ypsilanti. Olmstead says SPARK is committed to helping Landline, and similar efforts in the area, succeed through access to its range of development and talent services.

"The success of Landline Creative and the momentum it is building in Ypsi is an important next step for downtown Ypsi, and certainly a story that Ann Arbor SPARK can use to highlight the types of businesses that can achieve success in Ypsi," she says. "Entrepreneurs at all levels...are looking for communities that provide a sense of place and affordable rents and downtown Ypsi has all of these ingredients."

365 Retail Markets surpasses 6,300 installations

A growing demand for high quality, automated food choices in office buildings is pushing Troy-based 365 Retail Markets into stratospheric sales. In the last year the company expanded into three global markets, added 15 employees, and hopes to enroll a private equity firm to grow even larger.
 
"The market is pulling us forward," says President Joe Hessling, whose firm ranks among the fastest growing in Southeast Michigan, offering tasty alternatives to Lunchables scarfed down at the desk. "As people spend more time in the work environment, they look for more amenities from their daily lives. Food service technology is how companies can compete with Google, Facebook, and LinkedIn. We're a benefit for employees."
 
Hessling, who skipped college and went straight into the food service business, started 365 Retail Markets in 2008. The company reached $23.5 million in revenue in 2015, up from $17 million in 2014; Hessling anticipates a 30 percent increase in 2016. For three years the company has enjoyed a funding boost from Plymouth Ventures. Their main product is its MicroMarkets technology, a turn-key, unmanned market, an updated Automat for the coffee shop/convenience store clientele. While other companies fulfill the merchandise, 365 Retail Markets provides the kiosks, coolers, freezers, shelving, and payment options from credit cards to thumb prints that allow 24/7 access and remote inventory management.

Hessling says his company recently surpassed its 6,300th installation and now services accounts in Canada, Italy, and the United Kingdom, as well as the United States. In 2005, Inc. Magazine called 365 Retail Markets the global leader in MicroMarkets technology and ranked it No. 321 in the 5,000 fastest growing private companies.

Having the right technology at the right time is everything. Hessling says his goal is to achieve ultimate flexibility in what customers can order and how the equipment runs seamlessly. Nearly half the operating costs, according to Hessling, is software development, systems that can provide data analytics on what customers buy and how often. The company started with an honor system for payment, and now has developed theft deterrent and security packages for seamless operation 24/7.
 
"The amount of change one good software developer can make on the company trajectory is worth it," Hessling says. His firm has 30 developers among its 140 employees and 10 contractors with offices in Troy, Provo, Utah, and Santa Clara, California. The software and customer service team work with clients to prepare a launch site, get equipment installed, and work to keep the market running smoothly.
 
This month, 365 Retail Markets is launching Verii, a compact vending unit and a pay window for scanning and purchasing through smartphones. Hessling believes his firm could enlist up to 200,000 small offices with 25-100 employees who would be ripe for this service. Just say cha-ching!

Maureen McDonald is a Metro Detroit freelance reporter who writes for Issue Media Group, Detroit Neighborhood News Hub, Crain's Detroit Business, and many other publications, and taught journalism at colleges around Metro Detroit.

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Prominent public relations firm Berg Muirhead transitioning to new name and ownership

The transition seemed almost instantaneous. Last week Berg Muirhead and Associates was one of Detroit's most recognizable boutique public relations agencies. This week it has a new name, Van Dyke Horn Public Relations, and new owners. But this change has been a longtime coming.

"It wasn't a quick turnover process," says Peter Van Dyke, CEO and co-owner of Van Dyke Horn Public Relations. "We have worked toward this slowly and carefully for the last five years."

Berg Muirhead and Associates is one of the household names in Detroit public relations. The company was founded in 1998 by Bob Berg, a public affairs adviser for former Detroit Mayor Coleman A. Young, and Georgella Muirhead, a public relations administrator for the cities of Detroit, Southfield, and Ann Arbor. The company built an enviable client list that included everything from Detroit Future City to Strategic Staffing Solutions to the Grand Hotel on Mackinac Island.

Successful businesses like this are often built on the shoulders of their founders, and too often live and die with them. But Berg Muirhead/Van Dyke Horn seems like it has a better shot than most of surviving because it's been preparing for this moment for a long time.

Van Dyke started as an account executive at Berg Muirhead a decade ago, becoming an account supervisor a year after that. Five years ago Van Dyke made the move to vice president. He became a partner in the firm about two years later. Marilyn Horn, the co-owner and president of Van Dyke Horn, has been working at the company for even longer as director of administration before becoming a vice president in 2013. All four people became practically interchangeable over the last few years in preparation of this transition.

"Bob, Georgella, Marilyn, and I work very close together," Van Dyke says. "If we can work closely together and leave each day as good business colleagues and friends, then we have something special going on."

That group of four will continue to work together. While Horn and Van Dyke are the new owners, Berg and Muirhead are staying on as "of counsel" senior staffers. The company's staff of nine will remain the same and continue to work in its offices in the Fisher Building in New Center. In fact, Van Dyke expects to hire another account executive or two before the year is over.

He and Horn have set a goal of raising the firm's annual revenue to $1 million this year. Van Dyke expects to announce new clients within a few months, and hints they many will come from developers building up the greater downtown area and the rest of Detroit.

"There will be a lot of growth in the next six months," Van Dyke says.

Pro-granny flats ordinance moves forward in Ann Arbor

Granny flats are a major step closer to coming to a college town near you. An ordinance that would allow the addition of granny flats, technically known as accessory dwelling units, to single-family homes in the city of Ann Arbor has been recommended for approval by the city's Planning Commission. A vote for approval of the ordinance could come before the end of summer.

Accessory dwelling units are small apartments homeowners building on their property. It could be anything from constructing a mother-in-law suite above a garage or a basement apartment for a son who just graduated. Theses units are typically used to house family members while giving them their own private space or to allow older people to generate a little rental income.

"They increase the opportunities for the homeowner to age in place," says Chris Cheng, planner for the city of Ann Arbor.

The ordinance has run into some opposition from people who are afraid this will open the door to create more student rentals in traditionally family oriented neighborhoods. And there has also been the predictable backlash of NIMBYs who don’t react well to change.

However, Cheng says the city has taken steps to help ensure this doesn't turn into a loophole for owners of single-family homes to turn them into student-rental duplexes. For instance, the property must be the homeowner’s principal residence except for temporary absences up to six months.

"We are trying to make this as simple as we can but still keep up with the neighborhood concerns," Cheng says.

The granny flats ordinance received its first reading in front of Ann Arbor's City Council in July. The second reading is set for August. Once that happens the City Council can vote on it or table the issue.
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