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The Passion Of Rich Sheridan

Richard Sheridan's decision to launch his own start-up, Menlo Innovations, should have been harder to make.

The then 43-year-old had the normal upper middle-class accoutrements: a mortgage, car payments, spouse, three college-bound teenage girls, and a career filled with promotions, bigger responsibilities and nicer offices. That all changed when the Internet bubble burst. Sheridan, then an executive in an Ann Arbor-based tech firm, had to lay off several of his friends shortly before getting the ax himself. Not long after he started Menlo Innovations to make software. He never looked back.

"In some ways it was a relatively easy decision for me because there were no jobs in my industry in 2001, so I had to make my own," Sheridan says. "It was one of those moments when I looked at myself and said, 'Now is the time. I am ready.' I knew the people I wanted to work with. I knew the concept as clear as day. I just made that decision to move forward."

Typically, that decision is not as easily made as Sheridan makes it sound. Entrepreneurship is normally a young person's game. Parents about to enter the most expensive phase of their lives often talk themselves out of starting a business. Sheridan talked his family into it and launched Menlo Innovations out of his basement. He now jokes that they got in on a "sub-ground-floor opportunity" at what is one of Michigan's top tech firms.

"It would be very interesting if you did the same interview with my wife," Sheridan says. "She probably had a completely different point of view of what was going on. I think she thought, 'Oh, this will pass. He will wake up one day and realize he needs to get a job.' … There were the evening discussions with my wife just before falling asleep. She always looked at me and said, 'You know Rich, all you have to do is tell me it will be OK.' That was my role in life during those early years. We just had a victory with our relationship with Accuri Cytometers (a recently acquired, local start-up). She looked at me and said, 'I always knew this was going to work out.'"

Today Menlo Innovations employs 40 people in Kerrytown. Sheridan and his company regularly grace the covers of top business magazines, like Inc., for their creative approach to developing software, workspace and business culture. Menlo Innovations, named for Thomas Edison's research laboratories, has become so successful that Sheridan is now one of the state's go-to entrepreneurs for advice.

"When I coach entrepreneurs, I come from the school of passion," Sheridan says. "It's not about the idea or how smart you are or anything like that. It's about the passion for what it is you're doing, because it's the passion that carries you through the abysses of entrepreneurship."

Sheridan recently invited Concentrate's Jon Zemke to a small, hidden courtyard by Sweetwater's Café in Kerrytown. They talked about entrepreneurship, Zingerman's and high-tech cultural anthropologists.

What advice do you have for a middle-aged person about to start their own business?

Don't go it alone. There are a lot of times you are not a complete enough thinker as an individual.

When you started Menlo Innovations, did you have any idea it would be like this today?

Quite frankly, I did. One of my talents is being able to have a vision for the future and create a reality of that vision.

What's one hard lesson you learned during your first decade of business that you can pass on to new entrepreneurs to make their experience a little easier?

There are no lessons you can learn the easy way. That's the hard thing. You really have to go through it, experience it. That's why passion is so important. It's passion that gets you through those moments of stark fear and terror.

An awful lot has been written about the evolution of Ann Arbor's entrepreneurial ecosystem. What angle hasn't been written about?

Coffee shops. The Sweetwater's, Zingerman's, Café Zolas. If you want to bump into entrepreneurs in Ann Arbor, go to coffee shops. That's where a lot of the mentorship and casual networking occurs. People underestimate the value of getting out of the office and just bumping into people.

More businesses are utilizing creative office spaces, which usually entail modern design, loud colors and allowing the employees to re-create their cubicle. What are your rules for developing a creative workspace?

Our space is very functional. There is a purpose to everything in it. It's not just about fun. You're not going to find foosball tables or arcade machines. The fun is actually the work we do.

How is Menlo Innovations' office space different than the likes of larger corporations, like Google and Quicken Loans?

We're cheap. You'll find we painted the floor rather than carpet it. We still have the tables we bought that were used when we started.

What goes through your mind when you see a company that has stereotypical cubicles in a bland office park adrift in a sea of asphalt?

(chuckles) A lack of energy in the team. I see the lights down low and the employees clicking away quietly with ear buds in their ears. Then the CEO takes me to his corner office and says, 'We're having some communication problems with our team.' Really? Could it be that no one is talking to one another?

Menlo Innovations' mission statement, "To end human suffering in the world as it relates to technology," sounds more like the goal of a non-profit than a business. How does that sentence translate to profits?

Most businesses talk about what they do and how they do it. They forget the most important part, why. We have very intentionally created a culture focused on the business value of joy. It's stunning how dramatically different the results can be if you focus on the right things.

Menlo Innovations' policy of taking 50 percent off the price of its work in exchange for a stake in the customer company is a long-range strategy. Will we see more of this or is the business world just becoming too instant-gratification oriented?

Don't look for instant gratification. If that's what you're looking for, buy lottery tickets. It's less expensive and far less risky.

How does high-tech anthropology equate to what's next in software?

Technology is no longer the constraint. Imagination is now the constraint. Technology design is critical for human beings. We study users in their surroundings and design the solutions to meet their needs.

Shouldn't we spend less time looking backward and more time looking forward?

The world is littered with great ideas that never took hold because the innovators never took into account the people who would use them.

You had to lay off a number of co-workers you were close with not long before you were downsized yourself. As someone who has been on both ends of that painful transaction, how do you ensure that you don't have to do that again at Menlo Innovations?

Part of that is paying attention to the basic blocking and tackling of business. We also treat our people like human beings, like family. There have been people who haven't worked out at Menlo and we sent them on their way, but I always try to be a resource for them.

What do you think about Zingerman's expansion project?

I am thrilled they are continuing to grow their business. We either change or we die. The way they're approaching this is very respectful. It will be a wonderful aesthetic addition to the neighborhood.

What about all the hoops it needed to jump through to get approval?

Nothing is easy in entrepreneurship. There will always be more hurdles. Should it have been easier? Yeah, but it's Ann Arbor. We love to contemplate things like this on and on and on.

Jon Zemke is the Innovation and Jobs News Editor for Concentrate and the Managing Editor of SEMichiganStartup.com. He conducted and condensed this interview. His last story was Make Don't Chase: LLamasoft's Don Hicks and Toby Brzoznowski

All photos by Doug Coombe


Richard Sheridan during the interview with Jon Zemke and at Menlo Innovations' Kerrytown office.
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