The irony that the future of Michigan's economy may be evolving within
the shell of an old manufacturing building in Detroit isn't lost on
Howard Bell, executive director of TechTown.
He reminds people
all the time that the old buildings around TechTown, including the
Piquette Plant Building where the Ford Model T was conceived, were also
centers of entrepreneurship. "Those guys were really brave, courageous
people to think that the idea of a buggy with wheels would turn into
the biggest corporations in the world. These guys defined
entrepreneurship. What we're doing here is taking their ghosts, their
spirit and history and transferring it into different industries."
located in between Midtown and the New Center, is an entrepreneurial
incubator, providing the costly infrastructure that might prevent a group of people from turning an idea into a business, and lessens the risk for entering the marketplace.
In fostering new businesses, it has created a unique urban entrepreneurial ecosystem
that balances market discipline and support systems to launch new
businesses in the life sciences, manufacturing technology and other new
Research meets market
entrepreneurial ecosystem requires a variety of relationships, from
investment capital to customers. It also needs a source of new
knowledge, explains Sergio Mazza, president and CEO of
SenSound (http://www.sensound.com/), a start-up technology company that
originated from collaboration between entrepreneurs and university
"In our case, Wayne State is an integral part of
our ecosystem in several ways," Mazza says. "They effectively supply
all of our technology. They are a stakeholder in our company – they own
equity. They supply talent – six of our 10 employees are Wayne State
university graduates or a professor."
Mazza knew he wanted to
build a company "where the brains behind the technology would be an
active participant. I know from experience that technology companies do
not stand still. They have to continually develop new products or they
will be a flash in the pan."
Knowing that he wanted to develop either a medical device or software, he selected Wayne State's research in noise diagnosis.
offers the opportunity to transform pure research into applied research
via a commercial product, Mazza says. Sometimes the research needs to
be formulated into a product, sometimes it's already a product.
commercial end of the business, however, needs to be done somewhere
away from campus, but not too far away. "If you're going to continue to
be a professor and also contribute to the growth of a company, you
can't spend an extra two hours of your day commuting to the university.
That physical proximity is not to be understated in importance," Mazza
The blurring between academic and commercial interests is
very carefully managed, says Fred Rheinhardt, assistant vice president
for Research and Technology Transfer at Wayne State. TechTown provides
the separation needed to avoid the conflict that could arise if a
professor conducts commercial functions while still acting in an
academic capacity. "They walk out the door, take off their academic
research hat, walk over to TechTown and put on an entrepreneur hat.
They need a different mindset," Rheinhardt says.
Making things happen
addresses another aspect of an entrepreneurial ecosystem: the more
mundane needs of a small business. You need, Mazza says, "a package of
services that is very fertile ground for the growth of a business –
throwing fertilizer at your plants. You need meeting rooms. You need a
copy center. You need cafeteria space – all of the little things you
need (that) by themselves would seem trivial, but as a package it
provides fertile ground for the company."
Rheinhardt likens it
to a nest of young birds. "You have a protected area until something
gets big enough to fly, then you kick it out…they've got to be on their
own two feet at some point. We don't even want them to get government
grants for too many years because that's a trough. It skews (market)
behavior. We want to see them selling products and services to
TechTown, Rheinhardt says, is "a dynamic vortex
through which university-business relationships can spark economic
development in a variety of ways." Simply put, things happen. "Our
philosophy is that every relationship will spawn multiple other
http://www.neocutis.com/) a biotech in TechTown, was in its
early developmental stage, Mark Lemko, senior vice president for Sales
and Marketing, met Rheinhardt at a conference. Rheinhardt introduced
him to the university's biotech research capacity, as well as
Lemko was attracted to the Frontline Accelerator for
Science and Technology (FAST) program offered to promising start-up
companies at TechTown. FAST companies receive a variety of free or
low-cost consulting services, including market research, business plan
writing, public relations and marketing, and human resources, as well
as access to investment capital, legal help, information technology and
other forms of professional support. They are also exposed to the
Detroit Entrepreneurial Network, a support group of entrepreneurs, and
the Great Lakes Angels(http://www.glangels.org/default.htm), an
investment group that targets entrepreneurial ventures. Both are
located at TechTown.
"The biggest thing was getting our arms
around our business plan and making sure it was in a format that every
type of reader could get a grasp on: what our concept is, what our
business model is, what our plans are and where we're spending money,"
Lemko says. "We have been able to present to no less than 20 potential
investors." He believes that the credibility of companies like Neocutis
is enhanced by an introduction from TechTown.
Companies in the
FAST program face an arduous screening process before being admitted,
explains Becky Davenport, program administrator who also helped write
the original business plan for TechTown developed by Wayne State
business school faculty. Milestones for growth/development are
determined for participating companies to ensure that they progress out
of the program. A "champion mentor," or dedicated consultant, is
identified for the company to provide ongoing support.
to help them (companies) make better decisions," says Davenport. "A lot
of entrepreneurs flail around in a number of different directions. We
use the experience and expertise of the staff and consultants to make
better decisions earlier on and not waste time and money."
and protecting intellectual property is important for technology
companies. To that end Detroit law firms, such as Clark Hill, Butzel
Long, and Dykema Gossett have been generous in working with TechTown
firms for no or reduced fees, Davenport says.
entrepreneurs be helped at all? Why not let them prove they're strong
enough to survive on their own merit and let the weak perish? "A lot of
what we do is help these companies refine, develop business plans,
business models, so they're in a better position to get money from the
angels (investors)," Davenport says. "We're leveraging resources … in a
way that gives us the most bang for the buck; get more companies from
great idea to solid businesses producing revenue, employing people,
is a "complex network that changes according to the need … a huge
universe of resources to draw upon," says Terry Cross, WSU executive in
residence for entrepreneurialism. He is also member of the Great Lakes
Angels board of directors.
But, in a virtual world, why is there a need for an entrepreneurial community at all?
are a lot of advantages to being in a building with 30 other
companies," Rheinhardt says. "Whether you're exchanging ideas – you
might exchange personnel (or) you might talk about 'pre-competitive'
ideas – there's a tremendous advantage to having a physical community.
It's a lonely profession to be an entrepreneur. You've got to have
stimulation from like people doing the same thing."
that this "campus" has "First Friday" mixers that promote socializing
outside of the workplace. These parties are important to creating a
culture in TechTown, says Bell. "People will now come out of their
doors, walk to our party and celebrate. That's how communities get
formed – people deciding that they want to spend time out of their day
socializing with people of like ilk."
The result of this
"entrepreneurial campus" is significant not only for Detroit, but for
Michigan, says Jim Croce, president of
NextEnergy,(http://www.nextenergy.org/) which is located in TechTown.
"This is an emerging opportunity for all of Michigan; not only an
emerging opportunity, but an absolute requirement that we foster
NextEnergy, which has projects in other
Michigan university technology parks in the state, also serves as an
alternative energy incubator for alternative energy companies, offering
technology collaboration, access to investors, and market development.
need to recognize the true gem that's emerging here and foster that.
What I'm seeing is the business community, particularly the economic
development leadership in the community, is recognizing that
opportunity and I'm seeing signs of support," Croce says.
is not only building on the area's university resources, but also the
existing talent in the region, says Bell, an engineer. "We've got some
of the most talented engineers in the country. In fact, we have more
engineers with advanced degrees in this region than any place in the
"Give us space to create in and we'll create. We have to
figure out what that is and put these people in it. They'll create
Ramon Crowe Jr., The Java Exchange; John Corvino, Wayne State
University; Jonathan Shuttlewood; Katherine Abramczyk, Visca; Gary
Detroit Entrepreneurial Network; David Weaver, Great Lakes Angels
Howard Bell, Techtown
Sergio Mazza, SenSound
All Photographs Copyright Dave Krieger