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Endeavor report calls for focus on gazelle startups to spur job growth

Two things are evident after reading Endeavor’s Detroit office's assessment report of metro Detroit's entrepreneurial ecosystem: the region has lost a lot of jobs since the Great Recession and metro Detroit's best chance to get them back come from gazelles, i.e. young, fast-growing companies.

Gazelles, also known as scaleups, are small businesses that with tremendous growth potential. They traditionally grow from a couple of employees to a staff of a few dozen people in a matter of months. These are the companies that attract large sums of venture capital investment and make headlines as the new darlings of the local business world.

"Scaleups are a really important part of creating new jobs," says Mike Goodwin, project leader with Endeavor Insight. "They have the most potential for creating new jobs."

However, the "Scaling Up In The Motor City" report, supported by the New Economy Initiative, points out that gazelle growth declined by more than 50 percent between 2007 and 2012, going from 674 to 323. That is the same time Michigan's unemployment rate went from 7.6 percent to 10.1 percent. Michigan needs to create 6,000 more jobs to get back to its 2007 employment levels.

Endeavor opened an office in Detroit with three direct employees and seven members of its board of directors earlier this year with the idea of helping reverse those job-loss numbers. The New York City-based nonprofit helps build regional entrepreneurial ecosystems around the world by helping gazelles grow even faster, introducing them to talent, mentors, and, eventually, investors.

The office in downtown Detroit is currently evaluating a broad range of local gazelles with the idea of picking half a dozen to enter into Endeavor's network by the end of the year. Endeavor's Detroit office will start taking on up to eight gazelles each year after that with an eye on supercharging metro Detroit's economic engine.

"We are aiming to accelerate and support the growth of high-impact entrepreneurs and in being successful we expect to contribute to the growth of the the region," says Antonio Luck, managing director of Endeavor’s Detroit office.

Source: Antonio Luck, managing director of Endeavor’s Detroit office and Mike Goodwin, project leader with Endeavor Insight
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Diversity of projects leads to significant growth for Motor City Electric Co.

Motor City Electric Co. has been in Detroit for a long time. Since it formed in 1952, the company has seen several of the city's comebacks and renaissances start and founder. Despite those experiences, the commercial electrical company is more optimistic than ever before about growth in its hometown.

The firm, which is headquartered near City Airport, has secured work on a growing number of large projects throughout Detroit that have allowed it to hire 200-300 union electricians and another 25 office workers, bringing its administrative staff to at total of 145 people.

"It just seems like things are starting to click," says Thomas McGrail, executive vice president of Motor City Electric Co.

The company has scored work with the Detroit Public Lighting Authority’s street lamp project. It has also done lighting work at local Chrysler plants and the Detroit Medical Center. It's biggest score, however, is with Rock Ventures, the umbrella entity for Dan Gilbert's business and real estate portfolio.

"We do numerous projects for them and their remodels," McGrail says.

Motor City Electric Co.’s work isn't limited to Detroit. The firm has subsidiaries across the U.S. in seven states as far west as Nevada and as far south as Florida. It also has a subsidiary in Ontario. McGrail expects his firm’s workload to grow both here and across the country.

"We think the construction industry will continue to grow over the next year or two or three," McGrail says.

Source: Thomas McGrail, executive vice president of Motor City Electric Co
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

LevelEleven spins out of M@dison Building and into bigger downtown offices

LevelEleven is leaving the nest where it was formed, the M@dison Building, and moving into its own office a few doors down on Woodward Avenue.

The software startup is taking the third floor of 1520 Woodward, one of the recently renovated commercial buildings on the same block as the M@dison Building. The block of buildings is being branded as the M@dison Block. It is primarily owned by Rock Ventures, the umbrella entity for Dan Gilbert's business and real estate portfolio, and occupied mostly by Gilbert-affiliated startups.

"We want to stay in the tech community that is building here," says Bob Marsh, CEO of LevelEleven. "Detroit Labs (another early occupant of the M@dison Building) is on the floor above us."

The 2-year-old startup has hired 10 people over the last year, including two that started this week. The new positions include sales professional and client services people. LevelEleven is looking to hire another three people currently.

"We have about 25 people and this space will allow us to grow to about 50 people," Marsh says. "There is a lot of room to grow."

HelloWorld spun out LevelEleven to sell an enterprise gamification app (native to the salesforce platform) with the idea of motivating sales professionals and tracking their progress. It recently added the Scorecard feature, which offers personalized analytics and historical trends for salespeople that allow managers and teams to assess and respond to key pieces of data.

"It tells the sales person exactly what they should be spending their time on," Marsh says. "It's a huge evolution for us."

LevelEleven, a portfolio company of Detroit Venture Partners, is looking to close on a 7-figure Series A in the next 60 days. That money will help it scale its business. It is already growing at a 200 percent annual growth rate and has added a number of new clients, such as Staples, Pandora, and Ford.

"We work with companies that have 25 sales people to companies that have a couple thousand like Comcast," Marsh says.

Source: Bob Marsh, CEO of LevelEleven
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Video production firm Detroit Lives! moves into Penobscot Building

Philip Lauri launched his creative agency, Detroit Lives!, just as the Great Recession was getting started in 2009. It turned out to be the right move despite the dour time.

The video production company has doubled its revenue every year since its launch. It recently moved into bigger offices in the Penobscot Building (the former offices of the Detroit Stock Exchange) to accommodate its growing staff.

Detroit Lives! has expanded to five people, including hiring an editor over the last year. Lauri is also looking to add another editor to help enhance his team and its story-telling abilities.

"We make sure we always do our best work," Lauri says. "Whether its a big project or a little project, we want to be the best."

Detroit Lives! has made videos for a variety of customers over the years. Some of its more recent work includes videos for the Kresge Foundation’s Innovation Project and the NEIdeas competition.

"We are currently working with Chrysler on some video content," Lauri says.

Lauri plans to expand Detroit Lives!'s clientele by doing more work with traditional advertising firms.

Source: Philip Lauri, founder & creative director for Detroit Lives!
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

CCS grads return to Detroit to launch boutique creative firm, Space Camp

Scott Waraniak and Marcus Mullins followed a fairly typical path when the graduated from the College of Creative Studies a few years ago. They took their graphic designs degrees and headed for creative class jobs on the coasts.

Waraniak spent a couple of years in Los Angeles and spent more time thinking about where he came from instead of where he had moved to.

"The entire time we were out there Marcus and I talked about starting our own studio in Detroit,"  Waraniak says.

Words turned into ideas which turned into action. Waraniak and Mullins came back to the Motor City a year ago and launched Space Camp. The fledgling boutique firm specializes in design, branding, and animation work for video productions. Check out Space Camp's demo reel:



Some of Space Camp's initial projects include the creation of videos on behalf of Team Detroit for the launch of the new Ford Explorer. It has also done other automotive work, but the company is looking to diversify its client base this year.

"We just want to keep growing," Waraniak says. "We want to find a way to bring new people on."

Local job creation was a significant factor in the inspiration for Space Camp. Waraniak and Mullins lament that many of the job opportunities for them and their peers were on the coasts and not closer to home. The company recently moved to Penobscot Building in downtown Detroit to make some room for its first employees.

"It was frustrating watching all of this talent being outsourced to Los Angeles and New York," Mullis says. "We want to create reasons for people to stay."

Source: Scott Waraniak and Marcus Mullins, partners, designers and animators of Space Camp
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Detroit Bikes to open retail space on Capitol Park as its sales grow

Later this week, Detroit Bikes will open its first retail space in a storefront overlooking Capitol Park in downtown Detroit.

"It's an opportunity for us to sell bikes the way we want them to be sold," says Zakary Pashak, founder & CEO of Detroit Bikes.

The Detroit-based startup aims to make the Motor City the home of the classic American commuter bicycle -- a bike whose streamline design employs thinner, smoother tires on larger wheels, a frame made of chromoly steel, and only three speeds.

Detroit Bikes bicycles will be showcased at 1216 Griswold in the ground-floor retail space of The Albert starting on Friday. The store will also serve as a place for Detroit Bikes to tell its story and showcase other local businesses the firm works with.

Pashak moved to Detroit a couple of years ago from Calgary to start Detroit Bikes. He bought a vacant 50,000-square-foot factory on Detroit’s west side and retrofitted it to manufacture the classic American commuter bicycle. The company currently employs 25 people after making 12 hires over the last year, including welders, marketing professionals, and product managers. It’s now looking to hire a couple of welders and a national sales director.

Detroit Bikes sold 1,000 bikes in its first year through bike shops across the U.S. Its bikes can also be found at at a few retail locations in Switzerland and Canada. This year Pashak has loftier sales goals. He brokered a deal with New Belguim Brewing to promote its Fat Tire Amber Ale.

"This year we'll do 4,000 to 5,000 sales," Pashak says. "We already sold 2,500 to New Belgium."

Source: Zakary Pashak, founder & CEO of Detroit Bikes
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Campus Commandos launches mobile app for college students

Campus Commandos, the college student marketing agency, is launching a mobile app called Go Commando that it expects will help it expand its reach to an even wider audience.

Go Commando pairs big name brands and with enterprising college students. The users (the students) can earn money and build their resume by performing simple tasks on the mobile app on behalf of the brands, including posting on social media and filling out surveys.

"It allows you to put your brand in the hands of millennials within minutes," says Adam Grant, CEO of Campus Commandos.

Go Commando is available at 460 colleges across North America. Grant hopes to have 100,000 downloads of it by the end of the year. The plan is to get a high percentage of active users of the app rather than just focus on achieving a blanket download with little usage.

"We're more interested in the quality of the users," Grant says.

Campus Commandos specializes in marketing for the college environment, creating campaigns for everything from students to university staff. Grant, a Bizdom graduate, got his start in the business while attending Michigan State University in the mid-2000s. The firm’s client list includes huge brands like eBay and Nike.

The 5-year-old firm is based in downtown Detroit in the First National Building. It currently employs a team of about 10 people after making two hires in sales over the last year. It is currently looking to hire another sales professional later this year.

Source: Adam Grant, CEO of Campus Commandos
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Grubbable connects locally sourced food with local customers

Click on Grubbable's website and three words stick out: "eat with purpose."

The 1-year-old tech startup helps people looking to eat out find the best restaurant that serves locally sourced food. Then they can know that fruits and vegetables and other ingredients in the food they are eating is made in the most sustainable way possible.

"We love eating good food," says Michael Feng, president of Grubbable. "But it's really hard to find restaurants serving locally grown ingredients."

The idea behind this sort of ethical eating is that most food served the U.S. is shipped over long distances, such a leafy greens from California or fruits from Central and South America. By eating locally grown foods, consumers knows that they are helping maximize the impact on the local economy and preventing pollution from long shipping distances.

The Villages-based startup and its team of three co-founders just released an app that helps local consumers make these connections. Grubbable is currently featuring seven eateries in the city on its app and is partnering with 70 restaurants across the region that it will add to the app later this year. Users can download the app for free or become members and pay a $4 monthly subscription for enhanced services, such as discounts on food at all participating restaurants.

"It's kind of like a Diners Club," Feng says.

Source: Michael Feng, president of Grubbable
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Line Studio Detroit turns concrete countertops into boutique business

Andrew Ward and his wife Jessica Smigels moved to Detroit from North Carolina to raise their family near the numerous members of their extended family. It turned out there were far more family members than job opportunities, so the Wards decided to make their own jobs.

The couple founded Line Studio Detroit, a Corktown-based company that turned concrete into countertops and pieces of furniture. Today it has become their full-time jobs.

"It was hard to find a job that paid well enough to keep the lights on and for me to go to school," Ward says.

Line Studio Detroit has carved out a niche for itself making custom jobs for cast-concrete countertops, vanity tops, and furniture. It’s aiming to release its own line of housewares later this year. Further down the line, Ward hopes to add large outdoor public works to the company's clientele, including water fountains.

Line Studio Detroit has become so busy that Ward is starting to look at making his first hire. He would like to add two new team members by the end of this year.

"I would like to keep us small enough so we can pivot when necessary," Ward says.

Source: Andrew Ward, co-founder of Line Studio Detroit
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

BoostUp adds staff as it lands spot in REach accelerator

Local software startup BoostUp has landed a spot in the 2015 class of REach, a tech startup accelerator program in Chicago.

The startup, which is based in downtown Detroit's M@dison Building, plans to leverage the 8-month-long accelerator program to further its reach into the real-estate industry.

"It's a huge opportunity for us to connect with real-estate agents and brokers," says John Morgan, founder & CEO of BoostUp. "It should really open up some doors for us."

The REach accelerator program is a part of the National Association of Realtors' strategic investment arm, Second Century Ventures. BoostUp beat out hundreds of other applicants for its spot in the program. It will have access to workshops, conferences and networking opportunities within the real estate industry.

BoostUp’s online platform helps users to save money for the down payment on a house or car. It lets the user tell their family and friends about their goal through social media and gives them an option for people to donate toward that cause in the form of birthday or holiday gifts. The platform also offers a dollar-for-dollar match option with its brand partners, such as Hyundai and Quicken Loan.

"We started out with an automotive focus," Morgan says. "Now it's cars and homes."

BoostUp spun out of Synergy Marketing Partners and is one of the portfolio startups of Detroit Venture Partners. The 2-year-old startup currently employs a team of four plus a couple of summer interns. It has hired two people (a marketing manager and a product manager) over the last year and is looking to hire two more now.

Source: John Morgan, founder & CEO of BoostUp
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Corktown-based Beard Balm releases new heavy duty product

Jon Koller knows a thing or two about beards. For one, he has had a beard for a while -- a big beard.

"I haven't shaved for three years at this point," Koller says. "I'll leave the size of it up to your imagination."

He's also the owner of Beard Balm, a Corktown-based business that makes an all-natural, leave-in conditioner for beards and facial hair. The balm is made of natural products like lanolin oil, coconut oil, and beeswax from a Traverse City farm. If there is such a thing as a manly man hair product, Beard Balm makes it.

"It's a leave-in conditioner for after you get out of the shower," Koller says. "It makes you skin happy and your hair happy so they play nice together."

Koller heads up a team of five people who make Beard Balm’s products, which retail for $20 and $22.49. The company is now getting ready to release its latest product this weekend: Heavy Duty Beard Balm. More information about its release party on Friday, May 1, can be found here.

Heavy Duty Beard Balm is a medium-hold balm. Most beard balm products are a light-hold. Medium-hold products have a heavier consistency, but not as heavy as mustache wax, the stuff that people use to make handlebar mustaches.

"It's formulated to hold your beard together more," Koller says. "It has more sticky stuff in there."

Source: Jon Koller, owner of Beard Balm
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Functional Fluidics leverages WSU tech for new contract research

Dr. Patrick Hines has long been fascinated with blood analysis. He has used flow-based platforms to do blood analysis since he was a grad student in North Carolina.

That history and his wife taking a residency at the University of Michigan Health System led Dr. Hines to Detroit where he is launching a life sciences startup, Functional Fluidics.

"I was most comfortable with the opportunities here in Detroit, working Children's Hospital of Michigan and laboratories at Wayne State University," Dr. Hines says.

The 1-year-old startup is licensing technology spun out of Wayne State University that is enabling it to do expedited contract research of blood analysis for pharmaceutical companies. Dr. Hines and his team have developed a novel assay that allows the user to quantify the amount of adhesion and thrombosis in a sample of whole blood under physiologic flow conditions. The use of a patient's whole blood allows for a more accurate result. It is used in sickle cell research and blood platelet work.

The TechTown-based startup currently employs a team of five people. It is currently getting ready to raise a seed capital round to further its work.

"We are planning to raise between $500,000 and $1 million to grow this business and finance new product development," says John Cunningham, COO of Functional Fluidics.

Source: Patrick Hines, founder & CEO of Functional Fluidics; and John Cunningham, COO of Functional Fluidics
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Warranty Ninja simplifies warranty registration process with app

People buy things everyday, from expensive pieces of equipment to small odds and ends. Few ever register these purchases. Warranty Ninja thinks it has an answer for that dilemma.

The TechTown-based startup was inspired Edward Carrington's photography hobby. He bought lots camera equipment over the years, both expensive and cheap. Every purchase came with an opportunity to register it.

"I register everything I buy," Carrington says. "I am the type of person who doesn’t like to buy an extended warranty."

The problem is registering everything is a cumbersome operation, requiring filling out paperwork and mailing it in to the manufacturer. It’s a process that hasn't changed in the better part of half a century. Warranty Ninja hopes to change that by digitizing this process with a mobile app. That way, not only are the products registered for their owners, but information on recalls or discounts are automatically sent to the user.

Warranty Ninja will also offer a subscription model for companies to leverage the system. That way the manufacturers can discover more information about their customer since only 10 percent of consumers register their purchases today.

"They are missing out on who is buying their product," says Jerry Rucker, co-founder & CEO of Warranty Ninja.

The 1-year-old startup currently employs a team of four people. It plans to roll out a Beta version of the software later this summer.

Source: Edward Carrington, co-founder & COO of Warranty Ninja; and Jerry Rucker, co-founder & CEO of Warranty Ninja
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Reach influence moves to M@dison Building from Royal Oak

Reach influence has moved to downtown Detroit, taking up residence in the M@dison Building and bringing 19 new workers with it.

The retail analytics startup took $5 million in venture capital investment earlier this year with Detroit Venture Partners as one of the lead investors. Based out of the M@dison Building, Detroit Venture Partners is the primary investment fund for the surrounding tech startup cluster, branded as the M@dison Block.

"We are excited to be part of what is happening in Detroit," Eric Green, CEO of reach influence, said in a press release. "The vision, passion, and energy are contagious and will help our company continue to grow."

The 6-year-old startup’s software enhances the shopper experience (and the sales that come with it) with the help of data analytics, along with marketing and merchandising programs. Its flagship products, reach engage and reach offers, provide shopper-facing marketing tools for independent grocery stores in 37 states.

Reach influence has grown to 21 employees (two work remotely) over the last year. It has hired five people in the last year and is looking add a couple more people now.

"We are always looking to add to the team," says Susan Dettloff, director of marketing for reach influence.

The firm had been based in downtown Royal Oak before making the move to downtown Detroit last month. It is currently taking up a large section of the second floor of the M@dison Building, where it expects to continue to add staff as it works to increase sales and its client base.

"It's a very open, collaborative workspace," Dettloff says.

Source: Susan Dettloff, director of marketing for reach influence
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Property management startup Castle closes $270K seed round

Castle, a tech startup focused on property management, has closed a seed round of funding worth $270,000.

The Detroit-based company plans to use the seed capital to add staff and continue to build out its property management software and services. The 1-year-old firm is proving out its business model in Detroit with aspirations of taking it national this year.

"We have seen some really exciting traction over the last few months," says Max Nussenbaum, CEO of Castle. "Let's see where it goes from here."

Three members of Venture For America's inaugural class (2012) launched Castle last year. Venture For America functions similarly to Teach For America, pairing talented college graduates with jobs at startups in economically challenges cities for a two-year fellowship. VFA fellows also helped found Rebirth Realty, which is turning a tax foreclosure in Virginia Park into housing for future Venture For America fellows. Castle is based out of that house.

Castle's software platform handles property management by automating service calls, rent collection, and other similar duties. The company is currently handling management for 52 properties both in the city of Detroit and the surrounding suburbs. Those properties are primarily single-family homes. The Castle team would like to get those numbers to several hundred by the end of this year.

"We figure if we can make this work here, we can make this work in Baltimore or Providence," Nussenbaum says. "It's only going to get easier."

Castle currently employs a team of three people and is looking to hire another three. Those new jobs include software development, business development, and operations.

Source: Max Nussenbaum, CEO of Castle
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.
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