August 2008 Archives

Lenders would ask, "How is it your going to make money with Pfizer closing down across the street?". They didn't get that the store was just a face for their online store. As a matter of fact, Tree Town Toys wasn't wincing from the Michigan economy at all, it was growing on wealth from around the country.

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Filed under: Ann Arbor, MI | Financing | Tree Town Toys

Last time I wrote about Tree Town Toys, I mentioned how great their website functioned and how complete their toy selection was.  After speaking with Hans Masing (co-owner with his wife Tricia), I discovered that there is a lot more behind their store then just toys.

Spurred on the success of Brain Station, their online store, the Masings created a home base for their operations in Ann Arbor.  This is an area I feel that most entrepreneurs and business owners would feel missing if they operated solely as an online store.  With Tree Town Toys, Tricia and Hans had a home. 

As many return readers may note, Michigan Innovators has been spending a good portion of the summer on financing innovation.  With the departure of Pfizer from Ann Arbor, it's easy to envision large bags of money running out of Michigan's borders.  So when Hans came to investors trying to open his store across the street from the now nearly empty facility, they were skeptical.  What they failed to see was the huge potential of the online portion of the store.

So how did Hans get the investors to turn around?  While convincing numbers of their online sales always helps, managing growth is an important step as well.  If you know an industry well, there is always a void that needs filling.  Few other specialty toy stores had an online component to their stores.  This left an untapped market in the palms of the Masing's hands.

It also pays to have a unique perspective.  As an IT professor, Hans is far more business minded then the typical toy store owner.  Information technology is one of the fastest changing fields out there, so keeping up with the business world is simple for the couple.

Finally, in order to compete with the big guys, it helps to buy and sell like the big guys.  A new addition to their toy store family, Dragonfly Depot, brings the online store potential to other small mom and pop toy stores.  By managing inventories for multiple stores in one facility, all parties can benefit by splitting costs that would be too substational for each store to undertake on their own.  Stay tuned for more info on Dragonfly Depot.

While a great business plan and a smart approach towards investors always helps a business get off the ground, Tree Town Toys really taught me that when you have all of the pieces to your business puzzle set, everything will fall into place.  By starting with what you know best and expanding beyond your own experiences, you will find that there are more untapped pieces of business ideas that are waiting to be put together.

When creating a new product, there are so many things that can go wrong (many of which cannot be prepared for or are completely unexpected), so it only makes sense to use existing technology or ideas in your product to increase reliability.

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Filed under: Alphonse Anderson | Ann Arbor, MI | Charles King | Competing Globally | Financing | Innovation | Renewable Energy | Start-Ups | Velocity² Wind | Wind Power

When talking to Alphonse Anderson and Charles King of Velocity² Wind I found that one of the most interesting parts of their process to create a new product of small wind turbine was how much of their product was, essentially, theirs. King said, "we try to re-invent as little as possible. Use what's out there."

What is "out there" for small wind turbines? Again, King: "We've found ourselves taking ideas from aerospace to roller coasters." Roller coasters? Sure, the aerospace industry can easily offer some design ideas to small wind turbines, but the thought to look into how roller coasters are built (presumably regarding their light-weight structure; they wouldn't comment) is marvelous.

It turns out that Anderson and King have tapped in to a historically successful business plan: don't re-invent the wheel. When creating a new product, there are so many things that can go wrong (many of which cannot be prepared for or are completely unexpected), so it only makes sense to use existing technology or ideas in your product to increase reliability.

I posed this question to Alphonse Anderson and Charles King of Velocity² Wind: "what are some of the first things you should do when you first have an idea for a new business?"

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Filed under: Alphonse Anderson | Ann Arbor, MI | Charles King | Competing Globally | Financing | Innovation | Renewable Energy | Start-Ups | Wind Power

I posed this question to Alphonse Anderson and Charles King of Velocity² Wind: "what are some of the first things you should do when you first have an idea for a new business?"

King told me that it's necessary to make sure that the idea is original. He said to use "Google Patents and research databases of universities to look for Phd. topics" and to find where technology is now. There's no sense in spending your time on a product for which you cannot get a patent or a service that is already being developed by another (presumably larger) company.

He said that "you must look at your personal network to find people who are willing to help you." This goes beyond asking freinds and family for money. When starting a new endeavor, you need to know who can be a part of your program, or even who knows somebody who can offer advice or a service. It's much more efficient to utilise your network rather than the yellow pages for your entrepreneurial needs.

King followed up by saying "If you believe that you have no connections, then you're not trying hard enough."

John Heiss is using social innovation to improve the economy in Michigan by creating a network of double-bottom line organizations. Additionally, he has plans to revive and improve a fading, but promising market.

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Filed under: John Heiss | People | Social Ventures Network

Recently I had the honor to interview John Heiss of the Southeast Michigan Social Ventures Network. As a social innovator, Mr. Heiss is using the Internet with its “open source infrastructure” to bring together a “network of a network” where organizations are “applying the network technology to get things done.” Various types of organizations including “capital networks, deal flow, entrepreneurship, for profits, and non-profits,” get together to achieve a double bottom line. A double bottom line is where the first bottom line is to make money, and the second one is to fulfill social responsibilities. He is bringing together local organizations with goals to “generate jobs and social purposes” to share ideas, information and resources.

When I asked Heiss about Michigan’s future, he  pointed out that we have to look at what resources and strengths we have to offer, as a state.  One example he mentioned was the creative class in Florida; where the arts are supporting a good portion of the economy there.

In the next part, Mr. Heiss reveals his innovative ideas to kick-start a fading, but promising market in Michigan.  

They have chosen to use alternative materials in building small wind turbines in an attempt to increase efficiency and decrease cost. With only a few tweaks of materials, Anderson and King have a real shot at breaking into the fledgling industry.

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Filed under: Alphonse Anderson | Ann Arbor, MI | Charles King | Competing Globally | Financing | Innovation | Renewable Energy | Start-Ups | The MORE Program | Velocity² Wind | Wind Power

Recently, I met with Alphonse Anderson and Charles King, founders of Velocity² Wind and participants in the MORE Program. They have chosen to use alternative materials in building small wind turbines in an attempt to increase efficiency and decrease cost. With only a few tweaks of materials, Anderson and King have a real shot at breaking into the fledgling industry.

The fledgling industry of small wind power, that is. Large-scale commerical-grade wind power is already a huge market, making up most of the 5.2 thousand Megawatts of wind power that was installed in the U.S. just last year. However, the small wind industry is still struggling to take flight, mostly due to the consumer worries of cost efficiency, noise, and visual impact. Oh, and safety issues, too (although there have been no 'innocent bystander' casualties due to wind power. The only casualties have been to workers installing and repairing the large-scale systems, and an unfortunate parachuting accident).

When King had the idea for using alternative materials for a wind turbine, he realized that the only way to properly approach his idea was to attempt it in small wind systems, whether or not it would work in large-scale wind. He remarked that trying to pitch his idea to the large-scale wind companies would be futile, but small wind was a good bet since no company has jumped out to be the leader.

Anderson and King have been working with prototypes of their design and comparing it to existing designs from competitors. So far, their tests have given them great results. Since they decided to enter an industry that has not yet solidified may very well allow them to break through to the surface soon.

UM has begun to meet new entrepreneurs halfway by allowing them to "utilize the school's enormous resources [such as] faculty consulting, laboratory equipment, research projects and professional development classes."

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Filed under: Ann Arbor, MI | Competing Globally | Innovation | Start-Ups | University of Michigan

The University of Michigan is (finally) doing its part to lift Michigan's economy: it has recently opened many of its resources to area entrepreneurs not linked to the university.

A good way to turn around this poor economy is by creating new industries to bring money into Michigan. UM has begun to meet new entrepreneurs halfway by allowing them to "utilize the school's enormous resources [such as] faculty consulting, laboratory equipment, research projects and professional development classes."

What does this mean? Well, for one, that UM is feeling the slow economy. In addition, it has decided to take steps toward changing things. With any luck, area entrepreneurs will be able to use UM's resources to solidify their business in the market.

Yes, ethanol can be very useful as fuel. It could reduce our consumption of gasoline. But corn ethanol isn't the answer. If we are to use biofuel, then we need to choose a more efficient type of ethanol.

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Filed under: Fuel Efficiency | Renewable Energy

It is becoming more and more obvious that we need to move away from oil as a major source of fuel. The problem is that we are obviously and pathetically hooked on it. Nearly every middle-class American has considered taking the car to the corner store as opposed to walking. Although it is great that we've found a way to reduce oil consumption in cars with biofuels, we need to make sure that we're making the right decisions.

Corn ethanol, the biofuel receiving the most support from the U.S. government, is a bad substitute for gas. In fact, corn ethanol provides not more than a 3% reduction of greenhouse gas emissions, whereas sugar cane ethanol and celluslosic ethanol, respectively, provide a 50%-70% and more than 90% reduction in greenhouse gas emissions. As it turns out, corn ethanol is not very 'green.'

Yes, ethanol can be very useful as fuel. It could reduce our consumption of gasoline. Experts agree that ethanol is energy efficient. But corn ethanol isn't the answer. If we are to use biofuel, then we need to choose a more efficient type of ethanol. However, we need to choose wisely because with the help of biofuels food prices are soaring. Biofuels should only be a means to an end, not a permanent solution. The only way to create a system that can last is to eliminate the use of oil.