March 2012 Archives

Detroit, Ghana, and Fashion

Unusual post today: short thoughts and some shout outs. 

Jake Cohen  generously gave me an hour of his time yesterday answering questions about Detroit Venture Partners (DVP),  the Gilbert family of companies, and rebuilding Detroit through entrepreneurship. At the end of our conversation, he mentioned some other people to talk to. One was Jerry Paffendorf, a name that was completely new to me.  After a bit of Google stalking, I've learned that he's doing some truly interesting things including crowd sourcing the ownership of land in Detroit for a buck an inch.  My is-this-synchronicity side noted that he tweets under the name WELLO,  the same name as Cynthia Koenig's company to deliver water to the poor of India. I've been interacting with and supporting Cynthia for several years.

DVP  invests in software and digital companies poised for rapid growth. A "sister" company in the Gilbert / Quicken Loans family, Bizdom,  is a nonprofit that helps smaller entrepreneurs get off the ground with funding, support, and space. Oh, and connections to other companies in the extended family.

Bizdom and DVP share space in the beautifully restored M@dison Building along with other companies connected to the family in some way. One,,  has a small business doing crowd sourced home videos for weddings. I spoke with its founder, Brett Demeray,  about the kind of  connections he'd benefited from. 

Among others were: 
  • support from Quicken Loans' director of marketing in launching an AdWords campaign
  • introduction to Crowne Plaza Hotels so that WedIt  could be in on all the weddings that took place 11/11/11
  • HR training from the head of Quicken's HR department
  • a mockup of the packaging WedIt could use for the cameras they'd send in the mail, courtesy of Fathead, a company in the family.
 The fee for any of these?   "Nothing. You wouldn't ask your cousin to pay you back, would you?"

I had a check-in meeting with David Merritt this week. David continues towards the launch of his amazing fashion brand -- one that will give 20% of its revenues (yes, revenues) to support poor kids attending college. David's company, Merit,  shows how a for-profit company can have, at its heart, an unmistakable ambition  to make a big difference. MERIT is currently exploring its best options for manufacturing its line of clothing and is raising capital for its product launch.
I also had a check-in with Teresa Fisher who, along with co-founder Gilliam Henker, is leading the efforts of DIIME to develop health technologies for infants and mothers in Ghana. DIIME has developed a life-saving, affordable blood transfusion device which has recently been proven effective by independent lab tests and is awaiting animals trials.  DIIME is hoping to do clinical trials with its partner, the Komfo Anoyke Teaching Hospital in Ghana, by the end of the year. 

DIIME is hard at work preparing for future tests and raising the necessary money to support them.

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Metaphors for Reviving Detroit

I was in Detroit yesterday learning more about incubators. I came away thinking about metaphors.

My morning began in TechTown, where Faris Alami gave my research associate, Neesha Modi, and me a heady introduction to all that is taking place. TechTown is at once a research and technology park, a business incubator, and a collection of enterprises part of revitalizing Detroit.

We met in TechOne, a five-story facility where GM once designed the Corvette that looks out over the 12 city blocks that TechTown hopes will become home to all types of vibrant businesses. TechOne is home to IT and medical/biotech companies, as its name suggests, but it is more than that. For instance we met with Marion Jackson and Barbara Cervenka, co-directors of Con/Vida, a nonprofit organization that promotes the work of Brazilian and Peruvian artists by organizing exhibitions and selling their work. We also met with TechTown's former executive director, Randal Charlton, whose new venture, Boom! The New Economy, is helping adults 50 years and older create new businesses. But Jackson, Cerveka, and Charlton--themselves in the 60+ age bracket--might bump into middle school and high school aged tenants of TechOne who are there learning how to apply science to solve global problems.

TechTown also offers support services to entrepreneurs hoping to launch Detroit-based businesses. This program, "Thrive," supports entrepreneurs of all stipes, from one individual who needed support to purchase a truck and start a small transportation company to another who is developing a radiation-free breast cancer screening device.

Our next stop, the Green Garage, is another mixture of place, tenants, and business creation. The Green Garage (the place) was a show room for Model T's, but since the Detroit riots in the 1960s its windows had been bricked in, it had lost its charm, and it had generally fallen into disrepair. You'd certainly never know that today, as it has been spectacularly restored using reclaimed building materials and is worthy of a cover of Architectural Digest.


And that only begins to scratch the surface of what the Green Garage is. The Green Garage is designed to be a net zero energy building: consuming no more energy than it can produce. This is no idle boast, as the facility is constantly deploying new technologies like solar tubes for lighting and chest refrigeration systems and metering and monitoring everything that comes in and goes out of the facility. It represents the very possibility of creating and operating buildings without imposing a cost on the planet.

The tenants at the Green Garage are carefully selected for their "green" approach to business and for their fit with Green Garage's sense of community. I had a conversation with Chad Dickinson, a transplant from Nashville and new tenant, who has designed state-of-the-art recording studios in a holistic way without using blueprints. Dickinson by Design is his Detroit based business. Using vintage power tools in his workshop in a corner of the Green Garage, Dickinson creates beautiful, "green" furniture from 99% reclaimed and recycled materials. He is using his craft to create affordable, long-lasting furniture and woodworking that create inviting homes, just as these homes can help reclaim the city.

But what might be most remarkable at Green Garage is the work being done by its co-founder, Tom Brennan. A former business consultant, he now rejects the idea of creating businesses in the typical way: idea, business plan, financial backing, make money. Instead, he teaches a type of business creation that places any organization squarely in the midst of the other organizations to which it is connected. Brennan believes that any enterprise must create positive economic, community, and environmental benefits for all organizations in its ecosystem, not simply itself.

This idea is reminiscent of Paul Hawken's description of a series of mutually beneficial business relationships in Kalundorg Denmark. The waste (in the forms of heat, steam, gas, sludge, etc.) from various industrial processes became the inputs for other producers. For instance, gypsum, which was the byproduct of a power plant, was used to make sheet rock. Fly ash, the waste from producing coal, was used in constructing roads. These input/output relationships all arose by happy accident, not design.

Brennan suggests that we need not hope for such fortuitous accidents; these sorts of relationships should be baked in to our efforts to develop businesses. And, again, these relationships should benefit all parties in the ecosystem, not just immediate partners, by improving each element of their triple bottom line.


Which brings us back to metaphors.

The Green Garage explicitly embraces the idea that businesses are like living systems, not machines. For living systems to thrive, they must take care of themselves and the environment of which they are part.

TechTown, in contrast, conjures up the image of Edison's Menlo Park laboratory. A number of business experiments are taking place in parallel--even rubbing shoulders. There is a sense of energy and pragmatism but, by and large, these efforts form a greater whole mainly in the sense that each success creates jobs in a city that badly needs them.

On the drive from TechTown to the Green Garage, Neesha and I stopped for lunch at the Avalon Bakery. Avalon's funky appearance belies what it is: something of a powerhouse that serves 1000 customers daily and delivers baked goods to 40 additional locations in southeast Michigan.

Avalon embraces the Buddhist principle of "right livelihood," its motto being "Eat Well. Do Good." Avalon has the ultimate respect for the earth, never using anything but 100% organic flour. It is also an anchor tenant of the Detroit "Agri-Urban" movement, bringing social and economic benefits to its immediate neighborhood and beyond for the last decade and a half.

All of which raises the question, "Do these metaphors matter in creating businesses?" That is the question that I'm thinking about right now as I reflect on how a city in need can be returned to greatness.

How do you restore Detroit economically while honoring its culture and community and improving the environment? And how do you balance the impulse to let things grow organically at their own pace with the knowledge that there are many people living on the economic edge?

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Make Education Bigger

The four ideas I stress in teaching social entrepreneurship are these: Big Picture Design (which, itself, encompasses "designing everything," and "stealing shamelessly" the ideas of others); Making It Appropriate; Making It Stick; and Making It Bigger.

Most people have a handle on the last item -- Making It Bigger -- equating this with the important idea of taking a small business or non-profit activity and then "scaling it up." But this definition does not go far enough.

Importantly, another kind of scaling up involves increasing awareness--even if that only indirectly leads to an increase in size of a business or some other social endeavor. A wonderful example of this is the well-known series put on at, where free talks introduce us to remarkably informative video-bites from people with big ideas. But recently, TED expanded its focus to include educators whose powerful ideas can be enhanced via animation and then shared with the world on YouTube.  

What is taught without animation can be brought to fuller life through animation. And this animation-enhanced great lesson can spill well beyond a single classroom to be viewed by anyone, any time. 

TED-ED's role is soliciting ideas for lessons (and the person who can deliver it) and recruiting animators whose work may help crystalize the idea. The award-winning, fee-based program, Hey Math!, is one demonstration of the power of animation in teaching math. Ted-ED promises to extend the range of topics that become more accessible through animation and deliver them to the world without charge.

The launch of this effort is fast approaching. Take a look at this simple, but powerful, way to Make It Bigger.


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Detroit 2.0 or 2 Detroits?

Are we creating Detroit 2.0, or are we creating 2 Detroits?  

There is a renewed sense of energy and optimism in Detroit.  I am seeing this as I explore Detroit's business incubators (writ large), and there is much to applaud.  Detroit Venture Partners is creating attractive workspaces for businesses to rub elbows, learn from, and and support each other.  It is providing early-stage funding for a handful of promising web and IT start-ups.
Detroit Venture Partners is not the only organization that is investing time, money, training, or other resources in Detroit. The Green Garage hopes to create a greener, more entrepreneurial city. The Detroit Creative Corridor Center supports businesses catering to those in the arts and other creative endeavors. 

I love these efforts. I just I don't think that they're enough. 

Detroit is on the verge on joining Flint, Benton Harbor, Pontiac, and Ecorse as a "failed" Michigan city that will be run by a state-appointed emergency financial manager. This politically fraught move would strip power from the city and sell or privatize city assets while further curtailing already eroded city services. The difficult straits that Detroit finds itself in suggests that, for all the high-tech, high-arts, green activity that is animating the city, we need something, well, grittier. That does not mean 1950s-era manufacturing; that day is gone. Even the successful investment by the government in General Motors and Chrysler is helping the state more than the city.
A broader, more inclusive form of capitalism is necessary--something I think of as BOP USA. The idea of BOP (bottom of the pyramid) business is gaining acceptance among companies that recognize that poor, developing world countries have considerable, and growing, aggregate wealth. And, more importantly, they represent the frontier of business where new markets are being created, new products are being developed, and innovation is everywhere. If in India or Latin America, why not Detroit?
Data on wage inequality indicates that the most unequal wage distributions are in cities with the highest levels of knowledge workers, including New York, LA, and Silicon Valley. Lower-paid workers earn more if they live where knowledge (creative class) workers' wages are higher. But the overall average wage in these locations is almost perfectly correlated with the average of the knowledge (creative) class. With a little math and a few assumptions about the relative numbers of knowledge- and lower-skill workers, we can conclude that the contribution of lower-paid workers' wages to total wages is fairly small (but didn't we know that?).  More simply: wealthier wage earners pull up lower wage earners, but not by much.
So, what can we do to "save" Detroit. We can hope to create a complementary class of entrepreneurs who create less by using web services or nano tech and more by employing people who can be well-trained and work hard (even though they can't write iPhone apps). We need incubators to support these new kinds of business, and fortunately we are beginning to see them in BizdomEnterprsing Health, and TechTown.  And we need more social venture capital and business support services for those who launch businesses in Detroit, create products and services in Detroit, and provide benefit for all of Detroit.
Otherwise, Detroit 2.0 is a dream for the fortunate few, creating too little opportunity for the city as a whole.

Please join me in this discussion. I'd love to know your thoughts. We can make a difference.
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