Southwest Michigan may never be the next Silicon Valley. It may not even be able to compete with the money being spent in Detroit to make it tech-entrepreneur friendly. But a realization is growing that the online-innovation pie is big enough there is no reason the region cannot carve out its own slice.
And there also are lots of reason it should.
Traditional bricks-and-mortar business developments require infrastructure that comes with a big price tag. Streets, sewers and utilities are expensive.
For tech-based businesses the infrastructure is minimal, and none of it comes with a hefty price tag.
These days, communities need both types of development. And former speaker of the Michigan House of Representatives Chuck Perricone, tech entrepreneur Ryan Goins and other like-minded individuals want to make Southwest Michigan a welcoming place for those founding their own online businesses.
It’s a regional endeavor that’s come a long way in a short amount of time.
In March of 2011, Goins pulled together the first Startup Weekend Kalamazoo as a catalyst for building a community of young tech entrepreneurs. Out of that weekend five companies started and four still are in business. Another five were created during a second startup weekend in October.
Beyond the beginnings of the entrepreneurial community
Goins was aiming for, another upshot of those weekends has been an interest among movers and shakers in Portage and Kalamazoo in establishing what is known as the entrepreneurial ecosystem that will foster further companies.
It started when Chuck Perricone, now of the Perricone Group
, read Goins’ story in the local paper, and asked to meet him. After a three hour discussion in which Perricone learned of a whole world of which he previously knew nothing, the former lawmaker was energized. Goins asked him to judge the first startup weekend and Perricone became even more enthusiastic as he watched the creation of businesses in 54 hours.
"It took my breath away," Perricone says.
When he was in the legislature, Perricone helped put together the deal for Western Michigan University’s Business, Technology and Research Park and he understands the time and expense that go into traditional development.
Now he wanted to know how the region could foster the growth of these startups that can come together over a weekend, how it could attract and retain young innovators who currently believe they have to leave Michigan to start their companies.
So Perricone, armed with Goins’ introductions, funded and organized two trips to Palo Alto to meet with young entrepreneurs and find out what it would take to lure them to Southwest Michigan.
The fact-finders discovered it may not take a lot. Many of those they met with are from Michigan and say they would love to return if the conditions are right.
They need work-live places, which are just what they sound like. Places where people work and live, since the work at times goes on with little stop for sleeping. Or they need housing very close to where they work.
They need mentors, people who have started their own businesses, know the pitfalls and can offer assistance when the going gets rough.
And they need seed money. Often as little as $20,000 to $30,000 for 90 days may be enough for a young company to see if it has what it takes.
On the most recent visit to Silicon Valley, Kalamazoo Mayor Bobby Hopewell and Portage City Council Member Patricia Randall were part of the fact-finding group. They met with people Goins knew through groups like the Facebook group Hackers and Hustlers and others he’s met at events for tech entrepreneurs he’s attended.
Perricone invited Randall and Hopewell, expecting their interest would lead them to promote the effort in their respective communities. Perricone plans to meet with officials at the state level to talk about startups "so they can catch the fever."
Randall says she is particularly interested because she has three sons of the age of those now putting together their businesses in Silicon Valley. She would like area young people to feel as if they don’t have to leave Michigan.
She was amazed by the visit to seed fund and startup accelerator 500 Startups
. The floors were bare cement, there were developers of hundreds of companies all in one room where the closest thing to office furniture was saw horses and doors to hold up the computers at which they work round the clock.
Representatives of a number companies being incubated in 500 Startups met with the Southwest Michigan group as did one of its mentors to share information on creating a startup environment.
The group also met with the founders of Olark
. Two of the five founders are Michigan transplants. The company that has rock star status in Silcon Valley offers an easy way to add a chat function to web sites, to boost interaction with visitors and sales. Perricone says the members of the Olark group "were so excited that a mayor and a city council member would want to meet with them.” They offered to do what they could to help with mentoring.
One things Perricone says he has come to appreciate during this research phase is the culture of startups. Those who are part of it all share information with one another. They are extremely mobile and a business can be started anywhere.
"They measure success differently. It’s a flat out race,” he says.
They want to be the first to find the solution. Or to be second and be better.
"It’s not about building a company,” Perricone says. "It’s about the adrenalin rush of creation and implementation."
So once a company is up, the founders are likely to turn it over to someone who has the interest and ability to run it so they can be on to the next challenge.
The young business people also told the fact-finders that being outdoors whenever possible is important to them. A strong draw that Michigan can use to its advantage is the seasons and opportunities for outdoor sports and recreation year round.
Southwest Michigan has always been an idea-driven region, Perricone says. Pursuing startups is a fresh idea. "This whole endeavor can run parallel and complement traditional economic development efforts like those of Southwest Michigan First led by Ron Kitchens. I’m doing my part to open some eyes, to generate some interest and support for a new path."
Today more and more communities realize that they don’t have to have a Silicon Valley zip code to provide startups with an environment for success. Most of those are large metropolitan regions: Dallas, Chicago, Miami and Atlanta.
But Southwest Michigan, with a thriving downtown in Kalamazoo, outdoor activities available year round, affordable housing and cost of living, and the Kalamazoo Promise can compete, Perricone says.
"We have to sew the pieces together to make this work.”
Kathy Jennings edits Southwest Michigan's Second Wave. She is a freelance writer and editor
Photos by Eric Holladay
Chuck Perricone hopes to establish an infrastructure for start ups in Southwest Michigan.