How Hooklogic turned an old economy space into a new economy enterprise

When Leopold Bros  Brewery pulled up stakes and moved out of Michigan for Colorado, it left a big hole in downtown Ann Arbor. Actually, it left a big, empty building.

The hangar-like structure at 523 S Main St is big, cool and historic. And hulking. Definitely hulking. It's an odd space. When Leopold Bros left it was anyone's guess what would go there, and guesses were the best things people could come up with for a while.

Until HookLogic took it on. The software firm moved in and turned it into a hotbed for technology development and job creation. Today dozens of employees are filling the space and turning it into the type of loft-style office technologists dream of.

"When we came in it was a whole disheveled space," says Jonn Behrman, chief product officer at HookLogic. "In terms of physical space it was perfect for us. It has parking. It's wide open. It's kind of cool and modern. It was something we felt provided the vibe we wanted."

Leopolds of Old

People who have lived in Ann Arbor since the late 1990s probably have a memory or two of the old Leopold Bros bar.

The microbrewery/distillery quickly became a staple of downtown Ann Arbor, known for its high-quality drinks, soaring ceilings, communal tables, stellar jukebox, green ethos, and its board games. For those who didn't experience the old Leopold Bros, it shared a lot of similarities with Piece Pizzeria & Brewery in Chicago's Wicker Park neighborhood. 

Leopold Bros co-founders Scott and Todd Leopold moved the business to Colorado in 2008 to focus on distilling. A spike in rent and Colorado's more liberal craft alcohol distribution laws prompted the move. Read more about the story here.

Leopold Bros' move left 523 S Main empty, and it's not an easy property to fill. The 11,000 square foot structure was built in 1927 for light industrial purposes. Its location just south of downtown Ann Arbor made it too desirable to go back to industrial use but just a little too off the beaten path and a little too big to be a slam dunk commercial space.

It stayed empty for years. Plans for everything from an entertainment center to condos were floated. None of them came to fruition. Then HookLogic's team came along and made it their own. And its new home is impressive.

"I'd be hard-pressed to find somebody who has a better space in Ann Arbor," Behrman says. 

New Economy Playground

HookLogic's bread and butter consists of paid product listings on commerce sites that help influence online shoppers. Its  three verticals include retailers (Target), online travel agencies (Expedia), and automotive dealerships. The New York City-based firm's software gives marketers direct access to bottom-of-funnel shoppers, as well as a clear view into resulting sales attribution.

"We like to think of ourselves a high-tech, coastal startup," Behrman says. "We wanted to create a vibe around that."

Which means working at HookLogic's Ann Arbor office comes with many of the stereotypical new economy playground staples. It has a ping pong and foosball tables. Employees can bring their dog to work. There aren't set hours for when people need to be at their desks. They can stroll in when they want as long as they get their work done on time.

What might be the most unique part about HookLogic's new economy company culture is each new employee receives a free pair of headphones on the first day. The idea is to give the worker a tool to help them focus and get their work done in the middle of its wide-open bullpen area. HookLogic bought dividers for its desks, but they're stuck in a storage closet somewhere thanks to a lack of demand.

"People don't want them," Behrman says. "They like the wide-open space. You put the headphones on if you want to focus."

HookLogic currently employs about 60 people at its Ann Arbor office. It has filled out the front end of the building (where Leopold Bros's beer hall was located) with software developers and the back end of the building with its automotive team. Leopold Bros's only occupied the front half, and left the back area mostly empty. Now its filled with a few dozen employees.

HookLogic has already hired about a dozen people over the last year and is looking to hire another 25 right now. Behrman expects the company to comfortably top out at 90 employees in the space, which should happen within the next year or two.

"We think we can stretch to 100 if we really pack them in," Berhman says. "At that point parking will become a bigger issue."

Ex-pats to the Rescue

HookLogic almost didn't come to this space. It almost didn't come to Ann Arbor at all.

The company launched in New York City in 2004 and landed nearly $10 million in venture capital a few years later. It grew fast and needed to solve its tech problem, specifically how best to acquire more software talent. It was looking at outsourcing the work to India when its co-founders decided to set up shop in Ann Arbor instead.

Keeping top software talent employed in New York City is expensive. It costs a lot in salaries, and in rent for office space. In Ann Arbor, all of that is cheaper. Tree Town provides some urban aesthetic similarities with coastal America, and its home to the University of Michigan and its talent pool.

It also helps that HookLogic's CEO, Jonathan Opdyke, holds a couple of degrees from U-M. Two more of the company's co-founders worked for Behrman at his digital marketing firm, Ann Arbor-based Beyond Interactive, which was acquired in 2000. They brought Behrman on to help set up and run HookLogic's Ann Arbor office, and he knew just what he needed to be competitive.

"When you're looking at building's downtown and looking at spaces that are basically a big square, it's unappealing," Behrman says. "This (523 S Main) is much more exciting. The physical space is a big selling point for us."

While everyone else was still lamenting the lost of Leopold Bros, Behrman saw the opportunity in the forlorn space. He saw a place with parking (and space to tailgate for U-M football games) that was an easy walk to downtown. He saw a building with character that could become the next dynamic workplace in Michigan because it was different than just about any other commercial space.

He saw all of that as one big talent magnet in the heart of Ann Arbor.

"It's tough to find really good talent," Behrman says. "You still have a lot of really good companies that are competing for these people. One of our strategies to attract people and retain them is to create that environment that people walk into and it makes them smile."

Jon Zemke is the Innovation & Jobs News Editor of Concentrate and its sister publications, Model D and Metromode. He is also the Managing Editor of SEMichiganStartup.com. He loved the old Leopolds Bros but he is a bigger fan of what HookLogic is doing with the space.

All photos by Doug Coombe.

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