The Entrepreneurial Spirit of Detroit

In an effort to feature metro Detroit’s up-and-coming business leaders, DBusiness presents the first annual MBA Entrepreneur Spotlight. Our criteria was simple: We asked several business schools in southeast Michigan to recommend up to three MBA students who launched or developed for-profit companies before or during their enrollment. From that list, we’ve selected five exceptional entrepreneurs. This is not an awards program, but a recognition of regional startup companies that, despite the faltering local economy, appear destined for success.
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Photograph by Dave Krieger

The principals of Husk Insulation formed the company to complete an MBA business-plan class at the University of Michigan’s Stephen M. Ross School of Business in Ann Arbor. From left to right: Shally Madan, Min Kim, Ian Dailey, and Siddharth Sinha.

Ian Dailey

President, Husk Insulation, Ann Arbor
Stephen M. Ross School of Business at the University of Michigan, Ann Arbor

Finding investors for a startup company is never easy, but armed with a business plan developed last fall in an MBA class at the University of Michigan, Ian Dailey and his team of fellow students raised more than $250,000 in seed money for their environmental insulation company.

How? The group of six entrepreneurs, which includes five MBA students and a postdoctorate graduate, won or finished second in a number of recent business-plan competitions offered at U-M, Carnegie-Mellon University, MIT, and others. “The great thing for us is we don’t have investors yet, and the money we’ve raised will allow us to continue developing prototypes for potential customers,” says Dailey, 28. “But at some point, we will need investors.”

Dailey says he wasn’t interested in creating a generic business plan to complete a class assignment, so the group decided to launch a real company. To get started, they partnered with a local inventor to develop rigid insulation panels made from rice husk ash. While such ash is typically placed in landfills, the group converted the material into a solid state, wrapped it in a foil laminate, and then vacuum-sealed the final product.

The resulting insulation is six to 10 times more efficient than conventional offerings, Dailey says. “We see great potential in the refrigeration market,” he adds. “A typical fridge has 2 inches of insulation, but we can offer the same, if not greater, insulation properties with a half-inch of our product.”

The company has already reached out to a number of appliance-makers as potential customers. The product could also be used for refrigeration trucks, water heaters, and prefabricated panels for residential and commercial use. “Our goal is to begin production in early 2011,” Dailey says. “And we’re currently looking for around 40,000 square feet of production space to get started.”

Joining Dailey at Husk Insulation are Erica Graham, vice president of sales and marketing; Shally Madan, vice president of business development; Siddharth Sinha, vice president of product development; and Elizabeth Uhlhorn, vice president of finance and sustainability. Min Kim, who serves as vice president of technology, recently completed his postdoctorate in materials science at U-M.

Dailey credits his business-plan class with setting the company on a path for success. “We really refined our thinking, and I must say it was difficult to have our plan critiqued by the whole class, especially when you don’t know all the answers,” he says. “But we have a product that will not only help society … it really cuts down on energy use.”

In addition to taking on private investors, the company has been approved for a grant from the Michigan Initiative for Innovation and Entrepreneurship (the exact dollar amount hasn’t been determined), and is researching whether it would qualify for federal stimulus funds geared toward product development.

Photograph by Dave Krieger
Kathy Abramczyk, an MBA student at Wayne State and vice president of Visca in Troy, works in tandem with scientists at TechTown in Detroit.

Kathy Abramczyk

Vice President of Administration, Visca LLC, Troy
School of Business Administration, Wayne State University, Detroit

A soldier in the battlefield might not know that a particularly violent explosion has triggered a post-traumatic stress disorder. And any further harm on the battlefield can be lethal. To help warn soldiers to leave the battlefield before it’s too late, Wayne State MBA student Kathy Abramczyk is working with Beaumont Hospital in Royal Oak to develop a small sensor called a wireless data transmitter, which would monitor and send a GI’s physical data to a base camp. “The sensor would fit inside a helmet and would tell the base that one more hit will likely kill or further harm the soldier,” says Abramczyk, vice president of Troy-based technology research firm Visca. “So the base would [contact] the soldier to leave the battlefield immediately. We also have sensors that could alert a driver to change the oil in their car, or their oil filter. We’re even studying sensors that could be used inside golf clubs or hockey pucks.”

In 2004, Abramczyk co-founded Visca with Bill Harris, the company’s CEO; retired Brigadier General Roger Burrows, who serves as COO; and Gregory W. Auner, chief technology officer and professor of electrical and computer engineering at Wayne State.

The company works with numerous clients on the development of micro sensors, including the Department of Defense, various subcontractors, and private companies. Some of the projects include sensors that can monitor agricultural fields for potential diseases. Other devices, meanwhile, warn public-safety officials of pollution in Lake St. Clair, for example, or determine whether shipping containers have been tampered with.

“Research and development is something I understand very well, but I wanted to get my MBA because I needed practical business experience,” Abramczyk says. “I interact a great deal on business applications for my Department of Defense contacts, but it wasn’t until I started taking MBA classes that I really understood the challenges of running a day-to-day company.”

Last year, the company, which leases lab space at the science and technology park near Wayne State called TechTown, generated $800,000 in revenue. That’s up from $150,000 in 2004. Next up is full-scale production, including the use of clean rooms to assemble electronic devices or micro-fluidic systems.

In the near future, the company plans to begin producing drugs fitted with sensors that direct medicine to a particular area of the body. Visca also markets and licenses its technologies to a range of business sectors, including homeland security, aerospace, health care, and automotive.

Abramczyk is on pace to complete her MBA next year. Since 2005, she’s been taking one or two classes per semester. “It’s been a long road,” she says, “but by working full-time and going to school at night, I’ve really been able to benefit from the synergies between the classroom and the company.”

 

Jim Gordon

Business Manager, E. Gordon Associates, Bloomfield Hills
College of Accountancy and Business, Walsh College, Troy

Five years after launching a company to advise parents on the best schools and educational programs for their children, Jim and Elizabeth Gordon determined their business was really managing them. “My wife and I made a decision that we could either grow the business and take it to the next level, or we could continue to bump along and grow steadily,” says Jim, business manager of E. Gordon Associates. “We decided to take it to the next level.”

But getting there wasn’t easy. After spending several years as a teacher — Jim earned his undergraduate degree in education — he grew weary of budget cuts and job losses. “I was never let go, but I wanted to control my destiny,” he says. “So I joined forces with Elizabeth and eventually went back to college to pursue an MBA.”

That was four years ago. While he wasn’t a typical MBA student in terms of age, Jim, 52, says he had few qualms about returning to campus life. “I chose Walsh because it was a smaller, more intimate school,” he says. “It would’ve been much different had I chosen to return to a large university. There wasn’t much hope of trying to live in a dorm.”

At the time of Jim’s enrollment, he and Elizabeth relied heavily on parental referrals to land new accounts. But after Jim took classes in marketing function and e-marketing, the couple began to target psychiatrists, psychologists, therapists, and hospitals.

“This was a strategic shift from relying on word-of-mouth [referrals] to marketing and informing mental-health professionals about educational consulting and how we work,” Jim says. As a result of the new outreach, Jim says clinical referrals increased 20 percent over a three-year period, while new leads from a revamped Web site rose 21 percent during the same time frame.

“I remember in my first year at Walsh (2005), I was talking to a professor about how our business was going and whether we should develop the resources to grow,” Jim recalls. “And I remember he was very adamant. … He said, ‘Don’t wait; grow the business.’”

Elizabeth says she’s noticed numerous changes in the business since Jim started taking MBA classes. “We now have a database of all of our clients, where before it was all in file cabinets,” she says. “We’re also doing more relationship-building with psychiatrists and psychologists in terms of phone calls, lunches, trips, or coffee sessions. We’re just better organized and we know what to do to grow.”

Increased efficiency at the office was another benefit of Jim’s MBA training. He studied how the couple handled everything from phone calls to interviews, and recommended several changes. The company also regularly surveys its clients to discern any trends or detect any pending problems. “The big thing we learned is that the parents wanted more personal attention,” he says. “So now we communicate with them more often. That’s been a big help.”

Christine Bournias

Principal and Brand Director, Visual Concepts, Creative and Color, St. Clair Shores
Richard DeVos Graduate School of Management, Northwood University, Midland

After spending two decades in advertising and creative design, Christine Bournias took on an ambitious and, some would say, risky career path. In 2007, she enrolled in the MBA program at Northwood University and simultaneously formed her own brand-management and design firm.

“What really encouraged me to take on both endeavors was my former manager … at Kelly Services,” Bournias says. “He didn’t have a creative background, but he knew how to manage the process and organize a team. Plus, he was an MBA graduate [of] Northwood.”

Slated for graduation next December, Bournias drew on her creative design experience and applied the business skills she was learning at Northwood to tackle several large promotional accounts. But she says she wasn’t interested in submitting bids and doing the work. She wanted to go the extra mile.

Working with the city of St. Clair Shores, for example, she won a bid to develop a brand-marketing program for Harper Avenue, one of the city’s main retail corridors. “The city wanted to spruce up the corridor, and it would’ve been fairly easy to create a logo and put up some banners,” she says, “but I thought there was more we could do.”

What Bournias did was create a card-rewards program in which people received incentives for shopping at participating establishments. The effort, dubbed H.AVE (for Harper Avenue), was developed after Bournias interviewed several merchants about their ideas for drawing more business. “You [might] think you know everything about brand management,” she says, “but my professors (at Northwood) taught us not to assume anything. By interviewing the merchants, we came up with a very popular program that’s creating new business.”

Bournias is also working with the College for Creative Studies in Detroit on a customized training program targeted at seasoned professionals. The idea is to offer continuing-education classes and custom training in a variety of disciplines, including Web design and interactivity, storyboarding for film and animation, digital video editing, and some 20 other programs.

The college, which is planning to open a second Detroit campus in September in General Motors’ former Argonaut Building, finds it has the space to expand its mission beyond traditional students (some of its professional courses can be taken online, as well). “The program answers a real need in the marketplace for skilled training,” Bournias says. “The economy is changing so fast, and there’s a great need to move our skill set beyond what’s been a dominant manufacturing base.”

Photograph by Dave Krieger
Chris Kolon, top right, co-founded sports equipment company Scorpion Lacrosse in Clawson and, to help boost sales, pursued an MBA at the University of Detroit Mercy.

Chris Kolon

Co-founder and Principal, Scorpion Lacrosse, Clawson
College of Business Administration, University of Detroit Mercy, Detroit

Evolution may best describe Chris Kolon’s entrepreneurial journey. In 2006, the co-founder and principal of Scorpion Lacrosse began selling high-quality lacrosse shafts online. Before long, Kolon and his partner, Jake Kenney, who played on three national title teams at Princeton University, began distributing those shafts to sports shops and dealers in metro Detroit and around the region.

The reason? Lacrosse was becoming one of the fastest-growing team sports in the country. Kolon and Kenney also delved into the international arena, which now accounts for about 20 percent of their annual retail sales.

“Our problem was that major competitors like Nike, Adidas, and Reebok also got into the market at the same time,” Kolon says. “We were able to hold our own and grow the business, but when the [national] economy started to slow a year ago, we regrouped and looked for other avenues of growth.”

While their retail sales declined, Kolon knew from his schooling at the University of Detroit Mercy that leverage could be found in almost any challenge. Armed with a strong brand, the pair began using their contacts to market themselves among coaches, parents, and high-school and middle-school students, which makes up 90 percent of their annual sales. The rest is split evenly between college and recreational players.

For example, by networking at Cranbrook School in Bloomfield Hills, Scorpion Lacrosse began to tap a growing market for customized shafts. In fact, members of Cranbrook’s 2009 men’s lacrosse team ordered camo-designed shafts. Detroit Country Day School in Beverly Hills, meanwhile, ordered shafts designed with the school’s logo and colors. Customers are also encouraged to send in their own designs.

“We found a niche there, plus we began to take on private label accounts for other customers while selling our own designs,” says Kolon, who played competitive lacrosse at Rutgers University in Camden, N.J. “We also do wholesale consulting,” he says, “and we have a license agreement with Vyatek Sports for a high-quality shaft that combines advanced composites and traditional metals like aluminum.”

An assistant lacrosse coach at UDM, Kolon believes that ignorance isn’t always a bad thing. “One thing we learned is that passion and optimism can carry you a long way. But had we known early on that we’d be competing with the big boys like Nike and Adidas, I don’t know that we would’ve expanded into retail sales,” he says.

Another challenge for Kolon was setting up production in metro Detroit.

“We tried to manufacture here, but there wasn’t a lot of expertise,” he says. “So we wound up spending money we shouldn’t have.” Instead, he and Kenney decided to work with existing production centers in Mexico, China, and Pakistan.

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