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Sunday, 20 August 2017 10:37

As West Michigan’s startup culture evolves, Start Garden grows into new roles

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For the last 16 months, Start Garden has administered the Grand Rapids SmartZone under an annual contract with the city for $725,000. The nonprofit also operates a business incubator in downtown Grand Rapids, shown at left. Recently, Start Garden collaborated with a range of local partners to support an expansion project in Walker for MOVE Systems International, a maker of eco-friendly food carts. For the last 16 months, Start Garden has administered the Grand Rapids SmartZone under an annual contract with the city for $725,000. The nonprofit also operates a business incubator in downtown Grand Rapids, shown at left. Recently, Start Garden collaborated with a range of local partners to support an expansion project in Walker for MOVE Systems International, a maker of eco-friendly food carts. Courtesy Photo

GRAND RAPIDS — A growing manufacturer of high-tech food carts could serve as an example of the kind of business development that’s possible in West Michigan.

That is, if Mike Morin has anything to say about it.

Last week, Start Garden — for which Morin serves as co-director — was among the collaborating organizations that celebrated the growth of New York-based MOVE Systems International, a manufacturer and distributor of solar- and battery-powered food carts that is investing $13 million into a production facility in Walker, creating 27 new jobs.

The MOVE Systems investment marked the first time that Start Garden, venture capital fund Wakestream Ventures LLC, the Michigan Economic Development Corp. and The Right Place Inc. worked together on a project to grow a company and add jobs in West Michigan.

For Morin, the project showed the inherent benefit of the work to establish an “entrepreneurial ecosystem” in Grand Rapids.

“The ecosystem actually worked,” Morin said. “I think that’s needed for any project.”

For the last 16 months, the nonprofit Start Garden has administered the Grand Rapids SmartZone tax increment financing (TIF) mechanism, a significant shift from its genesis as a pre-seed venture capital fund. But as Start Garden has become more of an administrative partner in the city, the organization now finds itself taking on different kinds of projects than it ever imagined it would.

“I think it’s hard to keep track of what we’re doing when we bounce around from talking about things like ‘smart cities’ infrastructure to a makerspace to creating funds for small neighborhood businesses,” said Paul Moore, one of the co-directors at Start Garden, which also operates a downtown startup incubator.

Moore said the organization’s main role focuses on making Grand Rapids a better place for high-tech entrepreneurial startup companies. If that happens, Moore said he can envision a time when Start Garden would no longer need to exist.

“The thing is, can we get all the pieces in place that you look at the whole city and think it’s an awesome place to start (a business),” he said. “If you can say that, then you can lock the doors and turn out the lights.”

‘WALK THE TALK’

After spinning off Wakestream Ventures in 2016 — the VC fund is run by Amway scion Rick DeVos, who also launched Start Garden — the organization has come to wear many hats.

As a key resource for entrepreneurial services in the West Michigan region, Start Garden serves as a landlord at its 14,500-square-foot business incubator, which currently has 112 members from 52 companies working at 40 Pearl St. NW in downtown Grand Rapids.

Executives at Start Garden say the incubator has reached full capacity, leading them to explore adding some new space.

Moreover, the organization increasingly has sought to champion diversity efforts in entrepreneurship, citing a Forbes report from 2015 that named Grand Rapids as one of the worst cities in the country from an economic perspective for African Americans. As part of those efforts, Start Garden earlier this year brought on Darel Ross and Jorge Gonzalez as co-directors.

Ross previously served as co-executive director of LINC Community Revitalization Inc., while Gonzalez was executive director of the West Michigan Hispanic Chamber of Commerce.

“Start Garden has been intentional, and by bringing Darel and I into the picture, that has been huge,” Gonzalez said. “Start Garden was the very first organization that decided to walk the talk. They’re like, ‘We’re going to put our money where our mouth is and we’re going to bring in grassroots leaders.’”

Start Garden currently works with multiple initiatives such as the Midwest Tech Project and Loop Coding Center, all of which aim to bring in more African Americans and Latinos to the tech sector.

In particular, Gonzalez cited the recent success of minority entrepreneurs in winning the 5x5 Night business pitch competitions put on by Start Garden.

“The point is, it’s working. We’re moving the needle — slowly, but we are moving the needle,” Gonzalez said. “And the fact (is) we’re reimagining the ecosystem and we’re reaching out to other communities where previously that wasn’t the case.”

FORGING RELATIONSHIPS

Start Garden operates with an annual budget of $2.2 million, with funding split roughly between the corporate, philanthropic and public sectors.

As the administrator of Grand Rapids’ SmartZone TIF mechanism, Start Garden receives $725,000 annually from the city to provide entrepreneurial support services, and it’s measured by various metrics and deliverables as part of its contract.

Earlier this summer, the city renewed Start Garden’s contract to continue operating the SmartZone for another year.

“It’s a good partnership and we feel it’s worthy of another year’s work,” said Kara Wood, economic development director for the city of Grand Rapids.

A survey conducted by Start Garden as part of its proposal to renew its contract with the city found that companies within its network reported a 9-percent increase in revenue — from $11.2 million to $12.2 million — over a period from October 2016 to April 2017.

While both sides think the partnership is working, they concede the relationship-building between city government and an organization tasked with growing and scaling nimble startups has had its share of cultural challenges.

“I think that’s what everybody kind of signed up for,” Start Garden’s Moore said. “What comes out of it, there might be smart cities technologies that are implemented downtown or new pots of money that we can bring to really target entrepreneurship (for) minority communities. But it’s the forging of the relationship between all of these entities that is the actual innovation.”

Wood said the city’s history of public-private partnerships prepared officials for the vastly different cultures of the two organizations.

“We’ve been working with educational institutions for a long time,” Wood said. “It’s very similar and the city operates like a business in many ways. We (actually) had more experience than they did.”

NEW INITIATIVES

For Start Garden, tackling “smart cities” technology has become one of the organization’s new ventures, Moore said.

While smart cities has become a catchphrase in urban planning and technology circles, the concept is quite simple and makes sense for Start Garden to work on, he said.

“It’s acknowledging that the internet has now become electricity,” Moore said. “It’s the thing happening in the background that we’re building everything on top of. It’s things passively in the background just sending data and just helping decisions get made.”

To that end, Start Garden currently is participating in a pilot program with a wide variety of public and private partners to use new technologies to better monitor air quality in Grand Rapids.

The city gets accurate, real-time data from all around Grand Rapids, while citizens get healthier communities and private companies have an opportunity to innovate new technologies using existing infrastructure.

“I think all of those interests converge,” Moore said. “If you don’t have that equity lens when it comes to the new technology, then I think what happens is that downtown will get every little smart city gadget and nobody will really think about how (to solve) problems for the communities that really need it most.”

While the connection between developing a technology that can improve air quality and helping to grow a company that makes food carts may not be direct, Start Garden executives believe that ultimately, they all stand as examples of the changing culture in West Michigan. For them, it’s also proof that historical silos between different economic development organizations are finally starting to erode.

Referring to the collaborative effort used to bring the MOVE Systems project to fruition, Morin said, “I think this is very indicative of the things we’re going to see and the things we’re going to win at here.”

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Nick Manes

Staff writer

nmanes@mibiz.com

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