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Post 2 - Simply Put: Place Matters and We Need to Create Better Places
Posted By: Sean Mann, 9/2/2010
While it would be easy to say that the state's dismal job market is a cause for the kids fleeing Michigan, surveys and the last census have shown that two-thirds of young people, who are key to developing and diversifying the state's economy, are choosing where they want to live and then they look for a job.  Furthermore, surveys by our universities have shown that a good number of the graduates who are leaving the state have a job offer in Michigan but decide to leave anyway, or don't even bother to look for a job here in the first place.

There is no single panacea for what ails Michigan, but it is detrimental to our future not to recognize that place matters. Individuals are placing a greater premium on their surrounding environment and the lifestyle that it supports. And while we have a lot to take pride in here in Michigan, in many ways we fail to create the types of communities that are going to attract a talented work force and help us move forward.

Why is it important to develop viable urban areas? Well a recent report in the Harvard Business Review put it best: To put it simply, the suburbs have lost their sheen: Both young workers and retiring Boomers are actively seeking to live in densely packed, mixed-use communities that don’t require cars—that is, cities or revitalized outskirts in which residences, shops, schools, parks, and other amenities exist close together.

BUT YOU ALREADY KNOW THIS. You wouldn't be reading this publication if you didn't already have an appreciation for communities that aren't indistinguishable, chock-full of box stores, and unsightly and pedestrian unfriendly 7-lane roads with overheard electrical lines and lined with Long John Silvers and PT O'Shenanigans.

So what are we going to do to create the types of communities where we want to live, work, and play?

Well, the Let's Save Michigan campaign was created to answer that question by advocating for a new focus on our city centers and main streets and to push for policies and personal actions that will make them more livable and desirable.

First off, I'm not going to go on some expletive-riddled tirade on curb cuts and box stores, but our physical environment matters (as much fun as that may be) but so much of what we need to do is a matter of design and being more strategic about what we are already doing.   Let's Save Michigan proudly advocated for Complete Streets legislation, the promotion of streets that are designed for all its users, which was recently signed into law. Still, we must do more to create less car-dependent cities, including promoting transit. Not only is there a moral argument that people should have an ability to live a less car dependent lifestyle, but there is a clear cut economic argument that these assets improve property values, create more desirable human environments, and leads to better use of existing infrastructure.

We have to be smarter about utilizing our limited resources. While our state is facing chronic budget shortfalls we currently give away more in tax breaks than we collect. Yet we fail to assess the effectiveness of these tax credits or ask critical questions of their implementation. Why isn't new development encouraged near existing infrastructure to keep down long-term public costs? Why are we as a state subsidizing the creation of faux Main Streets in cornfields when our existing Main Streets are struggling to stay afloat? Why does the state subsidize low-income housing but not ensure this housing is within proximity of transit lines so people can get from one point to another? The same could be said for hospitals.

As a state we need to determine what our funding priorities are and ask ourselves if simply cutting budgets will return us to prosperity. How will we have vibrant cities when we are now 49th in the nation in arts funding, at just 10 cents per person a year? Why will people choose to live in Michigan when our financially strapped cities are drastically cutting the basic services of our society for the past 150 years like, police, libraries and parks?

Ultimately we must demand of our leaders to ask, just because this is how we've done things in the past, does that mean it's the best allocation of resources or going to create the types of communities that are going to revive Michigan.

 
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Post 1: "The past is never dead. It's not even past."
Posted By: Sean Mann, 9/1/2010
That oft-rehashed Faulkner quote crosses my mind a lot as I pass through Michigan's cities.

Our cities have become the sad international poster child for the failed American dream. And I'm not only talking about the decay of Detroit but also the abandoned factories that dot the entire state, the shuttered strip malls, and expansive sprawl that rapidly shows its age and shortcomings.

These everyday gaping wounds are in part the harsh realities of international economics, but also an undeniable reminder of our history of hubris and poor foresight.

Writing about the decline of Michigan is nothing new and I certainly don't have to rehash all the economic gloom and its underlying statistics that surrounded this region and state for the past decade. However, there is one statistic in particular that weighs on my mind daily: nearly half of Michigan's college graduates are leaving the state within a year of graduation, and just as alarming, we are perennially near the bottom in inward migration from other states.

This is a much talked about topic across the state from blogs on this site to the chambers of the capitol to the barbeques of baby boomers discussing their children's new lives in Chicago, Portland, or New York.

If we think about the omnipresence of our history, it is worth remembering that young people leaving Michigan is nothing new. It has gone on for generations. I myself got out of Michigan as quickly as possible after graduation. But unlike nearly all of my college classmates, I actually decided to come back.

We live in an age where talent is more important than ever before and we can't afford to become less educated and less entrepreneurial in an increasingly competitive global economy.

A few years ago we got a lesson about the importance of having talented people in Michigan that I'm afraid we've already forgotten. In 2007, Comerica Bank, formerly the Detroit bank, moved its headquarters to Dallas. Justifying the move, the CEO of Comerica said nothing of tax rates, but stressed a need to "continue attracting and retaining talented employees" to stay globally competitive.

I don't judge anyone for leaving. Instead I see it as a clarion call for us to get our act together. For close to a year now I've been heading up the Let's Save Michigan campaign, which was born out of the necessity to address the decline in Michigan's human capital -- not just lament about our situation, but advocate policies and actions that will help turn Michigan back into the type of place young and talented people want to live in.

There is no silver bullet to solving what ails Michigan and anyone that suggests so is a snake oil salesman (or a politician). The solutions are more elusive and complex, ranging from a series of legislative initiatives that vary between the ambitious (totally revamping taxation and economic development policies) to the mundane (making transit more rider friendly) to the personal decisions we can make on a daily basis (shopping on our main streets).

In a crass sense, history can be boiled down to a series of notable moments and places that defined an era where there was a perfect convergence of necessity, individuals, and scale. I think more than anywhere else at this moment, Michigan in its efforts to redefine itself has the potential to define this era. The opportunities that this historic moment presents literally keeps me awake at night.

Through the Let's Save Michigan campaign we try to convey that sense of opportunity that Michigan has to offer because we aren't just surrounded by the gaping wounds of our past but the everyday possibilities of what we can create here in Michigan.

 
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Post 2: Good Deeds = Good Seeds
Posted By: Amanda Edmonds, 8/19/2010
Our approach at Growing Hope is about win-wins.  And, when we're lucky, they may even go three ways -- win-win-win, we call it.  Win-win is about getting and giving in both directions, so that everyone comes out ahead -- it's one of those core values I talk about.  Let me describe with an example and then pontificate a bit after.

Last year we were faced with a challenge.   We needed seedlings-- and specifically a way to grow a lot of them.  For non-gardeners out there, in February, March, and April green thumbs and brown thumbs fill every egg carton and peat pot and yogurt cup with a growing medium, stick seeds in that soil, and find the lightest spot to help them grow.  That way when it's time to plant later in the spring we're all set.  Growing Hope grows seedlings to plant at the Growing Hope Center, to donate to partner families and gardens, and to sell at our spring plant sale and at our Downtown Ypsi Farmers' Market.  Early spring seedling production needs to happen in heated space, and ideally under artificial lights (a south-facing window might work, but may still not be quite enough).  Our seedling needs began to far exceed available space.  Heated space with lights became a limiting factor.

We also know from experience that the physical and mental barriers to getting growing are things that limits people growing their own food.  Every tried to hand a jankity shoplight from the back of a chair or balance those seedlings on top of the fridge, only to have the family pet or toddler knock it all down?  Or, the seedlings that grew well at first but because of the drafty window and cloudy days became leggy and limp?  If you've started seeds you've probably had this sort of experience.  We looked to the commercial marketplace at seed-starting light stand set ups, and price is a huge barrier-- easily $150 to fit just 1-2 trays of plants.  

Our enterprising spirit kicked in -- in fact, it was our social enterprising spirit.  With volunteers and partners from the Washtenaw Community College Residential Construction Program, we made it up.  We designed a simple wooden light stand structure with an A-frame that fits two standard four-foot shop lamps.  There's room underneath for four flats, which generally hold 192 seedlings.  We wanted to create something simple and sturdy with materials anyone could buy at the store.   For about $45, when all is said and done (wood, bolts, screws, two 4-ft shop lamps, four bulbs), we birthed a light stand for seed starting.  We don't have shop drawings for it (we hope to eventually), but you can see photos here.

Then came the Seed Starting Squad.  This was our way to organize people using these stands to help us and help themselves grow seedlings.  We put out the call and people applied to be a part of the Squad.  Have you ever met a gardener or a garden-wanna-be in February?  Eager describes all of them, and 75 overwhelmed us with applications to participate.  We only have so much time and space to cut and assemble wood, so we were able to accommodate 45 households that year.  A Squad household could buy the light stand on a sliding scale (we really like these and trust people to pay where they can) from $50-$100.  Or, if that wasn't affordable, you could borrow the light stand, making the personal investment just about free.  To be in the Squad, you agreed to come pick up your stand and grow two flats of seedlings for us, leaving space under the lights for two flats for yourself.  Everyone wins.  When your seedlings have grown up, you drop them off and we put them into the mix in our plant sales, giveaways, or into the ground.  In year 1, about 3,500 viable seedlings were returned to us.  This year, the participation rate and numbers were even higher. 

It's a win-win-win: Families have learned or honed a great skill, resulting in seedlings for their own gardens, and have overcome the barrier of getting started inexpensively; Growing Hope has seedlings for sale, planting, and donation; the light stand is a replicable, scaleable model we can share with others, and the borrowed light stands are a resource we can lend or sell to future participants, share with schools, etc.... and, our community has a way to engage early in the season, participating in something that's satisfying -- and, as confirmed by our evaluation of the program this year, is making people more likely to grow their own fruits and vegetables.

We budget that this program breaks even in terms of material costs (volunteer labor not included in the calculation).  We consider this a social enterprise because it both furthers our mission and brings in revenue.  The Seed Starting Squad is structured to be affordable and accessible, transparent and replicable, not require any prior knowledge (we plan for some loss in our calculations), be family-friendly, use volunteer support, and a vehicle for community engagement.  As Growing Hope has assessed what social enterprise opportunities to pursue, these are all important qualities.  In fact, we made a matrix by which we judge mission-related earned revenue opportunities, weighing both traditional business planning considerations (start up costs, ROI, et al) with these and other principles (VALUES) that are important to all that we do.  

Other enterprises we've taken on also further our mission but are designed to earn more revenue to support programs or areas of our work that don't bring in funds.  Our raised bed kits, for example, which we sell in the spring (and we'll tell you how much we paid for materials and how much the mark-up is,  and we'll train you to build it yourself) are simple and affordable, yet our profit margin can still support our free Raised Bed Installation program for low-income and no-income families.  In fact, for every six raised bed kits we sell, we can fund the materials for one family's raised bed garden installation.  Again, it's a win-win-- an affordable solution for people in their homes that directly supports subsidizing for those without any.  (Note: our Raised Bed Installation program was modeled after one in Olympia, Wash. at a rockin' organization called GruB which was so open and willing to share their best practices with us).  And, while they haven't all come from us, you may have seen (particularly in Ypsi) more and more four-by-four-foot raised beds popping up all around town.  Our "what can you grow in a square" message has taken ground, literally, as the interest in local, healthy food and gardening has skyrocketed in the last few seasons.

My own advice to nonprofits and for profits working to better the community while also earning revenue -- think hard about win-wins.    Whether we've strategized or stumbled into them, when we've hit upon something that just really works from so many angles, it's been amazing to feel how the impact radiates throughout Growing Hope, and throughout our communities.

 
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Post 1: Not Your Average Rosy Speech
Posted By: Amanda Edmonds, 8/18/2010
I like talking about values.  One of the thing I often say when presenting about Growing Hope is how our organization's core values play out in how we choose the best strategies for furthering our mission.  We use these values as a lens and guide.  

Before getting into a discussion about particular values, though, it's important to share where I'm coming from.   I was born white, middle class in the United States in the 20th century.  These attributes, none of which I had anything to do with, put me in a place of privilege compared to many of the rest of the people in the world, including many of those in the United States.  For me it's important to recognize that to myself and others -- I started "the race" much farther ahead than many others.  While I have worked very hard for what I have or have achieved, others may also have put in that effort, only to be held back by barriers of race or class or geography, et al.  Teddy Roosevelt once said, "Far and away the best prize that life has to offer is the chance to work hard at work worth doing."  I was born incredibly privileged to have the chance to do work that I believe in.  

I grew up in a diverse community, where the public school district I attended from K-12 had a lot of white flight.  Many of my friends fled to private or parochial schools before middle or high school.  I often took it personally, and struggled not to pass judgment on these friends or their parents.  As a white person, I was in the privileged minority in our high school, which was about 87% African-American.  This experience gave me a pretty unique perspective on race.  From a young age, I thought about race -- and among a racially (though less-so socio-economically) diverse group of friends, we talked about race pretty openly.  I think it's incredibly important, even when not dealing directly with "racial issues", to be willing to talk about how racism, classism, sexism, and plenty other -isms play into what's happening in our neighborhoods and our society.  This doesn't equate to using the history of injustices as excuses or blame, but it does mean creating dialogue where such issues can be honestly brought forward.  

In fact, I gave a graduation speech about privilege and equity.  And, while that sounds like a heavy subject for a speech usually recounting shared antics and favorite professors, I figured that this platform was an opportunity to impact people -- classmates, professors, families -- and that I should take advantage of it to drive a point home.  My message was about having the privilege to not care -- that by having a U-M degree there was (at least before the recessions hit) an opportunity to live comfortably in a place where it could be easy to ignore or forget about the challenges so many in society face.  The challenge to my classmates was to not stay in that comfort zone and become complacent about injustices to the environment or fellow humans.  I think I drove the point home fairly well without being depressing.

Fast forward to now and I think I've tried to continue on this path of opening honest dialogue about social justice and privilege and race and class.  I've gotten up in front of groups of people locally in the food movement (and colleagues now almost expect me to) and brought up the often unsaid issues of equity that from my lens are essential when talking about healthy food in communities.  When giving talks to garden clubs, I don't shy away from speaking about how structures in society have reinforced disempowerment of people based on class and race.  It's definitely not your average rose talk, but somehow they ask me back.  And, if you know me, my m.o. is not negative at all-- amidst this honesty about inequity, I paint a positive picture about how neighbors and kids and others are coming together in proactive ways to grow healthier, safer, more equitable food and communities.  I think it's that balance that makes people listen and engage.

I credit my being willing and able to open this dialogue to my education and grounding in environmental justice while at the School of Natural Resources & Environment.  Environmental justice is about fair access to safe environments, about equity in our food and human rights to safe water and land, about community ownership and empowerment over the places we live.  For me, that all comes to fruition in a garden.  In another post this week, I'll say more about why gardens and food are such powerful and positive agents of change.

What does this talk about values and open dialogue mean for our organizations, businesses, and community?  Internally, I think it's about conscious creation of culture.  I've been lucky to build something from scratch where -- along with figuring out how to build a budget, infrastructure, programs, systems, et al -- I've also been able to help shape a culture.  That can be difficult in some ways when your staff is transient. Growing Hope's has been made up primarily of Americorps*VISTA members and interns -- and you need to re-invent things each year.  But, it also gives you a chance to rethink your message and approach when orienting new people to your organizational culture... I think it's made us better each year, and not let us take things for granted. 

A few years ago, as a staff team we conducted an anti-oppression analysis and discussion for about six months.  Each week in our staff meeting we had a reading assignment, and we rotated in leading discussions about those issues of racism and other -isms that many people would think off limits, particularly in a workplace.  We tried to create an open dialogue about these things in a safe space. The process reinforced that we aren't always perfect (and I will take ownership and say I am not always where I want to be in terms of anti-oppression mentality and actions), and the process wasn't always without tension, and we didn't always like what we learned about how we were doing.  But, it helped us grow and was just one way that in our organizational culture we've tried to live our values.  So, for Growing Hope values aren't about being preachy or claiming perfection-- they're about being honest, and being self-reflective as individuals and as an organization.  Having led this organization for much of my professional career I don't have a huge amount of experience in other places-- but I think our proactively doing such introspection and dissection may not go on in every business or organization.

...To bring it home to Growing Hope and how we carry out our work: Our mission is to help people improve their lives & communities through gardening.  For me the difference between that statement and "improving people's lives and communities through gardening" is immense, and represents one of our values... doing something for someone is very different from sharing resources, partnership, and support for someone to do for themselves.  There are many valid approaches to community and school gardens, but ours come out of the belief that sustainable change is about  empowerment and capacity building for self-reliance.  As the old adage says (sort of), "Teach a woman to grow a tomato, and she'll eat -- and feed her household and her neighbors -- for a lifetime... and she'll can and freeze and become a tomato-sauce entrepreneur."   It's something like that, right?


Tomorrow: Good Deeds  = Good Seeds

 
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Post 2: Entrepreneurial Distractions
Posted By: Doug Neal, 8/5/2010
As I was sitting down to write about popular distractions that entrepreneurs run into on a regular basis, I remembered a presentation that I saw by a Microsoft manager in the early 90s.  This guy is a very successful author and manager and did a great job in his presentation, but it was the comment he made about how he goes about writing a book that stuck with me all these years.

He explained that when he starts to write a book he always uses a yellow pad of paper and a pencil… he never uses a word processor to write the initial draft.  Only after that draft is written will he then use a computer to create the final version.

The reason for this, he explained, was that when he sits down and opens Microsoft Word to start writing he'll spend most of the time adjusting the fonts, aligning the paragraphs, changing the layout, etc. instead of actually writing.  There are just too many distractions that keep him from doing the hard work of creating a compelling book!

For entrepreneurs I think there is a very similar story to be told.  There are far too many distractions that many entrepreneurs engage in when starting a company that waste valuable time and money and most importantly distract us from the important tasks of trying to identify a compelling business model that you can build a company around.

So, based on my own experience and talking to dozens and dozens of entrepreneurs I'd like to present the top 10 entrepreneurial distractions:

#10 - Building a website
Many people believe that before they can go out and talk to potential customers they must build the ultimate website.  What's more, they believe they must do it in a custom way so that it can meet all potential future possibilities for online sales, support, and product updates.

This is crazy.  If you absolutely must have a website today, spend 5 minutes setting up a turnkey one through a domain aggregator or popular search engine.  You most likely don't need a custom website on day 1.  You can always revisit this later.

#9 - Polishing your business plan
For some, their company exists only on paper and they believe the more they keep polishing their business plan the better the company will be. 

The reality is that a business plan is rarely an accurate representation of what will happen in your business.  As Steve Blank says – "no (business) plan survives first contact with customer".

#8 - Ordering business cards
Ordering business cards for some people is a sign of success.  It's a way of telling the world – "look at me, I've lost my mind and started a business".  Rarely are business cards essential in the first few months of company inception.  I recommend you avoid all print until you have validated your messaging with customers, which won't happen until you have built some traction in your business.

At most, just spend 10 minutes ordering some generic card that has your name, email, and cell phone on it.  Any more time spent on this is not worth it.

#7 - Delegating Sales
Delegating sales comes in many forms (hiring a VP of sales, hiring sales reps, signing a contract with a reseller, etc.).  In the first few months of a company's life you (the founder) are the chief sales rep!  Delegating this responsibility because you are too busy or don't like talking to customers (yes, that is a common complaint) is suicide for your business.  How else can you find out if you are delivering the right value?  This is too important to delegate – find the time, make the time and get out there!

It doesn't matter if you don't have experience in sales, btw, just get out there and talk to potential customers about your product and most importantly… listen to them!  If you really listen carefully they will tell you their problems and you will see your opportunity.

After you figure out how to sell your product, then revisit this issue and figure out how to build your sales resources.

#6 - Pitching VCs
It's amazing how often I hear this… "I've decided to start a company so I need to go out and raise some money".  Uh-uh.  It doesn't work that way.  You can't just expect people to throw money at you unless you have proven some aspects of your business model.  Reducing risk is what VCs want to see you do and an "idea" usually doesn't cut it.

On top of that, pitching VCs and raising money is very time intensive.  Not many will actually say "no" (which lets you move on) – many of them will give you words of encouragement and ask you to keep in touch, etc.

Don't get me wrong, venture capitalists and angels are very valuable to early stage companies… just don't start pitching them on day 1.

#5 - Getting a merchant account
The logic goes something like this… I'm going to sell a lot of this product, I better get ready to handle a lot of credit card transactions, etc.  Worry about this the day you can't keep up with the sales volume.

#4 - Naming the company
Amazingly, this consumes a lot of time.  I once saw this bring an entire company (3 founders plus the first 5 employees) to stop working for an entire week to debate what should be the company name.

The fear is that if you choose the wrong name you will send the wrong message and the brand will be wrong and the sky will fall and… relax.  Pick some random name, get going with figuring out the business… you can always change the name once you get traction.

#3 - Getting a domain name
Same as naming the company and can consume countless hours.  Pick something simple, even ridiculous, and move on.   You can change this once you start getting traction. Yes, you will lose any SEO (search engine optimization) value if you switch domain names but come on, you don't have any customers yet, you just started… the time spent on this right now doesn't equal the lost SEO value.

#2 - Designing a logo
People seem to be fascinated by logos as if the logo will drive the entire customer experience… as if the logo is the brand of the company.  Get over it, the logo is not your brand.  The value you deliver and the experience the customer has with all aspects of the engagement of your company and product IS your brand… the logo is art.  It can change later too.

#1 - Renting an office
Yes, in my opinion renting a physical office is the #1 distraction that I see with startups.  There is a fixation on having a physical place to call home.  A place to engage customers and work all night in and have pizza delivered to.   

Reality check: you don't need an office for your business, you need a business model.  You need to figure out what you are going to deliver and how customers will value that and is there enough profit in the process to sustain your business.  The good news is that there are a lot of business incubators and accelerators popping up all over the world, and you should just grab some space at one of them and get going.


So, that is my top 10 list of entrepreneurial distractions.  I hope they help you avoid some costly delays and keep driving forward.  

In fact, when I'm trying to focus on creating a new business I find that the yellow pad and pencil work very well for that as well!

 
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Post 1: Simulate This
Posted By: Doug Neal, 8/4/2010
When I graduated college and went to work as a software programmer at a large company in Silicon Valley, I remember how excited I was to be working with some of the best engineers in the industry.  The creativity, intensity, and precision that everyone brought to their work was inspiring and I was amazed at all the work going on around me.

I remember one day specifically as my team was approaching the launch date of a new product I was working on, an engineer from a different team (team makes it seem small – in reality, his team was a group of about 100 software engineers) and I were having lunch and he turned to me and said "Wow, you sure are lucky.  I've been designing and building products for years but none of them have ever shipped… they are always canceled but you are working on a product that actually is shipping!  That must feel great."

I was dumbstruck.  How can it be that we would be spending all that time and money building products that would never ship?  After I made a few inquiries the word I got back from management was that when they had demonstrated the early product release with some key customers, they found it didn't meet their needs so the project was canceled and the team was reassigned to the next one.

The problem this company was having is very similar to what happens to engineering entrepreneurs who dive head first into designing and building a product without first validating that their solution will ultimately deliver strong customer value.  For large companies, this can be a costly mistake… for startups, it usually means death.

Over the last decade the pace of innovation has increased significantly and with it the need for a more efficient model for innovation has emerged.  This process which is followed by some of the best entrepreneurs is also one that can be used within large organizations – we call it using the entrepreneurial mindset.

The key is to take your idea as quickly as possible to potential customers in a way that will either validate or trash your concept so that you can make adjustments and try again.  Entering a lengthy design or build process without any real customer validation is simply not acceptable whether you are a startup or a Fortune 1000 company.  Note that real customer validation does not mean market analysis, customer segmentation or focus groups – it means getting in front of potential customers with a simulation of your business model to validate you are creating value for a customer.

Note that I specifically choose the word simulate instead of prototype.  The problem with the word prototype is that it implies the only way to get to a customer validation phase is to build some amount of technology and create a scaled down functioning version of the final product.  In my experience, this overemphasizes the technology and you can lose site of the goal.

Instead of prototyping your product you should be thinking about simulating your business.   Simulate the approximate customer solution and even pricing if possible with any means possible including drawings, human actions, even subcontracting out the work – do anything you can to simulate your business without actually investing in the technological development.  The reason for this is to maximize the speed at which you can get in front of customers, and, secondly, to minimize cost.

Jeff Hawkins, co-creator of the Palm Pilot, carried a block of wood around for a week while trying to validate the various aspects of a new handheld device. David Filo and Jerry Yang started Yahoo! as a simple web page of bookmarked websites that they had to edit manually before they ever considered building a dynamic and powerful web indexing site. These entrepreneurs were engaging potential customers with low-tech solutions very early on in the process and gaining tremendous knowledge of what was needed to build a successful solution.

The process of Simulating and then Validating your business before moving on to designing and building the product is the way we work with our student entrepreneurs here at the University of Michigan.  At TechArb (our student company business accelerator) we encourage our students to get out of the lab and into the customer environments as quickly as possible and to engage the customers.  

 
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Post 3: Keeping PACE
Posted By: Andrew Brix, 7/16/2010
When I agreed to write these few posts for Concentrate, I hardly expected to be commenting on such current events, but here I am, sitting down to tell you, my newly loyal readers, a tale of Fannie Mae and Freddie Mac... but let me start at the beginning.

In the beginning, there was Berkeley. (Actually, a whole heck of a lot happened before the first human set foot in the place we now call Berkeley, California, but this story starts in Berkeley. In 2007.) Berkeley had a lot of people who wanted to install solar panels on their homes, but even with the federal tax credits and California Solar Initiative incentives, they had a hard time coming up with enough cash to cover the upfront cost of a solar installation.

Fortunately, there were a few smart individuals working for the City of Berkeley and they realized they already had a solution available for these residents: the city could provide the upfront money for a resident's solar installation and assess the property over the next 10-15 years to effectively finance the cost of the solar panels. It's the same process cities around that country have used for 100 years to finance new sewer lines and sidewalks. After all, we don't expect everyone to be able to afford to buy a new car with a single check and electric companies don't bill us in advance for our next 20 years of electricity, so why wouldn't we allow folks to spread out the cost of a solar installation? Or, for that matter, insulation? Or a new furnace?

By 2009, the "Berkeley model" had become known as Property Assessed Clean Energy, or PACE, and Boulder County, Colorado had taken it to a whole 'nother level. Over the course of two application periods, Boulder County issued nearly $10 million in PACE assessments to homeowners for a wide variety of energy-saving measures, and the U.S. Department of Energy was offering significant stimulus funding for PACE programs through Energy Efficiency and Conservation Block Grants.

At the City of Ann Arbor, I like to think we know a good thing when we see it, and we put in to the Department of Energy for funding to start a PACE program here in Ann Arbor. Upon receiving notice that our funding was approved, one of our first tasks was to set about clarifying the legality of PACE in Michigan, which led to the introduction of the PACE Act (H.B. 5640) by Representative Rebekah Warren in December 2009. That bill passed the House on April 22, but has not yet been introduced in the State Senate, because this is where the games begin.

On May 5, 2010, Fannie Mae and Freddie Mac, the "government-sponsored entities" that hold trillions of dollars in mortgages reversed their previous support of PACE programs, stating in a lender letter that "[PACE] programs with first liens run contrary to the Fannie Mae-Freddie Mac Uniform Security Instrument and that [Fannie and Freddie] would provide additional guidance should the programs move beyond the experimental stage." This was followed by a July 6, 2010 FHFA Statement on Certain Energy Retrofit Loan Programs that effectively redlines communities that run PACE programs. The effect on PACE programs around the country?whether existing or in development?has been the policy equivalent of pulling the emergency brake on a train. Everything has come to a screeching halt. In California, Governor Schwarzenegger said in a statement that he is "deeply disappointed" with the Federal Housing Finance Agency's (FHFA) decision. In New York, the Town of Babylon is planning to sue FHFA in order to keep its Long Island Green Homes program active and avoid dozens of related layoffs.

What do you think? Are Fannie and Freddie simply doing their part to protect lenders or have they overstepped their regulatory bounds and shut down a great tool for economic development and environmental protection? I think it's clear where I stand on this one.

 
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Post 2: The LED Revolution
Posted By: Andrew Brix, 7/15/2010
In my previous post, I implied that technology is not the answer to our energy challenge. Or something like that, anyway. Of course, the answers are never that simple, and real life not only has shades of grey, it colors too!  However, for the time being, we are going to concern ourselves with only one normally dull color: white. What's so exciting about white?  It's that LED lighting?based around relatively new white LEDs?has the potential to save 25 percent of electricity used for lighting in the U.S over the next 20 years.

When I first learned about LED lighting back in 2005, white LEDs (light-emitting diodes) were still new to the lighting industry, and then-recent tests of LED lighting had been less-than-spectacular. But the potential was clearly there, and the city had previously had great success with LED traffic signals, so we starting testing LED streetlights around downtown Ann Arbor.

What's so great about LEDs? The short answer is they last longer and use less energy. As LEDs get less expensive, they are becoming the most economical choice in more and more lighting applications. As a bonus, they contain no mercury, and produce less heat than conventional lighting (that's part of being efficient).

For downtown streetlights in Ann Arbor, we're using half the energy as before (56 Watts vs. 120 Watts) and are projecting a ten-year lifetime rather than two years. The original test installation on Washington St., between Fourth Ave. and Fifth Ave. has now been in for over four years and has officially paid for itself! With the old metal halide fixtures, those bulbs would all have been changed twice now, but we haven't had to touch the LEDs yet. How many municipal employees does it take to change an LED light? None, it doesn't need changing! (Yet...obviously nothing lasts forever.)

Thinking about making the switch to LEDs yourself? You'll still have to do some homework and want to read a few reviews, especially if you haven't seen in person. The U.S. Department of Energy has some good information on LEDs, and what to look for in different applications. LEDs still cost more upfront than incandescent or fluorescent bulbs, so for those of you on a budget, Cree is giving away some of their excellent LR6 downlights?you can't beat that price! If you're still not ready to make the move to LEDs, go to compact fluorescents (CFLs) in the meantime to save energy and reduce those nasty CO2 emissions.

Finally, don't forget to have fun while you're saving the world!


Next:  Michigan: The Sunshine State

 
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