Organizers of the December
Accelerate Michigan Innovation Competition
believe that the competition's winners reflect a healthy
"entrepreneurial ecosystem" in Michigan. If Denovo Sciences is any
example, pre-seeded start-ups at the bottom of the food chain may be
faring better, but they're still living a hand-to-mouth existence.
Denovo
Sciences, established in Ypsilanti last year, couldn't meet the
entrance criteria for Accelerate Michigan, and its founders -- Priya
Gogoi, Saedeh Sepehri, and Chris Seimer -- couldn't afford to attend the
competition. So they volunteered to help at the event. In their spare
time, they studied the presentations, compared notes on the companies
competing, and took advantage of the networking with entrepreneurs and
venture capitalists.
"What we got out of this competition is that
investors, especially in the Ann Arbor area, look for 'cool'
technology, something that already has proof of concept," says Gogoi.
"It has to be unique technology…. The best case scenario is that you
come out of a university with 10 years into the research and it has some
proof of concept."
Gogoi and Seimer were completing an internship at
Esperion Therapeutics, Inc.,
in Plymouth last year when Gogoi suggested that Seimer join her in a
business venture. "I approached Chris and asked him if he liked the idea
of starting something. "'I'm monetarily a little independent, so let's
do something. This is the time to take risks. Maybe it's not going to
pay much in the short term, but do you have the passion?' He said, 'Yes,
I'm ready. I also want to make change in people's lives.'"
Sephehri, who was in Gogoi's master's program in cell and molecular
biology at Eastern Michigan University, made it a threesome. Seimer has a
bachelor's degree in biomedical science from Grand Valley State
University.
Denovo Sciences developed a method of transmitting
blood samples from a remote region to a clinical laboratory via cell
phone technology. Previously, technicians would have to transport blood
samples to centralized labs where pathologists are able to analyze the
samples on light microscopes. The innovation allows nearly real time
diagnosis.
Attending the Accelerate Michigan competition
reinforced their hope that Michigan, Southeast Michigan in particular,
is becoming a more promising place to develop a business, says Seimer.
He
and his partners learned some of the fine details of what makes a good
business plan, how to present the plan to investors, and how to be
prepared for the types of questions an investor will ask. "That's the
biggest part, being able to sit in on these competitions and see what an
investor is going to ask you about how you're going to get your product
to market, or how you're going to protect your intellectual property.
… Seeing the whole spectrum of companies -- the way they responded to
these questions -- has led us to go back and look critically at what
we're doing as we develop our business plan."
The Accelerate
Michigan competition drew nearly 600 entrants in various entrepreneurial
ventures, from life sciences and alternative energy to vehicle
manufacturing. About a third of the entrants were university students.
Armune BioScience, an Ann Arbor molecular diagnostic company, won the
grand prize of $500,000. A University of Michigan student company,
ReGenerate, won a $25,000 prize. Over $1 million in prizes and in-kind
services were awarded at the competition.
Roger Newton, Esperion president and one of the Accelerate Michigan
finalist judges, said the large number of applicants, and the large cash
awards, reflect the vitality of the entrepreneurial environment in
Michigan.
"There's a lot of support for small businesses,
entrepreneurs to really do something here. When I first started Esperion
in 1998, none of this existed. It's changed so much in a decade. People
are so much more open and collaborative. The provincialism that used to
exist from county to county seems to be melting away slowly."
Wayne
and Washtenaw counties hadn't really collaborated previous to the
development of the Michigan Life Sciences Innovative Center in Plymouth,
he explains. "Accelerate Michigan was a greater example of how those
walls are coming tumbling down."
The winners were impressive, but
he also acknowledged that they were mature companies that had developed
to a point where their ideas warranted significant investment, he says.
"Most of those who did win weren't brand new. They had their prototype
already in place…perhaps the younger folks didn't have the capital or
the experience to be competitive. That doesn't mean that there aren't
people in their 20s and 30s coming up with novel ideas and truly being
entrepreneurs. ...Part of it is knowing how to go out and get capital.
If you can't capitalize an idea, what are you going to do?"
That's
a daunting question for promising young companies like Denovo Sciences,
and it's a lesson that Accelerate Michigan inadvertently reinforced.
"We realized that that's the way it works: To get funded -- to even to
go investors -- they want experience. That's the first stumbling block,"
explains Gogoi. "Any start-up has to have some pre-seed money. For
instance, the easiest [business] for a young person to start is a
software company. You don't need to put in much money. You can work out
of a garage. A life science company or an advanced engineering company
-- you need to put in some kind of money. Young people usually don't
have the money to do that."
As a result, the Denovo Sciences co-founders are working on a subsistence income.
Denovo Sciences reflects the excitement that many university graduates
have for entrepreneurial life, as well as the diversity of university
cultures -- not evident in the Accelerate Michigan finalists, which were
primarily composed of white men. Denovo's founders are not only
gender-diverse, they are Indian, Iranian, and American; Hindu, Muslim,
and Christian. What brought them together was friendship, interpersonal
chemistry, and passion for biology, says Gogoi.
"We all believe
in the same thing, ultimately," she says. "Our friendship has become
stronger. Even though we are from different countries, different
backgrounds, we share the same passion. We all see things similarly.
That's been our strength, actually."
The Denovo Sciences partners
also share a passion for "making change in human lives" with biology,
Siemer adds. "That's why we built this team. We know that the three of
us have a passion for what we're doing. That's what it comes down to --
whether you like what you're doing enough to sacrifice that comfortable
[employee paycheck] that any one of us could get in Michigan or
somewhere else, and the health benefits that might go along with it.
…This is the ideal times in our lives to try something like this. We'll
never learn a lot of the things we've learned without doing this. At a
certain point you have to take a leap and work as hard as humanly
possible to make it work."
Dennis Archambault is a freelance journalist and regular contributor to Metromode, Model D and Concentrate. His previous article was Where The Spiritual Meets The Digital.