From recession to reinvention

E.L. entrepreneurs strive to revitalize stale economy

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Eric Jorgenson has notebooks with several million dollars scribbled on the pages.

The business and economics junior carries pen and pad wherever he goes, and whenever he thinks of the next best business venture he pulls out the notebook.

Jorgenson, who will co-direct The Hatch, an entrepreneurial incubator for students to be located at 325 E. Grand River Ave., is just one of many minds East Lansing and MSU are attempting to tap into as the city pushes entrepreneurship.

“There’s a common consensus of being sick of being considered a rust belt automotive, has-been sort of town, and that’s not what we are,” said Jorgenson, who started a bamboo clothing company called GoBoo Clothing.

“There’s a lot of young influence driving it into the right places and trying to bring Michigan up.”

Three years ago, entrepreneurial MSU students said they had no outlet for their ideas.

Entrepreneurship wasn’t part of the culture and still sounded like a dirty word to parents who desire job security and safety for their children.

But with the economic crisis crippling Michigan and showing its citizens that relying on the large corporation for jobs and livelihood can be risky, the word “entrepreneurship” has lost its nasty connotation and instead is providing hope.

The city of East Lansing is mining the talent across Grand River Avenue, and its efforts have started to reap benefits. The city was named by Entrepreneur Magazine as one of the best college towns in which to start a business.

If the city can get its hands on Jorgenson’s and other budding entrepreneurs’ notebooks, maybe East Lansing can strike gold.

Poised for success

Jeff Smith has been all over the country consulting various cities on how to maximize potential.

A former senior analyst with East Lansing-based Anderson Economic Group, Smith now is the new economy project manager for the city of East Lansing. He said the city is more poised for success than others he has advised.

“A lot of these communities are building off the industrial revolution and puttering around off an economy that existed 60, 70 years ago,” Smith said.

“They’re trying to do everything they can to replicate what we have here.”

East Lansing has been ambitious with creative entrepreneurial projects. The city sponsors the Technology Innovation Center, or TIC, 325 E. Grand River Ave., which houses 14 startup technology firms and offers shared utility costs, conference rooms, office space and subsidized rent.

It soon will launch The Hatch, a restaurant incubator, and has applied for a $1.7 million grant to establish a wet lab incubator at the city’s old Department of Public Works site at Park Lake Road.

East Lansing City Manager Ted Staton said rather than chasing the multimillion dollar corporations, the city now is opting for homegrown enterprises — a term Gov. Jennifer Granholm referred to as “economic gardening.”

“You can go on a number of hunting expeditions without bringing anything back,” Staton said.

“But your gardening efforts produce a lot of new companies in the ones and twos and threes and hopefully they become 10s and 20s and 50s and 100s.”

Smith said he is given leeway with his decisions and generally doesn’t have to fight through the city government’s red tape.

“The city is extremely progressive considering this is (the) worst economic crisis to be opening up facility and taking that risk, it’s an extremely aggressive stance,” he said.

Students

In 2008, there were three members in the Gumball Club. Megan Gebhart, a marketing junior who started msuCatalyst.com — a Web site devoted to MSU students and alumni who do interesting things — scrapped together every wannabe entrepreneur she could find, and it still wasn’t enough people to form a basketball team.

In 2010, there are 15 student entrepreneurs who meet at 6 p.m. every Friday at Harper’s Restaurant & Brewpub, 131 Albert Ave., for the Gumball Club. They sit and socialize, but mostly they talk about innovation.

“The state of the economy really is a motivator for people to change,” Gebhart said.

“So there is local government interest going into this, there are ambitious students who want to put in the work and community people who are putting in interest.”

It’s this type of spirit that makes universities coveted innovative hot spots, and MSU is East Lansing and Mid-Michigan’s greatest asset to economic recovery, Smith said. What the city needs to do is capture that excitement and build an economy off it, he said.

“Every year we get new bodies to conduct research and figure things out,” Smith said.

“All that energy needs an outlet.”

Adam Root, a finance senior who started the grocery delivery service Spartanicity, said the university setting is essential for networking with people from different parts of the country and world. He also said the flow of ideas from people of various backgrounds can create or improve concepts.

“You get a lot of different perspectives and ideas,” he said.

“Like someone from New York or Chicago was pretty familiar with grocery delivery, but to us it was a novel idea.”

Bryan Ritchie, associate professor of international relations and co-director of the Michigan Center for Innovation & Economic Prosperity, said universities are a main draw for innovation centers, and MSU could be one of those centers with the infrastructure East Lansing is building.

“It seems natural to me if there’s going to be a place with the structure of innovation it’s going to be East Lansing,” he said.

For those who still spend most of their days south of Grand River Avenue, there is a renewed sense of commitment to bringing Michigan back from the bottom.

“There’s a whole lot of gathering of like-minded people who (have), if not (the) same agenda, have a common understanding and appreciation of where this community needs to go and what needs to be done,” Jorgenson said.

What needs to be done

Just like those who survived the Great Depression, the Great Recession will be a critical component to this generation’s decision making as it heads into the real world.

“Those things we took for granted, like automotive industry, have crumbled before our eyes,” said Nathan Bashaw, a political theory and constitutional democracy junior whose company, Brighten, will allow authors to host their works on the Internet in an interactive environment.

“Now we think that’s not really what we thought it was, there’s no guarantees … it’s caused people to take a step back.”

Ritchie said the state is “stuck.”

“I was speaking to a bunch of legislators the other day and my comment to them was we’re stuck within an institutional structure which we’ve created,” Ritchie said.

Ritchie said Michigan has the most taxing units per capita in the country and doesn’t get great value for them considering the state cut services to balance the budget.

State Rep. Jase Bolger, R-Marshall, said the state must reduce cost barriers to start businesses, revise the Michigan Business Tax and loosen regulation.

“I think the biggest thing is we have to start with recognizing that government doesn’t create jobs, individuals do,” he said.

State Rep. Dan Scripps, D-Leland, said the state must expand access to capital, but he said community college and university entrepreneurship courses and the spread of incubators have helped change the state’s business culture.

Whether rhetoric can be turned into action remains to be seen. But entrepreneurs aren’t waiting for Lansing — they have a history of going against normal convention, anyway.

“It’s the future of Michigan,” Root said.

“To keep people around and turn around the dismal state of our economy we really need to foster entrepreneurship.”

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