Compared to the southeastern Michigan and the Grand Rapids area, our corner of Michigan takes a decidedly low-key approach to business. From the thriving wineries of the Leelanau and Old Mission peninsulas to the restaurants and shops in Petoskey, Harbor Springs, and Traverse City, many local businesses have roots in the tourism and leisure industries. Others provide the basic services and logistical support necessary to keep our communities running smoothly.
On closer inspection, the picture is much more exciting. From the Mackinac Bridge to Sleeping Bear Dunes, local entrepreneurs are slowly but surely lining up the building blocks of an economic transformation, and communities across Northwest Michigan–and beyond–stand to benefit. Let’s take a look at three local businesses to keep your eye on.
LeaseMaid: First Harbor Springs, Then the World
Up in Harbor Springs, a hot new startup incubator called Coolhouse Labs isn’t even done with its second season. Coolhouse solicits applications from entrepreneurs and early-stage startups for its intensive summer incubator program. In exchange for 6% equity, it gives each participant $25,000 in seed money and provides 12 weeks of free housing, a dedicated workspace in its facility, and access to several dozen tech industry thought leaders. Last summer, Coolhouse graduated five promising startups from around the country; this summer, it has another ambitious group.
One of the standouts is LeaseMaid, a real estate startup with roots in the Chicago area. As a young gun in the competitive real estate brokerage business there, founder Nate Kroll grew increasingly frustrated with the time-consuming apartment rental process. He came up with the idea for an app that relieves landlords of many tedious duties, including receiving rental applications, running background checks, preparing disclosures and lease agreements, collecting deposits, and billing established tenants.
The decision to partner with Coolhouse was “a no-brainer,” says Kroll. “My family has a small cabin in the northwoods of Wisconsin where I spent summers growing up–You mean you’re going to give me $25,000 to work on my dream and we get to spend the summer up in the northwoods? Done.”
Most Coolhouse startups pack up and leave town at the end of the summer, but not LeaseMaid. Kroll’s “up north” roots have endeared him to Harbor Springs, and he doesn’t plan on moving anytime soon. He’ll be renting a house in town this fall, then ramping up recruitment and adding to his six-person team next spring and summer. LeaseMaid has already made waves in the Chicago market, and “we have letters of intent signed from managers in Michigan, Indiana, and New York,” he says. To keep up LeaseMaid’s momentum, Kroll needs to add several web developers and business development specialists in 2015.
What makes him so sure LeaseMaid will take off? Unlike its direct competitors, Kroll’s app is completely free for landlords. LeaseMaid earns its revenue from the application and credit card processing fees that property management companies already charge current and prospective tenants. And the company works with everyone from independent landlords who rent out mother-in-law suites to management companies with thousand-unit apartment buildings in major cities.
For the immediate future, Kroll plans to build LeaseMaid’s account network–and “providing a solution to the paper problem,” as he puts it–from his base in Harbor Springs. But as the company grows, he’s open to forming partnerships that broaden its portfolio of services, creating new streams of revenue–and possibly creating even more jobs right here in Northwest Michigan. He cites a just-inked partnership with State Farm, through which LeaseMaid will offer renters’ insurance, and hopes to “partner with many other great companies down the road.”
Ozmott: Succeeding Where Others Failed
Just down the Lake Michigan shore, near the heart of Traverse City, another tech startup aims to make waves in the ever-fluid social deals space. Ozmott, the brainchild of T.C. native Joseph Walker, aims to succeed where Groupon and Living Social can fall short, and incentivize shoppers to spend more money with the company’s retail partners.
Walker founded the company in 2012, developed a proprietary app, and went live just last year. The eight-person company now has about 10,000 retail partners from coast to coast. It’s “just about to move into phase two,” says Walker, launching a nationwide marketing campaign that will lean heavily on endorsements from “influencers” and social media shares from early-adopting consumers.
Walker says the inspiration for Ozmott came from two distinct experiences. The first was his hard-won ascension (on Foursquare) to the mayoralty of his favorite coffee shop. Though proud of his accomplishment, he was miffed by the fact that he didn’t get anything tangible for it. So he hatched an idea for a location-based app that rewarded consumers for patronizing participating businesses.
Soon thereafter, following an epic binge-playing session, he beat Fallout 3, accumulating thousands of points in the process. But like the mayoralty of the coffee shop, these points didn’t actually mean anything. In a flash of brilliance, Walker decided to combine his idea for patron rewards with loyalty points that confer merchandise and service discounts on frequent shoppers–and those who share offers with their friends.
“We want to strike a balance between what’s useful for shoppers and what’s useful for merchants,” says Walker, noting that Groupon, Living Social and other “daily deal” models ask merchants for too much without offering any guarantee that participating shoppers will remain loyal. In fact, many shoppers “hop” between such deals without forming lasting relationships with retail partners. Ozmott works “within the traditional retail model,” says Walker, creating incentives for shoppers who regularly redeem its offers. It’s a win-win: Shoppers get more for less, and mechants get more overall.
Ozmott is already available in every region of the country, though Michigan and neighboring states have the highest concentration of participating retailers. The app is particularly popular with hardware stores, sporting goods shops, and other merchants with large, dynamic inventories of physical goods. Soon, Ozmott plans on leveraging Apple’s iBeacon technology, a sort of indoor GPS that’s currently in beta testing, to offer opportunistic in-store deals. Walker wants to use iBeacon to create seamless shopping experiences: Users walk into a store, get a deal alert on their phone, find the product on the shelf, pay with a stored credit card, and walk out–all without visiting a checkout station.
But Walker isn’t content with transforming the retail business. Long-term, he’d like Traverse City to become the Northland’s premier tech hub; “a mini Palo Alto,” without the snobbery, he says. The area is blessed with world-class beauty, recreational resources, great quality of life and low living costs. All it needs is a “kernel”–a company, or cluster of companies, like Ozmott–to attract tech talent. Walker cites Zappo founder Tony Hsieh’s success in transforming North Las Vegas, a downtrodden suburb of Sin City, into one of the country’s top destinations for ambitious young techies. (“The city looks like Wired Magazine designed it,” he says.)
Brewery Ferment: Small and Loving It
Residents of an increasingly vibrant Traverse City are sure to crave new sensory experiences, and Brewery Ferment wants to provide them. Co-owners Carly Anderson, Kirsten Jones and brother Dustin Jones–the brewery’s “head of fermentology”–lived in Chicago before relocating to Traverse City, seduced by its stunning landscapes and easy pace of life.
“The craft beer scene in Traverse City hadn’t grown to what is is today when we decided to open,” says Kirsten Jones, “but the great community and natural beauty made the decision easy.” It helped that the Joneses spent their childhood in the area–in a way, Brewery Ferment’s opening was something of a homecoming for them.
Brewery Ferment takes a different tack than many other Northern Michigan breweries, offering small-batch brews with a heavy influence on unusual flavors and local ingredients. For instance, Lil Nug IPA is a session beer with all-local Nugget hops, Cat’s Meyarrow is a honey ale with local catnip, and Medical Grade Mitten Wit is a potent, little-seen Imperial Belgian made with sour yeast.
The three operate out of a small brewery and taproom space in Old Town Traverse City. The location doesn’t have much expansion potential, and the one-barrel system allows Dustin to focus on experimental beers that might get lost in the shuffle at larger breweries. But future expansion plans are on the table, especially if Brewery Ferment is able to secure a lease on another property in town. But the current taproom is definitely the heart of the operation.
“We’ve discussed upgrading our brewing system or utilizing an off-site brewing facility to increase production, while maintaining our flagship location and taproom,” says Kirsten. There aren’t any concrete plans, though, and maintaining the quality of the product is paramount. Anderson and the Joneses still do the bulk of the work onsite, although they have a taproom employee who helps out during open hours.
And thanks to recent changes to Michigan’s alcohol distribution laws, the three owners have plans to implement a self-distribution operation, potentially reaching drinkers in outlying areas of Grand Traverse and Leelanau counties. “[The law] will be beneficial for festivals, beer pairing events and speciality beers being served at certain locations,” says Kirsten.
For now, Brewery Ferment is excited to be part of a close-knit brewing community that looks out for its own. It’s just one more thing that makes our neck of the woods special–and polishes its reputation as a lifestyle destination. “[We view ourselves as] bringing Traverse City more recognition for being a great beer destination town….each brewery has their own niche, their own vibe, and it’s great to have customers experience different types of breweries all in one area,” says Kirsten. “We view the other brewers as comrades rather than competitors.”
Brian Martucci writes about business, finance, food, drink and anything else that catches his fancy. You can find him on Twitter @Brian_Martucci