By guest authors Irina Patterson and Candice Arnold
I am talking to Ken Kousky, CEO of MidMichigan Innovation Center, which is a privately funded, nonprofit organization working to help entrepreneurs grow their businesses in central Michigan. MMIC operates a 112,000 square foot business incubator with significant support from The Dow Chemical Company. The center operates with minimal staff and uses resources from around the region to create collaborative partnerships for the benefit of its tenants, virtual members, and aspiring entrepreneurs.
Irina: Hi, Ken. Let’s start with a brief overview.
Ken: Our incubator is called the MidMichigan Innovation Center. We like to emphasize our role as a business innovation center and not just a business incubator. It’s a bit more expansive. I’m the CEO. The center was founded in 2005. It’s located in Midland, Michigan. It is a nonprofit, a 501(c)3.
Irina: Does your innovation center have any industry preferences?
Ken: The industry focus has been an organic result of our capabilities and the needs of the region. We are probably disproportionately focused on material science, partly because of the high concentration of material scientists and chemists with Dow Corning, Dow Chemical, and Hemlock Semiconductor being here.
We have a small cluster in alternative energies. Then the rest is quite diverse. We provide wet labs, light manufacturing, and office facilities combined in a single environment.
Our primary growth has been [through] outreach programs throughout Michigan to small-town, rural entrepreneurs, providing virtual services and business accelerator services for remote clients, not necessarily physical clients.
Irina: How many of your clients are technology entrepreneurs?
Ken: I would say that 80% of our companies have critical information systems technologies involved in their success. It’s sort of an 80/20 rule. I’d say 80% of them have it involved, but only 20% would be identified as a software product or business. It’s hard to do much in many fields without some level of integrated information technology in the business.
Irina: At what stage of development should companies apply for your program?
Ken: We’re finding, in Michigan, an unusual environment where a lot of mature organizations went through a devastating economic cycle that rippled out from the collapse of the domestic auto industry.
Tier A suppliers got hit, and this rippled back to the B and C tier suppliers. We had a much stronger recession throughout the state [than in other parts of the United States]. It started earlier, lasted longer, and was deeper. So, we have a large number of small companies that are reinventing themselves and rebuilding.
When we think of a company life cycle, we no longer think of just focusing on seed, early-stage startups. We have a healthy portion of our business that I would say is targeted at restarts today. Companies reinvent themselves and try to take some of their existing capabilities, but they identify new market opportunities.
Irina: What’s the ideal company for your center?
Ken: We’d love to have an MIT PhD scientist with unique technology that can be organized and scaled into large-volume production. We actually have one of those. We just wish we had more.
We look for the same features that any angel investing or seed capital investment group would look for, which are the strength of the technology, the market potential, and the strengths of the organization to fulfill the technology and market opportunity.
We believe we can provide support for any one of those three legs of the stool. We have a lot of retired scientists, probably one of the highest levels of applied scientists, chemical engineers, and PhD research scientists outside of a university community. That’s because of the long and deep research history that these corporations have had in the region.
Irina: How does your program work with angel funds?
Ken: That’s a great question, something that we think is very strategic, both for angel funds and for incubators or accelerators. MidMichigan Innovation Center played an instrumental role in aggregating a number of small groups that were looking to do minor levels of angel investing.
The incubator served as a catalyst to bring them together, build a stronger club, called BlueWater Angels, which is the most active angel club in Michigan and growing rapidly. It has one of the most expensive membership fees of any angel club in the nation, yet we’re seeing our membership grow.