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An Inspirational Entrepreneur

Kim's Key Lime CookiesI have dealt with dozens, if not hundreds of entrepreneurs, on five continents, during the course of my career. A disturbingly high number of them don’t really understand the basics of business, they have an idea for a product or service, or are maybe in a test stage, but there are some fundamentals not in place for growth.

Thankfully, those kind of people are why I was able to make a pretty fair living.

Rarely do I run into a founder/start-up who really “gets it” and has all the bases covered, but there’s a woman in Indianapolis that fits that profile – Kim Harvey.

When she set off for college, Kim knew she was going to be an entrepreneur, even if she hadn’t narrowed the selection of segments that she wanted to be a part of. After graduation, she set out to earn some money, did, socked it away, and used it to start her first venture.

Kim came from a long line of successful home cooks, including her grandmothers, mother, and aunts, so she was surrounded by cooking and baking of all ilks since she was a sprout – and made her first Key lime pie when she was 14. She loved the subtle and intricate flavor Key limes imparted to confections.

Moving to Chicago, she created Kim’s Key Lime Cookies, in two different varieties, powdered sugar dusted and dipped in white chocolate, located a commercial baker to work with, a company to design and manufacture custom cookie tins, and samples in hand, headed out to the Fancy Food Show in San Francisco.

She was placed in the “new products section” of the trade floor, scored early and big, with orders from Nordstroms, Macy’s and other outlets. Today the company is debt free and growing, with direct sales online, and retail outlets like Stein Mart, TJ Maxx, Home Goods, and Marshalls. Her immediate goal is to get major lux hotel chains and cruise ships to include them as in-room perks.

I have no doubt she’ll succeed.

While I usually give advice to start-up founders, to “focus, focus,” Kim had some slow periods with the cookies and was looking for a product to even out the peaks and valleys of sales, and particularly wanted something suitable for infomercial sales.

Wanting to fill a void in product availability, while staying in the cooking segment, Kim started experimenting with ways to cook burgers in a microwave, have them come out tasty, with great texture and browned.

She played with different materials found in the home, before hitting on a design that worked with the microwave, a tool that would hold four burger patties, cook them and not have spatter all over the inside of the microwave as a result.  The utensil also provided for fat drainage, resulting in a healthier burger.

When she thought she had the design down, she made some drawings, went to a cad company for the pics of the final specs, and then to a model building company for some prototypes.

Prototypes led to manufacturing molds, molds led to manufacturing, manufacturing led to a patent application (since granted) and the Microwave Magic line of cooking utensils was born.

The marketing push is on, the cookware is destined for the TV shopping channels and other distribution outlets.

Is Kim done creating and marketing products? Or course not. As she looks around the house, where others see problems, Kim sees solutions, and creates a product to fill the void. A new yard tool is next in the queue.

There’s so much venture capital available for tech (and apparently coffee shops and burger places), but it’s hard to find for consumer products. This is a small deal that could be a substantial venture some day with the right money guys behind it.

Kim’s “can do” attitude and tenacious manner of making it through all the steps to get products to market, without having the experience, is just amazing, and she’s a great role model for entrepreneurs everywhere.

 

 

 

 

 

 

 

 

 

 
Kims Key Lime Cookies

Categories: General Management, Private Equity, Uncategorized, Venture Capital | Tags: , | Leave a comment

So You Think You Need to Hire a Social Media “Expert?”

Hiring Social MediaIf you’re a small business, you’ve likely hired, or contemplated hiring people or firms from the realm of “social media experts,” SEO, and/or website builders.

You may not need the former, and you have to carefully screen the latter.

Most people that approach you claiming to be “social media experts,” probably aren’t. They’ll try and dazzle/confuse you with buzz words and key phrases that you’ve heard bandied about but may actually have no idea what they mean. “Analytic” “Click Bait” “Geotagging” “ROR” and so on. Guess what? The “expert” probably doesn’t understand them either. (Here’s a quick glossary).

It’s best to familiarize yourself with some of the terminology so you can at least ask informed questions.

With so many “non-experts” out there, I really question whether there is a need to have an outside social media consultant, or a full-time person on staff. Tools like Hootsuite and others have greatly simplified, automated the tasks, and there is no reason why you can’t have one or more of your regular, full-time employees take on the social media posting tasks. There will be a few rules to remember and install: 1) nearly everybody merits a reply, even the most unfavorable feedback – but not for the purpose of doing battle with them online. 2) stay away from politics and most social issues. 3) just as you wouldn’t do on “the street,” don’t bash competitors. 4) have ‘calls to action” and useful links, when appropriate. 5) humor is perfectly ok, as long as it’s not at someone elses expense. 6) brief introduction into your goals and taboos is necessary.

Website building, maintenance is a more complicated and time-intensive, and that is probably a task you want to outsource, but you’ll have to do your due diligence before hiring a firm.

Here are some questions to pose in the interview process:

  1. Show me examples of sites you’ve built, maintained. (And check with the owners for their satisfaction of the process and results). Don’t simply take whatever examples of “our work” that they post on their site as representative, remember, those are the ones they are ‘happy’ with. Also, note the AGE of the sites they are bragging about, and go to the URL and see if the site has been substantially changed, or there is a different agency taking credit for the site. (Usually a button at the bottom of the page).
  2. Can they help you select ancillary parts of the process, like plug-ins, hosting providers and so on. Many web firms offer to “host’ your site, but you’ll want to be at an independent provider, for your own security, and so the web firm can’t hold your site hostage or have a rogue employee conduct some malicious activity.
  3. Important. Ask, determine how much of their work is done in-house, and how much is outsourced. Outsourced to whom? Where? Will you have a dedicated account manager? The firm should have resources beyond their “sales person” that can effectively manage communications between you and the tech people.
  4. How is communication effected? In person? Phone? Email? Personally, I think impersonal, electronic, virtual communication can lead to a lot of errors.
  5. Costs? Calculations of costs? Included? Not included? Fixes? Redesigns?
  6. What happens, what are the steps, if the scope changes during the project? This can happen, and you need to know in advance what to expect from the firm in this instance.
  7. Sourcing, ownership, of materials used to build the site. Who owns the graphics, outside media? They will need to establish a path of ownership to you, the client. You don’t want the design firm to retain ownership to ANY parts of your site.
  8. Coders, builders, and different than “look and feel” (design) people. The firm needs to have both in-house.
  9. Flexibility. Part of your job mandate needs to be compatibility with the popular browsers, for both computers and mobile devices. The look and feel between computer and mobile sites should be VERY similar.

Take your time. Be diligent in your investigation. Don’t pay more than 25% up front. Approach it like a home remodeling project, with pay dates tied to accomplishments, with a hold back on the final remainder until everything is fixed.

Have outsiders (outside of your company) use different versions of the site, beta test, along the way, and give you feedback.

And if you’re the boss? USE your own website, from the perspective of a consumer, especially if you are selling anything, go through the process of buying and taking delivery. Absolutely.

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Why the Communication Break Between the Public and American Fast Food Companies?

restaurant-logosI admit, I’m not understanding the apparent disconnect between consumers and the major fast food companies.

Anecdotally, it would appear that the American public has become more interested in “healthier options” as well as knowledge of the source of their foods. One could surmise this not only from media reports, but also from the apparent success of food outlets catering to these types of interest, like the growth of Chipotle, premium burger restaurants, and the “made on demand” pizza segment.

Yet, the majors keep giving us options to eat more, larger, and “unhealthier” options. Total disclosure: Personally, I like the unhealthier options, but if you don’t, apparently like most Americans these days, you’re likely to pass on the latest offerings from fast food giants who should, it would seem, know better.

Pizza Hut’s 12” Meat Lovers Pan Pizza is 2400 calories, nearly half of them from fat. Each of the eight slices has 740 mg of sodium (RDA recommendation, a high of 2300 daily), and 27 carbs.

Hardee’s new ½ pound “Most American Thickburger” clocks in at nearly 1200 calories, 700 from fat, 3170 mg sodium (!!!!) and 71 carbs. Add medium fries for another 500 calories and 63 carbs.

The golden arches, going through struggles of their own, has told us in recent weeks they are adding weight to their quarter pounder. Their Bacon Club House Burger is 750 calories, 360 from fat, 1470 sodium, and 52 carbs. Tack on 350 calories for medium fries.

(These nutrition figures all came from the company’s own websites).

And we haven’t even taken soft drinks into account.

Let’s not forget the hot dog stuffed crust from Pizza Hut, or KFC testing a “pizza” in Asia that has fried chicken for a “crust.” Yikes.

Yet, the biggies haven’t gotten the memo from consumers, or discarded it without reading.

Over the past few years, the US has spawned so many ‘artisanal” food producers, and the purveyors of quick foods should be looking at quality suppliers like Creekstone Farms or Snake River Farms for beef, or Nueske’s or LaQuercia for processed pork.

There are dozens or hundreds of companies like these, in every segment you serve your customer, whether it’s protein or produce.

I would respectfully suggest that fast food execs take a few days out of the office and the in-house R&D labs, hop on their G5’s (even better, hop in the car stay off the interstates, and eat your way across the country) and go to some of these types of companies, eat a burger, or a slice of bacon.

Compare them against your own current offerings, and be prepared to have a light bulb or two go off in your head.

Categories: General Management, Marketing, Turnarounds, Uncategorized | Tags: | Leave a comment

Private Equity Could Use a Little Disruption

Lazy Cash Flow

I didn’t go to B school. I was far too eager to “get out and start doing it,” building businesses, doing deals. I don’t think I missed anything with that decision, and as I sometimes contemplated returning to school during my career, I’m pretty sure I would have ended up like Rodney Dangerfield in “Back to School” and been more of a hindrance than a help to those actually interested in listening to a professor who had spent his entire career in academia and never built a company. Oh well.

If you have read my posts here or on LinkedIn from time to time, you know I’m kind of unhappy with the private equity industry and what they are doing to some of America’s great companies through the process of overpaying and then trying to increase value in any manner they are able – which usually ends up being at the expense of the acquisition itself.

America’s companies have become the greatest in the world through brilliant ideas, product launches, innovative production techniques and, for the most part, taking care of their workers.

Private equity acquisitions have none of these ambitions or tenets. They operate by one principal, and one principal only, increasing the value of company for gain to pocket down the road. Once the target gain is realized, the company is dumped into the public market, or scooped up by another private equity group at an value even more stupid than the previous acquisition.

And how does the typical private equity deal increase value? The lazy ways: tossing another company into the mix and buying cash flow, slashing personnel, cutting back on products and R&D, or spinning real property to reduce the (implied) cost of the deal. Or knocking off having unlimited breadsticks.

Lazy.

Wouldn’t it be great if the role of private equity was to create value by building the companies themselves, instead of just tinkering with the P/L?

There was a quote (roughly) in a movie in the past few years which was “the industry of America has become moving money from one place to another and getting paid for the movement.”

That pretty much describes how I look at private equity.

I’d love to see a fund start or revise their mission to be “taking good companies and making them great” or some such.

Private equity (and venture capital) are always looking for concepts that are “disruptors.” Someone should look at disrupting both of those segments.

Wouldn’t be great if there were companies acquired by private equity (or VCs) that became some of the most admired companies in America? That other companies looked up to and thought “why can’t we be like that?”

It’s not so terribly hard to build a company like that. Rule 1: Take care of your employees the best you can. Rule 2: Follow rule 1 and there will not have to be any other rules, everything else will fall into line.

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Why Start-Ups Need Mentors

Should your start-up hire a mentor?I first “landed” in Silicon Valley in 1998, at the beginning of the first bubble. I use the word “landed” literally, as I had just completed nearly ten years of running media, information, and news companies overseas, across Europe, the Middle East, Africa, and Asia, including four years on Mainland China.

My colleagues, employees, and I had accomplished some really cool things during that time, including setting up a private, subscription news service with daily input from OPEC, and some of China’s first internet sites.

I moved to California as I thought my “global experience” might be of benefit to companies that were part of the WORLD wide web. A slight misjudgment, perhaps, timing-wise.

Nevertheless, I was successful in gaining assignments, hired by investors and Vcs to help along start-ups – led primarily by people in their early 20s who had just been handed checks for millions of dollars and were a little unsteady as to “what comes next.”

I was largely overpaid and underutilized.

Since the great majority of these young entrepreneurs didn’t know what the “next step” was, unfortunately they often didn’t know what the ‘first step” was. So I’d get tasked with important decisions like “you know those big phone thingies that are supposed to be in the lobby and you can direct calls around the office? Where do you get those?”

Check. And I look like a genius.

Ostensibly, the venture firms should have been able to advise their new clients, but most of the principals of Vcs hadn’t run companies, either. It was easier to hire someone like me, and when you hire an outsider, of course, you also have someone to blame when the proverbial shit hits the fan.

As the lead at a start-up, you need to surround yourself with people smarter than you, people that you can rely on for candor and advice. These should not be close friends or family members.

I’m also not terribly enthused about many “consultant/mentors” you might meet at local networking events; most likely, they are really looking for a job.

I’m a big advocate of calling on experts through SCORE, part of the US Small Business Administration. SCORE stands for “Service Corps of Retired Executives.” Through SCOREs hundreds of chapters across the US, you can access the gray matter of thousands upon thousands of volunteer mentors, many with amazing past career successes.

SCORE also offers free workshops, on and off-line as well as free access to business tools. Find the closest SCORE chapter with this tool.

By working with a SCORE volunteer, you can available yourself of a pool comprised of literally thousands of years of cumulative experience.

Finding a volunteer mentor who is hyper local can also tremendously boost your networking ability when contemplating new rounds of financing or strategic opportunities.

Your potential clients and customers can be a good source of advice, as well, but don’t over think it.

In other words, when choosing a mentor, just as when you hire, find the smartest people you are able, ask a zillion questions, and most importantly, listen.

Categories: General Management, Interim Services, Uncategorized, Venture Capital | Leave a comment

Making a Case for Incubators

How to Make Incubators and Accelerators Work

There have been some articles lately on the proliferation of incubators/startupaccelerators and debates on whether or not they provide a worthwhile service, or in fact, actually help to launch companies.

I can say unequivocally yes, they can be a valuable part of the start-up landscape if set up and managed correctly.

I say that with the caveat that you’re starting an incubator to actually assist promising start-ups, and not just to be in the property rental business, as so many incubators are.

Check your motives for entering the space prior to launch; a few years ago, I was hired by a law firm to create an incubator. In the early days of the discussions, they asked me if I had seen a law firm enter the space before, and my reply was “twice, once moderately successfully, the other a spectacular disaster.” They wanted to know what differentiated the two, and the answer was black and white: the successful law firm had long term goals in mind, and were willing to furnish professional services and invest cash into the enterprises; the failure was the type of the incubator that was more in the landlord business, with the hopes that someday the firm would get some billable hours out of the start-ups, as well.

Our venture fell into the spectacular failure category. The firm’s ulterior motive was to grab as much equity as possible in exchange for their ‘contribution’ of professional services and office space, run up actual billable hours whenever they sensed they could get away with it, and not put a nickle into any of the ventures. They buried the young, often naive, entrepreneurs with reams of legal mumbo jumbo paperwork.

How to practically guarantee success with an incubator or accelerator? Here are some tips:

  • Be as selfless as possible about why you are getting into the space, your primary motivation should be the joy of seeing budding young enterprises succeed, not with the expectation or hope that you have the next billion dollar valuation start-up under your roof.
  • Create an environment around a category you know, and know well. Too many investors look solely at tech, because the segment gets most of the publicity about rapid rises in values. But as the internet changes the way we, as a society, do nearly EVERYTHING, there are opportunities in nearly every industry segment for start-ups and disruptors.
  • There are real opportunities for major companies to create start-ups that are focused on solving problems the sponsoring company might encounter in the future, or to design new products or processes. Coca-Cola is leading the charge in the space, but many, many companies should be looking at incubators as a way to grow new revenue segments in-house.
  • Know that bringing a start-up into an office and telling them to “have at it” is simply not going to work. Have a group of mentors at the ready that can make real contributions to the future of the start-ups. Don’t have experts in-house? Tap into a gaggle of experienced executives as SCORE, a division of the SBA. There’s about a million years of expertise sitting in SCORE offices, yours free for the asking.
  • There is a big need for incubators/accelerators focused on FMCG start-ups, and pent-up demand.
  • Consider going into a space that nobody else is in.
  • Avoid companies that will end up with only asset on the balance sheet will be “trade name and good will.” Work with companies that MAKE something, or provide a tangible service.
  • Have both your senior and junior staff aware of the projects, tenants, and your company motivation for entering the space. Assign mentors from your execs.
  • Hire someone full-time to oversee the process, space, and intake to enable you to keep spending your time where you are needed – in your core business.
  • If you take equity as part of your deal, play nice.

So yes, incubators and accelerators can provide a valuable environment for start-ups, if they are able to stay focused on the motivation for entering the space and the big picture, rather than short-term bumps.

Categories: General Management, Startups, Uncategorized, Venture Capital | Tags: , , | Leave a comment

More on McDonald’s Ills

While he was talking to Wall Street, he should have been talking to “Main Street” and the former definitely noticed the absence of the latter, as McD’s shares took a slight tumble after the announcements.

Easterbrook’s idea on how to get the “company” back on track is to sell of a whole lot of corporate stores to franchisees (3,500), and undertake a corporate “restructuring” with personnel.

In other words, the plan is to boost revenue with the store sales, and boost profit by letting people go.

No idea on how this will get more people into the restaurants, increase sales, and set the chain back onto a growth pattern, and apparently Easterbrook doesn’t have any ideas on this subject either, since he’s taking the lazy way to a solution designed to do only one thing: improve the stock price. According to Time Magazine... Easterbrook said the benefit of more franchise-owned restaurants was that it provides McDonald’s with a more stable and predictable cash flow all while shifting accountability to local businesses. In all, the executive said this would save McDonald’s $300 million a year.”

When I wrote about McDonald’s ills a couple months ago here and  on LinkedIn, over 20,000 people read that post, and I found the comments very interesting. The one that tickled my imagination the most as a comment that suggested McD’s doesn’t really care about the food, that they buy the land, build the stores, and lease them to the franchisees, effectively making them a real estate company, not a restaurant biz.

I have no idea if there is any semblance of truth to that assertion, but by largely getting out of the restaurant operation business, don’t they become a company mostly in the business of holding intellectual property and receiving fees from others that are utilizing the IP?  (Kinda funny, eh?  Like the  world’s largest rooms company (AirBnB) doesn’t own any rooms, and the world’s largest taxi company (Uber) owns no cars, and the world’s largest content company (Facebook) creates none of its own)…..McDonalds will be the world’s largest restaurant company that doesn’t sell any food!

Here’s the dope, Steve:

  • Create great food, at a good value, and people will return….over and over again.
  • Don’t try and be something to everybody. You can’t.
  • Don’t SELL stores. BUY outlets back from franchisees. Demonstrate that the company itself has faith in its brand and believes it will succeed in the future.

Talking to Wall Street and trying to boost share prices instead of trying to woo customers back with announcements of product improvements is a good demonstration of what’s wrong with a lot of American business these days.

 

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Is Your HR Department Your New Storefront?

Some years ago, people talked about the importance of having a great website – that for many companies it was the equivalent of a brick and mortar storefront. The site was what the public saw first, created the initial impression of the company and encouraged (or discouraged) people from doing business with the concern.

I believe a new type of “storefront” has come into existence, and it’s your HR department, and how they deal with pools of applicants.

Especially for senior level positions, your HR department is like a “magic window” allowing applicants to peer inside their future prospective employer, understand how information and processes flow, how decisions are made, and what priority the company places on the position and applicants.

Questions for applicants to ponder: Is your first encounter with the company via an entry level position screener? Does the interviewer fully understand and communicate what the duties of the position are? Can the interviewer successfully communicate the chain of command for the position? Does the screen understand how your experience lends itself to the position requirements? Despite your experience and credentials, are you required to take some basic skills quiz online? Or create a “video pitch?” Does it take an extremely long time for the process?

To me, these are some red flags, and you might exercise caution in going further with the opportunity. You’re getting a rare advance glimpse into the inner workings of your prospective employer.

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The Joys of Working Overseas

Peter Stromquist

Cape Town, RSA

I’ve been fairly lucky to have had a long, internationally-facing career, having resided in London, Paris, Hong Kong, Guangzhou, and Beijing, and having touched down on business in sixty countries. I’m sure I learned more than I “taught,” and that’s perfectly OK with me.

My assignment with the largest and most challenging responsibilities included being responsible for hundreds of full and part time employees, stretched across two and one half continents, conducting business in dozens of languages with just as many cultural nuances.

The first company I worked for (US ownership initially) had operated internationally for 80 years or so, and had a certain comfort level in doing so. Acquired by a Middle Eastern investor during my tenure provided an even greater ease of dealing with many different cultures during the business day. At our London headquarters, we probably had colleagues from two dozen different cultures, and, with their assistance, dealing with the many different cultural aspects of the job in the field, provided me with support and understanding when/if difficulties arose in the territory.

My second international employer, a US company, was dipping their toes in the water for the first time, and thus they decided a joint venture with a local company might present less risk. They named me CEO of the venture. One would think that having a local partner might be an advantage to understanding the way business is conducted in a country, but that’s only true if one chooses to listen and take the advice of the partner. Unfortunately, my US employer believed they were impressive enough on their own, and my basic mandate was to do it “our way or the highway,” and if they would have told me that during the interview process, I probably would have passed on the position. They saw no reason why we couldn’t sell their off-the-shelf, designed for the American public, products and services to anyone, anywhere. (If they were successful in the US, why wouldn’t they be in China, Turkey, or South Africa)? They also figured if they were in the office in New York, we should be in the office at the same time, even twelve time zones away. I quickly came to dread the phone ringing in the middle of the night.

After that, it was on to a French multinational, a division of a very large industrialist who had been doing business all over the globe, in many different business segments, for years. They were the easiest. They completely understood localization, as well as the time/investment it would take to open a new territory. The board of directors could be impatient for profit from time to time, but the business head I reported to in Paris was really great at running interference when needed.

In addition to having so many opportunities to explore other cultures and their ways of doing business, I think being an expat for a long period of time made me a more tolerant and patient leader (and person) when I returned to the U.S.

One thing I was not prepared for upon my re-entry was a bit of difficulty in the reverse transition; when you live and work in emerging economies, the one thing you might miss is “choice,” and when you get back to the US, you are overwhelmed with choices, in every aspect of your life. It can be a little heady at times.

At some point during my career, we really did become “one world,” and if you’re just starting out, it’s pretty much essential that an international stint be part of your early career. Even if the initial position is beneath your level of education or experience, in the long run, the time spent abroad will be a huge asset on your resume.

And learn a language or two. Arabic or Mandarin would be good choices.

If you think you’ll get lonely or feel disconnected, rest assured, there will be lots of other expats in most locals that you can reconnoiter with, as well as US government employees. Embassies and consulates have some pretty great parties, especially around American holidays and events.

“Go west young man.” Or East, South, or North. Just go.

 

 

 

 

 

 

 

Peter Stromquist

Categories: Interim Services, Media Industry, Startups, Uncategorized | Leave a comment

The Mother of All Business Incubators/Accelerators

harvard2I’ve been involved in a lot of start-ups. No grand slams, but a few solid base hits and some spectacular strike-outs. My ex wife called me a “risk junkie,’ – I never agreed with that assessment, but I do enjoy the passion and energy of working with founders and employees of new ventures.

I’ve also been an adviser to a couple of incubator/accelerators. One achieving moderate success, the other a catastrophe, but a disaster that was predictable from day one.

Two years ago, I talked to the guys planning BlueSeed, which was a concept of a cruise ship as incubator, parked in the ocean off Silicon Valley. Being beyond the maritime limit of the US would have allowed BlueSeed to attract entrepreneurs from all over the globe that could come to “the U.S.” without visas.

BlueSeed had hoped to have as many as 1000 start-ups on board, along with support services and a group of mentors; they would charge nominal rent for the start-ups space and living quarters.

It sure captured my imagination; the imagination of big investors? Not so much.

I love the concept of “start-up cities,” and they have been launched and successful for specific business segments around the globe, i.e. Dubai Media City.

Illinois has an empty facility that would be an ideal location for a start-up city. It’s large enough that it could not only house the offices and manufacturing / distribution space for growth companies, but also house, feed, and educate the entrepreneurs and employees.

It’s large enough so that it would not have to be pigeonholed into a niche category, but could have separate ‘wings’ or floors for different disciplines, such as medical, the ‘internet of things,’ consumer products and so on.

Depending on the configuration of the property, square footage could be divided into work/live spaces, or housing could be in one area, offices in another.

Rents, such as envisioned by BlueSeed, could be charged not only for companies and residents, but also on a bid basis for support services: companies could vie to provide services like dining halls/outlets, laundry, a university, medical clinics, salons, law and accounting offices, and retail. Common areas would encourage collaboration and spawn joint ventures.

The facility should not consider itself in the landlord business however, that is the downside of many incubators; instead rents for start-ups should be very nominal, while the rents from support companies and services could be much higher.

The space was built in the late 1990s, at a (replacement) cost of $250,000,000, and has been empty for several years. It is located in McHenry County, a hour by (frequent) commuter train from downtown Chicago, and less than an hour from O’Hare International and forty minutes from Chicago-Rockford International airports.

Residents seeking leisure activities “off campus” do not necessarily have to travel to Chicago, as the area is surrounded by the northwest suburban communities of the Chicago area, which offer virtually every type of retail, service, and dining establishment desired.

The facility is presently called the Midwest Corporate Campus, and is comprised of 1.5 million square feet, on over 300 acres, with 6,000 surface parking spots. The climate and geography lends itself to an ideal server farm location.

The property is current;y divided up into these sections:

  • 400,000 square feet of office space

  • 165,000 square feet of core services

  • 619,000 square feet of manufacturing space

  • 355,000 square feet of distribution

It would take some wheelbarrows full of money to launch this, and unfortunately, most state, county and local economic development authorities don’t have access to those amounts of resources in the current climate.

But a substantial venture fund or multinational, particularly from the UAE, India or China would be a good candidate.

Illinois, and McHenry County should take a hard look at this concept, and establish Northern Illinois as the incubator/accelerator center of North America.

These are my thoughts, what are yours?

Aerial View of Site

Aerial View of Site

Categories: General Management, Interim Services, Startups, Turnarounds, Uncategorized, Venture Capital | Tags: , , | Leave a comment