Do you ever fantasize about owning a ________ shop in Detroit proper? Getting tired of running a company out of your mom’s basement? Ever feel like kicking down your cubicle and telling your slippery earls-wearing boss to go find another sucker? Have you, too, been bitten by the Detroit revival bug? Well, if any of these describe you, Hatch Detroit is worth getting to know.
In an eggshell, it’s a newly founded non-profit organization (501(c)(3) papers pending) aimed at launching retail businesses in the Motor City. Complete with a dozen-person advisory board of “people doing cool things in the city” and $50,000 to offer the first lucky entrepreneur-to-be, the web-based contest will open itself to several business plans and, finally, a winner will be chosen through social media sites like Facebook and Twitter. I caught up with one of Hatch Detroit’s co-founders, Nick Gorga, to find out more about the interesting concept. I mean, there’s got to be a catch to Hatch right? Wrong! Read on …
How did Hatch Detroit spawn?
Nick Gorga: Well, my partner (Ted Balowski) was talking about an idea to help entrepreneurs. Basically they would get together in front of a panel of established business people and present their business plan and everybody would give you constructive feedback. I said, ‘That sounds great, but there are so many groups that are sitting around here talking about stuff … well, I think the ones that actually make things happen just go out and do it.’ What do you need to actually do a business around here? You need money and you need connections. We met for a drink one day at 5 p.m. to talk about it and we ended up sitting there for seven hours. And we came up with this. Trying to make it very, very public with the idea that we’d fund the one person but we would, hopefully, help launch a dozen or more businesses because we have the stories of the 15 “runners-up” plastered all over our website and social media sites. Hopefully, someone else will say, ‘this is an idea worth funding so we’ll fund those as well.’ So, we’ll hatch a dozen businesses out of this.
So a bunch of hatches, then?
Yeah. We want the traffic that this business will hopefully generate because of the publicity, to help the other businesses around it. We want to bring people there. If we have people inside making sales calls, that doesn’t bring a single body down there.
Speaking of which, in the Crain’s article you mentioned something about a graphic design company not being welcome. I think I know what you were getting at but there’s a lot of variety in what can be done for the type of businesses to “hatch.” Who is this contest aimed at?
It’s funny. If anything was taken out of context in that article, I feel bad. I wasn’t trying to dis web designers. The only criteria we have is that the store has to be something like, someone walks in and gives money and gets something in return. Whether they’re buying a cappuccino, yoga lessons or a painting. There has to be some element of retail, we don’t really care what it is. Someone has to walk in and buy something. What we’re not going to do is have an office somewhere where there are five people sitting around making sales calls. In exponential terms, we want to fund one business but we want to use the process to fund lots of businesses. We want to revitalize one particular storefront or street, but we want to use the buzz to revitalize a lot of stores in that area. It can be anywhere in Detroit. In your initial submission you have to tell us which neighborhood it will be in and why. You have to do your homework.
Do you have to live here to compete?
You probably have tons of friends that you grew up with that have moved to Chicago or San Francisco or New York. They’d love to come back here if they could but they don’t feel secure coming back here because they can’t get a job … I’ve talked to 2 or 3 displaced Michiganders looking for a way to come home that are going to put in their business plan. To bring a talented, smart person from back San Francisco to open a shop here, I think it’d be amazing. It’s not limited to people just in the neighborhood here. I got a question on Facebook, “What if I own a business in another city?” I said yes. I’m not going to give money to Kroger or McDonald’s but if you have a cool retail idea that’s been successful in another city and it will be successful here, cool. Throw it in.
So no Buffalo Wild Wings in Detroit?
No, we’re not going to fund a Buffalo Wild Wings here (laughs)! It’s about launching a new business.
There’s a large emphasis on the public and social media here, “crowd entrepreneurship.”
Anybody who votes is going to feel committed to coming down. Originally, in terms of the funding, we were going to do it just by making several targeted phone calls. But, instead, we’re going to do public donations. We want people to feel like they can kick in 2 bucks or 5 bucks. We want everyone to feel like they have some sort of stake in this because that’s what it is. It’s a crowd mentality.
What about those who are nervous to give up an idea publicly?
I think that’s fair. The two-month process itself will be completely confidential but if you make the final 16, part of the bargain is you’re going to be out there. There are the pros of being out there because you’ll have an unprecedented forum for potential investors to see your idea in action. That’s going to be a performance and you’re going to have to deliver. The con is if you’re not prepared to share your idea and go for it out there, it’s not going to work.
So someone wins the fifty grand and that’s it? A sink or swim sort of deal?
It’s the exact opposite. One of the things we’re going to be soliciting actively throughout the entire process is people in businesses willing to donate any kind of services to ensure the person will survive and thrive for their first year. If your law firm will provide free legal services, sign up. If you can do free landscaping or dry wall, cool. You want to donate free artwork, interior design consulting … commit to packages so when they open they don’t have to worry about some of these things during the first 6 months in business. We’ll give you the $50,000 but on top of that we’re going to have a crowd of people that will wrap their arms around the business and say, ‘we’re going to make sure you make it.’ We don’t want to do this as a one-time contest. We want this to be an ongoing, viable non-profit that continues to do cool things for businesses for many, many years.