Can you open 10 new businesses in Detroit with just $50,000, some social media and great connections? Hatch founder Nick Gorga thinks so.
Last year attorney Gorga, a partner at Honigman Miller Schwartz and Cohn, and Ted Balowski, a senior account executive at CareTech Solutions in the suburb of Troy, launched Hatch Detroit, a contest whereby the public votes on the best storefront-retail idea for the city with the winning applicant receiving $50,000 to launch a store. The other nine semifinalists also receive considerable advice and support toward launching their own retail spots.
"We looked at the things that were out there being done by other fantastic organizations, and said, Where can we find a niche that isn't being served?" Gorga said.
"Neighborhoods tend to revitalize faster and better around cool and vibrant retail," Gorga said. "It's a huge factor in attracting and retaining younger residents."
Hatch last week announced the contest's second iteration, starting June 1, and a new sponsor, Comerica Bank.
Last year's list of 250 applicants got whittled down to a set of 10 semifinalists, and then the public voted in two rounds.
The winning applicant, Joe Posch, plans to set up his classic bachelor-pad-themed store Hugh in Midtown Detroit. Posch, who owned high-end furniture and home wares store Mezzanine several years ago and then launched Hugh twice as a pop-up operation, said he had planned to open the new store regardless of the competition's results. Next fall, Hugh will open in the Auburn, a mixed-use building now under construction at the intersection of Cass Avenue and Canfield Street.
"We wanted to be confident any business the public selected would have a good chance of being a viable business," he said. "Our goal was not to just hatch one business, but to hatch hopefully 10 businesses."
A goal of the contest is to help would-be entrepreneurs, Gorga said. "We leveraged our network of people within the city ... and now put Joe [Posch] in touch with all those folks who are helping him navigate the waters," he said. "It's not just giving them a check and sending them on their way."
"The guys at Hatch are kind of like the connector," Posch said. Through Hatch, he had the chance to consult retail designers, lawyers for intellectual property advice and an advertising agency about branding.
Several of last year's semifinalists are already on their way to launching brick-and-mortar shops. Detroit Institute of Bagels is renovating a building in Corktown. Anthology Coffee is running a pop-up cafe at the Museum of Contemporary Art Detroit and planning to launch a permanent spot at 2051 Rosa Parks Blvd., also in Corktown, by the year's end. Both retailers said they had tried to find space prior to the Hatch contest.
Collaboration between the retail shops planned by the various contestants was another hoped-for outcome of Hatch: Posch plans to source from floral shop Pot & Box, the brainchild of another semifinalist. Anthology and Woodbridge Gypsy Den & Tea Room (another semifinalist's shop) are sharing space at the contemporary art museum.
Ben Newman, cofounder of Detroit Institute of Bagels, said he envisioned using Anthology's coffee at his business. "It's a unique thing to the city of Detroit where people want to support people doing similar kinds of things."
Competition "still exists, but people are willing to set it aside to see other people also achieve their goals," Newman added. "Technically we're still competing with other people in the Corktown area but that hasn't stopped Astro from giving us solid advice," he said about a new coffee shop in that neighborhood.
While $50,000 in seed money is certainly enticing, Anthology Coffee's co-owner, Josh Longsdorf, said there are some drawbacks to a crowd-sourced competition. "The first Hatch seemed more about a popularity contest," he said.
Posch warned future contestants to have their brand, social networks and friends' support ready. "You have to be a politician; really, you have to ask for people's votes," he said.
Gorga divulged some of what Hatch is looking for in this year's applicants, whom he hopes will come from across the country.
"A big part is the idea, but a lot of it is the person behind the idea," Gorga said. "Small businesses succeed in large part because of the people who run them. It's a personal connection as part of a community."
"For that initial submission, it's got to be something that just catches our eye," Gorga said, "and shows us the public is going to love you."
For more information, visit Hatch website.