Orbiting Around the Local Economy In Kalamazoo

Why is food important to the local economy? Sitting in front of an audience for a Startup Grind Kalamazoo Fireside Chat on MayStartup Grind Kalamazoo 28, 2015, Erika Block, Founder of Local Orbit, stated that food is really about people, culture, and local community. During what began as a theatre project, Erika found patterns when listening to stories about the paths people were making. Erika’s ability to listen and realize patterns in a manner that connected people eventually made her decide in 2007 that the “theatre project” was greater than a project.

Everyone Erika met was trying to get more local products. People were telling her they wanted authentic food from sources they knew and trusted. Erika saw this as the beginning of a trend with a big impact for the economic development of local areas.  As a result, she founded Local Orbit.  The “theatre person” was now an entrepreneur.

How does a founder with a background in theatre run a tech company? Erika stated that software developers are similar to theatre people. The difference with a software company is the industry (i.e. different customers to sell to, different suppliers to negotiate with, different competitors to play with). The rest of the experience is the same. What Erika developed was a software company with an underlying infrastructure that helps groups of people work together. What other industries had created within management information systems did not exist for the local food economy (i.e. the local food economy was behind in technology development and usage).

Erika also has business skills from running a nonprofit organization she co-founded and she comes from a family of entrepreneurs. Since Erika knows what it is like to have a cofounder, she also understands the difference with not having one, as is the case for Local Orbit. “In the end, it’s me,” Erika said.

The newness of the idea of local food was such that it was difficult to convince investors that it existed. In 2004/05, when Local Orbit was still a project, only a handful were thinking about local food. As Erika kept talking to people, she finally met an interested angel investor. The investor had read the book “The Omnivore’s Dilemma,” by Michael Pollan. Reading the book changed the angel investor’s perspective about the food industry. The particular investor is who connected Erika to Start Garden (a venture fund in Grand Rapids) and the beginning of funding for Local Orbit.

After spending several years developing a solution for the local food economy, Erika has discovered a more generic problem which Local Orbit can address.  Working with many small vendors can be tedious and companies don’t have a good “local vendor management system”.  This has led to the LocalEyes product being developed, and providing another avenue for creating a financially sustainable business.  This is one of the beauties of starting a business.  By opening one door (opportunity), other doors (opportunities) become visible (Knowledge Corridor Principle, Ronstadt 1988).

Startup Grind KalamazooWhen talking about hardships she has faced, Erika discussed what she has been working on during the past year.  The backend payment system company Local Orbit selected went out of business.  Erika had to make the decision of what to do next, as the company’s revenue model was predicated on transactions, and without a backend payment system, no transactions could take place.  Erika had to make the difficult decision of allocating money to retooling an existing system rather than building new features for customers. To create the payment processing system, Erika utilized extra money that was raised. . The decision has proven to be fruitful so far.

In conclusion, as the patterns Erika first noticed continue to develop around the local food economy, it becomes more than what happens in our homes and restaurants. Events like Startup Grind are also about people, culture, and the local community. Local food, then, is always good to provide at Startup Grind events. :-)

Erika’s nuggets of advice for entrepreneurs included:

  • Trust yourself – know your north star, because there will be many days you wonder “Why am I here?” Every entrepreneur struggles.

  • Although Erika is not a sales person she is always selling and states that It is not a bad thing. According to Erika, the key to selling ultimately comes down to storytelling and being yourself.

  • The biggest learning is that Erika knows she can get through a bad day because she has done it before (either in Local Orbit, or as a theatre person).

Other topics Erika discussed:

  • The phases of Local Orbit

  • More details of research

  • The financial impact the new food economy has on local areas

  • Investor and board relationships and knowing when to walk away

  • Rethinking metrics

  • Challenges of a new company and the “startup grind”

  • The importance of training

  • Network theory

If you would like to view more about the event, you can visit Erika’s Startup Grind interview page here to watch and listen to the video of the interview. Thanks!