The acceleration of the digital era for manufacturing has brought together an ambitious collection of about two dozen major employers in southwestern Michigan in a group they’ve called the Seamless Consortium.
Including appliance titan Whirlpool, giant auto supplier Gentex, consumer-products leader Amway, business-furniture company Haworth, and vacuum-cleaner maker Bissell, the consortium is financing “proof of concept” engagement with startups around the world related to manufacturing technologies such as sensors – both nurturing the entrepreneurs and drawing benefits back to the companies’ headquarters and operations in the Grand Rapids area.
One of the group’s big advantages is that its members know how to put to use on the factory floor the advances from the technologies and companies they’re nurturing. Among other things, the Seamless Consortium is demonstrating the importance for states and cities nationwide to embrace legacy industries as an effective path of least resistance for regional digital transformation.
“The West Coast is getting excited about the Internet of Things, connecting widgets to the internet,” Mike Morin, co-director of the consortium, told Chief Executive. “But it’s easier for physical companies to integrate this stuff than for digital people to integrate all the capital in the physical world. That’s why you’re seeing this happen here.”
The group “was created in part to make startups and corporate engagement more effective, and the particular approach we took of bringing different industries together is aided by the fact that we have all these industries here,” Matt Benson, also a consortium co-director, told Chief Executive.
“Every one of these [member companies] that has been physical is now trying to figure out digital manifestations, because the world everyone wants to live in is that converged world,” Morin said. “All these companies are looking at the same kinds of technologies to do that: sensors, machine learning, smart materials.
“The fundamental problems are business-model problems. What does a technology mean to a business model? We’re very well equipped in this area to take advantage of that. The technologies can be different, but the notions of embedded technologies are well known here.”
Coastal experts are legitimating what the Seamless Consortium has accomplished in just the six years from its founding as an offshoot of Start Garden, a Grand Rapids incubator that involved principals including Rick DeVos, a scion of the co-founding family of Amway.
The group’s “philosophy of ‘stronger together,’ regularly perceived as naïve in the hyper-competitive innovation hubs of Silicon Valley and Boston, is integral to the societal and corporate fabric of America’s heartland as evidenced by” the Seamless Consortium, wrote Chintan Vaishnav and Nevan Hanumara, researchers from the Massachusetts Institute of Technology, in the Grand Rapids Business Journal recently.
“The organization has fostered an innovation ecosystem that brings together multinationals and startups to leverage each other’s strengths, while contributing to prosperity and a culture of inclusion in the region.”
The consortium is “very unusual,” Hanumara, a medical-device design expert in MIT’s mechanical-engineering department, told Chief Executive. “Lots of corporations launch ventures and startup initiatives, but never as a group … Most companies are very scared of sharing information with other companies. But in this smaller region is a network of people who know and trust each other, and that seems to be rooted in a Midwest mentality.”
Besides a cooperative spirit that allows a slot in the Seamless Consortium for a single participant in a number of verticals, Benson said “design thinking” and the area’s industrial-design legacy are huge factors in the budding success of the group. This history is evident in everything from chair designs by the area’s office-furniture companies to the layout of buttons on a Whirlpool dishwasher to the silhouette of a bottle of Amway Artistry perfume.
“When you think about innovation, every area or company is going to try to leverage what they know, and in west Michigan, specifically, we’re historically good at designing and building things, at creating beautiful and useful products,” Benson said. “When you have a Silicon Valley startup, often the big outcome is a realization that they have to be more user-centered and think more about usability coming out of the effort. Our folks are much more familiar and thoughtful about the user side of it.
“Not that this isn’t important on the coasts, but the kind of ethos we have here about that isn’t quite as strong elsewhere.”
Indeed, the area’s history as a “design capital” plays heavily in the capabilities of the Seamless Consortium, Hanumara said. “It’s in the DNA and in a network of professionals who hop from company to company there and stay tightly interconnected.”
Such design thinking “really unifies these people regardless of what artifact their designing,” Vaishnav, an MIT socio-technologist, told Chief Executive. They’re able to take advantage of a historical legacy “that the coasts probably will never come to do well.”
Seamless is not a venture-capital fund and doesn’t specifically invest in startups, Morin explained. “We fund proof-of-concept experiments and facilitate connections with companies that have invested,” he said. “We’re not an accelerator or incubator. We buttress them by giving them exposure to the best startups in the world doing things that are complementary or disruptive. We don’t require companies to be on site or give us ownership to do an experiment. We’re really there – built by corporates for corporates – to take all the friction out.”
For instance, Morin said, the group “can pay a startup within two days” compared with the 90 days it could take for an enterprise to get into the billing system of a big company. Seamless Consortium can provide common non-disclosure agreements quickly. And so on.”
In other words, he said, “We built all the hard parts of a fund. We’ve got an amazing thesis driven by the insights of multiple corporations over several years. We have looked at thousands of companies with the best due diligence, and we have [members] ready to work with startups. The only thing we don’t have the ability to do is write a check, but our enterprises do.”
Seamless Consortium staff and members scrum around three basic elements. First, they’re trying to find common goals for new technologies in terms not of products but in benefits for consumers and customers. Second, they’re searching for, finding and engaging collectively with startups around the globe, especially “early-stage companies that are trying to commercialize things,” Benson said.
And third, the group “is targeting well-crafted proof of concepts with startups that inform multiple use cases,” Benson said. An example would be “some kind of novel sensor. It could go into an office, a car, a home or a hospital room. And it might go into slightly different products and have different performance requirements within them, but from a technology standpoint we could probably run a single project that would validate the technology and decide if it works.”
All of this, Hanumara said, for a cost to each company member “that is equivalent to the cost of one engineer.” And for startups that engage the Seamless Consortium, “They can talk with multiple companies rather than have to get locked into one exclusive relationship,” Vaishnav said.
The MIT professors recommended that Seamless Consortium consider making venture-capital investments as a group, taking a more strategic role with startups, and expanding its work in regional economic development in western Michigan.
“Most companies operate under corporate social-responsibility efforts,” Hanumara said. “But what if [the Seamless Consortium] said, ‘We’re not going to dedicate a ballfield or sponsor a team, but we can look long term at workplace training, which would grow communities and directly benefit our area ecoomically’?”