Better together: How metro Detroit's entrepreneurial ecosystem nurtured Drought Juice
Caitlin James had lived in New York City and served with the Peace Corps in Jordan. But when she decided to start her own business, the only decision that made sense was to come home to Metro Detroit.
James is the CEO of Drought Juice
, a Ferndale-based producer of organic, cold-pressed raw juices. Drought, which James cofounded with her three sisters in 2012, has four metro-area juice bars and it recently began national wholesale distribution. But in 2010 the James sisters had a much more modest business concept in mind. Experiences with New York juice bars intrigued them in going into the juice business, so they thought they'd establish a farmers' market stand to sell their own healthy concoctions.
"The mantra was 'do it yourself' within our family," says James, whose father owned an appliance distribution business in Livonia and Troy. "I don't think that we all anticipated owning our own business, but when push comes to shove and you realize what your options are as you become an adult, I think becoming an entrepreneur is pretty attractive."
Attractive, but as any entrepreneur will tell you, not easy. And for the first few years of their business the James sisters faced an unusual added challenge on top of the long workdays and minimal capital that any new small business owner grapples with. It was important to Drought's ethos that the company's raw juices remain unpasteurized in order to maintain the full nutritional value of the product; the heat treatment involved in pasteurization can remove nutrients even as it destroys bacteria. But Michigan law prohibits wholesale distribution of unpasteurized juice.
But the James sisters' efforts to address this early challenge and many others were buoyed by an ecosystem of support for metro-area small businesses. James says the metro-area network was the reason she and her sisters brought their business back home.
"It diminished the learning curve a little bit," she says. "It didn't eliminate it. But knowing that we wanted to do something that was good for ourselves and our friends and family, it made the most sense to come home and do it here."
When hummus met juice
Although Drought found assistance from some formal entrepreneurial support institutions in the area, James firmly asserts that "other local businesses are the best resources." Having raised $13,000 in a 2011 Kickstarter campaign but with little other access to startup capital, she says non-monetary support from more experienced local business owners was invaluable in the early days.
James and her sisters formed an extremely important partnership soon after Drought got started with one of the metro area's most successful food businesses, Ferndale-based Garden Fresh Gourmet
. James met George Vutetakis, then Garden Fresh's director of research and development, at Eastern Market.
"I knew that they existed, but I was so kind of in a daze from working 22 hours [a day] that it was hard to see why we would meet them and what sort of resources they would have to offer," she says. "They made salsa and hummus. We made juice. We didn't see any sort of connection there."
However, James says it turns out that there were "interesting parallels" between the two businesses – most importantly, the fact that Garden Fresh had experience in making food shelf-stable without pasteurizing it. The salsa company had two high-pressure processing (HPP) machines, which inactivate mold and bacteria in food by exposing it to high pressure. Vutetakis and Garden Fresh founder Jack Aronson welcomed the Jameses to experiment on the expensive machines, while also offering professional guidance on a variety of other issues.
James says that essentially allowed Drought to "create an R&D department for next to nothing." And for Garden Fresh, which has provided incubator services to numerous other startups, it was only natural.
"You pay it forward a little bit," Vutetakis says. "You teach and you give. You facilitate somebody else in their job, and the reward isn't just a personal reward. It's a better community for it. You're developing a landscape that contains people who are trained in how to run businesses."
Garden Fresh wasn't the only local business to give Drought a boost in the early days. The James sisters regularly sought advice from Joe McClure at McClure's Pickles
, who they also met at Eastern Market. Carlos Collier of Door to Door Organics
, who James met when he was running a table next to Drought's at a particularly sparsely attended local health fair, provided surplus produce to Drought when the business was still too small to buy wholesale directly.
"Any other business owner I've approached has been helpful," James says. "No one's ever been secretive ... It's taught us a good lesson to be open with other small businesses that approach us in the future."
Collier, formerly the regional director of operations for Door to Door, says that supportive mentality is widespread among area businesses. He attributes it to the "buy local" movement that grew in popularity after the Great Recession.
"It's moved beyond just the end consumer trying to buy Michigan, trying to buy local as much as possible," he says. "It's really extended to the businesses trying to support each other."
In addition to receiving assistance from other local businesses, Drought also found valuable resources in area entrepreneurial support organizations. In the early days James says the MSU Product Center
was a particularly valuable asset as she and her sisters navigated the puzzling process of scaling up their business. The Product Center provides free assistance to businesses in the food, agricultural, and natural resource sectors. James says that while many were "kind of confused at what we were trying to do and how we could ever do it without any money," the folks at the Product Center would "really take the time to understand what we wanted to do and help us figure that out."
In those days, Product Center innovation counselor Frank Gublo had just started to step up his work in Detroit. The center has since added a dedicated staffer in an Eastern Market office, which handles nearly half of the 10 to 12 new clients the center deals with per week.
"The way that I did business was if I helped you, people would say, 'Well, what do you need out of all this?'" Gublo says. "And I would just say, 'Tell someone else. If you think I've done a good job, tell them that I'm available now.'"
Although Drought has now moved far beyond some of its early challenges, it's still taking full advantage of the resources the metro area's small business ecosystem has to offer. Drought is currently in the process of joining Endeavor Detroit
, a nonprofit support network for high-impact entrepreneurs. Through interacting with Endeavor's network of entrepreneurs and mentors around the world, James hopes to guide Drought to the point of international distribution. Other major area food businesses like McClure's and Two James Spirits
have also participated in Endeavor.
"It usually requires more than just capital or just one good connection," James says. "We're all in that same boat to help our businesses take it to the next level."
The metro area's entrepreneurial ecosystem has treated Drought well, and it continues to do so. But James cautions that no matter how many resources an entrepreneur seeks out, the ecosystem is most helpful to those who help themselves.
"I think there's a fine balance," she says. "If you're not willing to do the hard work and do it yourself, you'll find that even with significant grants and assistance and certifications from local organizations, you'll still find yourself struggling."