Young Jewish Entrepreneurs Contribute to Startup Growth in Detroit
Have you heard of Banza, Castle, M Vending or M Laundering? All four companies are founded or co-founded by young Jews who moved to Detroit during the last four years without having roots in Michigan.
Their businesses — all established within the last three years and all headquartered in the city of Detroit — collectively employ more than 30 people. These companies, founded by entrepreneurs in their 20s and early 30s, are a small glimpse into the growing group of upstart companies in Detroit. And over the last 12 months, they’ve been accelerating at a rapid clip — with growing teams, expanding revenue streams and a rapidly increasing impact on the city they all now call home.
Back in 2014, Brian Rudolph started making chickpea pasta in his kitchen because he couldn’t find a pasta he liked. Soon he realized he wasn’t the only one seeking a better pasta. Today, Banza is on a mission to make nutritious food more accessible.
Rudolph, who co-founded the business with his brother Scott, wants to “take the food people love and make them with even more nutritious ingredients.” Their first product is a high-protein, lower-carb pasta made from chickpeas.
In the last 12 months, Banza has gone from two to 2,300 stores; it’s been recognized by Time magazine as one of the Top 25 Inventions of 2015; and has been featured in the New York Times Food section, on the Today Show and Good Morning America, which included Rudolph in a key segment last month.
“We believe we can change the pasta category forever, for the better. Our long-term vision is to extend beyond pasta with that same core thesis,” he said.
Rudolph founded Banza from scratch in the Detroit kitchen he shares with eight roommates. After graduating from Emory University, he became a Venture for America Fellow and was placed at Quickly, also founded by a young Jewish entrepreneur who moved here from out-of-state.
Banza now has revenue in the millions and a growing team that currently stands at 11. It has become the No. 1 selling pasta at Fairway markets and has sold 50,000 boxes during a three-week promo at ShopRite stores, both on the East Coast. Within the past month, the company launched in one-fifth of all Target locations.
The cost of living here is attractive to Rudolph. “For a food business in particular, Eastern Market is one of the best testing grounds for new concepts. You can also find people who have built successful businesses and are generous mentors. Former Garden Fresh partner Dave Zilko is a perfect example.”
Banza is also seeking to give back to Detroit. It’s donated 3,000 pounds of pasta to Forgotten Harvest’s food bank and has partnered with Detroit Food Academy to help teach young Detroiters about the food business and to employ its students in paid internships at Eastern Market.
Detroit Food Academy was co-founded by Boston-native Noam Kimelman, another member of the Detroit Jewish community, who also co-founded Detroit’s Fresh Corner Cafe.
Max Nussenbaum and his co-founders started Castle in late 2014, and have seen massive growth ever since. After rehabbing an abandoned mansion on Virginia Park in the New Center area, he immediately realized there needed to be a better way for landlords to manage rental homes. After learning many landlords had a similar problem, he developed Castle to solve the “pain point” in the market. Their software uses automation and on-demand labor to make the management process more efficient.
Castle, which took on its first units in early 2015, has doubled its business every quarter since. The system currently manages just under 600 units in Southeast Michigan (up from 250 at the start of 2016), and they represent real estate investors on every continent except Antartica.
The team recently moved out of the home on Virginia Park they restored themselves into a new office space in the Milwaukee Junction neighborhood. It keeps them in Detroit’s New Center/North End area, which they’re quite fond of. “We’re thrilled by the enormous growth we’ve seen and flattered and grateful that our approach is resonating,” Nussenbaum said.
The 10-member team plans to hire at least five more in Detroit by the end of the year and possibly more.
“While we don’t have a ton of connections to the Jewish community in Detroit, one of our earliest team members, Amanda Silver, recently went on a Birthright Israel trip. We actually have quite a few Israeli customers as well,” he said.
“While my co-founders and I moved to a city four years ago that was so different than anywhere we’d lived, everyone in the Detroit community was and continues to be so warm and welcoming of us that it was a smooth transition.”
Over the last year, the business has grown customers and revenue by more than 10 times; it has built technology that has impacted the lives of hundreds of rental owners and tenants; and Castle has raised a $2 million investment round, which was led by Khosla Ventures.
Filling A Niche
While the startup world often gravitates to what’s new and futuristic, this is the story of three businesses seeking to bring a fresh look and approach to often neglected industries. Shimon Levy was recruited to be a principal of Secret Sauce Capital in October 2014, shortly after graduating from Harvard University’s Kennedy School of Government, where he had the privilege of being the first Israeli to offer the commencement speech.
The founding partner — an Israeli Navy captain with more than a decade of military, government, public and private sector experience — Levy is now the head of ancillary businesses for Secret Sauce Capital. He focuses on redefining three core service areas and manages a growing 10-member team.
M Laundering is a multi-family machine service provider, which was established to expand and operate throughout the Midwest. The business has already collaborated with two dozen partners and secured agreements with approximately 30,000 apartment units in Michigan and Ohio. Almost five years ago, the only local multi-family laundry service provider was sold to a national powerhouse in California.
The result, M Laundering Vice President Brett Anchill says, was what many considered diminished personalized services and no customer-centered approach. “Many people in the industry I discussed this with expressed their desire to do business with a local operator,” he said.
After Anchill sold his equity in a laundry service company in 2015, he joined Levy’s team. Over the last year, Anchill believes the business is now spearheading the local industry with its technology back-end solutions, superior customer service and a focus on increasing its partners’ annualized revenue. “We are now working with the most respected brands in the laundry industry and the finest owners and management companies in the Michigan apartment industry,” he said. This summer, M Laundering expects to be serving almost 50 Midwest communities.
M Vending is a vending service provider for the multi-family apartment market. The business has partnered with Coca-Cola, expanded to more than 50 apartment communities and has recently recruited three members to its team. By summer 2016, the business plans to increase its customer base to nearly 100 apartment communities.
Belmont Security, also founded by Levy, is currently developing and beta testing a closed-circuit system with remote monitoring capabilities, that will also service its multi-family apartment clientele.
While the parent, Secret Sauce Capital, has a warehouse in Ferndale and an office in Orchard Lake, its headquarters is located in Downtown Detroit. Several million dollars has already been invested into the businesses. Princeton Enterprises Founder and CEO Matthew Lester is a key investor and principal in Secret Sauce Capital.
Matt Sendler, who oversees customer care and operations for the growing M Vending business, said that he most enjoys getting to provide a service that not only makes people’s lives more convenient but also empowers local Michiganders and revives Detroit.
Anchill, too, is attracted to helping Detroiters. People in Detroit have been neglected for years, he says, and empowering the residents once again is incredibly meaningful.
“Our mission statement and values revolve around bringing the power of doing business back to Detroit and making Michigan and Detroit, once again, the center of business and customer service,” he said.
Levy, now a Detroit resident, is shifting the paradigm for how businesses are provided to the multi-family apartment market.
Through his expert navigational skills, he’s obsessed with not only improving neglected services to landowners, but also using his rapidly growing companies to bring business back to Detroit. And with the early, tangible success he’s had with businesses like vending and laundry machining, it’s easy to see how change is already happening in the industries they seek to transform.
By Adam Finkel, Contributing Writer