2009 FSEP Conference

1. The MSU Product Center
Services
Tom Kalchik
Associate Director
Bus ine s s innov ation in ag riculture , food and natural re s ource s

2. Product Center
• March 2003 (operational Jan. 2004)
• Memorandum of Understanding (MOU)
– College of Agriculture and Natural Resources
(CANR)
– Michigan State University Extension (MSUE)
– Michigan Agricultural Experiment Station (MAES)
– Renewed 2009 for 5 years
• Department of Agricultural, Food and
Resource Economics (AFRE)
Bus ine s s innov ation in ag riculture , food and natural re s ource s

3. Mission
• Create networks of resources
• Deliver services that support the development of new
ventures, entrepreneurs, and entrepreneurial communities
• Strive to spark business innovation and economic
development in agriculture, food, natural resources and
bioeconomy through collaboration, knowledge and best
practices
• Work on behalf of our Michigan stakeholders
– Customers who want to develop ventures and their
entrepreneurial talents
– Service providers from Michigan State University and from the
broader private and public sectors
– Sponsors both inside and outside the university
Bus ine s s innov ation in ag riculture , food and natural re s ource s

4. Strategies
• Venture Development and Service
Networks
• Entrepreneurial Development
• Market Research
Bus ine s s innov ation in ag riculture , food and natural re s ource s

5. How does the PC help?
• Develop a concept
– Is there a market?
– Can you produce it?
– Can you deliver it?
– Can you finance it?
– What is your risk tolerance?
Bus ine s s innov ation in ag riculture , food and natural re s ource s

6. How does the PC help?
• Develop a concept
• Basic business plan
– Executive Summary
– Mission Statement, History, & Objectives
– Business Organization/Operations
– Marketing Plan
– Management/Human Resources
– Financial Plan
– Supporting Documents
Bus ine s s innov ation in ag riculture , food and natural re s ource s

7. How does the PC help?
• Develop a Concept
• Basic business plan
• Advanced planning
– Detailed feasibility analysis
– Production processes
– Supply chain arrangements
– Legal/organizational issues
– Regulatory compliance
– Financing
Bus ine s s innov ation in ag riculture , food and natural re s ource s

8. Resources of PC
Innovation
Counselor/
Educator
Network
Bus ine s s innov ation in ag riculture , food and natural re s ource s

9. Resources of PC
• MarketMaker
– A web-based resource that provides a
link between producers, processors,
wholesalers, retailers, farmers' markets,
food service providers and end-
consumers within the food supply chain
– www.mimarketmaker.msu.edu
Bus ine s s innov ation in ag riculture , food and natural re s ource s

10. Resources of PC
• Access to MSU resources
– Food Science and Human Nutrition
– Packaging
– Advertising, Public Relations, & Retailing
– Agriculture, Food and Resource Economics
– College of Law – Small Business and Non-profit
Law Clinic
– Eli Broad College of Business
– Capstone Courses
Bus ine s s innov ation in ag riculture , food and natural re s ource s

11. Resources of PC
• Market Research
– Market analysts
– Mintel consumer research reports
– Mintel Global New Products Database (for
food and beverage)
• On-line public reports
• Private for-fee reports
Bus ine s s innov ation in ag riculture , food and natural re s ource s

12. Resources of PC
• Website:
www.productcenter.msu.edu
Bus ine s s innov ation in ag riculture , food and natural re s ource s

13. Resources of PC
• Outreach staff
– Tom Kalchik, Associate Director
• kalchikt@msu.edu
• 517-432-8752
– Matt Birbeck, Project Consultant
• birbeckm@msu.edu
• 517-432-8753
– Dianne Novak, Specialized Services Consultant
• novakdi@msu.edu
• 517-432-5754
– Janice Harte
• harteja@msu.edu
• 517-355-8474
Bus ine s s innov ation in ag riculture , food and natural re s ource s

14. Resources of PC
• Market Analysts
– Chris Peterson, Director
• peters17@msu.edu
• 517-355-1813
– Bill Knudson, Market Analyst
• knudsonw@msu.edu
• 517-355-2176
– Getachew Abate
• abatekas@msu.edu
• 517-355-0337
Bus ine s s innov ation in ag riculture , food and natural re s ource s

15. Resources of PC
• Bioeconomy
– Ruben Derderian, Associate Director
• derden7@msu.edu
• (517) 432-1676
Bus ine s s innov ation in ag riculture , food and natural re s ource s

16. The Challenge
• To systematically turn a business or product idea into
a real start-up or launch.
• Desire often overwhelms reason.
– The glory of the idea
• “Build it and they will come.”
• “Everyone will want it.”
• “It’s the greatest thing since sliced bread.”
– Missing the logical flow of development
• Operational detail before concept/strategy development
• Production before marketing
• No consideration of the real return potential
Bus ine s s innov ation in ag riculture , food and natural re s ource s

17. The Intuition about Process
• First, tell a plausible “fairy tale” about the idea
of the venture?
– Market/customer driven
– Internally consistent and appealing
• Then, will the venture make a reasonably
profit if everything goes well?
• Finally, what is the venture’s potential to work
(feasibility)?
Bus ine s s innov ation in ag riculture , food and natural re s ource s

18. Service Portfolio
(examples)
Venture Market Entrepreneurial
Service Tiers Development Research and Community
Development
Concept Development Concept Definition Market Briefings “Road to
Independence”
“Creating Innovation”
Venture NxLeveL, Purdue Market Analyses Business Boot Camp
Software, Fastrac,
Fundamentals workbooks, etc.
Specialized Services Faculty teams, Market Feasibility Seminar modules,
consultant referrals, Analyses e.g., contracting,
sensory testing venture capital
Services for Start- Referrals to added Analysis updates E&I Club
expertise or back to
ups other services
Bus ine s s innov ation in ag riculture , food and natural re s ource s

19. Results
(since 2004)
Number
Total counseling sessions 11,509
Concept development 1,094
Business fundamentals 754
Specialized services 538
Launched new ventures 127
606 new jobs (actual) + 348 retained
$194 million annual sales increase
$201 million invested
Bus ine s s innov ation in ag riculture , food and natural re s ource s

20. Results
(FSEP Area)
Customers Sessions Hours Miles
Jackson 35 301 408 676
Lenawee 29 345 354 1,041
Monroe 27 239 282 466
Washtenaw 62 744 882 858
Wayne 77 941 1,131 1,334
Total 230 2,570 3,057 7,375
Bus ine s s innov ation in ag riculture , food and natural re s ource s

21. Results
(FSEP Area)
Total Customers = 230 Customers
Concept Development 149
Venture Fundamentals 146
Specialized Services 37
Service after Start-Up 42
Bus ine s s innov ation in ag riculture , food and natural re s ource s

22. Results
(FSEP Area)
Ventures Launched 24
Jobs Created 180
Jobs Retained 17
Sales Increase $ 116,905,850
Capital Invested $ 95,592,143
Bus ine s s innov ation in ag riculture , food and natural re s ource s

23. Bus ine s s innov ation in ag riculture , food and natural re s ource s