For Civionics Co-Founders, Southeast Michigan an Accessible Base to Launch Wireless Sensor Company
Jerry Lynch, co-founder and executive vice president of Civionics, has experience navigating high-tech entrepreneurial ecosystems. And his experience has taught him that southeast Michigan is a premier place to grow a fledging company.
Lynch’s Ann Arbor-based company makes wireless sensors that can monitor everything from the structural stability of a bridge to the energy consumption of an office building. But Civionics isn’t Lynch’s first company—as a doctoral student at Stanford, Lynch launched startup in a similar field based in the Bay Area.
“In comparison between the two experiences, it’s a world of difference,” Lynch says. “From an entrepreneur’s standpoint, having done it in both communities, I would much prefer to do it here in southeast Michigan.”
Since Lynch and Civionics co-founder Andy Zimmerman officially launched their company in August 2009, the two say they’ve benefited from southeast Michigan’s unique startup culture.
“One of the challenges of the Bay Area is that if you’re a small startup it’s a lot of times very hard to penetrate that community,” Lynch says. “So it’s there, you’re co-located with it, but it’s not accessible necessarily.”
But of southeast Michigan Lynch says: “It’s a much more close-knit community; everybody sort of bet on the success of this community and everybody has a vested interest in everybody else’s success.”
According to Lynch, an associate professor of Civil and Environmental Engineering at the University of Michigan, southeast Michigan’s startup culture allows for partnerships between young companies and a plethora of resources from institutions such as Ann Arbor SPARK and U-M.
And Civionics is already taking advantage of some of these amenities. The company is slated to move to U-M’s Venture Accelerator in the coming weeks. Zimmerman says the accelerator, which U-M officials unveiled last week, will allow Civionics to be “in a startup atmosphere with other companies that are at similar stages of development and are developing technology based solutions.”
In addition, Lynch says renting space at the accelerator is a bargain, especially considering all of the services it provides. “In a small company where you only have two or three employees, what happens is you get spread thin very quickly,” Lynch says. “Having people in the incubator that can help give advice, it’s really like having a few extra people in your company without it really costing you.”
Though they think the services provided by the accelerator will help to give them an edge, Lynch and Zimmerman say Civionics real competitive advantage over other companies making wireless “smart sensors” is in its technology.
“The real IP with the technology is actually this imbedded intelligence that’s sitting in the device,” Lynch says. “It’s an informatics driven solution that gives us the opportunity not only to collect data at low cost, but we’re also autonomously processing data; the idea being that you’re not giving raw data to the individual that has purchased the system.”
In addition to being accessible for end users, Lynch and Zimmerman say their product is more scalable than most smart sensors on the market. According to Lynch, because wireless sensors are relatively inexpensive consumers are able to install a large number of them, which can often make it difficult to implement a centralized system for analyzing the data provided by the sensors.
“It’s just like having 1,000 computers running on one router, how do you manage that in a scaleable way?” Zimmerman says. “And that’s where we sit, to help that and then to avoid the need for someone sitting at that router to make decisions based on all that data that’s coming in.”
So far Civionics has managed to fund itself without the help of a venture capital firm. In addition to the capital the founders injected to launch the startup, the company is bringing in revenue through government contracts and by selling a flexible wireless sensing system that incorporates some of the hardware and software they’ve developed, but Lynch says that’s only a temporary plan.
“That’s more of a commodity based revenue stream whereas right now we’re trying to position the company to be based more on selling a complete solution to the market,” Lynch says.
And Lynch and Zimmerman say they’re taking advantage of the resources offered by Ann Arbor’s startup community to help them navigate the market. Lynch says Civionics is currently in discussions with a company they can’t disclose to create a strategic partnership, and the advice they’ve received from the mentors in residence at U-M’s Tech Transfer office helped to make the founders more comfortable during the negotiations.
“These are grey haired experts that have been through it all before,” Lynch says. “It allays a lot of our concerns as we negotiate these types of things.”
And as much as Lynch and Zimmerman praise the accelerator, the mentors in residence, and the pioneering spirit of entrepreneurs in southeast Michigan, Lynch says he only expects the atmosphere for startups across the state to improve.
“With the new governor in place, I think that the climate is actually going to get better,” he says.