Catching Tsunami Lab’s first wave: A diverse cohort prepares to keep local businesses thriving

Editor’s Note: This story is part of Momentum: The people and companies shaping what’s next, a weekly series that explores new ventures, founder support, and the resources powering entrepreneurship and small businesses across seven counties in Southwest Michigan. This project is sponsored by Southwest Michigan First.

KALAMAZOO, MI — “Silver tsunami” is a term used to describe the socio-economic effects of Baby Boomers, people born between 1946 and 1964, turning 65. This began in 2011, creating a large group of Americans who are retired or planning to retire soon.

Among these are many owners of small businesses. It’s estimated that about 40 percent of small businesses in the country are owned by people in the “silver tsunami.”  If those business owners don’t have a plan for what happens to their enterprise when they retire, the consequences can be very negative.

Kalamazoo Forward Ventures (KzFV) estimates that only 30 percent of owners have a succession plan, and when a business closes, there’s a loss of jobs, wealth, assets, and tax base. KzFV has started a program called Tsunami Lab to help keep businesses going by preparing prospective new owners.

Kalamazoo Forward Ventures is a $50 million, Black-owned investment fund started almost two years ago to make early-stage investments in growth-oriented businesses. 

“We’re making a long-term commitment to strengthening the regional economy by helping new owners step into existing, successful businesses as current owners retire,” says Marcel Fable Price, KzFV’s director of platform and programming.

“We protect our economy by transitioning these businesses,” Price says.  “Tsunami Lab is an accelerator that can get people ready to take over and operate these businesses.”

The program had 104 applicants for its first cohort, and 13 were selected.  “They’re a very eclectic group, but they all have the intangibles of people who can do this and do this at a high level,” Price says.

He also praises the teachers for the classes, which started in April and will end in July.  “It’s people who are the best at what they do, from branding to curriculum development to some of the most brilliant subject-matter experts in our region. We really brought the best minds together to make this curriculum,” he says. Tsunami Lab is partnering with Kalamazoo Valley Community College.

Kalamazoo Venture Fund is so pleased with how Tsunami Lab is working that they’re considering expanding the program. “I think this is something that can spread across Michigan, and then you can keep a significant amount of wealth in the state instead of businesses being bought up by private equity,” Price says.

“The goal is to franchise this program. We want different community colleges across Michigan to be able to offer this,” he says. “We want different foundations to be able to look at impact investments as the future. Instead of just funding programs the way that we have historically, can we use our philanthropic levers to create more opportunities for wealth in our communities?”

KzVF also helps owners who are thinking of selling their business. They have a list of 15 so far and would welcome more. Information is available here.

Among the Tsunami Lab participants is a retired Air Force lieutenant colonel, Dave “Brew” Brewer, 48, of Kalamazoo.

During his 30-year military career, he led modernization initiatives for the Air Force and represented the Department of Defense in global artificial-intelligence projects.  He runs his own business, InnoTECH Research and Consulting, and he teaches part-time at the University of Michigan Center for Entrepreneurship.

“I would love to buy something in Southwest Michigan,” Brewer says. “It would be nice to get into something focused on tech development, but that may be challenging to find for an existing business.

“I do a lot of work in artificial intelligence and autonomous systems,” says Brewer. “I think southwest Michigan is ripe for technology to come in and optimize the talent that we have in this area.”  He notes that technology companies are concentrated in East Michigan and comments, “Now it’s time for us to have a run at something good.”

“If I was going to daydream, I would find a business that is looking for modernization and the owner is ready to move on to their next chapter, whatever that could be, and it’s a company that has been taken to a point of success, maybe even slightly plateaued,” Brewer says.  “Now they’re looking for a fresh set of eyes to come take a look at the business to launch it into its next decade of growth. This is a business model that sounds appealing to me.”

Brewer was an entrepreneur before joining the Air Force. He was married and living in Toledo, Ohio, and had just turned 20 when he bought a pickup truck, ladder, and pressure washer and started a business as Greater Toledo Deck & Gutter Cleaning.  “I found myself making a pretty darn good living,” he says.

“An opportunity arose with a brand new company. It was LeafFilter,” Brewer says, noting that LeafFilter is now a huge corporation.  He called the inventor of the gutter guard in Virginia and arranged to visit him.  “I stayed with him on his couch,” Brewer says.  “I loaded my car up with all this brand new, freshly manufactured product; I was the first distributor in the United States. I drove it back to Ohio and started selling it like hot cakes.”

However, soon another opportunity came along. Brewer was in the Ohio Air National Guard, and he was selected to be a fighter pilot. “That was my childhood dream,” he says.  He joined the regular Air Force and moved to Texas for pilot training. He was a pilot for four years until an injury made him ineligible, and he then became an intelligence officer.

“I was lucky that the Air Force recognized my penchant for coloring outside the lines and gave me missions where that was valued,” Brewer says.  He developed eight organizations within the Air Force from scratch, including one for the Michigan Air National Guard at Battle Creek.  “I had this really weird, entrepreneurial military career,” he comments.

Brewer shares Price’s enthusiasm for the people running Tsunami Lab. “The staff has been amazing.  I’m taking notes on things I can bring into my consulting business, material I want to teach to my students at the University of Michigan.”  He especially praises Tim Mathews, the lead teacher, and John Knowlton, an investor, business owner, and experienced acquirer of small businesses.

“The energy of the Tsunami Lab students is tremendous,” Brewer says.  “They picked some really talented, creative, passionate people.  Kalamazoo Funding Ventures is on to something!

“Several of us are already operating businesses, so they didn’t bring in a bunch of people that came out of college with no experience. They really grabbed some folks that have a range of experience, so we end up mentoring each other in the class.”

Brewer continues, “Kalamazoo Funding Ventures has done a great job plugging us into other businesses that are mentoring us.  There’s a marketing company in downtown Kalamazoo that brought us in and told us their acquisition story, how they came into the company, they learned the ropes, they transitioned from one owner to the current one, and how they’ve learned the business.  So it’s not theoretical; they bring in real CEOs, real business owners, and leaders.  They’re teaching us, actually, how to do this.”