When entrepreneurship drives community building: Uwajimaya legacy

Guest blog post by Rita Brogan, CEO of PRR

Uwajimaya’s beginnings were humble, when in 1928 Fujimatsu Moriguchi started selling fishcakes in Tacoma, Washington. Today, Uwajimaya is the largest family-owned Asian grocery and gift company in the Pacific Northwest.

In 2011, Tomoko Moriguchi Matsuno, the youngest of Fujimatsu’s seven children, leads the family enterprise as Uwajimaya’s Chief Executive Officer. “I became an entrepreneur by inheritance,” says Tomoko. “I started my career as an artist.  An entrepreneur takes risks, and I will not take risks with my family’s business or Uwajimaya’s 400+ employees. My thought process may be risky, but then I weigh the consequences. I don’t think of myself as an entrepreneur.”

Rather, like many businesses in the Asian American community, the entire Moriguchi clan is an entrepreneurial family, working together to weigh decisions about investments and growth.  They take risks together, informed by experience and a commitment to each other.

Certainly, it is an entrepreneurial family vision that has guided Uwajimaya’s growth—a vision that is as much about cultural sustainability as it is about offering the highest quality and broadest variety of Asian foods in America.  It was vision, and a willingness to take risks, that inspired Fujimatsu Moriguchi to open the family’s first store at the corner of 4th and Main after they had been released from the Tule Lake Interment Center in 1945.  And certainly it was vision and a commitment to community 55 years later that led the Moriguchi family to invest and expand its flagship operations in Seattle’s Chinatown/International District into a mixed use development that with 66,000-square feet of commercial space and 176 apartment units on top.

Today, Uwajimaya has stores in Seattle, Bellevue, Renton and Beaverton, OR.  Tomoko was responsible for opening each of these stores.  She has learned the family business from the ground up, and assumed her position as CEO three years ago, in 2008, after her brother Tomio retired from that post.  Tomio steered Uwajimaya through its years of growth. Tomoko says she follows the “servant CEO” model, over a more typical American corporate approach of “strategic planning” led by a single charismatic leader. “These days it’s much more about operations  because you need to be able to fix things fast.”  Tomoko adds, “I believe in mutual accountability. It’s a more sustainable approach.”

Uwajimaya’s newest Bellevue store, opened in March of this year under Tomoko’s leadership, is exceeding revenue expectations, largely because of the growing demand on the Eastside for unique, quality pan-Asian food.

All of this has Tomoko thinking about the future.  She says, “It’s hard to explain that Uwajimaya is about more than just selling groceries.”  Tomoko thinks about the changing and evolving character of Asian/Pacific American communities and how Uwajimaya can help educate and sustain cultural identity.  She thinks about the growing “foodie” movement. She thinks about the evolution of “creative class” communities of highly educated and culturally vibrant neighborhoods. She thinks about the next generation of Moriguchi family members and their roles in taking Uwajimaya the next step.

The vision continues.

Rita Brogan is the CEO of PRR, a public affairs and communications firm based in Seattle, one of Washington’s 50 largest minority-owned businesses. Brogan was a recent recipient of the Foster School’s Business and Economic Development Center Asian/Pacific Islander Business Leadership Award. She writes the BEDC Brogan blog series monthly. Previously, she covered green economy issues with an emphasis on ways that businesses owned by people of color or women can create a competitive advantage. Her current blog topic focus is on innovation.

Gravity at the speed of light

At 16, Dan Price’s high school rock band, the Straightforwords, broke up. At 26, he was on a stage in Washington, DC, shaking hands with President Barack Obama, who had just announced Price as the winner of the National Small Business Administration Young Entrepreneur of the Year Award for his company, Gravity Payments. Unrelated events? Not exactly.

After the Straightforwords broke up, Price kept up with his record store and coffee shop friends who had ties to the music industry. This small business crowd complained about the credit-card processing fees that made it hard for the little guys to compete. Having spent some time in the industry, Price vowed to level the playing field. In 2004, 19-year-old Price and his brother Lucas started a company called Gravity Payments.

Today, Gravity Payments handles over 10,000 clients, including about 30% of all small to medium-sized companies in Seattle. Their formula is simple. In a world where big banks often tack on whopping fees to the credit card transactions of smaller customers, Gravity charges about one-half to two-thirds less, with a fee structure that is refreshingly transparent. Add world-class customer service and it’s understandable why Gravity is processing more than $4 billion annually for clients in all 50 states, with revenue just under $100 million.

John Platt, owner of St. Clouds Restaurant and Catering, a Madrona neighborhood mainstay in Seattle, notes, “I don’t need a lot from a credit card company other than access to our money, and Gravity does that well. Even though the company has grown, if I have a problem and call him, Dan always gets back to me within 24 hours.”

As a student at Seattle Pacific University, Price won second place in the 2007 UW Business Plan Competition for Gravity Payments. “We were already in business at that time,” Price said, “but entering the competition gave me the opportunity to step back and get perspective on where we were going. The event strengthened my confidence and Gravity’s visibility. Investors were knocking on our door, but ultimately we declined their offers.”

Meeting President Obama in 2010 also served as a springboard into making a political difference, one that would help small businesses and Gravity. The Dodd–Frank Wall Street Reform and Consumer Protection Act was up for vote in Congress. The Durbin Amendment included a provision aimed at regulating debit card fees and increasing competition in payment processing. Major banks “threw everything they could” at repealing the effort. Price contacted Senator Patty Murray, a member of the Senate Appropriations Committee, and the senator’s office told him that his letter played a key part in passage of the amendment.

It’s hard to hold Gravity down

Competition winners and job creation

Since the UW Foster School of Business Center for Innovation and Entrepreneurship (CIE) launched the Business Plan Competition in early 1998, 891 student teams have gone for the gold. And 95 of those teams divvied up nearly $1.1 million in prize money. Launching companies out of a competition is relatively easy. But what was their impact on job creation on the Washington state economy?

In May 2011, CIE undertook a brief survey of 38 companies that had launched as a result of the competition and were still in business. 28 of the 38 companies responded to the survey: 15 consumer product/retail companies, 5 tech firms, 4 life-science companies and 4 in clean technology. Combined, these companies employed 640 people, with 220 of them earning more than $75,000 a year.

Among the additional findings:

  • More than $60 million in venture capital has been raised (17 companies raised $250,000+ and 12 raised $500,000+). 8 companies chose to bootstrap.
  • $92.7 million in anticipated revenues for 2011 (with 13 projecting more than $1 million).
  • 3 companies made it on the 2010 Inc 500 list of fastest-growing private companies.

Responders’ thoughts captured the intangible value of the Business Plan Competition:

“I like to tell people that I was a PhD student in mechanical engineering,” said one founder, in his comments about the event, “but I got an MBA from the UW Business Plan Competition. Because honestly, I’m not sure what else I could learn from business school that I didn’t learn from the competition. None of this [success] would have been possible without CIE and the UW Business Plan Competition. Because of the competition we were able to make a lot of our mistakes before they counted and could derail our business.”

“Believe it or not, we went through the fire of the investment round three times,” said another, “and got asked all of the tough questions. So when it was time to do it for real, we were grizzled veterans of the process. If it weren’t for all we got from the Business Plan Competition, we would have never gotten off of the ground and I would probably be working for someone else’s start-up in Minneapolis or the Bay Area. Instead, I have people working for me here in Seattle. CIE helps make dreams come true.”

West Coast Research Symposium inspires novel research

PACCAR Hall,Faculty researchers from 50 major universities across the United States and from as far away as Singapore and France met on September 8 and 9, 2011 at the UW Foster School of Business. They came to do what they do best: share their research and experience in technology entrepreneurship.

This year the top papers were weighted toward the emergence of new markets and the role of cognition—how markets are formed and how perceptions get framed of those markets. Other areas of research included venture investing, management teams and innovation, generating legitimacy and creating identity, tracking technology patterns, technology shocks on existing industries, and longitudinal perspectives on new technologies. Out of 50 papers submitted to the symposium, only 19 were chosen for presentation.

The West Coast Research Symposium (WCRS) is dedicated to improving research projects, stimulating novel ideas, and fostering new relationships and research collaborations. As Professor Suresh Kotha of the Foster School (and one of the original organizers of the event) noted, the atmosphere of the meeting makes it easy to share information. “Most academic conferences have as many as 10,000 attendees, but the WCRS is an intimate meeting,” he said. “We had 92 attendees this year. In that environment, people get to know each other, and their conversations revolve around what they’re researching in technology and entrepreneurship, and how they might be able to collaborate going forward.”

This year also marked a first for WCRS. Eleven of the papers presented at the symposium will go into a special issue of the Strategic Entrepreneurship Journal (SEJ), slated for publication in 2012. SEJ is a sister publication of the prestigious Strategic Management Journal, and is designed to expand and develop the natural relationship that exists between strategic management and entrepreneurship’s focus on innovation and opportunity recognition.

A key element of the WCRS is a one-day doctoral student consortium designed to educate the next generation of technology entrepreneurship researchers and keep the field vital for the future. The symposium, funded with financial support from the Ewing Marion Kauffman Foundation, provides an opportunity for PhD candidates who haven’t yet defended their dissertation proposal to discuss their interests with senior scholars in the field. The students use the day to explore their own emerging interests or find new ones, and meet peers who may become lifelong colleagues.

Professor Nandini Rajagopalan, a member of the WCRS organizing committee from USC’s Marshall School, remarked that the doctoral students and research faculty alike benefit from the interaction. “Our attendees note how open and constructive the meeting is. The tone is nurturing and critical at the same time—a difficult combination to pull off.”

WCRS history goes back to 2003, when faculty from three universities—University of Washington, Stanford University and University of Oregon—held the first symposium at the UW. The WCRS organizers were later joined by faculty from the University of Southern California and University of California Irvine.

Electrifying cars, one fleet at a time

Voltaic
Voltaic team

In 1909 Henry Fold laid down the law: “Any customer can have a car painted any color that he wants so long as it is black.” Today, consumers who want their favorite car to be electric instead of gas-powered will confront a similar lack of options. The problem is that retrofitting drive trains on an existing fleet to run electrically is prohibitively expensive. That will change if Voltaic Drive Systems succeeds.

Voltaic won 2011 Grand Prize of the University of Washington Environmental Innovation Challenge (EIC), produced by the Foster School of Business Center for Innovation and Entrepreneurship in partnership with the UW College of Engineering and UW College of the Environment. The team drove away with $10,000 after besting teams across Washington with a 2002 Honda Accord fitted with their V-EV Drive Module. Their prototype demonstrated that a module component approach could provide automotive companies with the ability to produce electric models of current gasoline vehicles quickly and affordably, bypassing expensive redesign costs.

On the heels of winning the Challenge, Voltaic was awarded a $700,000 competitive EcoCar 2 grant from the US Department of Energy and General Motors. Sixteen universities across North America are competing to reduce the environmental impact of a Chevrolet Malibu without compromising performance, safety and consumer acceptability. The ideal vehicle will generate limited or zero pollution, have a range of 300 miles and be fuel-efficient.

James Barger, Voltaic’s VP of finance is upbeat about their chances. “The EIC provided us with great experience in developing a drive train. We built that working prototype in four months, and we think that will give us an edge in the EcoCar competition.”

UW mechanical engineering Professor Brian Fabien worked with the Voltaic UW senior design team of Trevor Crane and Trevor Fayer, and was impressed by their talent and skills. “It was obvious that these students had extraordinary leadership qualities,” he said. “The module was their idea and their implementation.”

If Voltaic succeeds, it will be a win all around: greener vehicles, lower costs for the car maker and more choice for consumers.

Kids with hats are on track

Krochet KidsKohl Crecelius is a young man of many hats: a social entrepreneur, a dedicated practitioner of crocheting and CEO and co-founder of Krochet Kids, a company that sells “headwear.” He’s even somewhat of a media celebrity, appearing on a national TV ad for Bing that ran during the fall kick-off week on major networks.The concept for the company was an unlikely combination of activities. Kohl and his surfer, high school friends loved to crochet and enjoyed summers volunteering in developing countries. How to combine the two?

With a mission and the passion to empower people to rise above poverty and “stand on their own two feet,” Krochet Kids was born in 2007. The plan was to teach women to crochet hats and pay them a living wage for their work. While students at the University of Washington and Whitworth College, the three friends formed a non-profit organization and targeted a chronically poor, war-torn province in Northern Uganda. From a small group of workers they taught to crochet in 2008, the work force has expanded to 122 women today. Earning a sustainable wage means that these women can provide food, water, clothes and education for up to six dependents. Customer appeal is clear: “buy a hat, save a life.” Each hat comes with the personal story of the woman who crocheted it.

Since winning the “Best Social Idea” at the UW Center for Innovation and Entrepreneurship Business Plan Competition in 2008, the company has been growing to the healthy tune of about 250% a year. “The BPC instilled confidence in our model,” says Crecelius. “We had judges buying our hats during the event, and winning the competition gave us the validation and encouragement we needed.”

Since the competition, Krochet Kids has attracted the attention of Nordstrom which now carries their hats; partnered with Seattle’s One Day’s Wages, a group dedicated to alleviating extreme world-wide poverty; and won $2,000 in the Chase Community Giving Competition, a program where fans on Facebook vote for their favorite charities.

Company founders believe the model used in Uganda can be applied anywhere. Recently, they expanded to Lima, Peru, employing 10 women working with some “amazing yarns.” Introduced in mid-September, the Kids’ fall line of hats and the shirts they recently added sold out within a week.

One of Krochet Kids’ advisors, P. Scott Cummins, a Seattle-based social venture expert, recently made a bold prediction: “Kohl Crecelius is among the 100 most important graduates of UW Business School. But mark my words, even five years from now, that will be considered an understatement.”