Artisans in Memphis face obstacles in both sourcing and logistics. A privately-backed competition seeks to spur solutions for some of the challenges that entrepreneurs face.
Little Bird Innovation and EPIcenter kicked off the Operation Opportunity Challenge: Maker Edition on November 15. Winners of the business plan competition will receive $20,000 each as well as $5,000 in technical assistance.
Additionally, if either plan is scalable beyond Memphis, they could be a good fit for EPIcenter’s logistics accelerator that runs in the summer.
“This is about the idea that the system our makers are working in, in terms of their access to capital, production space, equipment, sources and logistics, that system has some significant gaps in Memphis,” said Nicole Heckman, co-founder and partner with Little Bird Innovation.
The hope is entrepreneurs, when properly incentivized, will apply problem-solving to these gaps that often limit entrepreneurs’ or small businesses’ earning potential.
“Local sourcing, which we heard in our research with makers, is a pain point for them,” said Heckman.
Except for large corporations with their massive purchasing power and wide reach, acquisition of needed materials can be a challenge for most businesses. A lot of items cannot be found locally. Therefore, online orders or special trips are often necessary.
Gas, shipping costs, time lost and other factors can chip away at a makers’ bottom line and cut into their margins – which are often razor thin. Moving products can be equally challenging.
“Some of our makers are getting big enough that fulfillment is a real problem. By fulfillment, I mean the order comes in and someone needs to box it up, print the shipping label and get it to the shipper,” said Heckman.
Distribution companies generally show interest in large-scale operations. This can leave small-scale makers with the chore of getting goods from point A to point B, which makes the small business less efficient.
“When it comes to distributing products, be it locally or especially regionally, makers are taking a lot of time from their schedule to drive their deliveries from one place to another, which is not very cost-effective," said Heckman.
"Because that eats into the time they could actually make new products. We are looking for entrepreneurs that want to be that fulfillment arm and come up with a model for how to do that."
Submissions for business plans are due in January. From there, submissions will be winnowed down to a group of semi-finalists. EPIcenter will work with semi-finalists on their business models, plans and then help prepare their pitches.
“This process will generate a pipeline of innovators and entrepreneurs who have great ideas and make connections across the community,” said Leslie Smith, president of EPIcenter.
A committee will evaluate the entries, and the winners will be selected in February.
The competition fulfills a part of the Made By Project’s development plans that were announced in May.
Related: "Made by Project: Entrepreneurs and data central to solving Memphis makers' challenges"
“We’ve done a couple of things under the Made By umbrella. We’ve launched a maker council which is a diverse group of 11 makers across Memphis who are guiding the implementation of the Made By recommendations,” said Heckman.
The maker council is working on a business plan for a trade group. The working title of the association is the Made By Collaborative.
“Right now, we are getting feedback from makers on the key benefits they want to see and the revenue streams that would be associated with this group,” said Heckman.
Ultimately, the collaborative will work to implement the remaining development plans of the Made By Project.
“We identified a series of needs that makers had that could be solved by other entrepreneurs. EPIcenter is trying to create a behavior change within the community that has the market needs and gaps that lead to the creation of companies,” said Smith.
The Operation Opportunity Challenge also falls into the gap-filling activities the Made By survey identified.
“There were a series of recommendations that came out of our findings, and EPIcenter, in its gap-filling role, is trying to activate those programs in ways that serve the makers. And that's what this competition is,” said Smith.