Small businesses working together in West Loop
11/07/2012 10:00 PM
Economists will tell you the companies responsible for employment growth won’t be big corporations. They’ll be start-ups — small businesspeople with good ideas. Alas, nothing is quite as hard as building a new business from scratch. Interestingly, the West Loop is fertile ground for new businesses. Two are actually geared toward helping other small businesses succeed: Ox&Pen and Innovation Factory.
When I visited the Ox&Pen office, it had the vibe you’d expect from a business that rides on social media networking. It has an open bullpen area, an energetic young staff working the phones, a foosball table and curious Yorkshire Terrier named Madison.
Ox&Pen just celebrated its one-year anniversary. You’ve probably seen their representatives in distinctive purple shirts at street festivals. The company matches up its members with merchants to generate repeat business. They customers earn reward points when they shop at 100 or so Chicago businesses.
It’s all done via smartphone (there’s a free iPhone and Android Ox&Pen app). You can earn points when you spend money, or just by checking in with the merchant by scanning a QR code. Or, earn additional points by sharing the check-in on Facebook or Twitter.
The twist is, Ox&Pen only works with small businesses, no chains or big boxes. The little guys don’t have the advertising budgets to pay for a mass media campaign, but they can afford to award points and offer promotions for their goods and services, in return for customer loyalty.
One of those businesses is the West Loop restaurant Westminster Hot Dog at 1045 W. Madison St., which opened earlier this year. Owner Jake Kaminski is always happy to see a repeat customer ordering a sausage or dog. A half-dozen times a week, he also sees a customer scan the Ox&Pen QR code with a smartphone. That tells Kaminski the marketing works.
“It’s a good program,” Kaminski said. “Of all the deal sites, I like their concept the best because it gives people the incentive to come back. I like the idea of rewarding loyal customers who do business on a regular basis. This kind of concept makes good business sense to me. It’s user-friendly and easy once you get the hang of it. People are getting more familiar with these apps.”
Andrew Gluck, founder and CEO of Ox&Pen, is satisfied with the company’s progress in its first year.
“We’re on target for our year end objective,” Gluck said. “But in order to achieve our vision, we need more. It’s a work in progress.”
A completely different new West Loop business opened last month. Innovation Factory shares the Ox&Pen strategy of helping other small businesses succeed. And, they use technology to do it, but in a unique fashion, by creating products nearly out of thin air. In the process, they hope to bring manufacturing back to the U.S.
When I visited Innovation Factory at the corner of Fulton Market and Carpenter, I watched a curious device called a Makerbot Replicator form a plastic three-dimensional model of Tricia Thomas, the company’s design specialist. It began with a 3D photo taken as she spun slowly in a chair. The replicator hummed and whirred and after a few minutes, it turns unformed plastic filament into a lifelike bust of Thomas.
The replication was a demonstration of what Innovation Factory does — helping designers create new products.
“We’ll have expert designers to assist customers develop their idea, from the initial concept through production,” said founder Jonathan Kinlay. “If we like the idea enough we may offer to sponsor some or all of the development costs, and the cost of manufacturing and marketing the product. We plan to hold regular competitions and will sponsor the winning design.”
You might think being an inventor requires a Ph.D. in engineering (actually, Kinlay earned his in economics) or must have a mind like Thomas Edison. The reality is, anyone with a good idea can create. And, Innovation Factory has an environment that fosters creativity, open to anyone. Kinlay said the West Loop’s proximity to the Art Institute of Chicago also could help generate some great product design ideas.
One interesting aspect of both Ox&Pen and Innovation Factory was the origin of these two very different businesses. Andrew Gluck came up with the idea of a universal loyalty program several years ago. He refined the business model, then began building the business. He does credit his wife for the name — it’s a take-off on British rhyming slang for Oxford and Pence, or dollars and cents.
Similarly, Jonathan Kinlay has had an interest in alternative manufacturing technologies for many years. He saw a problem that needed to be addressed; that being, how to generate domestic manufacturing. “I wanted to create a company that would take advantage of new manufacturing technologies and harness new sources of investment to develop innovative ideas.”