Cities Startup Culture

Detroit Needs Talented People … and It’s Getting Them

We’ve asked speakers at our upcoming Techonomy Detroit conference to share perspectives on topics they will discuss at the event relating to U.S. economic growth, jobs, and urban renewal. (To register for the conference, click here.)

Thanks in part to Venture for America, downtown Detroit has become a hotbed of startup culture. (Image via Shutterstock)

Thanks in part to Venture for America, downtown Detroit has become a hotbed of startup culture. (Image via Shutterstock)

Detroit’s unique challenges have given rise to bold policy prescriptions and created a hotbed of opportunities. Marc Andreessen recently suggested making drones legal to help turn the city into a policy and industrial innovation zone. Michael Bloomberg proposed providing a direct path to U.S. citizenship for immigrants who migrate to Detroit and contribute to the community for seven years. And a plan to raze and remove the city’s 40,000 abandoned buildings has gained considerable support and momentum, not to mention $450 million funding. It could help start making Detroit look like a verdant park in coming years.

Last year, I asked an audience in San Francisco, “What would happen if everyone in the Bay Area were to move to Detroit?” Think about that for a second. After a bit of back and forth, we agreed that there would be a rush of startup activity out of the Motor City, including personal warming devices and other innovations. Even if the people of Silicon Valley weren’t allowed to bring money with them, investors would follow, and 8 Mile would become the new Sand Hill Road almost overnight.

Human and intellectual capital drive innovation more than any other thing.

In 2012, a dozen smart, enterprising recent college graduates moved to Detroit. They were Venture For America Fellows, assigned to local startups to gain experience and contribute energy to Detroit’s revival. Three of them—Tim Dingman, Scott Lowe, and Max Nussenbaum—joined with former marine Sean Jackson, a 2013 VFA Fellow, to buy a foreclosed seven-bedroom mansion in Midtown for $9,200. Calling the house Rebirth Realty, they crowdfunded an additional $10,000 to renovate it themselves. By age 25, Tim, Scott, and Max discovered that being a landlord was fraught with issues. So they co-founded a software company, Castle, to provide services to small landlords, raised $30,000 in early investment, and are about to launch their first mobile product.

Another of the graduates, Brian Rudolph, a fitness nut, began experimenting in his kitchen to prepare something he could eat all of the time. After months of tinkering, he hit upon a recipe for high-protein, gluten-free, low-carb pasta made of chickpeas. He started a company called Banza and raised $75,000 in seed money by winning an investment on CNBC. His delicious pasta is now being distributed by Meier and at the Banza website. He hired his first employee last month.

Another Venture for America Fellow in Detroit, Brian Bosche, noticed that small businesses had a hard time creating effective videos to promote themselves online. He began researching technology solutions, including GoPro cameras and cloud editing solutions. He co-founded a company, TernPro, with his friend and Dan Bloom, a 2012 VFA Fellow, and raised $25,000 from Bizdom, an incubator funded by Dan Gilbert. They have 30 customers and have hired 2 people.

Castle, Banza, and TernPro are tiny companies that might not succeed or leave much of a mark on Detroit. But with enough of them, some are bound to become significant. Every tech job in the traded economy (where the goods sold are being bought by companies and people outside the region) accounts for between two and five service jobs—such as waiters, baristas, hairdressers, babysitters. Quicken Loans, which employs 8,000 people in downtown Detroit today and supports thousands more, was itself a startup 29 years ago.

The conditions are right for innovation in Detroit: costs are low and resources are significant. Leaders like Dan Gilbert and NEI are investing in the city’s future. Imagine if the same body of talent that’s currently heading to shrinking fields like law and academia were instead heading to early-stage companies in Detroit? What Detroit needs—what we all need—is for more of our most talented and enterprising people to take on the challenge and the opportunity to build something new.

Andrew Yang is the founder and CEO of Venture for America, a fellowship program that places top college graduates in start-ups for 2 years in low-cost U.S. cities to generate job growth and train the next generation of entrepreneurs. He will speak on a panel about startups and sustaining innovation at the Sept. 16 Techonomy Detroit conference.

Tags: , , , , ,