The Detroit Transportation Challenge

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  • From left: Nima Adelkhani, Meredith Kerekes, Alisyn Malek, Jamie Shea, Ted Serbinski

  • Nima Adelkhani, IdeaMarket

  • Meredith Kerekes, Detroit Creative Corridor Center

  • Alisyn Malek, GM Ventures

  • Ted Serbinski, Techstars Mobility

  • Jamie Shea, Mission Throttle

Panelists

Nima Adelkhani
Chief Innovation Evangelist, IdeaMarket

Meredith Kerekes
Entrepreneur in Residence, Detroit Creative Corridor Center

Alisyn Malek
Investment Manager, GM Ventures

Ted Serbinski
Managing Director, Techstars Mobility

Jamie Shea
Managing Director of Investments, Mission Throttle


Session Description:
The Detroit Transportation Challenge is a call to entrepreneurs, engineers, designers, and other creative thinkers to create an innovative solution that significantly improves transportation in Detroit with focus on public transportation. The winning team with a creative solution will receive an investment of $250,000 to help establish a new company in Detroit.

 

Adelkhani: First of all, really excited to be here. The journey to end up on this stage started December 10, 1989, when I first moved to US from Germany. The very first football game I ever watched was a Detroit Lions game against the Bears. And I didn’t understand football so I immediately fell in love with the Lions and Barry Sanders and the next day bought this t-shirt. This t-shirt is 26 years old and I still wear it.

But fast forward to about February of this year, our lead investor, Steve Case, was speaking at Startup Grind in Redwood City and he talked about Detroit, and just like right now, I got goose bumps. I’ve had a Cadillac, I’ve had five GM cars, I drive a Volt, I’m a Lions fan, and I’d never been to the city. We were planning to do an innovation challenge launch around a city or a place at South by Southwest, and so IdeaMarket is really a platform where investors put up money with ideas and then we scour the world to find the teams that can build the best solutions.

So I didn’t know anybody in Detroit so I emailed Alisyn, because I had read an article about her in I think “Entrepreneur” magazine or “Forbes,” and I said, “Hey, we want to do this innovation challenge around the city of Detroit. Do you have any ideas where we can start and what we can do?” And again, the idea was that we would have a house at South by Southwest in Austin and people would come and write ideas on the wall.

So we did the house, we had 976 submissions ranging from homelessness to blight removal to job creation to transportation, education, safety, retraining the workforce, microfinance, and we were overwhelmed. Then in May we came here—and I think that’s where I want to start. We came here to get feedback and kind of check in with the community, and Meredith, you were there that evening when we in a sense kind of played musical chairs. We had identified six verticals: education, safety, healthcare, transportation, microfinance, and micro-manufacturing. And so tell us about that night and what we did and what you thought.

Kerekes: Well, first of all, I was surprised to be invited to an event during Mackinaw [ph 0:03:26.6]. So that was another event. So it was nice to have kind of the unusual group of people there. But it was a blast. It was a ton of fun. It was a great way to meet new people from the community and understand what kind of the outside world thought our challenges were, and then, coincidentally, how does that balance up to what we, as being in the ground floor working with the community and with the city to kind of understand and identify that. And it was a great way to narrow that down, and really, really well done.

Adelkhani: Yes, and so what we did was we rated the six verticals on scalability, profitability, and impact, and lo and behold, transportation got the highest score. And again, Alisyn, in this whole time that we’ve been communicating, started connecting me with people and since then I think I’ve knocked on every door I could ever think of. But Alisyn, maybe you can talk about, you know, what did you think when I first reached out to you, or what was your vision or what was your first response kind of?

Malek: So when I first got the random LinkedIn request trying to explain what IdeaMarket was, I had my typical reaction when I hear about people that want to come and save Detroit and have never been here, which is to roll my eyes. But then I realized that it wasn’t—I did some Internet searching and realized that they were a legit organization and that this was an opportunity instead of to roll my eyes and see what comes out of it, but to help actually connect with the problems that we do have. So instead of just having outsiders pontificate about what Detroiters need, actually try to connect to different community organizations, nonprofits, startup incubators, everybody I could possibly think of to help this be successful. I think it’s a really great asset for the region and I was excited to be able to in on the ground floor to help make sure that we do have broader community coverage.

Adelkhani: Okay. By the way, I didn’t ask you, Meredith, was transportation your favorite?

Kerekes: It was not. It was not. So I work with the Detroit Creative Corridor Center and I was interested in micro-manufacturing.

Adelkhani: That was one of my favorites as well. Jamie, so one of the introductions that Alisyn made was to you. You’re with Mission Throttle here, and we talked about this early on and I wanted to get a sense of what you thought, coming from a social impact investment angle and really your thoughts on is this something that would work and—you know, what were your thoughts?

Shea: So a) I just love the idea of the challenge in the first place, and all of the different topics that were just listed to me were all really interesting ideas. Transportation actually was my first pick. And the reason transportation was my first pick is that as an impact investor here in southeast Michigan and statewide, we invest in mission-driven organizations that are looking to solve challenges around health, education, environment. And every single time we come up against the challenge around education or health, part of the solution usually involves transportation, and actually the lack thereof is a huge problem in relation to education, how do you actually get kids to schools? Related to health, how do you get individuals actually to the available healthcare? And so transportation in particular is something that I think is particularly relevant for us because it’s so tied in to all these other challenges that we have.

And that was actually part of that discussion too I think in May, was that obviously all of these challenges around health, education, transportation, workforce redevelopment are actually all very linked.  I think transportation in particular. And of course we’re talking about transportation for all Detroiters, not just for the Detroiters that are in the core 7.2 miles here, but that are also living in the neighborhoods. They’re the ones that have the most difficult time accessing transportation and have the longest way oftentimes to get to jobs, many of them traveling two to five hours a day just to work.

Adelkhani: Right, and that was actually one of the interesting points. I did so much research around the city and the community and all these stats: 26% of the people don’t have cars and the average person spends two hours and 45 minutes. And then I read the story about the gentleman who walked 18 miles, 20 miles a day. And all these things honestly seemed kind of unreal to me because, you know, I live in San Francisco, we have an amazing public transportation system and it’s more efficient than driving. So I was thinking to myself, you know, how is this possible?

But what was interesting was when I came here and, you know, obviously talking to the folks on the panel and everybody else, we saw this opportunity. And so if you think about what we do—I don’t know how many of you are familiar with the XPRIZE. Peter Diamandis is I think one of the greatest visionaries who has come up with these mega challenges to impact the world. He’s on our advisory board. The other cofounder is Bill Gross of Idealab, who started over a hundred companies. So what I tend to say is that if the XPRIZE and Idealab had a baby it would be IdeaMarket.

So what’s going to happen is we’re going to launch this challenge today. If you’re familiar with Thunderclap, in about 20 minutes or so a group tweet is going to go out to I think now 1.2 million people around the world and we’re doing a call for applications for people to submit their ideas on solutions on how to solve public transportation for the city of Detroit, and then hopefully we can use this for other cities. And throughout this process, obviously I think the one person that’s kind of leading the charge on mobility and transportation in Detroit was Ted, who Brad Feld connected me with, and I just came from the demo day.  Congrats on that. I was blown away. All 10 companies were amazing. If the split team was here, you probably would have won this challenge. They’re awesome.

But, Ted, talk about a) obviously why are you guys doing mobility and transportation, why is it important, what’s the impact it can have on the community, and then tell us obviously a little bit about Techstars and what your vision is for what you’ve got going on.

Serbinski: Yeah, so Techstars is a global ecosystem that helps entrepreneurs take their startups and bring them to market and grow them anywhere from idea all the way to exit or IPO. And Techstars, we have 19 locations around the world and Detroit is one of the newest ones, and the mobility program is around next generation transportation, logistics, those kinds of startups in Detroit, what Detroit’s good at. And I like to say we operate at the intersection of Detroit’s entrepreneur resurgence and its automotive dominance. And when Nima approached me about what they were doing I was like this is a perfect fit. We’re trying to build an ecosystem here. Our program only runs once a year. We only take 10 companies a year. And we just had our demo day last week. We had 1,100 people show up for that and it was just a fantastic day just kind of celebrating entrepreneurship in Detroit, but also thinking about the future of mobility. And with the IdeaMarket challenge here, this is a perfect continuation of that. It’s not only how do we bring that kind of thinking to Detroit, but how do we solve some of Detroit’s own transportation problems. So I think it’s a fantastic program and continuing to bring the conversation around next generation mobility, transportation companies, and ideas back to Detroit, back to its birthplace.

Adelkhani: Awesome.  Again, the program was—the demo day was amazing. All of the companies were amazing. I was truly impressed.

Before we actually read the challenge out loud, a) I wanted to ask if anybody has any questions and b) I wanted to first of all thank you all for being part of this journey. Alisyn, again, I probably couldn’t have been able to do this without you. But I want to open up for a couple questions before we actually read the challenge out loud. Anybody have any questions?

Audience 1: So what’s the endgame?

Adelkhani: The endgame is we’re going to be taking applications for about 90 days. The group here is on the judging panel, as well as Bill Gross, Bill Thompson, who’s our ambassador here in Detroit, a couple of other investors, and we’re going to hopefully pick maybe more than one team to relocate to Detroit, or if they’re based here, to start a new business to figure out how do you get people to work safely, efficiently, and cost-effectively. And they’ll get an investment services. Meredith and the DC three are going to help them with design work. And we are also going to give them access to a network of over 300 mentors in Silicon Valley. And I’ve been asking pretty much everybody here who I bump into to also become a mentor and support them on their journey here.

Audience 1: Is there political support?

Adelkhani: Yes, so Jill Ford from the mayor’s office is also one of the judges and we’ve been engaged with her. And she actually was at the Idea House in Austin, and she also submitted an idea. So, yes, we’ve been talking to literally I think almost everybody. And then the goal is to do one of these challenges every three months. So we’re going to continuously fundraise and try to raise money to do all the challenges. For healthcare, for example, we might want to address infant mortality, retraining job forces. And so we’re going to continuously come up with new challenges that we can launch and find teams too.

Audience 2: Just two quick logistical questions. One is, when you say start a new company, does that mean it can’t be a formal legal entity yet, or where do you define new? And, two, are you guys taking equity or is it a grant or some other sort of financing?

Adelkhani: Yes and no. So new company meaning that a new company is formed, the investors make an investment—it is an investment, not a grant or a prize, which we think is actually going to create more accountability and responsibility to really drive innovation and job creation by starting a new business. What we tend to see with companies that apply on our platform in many cases is that they are working on something similar. It’s maybe a mini pivot or a slight adjustment, but they have domain expertise, they are technical, they can build a solution, or have already started. So it is a new company that’s going to address the specific problem.

Petraszczuk: Since we’re speaking of challenges—this is Natalia Petraszczuk, tech cofounder of a startup, VizBe.co. Born and raised in Detroit but I did live in Chicago for seven years, sold my car and used mass transportation the whole time I lived there. I’ve never used, outside of the PeopleMover, any transit here in my whole existence. I’m 36 years old. So I think inbound and outbound use of transportation is a very important factor to be considered, how can we be—and this is more of a point of information than it is a question, but I wouldn’t mind some response. Making sure that we’re challenging both inbound and outbound users to use said public transportation and educating them is a really important factor. So it’s more of a point of information, wouldn’t mind any input.

Adelkhani: Thank you. You know, when we worked on this challenge, we actually went to the folks of XPRIZE and at first we were thinking, hey, let’s go really narrow in focus and say how do we get a thousand people to and from work in 90 minutes or less for three dollars or four dollars? But what Peter actually said was that this is more like a beauty contest. You want to go as broad as possible. And the solution could be something that helps public transportation, an algorithm that optimizes routes, it could be car sharing—I mean, it really can be anything. And, again, the goal is to help the community. So I actually wrote a blog post about my experience and someone challenged me to ride the bus, so I’m going to ride the bus for entire day during this trip and talk to people and really figure out, you know, what are they going through.

So one more question and then we’re going to read the challenge. In the corner there.

Audience 3: I just wondered if Transportation Riders United is a very important access [ph 0:15:38.6] organization for transit here and I would hope that—

Malek: I put Nima in contact.

Audience 3: Okay. But someone should be involved in assessing the applications, in the sense that they know the problems of best probably.

Adelkhani: Yes, so, again, we’re taking applications for 90 days and we already have I think 14 people on the panel, including a couple of transportation experts. And we want to build this panel to really, again, involve everybody.

So can we move to the next slide so we can read the challenge? And what I ask you, since I’m not the people of Detroit, everybody read—Meredith, do you want to start with the first?

Kerekes: Sure. We the people of Detroit hereby throw an ambitious challenge to any entrepreneur, engineer, or creative thinker to produce an innovative solution to help the citizens of Detroit get around the city efficiently, safely, and cost-effectively.

Malek: We believe that efficient transportation will reenergize Detroit’s economy to increase job opportunities.

Shea: We believe that the citizens of Detroit deserve mobility.

Serbinski: We believe that the Detroit Transportation Challenge will support our current residents and attract new residents.

Kerekes: We believe in the collective power of our innovators to create solutions that will solve Detroit’s pressing transportation problems.

Malek: We believe that small teams focused on solving a problem can produce great results, which can bring access to reliable transportation to everybody.

Shea:We believe in a future where Detroit’s efficient transportation becomes a model that other cities around the country and the world will look to replicate.

Serbinski: And today we’re starting the movement with the launch of the Detroit Transportation Challenge.

Adelkhani: So I ask you to share this with everybody in your network, tweet it, Facebook. And again, in about 20 minutes about 1.2 million people are going to see this call for applications and we’re excited to launch this. And again, we’ll be doing a series of these challenges, so if anybody’s interested in being involved, and, again, if you want to make connections to other experts and panelists, we’re more than happy to connect with them. Thank you so much. And panelists, thank you very much.

[APPLAUSE]

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