What Detroit wants to be known for next
In 1805, a citywide fire leveled Detroit. At the time, Father Gabriel Richard ran a school that was destroyed. Reflecting on this experience, Gabriel coined a phrase that serves as Detroit’s motto to this day: “Speramus Meliora; Resurget Cineribus” or “We Hope For Better Things; It Shall Rise From the Ashes.”
After the turmoil of deindustrialization, an intractable crime rate and bankruptcy, Detroit is again pulling itself up and dusting itself off.
“Detroit has always reinvented itself,” said Kyle Bazzy, the director of Startup Next Detroit a Techstars program. From a city built on shipping goods west to east and later the automobile, Detroit is now looking to tech as its next reinvention.
Understanding how tech can reinvent a city is a major objective of the Tomorrow Tour, a six-city event series brought to you byTechnical.ly and Comcast NBCUniversal. The Detroit stop takes place March 10.
According to Rachele Downs, the vice president of entrepreneurial strategies at Inforum, a professional women’s alliance, that transformation is already underway. “The last five years have been better than the previous 40,” Downs said of Detroit.
A part of the “reskinning” of Detroit is on account of Dan Gilbert, the chairman of Rock Ventures and Quicken Loans. He moved the Quicken HQ and its staff from suburban Livonia to Detroit in 2010.
Gilbert, through Bedrock Real Estate Services, is on a buying spree. According to Colby Berthume, the public relations manager at Rock Ventures, Bedrock owns or controls over 80 buildings totaling 14 million square feet in Detroit’s central business district.
This work intends to revitalize Detroit’s previously derelict core to better attract young talent to the city and create a denser ecosystem of entrepreneurs and startups. Something easier said than done.
Automation Alley, a Michigan technology business association, reports that the Detroit metro is third in the country for the number of STEM degrees earned. It’s also first in the nation for the number of architectural and engineering jobs. However, people are still reluctant to relocate to Detroit proper. According to recent Censusnumbers, Detroit’s population shrank by 4.7 percent between April 2010 and July 2014.
While Detroit’s population is not growing, investments in the region are. According to the Michigan Venture Capital Alliance’s 2015 report, there’s been a 70 percent increase in venture-backed companies in Michigan in the past five years, now totaling 129. The same report says 2015 saw $870 million in capital for new investments, up from $340 million in 2010.
For outsiders that think they know Detroit, here are three takeaways about its growing tech community:
1. The scene is more than software
With the city’s history permeated by the auto industry, mobility and the Internet of Things are big areas of opportunity in Detroit, says Paul Riser, Jr., director of TechTown Detroit. Perhaps the biggest sign of this emerging area is Techstars’ new mobility accelerator located in the city.
Techstars Implementation Manager Jessica Robinson says being in Detroit makes it easy to take advantage of the vertical integration of the region. Among others, Ford, Verizon, Michelin and the insurer Munich RE banded together to make the national accelerator Detroit-based. This multi-partner effort was a first for Techstars, but Robinson says that this approach is “truly reflective of Detroit.”
2. Detroit is accessible
Everyone we spoke with believed that Detroit was an open environment where outsiders can quickly receive help and mentorship as they build their businesses.
“Detroit is the biggest small town in America,” said Inforum’s Downs. When it comes to startups looking for help from subject matter experts, talent and funders, Downs says that all sectors of the local ecosystem are accessible and willing to talk.
3. It is fertile for social entrepreneurship
When people talk about tech in Detroit, they often talk about what tech can do for Detroit.
“The local tech scene is able to look at a lot of [Detroit’s] problems and create solutions,” said Razi Jafri, a cofounder of NeighborFix, a marketplace where neighbors can purchase services from one another.
To this end, the social entrepreneurs, says Bazzy of Startup Next Detroit, can expand the impact of tech outside of Detroit’s core. While downtown looks brand new, other neighborhoods with blight, vacancy and poverty are not reaping the same rewards.
But Bazzy is quick to swat down the belief that tech will “save” Detroit.
“Any time we hear a ‘save the city’ it’s never a good thing,” Bazzy said. He believes that tech will be a part of Detroit’s latest phoenix narrative, but it wont be tech alone.
That being said, Techstars’ Robinson, who moved to Detroit from Portland, Ore., two years ago, said that what drew her in was that “entrepreneurs in Detroit were more connected to what was happening” in their city than she saw elsewhere.
This larger mission got Robinson to move — and those bullish on the Detroit tech scene hope more will follow.
Posted by Friedman Research Team February 25, 2016