This document summarizes information about Detroit's growing startup scene and potential to become a major tech hub. It notes that Detroit has the third largest startup community in the Midwest, major tech companies have opened offices there, and Dan Gilbert has invested heavily in startups. The cost of living is lower than Silicon Valley and Detroit has strong engineering schools. The automotive industry is a major economic driver and attracts tech talent. There has been a 50% increase in Detroit-based startups since 2014. However, challenges remain as Detroit still struggles with poverty and blight.

1. CLBR #272 Show Notes Detroit Revisited:
Is it the Next Startup Hub?
Photo CC BY-SA 4.0
Aerial View of Downtown Detroit, Michigan, USA. Looking up Grand River Ave
Robert Thompson

2. 2015: Dave Maraniss, “Once in a Great City: A Detroit Story”
Link

3. 2016: Amy Haimerl, “Detroit Hustle: A Memoir of Love, Life & Home”
Link

4. Aug. 4, 2017: Kathryn Bigelow’s film “Detroit” released

5. Detroit Timeline
• 1950: Population peaks at 1,849,568 (5th
largest city)
• 1963: Detroit loses bid for 1968 Games
• 1967, 1968: Riots
• 1979: Chrysler Bailout
• 2009: GM Bankruptcy
• 2013: Detroit Bankruptcy
(largest municipal bankruptcy)
• 2016: US Automakers sell record 17.55
million vehicles
Detroit Population falls to 672,795
(23rd largest city)

6. DETROIT
• TechCrunch:
#3 Startup City in Midwest
#2 Institutional Startup Investors
• Forbes:
America’s Newest Tech Hub
• Through mobility, Detroit may have found the economic niche that
transforms its fortunes, and does so in the same way other major
metros have -- by taking an already existing asset to another level.
• Not Just Motor City, the following also have offices in Detroit:
• Alphabet
• Amazon
• Facebook
• Twitter
• Peter Faricy of Amazon explained that “Michigan is a rapidly growing
technology corridor and we're eager to bring the incredible local Detroit
talent to Amazon.
• Detroit native Dan Gilbert, founder of Quicken Loans, has invested
heavily in the local startup scene in an effort to rebuild Detroit’s blight
into a trendy, bustling movement.

7. Ted Serbinski
on Detroit
• Detroit, too, has immense resources at
an entrepreneur’s disposal, but to build
and scale in Detroit is to build and
scale Detroit itself – something you can
no longer do in the Valley.
• And this is the reason I packed up and
left San Francisco for Detroit in October
of 2011. I wanted to take part in the
emerging entrepreneurial gold rush in
Detroit. I wanted to help fuel the
startup renaissance and create a
legacy.
• The biggest challenge of the Detroit
region is the perception. People who
have never been here before say
anything from ‘It’s unsafe,’ to ‘No one
lives here.’ Until they visit and see
everything that is going on. Then they
usually say they can see themselves
living here.”

8. Serbinski on Why Tech Is Bullish on Detroit
Women 2.0
• Two of Detroit's biggest strengths right now are the entrepreneurial
ecosystem and the energy surrounding it. When it comes to what’s
happening in Detroit with mobility, we say it’s not Silicon Valley
versus Detroit, it’s Silicon Valley plus Detroit. Because if you’re in the
mobility space, you need to have a presence in Southeast Michigan,”
he said. “We’ve had one company come through the program that
was from Michigan. The rest are from other cities and countries. We
have test tracks here and other industry-focused resources you can’t
find in other areas of the country. Our founders also have access to
our eight corporate innovation partners, which include Ford, Verizon,
Honda, Next 47 (a division of Siemens), Bosch, Munich Re, Dana,
and Michelin,” he said.
• And the automotive and technology space is taking notice. “Our
demos days attract thousands of people from all over the world. A
good 40-50 percent of people at demo days are not from the area,”
said Serbinski.

9. The New
Silicon Valley?
• There’s a hidden diamond in the Midwest that
contains an economy larger than
California. Chicago to Detroit, down through
Cleveland to Pittsburgh, bending through
Columbus to Cincinnati, and coming full circle
through Indianapolis back to Chicago.Within
this map, there is a significant intersection of
talent and business:
• 8 of the country’s top 25 entrepreneurial
colleges, according to Entrepreneur Magazine
• 6 of the top 20 engineering schools including
Chicago, Michigan, Carnegie Mellon, Illinois, as
ranked by US News and World Report
• 15 percent of the Fortune 500. Zoom out an
extra ~100 miles around the diamond and you’ll
get a staggering 45 percent of the Fortune 500
• And if Drive Capital’s Chris Olson is right, in five
years, the Midwest will have more startups than
Silicon Valley.

10. TECHSTARS MOBILITY
ACCELERATOR
• Three years ago, Techstars
Mobility launched in Detroit.
Since then, we’ve seen many
startups relocate or open up
shop in Detroit to tap into the
automotive dominance of the
region. SPLT and Lunar, part of
the 2015 class of Techstars
Mobility, both relocated from
NYC to Detroit. Together they
now employ over 40 individuals
in the city’s downtown.
• And Oblong, PolySync,
and Mapbox all opened offices
operating out of the Techstars
office.

12. How Detroit Could Beat Silicon Valley at
Its Own Game (Seriously)
• In one frontier technology, Detroit may hold several competitive advantages over Silicon
Valley. Although predictions range significantly, many research organizations forecast that
autonomous cars will be the first place that the public sees true Artificial Intelligence, with
widespread adoption by 2030. This has led to a burgeoning war between Silicon Valley and
Detroit, with many assuming the city that personifies urban blight can’t compete with the
likes of Elon Musk and Larry Page.
• But critics may be missing several distinct advantages that the motor city holds over Silicon
Valley. In particular: it’s becoming a highly-attractive location for STEM talent, it has a
rapidly expanding (and hungry) tech scene and it has a localized industry cluster that may
be difficult for Silicon Valley to replicate.
• First, the Detroit-Ann Arbor area boasts a highly-educated population. According
to WalletHub, nearby Ann Arbor is ranked #1 on the list of most educated cities, ahead of
both San Jose (#3) and San Francisco (#7).
• Second, the cost of living in the area is below the national average and significantly below
Silicon Valley.
• Finally, Detroit is becoming much more attractive for STEM talent. Not only has STEM job
growth outpaced traditional by 6x, the city is midst of the kind of cultural revival that serves
as catnip for millennial technologists.
Link

13. • When you go back about one hundred years to the early part
of the twentieth century, this was the Silicon Valley of that
time,” says Gabe Karp, partner at Detroit Venture Partners.
“The Henry Fords of the world and the auto industry, that
was the heart of innovation, so that’s deeply rooted in the
DNA.”
• Perhaps the most obvious factor that has catalyzed the city’s
regrowth is the automobile industry, the piece of Detroit
lore that rivals the bankruptcy in recent cultural
consciousness. The city has become a prominent hub not
only for car companies, but also original equipment
manufacturers, suppliers, technology companies, and
advanced manufacturing. As vehicles continue to be more
connected to technology, the demand for highly capable
tech professionals in Detroit and the surrounding
communities continues to grow as well.
• “Detroit is becoming a robust ecosystem of entrepreneurial
activity [again],” notes Karp. “You don’t need a Silicon Valley
zip code to launch a great tech company.”
• Link

14. 50 Percent Increase
in Detroit-Based
Startups Since 2014
• There are currently 35 active venture-backed startups in Detroit.
• Venture-backed startups in Detroit represent 25 percent of the
startup companies growing in Michigan.
• There are five venture firms headquartered or with an office in
the Detroit area. These venture firms represent 15 percent of the
firms in Michigan.
• In the last year, 14 startups in Detroit received more than
$62,000,000 from venture capital firms.
• Currently, 43 percent of the startup companies that have
received venture capital funding in Detroit are information
technology companies, while 23 percent are life science
companies.
• Over 50 percent of the startup companies in the Detroit area are
in the startup/early stage.
• Detroit’s evolution toward becoming a premier hub for
entrepreneurial and investment activity in Michigan has been a
long time coming,” said Gab Karp, Partner at Detroit Venture
Partners. “The talent and networking opportunities in the city
provide new startups a strong base to grow and make an
immediate impact on Detroit’s economic resurgence. We’ve
already seen the positive impact made by the influx of
entrepreneurs investing in the future, and it’s only going to
accelerate going forward. We expect the startup landscape to
continue to grow and define Detroit as a nationally recognized
startup destination.”
• Link

15. MCVA Study
(con’t)
• Hot sectors include fintech
(e.g., Benzinga in Detroit), life
science/healthcare
(e.g., Millendo Therapeutics in
Ann Arbor), and security (Duo
Security also in Ann Arbor).
• Higher growth startups
include Rocket Fiber that
provides gigabit internet
and Shinola that is bringing back
manufacturing to Detroit.

16. • STARTUP AS MEME: Dandelion founder Jason Lorimer, who moved
from Philadelphia, to join Detroit’s future, was pillored for
embodying the image of “the white male entrepreneur and self-
styled savior.”
• HARD TRUTHS: For all the optimism, it must be muted. Detroit is still
the biggest poor city in the country. Only Philly rivals
Detroit’s abandoned property crisis. Forget the stories of Bay
Area expats flocking here. Detroit is still more Milwaukee than San
Francisco.
• The attention paid to Detroit’s startup community surely outpaces
its maturity but that’s likely because the excitement is more for its
future than its past. Whatever comes next will be a result of where
Detroit is now.
• Link

17. DETROIT BY THE NUMBERS
(Data from Bestplaces.net)

18. NETFLIX
DOCUMENTARY
• GENERATION STARTUP captures the struggles and
triumphs of six recent college graduates who put
everything on the line to build startups in Detroit.
Shot over 17 months, it’s an honest, in-the-trenches
look at what it takes to launch a startup as the film's
young entrepreneurs learn to fail and redefine
success.
• Directed by Academy Award winner Cynthia Wade
and award-winning filmmaker Cheryl Miller Houser,
the film celebrates risk-taking, urban revitalization,
and diversity while delivering a vital call-to-action—
with entrepreneurship at a record low, the country’s
economic future is at stake.
• Now available on Netflix! http://nflx.it/2nu4mjw