Breaking Down Barriers: A Detroit-Ann Arbor Dinner Conversation

Growing up in East Lansing, MI, I wasn’t aware of the “invisible forcefield on US-23,” as TechTown Detroit’s executive-in-residence Gerry Roston eloquently phrases it, that acts as a barrier between Detroit and Ann Arbor.

It seemed inconceivable to me that I, someone who grew up about 80 miles from Detroit, had visited the city more during my formative years than some of the folks I’ve met in recent times in Ann Arbor, a mere 39 miles from the Motor City.

Provincialism is nothing new in Michigan, but in the case of Ann Arbor and Detroit, particularly, it seemed strange that two neighboring cities—each trying to blaze a new trail in a recession-worn state no longer flush from the auto industry—wouldn’t be working together.

Each community is also nurturing a booming tech startup scene—Ann Arbor’s a bit more mature than Detroit’s—and can only benefit from cross-pollination and cooperation. To not make every effort to foster those relationships and bridge the walls would seem a disservice to the entire state. The Southeast portion of Michigan drives the state’s economy and churns out an enormous amount of talent. Imagine how much more powerful that engine could be if the startup ecosystems in each city operated as two halves of a united whole.

Things have gotten better in the past few years, but there is still plenty of work to be done. Because Xconomy has a foot in each community and covers the news of both, we wanted to help take the lead in a new effort to get local thought leaders together to see if we might tease out some solutions. That idea grew, and last week, with the lead support of the New Economy Initiative (NEI), we embarked on the endeavor.

What we hit upon was hosting a series of dinners and meetups to get the conversations flowing. We’re still not 100 percent sure how this will look, but over the next year, we want to get people together at least quarterly to see if we can’t find a way forward. Sometimes, the events might be sector-specific; we might host an intimate private dinner one quarter and a bigger, open meetup the next. We’re thrilled that a handful of our dinner guests are planning to write guest posts about the issue, and we look forward to rolling those out soon. Do you have ideas? E-mail me; you can find my address at the end of this post.

Last week, we also changed our name to Xconomy Detroit/Ann Arbor, in recognition of the two communities so crucial to the state’s efforts to innovate and diversify, as well as the regional collaboration we hope to help facilitate.

We held our first dinner in the Detroit-Ann Arbor series last Wednesday, and it sparked a lively conversation about how to bridge the gap between the startup communities of Detroit and Ann Arbor. We invited about 30 of our friends, supporters, and sources from both cities (Matt Bower from Varnum and Dug Song of Duo Security are pictured above).

David Egner from the New Economy Initiative was there, and so was Ken Nisbet, head of University of Michigan’s tech transfer office. Also on hand were Renaissance Venture Fund’s Chris Rizik and Paul Riser, who heads technology-based entrepreneurship efforts at TechTown, along with his boss, Ned Staebler. Ann Marie Sastry, founder and CEO of Sakti3, joined us fresh off a trip to Washington, DC, to hang out with President Obama at the White House. Ann Arbor SPARK and Bizdom were also at the table, along with founders from some of the startups they’ve helped nurture. (There’s a full list of our dinner attendees at the bottom of the post. We thank them for joining us, and we thank Varnum for sponsoring the dinner.)

A few common themes emerged—the serious need for executive talent, the harmful perception that people with kids can’t move to Detroit because there are no good schools, the poor job the region does marketing itself to other innovation communities and the world at large, the abysmal state of regional public transit—and there were a lot of really great points made. This first dinner was mostly about framing the issue from the innovation community perspective, not about hard answers. We hope to get more of those as we continue the series. But for now, here are some highlights:

On the executive talent issue, Joe Malcoun, co-founder and CEO of Ann Arbor’s Nutshell, agreed with Duo Security’s Dug Song that management skills—particularly, the lack of upper-level executive talent needed to run multimillion-dollar startups—was hampering the region in general. “We can’t hire people from California if they look at our state as regressive,” Malcoun said.

Staebler, who also serves as vice president of economic development for Wayne State University, thinks policy changes at the political level regarding how Michigan attracts and retains talent are crucial to the state’s growth. “That’s why the Ann Arbor-Detroit pipeline is so important,” he said. “It could be an amazing talent pipeline for the state, but instead it’s an amazing pipeline of talent to California. We need to move it east instead of west.”

“The talent thing is huge,” Malcoun agreed, going on to say that there are lots of things people can’t control—global economic forces, the state of public education, the glacial pace of transit improvements—but what Michigan innovators can and should align on are things like localized talent attraction programs. Nutshell, he said, is preparing to go on a hiring spree in the coming months and is developing its own in-house strategies for how to find employees that fit the company’s culture. Duo Security, Song said, is doing something similar.

When I asked the table what they think is preventing greater collaboration between the ecosystems of Detroit and Ann Arbor, the answers varied. Transit was a big one, and so was that invisible forcefield that Roston referred to—the one that has people in Ann Arbor saying, “We have everything we need here. Why would we go to Detroit?” Or, as a gentleman at an entrepreneurial conference put it to me once: “Why would Ann Arbor want to associate itself with a bad, losing brand like Detroit?”

“I’m not originally from this area, but I’ve met a number of people born and raised in Ann Arbor that have never been to Detroit,” Roston said. “I don’t know what it is, but there seems to be a reluctance by a large number of people in Ann Arbor to go to Detroit.”

“Ten years ago, I couldn’t get a 22-year-old to come to Detroit,” the NEI’s Egner said. “Now, that’s not a problem. Now, it’s how do you get the 35-year-old who’s not just excited and smart, but has some experience? To me, it all comes down to schools. I can’t tell you how many people I know who are in this spot in Detroit—they’re getting married, they want kids, and the first thing they’re thinking of is, ‘OK, what do I do now? I want to stay in Detroit, but my good school choices are so limited.’ If we could solve that issue, that would go a long way toward making it really comfortable for Ann Arbor companies to open Detroit branches.”

To Song, the keys to success for Southeast Michigan are smart development policies, affordability, and better transit.

“The way Southeast Michigan is carved up with all these satellite communities, it’s very hard for us to build a unified story as a region,” Song said. “That weird wall definitely exists. But if we don’t solve that problem, it will be the death of all of us. Communities are built through a mesh of organic relationships from the ground up. Institutions that exist between Ann Arbor and Detroit have always been connected in some way. But if we aren’t sending people back and forth to actually build those relationships, it’s all for naught. Unless you have people spending time with each other and going out of their way to go to Detroit or come here, or you’re sending people in either direction to help them build their companies, there’s no real community.”

Egner offered a bit of historical perspective that illustrated how far Detroit has come in the past few years: “Eight years ago, if there was anything cool going on in Detroit, I knew about it. Today, I look at how many cool things are going on and I can’t even begin to catalog them. This notion of being urban pioneers or regional pioneers for cultural change is critically important. And, Dug, you’re right—if we don’t create a culture where entrepreneurs are willing to make the connections, we’ve lost that. But I think you all need to recognize you’re on the fringe. You’re the lunatic fringe on this.”

Egner also pointed out that the innovation community is at a critical juncture in terms of making real, lasting culture change in Michigan: “Philosophers say changing a culture without a war or natural disaster will take eight to 10 generations, so if we assume this cultural change started in the ‘60s, we’re halfway through it. So as frustrating as this is, I don’t want to lose the notion that you guys are the tip of the arrow, and it’s going to be painful and you’re going to get tired, but if you retreat or don’t keep putting these issues out and multiply your numbers by bringing others in behind you, we’re going to reverse direction.”

Many people around the table agreed that, as a region and state, we’re still not telling the stories of our successes as well as we could be, which allows the perception of Michigan as a Rust Belt has-been to persist.

“Nobody knows that Southeast Michigan is a powerhouse in the photonics industry,” Roston said. “We’re just not telling the story right. I’m willing to bet that if we looked at the number of tech startups and just started marketing that, the numbers would astound all of us.”

My hope for the dinner was that something actionable would come out of it. It’s hard to tackle issues this big over the span of one meeting, but I think we’re going to take Song’s advice about making a concerted effort to send people back and forth between Ann Arbor and Detroit. I floated the idea of a version of a punk rock prom, only for people in the tech community instead of the music community. We could gather in Detroit this time, dress up, enjoy some social lubricants, cut loose, and see what happens.

What do you think? Are we totally off the mark? Drop us a line and let us know.

 

Thank you to our dinner guests:

Matt Bower, Partner, Varnum

Jim Boyle, Senior Consultant, Strategy and Communications, New Economy Initiative

Bob Buderi, CEO, Xconomy

MJ Cartwright, CEO, Court Innovations

Donna Doleman, Senior VP of Operations and Communications, Ann Arbor SPARK

Joan Dunbar, Associate Vice President of Technology Commercialization, Wayne State University

David Egner, Executive Director, New Economy Initiative

Maria LaLonde, Recruiting and Development Leader, Bizdom

Josh Lin, Associate, RPM Ventures

Joe Malcoun, CEO, Nutshell

Bill Mayer, VP Entrepreneurial Services, Ann Arbor SPARK

Jack Miner, Director, Venture Center, University of Michigan

Ken Nisbet, Director, Office of Technology Transfer, University of Michigan

Julia Owens, President and CEO, Atterocor

Jon Rimanelli, CEO, Detroit Aircraft Corp.

Paul Riser, Managing Director of Tech-Based Entrepreneurship, TechTown Detroit

Chris Rizik, CEO and Fund Manager, Renaissance Venture Capital Fund

Gerry Roston, Executive-In-Residence, TechTown Detroit

Ann Marie Sastry, CEO, Sakti3

Skip Simms, Senior VP, Ann Arbor SPARK

Dug Song, Co-Founder and CEO, Duo Security

Ned Staebler, Vice President for Economic Development, Wayne State University

Zach Steindler, Chief Olarchitect, Olark

Guy Suter, Co-Founder and CEO, Notion AI

Kristen Veresh, Partner, Varnum

Jordan Warzecha, CEO, Backstitch

Stefanie Warzecha, Co-Founder, Backstitch

Sarah Schmid Stevenson is the editor of Xconomy Detroit/Ann Arbor. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET_AA

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