Detroit Trends in 2018? More Traction, Diversity, and Collaboration
Editor’s note: This is part of a series of posts sharing thoughts from industry and technology leaders about 2018 trends.
A few trends come to mind that continue to shape and define the startup ecosystem in Detroit:
—Marketplaces continue to evolve and attract funding (initial and follow-on), and gain traction that has to be recognized and respected. A great example of that success for us here in the ecosystem is StockX and its success in 2018. Founders and early-stage startup companies continue to place major bets on XaaS—you fill in the “X” and the innovators are delivering it as a service. When you combine Duo Security’s amazing exit on the enterprise side and its presence in and commitment to Detroit, the city’s visibility on the national and international startup scene is only amplified by such breakthrough companies and the awesome leaders behind them.
—There is a growing hunger for diversity and inclusion in our tech ecosystem from various audiences, stakeholders, innovators, funders, and customers. The hunger is not only for the traditional mantra of “we need to do better,” but also for more conversation, questions, and transparency that there is no silver bullet to this stuff. It requires a long-term, deep commitment to make meaningful change and it’s completely fine to be vulnerable enough to be wrong about historical assumptions, current questions, and even past attempts that didn’t pan out so well.
It was fabulous to see not only the arrival of AfroTech in Detroit, but more importantly, the immense and undeniable success of it that resonated across the region—and the country. This was further reinforced by great programs such as gBeta, Backstage Capital, Black Girls Code, and many others making their presence felt in Detroit in 2018. In addition to programs, I was personally pleased to see more and more people take on focused roles and responsibilities (Emily Heintz and EntryPoint, for example) within companies of various sizes and types that supplement conversation with tangible and measurable resources to help shed existing disparities in our tech community. We have a long way to go in this journey, but major kudos to you—you know who you are!
—I love the trend of more and more large corporations getting in the startup game, whether it’s education based (both learning and sharing), investing, co-development, using co-working spaces to be close to Detroit’s innovation community, seeking ways to license their own technologies to complimentary startups, funding accelerators and the work of ecosystem providers, engaging entrepreneurs with internal innovation strategy development, and, maybe most importantly—increasing their physical presence in Detroit based on a desire to not only play the long game around cementing sustainable competitive advantages and access to amazing talent, but the willingness and effort to build partnerships while learning with and from startups.
—Cannabis is up and crypto is down, with Canada and Michigan enacting legislative measures around legalization of marijuana, there is explosive interest in tech-based solutions and Greater Detroit is playing an interesting role in the trend. On the cryptocurrency side, initial coin offerings (ICOs) went mainstream. No one can wrap their arms around crypto’s growth rates while regulation and our legal infrastructure play the role of the hound trying to catch the Uber driver. Rumor has it that standardization is on its way, which will help push through the gray clouds of uncertainty that we have today. Crypto starkly mirrors the dot-com bubbles of well over a decade ago as bitcoin officially became unprofitable (bitcoin prices recently fell below the cost to mine new assets). Go figure. I think we all knew it was coming sooner than later!
—Regarding the question of whether technologies are making it harder to predict if startups might remain relevant—well, I’ve seen more and more digital or robo “startup advisors” who help companies prepare pitch decks and business plans, set valuations, define funding rounds, and even attempting to automate the legal process, via online platforms, by offering startups “instant advice and service that’s more competitively priced.” The notion is that, for the first time, founders will be empowered to lead rounds themselves, choose more favorable deal terms, and close deals rapidly with investors who accept those terms. All of which are a bit scary to me. Time will tell, but entrepreneurs should beware and be cautious. Let 2019 be a year to properly and thoughtfully innovate within an industry that has not been warm and hospitable to these kinds of risks.