As a Detroiter hopefully this will give me a reason to start going downtown.
The current problem with the Detroit Metro area is when ever outside money comes in. Most the time the offices open in the northern/western suburbs.
I say this because most high paying jobs are in the suburbs. Because that's where the businesses are. The suburbs are doing well. At first I was very excited and hoped they'd open relatively close, but all things consider that wouldn't help the city as much.
up voted you and I agree. I grew up in what is referred to as the "Down River" area; the suburbs south of Detroit and I now live ~10-15 miles north of Detroit. After living here some 30+ years I'm ready to pack it up. Until Detroit can get rid of it's crime and the stigma that seems to linger, I have a hard time imagining anyone wanting to spend any time near the city after dark.
I own my own company and I have clients in the city; the Comerica building just to name one. If we are on a project that puts any of us down there after 5pm, we'er in pairs.
I'm originally from New York; parents moved to Detroit area when I was kid. I remember growing up listening to family constantly being concerned for our safety and when I got married about 10 years ago, I had a hard time convincing my NY relatives that Livonia was safe to visit. (Livonia is North & East of Detroit).
My mom worked in Detroit (McNamara building). She would take the bus into the city. If she missed the bus ride home, my dad and I would have to drive down to pick her up. We would always get this nervous feeling coming off I-75 by the old Tiger Stadium. The McNamara building is a federal building so it had high security which I think gave my dad some comfort but still, Detroit's crime has always over shadowed the place for as long as I've been here.
We even have stupid comments big celeberties like Ted Nugent who say we're the murder captial not because we shoot more people but because we're better shooters.
I digress... I'm hopeful things will turn around but as a father now with kids, I'm always on the lookout to get out still. Including moving my company HQ.
Hey! I grew up in the Downriver area as well (Lincoln Park specifically, about which the less said the better).
Growing up, I only ever went into Detroit for concerts and the semi-annual "Greektown" pilgrimage. Outside of that, it was blight everywhere, and I thought that is how a big city looked. It wasn't until my college years that I seen a bit more of the world and my perspective changed on urban areas.
Overall, I think Techstars moving in will be enormously positive. Cheap rents, stalwart employees (because of the bitter winters), and a "we can only go up from here" attitude is a good mix.
The only time I ever go downtown is for events at the Renaissance Center and Cobo Hall. There's really no reason to otherwise, unless you like to gamble. Pretty much everywhere outside of the immediate area around Cobo is really bad anyway.
> There's really no reason to otherwise, unless you like to gamble.
That's really not true. There's a ton of fantastic restaurants/coffee places that don't exist in the suburbs (Mudgie's, Slowe's, Great Lakes Coffee, etc), the Detroit Art Institute in Midtown (including famous works like Van Gogh's self portrait), a music scene ranging from the big pop stars at Fox Theater to the up and coming indie bands at the Magic Stick, there's all the sporting events, there's ice skating at Campus Martius during the winter and free music at Grand Circus during the summer, there's the Opera House, there's touring Broadway shows at the Fox, there's smaller but still professional theater at the Hillberry, and there's a few regular tech meetups that take place downtown (Detroit Google Developer's Group, Lambda Lounge, Detroit Craftsman's Guild). There's almost always something going on in the Downtown/Midtown area.
The other problem Detroit has is the freeways. I fail to understand why I-75 in the middle of the downtown area goes down from 4 lanes to 2 lanes of traffic. Boggles the mind. I've learned to avoid the area during major events because the freeway turns into a parking lot down there.
The Greektown area is nicer. Fairly good restaurants aimed at younger people, I've frequented that area often without a problem.
The "Down Town" area is perfectly fine. I have friends who live down town. Just when you leave that bubble protected by freeways it gets very bad very fast.
Sorry, I was kind of including the Greektown area in that general area. I don't really gamble so I usually don't go their but the food is pretty good. Most of the stops on the people mover seem to be decent neighborhoods as well.
As a Houstonion this gives me pause. Houston is a massive economic center by nearly every measure. It is also home to the most diverse county and university in the US. There are large successful technology companies here. Yet, Detroit and Dallas (arch enemy of Houston) are getting TechStars before us.
Part of the reason we don't attract accelerators like TechStars is the lack of a healthy startup ecosystem. I am NOT saying that the well intentioned community organizers aren't working hard. It's just that most of the VC here goes to Oil & Gas projects. If your tech isn't energy related it won't hit the radar. The technology startup successes I've seen in my 30 or so years here were built inspite of a (nonexistent) local startup ecosystem. Lastly, 9 out of 10 great people I've worked with here have left to go places with more tech opportunity. The talent is voting with its feet. Frankly, I'm done too. I'm on the first airplane out of here once I get my feet under me. I'm sad that it has to be this way. Maybe if I make it rich I'll come back and invest.
I guess the question is what makes for a good techhub/incubator. It seems to me embracing of a counter culture lifestyle is the key early differentiator. Certainly the Bay Area once had that. Austin. Seattle. Even Durham NC where I'm based now and is having a (relative) boom rose out of abandoned tobacco warehouses that could afford to support all types of people. I haven't been there in 8 years but I hear Detroit has that going for it now too. Houston with it's established booming energy sector probably doesn't draw in the right type of culture. (Although I have no response for Dallas vs Houston so you've got me there)
Sure you need good universities and cheap accommodation etc but it strikes me there has to be something unique and alternative to draw in the igniters of a new hub.
Oddly Houston has always been a wildcatter's town. People come here specifically to make money. I promise they're not here for the climate. People here are more entreprenurial than other places I've lived. People here have their own style of counter culture that more resembles a lack of f*s to give. Texans feel like they can do whatever they want. You'd think that would be great for business, and it is, the state and specifically Houston have done great during the recession. However tech just lags here.
One thing that San Francisco has that somewhere like Detroit doesn't, is the affluent residents with the ability to sustain a service like Uber or startups such as food delivery. Those kind of services are viable to create a startup focused on in SF but not in Detroit.
>> I've been told that the suburbs immediately outside Detroit city limits are rich as Croesus.
Yup. Oakland County was once the 4th richest county in the US. Michigan leads the nation in families with second homes. Everyone around here has a second home (cottage, cabin, etc) on a lake from 1-3 hour drive away. OK, not everyone. Part of it is that there are so many lakes that they're relatively cheap. I even knew a guy who bought an entire lake - property was like 100 acres and lake was within that. This cost him less than a two bedroom place in SF.
Bloomfield is nowhere near the city limits. Its a suburb. Detroit is all about the suburban sprawl. Its total area is massive. I think we're at about 200 miles east/west 250 miles north/south.
Its gotten to the point that some suburbs are big enough to develop their own suburbs. Notable Troy, South-field, Ypsilanti, Ann Arbor, Sterlining Heights.
These started out as satellite cities to Detroit, but since Detroit suburbs grew, the satellite cities suburbs grew. Its just a massive sprawl.
The thought has crossed my mind more than once that while Detroit may well pull out and survive that it will be a very long time before it leads the area again, because in the meantime a lot of the surrounding area has learned how to survive and even thrive again without Detroit qua Detroit. On a long enough timescale its geographical positioning theoretically gives it an edge (Ann Arbor will simply never have a port, for instance, Southfield can't have an international border without a lot crazier things than the collapse of Detroit happening), but that might be a while before it dominates.
"One thing that San Francisco has that somewhere like Detroit doesn't, is the affluent residents with the ability to sustain a service like Uber or startups such as food delivery."
On the other hand, one thing Detroit has that San Francisco doesn't have (or at least not to the same extent) is ready access to a lot of industry, especially automotive (even now), and the recovering Midwestern manufacturing base, in Michigan, easy access to Toledo, and feasible driving to several other industrial cities. If Detroit doesn't produce the next WhatsApp I'd guess it would be because the attraction of more business/industrial opportunities would be too great to ignore.
I think these are both great points. San Francisco seems well suited to launching consumer/mobile focused startups. The risk is we assume those are the only types of startups that need launching due to gravitational pull of all things Bay Area. But there are exciting new opportunities in drones/electric transport/manufacturing that a place like Detroit with much cheaper real estate and a different type of local skill set could excel at.
Detroit has a ton of affluent residents within 30 minutes of the city that regularly venture down there for various sporting events, gambling, and other events like NAIAS. Getting them to actually move to the city is the problem.
I live 30 minutes from detroit and come from an upper-middle class household.
and why would you? Detroit has problems picking up the trash, snow removal, and keeping the lights on. Who would pay taxes for no services coupled with the crime stats.
See my post further up. I grew up 30 minutes in what many around here call the down river area (Riverview) and when I bought my first house, I went north. I'll happily pay more taxes for blue ribbon schools, trash pick up, snow removal, and be able to take an evening bike ride under street lights in a safe neighborhood.
Why would anyone trade any of this for living in Detroit. The bad areas are where people go who can't afford to live anywhere else. A hard cycle to break.
I live on Virginia Park St., just a couple blocks north of the Fisher building, between Second and Woodward (New Center). I grew up in Troy, MI - went to school at UofM. Hometown guy, I've seen a good portion of the metropolitan area.
You are spot-on; until it's safe to raise a family in Detroit (which, based on the lead and heavy metals residing in the soil from the torn down structures, this may never happen) I can't see myself raising a family in the city. I'll be moving to the suburbs, if I'm still living Detroit.
D3 and Loveland are doing a great job documenting the upcoming housing apocalypse - and I don't care how geneous the city gets with payment terms to the debtors, if there is no present or future income to service the debt, it's game over.
For as much building as going on in Midtown/Downtown along with the new entertainment megaplex that Illitch is constructing, there is a two factorial amount that's decaying in concrete/wood/basic raw building materials, because there is zero disposable resident income to upkeep the property.
The city will have to decompose fully to thrive. I've sometimes played with with the idea in my head to split Detroit into three or four separate cities (to help certain portions thrive), but this of course would be politically untenable.
ps - See the 'Detroit by Air' article from a few days ago.
I wouldn't. But if those problems were alleviated I would in a heartbeat, I would love to live in a big city but do not want to move far from where I am now.
Also, the downtown area of Detroit is extremely nice and if the rest of it was even half as nice I would consider moving there.
> Part of the reason we don't attract accelerators like TechStars is the lack of a healthy startup ecosystem.
As an entrepreneur, you do not need a "healthy startup ecosystem" to build a successful company. Let me repeat: as an entrepreneur, you do not need a "healthy startup ecosystem" to build a successful company. If you have a great product or service and are willing to make the effort to get in front of customers, you can build a successful company anywhere. Starting today.
I won't argue that the things that come with a "healthy startup ecosystem" (accelerators, venture capital firms, etc.) can't be helpful, particularly to certain kinds of entrepreneurs chasing certain kinds of opportunities, but as a general rule, the people who are going to build successful companies aren't waiting for their cities to become startup hubs. It's simply irrelevant to their ability to execute.
> If your tech isn't energy related it won't hit the radar.
Any entrepreneur in any industry passively waiting to "hit the radar" is going to be disappointed. If you want attention from customers, investors, media, etc., you almost always have to go out and get it. Ironically, this is even more true in the Bay Area because there are so many companies and there is so much noise.
> The technology startup successes I've seen in my 30 or so years here were built inspite of a (nonexistent) local startup ecosystem.
Even in Silicon Valley, which has the "startup ecosystem" that is the envy of the world, most startups fail. You just don't see the graves because they're covered by the latest batch of startups.
> Lastly, 9 out of 10 great people I've worked with here have left to go places with more tech opportunity. The talent is voting with its feet.
While it's easy to get the impression otherwise, lots of people come and go in the Bay Area too. Just because this is the tech capital of the world doesn't mean the grass is greener for everyone.
Houston's actually a great place to live. I lived there for several years. Incredibly good schools in the suburbs, fantastic food and bar scene down in the Montrose, Washington Heights and Midtown. Very affordable.
I've lived in Wyoming, Colorado and the SF Bay Area and honestly I'd take Houston over all of them.
I think you're agreeing with me. The tech startups that are successful here do so in spite of the ecosystem. We're missing whatever that seed is that gets a healthy community going that would feed on itself and create more successes and make us appeal to TechStars.
No, I think you're placing way too much emphasis on the "ecosystem." Again looking at Silicon Valley, there are exponentially more failures than successes even though it has the ecosystem that is the envy of the world.
I know people who lived here when Silicon Valley still had orchards and whose parents were employed by some of the early companies. Silicon Valley's history, however, has little relevance to the discussion at hand.
You seem absolutely convinced that entrepreneurs can't build successful companies without a certain kind of "ecosystem" in their city. It's simply not true, but please don't take my word for it.
If and when you leave Houston and come to an area with a great ecosystem, like the Bay Area, you'll soon discover that despite the ecosystem, there are tons of entrepreneurs and wantrapreneurs who aren't any better off. The only difference might be that instead of the excuses you've provided ("there's no ecosystem", "the investors don't invest in tech") you'll hear a different set of excuses ("I can't find a co-founder", "YC rejected me for the fifth time", "the VCs won't invest in my company").
You are projecting. I am under no such illusion. I've lived and worked in the Bay Area at startups and in Houston, Austin, and Chicago at startups. I'm not saying the ecosystem is the constraint on entrepreneurial success. I'm saying there's something that would attract TechStars and Houston is missing it. My guess is community. I assert that ecosystem helps more than you appreciate.
I'm a Rice University alumnus (Hanszen '07), and your sentiment definitely resonates with me. When I took my first programming job, I had two offers come in at the same time: one to stay in Houston and write Java code for pipeline scheduling, the other to head to Austin and work for a small crummy independent company. Houston has so much going for it, and if I had felt like a vibrant tech startup scene were present, I might have stayed. Instead, I left behind my entire friend group and taking a job that paid half of what the energy industry was offering, purely for the sake of better future opportunities.
I know there are some entrepreneurial efforts being made at my alma mater, but overall it feels like a huge missed opportunity. The business school is strongly walled off from the undergrad population, the excellent CS department tends toward the academic side (with rare exceptions like COMP 410/415 [1]), and personally I never saw much of an attempt on the part of the local tech scene to get students integrated. There is the Rice Alliance [2] but it isn't quite the same as an organic grassroots-y scene.
Well, both San Antonio (Cloud) and Austin have TechStars programs. San Antonio's exist largely because of Rackspace, and Austin because the city is mature for a startup city. So, Houston either needs that large sponsor or organic growth, of which the former doesn't seem far fetched in the somewhat near term.
I have to agree. I love Houston but I left it for San Antonio because the tech scene in SA was much more lively with Geekdom and Techstars. Though I'm now in Boulder I've been keeping in eye on SA and there's a lot of cool stuff going on there, plus the VC activity has really picked up—multiple $1+ million rounds have been announced or will be announced in the next few weeks.
I am a part of the young tech startups in SA and I would also suggest for anyone to come back or give it a look see. I transplanted from SF and find the playing field wide open for new opportunities.
I lived in Houston for 6 months a few years ago while my girlfriend was student teaching there. It was so foreign to me that I couldn't find any semblance of a startup community in such a large city.
It's there, but it's not young and it's not the sort of tech that you see in SV. If you want to talk to startups building oil pipeline monitoring or healthcare software, it's the place.
Pipeline monitoring? Healthcare software? How in the world will anybody ever make any money in oil or healthcare?
Seriously, keep in mind that for all of the companies in Silicon Valley that do truly groundbreaking or meaningful things, there are many more startups that fall into one of the following categories:
1. Doomed to failure chasing inane consumer internet ideas that 50 other companies are chasing.
2. Doomed to failure leeching off of other startups, something that won't be viable when the current cycle ends.
3. Doomed to failure pursuing legitimate opportunities that their founders don't have the domain expertise to exploit.
I certainly wasn't trying to disparage either oil or healthcare tech. I grew up around oil and have huge respect for that industry. I think my overarching point was that startups in Houston aren't sexy, they don't get coverage on TechCrunch, but there are people building some solid, necessary products.
San Antonio is similar with companies like WellAware raising a $37 million series A for oil field monitoring tech.
I'm surprised there isn't more healthcare based startups (with underlying tech) in Houston. My understanding is that Houston is mostly Oil&Gas + Healthcare.
Maybe they're busy working on the company, or going to pilot events :-) I think there's a balance to be struck there: you see some places that are crawling with startup "scene" events and happenings and networking and you wonder how any work gets done. But if everyone stays holed up all the time, that's probably not healthy long term either, in terms of pulling new people in.
While YC is a wonderful program, I think it'd be nice to give some props and support to programs like TechStars that are actively expanding and supporting startup cities outside of the valley.
I completely agree. It's just that YC kinda has a reputation as being #1 at least for the kinds of startups they do. Either way, Detroit (or the Detroit area) has been overlooked IMHO and this is still a great thing to see.
Mechanical and Technical engineering base of the city already exists.
The automotive industry has already created a host of general consulting engineering companies specializing in everything from hydraulics to electronics to fluid flow is insane.
One area of the city is literally known as "automation alley" due to the huge number of PLC controlled robots it produced in the 80's and 90's.
The ideas of line automation were invented in Detroit.
Also the exposure the metro-area children get to this technology is unpresendented. While HN doesn't seem to be "big" on First/FRC high school robotics competition. Nearly every school in the suburbs has a team that builds at least 1 50k+ robot per year to compete locally. There are multiple programs and competitions FIRST isn't the only. I bring this up because Michigan teams don't exactly compete but dominate was a better word before the region limiting system was put in place.
Finally the education system is also in place. Lawerence/Kettering university were founded by Ford and GM as trade schools to crank out engineers for their companies, now they're private universes. But the it demonstrates just how many engineer degrees come from the state let alone the metro area.
Hey I judge at First every year! You're right that the amount of engineering prowess (and willingness to go into engineering) is really high, but for some reason the area is never mentioned among the heavyweights for some reason.
Oakland U also has (or had) a decent engineering program, no idea how it's coming along these days though.
OU is still hosting the annual AUVS intelligent ground vehicle competition - autonomous vehicles. My team took 2nd place back in 1994. Yeah Google, we've been doing that stuff for 21 years. They're also building another engineering building.
The problem now though is that robotics and automation is more than just engineering the machine, the challenges are in managing and building the AI. This area of study and research is not so active in Michigan.
Ann Arbor is about 40 miles from Detroit, and the university there has one of the top AI programs. I believe they are building an autonomous car testing ground for the auto industry as well http://www.technologyreview.com/news/531301/town-built-for-d...
If true and successful, this would be huge for Detroit.
I once looked into the suitability of Detroit for a start-up. It seemed that professional services were generally not as interested in working with young companies as in the bay area. The availability of deferred legal, accounting, or other services was non-existent. Being in the bay area, my company has benefited greatly from having deferred legal work. I also worried about finding good advisers.
With Techstars there, it would definitely solve these problems for their awardees.
While there aren't a wealth of affluent, urban customers in the city, there would be great opportunities for consumer or educational startups that address problems for the base of the pyramid. Whole Foods opened a store in Detroit, and talked more about it in their last quarterly conference call than any other topic. Ostensibly, figuring out how to be successful in markets like Detroit is a huge opportunity for growth for them. Finally, the city of Detroit has neighborhoods that are young and affluent. Inventory is very limited, and rents in the highest profile areas are as high as most big cities -- think Lake Merritt in Oakland.
I really hope TechStars is successful there. Detroit is a place dear in my heart and not as scary as many think. I lived in SF's SOMA 10-ish years ago, and can say that I had way crazier stories and more dangerous moments than my mom, who has been working in Detroit Public Schools since her retirement.
Although I'm glad Whole Foods is in Midtown, it's not catered towards the "base of the pyramid". Every time I've been in there, the customers are primarily the hip newcomers who have moved to Midtown or folks from Oakland county coming in to catch an exhibit at the DIA or symphony. I would love to see development happen in the areas that need it more and not just in the rapidly gentrifying downtown core.
There is already at least one accelerator in Detroit.
http://bizdom.com/ It is partially funded by the Dan Gilbert, founder of Quicken Loans. He also owns the Cleveland Cavilers and partial funds same thing in Cleveland.
Detroit is cheap compared to SF but actually downtown is filling up, rents are not as cheap as you might think.
Happy for Detroit, I think there is a responsibility of tech leaders to get this throughout our nation not concentrate it, no single point of failure, plus more input from different areas means better products + systems which are more robust.
However, when is someone going to setup in Phoenix (Chandler, Scottsdale, Tempe)? Huge market, short flight to CA, always overlooked. Gangplank (web/app/product), Game Co-lab (games) co-working locations + ASU are doing a good job for startups but it would be awesome for more investment here, fairly untapped and a blue ocean in the desert where we have to stay indoors working most of the time anyways.
However, many people outside of the startup scene have misconceptions, as they see survivor bias/success bias in the reporting. One item in the report feeds this misconception: "The average company got $1.9 million in funding." The median raised would be far more revealing of the actual experience that a startup faces than the average.
In the last 3 Techstars NYC batches (not including the most recent), there were 37 companies with median funding of just over $1.6 million. 28 are still active, 6 have been acquired and 3 have failed.
Thanks. That is indeed an incredible level of transparency. I didn't see a CSV download but just scanning, it looks like it's more like a $200k median, with 1.6M average. Medians just make far more sense in letting someone outside the system know what to expect. Just like, "The average actress in Hollywood makes $250k, when in fact the median is $30k and a few make $100M).
If you're a startup founder accepted into Detroit Tech Stars (or even a YC) who lives in a foreign country, there should be a policy in place to give you an accelerated visa to work / live in the US provided you base your startup out of Detroit. Could be a good policy experiment on urban renewal.
It might be an awareness issue. A2 has had a startup scene longer than Detroit. I was in QL's Bizdom accelerator in 2008-09, and there was no VC or startup scene to speak of. UMich has been spinning out tech startups regularly for a decade. The two ecosystems exist siloed from each other, but I think Detroit is a better choice since A2 startups can flock there and there is a faster growing community from what I can tell.
If you worked at a start up in Detroit, you were defacto a part of the Gilbert Mafia. I don't say that disparagingly, Dan Gilbert crew have done great things for the city, but its a one shop town.
A2 lacks a Dan Gilbert to make all the things happen, but it has a much more vibrant, Bay-like share-and-share alike, encouraging, open start-up culture.
Plug for A2-NewTech, a start-up meetup I'm a huge fan of (I'm not affiliated, just a fan)
The fastest growing tech startup in the Midwest in 2013 and 2014 was and is in A2 (Duo Security). We have multiple Google Ventures, True Ventures, Resonant Venture, etc. startups. We have the Tech Brewery, A2 New Tech, SPARK, Tech Arb, etc.
Barracuda Networks was started here. Google's Michigan office is here. One of the top 5 public universities in the world is all around us.
I can't imagine why anyone on HN would drive from Ann Arbor to Detroit for work when there are much better and higher paying prospects right here in A2.
I was living in the Detroit suburbs at the time, to be honest the team I was working with was amazing enough that I'd gladly do the drive to work with them again.
They have rolling applications, so each city has a different application period. Also, they probably won't take applications until the official announcement.
I wish there was something like this here in DC. Very little startup scene. All I get to see are those sweettalk recruitment shops and those three lettered agencies that I couldn't imagine working for.
I had the complete opposite experience in DC. There are a TON of startups in DC. Far more than where I live now (Portland OR).
You should checkout über offices. They have 5-10 startups working out of all three locations (most of with funding). On top of the co-working/startup spaces you have other accelerators and funding opportunities like 1776 and Acceleprise.
I agree, I've lived in DC my whole life and always told myself the startup scene was great there. Then I moved to NYC, and now Palo Alto. The startup scene in DC is horrible compared to similar sized cities (by contrast Portland has Nike, Intel, New Relic, Puppet Labs, etc.), and DC is dominated by the federal government. Why work at a startup in DC when you can make $150k+ as a gov't contractor in DC.
I don't recall that being the case - there are plenty of small companies in the area. The one problem all of them face though is funding is difficult to obtain there, but I have found that higher quality companies emerge as a result.
The current problem with the Detroit Metro area is when ever outside money comes in. Most the time the offices open in the northern/western suburbs.
I say this because most high paying jobs are in the suburbs. Because that's where the businesses are. The suburbs are doing well. At first I was very excited and hoped they'd open relatively close, but all things consider that wouldn't help the city as much.