Why I love the Detroit startup scene | Hacker News Reader

Why I love the Detroit startup scene

venturebeat.com

55 pointsrmason48 comments

This is a great PR piece.

Most Detroit Startups are actually just subsidiaries of Dan Gilbert's Quicken Loans. I've interviewed at least 2 of these startups where the compensation conversation ends up turning into. "Oh there is no CAP table. No shares to vest. We're wholly owned by Quicken Loans."

You are literally just being give an open office, Free coffee, stupid tight deadlines, and next to no budget. To shove a product out the door. You still have a series B, C etc. (kind of). It's you meeting determined deadlines and metrics determined by Quicken Loans to keep the startup afloat.

This isn't founders joining an incubator. This is Quicken Loans spinning off a shell company and 2-3 managers leaving Quicken to hire 6-7 fresh faced college kids with 3-5million in runway to do a project.

---

Not to say there aren't real startups in Detroit. There are. Just _most_ listed in this in the OP are literally Dan Gilbert's pet projects.

Seems like a bad strategy overall, I mean they should have some shares available for employees. Cisco and other companies have spun out startups so it is not necessarily a bad model.

That is correct. I can't image why this kind of article should be on hacker news. Hacker news sinks.

Thank you for your candor.

I spent the last week in Ann Arbor (Boulder native + 17 years in CA, 2 in Seattle, +2 in the "silicon slopes." It's quiet here.

The youngs don't seem to know yet that they can create (ridiculous) value on their own.

If I'm missing something, e.g. if there is a strong angel group in A2 or Detroit, please drop me a note, I'm moving here and I'd love to join. (Yes I've seen the umich entrepreneurship efforts; winning school purses does not count)

I'm bringing with me some anti-Incubator technology from out west. As in, I offer no money, I take no equity, and after 15 weeks of weekly 7am CEO meetings, you'll be convinced of 5 things:

(1) No old (or "successful" entrepreneur) can solve your problems for you

(2) Your peers are an amazing resource

(3) You are the greatest impediment to your progress

(4) You already know everything you need to know to start creating value, and you don't need a check to get started (unless you're curing cancer or doing similarly real science)

(5) Andy Groves and Larry Ellison (v1) knew a thing or two about management

I'll be launching an A2 cohort (unaffiliated with umich), an East Lansing cohort (possibly in conjunction with MSU), and potentially a Detroit cohort this Fall. If this sounds at all interesting, please drop me a note, I'd love to chat and I'd be happy to share metrics from earlier cohorts...Time to test out the model on Michigan--or vice-versa!

I'm in Detroit area, reachable via segmond at gmail.

Larry Ellison v1... How many versions of Larry Ellison are there heh?

That could not be more false. First of all Ted works for Techstars which has no connection I know of to Dan Gilbert, though they did receive funding I believe from Ford.

Dan Gilbert has funded a lot of startups, but no where near all of the ones in Detroit. The majority of those startups are not connected to Quicken Loans except through their funding.

Now it is true Dan Gilbert has a major PR machine but Ted's story isn't part of it. In 2008 when Gilbert began purchasing Detroit skyscrapers there wasn't a single VC in the city and few startups. Now there's VC's, offices from Twitter, Amazon, Google and an entire neighborhood of startups. It's rumored that Microsoft and HP are seeking downtown campuses.

But Gilbert got the startup flywheel started in Detroit and we're feeling the effects a good ninety miles away here in East Lansing.

Microsoft is opening an office, not a rumor.

TechStars Mobility was originally started in Detroit as a partner with Bizdom, Dan Gilbert's now defunct startup accelerator (former participant speaking). Ross Sanders and the other Bizdom folks had a strong presence at the last Tech Stars Mobility demo day I went to.

Now that Bizdom is gone, there is more oxygen for natural organic community.

On a related historical note Marc Weiser and Tony Grover from RPM were active in funding Detroit startups and other MI tech from their office in Ann Arbor well before 2008.

Lots of progress and growth in the Detroit startup scene, but far from the maturity that other communities have.

"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."

Anybody have any info on this? Seems suspect to me. If you add large metro areas in that area, it looks to be around 25 million people. I'm sure there is a lot of manufacturing but this has to be BS right? I grew up in the middle of that diamond, and now live in the Bay Area, and I just cannot make sense of this.

https://en.wikipedia.org/wiki/List_of_U.S._states_by_Gross_S...

Add up the states he cited...

Large parts of those states are not included in the diamond he outlined, but if you add them all up, all 5 states, it's about the same GDP as California.

But, 53.5 Million people vs 39 million in CA.

for the most part, outside of the major cities, the rest of the state is not generating much gdp

But there are major cities in those states not included in his Diamond. Most notably: Philadelphia, Springfield, Peoria, Lansing, MI, Grand Rapids, Mich, etc

Philly isn't in the Midwest, hell, it's almost in the Atlantic!

That was his point. The article said that a region it outlines has an economy bigger than California. But adding up the GDP [1] of all the states that overlap that region gives an economy about the size of California's.

Philly is in a state that overlaps the region, but is not in the region. Hence, adding up the state GDPs overestimates the GDP of the region by at least the GDP of Philly.

[1] technically, I believe it is actually called the GSP (Gross State Product) in this case.

They're effectively comparing the entire Rust Belt... A nontrivial land mass... 5 whole states to 1.

California's a pretty damn big state. The total area of those five states is only ~70% more than California, and that's counting all the central and northern bits of Michigan that definitely aren't part of this, and eastern PA.

California is a big, but generally unpopulated state.

Approaching 40 million, that population is divided, generally, as: half in the Los Angeles - San Diego region, half the remainder in the San Francisco - San Jose region, half the remainder (5 million) between Sacramento and Stockton, and the remaining 5 million throughout the rest of the state, mostly still within the southern Central Valley (particularly Bakersfield).

See: counties by population, showing 23 counties of fewer than 100k population. Over half the state's population is in 5-6 counties: Los Angeles, San Diego, Orange, Riverside, San Bernardino, and Santa Clara.

https://www.california-demographics.com/counties_by_populati...

I dunno... the polygon the author drew is only about half the area of California.

On the other hand it's kinda cheating to put the major cities at the corners.

I'd say the equivalent to the SF Bay Area surrounding area would be Seattle, Los Angeles, Portland, and San Diego. One could definitely argue those areas are even more vibrant than the combination of Cleveland, Pittsburgh, Cincinnati Chicago, etc.

The map was confusing. They say the edges of this diamond include Chicago, Pittsburgh, and Cincinnati, so I imagine they are bundling them into this claim. But in the picture of the diamond they're excluded, making Detroit probably the most interesting city inside it.

Chicago, Pittsburgh, and Cincinnati all sound better than Detroit. A lot better.

What this PR piece doesn't talk about is the huge oil and gas growth in eastern Ohio/western PA which is probably massaging these numbers quite well. Pretty much all of Ohio outside the major cities in this area is fracking country.

I'm in Detroit area, Oakland county and do like to link up with fellow folks from the area. I'm an IT guy and have worn many hats, Unix admin, DBA, security engineer, developer and I'm currently an engineering manager. I'm happy to help and make things happen. Reachable via segmond at gmail.

"Google got its seed funding as research out of the University of Michigan." -- what does this refer to?

I imagine it is just confusion (Page went to school at Michigan but Google happened while he was doing his PhD at Stanford).

This article is such filler material. The quality of life in metro Detroit is horrible compared to the Bay Area, SLC, or Denver/Boulder.

Sure the type of work singularly may attract some people from out of state. What else does it Detroit have going for it?

Exactly. There may be a ton of people in that diamond area, but I've lived inside it and Detroit is probably third backup at best for anyone looking for IT work. It's going to be a toxic area for a while.

Southeast Michigan (where I have lived and worked for many years) has some good tech opportunities and some pleasant and affordable places to live, just not in Detroit proper. I won't work in downtown Detroit, if I have a choice, because the commute in and out is a traffic jam through a post-apocalyptic wasteland. Some gentrified communities among the blight are livable, if you don't have kids. Detroit public schools are a disgrace that no child should be allowed to attend.

Dan Gilbert bought up a bunch of Detroit at fire sale prices and uses PR like this so he can flip them to make a quick profit.

lived in Detroit burbs and went to school in AA. Yeah there are always worse places in the country.. but blah.. compared to the tech hubs out west, SE MI is such a boring place to live. it's all relative though of course

By what metrics (subjective or otherwise) is the quality of life in metro Detroit worse than the areas you mentioned, assuming a reasonable income? For instance, specific suburbs have schools that are at least as good as those in the other areas, partly thanks to a massive concentration of engineers and STEM professionals, and they are otherwise suburbs like any other American suburb.

Also, do you include Ann Arbor in your definition of metro Detroit here?

I was going to reply to that but then I realized that the comment is probably coming from someone who doesn't know the area and to get into it will be to get into a pissing contest. I just came back from SF 3 days ago and I'll hold my comments and opinions. I'll just extend an offer for anyone that doesn't know the area and is in town and wants to link up to reach out.

Uninspiring landscapes, lack of diverse or superlative outdoor activities, climate.

There is a reason those places I named are tourist destinations to a much larger degree than Detroit / SE Michigan

Thanks for clarifying your reasoning. I would agree that the landscapes and climate along the west coast are fabulous for tourist destinations and nice to have otherwise, but they don't seem to be as strong of metrics for daily quality of life, at least from speaking to my family members who have lived in multiple areas that you mentioned. There are a lot of resort towns (including in CA, among other states/countries) that excel at these but are otherwise poor areas to live in.

Then again, some of the family I was referring to are moving back to the west coast, so I completely understand that we can value different things.

> The quality of life in metro Detroit is horrible compared to the Bay Area

I don't know about that... I pay less than 1200 for my own apartment in a literal mansion in downtown Ann Arbor--11ft ceilings, marble fireplace, etc. My friends are UM grad students and staff, I walk five minutes to work at my job at a YC company's HQ, shop at a local food coop across the street, fly anywhere out of DTW, and spend my free time boating on the river that's a 10m walk from my front door.

Can you do that in SF?

Ann Arbor is not Detroit.

It's a quicker commute than many bay area residents make.

It is effectively (if not technically) Metro Detroit, though, which is the phrase that GP used.

Only in a limited definition of effective metro areas. There is a swath of extremely low population agricultural land that you must travel through to get from Ann Arbor to towns like Canton which are clearly in the Detroit metro. By some definitions, this would place Ann Arbor in its own metro. Another interesting factor would be the commuting ties between the areas.

> By some definitions, this would place Ann Arbor in its own metro.

This is why I added my parenthetical. I lived in Ann Arbor for several years, so I'm familiar with the area.

By boating you mean canoeing/kayaking on the Huron River, yes?

yup!

Cool. I thought I'd check because "boating" means something very different here in Seattle, and I wondered if I missed some new development in A2.

AA is nice but nothing to write home about and no one will mistake AA as a travel destination.

If you work in tech and likely earn enough to live comfortably in bay area or the other places I mentioned, the quality of life isuch better

Attractive travel destinations are not the same as highly livable places.

I applaud this spirit, but can every city turn itself around by becoming a version of SV?

Possible responses:

1. Yes

2. No, but that is not what this is

3. No, but this once can

4. No, this will fail or succeed for different reasons

Surprised that there is no mention of the 6 million people who also just live within 4 hours north of Detroit (corridor leading up to Toronto) and the opportunities available there (and greatly leveraged by the auto industry).

haha

Reply on news.ycombinator.com