The secret’s out. Entrepreneurs, engineers and investors – even those without any prior connections to the city – are packing up and moving to Detroit to be a part of the magic that’s happening here. I frequently have the opportunity to chat about the city’s appeal, the state of the business environment, and why so many entrepreneurs and investors have decided Detroit was the place to be.
Max Nussenbaum, co-founder and CEO of Castle, thinks that while Detroit might not be the best place to live by a lot of common metrics, “you then get this whole avenue of other opportunities that you couldn’t find anywhere else.” Max—like his peers Brentt Baltimore and Eleanor Meegoda of Detroit Venture Partners—has been part of a growing fellowship program called Venture for America (VFA), an entrepreneurial-based initiative for top college grads to work at emerging early stage companies in American cities.
For us, it’s not shocking that Detroit is the city where the largest number of VFA fellows choose to go, even next to alternatives such as Las Vegas and New Orleans. Most members of the VFA program seem to want to start their own company, and nowhere attracts more VFA fellows than Detroit. “On a per fellow basis, just the sheer number of companies that are being started is far greater coming out of Detroit than it is coming out of any of the other VFA cities,” Baltimore explains. Brentt, originally from the Los Angeles area, knows it’s no coincidence that a majority of these talented college graduates are choosing Detroit. There’s more to such a migration than mere chance.
An Electricity in the Air
Entrepreneurs flock to Detroit not only because the cost of starting and running a business in the city is lower than in other major cities, such as Boston, Washington, D.C. and San Francisco, but also because of the prospect of attracting top talent from the area’s many top-ranked universities and colleges. Harvard Business School M.B.A. candidate, David Askaryan explains he knew he wanted to seek out summer job opportunities in Detroit after visiting just once, because of the “cool electricity in the air.” The M.B.A student continues, “The only people who are still in Detroit today are those who have a really interesting focus on trying to create something. They’re here for a reason. The density of creation within my generation alone in Detroit right now is just so high.”
The Builder Mentality
While we discuss the culture in Detroit, one thing stands clear: Detroit attracts a certain type of person – the builders, the creators, the doers and the go-getters. What differentiates Detroit from other cities is that it is, in many ways, a blank canvas. Who could ask for a better entrepreneurial opportunity than to be able to build a city from the ground up? If you’re a builder – that’s here, that’s Detroit.
David agrees, “I have a compulsion to create things. I was an engineer, a musician. I’ve always wanted to create at the highest velocity, and that’s happening in Detroit right now.” Some even call the city, “The Wild, Wild West,” or a place where you can build something that doesn’t exist. This mindset, or the idea that you can build from scratch, is deeply engrained in Detroit’s culture. And it makes sense. After all, Michigan employs the highest number of engineers per capita in the nation.
Talent: the Solution to Detroit’s Problem
Detroit Venture Partners’ Jared Stasik smartly points out, “Entrepreneurs don’t follow capital; capital follows entrepreneurs.” The case has never been as obvious as it is in Detroit today. Entrepreneurs are streaming into Detroit to fill a vacuum, to be the first movers in the area and to position themselves as part of the city’s revival. All the while, we are seeing new venture funds popping up and investment portfolios expanding like never before.
The reason for all of this growth – evidenced by the Michigan Venture Capital Association’s 2013 research report – is that Detroit’s got talent.
Looking to start your own business? Visit michiganbusiness.org for more information.