Howes: Karmanos flips tech script, favoring Pontiac

Daniel Howes
The Detroit News

Pete Karmanos Jr. is at it again.

The tech mogul who moved his Compuware Corp. to downtown Detroit long before it was cool now is heading to Pontiac. That’s where the MadDog Technology firm he co-founded said Thursday it is moving three of its companies and 52 new jobs.

Small? Yes. Mildly contrarian, given prevailing sentiment favoring all things Detroit? Of course. This is Karmanos we’re talking about, the pugnacious CEO and owner of the NHL’s Carolina Hurricanes who didn’t climb the greasy pole of business without taking calculated risks and defying conventional wisdom.

Now, he’s quick to say his new gambit, “Just felt right from a business point of view. In Pontiac, there was an excellent business opportunity and we could get some funding from the state to support our hiring and redo part of the building.

“We want to hire, hopefully, 100 to 500 in the next year, year-and-a-half, and now we have to look for the people,” Karmanos said in an interview. “The market’s certainly gotten a lot tighter. The number of high-tech jobs that are currently being created in the auto business and other startups” mean “the amount of talent really is dwindling.”

The details: Birmingham-based MadDog’s Lenderful LLC, an online mortgage platform, and two affiliated tech startups will be moving to the historic 10-story Riker Building in downtown Pontiac. The initial $1.75 million investment is expected to bring more than 100 jobs to a city desperately trying to rebuild its core downtown.

The company says Lenderful enables customers to shop rates, study the mortgage process and file applications online. Related online companies DeliverMyRide and PerfectRealty are expected to occupy the the 15,000 square feet of space under renovation.

The symbolism is hard to ignore. A city long associated with engines and metal-bending is beginning to draw tech startups as part of the effort to write a new chapter for Pontiac that could easily be subtitled, “After the Fall” — into state-mandated emergency management and an unemployment rate more than double the state’s rate of 4.6 percent.

Oakland County is hailing the move, with Executive L. Brooks Patterson calling it an enhancement “to our reputation as a high-tech destination.” Mayor Deirdre Waterman says it recognizes Pontiac’s “destination downtown and our abundant inventory of underground fiber optic cable.”

In an interview, the mayor added: “This underscores what’s going on in Pontiac, not only to diversify our economy but to bring in companies from emerging sectors. We’re establishing ourselves as a city that’s open for business.”

How times have changed. Instead of the assembly workers and skilled tradesmen of the automotive heyday, next steps toward reinvention are being taken by tech firms more accustomed to risk and failure — and generally quicker to seize opportunity.

Karmanos may be 73, but he and his partners are betting on businesses that form a new generation of entrepreneurs and tech jockeys, not unlike the backbone of mortgage mogul Dan Gilbert’s multibillion-dollar empire of affiliated companies and real estate holdings in downtown Detroit.

Where Gilbert, the Ilitch family, Wayne State University, the College for Creative Studies and auto suppliers such as Southfield-based Lear Corp. are creating a tech hub to draw talent to historic downtown properties, Karmanos essentially is flipping the proposition.

In Pontiac, MadDog is bringing the hub to the talent. Commutes would be shorter; parking would be easier and less expensive; communities with stronger schools and better basic services would be nearby.

They’re also wagering that the deepening techification of the auto industry, the plunge into ride-sharing and autonomous vehicles, will concentrate more intellectual firepower in the suburban supplier community.

And they’re probably right. The pace of change inside the auto-driven tech community is quickening. You can see it in the ferment of deal-making and alliances roiling this town’s automakers, and you can see it in the intensifying interest of Silicon Valley’s auto plays.

The excitement sure beats the alternative — the angst-ridden restructuring of the global financial meltdown and its destruction of Old Detroit. I asked Karmanos whether he considered Detroit for his companies:

“No,” he chuckled, “it’s too crowded downtown.” That beats the alternative.

(313) 222-2106

Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, listen to his Saturday podcasts, or catch him 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.