Detroit touted as hub for tech startups of the future

Lauren Abdel-Razzaq
The Detroit News

Detroit — Speakers at the opening session of the Techweek Detroit conference and expo Thursday sent a clear message to aspiring entrepreneurs and startups: Detroit is the place to be.

"Places like Detroit are the laboratories of the future," said Olga Stella, vice president of the Detroit Economic Growth Corp., during a presentation at the Ford Field expo. "In 2050, 88 percent of U.S. residents will be living in cities. Today's Detroit is the market of tomorrow."

Stella was one of the speakers during the "Emerging City" summit, which highlighted the changes Detroit is undergoing as innovation changes the landscape of the city, propelling it into a future that leverages the assets of the past.

Tige Savage, a co-founder of Washington D.C.-based venture capital firm Revolution Ventures, said entrepreneurs are transforming the city for the future.

"If you roll the clock back 60-70 years Detroit really was the Silicon Valley of its time," said Savage. "The resources here are great, there's a huge investment in R&D, the universities, the highest number of engineers per capita."

Savage, a University of Michigan graduate, co-founded Revolution Ventures with Steve Case, the co-founder of AOL. He said one of his favorite things to do is drive around the country looking for up-and-coming firms to invest in. They started in Detroit.

"Just in the last couple of years there's a lot going on here. There's a tremendous amount of energy. People are taking risks," he said. "It's a way different place than when I was going to school here."

One of the companies that is working with the existing environment in Detroit to create innovation is Loveland Technologies, which got its start by mapping out properties in Detroit and quantifying problems like blight and abandoned homes.

Loveland co-founder and CEO Jerry Paffendorf said by using a team of Detroit residents essentially mapping out their own neighborhoods, they were able to create a clear picture of the issues Detroit faces with housing and government, police and fire officials now rely on that data on for making informed decisions.

"We're just starting to crawl out of this world where all of that is on paper in file cabinets and put this information on the web," said Paffendorf.

What he's also discovered is there is money to be made because the same system can be taken across the country.

"We can take all our good intentions for the city and make them more strategic and practical," he said. "Hopefully this will be something that can continue building from downtown Detroit."

Given the city's past, Detroit is uniquely positioned for startup success in mobility and manufacturing, but there hasn't been much of a shift from capital-intense hardware to software, said Chris Thomas, founder and partner of Fontinalis, a venture capital firm looking for mid-stage mobility startups. The Detroit-based firm is currently investing in 14 companies from around the world, none of which are from Detroit. That's "not for a lack of looking," Thomas says.

He says the area needs more mobility-centered startups and entrepreneurs now.

"The future is now. This isn't an R&D thing. It's not something we can wait for 5 to 7 years," said Thomas. "It's happening now and Detroit should own this because of our people and our talent."

Detroit already has the advantage of having partnerships between philanthropic, public and private organizations. Now, Thomas says, "if we can stop making things be about ego and start making things be about success, (it) will come together."

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