It's been called a start-up renaissance.
Detroit is increasingly flush with young companies, including a few gaining national notoriety, such as year-old Detroit Labs, of Super Bowl fame, and HiredMyWay, a two-year-old online recruiting service that's now expanding nationwide. What's more: Venture capital—once virtually nonexistent in Motor City—has set up shop, too. There are well-known firms, such as Detroit Venture Partners, which counts entrepreneurial celebrities Josh Linker and Dan Gilbert on its team, to smaller seed-stage firms, such as 313 Ventures. A patent office is even on its way in. In other words, it's a buzzing entrepreneurial ecosystem.
"What's really prompting a lot of this growth is our huge pool of talent here," says Jake Cohen, vice president of Detroit Venture Partners.
But where exactly is this talent coming from?
Detroit is far from being celebrated for its traditional education (a recent report found that nearly half of the adults in the city are functionally illiterate), but people knee-deep in this new economy will tell you that the foundation of Detroit's comeback is its growing entrepreneurial education system—a tapestry of universities, incubators, and competitions that foster growth and produce new talent in several industries.
"Over the past decade or so, we've built an incredibly efficient ecosystem to help entrepreneurs get off their feet. There's education and support for nearly every stage of a company," says Tina Bissell, business manager at the Michigan Initiative for Innovation & Entrepreneurship, which aims to foster entrepreneurship in public universities. "If we want this boom to continue, it boils down to making education a priority."
The New Frontier
Let's start with TechTown (the colloquial name for Wayne State University's Research and Technology Park). Located the heart of the city, TechTown is perhaps one of Southeast Michigan's most respected and long-standing incubators. Founded in 2000, it provides a long-list of entrepreneurial resources: Space, coaching, mentoring, educational workshops, and access to capital. It has programs for seed-, launch-, and growth-stage companies—and works with entrepreneurs of all stripes.
"Something that gives Detroit an edge is our diversity. It's not just young people coming through the doors, it's anyone willing," says TechTown president Leslie Smith. "And that diversity has made our entrepreneurial education more comprehensive, in a way. It's unique to this city because of who is here."
Today, TechTown hosts nearly 300 companies (it started out hosting just one in September 2007) and has introduced more than 3,000 local residents to training programs since 2009. Despite the name, TechTown isn't just about high tech start-ups.
"From the beginning, we wanted to focus on companies that would be place makers—that would contribute to the community here in Detroit. The industry doesn't matter as much as the mission," Smith says.
What is a place-making start-up? Take TechTown-based Clean Emissions Fluid, a 5-year-old start-up just got $420,000 in seed funding to continue developing a new technology that would blend biofuel and clean diesel for trucks, for example. Another is Quick-2-Learn, a technology start-up which rebuilds obsolete computers for Detroit's low-income schools.
This sort of comprehensive approach is also echoed in other public universities, including University of Michigan and Michigan State University, which are aided partially by the MIIE. The collaborative, composed of the state's 15 public universities, has a goal to create 200 start-ups in 10 years by creating out-reach and support programs for entrepreneurs directly on campus.
"Overall, Michigan is making a huge effort to grow the educational opportunities for entrepreneurs," Bissell says. "Detroit is a big part of the equation because of the additional resources there—the incubators, accelerators, venture capitalists, and community that's there."
So is all of this working? Just ask a start-up's recruiter.
"The conversation has changed in the schools," says Detroit Labs's chief recruiting officer Nathan Hughes, who actively recruits from the metro area's universities and incubators. "We've seen this idea that entrepreneurship can be a real career path grow not only in just talk you hear around the city, but in the schools themselves."
Detroit's Experiential Education
In addition to public schools, Detroit has seen a growing number of experiential programs for entrepreneurs.
Enter the Kauffman Foundation's Urban Entrepreneurship Partnership. Founded in 2009, the UEP Detroit 150 is a project that aims to put 150 of the city's former minority auto suppliers through an entrepreneurial education program. So far, 110 Detroit start-ups have come through this program, and they range from scrap metal makers to food suppliers.
"Our method is intense one-on-one coaching," says CEO of UEP Daryl Williams. "It's all centered around real life. Real conversations, real numbers. We give people the tools to take action."
For Williams, this approach is far from that of Silicon Valley.
"This type of entrepreneurial education isn't made for the superstars—the guys growing their company at 40 percent a year. It's not about putting a start-up on steroids. It's much more fundamental. It's about getting that one person with a great idea the support and education they need to get off the ground. That's a very different approach than most other cities."
And UEP is just one of a litany of non-traditional education platforms.
Competitions, such as Start-Up Weekend (also a Kauffman initiative) and Challenge Detroit, are also seen as avenues for experiential education. Social networks are making a mark too. Girls in Tech Detroit, a social network for women in technology, hosts casual mixers and meet-ups for city networking, while Meetup's D-NewTech hosts a local start-up get together every month.
"Our absolute biggest challenge for the future is going to be keeping talent in Detroit," says Smith. "We see some young people get educated here and then leave. It's getting better, but it shouldn't be happening at all."
Another challenge for these educational programs—even for the big universities—is exposure.
"I think it's great that there are curriculums around entrepreneurship, but I think we may be even more successful approaching students within other disciplines," says Williams. "So an accounting major will have some exposure to entrepreneurship in that core, and it can then become a real career option."