Evan Klonsky
Inc. Magazine

There's no hiding the fact that the past decade hasn't been easy on the Motor City. Once a paragon of stability and the nation's fourth largest city, Detroit has seemed to fade alongside the auto industry on which it so vitally depends – now sitting at 11th place on that very same list.

In spite of the decline, those who stay refuse to see this as an anything other than an opportunity. With tons of open space, inexpensive rent, and legions of talented workers, the city was – and is – ripe for the kind of fresh and innovative thinking that drives new business. "Detroit needed to decrease its reliance on manufacturing," says Ross Sanders, CEO of Bizdom U, a local business accelerator formed in 2007. It needed to transform into a "brain economy," he adds, rooted in innovation and entrepreneurship.

Bizdom U, founded and funded by Quicken Loans CEO Dan Gilbert, is among the many organizations formed the past few years with the aim of diversifying and sustaining business in the region. These places recognized the ingredients – the new ideas, the support, the passion – already in place to make Detroit into a 21st century economy.

"The entrepreneurial spirit that exists in this region has been here forever," says David Egner, director of the New Economy Initiative for Southeast Michigan. What organizations like his have done is shine a light back on would-be entrepreneurs and provide them the resources to start strong.

While returns remain modest, small ripples of new businesses have begun to pop up around the city’s tri-county area. Ranging from high-tech battery-makers to downtown storefronts, these new businesses hope to grow into the impending wave of prosperity down the road. Here are five reasons why they will succeed.

1. Innovation is in the air.

Egner of the New Economy Initiative isn't hyperbolizing when he talks about Detroit's unique, longstanding entrepreneurial spirit. He's just trying to characterize a city that paved the way for automotive innovation for more than 70 years. The problem, however, was that the city became extremely rooted in its past success.

Perhaps too rooted. "What's held Detroit back has been the success of entrepreneurs in the last century," says Chris Rizik, one of the region's most prominent venture capitalists.

"What it created were two generations of employees, not of entrepreneurs," says Rizik, whose Renaissance Venture Capital Fund invests only in Michigan start-ups.

Once the large corporations – or the "safety net" as Rizik describes them collectively – began to falter, many of their employees were left jobless. "People had the choice to stay and do things more entrepreneurial, or leave," Rizik adds.

Ah: a silver lining. Those who stayed have started to bring about dramatic changes in the culture, not unlike New Orleanians after the flood.

To see the change, you needn’t look further than the SPARK Business Accelerator in Ann Arbor. Located 45 miles outside the city center, SPARK has helped more than 200 innovation-related start-ups in the region. Its convenient location next to one of the world's leading research institutions – the University of Michigan – doesn't hurt either. "We think Ann Arbor represents a wonderful hub of activity that can serve as a catalyst for the rest of the state of Michigan," says Michael Finney, president and CEO of SPARK.

Entrepreneurs also look to the region's automotive pedigree to tackle new industries. They can parlay the region's swath of talented engineers to make innovations in areas like battery technology, which Rizik says fits "hand-in-glove" with the auto industry. SPARK has, in fact, sought funding for a few battery makers in Ann Arbor, aiming to establish Michigan as a leader in the technology for the rest of the country.

2. Training and support abound.

Integral to the success of any entrepreneur is, after all, having the right tools get there. Organizations like Bizdom U and the Kauffman Foundation have poured resources into training business owners in how to sustain growth for the future. In June of 2009, the New Economy Initiative helped bring Kauffman's FastTrac program to the city without cost. Since then, FastTrac has worked with and graduated more than 1,200 entrepreneurs from an assortment of backgrounds.

Two FastTrac graduates include Austin Black and James Canning, longtime friends and Detroit natives who both started their own businesses this past year. After completing the course last year, Black encouraged Canning to enroll as a way to shore up the direction he wanted to take his new PR company. "As someone whose job it is to help people tell their stories, this class helped me to tell my own story," Canning says. Soon he learned strategies like how to develop his mission, create his competitive advantage, and attract new clients to the businesss.

FastTrac courses typically run 10 weeks and help entrepreneurs to carry out certain early business plan objectives. Bizdom U, by contrast, provides an intense, full-scale experience from the idea stage all the way to acquiring funding. Each year, twenty chosen entrepreneurs partake in a four-month regimen where they get feedback from consultants, a professional workspace to operate from, and help with business plan development. At the end participants are eligible to receive up to $100,000 in funding to invest in their businesses.

Bizdom U largely came out of the vision Dan Gilbert had for the city in 2006. By moving the Quicken Loans headquarters to downtown Detroit, Gilbert staked his faith in the future of the city. And, as Sanders points out, entrepreneurs have responded to the call. These aggressive, forward-thinking leaders, he says, will lay the groundwork for the city’s next generation of innovators.

3. A vibrant support network exists.

Though a diverse lot, Detroit entrepreneurs all seem to share one common trait: they want to see each other succeed. Owners of businesses large and small, across dozens of different industries, have united under this belief to help the city progress as a whole.

"You have this community in Detroit where entrepreneurs want other entrepreneurs to succeed because it brings more business and more people to the city," says Black, who started his own real estate company devoted to city living. Black's passion for Detroit and its success extends to his work with Detroit Synergy, a group he helped found to give people the resources they need to revitalize the city.

Detroit's collaborative and collective mindset is one of the primary catalysts for the creation of groups like Open City Detroit. Started by two women entrepreneurs, Open City invites its network of loosely connected business owners to share thoughts on how to run better businesses. "No one is competing here as much as they are trying to help one another through forums like Open City," says James Canning. Open City is just one of a number of similar resources such as Motor City Connect, Business Leaders for Michigan, and Fusion Detroit that aim to bring these enthused leaders together.

One such leader is Jonathan Citrin, the 34-year-old founder of the aptly titled financial services firm CitrinGroup. Citrin considers himself lucky that he was on the early end of the city’s entrepreneurial upswing – the firm started in 2003 and has doubled its revenue in the past 18 months alone. Now, after all his success, Citrin hopes to guide others along a similar path. "I made a ton of mistakes," he admits. "But had I had some of the support that’s here now, I know I would’ve done even better."

Part of helping others to do better involves mentoring other business owners and teaching part-time at Wayne State University's School of Business Administration. Citrin says he loves to talk with students and aspiring entrepreneurs about their projects, particularly Wayne State’s high-tech business park, TechTown. "I don’t know if they get enough credit, but Wayne has been a real bright spot in fostering entrepreneurship in town," he says.

Similar to SPARK, TechTown works with innovators from the university community to bring ideas into fruition. It hosts 70 high-tech, growing companies from its facility in the heart of midtown and has enrolled a host of entrepreneurs in Kauffman’s FastTrac program as well. While TechTown and SPARK and other accelerators operate independently, each has its own strengths. Rizik helps spawn capital for many of these accelerators and has seen increased communication between them in recent years. He says that "it’s only through the coordination and efforts between them that they can each be optimized."

4. There's access to space, leadership, and capital.

These three elements combine to make the Detroit landscape an untapped territory for starting business on the cheap.

Austin Black worked in the Detroit real estate market for nearly a decade before opening up his own shop specializing in urban communities. He says he's witnessed a lot of movement over the past five years into neighborhoods that had traditionally sparse residential populations. Lately, though, Midtown in particular has turned many of its vacant lots into mixed-use structures that combine storefronts and residences.

"You have a lot of landlords that really want to work with entrepreneurs and help them open businesses because of the benefit of storefront sales," Black says. This seamless "barrier of entry," he says, is what drives entrepreneurs to open businesses they are passionate about and fill a need for the city.

The hospitable disposition you get from the city trickles down from the its stable of strong, accessible leaders. James Canning says he doesn't have trouble getting meetings with some of the top CEOs in his industry, willing to lend a helping hand to those starting out. "The established leadership are looking for new ideas and next wave leaders to step up," he says. "Those that are taking the initiative to do so are being heard."

Named Crain Detroit Businesses' Newsmaker of the Year in 2009, Chris Rizik is certainly one of those leaders looking for the next big idea. He founded Renaissance Venture Capital Fund under the notion that Michigan was brimming with opportunities for investment. He cites that it has been a top-five region for research and development over the past few decades on both the corporate and university levels. Now it is his responsibility to convince investors of the state's potential for innovation and business development. And to a large extent, Rizik has been quite convincing.

"So far we've invested a certain amount in venture capital, and they've invested four times that amount in Michigan," Rizik says of the investors.

While funding from companies like Rizik's makes for a good start, investors aren't exactly throwing money around, especially for non-high-tech industries. Egner believes that the region's access to capital will grow even stronger once it has a more robust entrepreneurial ecosystem. "VCs will come here when they see something to invest in," he says. "We have to make sure the infrastructure is in place, so that companies that come here will stay here."

For now, Egner advocates freeing up capital for companies in the second stage of growth looking to reach the next level. He doesn't want to freeze capital for proven companies while earlier stage companies misallocate funds. He says that only once they align the right resources – the research, development, and communication – can they use capital to fortify growth.

5. Government support is plentiful.

Apart from all the independent accelerators out there, the government itself remains dedicated to small-business growth as well. Michael Finney of SPARK says that government cooperation has been vital to the growth of Ann Arbor's now-vibrant entrepreneurial community. "We have a very seamless voice to local and state government with respect to the needs of our entrepreneurs," he says. "And these governments respond very nicely to ensure they're not inhibiting the ability of the entrepreneur to be successful."

Organizations like the Detroit Economic Growth Corporation also serve as liaisons between business owners and the state. Bizdom U CEO Ross Sanders says his businesses have received assistance from the DEGC as well as support from the city government. Entrepreneurs from the program have presented their progress in front of City Council meetings and have even gotten pep talks from Detroit's mayor, Dave Bing. "The government is really recognizing need to foster entrepreneurship and to retain talent in Michigan to do so," Sanders says.

Grant programs such as the 21st Century Jobs Fund prove the state's commitment to aiding Michigan businesses. So far Michigan has committed close to $100 million to the 21st Century Jobs Fund, which aims to grow new industries in technology and alternative energy that will bring a diverse, robust economy to the state.

Ultimately the burden to change will fall in the hands of the entrepreneurs and their passions. The government, the leaders, and the community have given them the means to succeed. Now it will be up to them to make it happen.
The Associate Baron's Council, the Detroit young professional group who have aligned themselves with the American Cancer Society, is hosting a wine tasting event on Oct. 21st at Assaggi Bistro in Ferndale.

The event is our second fundraiser this year for the American Cancer Society. We are looking to make it just as successful as our Drive Against Cancer Golf Outing which raised over $12,000 for the American Cancer Society.

Below is the information regarding the event:

Assaggi Bistro Wine Tasting
Hosted by The Associate Baron's Council

The Associate Baron's Council invites you to attend the Assaggi Bistro Wine Tasting. Tickets are $50 with the proceeds going to the American Cancer Society. Your ticket includes fantastic wines and delicious hor d’ouerves in an elegant bistro setting.

Assaggi Bistro
330 W. Nine Mile Rd
Ferndale, MI

Thursday, October 21st, 2010
Cost: $50 with proceeds going to the American Cancer Society
Time: 6:30 p.m.- 9 p.m.

Assaggi Bistro in Ferndale will close its restaurant doors on Thursday evening to host an exclusive wine tasting to benefit the Associate Baron's Council and the American Cancer Society. Please join us from 6:30-9:00 p.m. to taste fantastic wines and delicious hor d'oeuvres in a Medditerian atmosphere!

The Associate Baron's Council is comprised of young professionals representing nearly every facet of the Detroit business community who have aligned themselves with the American Cancer Society to make a difference in the lives of the more than 22,000 patients that will be diagnosed with cancer this year in southeast Michigan. The Associate Baron’s Council offers the opportunity to make a lasting impact while you rub elbows with some of Detroit’s top business leaders and the fight against cancer.

Associate Baron’s Council members serve as community ambassadors for the American Cancer Society’s mission and programs. Members are asked to attend Associate Baron’s Council meetings and commit to an individual fundraising goal of $500 through a variety of Cattle Baron’s fundraising opportunities

For more information or to reserve your tickets today, please contact Julie Cameron at 248-663-3468 or visit cbbabc.org after Oct. 4th to purchase tickets online.

More than 400 young professionals are expected to come together for the first time at Detroit Harmonie on Oct. 9, 2010 at the Virgil H. Carr Cultural Arts Center in Detroit. Detroit Harmonie is an evening of international entertainment that will showcase the regions rich diversity.

Detroit Harmonie is being organized by ComePlayDetroit, CommunityNEXT, and the Young Professional Leadership Council, and will showcase more than 10 cultures from around the world through ethnic food, drinks, art, and music. Attendees will also view the grand opening of a new photography exhibit at the Virgil H. Carr Cultural Arts Center entitled Paradise in the City: Through the Eye of the Camera- an exhibit that will counter the negative images of Detroit published in TIME Magazine earlier this year. 

“Beyond celebrating diversity in Detroit, Detroit Harmonie exists to bring several young professional groups together to network and ultimately create one unified, cohesive voice for the future leaders of the community,” said Jordan Wolfe, director of CommunityNEXT. “Due to the sprawling geography of metro Detroit, many circles of young professionals often do not know of or interact with their peers and we want to use this event to start the conversation between people in the city and suburbs.”

Metro Detroit truly is a melting pot of different cultures with more than 140 different languages spoken in this region alone. Among the cultures and regions involved are African, Asian, Brazilian, Caribbean, Greek, Latino, Middle Eastern, and Russian.

Tickets are $30 and can be purchased at www.detharmonie.com

For more information or for sponsorship packets, please contact Sara Bloomberg via email sara@communitynxt.com or by phone (248) 752-2542.



Thalia Mavros, Director & Producer, VBS.TV
CNN

Editor's note: The staff at CNN.com has recently been intrigued by the journalism of VICE, an independent media company and website based in Brooklyn, New York. VBS.TV  is Vice's broadband television network. The reports, which are produced solely by VICE, reflect a transparent approach to journalism, where viewers are taken along on every step of the reporting process. We believe this unique reporting approach is worthy of sharing with our CNN.com readers.

In August 2009, Vice published a story called "Something, something, something, Detroit: Lazy journalists love pictures of abandoned stuff," about the roving gangs of photojournalists prowling the empty city and feasting on its highly photogenic carcass. Since then, some of the worst offenders have abashedly changed their approach to covering Michigan's largest city. But most outlets are still fixated on the all-you-can-click pageview buffet that is "misery porn" of the decaying Motor City.

Last month, we traveled to Detroit with co-creator and star of the "Jackass" empire Johnny Knoxville to explore what lies gasping beneath the rubble of over-indulged industry, frighteningly embarrassing municipal mismanagement, and decades' worth of social and economic imbalance. What we found is a burgeoning class of creative young folk intent on rebuilding their communities and the city, despite being faced with a world that has already phoned in their city's obituary.



Of course, not so much has changed on Detroit's surface: empty seven-lane streets, lots of abandoned stuff, fortified mansions beside charred remnants of neighborhoods, grasslands reclaiming entire city blocks, gaudy casinos in the deep ghettos. You've heard this all before. Even the BBC has filmed its requiem for the city, and NBC's "Dateline" has infuriated Detroiters with accounts of impoverished residents barely subsisting on freshly hunted raccoon meat. It amounts to a nihilistic sensationalism tinged with brittle, gauzy vestiges of hope and breathtaking visuals.

The fact of the matter is that the situation in Detroit is daunting. The city that so successfully realized the 1950s American dream is now a visual testament to its grandiose demise. But is that really news?

We like to think that the story is better told by identifying those who remain in Detroit and those who are moving back precisely because it is challenging. We set out to give the people of Detroit a platform to tell their story. The city has become a place where enterprising classes can find the space and time to do whatever they want, cheaply and hassle-free. It's a raw space where they can create community and start rebuilding their city from the inside out.

The people we talked to were all eager to discuss the reasons they love Detroit and, just as important, their vision for it. Everyone is doing something: buying and developing land, building businesses, making music, and laying the foundation for a new Detroit with a creative scene that reminded us of East Berlin after the Wall came down.

What we found there is a DIY paradise where people hustle to survive and use an anarchic sense of creativity to make things happen. It's a city primed for innovative solutions: How does a 20th-century city transition into the 21st, divesting itself of its outmoded industrial and economic models?

It's an exciting challenge that goes hand in hand with redefining the new American dream.

Click HERE to see more of the film.
Ron Leuty
San Francisco Business Times

If California wants to get its innovation game back, says venture capitalist Tom Baruch, it should look at Michigan.

That wasn't a misprint — much-maligned, Rust Belt-tagged Michigan.

We’re talking about my ancestral homeland here. I grew up in the southwest part of the state, where the recession and oil embargo of the 1970s drove unemployment in my little town above 40 percent.

I lived in funny-named places like Kalamazoo and Ypsilanti — both home to state universities and large auto plants — owned a home in one of the state’s innovation hubs, Ann Arbor, and worked in Oakland County, the biggest beneficiary of Detroit’s decline.

My dad, my brother, a sister, in-laws and a Facebook page full of friends — some of whom took me to task for recently leasing a Honda instead of buying from Fords — still call the Great Lakes State home.

Bottom line, I know my Soapy Williams from my Soupy Sales, my Benton Harbor from my Keego Harbor, my … well, you get the point.

So I had to ask Baruch again. “Which state?”

“Michigan,” the founder of San Francisco’s CMEA Capital repeated. “Now I’m not that close to it, but you see it more in programs and policies. They’re protecting small businesses, providing tax breaks — lots of breaks — and they’re providing worker training incentives.”

Also, Baruch noted, Michigan has a strong delegation in Congress that has helped funnel federal stimulus program cash in an effort to transform the world’s auto capital into a green-auto hub.

“(State government has) tends to be less antagonistic and more of what you might call ‘participatory’ in bringing together assets within the state, including the universities,” said Baruch, whose firm has bankrolled the likes of cleantech companies Codexis and Solyndra.

Maybe Meg Whitman should talk to Baruch. (See Detroit Free Press cartoonist/blogger Mike Thompson's take on Whitman's comments here.)

It is important to note that Michigan has a Democrat as governor, a split Legislature — a Democrat-controlled House and Republican-led Senate — a general fund deficit of more than $300 million and a nearly $500 million shortfall written into the next fiscal year's budget. That combination of politics and budget problems would spell stalemate in Sacramento.

CMEA Capital's Tom Baruch.

“California’s tough,” Baruch said. “In California, getting support from the state government is challenging. The funds are just not there.”

Baruch heard a lot about Michigan and other states, like Arizona, earlier this month at the first meeting of Commerce Secretary Gary Locke’s National Advisory Council on Innovation and Entrepreneurship. The group of heavy-hitters includes AOL co-founder Steve Case and University of Michigan President Mary Sue Coleman.

“There’s a lot going on in Michigan,” Baruch said, calling out A123 Systems Inc., which earlier this month opened North America’s largest lithium ion battery manufacturing plant near Detroit.

CMEA is an investor in A123.

It seems too good to be true, so I queried Stephen Rapundalo, president and CEO of the life sciences trade group MichBio. He outlined a handful of programs — from regional SmartZones that provide, for example, mentoring, incubator space or wet labs for startups to a pre-seed capital fund offering $250,000 alongside an investment partner and a pre-seed microloan program giving up to $50,000 to get companies ready for outside investment or customer sales.

There also is a tax credit that provides an incentive for large companies to invest in small, emerging tech companies' R&D projects. The large company can claim a credit against the state’s business tax equal to 30 percent of the contribution, up to $300,000.

“It seems to be working in multiple technology industries beyond just the biosciences, including alternative energy (batteries, wind, solar, biofuels), aerospace, defense mfg., etc.,” Rapundalo wrote in an email to me.

“I keep telling many people who muse about Michigan’s economic doldrums that they only need to look at some other states like New York, California to see state budgets that are in far worse shape than ours,” he continued.

In the end, policies and programs that support innovative startups comes down to leadership, Baruch said. California and the nation as a whole are failing to tap the cadre of experienced entrepreneurs, he said, who could lead a “Peace Corps of Innovation” and inspire a new generation of innovators.

“If you have leadership, you can have a big impact with very little money,” Baruch said.

And Baruch didn’t just fall off the pulp truck.
Garment districts have long been associated with New York and Los Angeles, but a garment district in Detroit? Joe Faris, a Project Runway alum and metro-Detroit designer, has taken a first step towards establishing an apparel industry in southeastern Michigan with his new line, Motor City Denim Co. by Joe Faris, made entirely in his home state.

The line for men and women will include jeans, skirts, dresses, western shirts, T-shirts, outerwear and accessories. Branded "Industrial Couture" by Faris, the collection will mix high-fashion elements with industrial edge, such as an evening dress made of denim. The line, which will be ready for wholesale October 1, will begin arriving in stores in early 2011.

By partnering with TDIC, Inc., the designer and manufacturer of protective robotic covers for more than 30 years, in Sterling Heights, all it took was minor retooling of existing machinery, plus a couple of jeans-specific machines, and the factory was ready for production. Faris added Taylor-based Arrow Uniform as his denim-wash facility, plus local screen printers and embroiderers to create an all-Michigan production team.

The partnership with TD Industrial Coverings, which took six months to establish, was the culmination of 10 years of planning for Faris, which switched into high gear when he landed on Season 5 of Project Runway, in 2008, finishing in the top 6 of 16 contestants, which ended with his collection on the runway at Bryant Park in New York.

Faris, who has designed for several brands, including Bugle Boy, Ralph Lauren, Pelle Pelle, Perry Ellis, Schott NYC and Made In Detroit, moved closer to his goal of a Detroit garment industry by co-founding Fashion In Detroit, a multi-show runway event, which made its debut last year.

"One of the goals for Fashion In Detroit was to put a spotlight on this area and get automotive companies to realize they can gear part of their business toward local fashion designers, giving them the ability to make their garments here," Faris says.

Tour de Troit

The Tour de Troit is a bike ride that explores some of the city’s historic areas, takes in many of its most breathtaking sights, and provides bicyclists a unique opportunity to legally “take over” the streets of the Motor City.

The 2009 TdT attracted a record number of cyclists — over 2,000! — and raised over $20,000 towards the Corktown-Mexicantown Greenlink, a planned series of bike lanes and off-road pathways that will connect the neighborhoods of Corktown and Mexicantown to each other and to the Detroit River.

The 2010 ride is set for September 25. Registration is available at tdt.eventbrite.com. The cost is $30 per rider ($25 for students) and includes a tee-shirt if registration is confirmed prior to September 7. The price goes up on September 15. Because this event may sell out, on-site registration may not be available.

The Southwest Detroit Business Association sponsors the TdT to raise awareness of biking as a mode of transportation; to publicize the growing greenways network in the City of Detroit and all of Southeastern Michigan; and to raise funds for Corktown-Mexicantown Greenlink, which will be constructed in 2011.

Once again, the TdT is offering riders two options. The first — and primary — will be a leisurely ride of 30 miles with police escort that takes off at 10 a.m. from Roosevelt Park, located at the intersection of Michigan Avenue and 14th Street.

The second option is intended for extremely experienced cyclists. It is a metric century (62 miles) that will not include police escort and will take off at 9:00 a.m. from Roosevelt Park.

Both rides will be sweeper- and SAG-supported.

2010 TdT sponsors include Miller Canfield, Team Detroit, Savor Southwest, Slow’s Bar-B-Q, Audio Rescue Team, Vitamin Water, Wheelhouse Detroit Bike Shop, Michigan Trails & Greenways Alliance, Whole Foods Market, The Hub of Detroit, Arbor Brewing Company, New Center Council, Detroit Bikes!, Kem 3D, Moo Moo’s Vegetarian Cuisine and Great Lakes Coffee.
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