Henry Ford and Margarita Barry don't have much in common, but they do have this: Both have aspired to create jobs in Detroit.
Ford, of course, built Ford Motor Co., one of three car companies that dominated this city for the past century — their boom making Detroit rich, and their long bust leaving a legacy of vacant lots and an unemployment rate above the national average.
Barry, 26, grew up in their shadow but always saw another side to Detroit: an artistic and rather edgy one. So last year, she launched I Am Young Detroit, a website devoted to Detroit news and events. With new funding on the way, she'll be adding a handful of full-time and part-time positions this spring. Detroit, she says, is a great place to start a business. Real estate is cheap, and "there are so many people out there with talent, primed and ready to get back to work."
Plenty of savvy entrepreneurs are discovering the same secret. Viewed in one light, the decline of Detroit's auto industry is a tragedy for the people who depended on it. On the other, the destruction has freed up an awful lot of creative energy and resources for those willing to take a gamble. According to the Kauffman Foundation, which promotes entrepreneurship, the rate of new business formation per 100,000 adults nearly doubled in Michigan from 2006 to 2009, before leveling a bit in 2010.
It's a very American story of reinvention — like Houston diversifying from oil, and Pittsburgh thriving after the steel mills left.
"Detroit is in some ways a blank slate," says Paul Chambers, whose two tech companies, Core3 Solutions and Quotegine, employ 15 people. It will take a flush of new businesses to equal the thousands of jobs lost here over the past decade, but like seedlings after a forest fire, start-ups are slowly giving this city a new look — and life.
'Fat and sassy'
It's hard to overstate just how much of Detroit's mind-share the auto industry once consumed. "We got a little bit fat and sassy with an industry that sustained us ... for 100 years," says Leslie Lynn Smith, general manager of TechTown, Wayne State University's business incubator, which is housed in an old auto building (the Corvette was designed on the third floor). Her father worked in the auto industry for years, and with the car companies paying high school grads well enough to afford homes and often vacation cottages, few bothered looking elsewhere.
Globalization destroyed that fantasy world, but the long decline that culminated in the 2009 GM and Chrysler bankruptcy reorganizations created space for new ventures. Entrepreneurs here argue that, despite lingering bureaucracy and a serious crisis in the school system, Detroit is one of the best start-up environments in the country for three reasons:
•First, space is comically cheap. Real estate listings seem to be missing a zero. Thanh Tran, founder of MentalNote, an electronic medical records software for mental health professionals, reports that he is paying $14 a square foot to rent a nice space for his company, a rate that would be hard to get elsewhere. Phil Cooley, co-owner of Slows Bar B Q — whose two locations employ 105 people — recently made a $100,000 offer for a 30,000-square-foot building, which he plans to turn into artists' studios. In New York, where you can't get 300 square feet for $100,000, his creative friends report that "they're not making art anymore — they're working four jobs," he says. Come to Detroit, and you can bartend at Slows three nights a week and use the rest of the time to make art, sell crafts on Etsy, freelance or invent the greatest new thing since the internal combustion engine. Renting a room in a big Victorian mansion runs $200 a month. Even if bank lending to small businesses isn't brisk, it's not hard to bootstrap that.
•Second, plenty of hard-working potential employees are more willing to consider small firms than in the days when everyone got a job at Ford. This includes former employees of the auto industry, and the surprising number of young professionals now living downtown. Whenever Saundra Little, an architect who specializes in green buildings, scales up for a new project, "there's a nice pool out there for me to pick from," she says. With the low cost of living, talented people also are more open to the short-term contracts that start-ups often use.
•And finally, unlike in some more cut-throat cities, those who haven't fled Detroit are eager to see risk-takers succeed — even another restaurant on the same block. "We're desperate for companionship," Cooley jokes. People buy local when they can and create two-hour lines outside Slows in nice weather. A civic spirit of us-against-the-world has neighbors turning vacant lots into urban farms and sculpture parks, and building a bike track next to a burned-out house.
Of course, this new economy is one thing if you're well-educated. It's another if you worked the assembly line for 20 years and might not have the skills that Detroit's start-ups require.
Even in these hard cases, however, the death of one thing often leads to new opportunities. Margarita Barry takes design classes at a local college and reports that "a majority of my class is adults who worked in the auto industry for years and are starting to rebuild their lives." With stable, if boring, jobs beckoning, "people set aside their creative sides to work the assembly line." Now, "I see them exploring this other side of themselves," she says. They learn that "you can't depend on these large companies anymore." If you can't get a job, you can make a job, tapping into that creative spirit that resides in all of us — even in Detroit.
Says Cooley, "There's tremendous potential everywhere."
Laura Vanderkam, author of 168 Hours: You Have More Time Than You Think, is a member of USA TODAY's Board of Contributors.