People often ask me, “Why did you move from San Francisco to, uh, Detroit?” The answer is easy. In 10 years, San Francisco will be as good as it is today, but Detroit will be a roaring city once again, defining a new technology hub at the intersection of steel and bits.
When choosing to move to Detroit, a city that has been in a recent state of rebuild, many do so to roll up their sleeves, get to work, and make a difference. These attributes are what’s needed in an entrepreneur, which makes the city’s vibe appealing to early stage startups.
When entrepreneurs make the pilgrimage to San Francisco to change the world with their ideas, they do so for the vast amount of resources present in the Valley. Detroit, too, has immense resources at an entrepreneur’s disposal, but to build and scale in Detroit is to build and scale Detroit itself – something you can no longer do in the Valley.
And this is the reason I packed up and left San Francisco for Detroit in October of 2011. I wanted to take part in the emerging entrepreneurial gold rush in Detroit. I wanted to help fuel the startup renaissance and create a legacy. And over the last six years, I’ve seen the seeds of entrepreneurship blossom into a growing and thriving ecosystem. (Check out the documentary Generation Startup to see what it is like to build a startup in Detroit.)
Why is Detroit good for business?
The cost of living and doing business in Detroit is much lower than in coastal hubs like San Francisco and New York. You can hire a recent computer science graduate for $60K vs. $120K on the coasts. According to Numbeo, the cost of living in San Francisco is 93 percent higher than in Detroit. Your employees can afford a wonderful house in a great neighborhood, live in an amazing school district, and not break the bank. Not something you could do easily in San Francisco or New York. But across metro Detroit, you can. And that means more money to hire and scale your company. Your employees can raise a family and still live on an early stage startup salary. And your venture capital investors can see higher returns as a result of less capital needed to scale the business.
Detroit has a great talent network spanning universities, Fortune 500 companies, and business titans. Google got its seed funding as research out of the University of Michigan. A high percentage of the top venture capitalists in the United States have taken Professor David Brophy’s classes on venture capital. With 75 percent of the US automotive industry R&D investment located in Michigan, the future of self-driving cars will be built and tested across Detroit. New facilities like Mcity and the American Center for Mobility will support testing and validation of autonomous vehicles. And business titans that call Detroit home include Dan Gilbert, Roger Penske, Chris Ilitch, and Bill Ford.
There’s a hidden diamond in the Midwest that contains an economy larger…