Technology is the most important economical component to help a nation advance and make life better for people every day. Techonomy is a conference company that was created to drive social progress with a focus on technology and the economy. When I found out that the conference was coming to Detroit, I knew that I had to be there.
People that live in Michigan like myself have a notably less amount of resources that tech start-ups in Silicon Valley has. Fortunately that gives us certain advantages. For example, start-ups that gain a little bit of traction in Michigan get really noticed. We also get to take advantage of a lower operational cost. Houses costs much less here and so does commercial real estate for your office. The only thing limiting you from starting a business and growing it is your own drive. If you have the drive, the sky is the limit for what you can pull off in Michigan.
While tech entrepreneurs in Michigan look up to their counterparts in Silicon Valley, Silicon Valley entrepreneurs know that Detroit entrepreneurs knows how to hustle like Axel Foley in the Beverly Hills Cop. They respect that, which is why many of Silicon Valley’s brightest came to inspire a large crowd for a networking event at the M@dison Building and an all-day conference in at the Wayne State University Community Arts Center in Detroit.
This is my story about attending the conference.
When I rode up to the top of the M@dison Building in downtown Detroit, I briefly chatted with David Kirkpatrick, the CEO of Techonomy and made sure to compliment him on how well the conference is organized. Everything was meticulously planned from the unique foods that were served at the M@dison building, to the list of speakers, and the exact timings. Detroit start-up company Detroit Labs even put together a Techonomy Detroit app well before the conference actually took place.
This is what the building looked like within an hour or two. It got packed!
After a night of and networking, I headed home and got ready to learn as much as possible from the conference taking place the next day. Bright and early, I was greeted this morning by this sign on the Community Arts Center building.
As the conference progressed, the Twitter hashtag #TEDetroit started to trend from all the tweets related to the Techonomy conference that day.
As a press partner for the conference, I thought I would share this photo I took of the sponsors that worked with Techonomy too:
The conference started with a wonderful intro by Beth Chappell (president and CEO of the Detroit Economic Club), Allan Gilmour (president of Wayne State University), and David Kirkpatrick (CEO of Techonomy).
The first segment was called “Entrepreneurship and American Relevance.” The speakers on that panel included Steve Case (AOL founder and Revolution LLC founder) and Josh Linkner (ePrize founder and Detroit Venture Partners CEO/Managing Partner). David Kirkpatrick was the moderator of this segment. Linkner just sold ePrize to a private equity company called Catterton Partners..
Steve Case was excited to join the talk because he strong believes in “the Detroit story.” He said that “the place to focus on is entrepreneurship” not “just in Silicon Valley, but also in Detroit.”
“You know, here in Detroit — it’s weird — you can bump into somebody and they say oh I hear everything that is going on — this bustling tech scene — and they’re really familiar with things. And then you bump into somebody else and they don’t have any sense of it at all,” said Linkner in the talk. “So I think that events like this and the continued support of the media — we have to scream from the mountaintops that Detroit is open for business. This is a great place to build a tech company.”
Case said that there are two types of entrepreneurs. “There are some that are trying to create some kind of interesting product or service and have somewhat modest ambitions — they’re just trying to start a business and that’s fine. They are an important part of the economy as well. And the others are the ones that are trying to change the world. They’re swinging for the fences.”
The second type of entrepreneurs have to really have a passion and perseverance to see it through. “I saw this with AOL. We started AOL 27 years ago. Only 3% of people were online. On average, they are online only 1 hour per week. Most people thought we were crazy. Nobody wants to do this stuff. But we stuck with it — it took us really a decade before we really got traction. And then finally in the mid-90’s things kind of took off. Some people say ‘oh AOL was really an overnight sensation.’ No it wasn’t! We were at this for more than a decade when no one really knew what we were doing. So that’s kind of the perspective that I think entrepreneurs need to bring.”
When Linker was asked by Kirkpatrick whether he thinks he is a revolutionary, Linker replied that he sees himself as a disruptor. “Detroit specifically was born on the spirit of disruption and folks like Henry Ford put us on the map.”
“As a result our city prospered and we were the Paris of the Midwest. And then we stopped doing that. I mean essentially we built these stifling bureaucracies, became immersed in finger-pointing and blame and our city crumbled, but today we’re in the midst of a new revolution. A time when entrepreneurship is alive and well and I think this is the time to make it happen, specifically to diversify the economy,” added Linkner.
Case talked about the talent aspect of entrepreneurship during the talk as well. Talent is the most important part of entrepreneurship. “The battle for talent also happens at a regional level. How do you get some of the people that leave Detroit to come back?” He said this is why some of the work that people like Josh are doing is important for bringing back students that believe they had to leave to find opportunity.
In the segment, Case talked about the importance of crowd-funding. “Crowd-funding, which basically… for those of you that don’t understand is using the Internet to aggregate small investments from a lot of people to be able to start a company or grow a company. This legislation that passed basically legalized crowd-funding. There was a law that passed in 1933, the Securities Act, that basically said that you can only invest in companies if you are rich. You can’t invest in companies unless you are an accredited investor. This democratizes access to investing and democratizes for individual investors that want to invest and also democratizes access to capital for entrepreneurs. It’s probably not that important or that helpful in Silicon Valley because there is tons of money and venture capital in Silicon Valley. It’s really important in places like Detroit where there is not that much capital. So now you’ll have the ability starting early next year when the SEC writes the rules to basically put your business online, explain what you are trying to do, explain why you think it’s a good investment and people can make an investment up to $10,000 each and if your income is at a certain level it’s only up to $2,000 so there is a way of trying to protect investors and people can raise up to $1 million total through this mechanism. And that will be the difference for thousands of entrepreneurs that otherwise would not have been able to start a company,” said Case.
“As I mentioned and I know it’s controversial, but the issue of immigration is also important. Right now over half of the people coming to our great universities get PhDs and Masters from other countries, once they get their PhDs and Masters, we essentially for the most part kick them out of the country and force them to go home. We should ask them to stay, make it easier for them to stay here. Because these are the people that create the Googles and the Fords and some of the great companies that create thousands or tens of thousands of jobs. So trying to make sure we win the battle for talent globally is really really important.”
The next segment was by Carlo Ratti of the SENSEable City Lab at the Massachusetts Institute of Technology (MIT). Ratti’s presentation was about “Big Data.”
Ratti quoted Google chairman Eric Schmidt by saying “the amount of data produced from the dawn of civilization up until 2003 can be estimated in five exabytes.” In the quote Schmidt had from 2010, he added ?that same amount is created every two days.?
Ratti pointed out that one of the biggest problems today is that we understand how a computer is built, but after it gets old and we throw it away — we don’t know what happens to it. This is why the SENSEable lab put little chips in waste and “tracked trash” to see what happens to it. Around 500 people in Seattle agreed to have their trash tagged. Around 3,000 objects ended up being tracked. It is amazing to see how fast the trash traveled in around 3 weeks to two months. A lot of the waste travelled across the country in a non-optimized way.
One time a burglar entered the lab at MIT and saw a lot of stuff including the tags that tell where the items are going. The device ended up reporting its GPS location. The suspects photo. The suspect also had a T-shirt on that had his business address imprinted on it. “When objects talk back to us, they can tell us unexpected stories. And remember, stealing from MIT is a bad idea.”
“While this was just a quick example about sensing, I wanted to show you another example about when you put more data streams together — that’s what we’re doing in Singapore. So this was using sensors on the trash, but imagine you can collect much more information and get to almost like a living city where you know in real time or what’s happening around yourself,” said Ratti.
Then he showed a video of how energy is consumed causing temperature to rise at different networks. He also showed how the city behaves during certain events like the Formula One race in Singapore. Even a simple thing like mixing taxis in the rain. You can also see how a city expands and shrinks as people driving during the day. It also shows people coming in and going out of the city.
In the next segment, Bruce Katz (Vice President and Director of the Metropolitan Policy Program at The Brookings Institution) moderated a discussion about “how far can innovation take our cities” along with Janet Anderson (Adjunct Professor of Wayne State University and Policy Analyst for the City of Detroit), Gordon Feller (Director of Internet Business Solutions and Urban Innovations Group at Cisco Systems), Michael Littlejohn (VP of Business Development at IBM Smarter Cities), and Carlo Ratti (MIT SENSEable City Lab).
When Mr. Littlejohn was asked about where he sees progress in sectors and cities and where the U.S. is. Mr. Littlejohn said “So Bruce the good news is that there is tremendous progress across the country, but it’s relatively siloed. So we can point to smarter water, smarter implementations, and smarter transportation, smarter public safety, smarter healthcare, smarter grid, and smarter energy management. But that is not necessarily a smarter city. A smarter city (and it was eluded to a number of times this morning), is really about taking advantage of the fact that a city is a complex system of systems. And so how do you take advantage of the integration of those systems, the integration of the data (the big data) to move your city, to move your state, to move your country forward? And that’s where we are lacking. And the example I’ll use is take a building and you can implement the best building information management system that exists in the world. And then you can implement the best physical security system that’s in the world and you’d be doing pretty well. But there’s an opportunity there to even better your operations by integrating the two. Think of the possibility if you could take the data from the building information management system and the data from the building security system. Think of the additional insights you could gain and how you could run that building, how you could manage that building more effectively. The same principles hold true for a city.”
Bruce was curious about how some of these opportunities that are siloed can be applied to Detroit, a city plagued with fiscal and economical challenges and barriers that can be removed by smarter city data. Ms. Anderson said that she lived in Detroit her entire life (40+ years) and worked at the City of Detroit for over 20 years. “There is definitely a new focus on the condition of the city — on cities in America as well because cities are the engine that built this country.” She said that when you have been in the trenches as long as she has been, you have find that “there are so many silos and breakdowns both within city government and within the region.” She said that there is so much overlap and overlay of governmental jurisdiction. “Within the region, I think it’s 140 municipalities within metropolitan Detroit. As we try to address some of the environmental challenges, how do you bring all of these types of entities onto one page? I worry about the capacity for planning.” Bruce added “Crisis begets innovation.”
When one of the audience members pointed out that data collection is simply a means to an end and that end is some type of “social media application” or app, he wanted to know how the two can be connected somehow.
Mr. Feller said “We talk to a lot of mayors that want to create networks of allies for the projects that the cities are undertaking. Partly because they want to have access to all that knowledge or resource that the social network can help the city tap. And that’s an understandable thing that the mayor wants to do. But it’s very opportunistic. A little bit mercenary. You know I want to build a social network in order to be able to accomplish my goals and we have to explain carefully to those city leaders that often the people in the social network have different ideas about how to go about the process of changing schools or improving buildings or making mobility and transit more efficient and more affordable in the city. And often you get results from the social network that you weren’t necessarily expecting when you ask them to participate in a conversation.” Feller has to tell these city leaders that they should not start by thinking that their ideas are some of the best ideas.
The next segment was about U.S. competitiveness. It was moderated by Jim Dougherty (Adjunct Senior Fellow for Business and Foreign Policy at the Council on Foreign Relations). The speakers in the panel included Edward Alden (Council on Foreign Relations), Vivek Kundra (EVP of Emerging Markets at Salesforce.com and former CIO of U.S.A.), Paul Mascarenas (Chief Technical Officer and VP of Ford Research and Innovation), and Michael Teitelbaum (Wertheim Fellow of Harvard Law and Senior Advisor at Alfred P. Sloan Foundation).
Jim said “Vivek, your last job was CIO of the United States of America, that’s a pretty big job. So you got to see lots of things. You had a great perspective on these three areas in the United States – the immigration, education, infrastructure. Can you pick one or two of those and comment what the current state is in the United States in terms of being competitive in the world?”
Mr. Kundra said “My view is that it is still the best country in the planet when it comes to starting up a business, advancing an idea that you have, or access to talent. The challenge we have before us because we are the architect of our own destiny… that there are key issues that we have to confront. If you look at the next 30 years, if we don’t address them, I don’t think we can remain the most competitive country in the world.” Kundra added that immigration is broken because we educate immigrants and then sending them off to create businesses elsewhere. “Why aren’t we stapling right to their graduate application – a visa or green card?” Kundra also said that education is broken as we look forward the next 30 years. He said in Detroit there are 3,400 IT job openings in the Detroit metro region. We need to get better at retooling the education system that we have domestically.
Mr. Teitelbaum talked about how the U.S. did in education versus other countries. He said that the science and engineering employees come from the top tier and the K-12 students can produce some of the top calibre by international standards, but we are leaving behind the bottom quartile who are doing very badly. “You really want people to be literate and numerate in all occupations these days.”
Kundra said that it is really up to the cities to be “open” to technology and innovation. In an example he said that when Uber first came in to Washington D.C., the city council decided that they would ban the company because it would disrupt the traditional taxi cab model. It caused an up-roar between the traditional model for the new model. A lot of actors at the city level have an interest in preserving the status quo.
When Mr. Alden was asked a question about what the United States is doing to encourage mid-size businesses to export overseas, he said “not nearly enough is the right answer.” He added “we have a commerce department and that’s part of it’s mandate, but the money that goes into it is pretty minimal. There isn’t the kind of coordinated, focused, export effort at the federal government that you see for instance in Germany. And I think there are a lot of possibilities for collaboration. I think that people working on the ground in China are doing exactly what you are talking about.” A lot of innovation on this is taking place at the state level, but not at the federal level.
In this segment, Erick Schonfeld (Formerly of TechCrunch and an editor for Techonomy) moderated the panel. Panelists included Grady Burnett (VP of Global Sales and Operations Facebook), Mark Hatch (CEO of TechShop), Danae Ringelmann (Co-Founder and COO of Indiegogo), and David ten Have (Co-founder and CEO of Ponoko). Burnett used to live in Ann Arbor for several years. There are a new set of tools that manufacturing companies and startups are taking advantage of like crowdfunding with Indiegogo, prototyping a product with TechShop, to manufacture it, and ways to market it.
Based on the DIY economy and all of the tools that are available to entrepreneurs, “is it possible to create a GM in your garage now?” asked Schonfeld.
Mr. Hatch said “absolutely!” He added “Some things that some people don’t necessarily realize today – the cost of a computer numerically-controlled milling machine (CNC tool) has come down something in the order of 95%. Primarily again because of Moore’s law. Most importantly, software companies like AutoDesk are making the software so much easier to use… that we are training people how to use these tools in 2 or 3 class sessions. Now they’re not world-class millwrights at the end of the 2 or 3 class session, but if you are Patrick Buckley and you want to do an iPad case and you come in and take 3 classes, 90 days later you could have just like he did — a million dollar company. They did $3 million in the second year, $10 million this year. Square did the original 3 prototypes at TechShop on the benches. And they’re doing just fine. So the ‘casm’ has just gotten much smaller. Typically when you do a software startup now you need $25-50-75,000 — well now you can do a hardware software for the same kind of money. We’ve had dozens and dozens and dozens of crowd-funded projects come through from $10,000 to $100,000 that actually got them all the way through the prototyping stage — their first run in manufacturing. That is new to the world. You’d never have been able to do that at that kind of price points.”
Schonfeld asked Ms. Ringelmann what kind of products and companies that are on Indiegogo and “how do you see it opening up these opportunities to people who may have just been hobbyists in the past?”
Ms. Ringelmann talked about the “Bug-A-Salt.” Bug-A-Salt was by “a few young entrepreneurs that were passionate about keeping bugs away.” She added “So what they did was that they put their creative minds to work and they came up with this awesome contraption to the very benign fashion of shoo-away flies. And what they ended up doing was they used Indiegogo which leveraged Facebook and all the social media. They ended up raising almost $600,000 by offering their product as a way to raise the money to actually go and build their product. We’ve had campaigns raise money for 3D printers, we’ve had campaigns raise money to make the next film, we’ve even had campaigns for charity or cause related stuff. People funded their baby. We had a couple that couldn’t afford IVF (in-vitro fertilization) treatment so they went on Indiegogo and raised $10,000 to have a baby.”
Mr. Burnett talked how Facebook helps the community spread messages in a word-of-mouth way that never existed before. He talked about a former football player at the University of Michigan named Martavious Odoms that played there a couple of years ago who graduated and went into the professional work-force and did not end up playing professional sports. “He’s jumped back into his community in Florida and has a new business called Pound Eating that is all about sustainable farming and eating healthy in his community that has not done that historically. And he’s doing it through crowd-funding and he’s actually funded this through a group of friends. He’s distributed it through Facebook that have like interests. So as a result I contributed to that.”
I thought one of the interesting points that Ms. Ringelmann did was talk to the taxi driver about how things are going and how his job is. The taxi driver said he wishes he could make more money. Ms. Ringelmann asked him if he ever thought of starting his own business. The taxi driver said that one of the pain points for taxi drivers is that they are unable to go to the bathroom when they need to and so he had this idea for a portable bathroom with a tent that pops up. “He went crazy giving me all the details of this amazing plan.” The taxi driver said he needs help with money, she said there is something called Indiegogo and then the taxi driver said that he needs help with design and then she said that there is something called TechShop. The taxi driver was blown away by the fact that it was possible. Ringelmann said that we live in a society where ideas are repressed because of the limitations. These limitations are now being removed.
Mr. Hatch said that one of the first members at TechShop in Allen Park was a man named Luciano. He was an Italian that moved to Detroit and lost access to tools when he got married and moved here. Now he has gotten back to creating beautiful string basses:
One audience member asked if even unskillful people having access to these tools will benefit from the DIY economy. Mr. Hatch said “What’s different is that literally for the first time since the beginning of the Industrial Revolution, you can have access to those tools for the cost equivalent of a daily Frappucino. That has never happened before.”
Ringelmann added “And you can make more mistakes and not be completely destroyed by them because you have only lost the price of a cup of coffee so you are going to try again.”
Ben Kaufman, the CEO of Quirky, was the next speaker. Earlier this month Quirky raised $68 million in funding. He opened by saying “So David told me I have 10 minutes to change your entire perception on everything you see in the world so I am going to do just that. So let’s see if that works.”
Kaufman said it took 1 year and 45 days to build the Empire State Building. It took 2 years and 2 months to build this fucking potato peeler.”
There’s something wrong here. It’s been 11 years and we still don’t have a Freedom Tower.
Kaufman said this is the first jetliner — The Lockheed P-80. “From idea and design to delivery was 143 days. That’s what our country was capable of when we needed to be innovative. Fifty years since the original Concorde was designed and it’s still the fastest commercial jet in the world.”
“And it was flown completely mechanically like no on-board computers — it like switches and things like this.”
There is something to be learned by all this and that is as the world has moved into a place where we’re making apps and technologies and servers and things like this, we’ve forgotten about the things that actually touches us as human beings. Real things that you could hold in your hand, look out into the street, and sometimes drop on your foot.”
Quirky quoted the CEO of P&G as saying “we haven’t created a new category or meaningful new brand in some time.” Kaufman said “Guess who has? A bunch of crazy folks locked in a glass conference room in New York City. In fact, we launch two brand new consumer products every single week — every Tuesday at 12 and every Thursday at 12 regardless of what’s going on in the world. And that’s going to increase to about 10 products per week by the end of the year.”
Some of the ideas that come to Quirky are recycled science projects. One idea from a kid that recently graduated from high school in Wisconsin said that he cannot fit all of his power bricks into a power strip. He submitted the idea to Quirky.com. The community came together on it. Over 700 people came together to work on it as part of a product evaluation process and a design process. All of a sudden we have the world’s first pivotable power strip. Over 700,000 units were sold generating $11.7 million in revenue and $1.2 million went to the community.
“Everyone talks about the future. The future. The future. A hundred years, a hundred years of progress. In this fair town over 100 years ago, you guys had a guy that made something like this. It was a car. It was called the Model T.”
“It was the best selling car in 1909. And it came in black. And it got actually 17 MPG. Here we are 100 years later. One hundred years later (wrap your head around this!), the best selling car in America is still a Ford! It’s still black and it gets 16 MPG. Now that was a hundred years of progress.”
In the video below, Kaufman talked about a girl named Jenny that went revolutionized the milk crate from 0 days to 100 days and made over $1 million in revenue.
Daniel Howes (Columnist and Associate Business Editor at The Detroit News) moderated the next segment where he talked with Amar Hanspal (SVP of Products at AutoDesk), Stephen Hoover (CEO of PARC – Palo Alto Research Center at Xerox), and Lou Rassey (Principal at McKinsey & Company) to talk about “Manufacturing 2.0.” Rassey was a Detroit native at Sterling Heights, Michigan.
Daniel said that there are certain stereotypes around the common manufacturing employee looks like based on education, age, compensation etc. He the panel what they thought the future of manufacturing employees will look like. Hanspal said that he looked on Monster.com to see what kind of manufacturing employees that companies are seeking today. “They are skilled at robotic programming, CNC programming, they are skilled in lean manufacturing techniques, and I think those are different from what they looked for 15 years ago.”
When talking about other countries that strongly compete against the U.S., Mr. Hoover said that “Germany really values building things.” Engineers are respected a lot more over there. They have a value system in early stage technologies. Howes said that the government and education system has the same set of values whether they are on the right or the left. Mr. Rassey said that the way that the government is thinking about manufacturing is changing such as their explicit strategies.
Towards the end of the panel Mr. Hoover said that there is a phrase that one of his friend uses which is “never waste a good crisis.” Big institutions change when they have to.
Tim Draper (Draper Fisher Jurvetson and Draper University School for Entrepreneurs) talked about the next generation of entrepreneurs. When David Kirkpatrick introduced Tim, he said that around 15 years ago in Berlin Draper was passionate about how ordinary people should be able to invest in start-ups.
“This is what I do. I support heroes,” said Draper. Draper said that “you have lived off this automotive tit way too long.” It’s three or four more generations. “It’s time to do something else” so if “you’re going to stay in automotive, you’re gonna have to make that car fly.” Draper said that we come from a long list of entrepreneurs, but many of them are in the car business. On the list of the right, there is a list of people that have left Detroit:
Draper plugged his dad’s book “The Startup Game” by William Draper III. Draper is a third generation venture capitalist. He also plugged his daughter’s show “The Valley Girl Show” where she interviews a lot of entrepreneurs. She got Elon Musk to shoot up a bottle rocket and she got Vinod Khosla to paint her green in the show.
Draper talked about some of the places he had been in the world including India. In the video he tells a joke about how Indian people are constantly doing math in their heads just to cross the road with all of that chaos, which makes them great engineers.
Draper also told a funny story about how he worked with the Skype founders to do a video-conference call. To make the video conference run as smoothly as possible, one of the Skype founders cut off 100,000 phone calls to free up some bandwidth.
Draper said that they look for “black swans” wherever they are. One example he gave was in regards to SpaceX. “One thing I will mention is that in space, SpaceX has figured out how to launch the exact same payload with their Falcon as the Vulcan – the NASA Vulcan launched — and the NASA Vulcan costed $400 million in hard costs and another $2 billion in soft costs. SpaceX launches the Falcon 9 and it is $30 million. So that be done with government or private? Government or private? What do you think?”
In the next part of his presentation, Mr. Draper said that he bought an old hotel to build an immersive program for entrepreneurs to be forced to think creatively called Draper University. “Instead of teaching History, we teach something called Future.” Draper said that they make them do a full simulation of an industry with teams and learn to do balance sheets by gut.
If you go to DraperUniversity.com, you can see what some of the entrepreneurs at the school has done. “Remember wherever you go, whatever you do, entrepreneurs are heroes.”
Guy Halfteck (Founder and CEO of Knack) said that human potential is the most valuable resource. His company Knack has three components to their technology: behavioral science, game-play, and big data. There are 6 scientists that the company is working with. They collect data from your game-play. The game observes how you learn, how you change your strategies, and how you cope with failure. Everyone is wired to play games from toddlers to late age.
One of Knack’s games is called Wasabi Waiter where you play the role of a waiter and you have to serve sushi to the customers based on their emotions. It is just like The Sims, but data is analyzed. The emotions include angry, sad, and happy.
Mr. Kirkpatrick chimed in by pointing out that the pedigree of universities could be less relevant with this type of technology. Knack is running pilots with Shell and Bain to find business talent. They also partnered with one of the largest medical centers in New York City to run a pilot in what makes a great physician.
After lunch-time, there were several break-out sessions. The sessions included
1. From Here to There: The Evolution of Mobility (video below)
Russell Hensley (McKinsey & Company) was the moderator. The panel included Jay Baron (Center for Automotive Research), Vivek Kundra (Salesforce.com), Michael Littlejohn (IBM Smarter Cities), K. Venkatesh Prasad (Ford Motor Company), and Susan Zielinski (University of Michigan). Check out the video below:
The other breakout sessions included:
2. So You Want to be an Entrepreneur?
Erik Savitz (Forbes) was the moderator. The panel included Brian Balasia (Digerati), Angela Benton (NewME Accelerator), Grady Burnett (Facebook), Tim Draper (DFJ), and Mike Norman (Wefunder).
3. Is Detroit the Next Berlin?
Justin Fox (Harvard Business Review) was the moderator. The panel included Matthew Clayson (Detroit Creative Corridor), Josh Linkner (Detroit Venture Partners), Leslie Smith (TechTown), and Tim Smith (Skidmore Studio) was on the panel.
4. Jobs, Growth, and Michigan’s Future
Hans-Werner Kaas (McKinsey & Company) was the moderator. Timothy Bryan (GalaxE.Solutions) Michael A. Finney (Michigan Economic Development Corporation), John Gallagher (Detroit Free Press), and Sarah L. McClelland (JPMorgan Chase) was on the panel.
5. Beyond the Theories: Local Strategies to Revitalize Detroit
Akosua Barthwell Evans (The Barthwell Group) was the moderator. Drextel Amy (Liberty Bank and Trust), Walter K. Evans (The Barthwell Group), Oran Hesterman (Fair Food), and John Webb (Quantum) were on the panel.
We always talk about transformations being underway for governments and companies. But what changes do we as individuals have to make in a rapidly changing environment. The older we are, the harder it gets.
In this segment Dick Bolles, the author of “What Color Is Your Parachute?” was interviewed by his son Gary Bolles. “What Color Is Your Parachute?” sold around 10 million copies. Gary and Dick are starting a company together called eParachute based around some of these ideas. Gary actually produced an event in Detroit called TED Motor City about a year ago.
When Gary asked his father about what college students should think about when entering this economy. Dick said “Self-inventory” three times to find meaningful work. Gary said that they did a survey in 2009 of all the job hunters that were job hunters that went to live back with their parents. The average was that job hunters spent one hour per week looking for a job. “I couldn’t find a lost dog in an hour per week!”
In this segment, Rochelle Riley (Detroit Free Press) was the moderator. Tonya Allen (COO and VP of The Skillman Foundation), Catherine Kelly (Publisher of Michigan Citizen), Bruce Schwartz (Detroit Relocation Ambassador and Quicken Loans/Bedrock Real Estate), and Brian Balasia (President and Founder of Digerati) were on the panel.
Ms. Riley asked the panel why they individually believe in Detroit. Mr. Schwartz said that Detroit has a great and rich history and the area is a great place to bring your family up. Ms. Kelly said that Detroit is a great place for entrepreneurs and the decline of the automotive industry has pushed people to the edge to come up with new movements. Ms. Allen believes in Detroit because “we’re resilient” and despite the hard times people get up and try to make this place a better place. Mr. Balasia said “I think this place is great. I don’t know any other place in America where you’re going to find the blue collar, hard-working, roll-up-your-sleeves mentality mixed with the brilliant minds from the research universities that we have. There are very few barriers to entry. Costs are low. And it’s a small enough pond where you get to interact with everybody. It’s a globally connected marketplace.”
When one of the audience members said that throughout the conference, there was constant talk about the importance of change in Detroit, but not a lot about how it was possible. He asked how change is possible at the grassroots level.
Ms. Riley said that one of the most important things to happen in the city in the last 95 years happened last year. The voting residents changed the way that they elect the city council to elect them by districts — 7 districts — instead of them all at large.
Ms. Allen challenged the assumption that the grassroots are not already active. There are tons of people in the community that wake up and try to do the best they can do.
When the panel was asked how the job opportunities are marketed and how to incentivize students to stay around, Mr. Balasia said that they were working with a program called “Interns in Michigan.” Some of Digerati’s interns left the state because they were worried that jobs were not available. The Skillman Foundation funded the Interns in Michigan program.
David Kirkpatrick interviewed Dan Gilbert (Founder of Quicken Loans, Chairman of Rock Ventures, Principal at Detroit Venture Partners, and Majority Owner of the Cleveland Cavaliers).
Mr. Gilbert said that technology transformed and became their company. “Everything moves with technology.”
Mr. Kirkpatrick found that Dan Gilbert’s contributions to Detroit has been incredible. He asked why he made such big commitments to the city. Mr. Gilbert owns millions of square feet in real estate in the city of Detroit. Gilbert said that his father and grandfather are from the city so there is a sentimental component and he wants to see the city make a comeback.
He also pointed out that there are a lot of brilliant minds at Wayne State, Michigan State, etc. This upcoming generation wants to be in a vibrant community rather than a quiet building in the suburbs. “The good news for us was that there was a skyscraper sale going on” and there was a “few of them on eBay” (LOL from the audience).
When talking about regulation, Gilbert said that they run into many issues. He even pointed out that there is some regulation where a blind kid has to pass a driver’s test to graduate in Chicago. There is another building that he owns where the city is giving him a bit of trouble because they don’t want it to be modified for historical purposes.
Mr. Kirkpatrick asked Dan Gilbert whether college degrees are necessary to work in technology jobs at his companies. Dan said that there are a lot of kids that grew up as computer geeks and taught themselves how to program. He said if you are a Michigan State grad, we’ll pay you more money though (cheering from the audience).
David Kirkpatrick interviewed both Jack Dorsey and Dan Gilbert in this segment. When asked why he was excited about coming to Detroit back in January, Dorsey said that he comes from a major city as well since he is from St. Louis. He said that people in St. Louis are seeing a resurgence in both St. Louis and Detroit.
Kirkpatrick said that “you have an obsession with cities, let us know about that.” Dorsey said he became obsessed with maps and “had them all over the place.” Eventually Dorsey got into the dispatch industry so he could see the life in the cities like fire trucks and cabs. Eventually he worked at the dispatch in New York. “Twitter was an extension of that idea.”
The way he got the job at the dispatch center in New York was interesting. When Dorsey was in college, he found that the website at the Dispatch Management Services in New York had no contact information. Dorsey found a “security hole” in their web server and e-mailed their CEO. One week later he was flown out and he took a job there.
Dorsey said that the Square contraption is made in Mexico and China, but they have a goal to start making them entirely in the U.S. He also confirmed that the prototypes for Square was design at TechShop in California. Dorsey said that he wants to become mayor of New York one day.
In some articles, some people comment how come Dan Gilbert does not become mayor of Detroit? Mr. Gilbert said that with all of his investments in Detroit, it would be hard to deal with conflicts of interest even though he believes his people would behave ethically. It seems like Mayor Bloomberg in New York City put up a blind wall. Gilbert joked that he would like to be the mayor of St. Louis and Mr. Dorsey could come to Detroit.
When Mr. Dorsey talked about his talk at the TechCrunch Disrupt conference that happened a couple days earlier, he questioned the keyword “Disrupt.” Dorsey believes that the word disruption simply means moving things around like an earthquake and it doesn’t have value, direction, or leadership. It causes a lot of confusion. “I don’t want to disrupt things.” He believes that a stronger word is revolutions. Sometimes revolutions are not always violent and they have thoughtfulness.
Entrepreneurs don’t need to start a company to be an entrepreneur. An entrepreneur is someone that takes a big risk and moves things forwards. We put some much emphasis on founders, but there are multiple founding moments in a company, a nation, and a city. In the founding of our nation, we had a few good ideas but one of the best ideas was “a more perfect nation.” This indicates that this will not finish. There will be people that evolve it.
When Mr. Kirkpatrick asked Dorsey whether he tries to instill employees at Twitter that they can have a impact no matter how big the company gets, Mr. Dorsey said “an idea that can change the course of the company can happen anywhere in the company.” He said that “you need to speak up and act like an owner of this business instead of just an employee.
The TV station WXYZ ran a contest using Twitter to find out what the best question would be to ask Jack Dorsey at the event. The question was “you invented Twitter out of the conviction that cities can work more efficiently. So how can Detroit work more efficiently?”
Dorsey said “What I find compelling about cities and government in general is just a question of velocity. Change happens so slowly. So how can we actually speed up the change? And one way to speed up the change is to over-communicate. And to make more available, more transparent – the data – how the government is running, what needs to change, why it needs to change and really focus on the answer to the question ‘Why?’ It’s the hardest question to answer, but it’s the most compelling. And it gets everyone on the same page. So simply talking about the issues in a very public way, in a very fast way but an actionable way that people can actually see an end-point on is the broadest thing. That has been the true success of Twitter. Internally at the company, the entire company is on the same page because we have a lot of transparency within the company and we make our decisions known. We make the ‘why’ of the decision known and we share all the information with the company. And the same is true of Square. We actually get up in front of the company and run through our entire board deck so the company knows everything we’re telling the board and what the board feedback was. So that cannot be under-valued. The amount of information that is out there that people can actually use and have their own ideas around and then actually take action on is a really good start.”
When asked about what the future of Square holds, Mr. Dorsey said that at every point in someone’s life “money feels like a burden.” Mr. Dorsey said that they think technology can be used to lift that burden. He also said that they can help small businesses and that if you go to any mom-and-pop coffee shop around here and you ask them how many cappuccinos they sold today, they might not have any idea. They will know if they count how many cappuccino cups are coming in and out of the dishwasher. “But that’s the only analytics they have.” Meanwhile a company like Starbucks know exactly what is being sold and what the weather is doing to their day. Mom and pop shops have no idea what is going on. If you make the analytics free to everyone, you can help businesses make good decisions. “The other thing we want to do is remove the burden from unhealthy behavior around your finances. The credit card business has created a lot of unhealthy behaviors and it’s purely because of a lack of data. It’s based around ignorance and it’s criminal. And they’re encouraging people to do bad behavior to reap more fees. And it needs to stop. And we’re going to stop it by giving people more data.”
Dan Gilbert said that there is a company based in Detroit called Quizzle that addresses a lot of what Mr. Dorsey was talking about in regards to the lack of data in the credit card industry. The analytics gives a lot of data on the liabilities and debt side. A lot of consumers have information on their assets, but they don’t know just how much their debt is affecting them.
Two questions that Dan Gilbert asked Jack Dorsey was:
1. How did you come up with Twitter. Did it just hit you in a moment or was it an evolution in your mind?
Jack Dorsey answered this question by saying “It was definitely an evolution thing over many, many years. The real conception of the idea was in 2001. But the technology just was not there. So in 2006 SMS got big and that was our moment.”
2. How did you come up with the name “Twitter?”
In terms of the word, Dorsey said that they wanted “something that was tangible” and you “could actually feel.” He added “when you got a tweet, the phone would actually vibrate, so it would kind of twitch. The original name was Twitch.”
Dan Gilbert jokingly asked “so you would tweetch if you had Twitch?”
“Yeah. And this is why we did not name the company Twitch,” said Dorsey while laughing. “And we looked in the dictionary for the ‘tw’ words and found the word ‘twitter.’ And Twitter means short and inconsequential bursts of information, chirps from birds. So it was perfect.”
The conference happened around two weeks ago, yet it still resonates with me. Given that I have spent a majority of my life living in Ann Arbor and the suburbs of Detroit, I have gone from a kid rooting for the Pistons, Lions, Red Wings, and Tigers to a technology professional rooting for the Detroit start-ups. This conference was a great way for startup entrepreneurs to learn from some of the seasoned veterans and the movers and shakers of the industry. I would like to thank Matt Friedman at TannerFriedman for supporting Pulse2’s press involvement for the event. I also applaud David Kirkpatrick for bringing such an awesome conference to Detroit.