Study May Preview a New Generation of Great Detroit Entrepreneurs

Stories of Detroit’s renaissance are everywhere. Some are overhyped—after all, when you’ve gone through bankruptcy, really anything can look positive in the right light. Others are far too limited, with little to no impact outside of the downtown area. But some truly are stories of a changing, improving city with a bright future.

A 15-page 2017 Detroit Entrepreneurial Study from Michigan Venture Capital Association, an Ann Arbor group that gathers regional and statewide data on startup investments, has data that supports the latter narrative. Here are some highlights:

• From 2014-17, the number of startups in Detroit increased by 50 percent.
• The last year has seen venture capital firms give over $62 million to Detroit-based startups.
• The startups cover a range of industries, but most are in information technology or life science. Only six percent are in manufacturing.
• Detroit attracts entrepreneurs because of its substantial advantage in ease of living over other major cities. Commutes are shorter, housing and store prices are cheaper and the city’s entertainment and leisure offerings are rapidly growing to rival other American metropolises.

It’s a promising start, says the report issued Monday, but needs sustained funding to keep going.

"The demand for funding from new startup companies, coupled with the need for follow-on funding by existing startup companies, exceeds what is currently available," the association says.

Perhaps the most fascinating part of this entrepreneurial evolution is how it relates to Detroit's history. Those who planted the seed for Detroit's greatness, such as Henry Ford and the Dodge brothers, were the city’s original entrepreneurial class, their company’s the original Detroit-based startups.

Over the course of the 20th Century, the auto industry emerged as a series of corporate behemoths. These companies perfected the art of the profit, using one specific model. But when times changed, it took quite a while for them to shift gears and adapt to the competitive world economy. Detroit felt the pinch.

Like with anything in Detroit over the past few years, it’s incredibly difficult to tell what’s a sign of real, sustained revival and what just looks exciting and new.

But who knows? We might just be seeing the beginnings of a second generation of great Detroit entrepreneurs.

► See the report