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Business evolution: From incubation to visibility
 

Growing tech company brings human touch to downtown startup scene

Are You a Human started as a student project in an Ann Arbor incubator before joining a cluster of innovative small businesses in downtown Detroit's suddenly thriving M@dison Building.

Humans. That's the nickname for the staff of Are You A Human, an up-and-coming start-up staking its claim in downtown Detroit's M@dison Building.

Ask for directions, and someone at the M@dison Building could easily say, 'Go down the hall and turn left at the Humans.' Technologists, entrepreneurs and investors alike in the office building often crack, 'There goes one of the Humans' when an Are You A Human employee walks past. Finding creative ways to reference the Humans has become has much a part of the quirky character of the M@dison Building as its avant-garde architecture.
"You can see all the energy," says Reid Tatoris, co-founder of Are You A Human. "There are so many people here now."


Which is a bit ironic considering Are You A Human was one of the first start-ups to move into the M@dison Building last fall, making the Humans one of the few homo sapiens walking the halls. Back then the only people in the freshly renovated office building were the first employees of UpTo, Detroit Labs and Detroit Venture Partners, the venture capital firm that anchors the structure. Today the building is full of serial entrepreneurs, creatives and investors, most of whom specialize in technology-based small businesses. The buzz is much more palatable for the Humans today.

"You can see all the energy," says Reid Tatoris, co-founder of Are You A Human. "There are so many people here now. It has been a year and we have seen a number of Detroit Venture Partners and Bizdom (the downtown Detroit-based entrepreneurial education program for aspiring technologists) companies come in. It's encouraging for all of us."

Humans in the TechArb

Hannah Montana inspired Tyler Paxton to start Are You A Human. Specifically, it was the process of trying to buy tickets online for a Hannah Montana concert that one of Paxton's then co-workers went through in 2007. The tickets sold out in seven minutes. Many of them went to scalpers using software programs to bypass the online-buying safeguards.
The then U-M students launched Are You a Human in the fall of 2010 after laying the groundwork for the company at the downtown Ann Arbor-based TechArb small business incubator.


CAPTCHA, the squiggly letters online users enter to authenticate that they are in fact people, was originally designed with this in mind. Hackers created software, commonly known as bots, to bypass this. So Are You A Human's co-founders decided to create small games, like Duck Hunt, to replace that authentication. The games give actual people the upper hand because the bots can't currently replicate the game-playing actions.

The then University of Michigan students met while pursuing their MBAs and launched Are You A Human in the fall of 2010. They used the downtown Ann Arbor-based TechArb as their first base of operations to lay the initial groundwork for the company. TechArb is a small business incubator run by U-M. It specializes in providing entrepreneurial services in an environment made for college students. It not only provided them with a free place to meet but also the confidence and motivation to build the business.

"When we were at TechArb, we were in Are You A Human mode," Tatoris says. "That's all we did. It helped us focus and spend more time working on it."

It also provided plenty of opportunities to network where they could find mentors and investors. Are You A Human's trio of co-founders met venture capitalists from Detroit Venture Partners during one of TechArb's events. The VCs were impressed with the startup's laundry list of business plan competition wins, the highlight of which was winning more than $100,000 at the prestigious Rice Business Plan Competition. Not long after that initial meet, Detroit Venture Partners led the first seed capital round for Are You A Human last summer.

"These are the startups we don't want to lose," says Jake Cohen, vice president of Detroit Venture Partners. "It's why Detroit Venture Partners exists and why we have good relations with incubators like TechArb."

Moving to the M@dison

Many of Detroit Venture Partners 13 portfolio companies call the M@dison Building home, or have some kind of a presence there. A few months after the renovation of the former theater building, it was filled with a wide variety of tech startups, investors and creatively inclined firms. Twitter even opened an office there. The kind of companies that now inhabit the building that overlooks Grand Circus Park complement the edgy, contemporary architecture of the building.

The vibrancy that comes from this environment is a key reason why Mallak Beydoun moved her coffee shop, Chez Zara, to the ground floor of the M@dison Building. To her, the building's vibe is young, trendy, creative. She sees it as a great place for a local coffee shop to make a go of it in downtown Detroit.
They bought into Dan Gilbert's Webward vision for downtown: Woodward Avenue between Grand Circus Park and Campus Martius becoming a nexus of technologists, serial entrepreneurs and investors.


"Everything that is up-and-coming and trendy in Detroit is in the M@dison Building," Beydoun says. "They showcase companies here on a local level and I think they will be showcased in a national level."

That sort of momentum was a huge attraction for the co-founding Humans. They were quickly sold on it when they saw Detroit Venture Partners' plans for the M@dison Building and how the adjacent Broderick Tower was being renovated into luxury, high-rise apartments, and the plans to turn the nearby, vacant Whitney Building into a boutique hotel. 

They bought into Dan Gilbert's Webward vision for downtown. The chairman of Quicken Loans and co-founding partner of Detroit Venture Partners envisions Woodward Avenue between Grand Circus Park and Campus Martius becoming a nexus of technologists, serial entrepreneurs and investors. Startups moving to the M@dison are making that vision become a reality.

"It has really become a hub of technology and entrepreneurship in the city," Paxton says.

That rallying cry to improve Detroit was another key factor in attracting Are You A Human. The co-founding Humans see the potential for the rebirth of the Motor City's downtown as a tech hub and are playing a significant role in making that happen, helping reinvent Detroit's economy along the way.

"The idea of building something in Detroit is really appealing," Tatoris says. "This is bigger than I could have ever pictured."

Business evolution: From incubation to visibility
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Reid Tatoris
Co-Founder
Are You a Human, Detroit
 
The M@dison Building came online last year and the Broderick Tower is set to open next door this fall. Work on the nearby Whitney Building is scheduled to begin later this year. Can you describe the energy these projects are bringing to the Grand Circus Park section of downtown Detroit?
Any new development in Detroit is a huge deal for us. Remember how crazy the Whole Foods news was!? I particularly love that the two buildings you mentioned have such a great history, which is a big part of almost all Detroit projects. No one ever gives out an address in Detroit. Instead, they say they work at the M@dison, or the Guardian Building, or they live in the Kales. The stories behind all the buildings make Detroit such an interesting place to live.

Dan Gilbert envisions the section of Woodward Avenue between Campus Martius and Grand Circus Park as a hotbed for tech start-ups and entrepreneurs that he is branding as Webward Avenue. What needs to happen to attract more innovative start-ups like Are You A Human to make this a reality?
I think it's most important to attract and keep young talent in the area. Detroit has such potential to be a place where college graduates want to be. But for that to happen, we need a fun, thriving, city center with bars, restaurants, and events. When graduates from Michigan and Michigan State, for example, start moving to Detroit instead of Chicago or New York, some of them will inevitably start successful companies.

The M@dison Building is one of the most unique office buildings in Metro Detroit. Can you name a cool aspect of it that might not have been widely publicized yet?
The slushie machines are pretty great. Really the best part is the people in the building. It's a great environment where new companies constantly move in, and this always brings new energy and ideas. There are also many entrepreneur-focused events held at the M@dison, and being able to walk up the stairs to one, rather than driving, is incredible access.

What are the aspects of downtown that made it attractive for the co-founders to move Are You A Human to Detroit?
There are the obvious factors like lower cost of labor, lower living expenses, but the big factor was being part of the Detroit story. There is a new chapter being written right now, and seeing the city change and grow, along with so many other new companies like us, is incredibly rewarding. We underestimated how big of a factor this would be. This community is unbelievably supportive to anyone trying something positive, whether it's a restaurant, startup, or mowing a park. It's just plain interesting to see all the unique things happening in the city. Are you familiar with En Garde Detroit? How many cities have afterschool fencing programs?

TechArb describes itself as an incubator that provides services for student-led start-ups that traditional incubators like Ann Arbor SPARK can't. Can you give an example of that?
TechArb gave us hands-on mentorship from mentors with specific start-up experience. The environment was also extremely valuable. We worked right next to other entrepreneurs facing the same struggles, and that makes a huge difference. We have remained close friends with several of the companies we went through TechArb with. Having access to TechArb alumni that had gone from idea stage to real company is also invaluable.