When one of Anya Babbitt's business advisers asked if she'd ever consider moving her startup to Detroit, she thought it was a joke.
Babbitt had never set foot in the Motor City and wasn't interested in moving her New York-based carpooling and ride-sharing platform to the Midwest. But the adviser told Babbitt about Techstars Mobility, a 90-day acceleration program that offers funding, office space, and a host of business resources to qualified tech firms and advanced materials businesses focused on mobility and transportation.
She says the program sounded like a great opportunity for the company to be fully immersed in a new environment—especially in the birthplace of the automobile—and to take three months to do what would normally take a startup three years to accomplish.
Babbitt launched the company about two years ago and now runs it with co-founders Yale Zhang and Ben McMillan. Babbitt, who previously started companies focused on luxury marketing, real estate, and travel, wrote her thesis on reducing carbon emissions and using technology to address problems with traffic congestion.
She had a lightbulb moment when late to a meeting in Los Angeles. Her hotel shuttle bus was overbooked, and ridesharing apps had surge pricing and long waits. She saw two men about to get into a car, so she asked if they were also heading downtown and asked to share the ride.
Thus the idea for
SPLT was born. SPLT seeks to reduce transportation congestion and mobility barriers by partnering with corporations, universities, hospitals, and municipalities to offer commuting solutions.
DTE Energy, Magna, and Honda are among more than a dozen clients that provide their employees with the SPLT mobile app. Employees who are interested in carpooling input their home address and work schedule and are matched with colleagues who have similar routes and timetables. The company also
recently partnered with ridesharing app Lyft to provide nonemergency medical transportation in Detroit and other underserved communities.
Babbitt says she fully intended on moving back to New York once the three-month acceleration program was over. It's been more than a year since SPLT graduated from
Techstars Mobility, and the company proudly calls Detroit home. Babbitt runs the business from an office at Bamboo Detroit, a co-working facility in the heart of downtown.
"Detroit certainly keeps our engines running," she says.
Here a few of the reasons SPLT decided to remain in Detroit.
The support network
Babbitt says she was "blown away by the amount of resources that exist in this state for startups, and the ability to partner with different groups and entities who truly want to help propel your business forward."
The company has worked with the mayor's office, the health department, state offices, and others.
"We've stayed because of those relationships we forged with partners, with neighbors, with customers," Babbitt says.
Industry collaboration
Being in Detroit and working with Techstars Mobility gave SPLT access to dozens of mentors tied to the automotive industry and other sectors that intersect with transportation like health care and education. Ford Motor Co. is a marquee sponsor of Techstars Mobility, and Bill Ford gave some great advice to SPLT early on, Babbitt says.
She says it's been encouraging and inspiring to meet with manufacturers and suppliers to better understand their vision for the future of mobility.
"It's really cool to be in Detroit and to be at the forefront of that innovation and those discussions which you wouldn't have in New York or the West Coast as readily because the manufacturing is still here, the conversations are still here … we're really sitting at the epicenter," Babbitt says.
Detroit's entrepreneurial energy
Detroit offers a more collaborative, open, and accessible environment for a startup to flourish, Babbitt says. The city operates on the mentality that "we're all in this together," which differs from other cities' competitive vibes that Babbitt says are counterproductive to economic progress.
She says it's important that companies considering a move to Detroit know the intent behind moving to the city. Many people come and make promises to help, but then end up leaving, she says.
"Be patient," she says. "Sometimes it takes a little bit longer to do deals [in Detroit]. Be respectful. As an outsider, it takes time to build trust."
The city's challenges and opportunities
Babbitt views the lack of reliable, comprehensive, and affordable transportation options as Detroit's biggest problem. She's met people who have never left their three-block radius, and cited research that found more than 60,000 households in Detroit
don't have access to a car. That can be especially problematic when many suburban communities have opted out of public transit.
In underserved cities like Detroit, some residents are forced to take lower-paying jobs because of a lack of efficient and affordable transportation options, Babbitt says.
"We specifically chose to move our headquarters from New York to Detroit to really begin to solve transportation here where there clearly is a problem," she says. "I don't think necessarily that it's a lack of education that prevents people from getting out of their particular station in life, I think it's a lack of mobility. If SPLT can work here specifically in Detroit, we believe it can really work anywhere."
Inspiration to take company in new directions
The idea for SPLT started as a service to promote directly to consumers who wanted to carpool from the suburbs to jobs in the city. The company opted to pursue a business-to-business model after living in Michigan, where Babbitt says she realized there was a greater need to address areas without great public transportation and provide solutions to companies, universities, and municipalities.
"Being surrounded by investors and mentors and industry leaders and the automakers inspired us to look at our business in a new direction," she says. "Moving to Michigan, we say, is really the best decision that we've made to date."
Detroit-based nonprofit NextEnergy encouraged SPLT to launch a new division offering nonemergency medical transportation service. Hospitals in Michigan have signed up for the service to provide more reliable transportation so patients don't miss their appointments. Ridesharing company Lyft provides the vehicles while SPLT is the broker.
Challenges remain
While Babbitt is enthusiastically positive about her decision to move her startup to Detroit, it hasn't been without challenges, the biggest of which was fundraising. SPLT ended up having to seek investments from outside of Michigan for the first seed round. Now that they've been in Detroit for a year, they're starting to get some funding from Michigan angel funds.
"Access to venture capitalists in this area can sometimes cause a problem when you're trying to raise money, grow a company, and stay in Michigan," she says, adding that investors here seem to be looking for higher returns than she's seen in other states.
But the environment seems to be changing here, and she was encouraged by a conversation with the Michigan Economic Development Corp. about programs and groups aimed at addressing the issue.
Babbitt says she'd also love to have additional resources and support for doing business as a Michigan company with international customers. SPLT recently
closed its first account in Mexico.
Overall, Babbitt remains motivated about the resources and opportunities that Detroit and Michigan have to offer.
"The access and openness that we find from everyone and genuine support and community that we find here is really encouraging for us to grow our business," she says.
Anya Babbitt will be part of Startup’s High Growth Happy Hour on Tuesday, Oct. 25, along with Tatiana Grant from Flash Delivery, which was featured in Startup in August. The event is free but RSVP is recommended.
Melissa Anders is a Brussels-based freelance journalist and metro Detroit native.