M@dison building and the rise of Silicon Valley 2.0

If there is a precious jewel in Detroit’s entrepreneurial ecosystem, it’s the M@dison Building overlooking downtown’s Grand Circus Park.

For decades the former Madison Theatre building stood vacant and blighted, the subject of a number of stalled redevelopment efforts. That changed in early 2011 when We’re changing the city. This building shows what we’re doing to change the city. It’s the embodiment of what we’re trying to accomplish here.Dan Gilbert’s Quicken Loans purchased it and began the process of redeveloping it into the most dynamic hub for entrepreneurs and tech start-ups in Metro Detroit.

“We’re changing the city,” says Jacob Cohen, vice president of Detroit Venture Partners. “This building shows what we’re doing to change the city. It’s the embodiment of what we’re trying to accomplish here.”

Gilbert began creating the M@dison building at about the same time he co-founded Detroit Venture Partners, often shortened to DVP. The M@dison Building and DVP are considered the linchpins for Gilbert’s Webward vision of turning the lower Woodward corridor in downtown Detroit into an new economy hot spot. Think Silicon Valley 2.0 in the Motor City.

In its first year DVP has become the most aggressive venture capital firm in Michigan, investing six- to seven-figures in early stage tech start-ups at a rate of almost one per month. DVP calls the third floor of the M@dison Building home, sharing the floor with a handful of other local venture capitalists and angel investors. People step foot into the M@dison and they get a sense of what we’re trying to build. They get a sense of the value we add.DVP’s portfolio companies, 13 today, are either based in the M@dison Building or have offices there.

The entrepreneurs that work from the M@dison Building enjoy one of the most unique business environments in Michigan. The M@dison Building manages to combine both lavish and edgy design through its loft-style offices and rooftop party deck overlooking Comerica Park. It’s not a hard sell.

“People step foot into the M@dison and they get a sense of what we’re trying to build,” Cohen says. “They get a sense of the value we add.”

The M@dison Building isn’t just filled with DVP start-ups. The company reached 100 percent occupancy this summer by also recruiting creatively inclined firms, such as TextFromLastNight. If Twitter was looking for an office in Metro Detroit in 2009 would it pick downtown Detroit? Probably not. The M@dison and the start-up culture it’s building downtown is something you can’t find in the suburbs.What really got the ball rolling was convincing Skidmore Studio to leave downtown Royal Oak to become the M@dison Building’s anchor tenant. The biggest coup was scoring Twitter’s Detroit office earlier this year.

“If Twitter was looking for an office in Metro Detroit in 2009 would it pick downtown Detroit? Probably not,” Cohen says. “The M@dison and the start-up culture it’s building downtown is something you can’t find in the suburbs.”

Henry Balanon found tech start-up success in the Oakland County suburbs before the M@dison Building opened. His start-up, BickBot, created mobile apps when they first started to go mainstream. He says the M@dison Building’s success is thanks to creating a critical mass of people like him.

“They took all of the tech power in Detroit and focused it in one area,” Balanon says. He adds that “this space works because it’s open and collaborative.”

It was that sort of openness that led to Balanon becoming a part of the M@dison Building. He was at a coffee shop discussing moving his mobile app start-up when Josh Linkner, founder of ePrize and co-founder of DVP, happened to overhear the conversation. He pitched moving to the M@dison Building. That led to the creation of Detroit Labs, a mobile app super start-up co-founded by local tech entrepreneurs.

After one year, Detroit Labs employs 22 people who make apps for the likes of Chevrolet and Stryker. The Chevy contact came from a chance encounter in downtown Detroit and ended with Detroit Labs handling mobile app work during the Super Bowl.

“People come through here all the time,” Balanon says. “There are a lot of chance encounters that begin with, ‘Hey, let’s grab a beer at Detroit Beer Company?’ That’s how a lot of deals happen.”

And it all begins by taking a lot of like-minded people in the same building to generate excitement. Few companies in Michigan know how to work the hype machine as well as Dan Gilbert’s family of companies. They find ways to make Silicon Valley-style splashes through the contemporary design of offices or attracting big names.

Recruiting Twitter generated buzz. Convincing Chrysler to take office space in downtown Detroit made people take notice. Bringing Earvin “Magic” Johnson in as a DVP partner got everyone excited.

“There is a lot of potential for businesses to expand,” Balanon says. “There are 20 some companies in the M@dison Building now. If any of those scale a lot of the nearby buildings will fill up with companies. We will see a lot of these buildings along Woodward fill up with a lot of companies.”