Talk of the TechTown

A couple of summers ago, I invited Pike Powers, the Austin business guru who more than anyone else engineered the economic reinvention of Austin a generation ago, to come to Detroit, a place much more in need of reinvention than Austin. 

He and several others associated with the Citistates Group spent a couple of days looking at Detroit’s economic challenges, with the support of the Kresge Foundation. Before the first day was concluded, Pike snuck off (that’s how they’d say it in Texas) to look at TechTown. Arriving late afternoon, he was told he needed security clearance to look around. Using a patented folksy Texas accent, he talked his way past the security point and took a good look.

I still recall the glow on his face when he returned. I wrote down what came next: "This place they call TechTown is totally the key to a turnaround here. Everything is there that they need, from a critical mass of entrepreneurs to a supportive infrastructure, topped off with a clear connection to a good university with major investments in technology and medicine and engineering."

It turns out that’s exactly the same theory of action held by the leadership of TechTown.

I finally got around to going there myself. Late this past summer I scheduled an interview with TechTown’s CEO, Leslie Smith.  Smith has nearly a perfect background for her job, coming from the Michigan Economic Development Corp., where she headed an accelerator fund; and before that, CFO of a large real estate firm. She sees economic development in basic terms, as "largely a series of deals." And she’s a deal-maker. 

At TechTown, she’s got lots of deals to juggle. What’s different about TechTown, I asked her, from the hundreds of incubator-type organizations around the country. 

The first difference is size. The TechTown campus of 12 blocks sits between the northern edge of Wayne State University’s campus along Woodward Avenue in Midtown and the complex of buildings that was once General Motors headquarters. While we were talking, we wandered to a window and looked out to the east where the old Dalgleisch Cadillac dealership is set to be converted into a multidisciplinary bio-medical research complex for Wayne State. Once completed, it will house an army of more than 500 researchers from the university and Henry Ford Health System. 

Smith’s office is in a 135,000-square-foot Alfred Khan-designed building that was once a Chevy factory. The building itself may have creative DNA traces; the first Corvette was designed on one of the upper floors. The building is groaning with tenants -- from the mature tissue research firm, Asterand, to firms engaged in everything from clean auto emissions to proteins that can regenerate damaged skin. TechTown’s synergy with Wayne State is critical, offering immense potential in engineering and medical science.

There are more distinctions: 

• The TechTown leadership gets it about the "millennial" generation. It sees what kind of environment emerging entrepreneurs want, and that’s what they provide. Fewer walls, more interaction; a physical environment that induces conversations and collaboration. It’s the "spontaneous, unprogrammable meetings people have, that’s the secret sauce," Smith says.

• Smith says they’re forging a balance between the protection that incubators provide and the independence that startups need to acquire. "They like it here," Smith tells me, "but if you just let them stay indefinitely, it’s like having a bunch of 40-year-olds in your basement." They need to move on. So she is working on alumni networks to fan the collaborative embers even as startups leave the nest.

• Citing another 'balance' problem, she recalls a major push to recruit entrepreneurs. Since Detroit's legacy niche is making things, this produced a plethora of projects that mostly improved neighborhoods. That’s great, she says, "but it's time now to make technology the main focus." 

• TechTown’s demography is remarkably different--as many women as men, as many in their 40s and 50s as younger, and a nation-leading proportion of African-Americans. We haven’t researched the databases, but we cannot think of another region with this profile.

• Techtown produces regular evidence that scarcity of capital in Detroit is a myth. "We’ve helped our members raise a couple hundred million dollars so far," she says. A look around Detroit today reveals a variety of incubators and a growing supply of capital to support them--from Ponyride, a warehouse of people involved in crafts and hands-on solutions founded by a local fashion model turned successful entrepreneur, Phil Cooley--to Bizdom, an accelerator funded by mortgage mogul Dan Gilbert. A Gilbert partner, Josh Linkner, with Detroit Venture Partners, boasts of going from nothing to investing in three or four new companies a year now.   

• And TechTown has robust data. Relying on John Corcoran, who works there as a Detroit Revitalization Fellow (courtesy of Kresge and other area foundations), they now have a data trail to demonstrate results at every level. Smith calls Corcoran their "data dude," and is clear about the value his work adds. That’s how they know that TechTown since 2007 has provided support for 647 companies that have generated 1,085 jobs.

"Stories matter," Smith says as she’s recited several, "but numbers talk a different language."

Curtis Johnson is the president of the Citistates Group. Coverage of Detroit stories in 2012 was sponsored by the Kresge Foundation.
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