Iron Chef Detroit

AI-Generated Summary (via NotebookLM)

Dug Song discusses the challenges and opportunities of fostering a thriving startup ecosystem in Michigan, particularly in greater Detroit. Data reveals that while the University of Michigan produces numerous successful founders and unicorns, many relocate outside the state. Dug emphasizes the critical role of community building and “verbs” — actions like advocacy, promotion, and collaboration — over solely focusing on resources (“nouns”). Dug explores various strategies to create an inclusive environment that retains talent and attracts investment, ultimately building “flywheels” of local success. Several successful models from other regions are examined as potential benchmarks for Michigan’s growth.

AI-Generated Briefing

Dug Song’s keynote from the Detroit Policy Conference. A central theme is the idea that building a successful startup ecosystem requires more than just attracting capital and talent - it crucially hinges on cultivating a strong community and culture, and promoting equity and inclusion. He acknowledges that Michigan, while a strong producer of talent and innovative ideas, struggles to retain these assets, particularly in the context of startups, often losing them to coastal hubs like Silicon Valley. He highlights the need to shift focus from tangibles (“nouns” like buildings, institutions, programs) to intangibles (“verbs” like connecting, collaborating, advocating).

Key Themes & Ideas:

• The Importance of Community and Culture (vs. Infrastructure):

  • Dug emphasizes that while resources like capital and talent are necessary, they are insufficient without a strong community and a supportive culture. As one source states, “For ecosystems to work, there has to be a community of people who actively engage with and support each other.”

  • The need to focus on people and networks is emphasized over buildings and institutions. The importance of “flywheels” where success breeds success locally rather than funnels (where talent leaves) is central. A “key indicator” of a successful startup ecosystem is “do you have 3 relatable heroes? Founders who reinvest their expertise, capital, and connections into the ecosystem?”

  • “Ecosystems need verbs, not just nouns.” This means moving beyond simply setting up resources to actively fostering engagement and collaboration through actions like “connect & collaborate,” “promote,” and “advocate.”

• Michigan’s “Brain Drain” & The Need to Retain Talent:

  • The University of Michigan (UM) is a significant producer of talent, ranking #8 in the nation for VC-backed founders. UM has produced 46 unicorn companies (startups valued at $1 billion+) globally. However, a shockingly small number of them (3) are located in Michigan. This leads to the observation that “UM is strip-mined for relocatable talent by the Big Tech companies and SV startups and investors.” Another quote states “we train the best and keep the rest.”

  • Many successful Michigan startups or founded companies are drawn to or end up in other states, especially the Silicon Valley. This represents a significant loss of talent and potential for Michigan’s startup ecosystem. A cultural shift is required to reverse the brain drain: “The first question I got from my Silicon Valley friends after selling Duo: Who are you investing in? First from Michigan folks: Are you gonna stay in Michigan?”

• Equity and Inclusion are Essential:

  • A major focus is placed on the concept of “tech equity,” defined as aligning all types of capital (intellectual, human, financial) by building a culture of collaboration, trust, and connection (social capital). Equity is about reducing “distance to power,” not just removing barriers to brilliance.

  • He underscores the importance of creating an inclusive tech community that reflects local demographics. Without cultural capital, the sources claim, “individuals and institutions don’t have the common norms, values, or trust necessary to collaborate effectively.” Strong social capital is seen as a solution where “knowledge is shared freely,” “people are willing to take risks on others,” and “resources get connected to need and opportunity.”

  • The establishment of a Center for Tech Equity is presented as a response to the gap in startup ecosystems where capital exists, but meaningful progress doesn’t occur due to a lack of cultural and social capital. The concept of “inclusive growth” is central to their efforts.

• Policy and Infrastructure:

  • The need for policy changes that support startup growth is highlighted, referring to the “Right to Start” platform, which offers policy suggestions to make it easier for Americans to launch high-growth businesses. Some specifics of the plan include dedicating a small % of current funding to new entrepreneurship, creating an office of entrepreneurship, reducing licensing and fees for new businesses and creating various tax reliefs.

  • A call for more accessible infrastructure (public transit, walkable communities) to make Detroit a more appealing place for startups.

  • Michigan missed out on Tech Hubs designation and funding, and the need to learn from other successful regions (like Indiana and Ohio) on how to better mobilize cross-sector leaders and growth industries.

  • A key observation is that “efforts have to be both top-down and bottom-up,” indicating a need for strong leadership and visionary investment while also cultivating a vibrant, inclusive community at the grassroots level.

• Specific Examples & Actions:

  • The Michigan Founders Fund is highlighted as an example of a peer network of startup founders who have raised a significant amount of capital.

  • Specific companies (Lineage, Acrisure, Altair) are mentioned to highlight Michigan’s successful tech companies, though their location is not in Detroit itself. Other “unicorns” are also highlighted as well as the fact that Rivian and others left the region.

  • Examples are given of recent community support from entities such as Michigan Central and the Rocket Community Fund in the form of support for Black Tech Saturdays.

  • Examples of investments into companies tackling uniquely Michigan issues: clean air, clean water, energy equity, etc.

  • Dug mentions writing the first check for the first black-owned venture fund in Michigan. He is also attempting to provide “friends and family” money for those whose friends and family don’t have the ability to invest.

  • The need to “bring more connected capital to Michigan” is expressed, and this is being done by bringing exited founders and investors from other areas to Detroit to invest.

Conclusion

Dug’s keynote paints a nuanced picture of Detroit’s regional startup ecosystem. While it is generating significant talent and innovation, it struggles with retention and often falls short of its potential. The key takeaway is that creating a truly thriving startup environment requires a conscious shift in priorities from the tangible to the intangible, focusing on building a supportive culture, community, and prioritizing equity. This will require coordinated efforts from policymakers, investors, educational institutions, and, importantly, the broader community itself.