In recent years, a new entrepreneurial spirit has swept across the U.S. and entrepreneurialism has gained widespread acceptance as a legitimate career pathway. Many states, including Michigan, have established business incubators, competitions and workspaces to nurture innovators who are launching new ventures. While this is good news for the country, it is also cautionary news for Michigan, said industry experts who opened day two of the MGCS with a panel discussion about strategies for transforming Michigan’s entrepreneurial landscape. To stay ahead of the competition, Michigan must do more to differentiate itself as an entrepreneurial growth engine by focusing on its strengths, paying attention to details and providing meaningful mentorship, the panelists said.
Michigan has been doing a lot of things right to build its entrepreneurial and venture capital community, and that hard work is paying off. “We’re seeing the development of an industry that didn’t exist 15 years ago,” said Charles Rothstein, senior managing director and co-founder of Beringea. He cited a number of key drivers behind this development, including: strong state support for new venture investment programs; an influx of VC investors; the development of an angel community; the private/public sector efforts of the Michigan Economic Development Corporation and Ann Arbor SPARK; and Detroit’s willingness to “get off the mat to fight another round.” The entrepreneurial and venture community’s collaborative approach and welcoming attitude toward outsiders also has turned the tide in Michigan’s favor. “Everybody has worked together to create success,” Rothstein added.
Lou Cooperhouse, the president and CEO of Food Spectrum, said Michigan has an edge over many other states because its entrepreneurial and venture capital investment infrastructure is firmly in place. “There is already a cluster community here that can transform the economy,” he said. “I’ve very impressed by what I see at this conference and at the university.”
So, what’s missing? “Entrepreneurial density and serial success that spawns more activity,” said Robert Buderi, editor-in-chief, CEO and founder of Xconomy. “That’s a place for improvement.” Business incubator programs could be restructured to provide one-stop shopping for entrepreneurs who need many different service providers, Cooperhouse said. “These programs must be much broader than their four walls.” It’s important, he added, to identify resources, aggregate them and bring them together in one spot. “We’re missing a successful track record, but that will come in time,” Rothstein remarked. “Teamwork and collaboration will produce a spillover effect.”
Panelists identified several strategies for building entrepreneurial critical mass. Michigan should move away from a mixed-use business development model and instead direct its resources to specific sectors where it has proven strength and room to grow, advised Cooperhouse. He added that companies might be able to leverage their synergy by working together and sharing legal, IT, advisory and other services. Another raw material for entrepreneurial innovation is the large computer aided design, or CAD, cluster around Detroit. “What can you do with it?” asked Buderi, in a muted challenge to entrepreneurs in the room.
In terms of sector strength, Michigan has been strong in health care and clean technology, but weak in software. The panelist suggested new areas for entrepreneurial growth, such as Web-based personalization of dietary regimens and exercise programs and localization of food and other products. Looking ahead five years, they urged Michigan to work on increasing its entrepreneurial density, tracking its successes, attracting new investment capital, building upon its existing collaboration and infrastructure and bridging the Detroit and Ann Arbor entrepreneurial ecosystems. “For Michigan to succeed, we need a strong recovery and a rebuilding of Detroit,” Rothstein said. “We need a strong major city like Detroit and cannot let it crumble. Right now, the world is watching us and cheering for Detroit. The comeback of the city will move us all forward.”
For our readers: What are some other ways to transform Michigan’s entrepreneurial landscape. Send us your suggestions.