Inside Detroit’s Nascent Start-Up Culture

Forget Mark Zuckerberg. The entrepreneurial kids of Detroit want to make money while doing good.

Gabriel Craig, owner of the Smith Shop metalworking studio in Detroit's 'Ponyride' building, finishes a piece of custom silverware.
National Journal
Tim Alberta
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Tim Alberta
Feb. 26, 2014, 5 a.m.

This art­icle is part of a weeklong Amer­ica 360 series on De­troit.

DE­TROIT — It star­ted as a school pro­ject for Ver­onika Scott, who at age 20 was study­ing design down­town at the Col­lege for Cre­at­ive Stud­ies. One of Scott’s pro­fess­ors chal­lenged stu­dents to cre­ate a design that would meet people’s “needs” in­stead of just fol­low­ing “trends.” So, Scott, a nat­ive De­troiter with a tough up­bring­ing, began tour­ing home­less shel­ters to get ideas. After months of these vis­its, Scott de­veloped a pro­to­type of a thick, wa­ter­proof winter jack­et with an in­teri­or that un­folds in­to a sleep­ing bag.

She was con­vinced her cre­ation could be par­layed in­to a full-time en­ter­prise. So in 2011, Scott launched a non­profit or­gan­iz­a­tion called the Em­power­ment Plan. The goal was not just to make coats and dis­trib­ute them to the home­less free of charge, but also to hire home­less moth­ers to do the pro­duc­tion work. Today, thanks to Scott’s vis­ion and a gen­er­ous net­work of donors con­cen­trated in Metro De­troit, the Em­power­ment Plan churns out 500 jack­ets per month and em­ploys 18 full-time work­ers, most of them re­cruited from loc­al shel­ters. “And none of them knew how to sew when they came here,” Scott, now 24, says.

Scott’s suc­cess may be unique, but her mis­sion is not. She is part of a sprawl­ing net­work of so­cially con­scious young people in De­troit who are earn­ing a live­li­hood by launch­ing start-up en­ter­prises — either for-profit or not — geared to­ward re­build­ing the com­munity around them.

“There is an ab­so­lute drive among people of this gen­er­a­tion to pos­it­ively im­pact the out­come in their en­vir­on­ments,” says Dan Gil­bert, founder and chair­man of Rock Ven­tures;the bil­lion­aire’s um­brella com­pany now owns more than 40 prop­er­ties in down­town De­troit. “And it’s not just some purely greedy cap­it­al­ist thing, with a guy look­ing at spread­sheets. They have this mor­al­ist­ic view.” Gil­bert, who cut a check to the Em­power­ment Plan for $250,000 after meet­ing Scott at a phil­an­thropy event, has also giv­en mil­lions of dol­lars in seed money to oth­er so­cially aware start-ups around the city.

Stud­ies have shown mil­len­ni­als are flock­ing to urb­an cen­ters na­tion­wide, and they are es­pe­cially drawn to work­places and neigh­bor­hoods where they can quickly be­come part of the so­cial fab­ric. De­troit, with its shattered out­er neigh­bor­hoods, in­ex­pens­ive real es­tate, and low cost of liv­ing is emer­ging as ground zero for this move­ment of young, com­munity-con­scious urb­an en­tre­pren­eurs.

Phil Cooley knows this bet­ter than most. A Michigan nat­ive who more than a dec­ade ago fled the state for col­lege in Chica­go, Cooley, 35, re­turned to a city des­per­ately in need of in­vest­ment. After team­ing with oth­er in­vestors to open the now-boom­ing Slows Bar-B-Q res­taur­ant, Cooley saw an op­por­tun­ity in 2011 when a massive aban­doned build­ing went on the mar­ket in Cork­town, De­troit’s old­est neigh­bor­hood and one ex­em­pli­fy­ing its epi­dem­ic of aban­don­ment. Cooley patched to­geth­er loans and pur­chased the struc­ture for $100,000.

He was de­term­ined to prove a point to the deep-pock­eted spec­u­lat­ors who had swooped in and bought the city’s va­cant build­ings at clear­ance prices only to let them sit idle. If such spaces were made avail­able to cre­at­ive res­id­ents, Cooley thought, amaz­ing things could be ac­com­plished. “We just really wanted to see what would hap­pen if De­troiters has ac­cess to this land­scape again,” Cooley says. “We need to find that in­nov­a­tion here again. We look to Har­vard and Stan­ford so of­ten, and it frus­trates me. I love Har­vard and Stan­ford. But the people of De­troit, when they have op­por­tun­ity, are just as in­nov­ate and just as cre­at­ive. We just need to open up the pro­cess.”

Today, his hy­po­thes­is is prov­ing cor­rect. Cooley’s build­ing, called Ponyride, is packed with more than 60 small busi­ness and non­profit groups. Ten­ants are offered a heav­ily sub­sid­ized rent for their work­space — most pay between $100 and $250 per month — so they can fo­cus on product de­vel­op­ment and com­munity en­gage­ment. But there’s a catch: Or­gan­iz­a­tions in­side Ponyride must work with the broad­er com­munity for hun­dreds of hours each year, of­fer­ing in­struc­tion­al classes in everything from sew­ing to crop cul­tiv­a­tion to metal­work­ing.

Less than three years after Cooley pur­chased this de­crep­it build­ing, Ponyride is a bust­ling hub of en­ter­prise and en­gage­ment. Some of the busi­nesses are young and not yet prof­it­able, but their en­thu­si­asm is con­ta­gious. There’s a long wait­ing list for space, and Cooley and his army of “so­cially con­scious” en­tre­pren­eurs are do­ing their best to make room for re­in­force­ments.

One per­son already here is Gab­ri­el Craig, who along with his wife owns and op­er­ates Smith Shop, a metal­work­ing stu­dio in the base­ment of Ponyride. Like many of the young en­tre­pren­eurs here, Craig grew up in the sub­urbs but has roots in the city. His grand­fath­er was a Wayne County sher­iff, and his par­ents grew up in De­troit. Craig and his wife moved in­to the city, opened a busi­ness, and hired three em­ploy­ees. On top of par­ti­cip­at­ing in Ponyride, Craig’s busi­ness has partnered with the Vet­er­ans Af­fairs’ De­part­ment to of­fer weekly metal­work­ing classes to vet­er­ans of the wars in Ir­aq and Afgh­anistan.

Craig says he loves De­troit today be­cause the city has be­come a mer­ito­cracy, where people who work hard and think cre­at­ively can get ahead: “The cur­rency here isn’t who you know or what you look like any­more. It’s what you’re do­ing. De­troit is sick of people talk­ing about do­ing something. If you’re ser­i­ous about help­ing, roll up your f — ing sleeves.”

Across town, Andy Didorosi agrees. An­oth­er nat­ive of De­troit’s sub­urbs, Didorosi, 26, says the city of­fers the rare com­bin­a­tion of fer­tile ground for en­tre­pren­eurs and strong com­munity sup­port. “People here are mak­ing their own jobs. It’s not big com­pan­ies or big fisc­al blue­prints cre­at­ing them,” he says. “And it’s an awe­some cul­ture in De­troit. Chica­go doesn’t care about you. Brook­lyn doesn’t care about you. Here, you’re in the driver’s seat.”

As a young en­tre­pren­eur, Didorosi got his big break when he learned that Ferndale, a town just north of De­troit, was selling its fleet of old school buses at bar­gain-base­ment prices. He bought four of them for less than $10,000 total. He cleaned up the buses, had them in­spec­ted, and hired a loc­al group of artists to paint them with designs that cel­eb­rate the city. Then, in Janu­ary of 2012, Didorosi launched the De­troit Bus Com­pany. Today, the busi­ness em­ploys 15 drivers and six oth­er full-time em­ploy­ees, and of­fers a vari­ety of trans­port­a­tion ser­vices, in­clud­ing shuttles in and out of the city, long-dis­tance charter trips, and rent­als for wed­dings and oth­er spe­cial oc­ca­sions. The com­pany also partnered with the Skill­man Found­a­tion last year to give school­chil­dren on De­troit’s west side free rides to their after-school pro­grams — a ser­vice that now provides bus­ing for more than 4,000 De­troit kids.

These are just a few ex­amples of De­troit’s emer­ging start-up cul­ture, in which phil­an­thropy meets en­tre­pren­eur­i­al­ism. Today, these young com­munity in­dus­tri­al­ists — street-smart, tech-savvy, and so­cially con­scious — are de­term­ined to re­build De­troit one busi­ness and one neigh­bor­hood at a time. Or, as Cooley, the founder of Ponyride, likes to say, “It takes a vil­lage to start a cof­fee shop.”

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