If Michigan Were a Stock, I’d Buy a Bunch of Options
Maybe it’s a line they hand out to every Michigander, because I have heard it several times in various configurations. But it’s heartfelt. It’s a message to people around the country complaining about current economic conditions. The gist goes something like this: “You think you had it bad? Michigan’s recession began years ago—and it was a lot worse than what you’re feeling. We’re over our grieving and are hard at work, and you should be, too.”
[Editor's note: This article is a slight modification of Nature Abhors an Entrepreneurship Vaccum, written by Xconomy founder Bob Buderi for the Kauffman Foundation's recently released Kauffman Thoughtbook 2011. Many of themes raised in the article will be discussed on April 14 at Xconomy's Michigan 2031 event, which Bob will co-moderate with Xconomy Detroit editor Thomas Lee.]
I’m not from Michigan. And until last year, when I began planning a Detroit expansion of our high-tech news network, Xconomy, I hadn’t been in the Wolverine state since 2005. Now, with Xconomy Detroit successfully launched this past April, I’ve made several trips to southeastern Michigan and talked to scores of people in the state, both in person and on the phone or through e-mail. The economic pain that has been felt in the state is obvious—and hard for an outsider to comprehend in its depth. It is clearly reflected in the state’s psyche. But equally apparent is the determination to plow on and overcome by finding new ways to create jobs and growth. I can’t help but think of a corollary to the famous “Nature abhors a vacuum” saying most often attributed to 16th century French monk Francois Rabelas:
Nature abhors an entrepreneurship vacuum.
Or, perhaps more accurately–Nature abhors an innovation vacuum–because what I believe is unfolding in Michigan encompasses far more than entrepreneurs starting and growing new companies. I think that since virtually every fabric of the state has been affected by the auto recession/meltdown, the need for innovation is also pervasive—and that people and organizations of all stripes are responding. Maybe my theory is naïve. My company has been in the state less than a year. Yet we have put out hundreds of stories in that time—all of them laser-focused on innovation. Many of these stories were about entrepreneurs and their startups. But we’ve also written about innovative approaches to venture capital, such as the Renaissance Venture Capital Fund, a fund of funds that only invests in other venture firms that invest in Michigan, and innovative non-profit organizations from TechTown to the Michigan Women’s Foundation who are testing new models designed to spur innovation and entrepreneurship from a non-profit angle. As I wrote this, in fact, the Michigan Women’s Foundation was announcing a new angel fund designed to help women entrepreneurs.
Put it all together, and if I had to bet on the upside of any place in America right now, it would be Detroit—and, by extension, all of Michigan. I’m not saying Detroit or Michigan will fly the highest and have the strongest economy in America or somehow beget the new Silicon Valley. I am saying the state has the potential to show the biggest gains on a percentage basis. To put it another way, if Detroit/Michigan were a stock, I would buy a bunch of options on it.
Xconomy began eyeing Michigan in late 2009—sensing that some sort of major transformation was in the air. Our goal is to build a series of local news sites covering the business of technology and innovation in key clusters around the world—and weave them into a global network. Detroit was not in our original business plan. There were the obvious major and semi-major clusters: Boston, San Francisco, Seattle, San Diego, Austin, Research Triangle Park, even Pittsburgh or Minneapolis. But no Detroit.
But our view changed, not because of what had happened—but because of what … Next Page »