Detroit Labs, Compuware & More on the Mobile Opportunity in Michigan

4/13/12Follow @XconomyDET

The scene at a recent happy hour hosted by Detroit Labs was bustling, especially considering that the only means of event promotion were flyers hastily taped to the doors in the Madison Building, where Detroit Labs is headquartered. About 50 people crowded into the upper bar—most of them young men—and discussed their latest projects and entrepreneurial endeavors.

I struck up a conversation with Dan Ward, the co-founder and vice-president of Detroit Labs. The company was formed in 2011 to build apps for a variety of clients. (Perhaps its highest-profile product is the Chevy Gametime app, an interactive interface released around the time of the Super Bowl.) Detroit Labs is approaching $30 million in revenue, has over a million downloads, and has more than 4,000 reviews in the iTunes App Store with an average rating of 4.5 or 5 stars.

Detroit Labs might be Michigan’s highest-profile mobile tech success story, but it’s not the only one. Linda Daichendt, executive director and president of the Mobile Technology Association of Michigan (MTAM), describes metro Detroit’s mobile scene as “huge” and says the sector is rapidly growing across the state.

Mobile technology, by the way, is a catch-all phrase for wireless products and services. It doesn’t just relate to cell phones, but encompasses machine-to-machine technology used in manufacturing, health care, transportation management, automotives, building management, and more. It’s hard to think of a vertical that won’t be impacted by mobile technology. According to MTAM, in 2010, the value of the worldwide mobile/wireless industry reached $1.8 trillion, a growth rate of 9 percent over the previous year.

Daichendt added a mobile services practice to her consulting business three years ago, because she felt that people in Michigan weren’t getting it and were in danger of letting the mobile gold rush pass them by. She reached out to some of her contacts in Ann Arbor and started a chapter of Mobile Monday, an organization dedicated to mobile technology education and networking. (Michigan now has Mobile Monday chapters in Detroit, Ann Arbor, Grand Rapids, and Lansing.)

“I was a little nervous,” Daichendt recalls of that first Mobile Monday meeting in Detroit, which was held in October 2010. “I didn’t know if there was any interest. But more than 100 people showed up. I was blown away. Now we have over 800 members in Detroit and 1,500 members statewide.”

Though statistics aren’t yet available for Michigan, wireless economic contributions in the U.S. have grown faster (16 percent) than the rest of the economy (3 percent), Daichendt says. According to an internal study commissioned by the Michigan Economic Development Corporation (MEDC) in 2011, over 47,000 Michigan residents are already employed at 2,300 companies in the mobile sector. The average compensation for a mobile technology job in Michigan is over $63,000 (a cost-of-living equivalent to $145,000 in Silicon Valley) and the study found that for every mobile industry job created in Michigan, 3.9 jobs are also created outside the industry—a number that is outpaced only by the manufacturing sector. Daichendt says MTAM’s goal is to create 9,250 additional mobile/wireless technology-related jobs in Michigan by 2015; the MEDC says that if that goal is achieved, it will result in over 35,000 non-mobile related jobs and over $1.7 billion in salaries and wages for Michigan residents.

“Mobile technology is becoming very viable,” Daichendt adds. “It will have a tremendous economic impact in Michigan.”

We talked to some of the key players in Michigan’s mobile technology sector to find out their thoughts regarding the industry’s effect on our economy, and what they feel our state’s unique strengths and weaknesses are. We got a wide variety of (and sometimes conflicting) answers, which is probably indicative of mobile tech’s fledgling status in Michigan. It’s a new industry, and while we have a good start, it has a long way to go.

The following are highlights from a series of interviews we conducted over the past … Next Page »

Sarah Schmid is the editor of Xconomy Detroit. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET

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