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Blog post by ELP Student John Marinescu (Business | Class of 2021)

Let’s get this out of the way – Michigan isn’t Silicon Valley. Herds of unicorns don’t glide down Woodward atop neon-scooters, State Street VC’s aren’t restless to force-feed startups green like cattle, the best and brightest don’t stay but leave for brighter lights and warmer pastures, and startup isn’t an exclamation but a question.


That’s just disqualifying Michigan as the de-facto place to start-up. We can’t forget the numerous problems still impeding the growth of entrepreneurship in this state such as the absence of individual capital, a historical startup scene, and most agonizing, a collective entrepreneurial mindset.


Yeah, on the surface it doesn’t seem like we have much, but we have something that turns the tables on everything – our grit and resourcefulness.


Our closest-held value, determination, is an entrepreneur’s most powerful weapon and I don’t know if it’s in the delicious Great Lakes’ tap water, but we have it in abundance.


At this point, I could cite some of Michigan’s true advantages such as its proximity to the auto industry and support from some truly top-tier universities, but the underdog in me would rather keep to a rugged narrative. So instead, utilizing our famous resourcefulness, I’ll transmute our weaknesses into strengths.


More money, more problems – From my short time as a venture capitalist in-training, I’ve realized that money and excess is not so much a mighty moat as it is a crippling detriment to a startup. Money presents problems two-fold, it restrains otherwise creative expression of the business in favor of the easiest and often most unsustainable strategy, diffuses focus, and most debilitatingly blinds businesses of their own cataclysmic faults. Although Michigan startups are often far “behind” handsomely-funded competitors as a result of their underfunding, in the end this better prepares them to craft a killer product and distribution strategy that economically scales unlike many hastily put-together glass-cannons. In this case, the turtle wins the race.


Money is up for grabs with few entering the ring – Half-forget what I just said, money – in reasonable quantities – is paramount to the survival and growth of a business. Although there is a lot of money in the valley, much of that is inordinately concentrated in the coffers of a select few venture capitalist darlings. In Michigan, VC’s don’t have this luxury as they see magnitudes less and are therefore more inclined to give a sound-startup a shot rather than pass it aside for the reasoning that there are 10,000 others. Moreover, programs such as Invest Detroit, Invest Michigan, numerous under the Quicken umbrella, and many more fund Michigan startups, and Michigan startups only.


Expenses are considerably lower – This is where we really crush the valley, and for that matter most startup hubs in the US. Conservative estimates point to the cost-of-living and average salaries alone 60% lower here than in San Francisco, and this is without mentioning the luxuries such as exorbitant stock-options and diamond-studded ping pong tables necessary to attract and retain talent in the Silicon Valley. With almost all business expenses including office space just as cheap, Michigan businesses can run many times more capital efficient than their cost-battered peers.


Employees are more loyal – Employee turnover is company-crushing and too regular in the valley. Michigan startups, unencumbered by this impediment, can focus on building a great company rather than training a replacement every 6 months.


Out of the competitions’ eye – Having someone watch your every move is disconcerting, especially when that neck-breather’s sole purpose is to take your company down. At the same time, it’s often much more effective to focus exclusively on building your own product rather than fretting over the moves of the competition, a mindset much harder to cultivate when your competition is drinking from the same Kombucha-tap. Hundreds of miles separated from any competition, this will not be a concern.


Prison-tight network – Misery and proximity love company. Startup life is hard. Fortunately, in our wholesome Midwest state everyone from VC’s to fellow startups, 100-year old businesses, and congressmen have your back. It can’t be understated how valuable this support network is while in the trenches.


The evidence is convincing, start-up in Michigan!