By Charlotte Waldmeir (@cwaldmeir), Content Strategy for sente.link, @sente_link
If you’re involved in the startup world, chances are you’ve used the “e” word (“ecosystem”) at least once this morning.
In the first few minutes of the podcast Masters Of Scale episode titled “And The Next Silicon Valley Is….” host and LinkedIn Founder, Reid Hoffman, breaks down the many interconnected components that make up the great barrier reef of innovation. “You need entrepreneurs, with ideas, yes. But you also need people who are skilled at every discipline needed at every company at every stage.” According to Hoffman, a cocktail of engineers, product managers, lawyers, marketers, recruiters, operational geniuses, media outlets, institutions, universities and VCs is what earned Silicon Valley its name.
While cities around the world are attempting to become the “next Silicon Valley,” Hoffman proposes a different approach - ditch this pipe dream entirely. Instead let thousands of entrepreneurial hubs bloom around the world, like Endeavor’s Linda Rottenberg set out to do first in Latin America and now around the world. Promote high-impact entrepreneurship and innovation in each hub and do so by focusing attention on that city’s strengths...and its weaknesses.
The reality for a re-emerging ecosystem like Detroit? It will never be a Silicon Valley. But in the same respect, for a booming techtopia like Silicon Valley, it will never be a gritty, home-grown Detroit. More so, no matter how hard Silicon Valley tries, it will never have the tenure or muscle mass Detroit packs in the sector of automobility, which makes the emerging mobility industry a low hanging fruit for the Motor City.
A recent report created by Navigant Research shows how the 18 biggest companies in the race to develop self-driving cars rank based on a number of criteria like tech, go-to market strategy, production prowess, staying power, and sales, marketing and distribution. While Google’s Waymo, Uber and Tesla rank high in the technology sector of autonomous cars, Detroit’s Ford and General Motors (GM) lead the way overall. Why? They know a thing or two about mass production.
“The technology is great, but unless you can build tens of thousands of cars and get people in those cars, it’s not really all that useful,” says Navigant’s Sam Abuelsamid. Ford and GM already have the bedrock of producing and selling cars so all they need is to invest in the right technologies. Companies like Tesla, on the other hand, have the technology but are being banned in States around the US (like Michigan) because they would rather adopt a direct-to-consumer car sales model (think Apple stores) which, according to legislation, would have a direct impact on car-dealership sales.
Here, we see history repeat itself.
The car was on the road years before Henry Ford invented the Model T. What put Detroit on the map was Ford’s implementation of the moving assembly line in car manufacturing that could produce an already existing technology to the masses. From that point on, cars were no longer an exclusive purchase like Elon’s Tesla is for many today. People could finally get their hands on the wheel. The same narrative holds true for Detroit today. Only this time around, the hands are coming off the wheel.
While things might be looking up for the city, Detroit needs to understand things could change fast. For example - the minute their competition joins forces with any other large-scale car manufacturer, Ford and GM’s autonomous efforts could become irrelevant. Now, more than ever, Detroit needs to pack a punch if it wants to keep itself in the ring.
Planet M, Willow Run and the University of Michigan’s MCity are just a few of many testing sites and research facilities around the Detroit Metro Area and Ann Arbor that are solely focusing on connected vehicle technologies. Michigan’s state government is making a huge push to shift the state’s brand to be a “smart” motor city. "Michigan's signature industry is changing before our very eyes," says Sandy Baruah, CEO of the Detroit Regional Chamber.
"We're proud to be the center of the auto industry," said Michigan Governor Rick Snyder. "... But we need a plan for the future."
Detroit must anticipate that as technology continues to advance, industry and law is subject to change with it. Apple is a great example of how a new technology disrupted the PC market and Telecom companies and challenged the law. In the same respect, Detroit cannot hide behind a law that protects itself from being outnumbered by Tesla. But whether the law changes in favor of Tesla or not, there are many other competitors world-wide that could, and according to Hoffman, have already risen to the top. China being a leading contender.
To remain relevant, the city of Detroit needs to do what Hoffman proposed in the first place - ditch the pipe dream of becoming “the next Silicon Valley” and continue to bloom as a well-rounded entrepreneurial hub that is unique to Detroit.
Without a doubt, a lot has already changed for the city in the last 5 years. According to the 2017 Michigan Venture Capital Association Research Report, there was a 50% increase in the number of active venture-backed startups in Michigan. Additionally, the number of venture capital investment professionals living, working and investing in Michigan has increased by 41%. Out-of-state mobility startups like Spatial, HAAS Alert and Cargo are moving to Detroit and partnering with Ford to build out autonomous and connected car technologies.
“The possibilities are endless when you combine the experience and influence of a storied company like Ford with the energy and innovation of these inspiring startups,” said Bill Coughlin, president and CEO of Ford Global Technologies.
There has also been a 9.2% increase in Detroit’s population of millennials. Now, more than ever before, 20-29-year olds who graduated from college in Michigan are choosing to stay put to see the city grow and define automotive technology.
On January 14, 2018 the biggests players in connected and autonomous vehicle research and technology will come to Detroit to take part in NAIAS’ Automobili-D. The week-long event will host more than 89,000 engineers along with the world’s top researchers, designers, industry leaders, suppliers, automakers, emerging mobility startups, and international media, including sente.link’s New Mobility Cohort. The city of Detroit will serve as the epicenter of the future of mobility innovations - a title it's used to.