Choose Thinking: A Blog by Dan Gilbert

“For the strength of the Pack is the Wolf, and the strength of the Wolf is the Pack.”

- Rudyard Kipling

July 17, 2011

Detroit 2.0: It's Real and It's Happening Now

Let’s talk Detroit.

As you may have read, we (as in our entire organization from top to bottom) are like the pig at breakfast when it comes to Motown:

Fully committed.

Or as those who play Texas Hold Em’ like to say:

“All in.”

Why?

  1. Because we live here and work here (and we’re here, anyway).
  2. Because if we (as in all of us in SE Michigan) don’t create a safe, lively, exciting, technology-focused urban core that brings hope through new (and old) entrepreneurial companies that serve as a magnet for young, smart professionals, the vast majority of whom have made crystal clear they want the experience of living, working and playing in a cool downtown oozing with OPPORTUNITY, then just say “sayonara” to an entire generation of would-be “Detroiters” and “Michiganders.”

And this time, we can turn out the lights for good. (If the electric company doesn’t already do us the favor because we won’t be able to pay our bills.)

It’s not only a generation we are trying to save from fleeing to the likes of Chicago, NY, San Francisco, Boston or South Beach (God forbid!).

It’s THE generation that will and is already creating the most amount of wealth in the shortest period of time of any generation since Cro-Magnon and Neanderthal men walked the earth.

Don’t believe me?

Say “Groupon.”

Groupon was created in the fall of 2008. That’s less than 36 months ago or after most of you signed your last car lease.

In other words, your current automobile (hopefully, an American one) is older than this little company.

Little?

Well, they will likely be public in less than six weeks or so at a “little” 25 BILLION dollar or more market capitalization.

That’s a higher market value than each of these “big” companies:

  • Staples
  • Kellogg
  • Alcoa
  • Gap
  • Sears
  • Southwest Airlines
  • Nordstrom
  • Campbell’s
  • Hershey’s
  • DTE Energy
  • Pitney Bowes
  • Whirlpool

And bigger than the COMBINED market value of Penske, Compuware, Comerica, Lear, Masco, and Goodyear.

In less than three years.

And not only is Groupon creating thousands of new jobs, but they are also creating an entrepreneurial, urban-based, downtown hotbed of spin-off companies and other start-ups near their headquarters located in:

Chicago, Illinois.

Where were two of the three founders of Groupon (who together control over 30 percent of the company) born and raised?

Detroit (and its close suburbs).

Where did they go to college?

University of Michigan.

Who paid for their college?

Partially you, me and every other state of Michigan taxpayer.

Why did they move outside of Detroit and SE Michigan?

Because, back around the turn of the century, downtown Detroit simply was not the place that any Internet- or technology-focused entrepreneur was going to set up shop. This was the same time Eric Lefkofsky and Brad Keywell were beginning down their entrepreneurial paths creating the start-up companies that eventually led them to the launch of Groupon.

Did Detroit and SE Michigan miss out on this one?

Only to the extent that you believe hyper-growth, 25 billion dollar, e-commerce, entrepreneurial, job-creating machines that will further sprout an entire
eco-system of additional start-up, new economy businesses around it should be located in the downtown center of your city.

There is absolutely nothing more important than former rust-belt, manufacturing-dependent, major urban cities like Detroit and Cleveland to become attractive, exciting places for young, eager, wealth-creating entrepreneurs to embark on their business journeys.

How tragic is it that some of the highly talented people who are now doing exactly that in other cities and states not only grew up in the cities that need them most, but were educated by the public universities that the taxpayers of our state partially pay for?

We must create an environment that keeps them here.

That environment is a downtown that is hustling and bustling with young technology-focused people who can find cool lofts to live in, abundant retail and entertainment options close by, safe streets day and night, and most importantly, numerous
start-up and growing entrepreneurial companies where opportunity is endless and creative minds are free to collaborate and do what they do best:

CREATE!

That’s why we are investing heavily into downtown Detroit (and Cleveland as well).

So much is happening. More and more great people, investors and businesses are joining the initiative to build something very special downtown every single day.

It’s happening fast folks. And it’s happening now.

Detroit 2.0 is real.

We can’t afford to lose the next Groupon, created by our own kids coming out of our own universities, to some other town.

How do you measure that kind of loss (or gain) on a spreadsheet?!

Although there have been some major announcements and excitement over the past year or so, the best is yet to come for downtown Detroit.

My gut is we haven’t even scratched the scratch on the surface.

Stay tuned…

-Dan Gilbert

Posted by: in Business & Entrepreneurship, Detroit 2.0 | Comments (39)


39 Comments »


  • Comment by Kyle — July 17, 2011 @ 11:24 pm:

    Dan, great blog post. I’m a big fan of your passion for putting the Midwest back on the map, especially grateful for what you’ve done and are doing for Cleveland. That being said, we need your help recruiting other like-minded, willing and able players to get on board and put their money to work. The “Old Money” mentality in this city does nothing but inhibit progress. There are so many talented, capable people in our cities, its just a matter of creating an environment where they can earn a good living and enjoy the finer things a big city has to offer (e.g. Nightlife, Shopping, Recreation, Great Restaurants, etc). After all, Rome wasn’t built in a day, nor was it built by one man.

  • Comment by Brian Moran — July 17, 2011 @ 11:26 pm:

    Dan, the thoughts and actions that you have brought to Detroit and Cleveland have been awesome! A Cleveland native myself was bummed and saddened when I graduated that I was unable to find a job in Cleveland in my field of study which led me to move to Dayton, Ohio and now out to Iowa. I would LOVE the opportunity to return to Cleveland, and hopefully with the thought of Cleveland 2.0?? I can someday have the opportunity to return home.

  • Comment by rob — July 17, 2011 @ 11:31 pm:

    Dan, thanks for all you do for both of these great midwest cities. I know Detroit need you, but you’re even more beloved in Cleveland. Please fight through our local political bs and help our region grow. PS, can you buy an nhl team too? The NHL Lake Erie Monsters would look great starting rivalries with the Pens, Wings, and Jackets.

  • Comment by Ryan Shaw — July 17, 2011 @ 11:36 pm:

    Excellent post Dan. The same thing is happening in Cleveland as a large percentage of the young people are leaving. We appreciate your efforts in Cleveland, keep up the good work.

  • Comment by Comic Sans Sam — July 18, 2011 @ 12:03 am:

    Comic Sans: The typeface of champions!*

    *-Eastern Conference Champions, that one time

  • Comment by Beth Cobler — July 18, 2011 @ 8:58 am:

    Thanks, Dan, for all you continue to do for Cleveland. We WILL rebound. It’s already begun. My husband works in the manufacturing industry and is seeing an upswing in sales; slight, but improving.
    I love Cleveland and the Midwest!

  • Comment by Dan Gilbert Fan — July 18, 2011 @ 9:15 am:

    Dan, great read. I recently just graduated, I am not genius or businessman, but there is no work for me in Michigan. I have been looking out of state. I would love to stay.

  • Comment by John — July 18, 2011 @ 10:11 am:

    Good article. One more requirement to see a Detroit revival – you must get rid of the Democrat/Liberal/Union control that has driven the city into the ground. If the same group stays in charge, say ‘sayonara’ .

  • Comment by Stephanie Pool — July 18, 2011 @ 10:11 am:

    I’m 25 years old and a creative professional-ish lady I’ve just moved to Detroit from Los Angeles. Most people hear that and think I am crazy, but I think that Detroit is the most amazing city I’ve ever been in. It is teeming with potential and you can do whatever you want. Plus it needs us. That was my issue with LA and why I didn’t go to New York, because, essentially they’ve got a lot of what they need. I mean they have their problems sure, but they don’t need another cool coffee shop or boutique. Detroit NEEDS this creativity and the community comes together to support endeavors and these places don’t only succeed, they thrive. Literally every person in any job – if you’ve got a creative mind and adventurous spirit – can benefit from moving to Detroit.

    And, Dan, I’m here to help. Please contact me at my email (I think you have access to it.)

    Viva Detroit!

  • Comment by Bankrupt — July 18, 2011 @ 11:24 am:

    Dan, Groupon has never made money. Not one cent. The owners have basically funneled venture capital money to themselves. So, really, isn’t Detroit better off not having those guys?

  • Comment by Jordan — July 18, 2011 @ 12:10 pm:

    @Bankrupt, I think you’re missing the larger point Dan is making. He’s also talking about the influence that a company like Groupon would bring to the area, or you’re just ignoring this quote from his blog above:

    Did Detroit and SE Michigan miss out on this one?

    “Only to the extent that you believe hyper-growth, 25 billion dollar, e-commerce, entrepreneurial job-creating machines that will further sprout an entire
    eco-system of additional start-up, new economy businesses around it should be located in the downtown center of your city.”

  • Comment by Grif_E — July 18, 2011 @ 4:50 pm:

    If Murdoch hadn’t just realized such a huge loss on MySpace the upcoming Groupon IPO would end up being the defining Internet 2.0 flop. They’ll be around in 5 years but people are going to get burned. The tech bubble is back folks, be careful. Not that it wouldn’t be great to have a brought back down to earth version of Groupon in the Midwest.

  • Comment by BillCcarver — July 18, 2011 @ 6:45 pm:

    In the past memory of highly successful people is a chorus of voices telling them of the folly of their ideas. We will not fix detroit, any other city, or this country for that matter by telling our inventors and entreprneurs (the builders) that their idea cannot be achieved. Success of the whole happens when the nay sayers finally get on board with a good idea.

    We’ve already seen what pessimism has brought us. Decay, depression and despair. Lets put that behind us. Grab a small corner of your world and help lift it up.

  • Comment by DM — July 18, 2011 @ 9:55 pm:

    Detroit 2.0 is the real thing boys and girls! Time to wake up and jump on the train or you’re going to miss out!

  • Comment by Antony — July 18, 2011 @ 9:55 pm:

    Good people here in Cleveland and now Canton counting on us to bring the same passion and enthusiasm for building communities as is going on in Detroit. We hope to weave the threads that far south.

  • Comment by Bryan K — July 18, 2011 @ 10:38 pm:

    PicketReport.com is committed to being the next groupon located right here in Midtown Detroit. We are redefining how people choose where to live…and we are 100% on board with Dan and the vision to make Detroit great again! We are all in when it comes to the D!

  • Comment by Todd A — July 18, 2011 @ 11:40 pm:

    Quizzle.com is a proud tenant of Detroit. Quizzle is a company committed to helping Americans understand and improve their credit so that they can own homes and buy cars in amazing cities like cleveland, Detroit, and anywhere USA. Thanks, Dan, for leading a great new movement in the “D”. Our Quizzle chips are all down on this great city and the future that will soon be!

  • Comment by onair — July 19, 2011 @ 1:03 am:

    Keep it coming!!!!!!

  • Comment by Rachel Davis — July 19, 2011 @ 8:27 am:

    Dan,
    Fantastic writing, and very passionate. I started working for Quicken about four months ago, and picked up and moved downtown with my first commission check. Having grown up in Flint Michigan, it makes me incredibly happy to see Detroit coming back, and I love being a part of it. Thanks for making it possible.

  • Comment by TRH — July 19, 2011 @ 8:42 am:

    Dan, it’s all well and good to talk about the second order effects that high-tech businesses such as Groupon have on fostering the entrepreneurial environment and encouraging spinoffs, but let’s not forget is that what makes these businesses so attractive to investors is that they are extremely low-capex and about as lean as can be through better technology. They create jobs only for very specialized and highly-educated engineers that can code Ruby or mobile apps. That excludes a large share of the general population.

    When we talk about the Detroit 2.0, I think we’re really talking about a small section of the city that has become uber-cool and edgy. What about the other 150 square miles of blight and abandonment for which ineffectual land reform, a clogged municipal system, corruption, race issues, and deep structural issues remain the norm?

  • Comment by Michelle Matzka — July 19, 2011 @ 8:45 am:

    Simply put, you are a great man with a great vision. Better than that, you are executing your vision for the world to see. I look forward daily to the wonderful things you are doing for both Cleveland and the city I have always loved for 53 years…Detroit!

  • Comment by Josh P — July 19, 2011 @ 9:28 am:

    Dan hit this one on the head and he is doing things to make a difference. Right now there are hundreds of college interns working in downtown detroit- simply because he wanted them here. These young people represent the not so distant future of Detroit. They are brining ideas and energy with them… and for those of you that think there is no work here in Detroit- well don’t be surprised when one of these interns applies for the job you wanted AND GETS IT. It’s all in the attitude and effort when looking for work- jobs are out there, it’s just more competitive. If you want something then go out and get it, and if IT isn’t there, create IT for yourself. Lucky for many of us people like Dan G. are paving the way, creating a buzz, and putting opportunity in our face. I work downtown and just moved to a very nearby suburb- The D is where my future is and it’s a bright one!

  • Comment by Jim N — July 19, 2011 @ 9:31 am:

    The biggest thing to me is to get the locals to buy in, and to fully embrace the idea of Detroit being the center of Southeastern Michigan. It’s time to put aside 40 year old grudges and work to build Detroit back up, sorry but none of the suburbs are in any position to overtake Detroit anytime soon.

    Nobody said it’s going to be easy and results won’t come overnight, but it’s not impossible either, and I believe that it’s worth doing.

  • Comment by Rachel Robinson — July 19, 2011 @ 9:50 am:

    The major issue I have seen in Detroit over the last few years is the lack of influencial individuals with enough passion to rejuvenate the city. I am ridiculously proud to work for a company and a Chairman with this kind of vision, passion and execution. I was listening to a lecture last night about successful civilizations and their distinct connection to major waterways. I think about the parallels between Detroit and Chicago, both being located on major bodies of water, and it inspires me to think that if the community pulls together we could be in a place that thrives like Chicago and keep our Michigan Superstars here at home where they belong. We have a majestic river front, and a city just ripe to be molded into whatever the citizens want to make of it…we need to pull together, take action, and stop being so afraid. If good people flood the city of Detroit, there will be no room for the nay sayers! Thank you Dan for your continued vision and inspiration in the right direction!

  • Comment by Dom B — July 19, 2011 @ 9:55 am:

    I work in venture capital / investment banking in Cleveland (born and raised) and we are starting to the formation of many new early stage companies in the area. Despite a negative view of the macroeconomy (US gov’t debt / consumer debt / Chinese inflation / European debt), I’m really bullish on NE Ohio! New casino (on a side note, we need to have a big musical act – similar to Celine Dion or something like that – or some equivalent – like Cirque de Soleil – like Vegas; otherwise it’s just another casino), Med Mart, University Hospitals, Cleveland Clinic, major sports teams, early stage incubators, revitalized CSU campus, new Flats project, etc. List can go on. Now it’s time to fix public transportation (move the busing off Public Square!! It’s an eye sore in what should be a gathering area for the city.) and implement tax incentives to keep businesses from moving a la Eaton Corp, among others.

  • Comment by Jessica Magee — July 19, 2011 @ 10:03 am:

    I moved here to join the Detroit family 3 months ago from Kansas. When I first told people that I was moving to Detroit, people thought I was crazy! I knew they were wrong! I had the pleasure of seeing and feeling Detroit 2.0 in person and it was AMAZING. I flew my sister out to experience it first hand and she was pleasantly surprised as well. Detroit has a live energy about it that makes you want to get engaged in the action and buzz. The rest of the world will soon realize what Detroit 2.0 means.

    Jessica Magee

  • Comment by Steve Chandler — July 19, 2011 @ 11:45 am:

    Dan, we already have the road map to make Detroit and Cleveland the best cities in America, Here’s the path.. #1 Good Jobs!(Quicken and rest of the Family of Companies) #2. Reputation as a safe city both day and night. #3. Young people having fun, enjoying the night life, sporting events and the delicous food both cities have to offer. #4. Young people getting married, and buying a home in and around the down town area, young mom’s and dad’s filling the schools with little kids to grow and prosper in a great city. Parent involvement in the schools is key to making these cities great once again. #5. And since the church never left the city, they need young professionals filling the pews and the offering baskets, so the people who need help will get help and it won’t be from a government hand out!. This was Detroit and Cleveland! and This Will be Detroit and Cleveland again! But this time for good!!!

  • Comment by Aaron Angerbrandt — July 19, 2011 @ 12:05 pm:

    Even though I live in the heat of Arizona, my home state of Michigan is where my heart lies. I love seeing that a city with this much bad press, is starting to come back to life!

  • Comment by JAK — July 19, 2011 @ 1:30 pm:

    Great posting and effort to revitalize Detroit and Cleveland. Having lived in the motor city for 9 years some time ago, great to see it. Applaud Detroit 2.0. Should be Detroit on the go. I often say it’s the most misunderstood and under rated place to live and raise a family. Quality, hard working people with great worth ethic and moral fiber. That want and deserve this type of success.

  • Comment by Hopeful — July 19, 2011 @ 1:49 pm:

    Dan, I agree with what you’ve outlined and put into practice, but I think you’re missing an important point. Namely, that young people will not move to a city en masse that does not have good schools for their children. I think the quagmire that DPS has become has kept me and many others from seriously considering a move. Without massive improvement in schools, I fear the best we can hope for is a large base of commuters in from the suburbs, not a fully committed, all-in group of game changers.

  • Comment by Dan - not that Dan — July 19, 2011 @ 2:05 pm:

    @Hopeful – I hear what you’re saying about schools – but a large base of well paid commuters – all paying Detroit income tax and other taxes – as well a bringing money to the businesses in Detroit that pay taxes, can hopefully fuel a school turnaround.

  • Comment by Ann-Marie Murphy — July 19, 2011 @ 2:14 pm:

    @Dan_Gilbert_Fan: Maybe we can help. Contact me at annmarie[at]quickenloans[dot]com and we can talk about some of the job opportunities we may have for you here in Michigan. We’d love to keep you here in your home state!

  • Comment by Hopeful — July 19, 2011 @ 4:42 pm:

    @Dan – not that Dan -
    I see your point, that there has to be money for schools, but do you think that there is a structure in place to properly manage that money? Even now? It would exacerbate the problem, it seems to me, to simply funnel more money into a flawed institution.

    I love that DG is all over revitalization, I just wish there was a maverick that would attack the problem of chronically underperforming schools. If you look at lessons learned from rural communities you learn that schools and school age children are the lifeblood of a community. Any plan that tries to revitalize the D needs to seriously address this arena.

  • Comment by Ross Sanders — July 19, 2011 @ 6:39 pm:

    Dan
    Thanks for leading the way here. You have made our work here at Bizdom and within the Quicken Loans family of companies so much more than just a job. You have made us part of a mission to better our city and our communities. Pretty special opportunity. Please keep doing what you are doing.
    Thanks!

  • Comment by Kevin Bukvic — July 19, 2011 @ 10:16 pm:

    Dan,

    Great read. I’d like to thank you for all that you have done thus far for my city of Cleveland and all that you plan to do in the future. The same goes for Detroit as I believe the midwest needs to make this shift in unison in order to make it great once again.

    As an individual who has just graduated college you inspire me to not give up on calling the region I love ‘home’ and to believe that there are resources available where I can make a positive contribution. I look forward to reading more of your energetic and thought provoking posts

  • Comment by TRH — July 22, 2011 @ 7:10 am:

    It seems most of the people commenting here either work for Dan directly, for Quicken, or for one of the many portfolio or related entities. More productive would be hard-hitting dialogue that helps to frame the structural, cultural, and political reasons for why Detroit is the way it is, that recognizes that the surface-level Band-Aids being applied at current won’t address the root causes, and that takes aim at the collective Utopian vision that is easier gushed about than accomplished.

  • Comment by Jason Lorimer — September 1, 2011 @ 7:38 am:

    Retention is certainly important. I am currently working with a group of accelerator programs to implement a model focused on retaining those companies that are in the space between these programs and product/market fit.

    An ultimately larger opportunity however and one I think that is ripe for Detroit is in the importing of entrepreneurs from outside markets to spark the community. As Mr. Gilbert eludes to in his post, start-ups beget start-ups. I wrote about this specifically as it relates Detroit just the other day.

    Detroit Launch City -

    http://www.businessinsider.com/detroit-launch-city-2011-8

  • Comment by Mike Sacco — September 13, 2011 @ 4:25 pm:

    Injecting money into downtown schools is all part of the Detroit 2.0 plan. The rebirth of the education system will not take place overnight and the mindset that children of the upper middle class suburbanites must attend private school will take time to change. Remember, it is those who have already fled the area to get educations elsewhere in the country and now they want to return. They want their children to be raised the way they were raised. They want to show their children a proud Detroit. The bottom line is, the school system won’t get better until Detroit gets better first. So ultimately I think we will have an influx of young people who will continue to live in the burbs (and have their children attend school there) but work in the city. Eventually it will transition into people working and living in the city, but Detroit must continue to undergo a rebirth before that happens.

  • Comment by Chris — September 20, 2012 @ 12:48 am:

    What is the pipeline Dan? What about energy? The new fuel cells for the new cars that just don’t run on gas. Michigan should own that market, and it makes sense from a six sigma standpoint too….fuel cells….batteries….Detroit baby

Leave a comment

Subscribe to Comments via RSS Feed or get comments in your email inbox.

Authors