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As a hopeful founder here in Michigan, it's been interesting to watch this at the ground level. The article alludes to it, but the University of Michigan in Ann

As a hopeful founder here in Michigan, it's been interesting to watch this at the ground level. The article alludes to it, but the University of Michigan in Ann Arbor has been the driving force behind several startups in the area. Many of these are robotics or automotive startups, like May Mobility. The software world is sparser; Duo Security was a big success, but with a lot of mixed feelings around their sale to Cisco. An big issue is brain drain. UM is a major recruiting school for entrenched Silicon Valley corps (Google/Facebook/etc), and getting software tech talent to stay in-state is a challenge. California has a certain for new grads (though many are disabused of this mystique after a few years). Beyond that, for senior level talent, you quickly run into ceilings where working remotely for a California company nets you a 50% compensation bump vs a comparable Michigan company. Founders can have a tough time finding quality local talent in early stages. I personally love my life in Michigan. I can afford and enjoy a lifestyle that would be difficult in California. It's definitely an exciting time here.

jeffwilcox 5y ago
When I graduated in 2005, I was so happy to be moving somewhere (Seattle) with essentially my entire graduating class. That social network was comforting and fun, and it was great knowing people working at Amazon, at Microsoft, and other firms to compare and contrast experiences. In hindsight... only a few ever moved back to Michigan, and wow, yeah, what a recruiting pipeline, and what brain drain. I imagine that only accelerated the last decade as midwest total compensation likely trailed significantly. For a while, it felt like the tech firms were strip-mining all the talented midwest engineers who were willing to relocate. I hope the more remote-friendly future helps people keep their local roots.
wpietri 5y ago
Do you have tips on how to keep an eye on the Michigan startup ecosystem? I live in CA now, but would love to be better aware of what's going on in my home state. One of the things that always struck me here is the number of midwesterners I'd come across. It has long been my suspicion that Midwestern culture is better suited to creating companies that are highly collaborative and focused on value delivery. A great example to me is Atomic Object, mentioned in the article. They've been doing well for decades, and the couple times I've visited it seemed like such a sane place to work.
- nebula8804 5y ago
  What is Midwestern culture?
  - wpietri 5y ago
    I think that depends a lot on what your basis for comparison is. It's sort of like asking what California or New York culture is: what people notice is the differences to what they're used to.
  - gordon_gee1 5y ago
    Not op, but on the business/sales side ‘midwesterners’ tend to put people at ease and are decent communicators. In my experience they’re also the clearest American speakers, so non-native english speakers have an easy time understanding them. Coming from an area (at face value) that is not widely desirable or well-known gives a decent perspective on the ability to perceive value for others and speak plainly to sell it. Part of the above in my opinion is due to there being a far smaller gap between the wealthy people in the area and the poorest both financially and physically. A plumber, doctor and retail worker can live on the same street as homeowners. Not to knock the coastal cities too much, but contrast this culture to homeless people sleeping right outside a $3200/month flat, or primary teachers living out of their van, and you can see how it can have a different effect on those who are raised in those areas.
    - alphabettsy 5y ago
      > In my experience they’re also the clearest American speakers, so non-native english speakers have an easy time understanding them. Supposedly there is some history behind this and people who want to be in the media business will actually learn to speak Midwest-style English. Can’t find the article though.
  - bumby 5y ago
    My cousin has a theory that the (sometimes brutally cold) winters and generally blue-collar background breed a bit of "suck-it-the-fuck-up-and-get-it-done" mentality.
foobiekr 5y ago
It's pretty weird to me someone would found a company in Michigan. In general, unless you plan to entirely bootstrap and pursue a slow-growth strategy, recruiting and selling are going to be your biggest bottlenecks. Recruiting is unnecessarily hard in places other than first and second tier tech areas - so the bay, then NY, LA, Seattle, Austin, RTP, and to a very limited extent, NoVA. Companies founded elsewhere inevitably find themselves either paying more for talent (because that talent can work remotely for 50% more than the local prevailing comp, with added stability) or starving and unable to hire. Basically, it's a question of priorities. Also, non-competes are enforceable (§ 445.774a) for, among other things, goodwill. A not good situation for an area interested in creating a thriving tech scene.
- aussiegreenie 5y ago
  >It's pretty weird to me someone would found a company in Michigan. That just demonstrated your ignorance. I advise companies in Australia, Asia and Europe. Also, I am establishing new facilities in Maryland to help international companies establish in America. Costs matter...Baltimore is about 1/2 the price of Boston with a similar employment pool. Almost all B2B is easier if you are physically closer to your customers. in Life Science, FinTech or GovTech is a necessary. Location matters but so does employee lifestyles. Affordable housing and family support is more important.
  - ramraj07 5y ago
    Commenter OP said company so your statements are fair. But if They said startup then you’d be wrong - for startups costs don’t matter initially, growth does. You get vc funds to cover costs no matter how much they are. In that regard Michigan (till Covid) wasn’t probably a great place to start a startup.
    - bumby 5y ago
      I don't think this is 100% accurate but often spoken about, particularly in tech circles. I think it's more accurate to think of it in terms of if you're not profitable, you can buy time with growth until you can find a way to become profitable. But ultimately profits (and by extension, costs) will always matter.
zip1234 5y ago
The main problem is Seattle/California engineers can make way more than Ann Arbor, although pay seems to be trending up.
- organsnyder 5y ago
  And Ann Arbor is probably 20% higher median compensation than Grand Rapids.
jdhn 5y ago
I'm glad to hear you like it there. I just moved out of Michigan this summer as I couldn't tolerate the winters anymore, and the local job market isn't that good for my field. You're right about brain drain, although I'm curious to see what'll happen if remote work becomes the norm rather than the exception.
notsureaboutpg 5y ago
>Beyond that, for senior level talent, you quickly run into ceilings where working remotely for a California company nets you a 50% compensation bump vs a comparable Michigan company. Founders can have a tough time finding quality local talent in early stages. I don't get this. Presumably you raise money with a small team that doesn't make much and has a lot of equity. Once you raise, why can't you pay comparable to California companies? It will cost a lot, but your funders should expect you to burn through cash in exchange for speed of delivery. Alternatively, why can't you hire remote workers in the US who cost less than California employees?
analognoise 5y ago
"Beyond that, for senior level talent, you quickly run into ceilings where working remotely for a California company nets you a 50% compensation bump vs a comparable Michigan company. Founders can have a tough time finding quality local talent in early stages." That's just the price for senior talent. Isn't it a non-functional business model to just expect senior tech talent to just take a 50% haircut when they don't have to?
- snovv_crash 5y ago
  100% agree. However, because of the way that tech scales essentially for free, companies that already have large markets over which to apply an engineer's work can essentially just buy up all the talent at whatever cost and prevent smaller competition from ever forming. Obviously small companies aren't somehow entitled to cheap labor, but that doesn't mean that the market dynamics don't make it very hard for a small company to break through the initial 'activation energy' of scaling to the point where they have the cashflow (or guaranteed growth to get reasonable investment terms) where paying competitive salaries becomes viable. What kills me is when the companies don't offer decent amounts of equity, which is essentially free, to these early employees as a compensation for the lower salary.
analog31 5y ago
I grew up in Michigan and live in Wisconsin, working for a F100. We're not going to get the people who want to strike it rich in California. That's not necessarily an attraction for everybody. We hire who we can, and still manage to get some great people. Some of our recent hires have come from the west coast. We're pretty blunt, so we've asked people: Why the hell did you come here? Some have family in the region. Some anticipate a more laid back work culture, better lifestyle, more outdoorsy, easier to get around, 15 minute commutes, available housing. Some have a spouse or partner who isn't a techie, and they may have their own career reasons to be in the area. Sometimes we hire older people. The world that isn't the advertising business still needs to exist, and has less of a reason to locate around the tech hubs, especially if they anticipate making physical things. I develop measurement equipment. I opted out of a programming career sometime around 1983, because I thought it would be boring. Oops. ;-) There's technology in agriculture. Many of the startups in my locale are health, biology, or agriculture related. But in general, we get the people we get, and we do OK.
- Arainach 5y ago
  That goes both ways, thought. I grew up in Michigan. Most of my family, and my partner's family are still there. I travel there regularly and stay in contact with a number of friends who are there, and each passing year I my resolution to never go back is stronger and stronger. The entire state is deeply broken politically, and I would never want to raise a child in that environment. Even as a white man, it's remarkable to go back, sit around in a bar or just in public, and to see the blatant racism, homophobia, and hatred around. Let's not even get into the dysfunctional state government - and the gerrymandered voters who enable it. All of my smartest and most competent friends from high school - in every field - moved out of state. So did all of my friends of any kind of minority group who could afford it. I don't see any reason that's going to change.
  - analog31 5y ago
    Indeed, that culture was an undercurrent in Michigan even when I was growing up.
  - jdhn 5y ago
qudat 5y ago
I live in Ann Arbor and love it here. There are tech companies that operate out of this town but none of them besides Duo I would work for. Even then I don’t think I would apply. Working remote has enabled me to live here and still have a great job. When I did work for a startup in town a couple of years ago we were constantly talking about how to entice UoM grads to stay after college. The biggest industry here seems to be the hospital system. Throw a rock at a crown and you’ll probably hit a few physicians. A2 has a ton to offer for being such a small town. Personally, I love the small town feel but still manages to have all the amenities of a larger city. As long as you can handle the Michigan winters the summers are very temperate. There’s a lot to do here especially if you aren’t afraid to travel up north and enjoy the outdoors.
- epage 5y ago
  I loved Ann Arbor when I visited when I was hired at Duo and it has raised my interest in moving to Michigan (once a job allows it, my current remote gig has limited locations due to logistics) but I doubt it will be A2 just because of the cost of living. One of my interests is to drop in cost of living from Austin but Ann Arbor is not far behind.
  - doomslice 5y ago
    All the surrounding areas of Ann Arbor are reasonably priced. I live in Dexter (working remote) and love it here. Close enough to go to Ann Arbor whenever I want but far enough away to get a big house and lots of land.
andrew_ 5y ago
It sounds like you're being hamstrung by a limited view. I'd encourage you to look at any number of states to the south, both for headquarters and for hiring. Michigan is a dead end, or a the most a limited end.
cebert 5y ago
How is founding a tech company working out? I work for an established firm in the Greater Detroit area and it’s difficult for us to find great talent. I imagine it’s more difficult for startups in the area? I’ve also heard it’s much more challenging to get VC investment?

jeffwilcox 5y ago

When I graduated in 2005, I was so happy to be moving somewhere (Seattle) with essentially my entire graduating class. That social network was comforting and fun, and it was great knowing people working at Amazon, at Microsoft, and other firms to compare and contrast experiences. In hindsight... only a few ever moved back to Michigan, and wow, yeah, what a recruiting pipeline, and what brain drain. I imagine that only accelerated the last decade as midwest total compensation likely trailed significantly. For a while, it felt like the tech firms were strip-mining all the talented midwest engineers who were willing to relocate. I hope the more remote-friendly future helps people keep their local roots.

wpietri 5y ago

Do you have tips on how to keep an eye on the Michigan startup ecosystem? I live in CA now, but would love to be better aware of what's going on in my home state. One of the things that always struck me here is the number of midwesterners I'd come across. It has long been my suspicion that Midwestern culture is better suited to creating companies that are highly collaborative and focused on value delivery. A great example to me is Atomic Object, mentioned in the article. They've been doing well for decades, and the couple times I've visited it seemed like such a sane place to work.

nebula8804 5y ago
What is Midwestern culture?
- wpietri 5y ago
  I think that depends a lot on what your basis for comparison is. It's sort of like asking what California or New York culture is: what people notice is the differences to what they're used to.
- gordon_gee1 5y ago
  Not op, but on the business/sales side ‘midwesterners’ tend to put people at ease and are decent communicators. In my experience they’re also the clearest American speakers, so non-native english speakers have an easy time understanding them. Coming from an area (at face value) that is not widely desirable or well-known gives a decent perspective on the ability to perceive value for others and speak plainly to sell it. Part of the above in my opinion is due to there being a far smaller gap between the wealthy people in the area and the poorest both financially and physically. A plumber, doctor and retail worker can live on the same street as homeowners. Not to knock the coastal cities too much, but contrast this culture to homeless people sleeping right outside a $3200/month flat, or primary teachers living out of their van, and you can see how it can have a different effect on those who are raised in those areas.
  - alphabettsy 5y ago
    > In my experience they’re also the clearest American speakers, so non-native english speakers have an easy time understanding them. Supposedly there is some history behind this and people who want to be in the media business will actually learn to speak Midwest-style English. Can’t find the article though.
- bumby 5y ago
  My cousin has a theory that the (sometimes brutally cold) winters and generally blue-collar background breed a bit of "suck-it-the-fuck-up-and-get-it-done" mentality.

foobiekr 5y ago

It's pretty weird to me someone would found a company in Michigan. In general, unless you plan to entirely bootstrap and pursue a slow-growth strategy, recruiting and selling are going to be your biggest bottlenecks. Recruiting is unnecessarily hard in places other than first and second tier tech areas - so the bay, then NY, LA, Seattle, Austin, RTP, and to a very limited extent, NoVA. Companies founded elsewhere inevitably find themselves either paying more for talent (because that talent can work remotely for 50% more than the local prevailing comp, with added stability) or starving and unable to hire. Basically, it's a question of priorities. Also, non-competes are enforceable (§ 445.774a) for, among other things, goodwill. A not good situation for an area interested in creating a thriving tech scene.

aussiegreenie 5y ago
>It's pretty weird to me someone would found a company in Michigan. That just demonstrated your ignorance. I advise companies in Australia, Asia and Europe. Also, I am establishing new facilities in Maryland to help international companies establish in America. Costs matter...Baltimore is about 1/2 the price of Boston with a similar employment pool. Almost all B2B is easier if you are physically closer to your customers. in Life Science, FinTech or GovTech is a necessary. Location matters but so does employee lifestyles. Affordable housing and family support is more important.
- ramraj07 5y ago
  Commenter OP said company so your statements are fair. But if They said startup then you’d be wrong - for startups costs don’t matter initially, growth does. You get vc funds to cover costs no matter how much they are. In that regard Michigan (till Covid) wasn’t probably a great place to start a startup.
  - bumby 5y ago
    I don't think this is 100% accurate but often spoken about, particularly in tech circles. I think it's more accurate to think of it in terms of if you're not profitable, you can buy time with growth until you can find a way to become profitable. But ultimately profits (and by extension, costs) will always matter.

zip1234 5y ago

The main problem is Seattle/California engineers can make way more than Ann Arbor, although pay seems to be trending up.

organsnyder 5y ago
And Ann Arbor is probably 20% higher median compensation than Grand Rapids.

jdhn 5y ago

I'm glad to hear you like it there. I just moved out of Michigan this summer as I couldn't tolerate the winters anymore, and the local job market isn't that good for my field. You're right about brain drain, although I'm curious to see what'll happen if remote work becomes the norm rather than the exception.

notsureaboutpg 5y ago

>Beyond that, for senior level talent, you quickly run into ceilings where working remotely for a California company nets you a 50% compensation bump vs a comparable Michigan company. Founders can have a tough time finding quality local talent in early stages. I don't get this. Presumably you raise money with a small team that doesn't make much and has a lot of equity. Once you raise, why can't you pay comparable to California companies? It will cost a lot, but your funders should expect you to burn through cash in exchange for speed of delivery. Alternatively, why can't you hire remote workers in the US who cost less than California employees?

analognoise 5y ago

"Beyond that, for senior level talent, you quickly run into ceilings where working remotely for a California company nets you a 50% compensation bump vs a comparable Michigan company. Founders can have a tough time finding quality local talent in early stages." That's just the price for senior talent. Isn't it a non-functional business model to just expect senior tech talent to just take a 50% haircut when they don't have to?

snovv_crash 5y ago
100% agree. However, because of the way that tech scales essentially for free, companies that already have large markets over which to apply an engineer's work can essentially just buy up all the talent at whatever cost and prevent smaller competition from ever forming. Obviously small companies aren't somehow entitled to cheap labor, but that doesn't mean that the market dynamics don't make it very hard for a small company to break through the initial 'activation energy' of scaling to the point where they have the cashflow (or guaranteed growth to get reasonable investment terms) where paying competitive salaries becomes viable. What kills me is when the companies don't offer decent amounts of equity, which is essentially free, to these early employees as a compensation for the lower salary.

analog31 5y ago

I grew up in Michigan and live in Wisconsin, working for a F100. We're not going to get the people who want to strike it rich in California. That's not necessarily an attraction for everybody. We hire who we can, and still manage to get some great people. Some of our recent hires have come from the west coast. We're pretty blunt, so we've asked people: Why the hell did you come here? Some have family in the region. Some anticipate a more laid back work culture, better lifestyle, more outdoorsy, easier to get around, 15 minute commutes, available housing. Some have a spouse or partner who isn't a techie, and they may have their own career reasons to be in the area. Sometimes we hire older people. The world that isn't the advertising business still needs to exist, and has less of a reason to locate around the tech hubs, especially if they anticipate making physical things. I develop measurement equipment. I opted out of a programming career sometime around 1983, because I thought it would be boring. Oops. ;-) There's technology in agriculture. Many of the startups in my locale are health, biology, or agriculture related. But in general, we get the people we get, and we do OK.

Arainach 5y ago
That goes both ways, thought. I grew up in Michigan. Most of my family, and my partner's family are still there. I travel there regularly and stay in contact with a number of friends who are there, and each passing year I my resolution to never go back is stronger and stronger. The entire state is deeply broken politically, and I would never want to raise a child in that environment. Even as a white man, it's remarkable to go back, sit around in a bar or just in public, and to see the blatant racism, homophobia, and hatred around. Let's not even get into the dysfunctional state government - and the gerrymandered voters who enable it. All of my smartest and most competent friends from high school - in every field - moved out of state. So did all of my friends of any kind of minority group who could afford it. I don't see any reason that's going to change.
- analog31 5y ago
  Indeed, that culture was an undercurrent in Michigan even when I was growing up.
- jdhn 5y ago

qudat 5y ago

I live in Ann Arbor and love it here. There are tech companies that operate out of this town but none of them besides Duo I would work for. Even then I don’t think I would apply. Working remote has enabled me to live here and still have a great job. When I did work for a startup in town a couple of years ago we were constantly talking about how to entice UoM grads to stay after college. The biggest industry here seems to be the hospital system. Throw a rock at a crown and you’ll probably hit a few physicians. A2 has a ton to offer for being such a small town. Personally, I love the small town feel but still manages to have all the amenities of a larger city. As long as you can handle the Michigan winters the summers are very temperate. There’s a lot to do here especially if you aren’t afraid to travel up north and enjoy the outdoors.

epage 5y ago
I loved Ann Arbor when I visited when I was hired at Duo and it has raised my interest in moving to Michigan (once a job allows it, my current remote gig has limited locations due to logistics) but I doubt it will be A2 just because of the cost of living. One of my interests is to drop in cost of living from Austin but Ann Arbor is not far behind.
- doomslice 5y ago
  All the surrounding areas of Ann Arbor are reasonably priced. I live in Dexter (working remote) and love it here. Close enough to go to Ann Arbor whenever I want but far enough away to get a big house and lots of land.

andrew_ 5y ago

It sounds like you're being hamstrung by a limited view. I'd encourage you to look at any number of states to the south, both for headquarters and for hiring. Michigan is a dead end, or a the most a limited end.

cebert 5y ago

How is founding a tech company working out? I work for an established firm in the Greater Detroit area and it’s difficult for us to find great talent. I imagine it’s more difficult for startups in the area? I’ve also heard it’s much more challenging to get VC investment?