Recruiting optimists
The first pioneer of modern downtown Detroit tech was Compuware, the mainframe support provider, which took the plunge in 2002 to headquarter itself downtown, to much local acclaim. But Compuware is not a story of tech optimism; the company was recently
bought by private equity and split in two.
Each time I’ve been to the Compuware building, the guards have had trouble hearing me say the name of who I’m visiting over the thrash of the massive floor-to-ceiling fountain and the loud piped in pop music. Or maybe they’re just nauseous from the pervasive chlorine smell.
The Compuware building is where Gilbert works, up on the 10th floor. Amid the mainframe company’s recent turbulence this past fall, Gilbert took the opportunity to buy the building where his own office is. That must have been a niggling target on his list.
Vjeran Pavic for Re/codeIn November, Dan Gilbert bought the Compuware Building, a rare modern downtown skyscraper, for a reported $150 million.
As you rise up on the elevator through the central atrium, you see floors of boxy beige cubicles giving way to higher floors with bright orange, green and yellow walls, open floor plans, signs and tchotchkes, and succulents planted in vintage local soda bottles, inverted and suspended in the air. It’s an office-decor Pinterest board brought to life. You’re in Gilbert territory now.
In his glass office, walls covered with color printouts of his projects and potential projects, Gilbert is chattier and less imposing than I imagined he would be. But that’s not to say his vibe is relaxed; he wears a dark-blue sport coat and slicked-back hair. He talks with the same windy can-do pride that fills his frequent
op-eds,
blog posts and
open letters.
While Dan Gilbert is financing Detroit’s future, he’s also shaping it.
Gilbert tells me that Quicken Loans is a technology company. I need convincing.
“A mortgage transaction is very complex, very complicated, and very localized — the rules are not just by state but by county, sometimes even by municipality,” Gilbert says, adding that Quicken Loans employs 1,200 engineers. “To process and close models in 50 states and 2,000-plus counties with the myriad of just tens of thousands of different regulations, customs, vendors — it’s a monster. So the only way to do that is with technology. It really is rocket science.”
Part of the reason I ask is that any project on this scale is going to be in the creator’s image — whether it’s a person or a company. While Gilbert is financing Detroit’s future, he’s also shaping it.
Liz Gannes for Re/code Dan Gilbert’s massive new downtown parking garage is covered with colorful murals — an experience you wouldn’t get in the suburbs, he says.
So I ask: Why will technology startups be good for Detroit?
Gilbert offers two reasons: First, tech companies can do a lot with a little investment. “It doesn’t take the capital or manufacturing facility and it doesn’t take the time,” Gilbert says. “So your bets don’t have to be a $250 million auto plant that it takes seven years to start.”
And also, people pay attention to technology, so having a big tech success would “put Detroit on the map.”
And why is Detroit good for technology startups?
Three reasons, Gilbert says: The local talent, from the universities and auto companies. The cheaper cost of doing business. And larger potential for impact.
“It’s a place where if you want to impact the city and hopefully do well for your company at the same time, it’s really the place you can do that.”
Technology equals potential for quick growth. Gilbert needs bodies to fill up his buildings, and tech startups — when they’re doing well — grow really, really fast.
In this generalized sense, technology equals potential for quick growth. Gilbert needs bodies to fill up his buildings, and tech startups — when they’re doing well — grow really, really fast.
In downtown Detroit, Dan Gilbert’s acquisition rampage is outpacing ground-floor retail’s commitments to move in. Rather than leave them empty and waiting, many storefronts advertise fake potential businesses — another of dPOP!’s projects. Imaginative window displays of a chandelier made of violins, or a punky mannequin with a skirt made of tulle and CDs, or a spread of comic books, also feature the phone number for Gilbert’s Bedrock real estate leasing office.
Gilbert is an opportunistic investor, with an expanding empire of investment vehicles that he personally leads. Two of his other big projects are sports teams — he owns the Cleveland Cavaliers, and recruited hometown star LeBron James back this season; and casinos — he owns six of them, including the Greektown Casino in downtown Detroit. Outside of Detroit, Gilbert’s technology investments include leading a $40 million funding round for New York City-based Genius, the annotations site with exceedingly quirky founders.
Liz Gannes for Re/code While Gilbert’s real estate arm waits for first-floor retailers to move in, fanciful window displays for imaginary stores fill the space.
In Detroit, Gilbert is gambling on tech companies to grow and inhabit downtown offices as fast as he can renovate and decorate them. After spending some time with him on his turf, I come to understand that, just like in gambling and basketball, he is recruiting optimists.
But while Gilbert’s projects maintain the legacy of Detroit’s historic buildings, they are not always as inclusive when it comes to local residents. The technology scene in Detroit is as much of a white male monoculture as it is in other cities, and here in a majority black city, it is even more at odds with its surroundings.
“The tech startups here, their talent is not coming from Detroit,” says Stella Safari, an analyst at Invest Detroit who works with minority and female entrepreneurs.
Safari isn’t a native Detroiter, either — she’s originally from the Congo. She came to town two years ago as a post-college Venture for America fellow.
“I just think a lot of what’s happening in the tech space in Detroit doesn’t feel relevant to Detroiters,” Safari says. “I struggle with what’s the impact of me even being here. Who are we really creating jobs for?”
Everyone in Detroit technology, including Dan Gilbert, knows that lack of diversity is a valid criticism. “It’s a challenge,” Gilbert says. “Entrepreneurial culture and different cultures are … different.”