A lower cost of living and high quality of life are attracting tech startups to the city.
Michigan has been a magnet for innovative thinkers. Ransom Olds, John and Horace Dodge, Henry Leland, David Buick, Henry Joy, Charles King and Henry Ford all made their way to the Wolverine State, and the automotive industry exploded from these engineering nesting grounds. With that industry giant in the rearview, advanced manufacturing, software development, big data and other emerging technologies are taking root in Michigan, particularly in Ann Arbor.
Anchored by the University of Michigan, Ann Arbor has seen success developing second-stage entrepreneurial companies, many that launched from incubator and accelerator programs. Catalysts such as Ann Arbor SPARK, the region’s lead economic development organization, create a nurturing launch environment, offering programs that assist companies in finding capital, recruiting talent and connecting with customers and community partners.
After the incubation period, many of these companies remain in Ann Arbor. Through its Regional Incubator Network, SPARK operates innovation centers in downtown Ann Arbor and Ypsilanti. The centers offer affordable lease rates, technical assistance and a collaborative environment for startups.
One “graduateâ€ of the innovation center is data science and artificial intelligence company Groundspeed Analytics. Founded in 2016, Groundspeed now has more than 80 employees and continues to grow.
The Ann Arbor company uses data science and artificial intelligence to serve commercial property and casualty insurance carriers, brokers and managing general agents with solutions that automate core processes and provide predictive risk analytics that improve margins, identify profit pools and enhance customer experience.
In July 2018, the former Ann Arbor SPARK Central Innovation Center tenant and Entrepreneur Boot Camp graduate announced it attracted $30 million in Series B funding.
Tech-focused companies like Groundspeed could be located anywhere, but for Jeff Mason, Groundspeed founder and co-CEO, there is no better place than where they are now.
“Ann Arbor is a great place to start and grow a tech company,â€ Mason says. “Ann Arbor has a very high quality of life, comparatively low cost of living and great access to talent.”
The lower cost of living, especially in relation to tech hubs such as Silicon Valley, San Francisco and Boston, is a huge pull for people looking for tech careers without sacrificing quality of life.
The level of collaboration between tech companies in Ann Arbor is another way the region differentiates itself.
“The local startup and tech ecosystem is incredibly collaborative,â€ Mason says.
“We’ve received mentorship from much larger, more mature Ann Arbor-based tech companies and their successful founders. We also mentor other founders and CEOs in the area.”
A talent pipeline is a recurring kudos on Ann Arbor’s economic scorecard. Companies like IndustryStar Solutions can tap into graduates from Michigan State University and Western Michigan University‘s top supply chain management programs to hire engineers and programmers.
It’s not just top tech firms that are committing to the region. Revalue, an investment advisory firm and recent graduate of the SPARK East Innovation Center, is making waves in Ypsilanti. The socially conscious company understands the power of the pocketbook, giving people the power, as it puts it, to use their money “as a vote for a more sustainable, more conscious and more equitable world.â€ In addition to getting its start at SPARK East, the company has used Ann Arbor SPARK’s job portal to recruit talent to its growing team.
Retaining top talent and expanding businesses are attainable targets when companies are located in the Ann Arbor region.
Not only does the community consistently top polls for best places to live, the supportive startup community ensures continued success for the region.
“It’s part of the cultural fabric of the city,â€ Mason says. “We tech founders and CEOs see the work that we do as incredibly important to the Ann Arbor and southeastern Michigan economy, and we work to lift up each other and our teams.”
The Ann Arbor SPARK Regional Incubator Network (SRIN) provides physical space, essential business services and business development guidance for entrepreneurial companies in Ann Arbor and Ypsilanti. The SPARK Central Innovation Center in Ann Arbor and SPARK East Innovation Center in Ypsilanti offer professional, staffed business space that includes desk space, meeting and conference space and full amenities for launching a technology-driven startup. For more information, visit annarborusa.org/entrepreneurial-services.