Detroit is Fast in Becoming a City for Sustainable Startups

Over the last several years, Detroit has established one of the most interesting startup narratives of any major city in the United States. This is largely due to its newly minted status as a “comeback town.” For quite some time, Detroit had the reputation of a city in economic distress, with a murky future at best. But a surge in innovation has flipped that reputation upside down, such that Detroit now has the image of an up-and-coming metro area — or at least one experiencing a resurgence. Beyond the core comeback narrative though, the last few years have also given rise to the idea that Detroit is particularly an interesting city for innovation in sustainability.

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So how did we reach this point?

The “comeback” came first and seems in retrospect to have been driven by a handful of simple factors: opportunity, funding, and simplicity. On the opportunity front, VentureBeat’s discussion on the Detroit startup scene offered some fascinating perspective, suggesting that the city holds appeal for innovators because it can still be shaped. The article pointed out that “to build and scale in Detroit is to build and scale Detroit itself” — something that cannot be said of coastal startup hubs. In other words, there’s something to the idea that in Detroit there is a rare opportunity for startup founders not just to succeed in business but to help shape a city and region.

As for funding and simplicity, both are certainly “pros” on the Detroit startup scene. The VentureBeat article just discussed noted that the city “has immense resources at the entrepreneur’s disposal,” and this is backed up by Detroit’s placement on numerous best-city-for-startups lists in recent years. And where simplicity is concerned, it’s no small detail that the state of Michigan has streamlined the steps founders actually need to take to register new companies officially. ZenBusiness’s overview on forming Michigan LLCs (and to some extent other types of companies) makes it clear that the formal effort is quick and easy. The founder of a new startup in this state need only fill out a few government forms — entirely online — to be registered with proper tax status and the structure needed to grow responsibly.

All of this, plus the snowball effect of innovation we sometimes see in metro areas, helps to explain Detroit’s resurgence. What’s a little bit harder to explain, however, as welcome as it may be, is the city’s clear embrace of sustainable startups.

This is something that’s been highlighted here in past articles, such as one discussing the goals of Meadowlark Energy to offer “green energy retrofits” for buildings around Michigan. But with each passing year (or month, nearly) it becomes increasingly clear that companies like Meadowlark Energy aren’t operating alone. Rather, they represent a growing movement within the state-wide startup scene toward sustainable focuses. And much of what we’re continuing to see on this front is happening in Detroit.

A look through Model D’s list of Detroit-based startups that “can change the world” will demonstrate some of what we’re talking about. That list highlights brand new companies in the area like SPLT, which organizes carpools to cut down on congestion; CityInsight, which offers users new visibility regarding water usage and waste; and Maxwell Detroit, which recycles material for clothing and sleeping bags, all while going well out of its way to help the homeless. And beyond this list, other prominent companies like Detroit Bikes and Green Garage are helping to promote sustainable practices in everyday life throughout the city. Even some of the city’s bigger companies — like Shinola — have begun to promote sustainability through things like manufacturing and shipping practices.

All of this speaks very well to the future of Detroit both as a startup hub and a model of sustainability. And given how things have been going so far, we may only be at the beginning of the city’s emergence on these fronts.