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Kicking it up a notch

Jeff Bocan thinks Michigan is getting a well-deserved kick in the pants right now.

We got soft, enjoying those fat automotive jobs. We stopped innovating. We failed to think or act as entrepreneurs.

Everybody's welcome to their own opinion, right? Well, Bocan has more than a soapbox to stand on. He has a regular blog spot since September on one of the Web's most popular sites, The Huffington Post. And he's using it to tell stories about business, Michigan and the Midwest – good and bad.

Rather than just link to his blog posts, I recently stole a few minutes from Bocan's schedule and asked him about his work, why he came to Michigan and how he got his blog.

First, a little background. Bocan is managing director of Beringea LLC, a venture capital firm. It is based in London and Farmington Hills, a distant Detroit suburb. Bocan lives in Ann Arbor with his wife and three children. (He went to Notre Dame for his undergrad; now, he's living in unfriendly Wolverine territory.)

His job is to invest in up-and-coming companies. Specifically, his primary focus for Beringea is a $100 million venture fund dedicated to companies that are already or willing to come to Michigan. He focuses mainly on “clean tech” and health-care sectors.

Q: How did Michigan get lazy?

A: There was this notion for a generation that is was easier to get a job working for the auto companies than for yourself. You'd get a job on the assembly line, get the house on the lake and you're set. It was comfortable. There was no reason to push yourself. So for the past 50 or so years, there's been a lack of corporate innovation. The little there has been has focused on automotive. … There's 10 million people here. And with the environment now, it's creating a lot of first-time entrepreneurs. Most won't succeed, but the impact of even one hitting it big can touch the lives of thousands of people.

Q: Is there any chance for Michigan to recover? Is there a window for the turnaround?

A: We get calls and emails every day from outside of the state, all of them looking for opportunities to grow their businesses here. The state of Michigan, to its credit, has been very aggressive in contacting companies, and it's starting to have an impact. Michigan is on the radar. (But) it's not going to happen in five years. It could happen in 10 or 15 years. In those first five years, the companies that are growing will become well known on a national level and enjoy serious success. Their success will beget other success. … We (at Beringea) are not betting on the entire Michigan economy. We're looking for 10 to 20 great companies. But their impact could be significant. It can transform a community – over time. The company has to get its revenue up, then start hiring and that then trickles down to the schools, the cities and the people.

Q: Why does Michigan need entrepreneurism?

A: Because the Brain Drain is very real here. For so long there was no place or support for the innovators. I have an acquaintance, Kevin O'Connor. He went to Detroit Catholic Central. He graduated from the University of Michigan. He loved it here. But there was no support, no like-minded people, no interest in getting him to stay. He founded Double Click, which he sold to Google for something like $3 billion. Before that he started an Internet security company, which he sold to IBM for another $1 billion. The next Kevin O'Connor might be here right now. We've got to get them to stay here. … Look at Ann Arbor. Many are very optimistic there. There's lots of entrepreneurial spirit. There are the universities, the research centers. There are ideas and relationships there than can be developed that serve as the foundation for great entrepreneurial ventures.

Q: What areas are you most excited about?

A: Green technology and health care – the momentum for those industries is here already. There are chances that some of these new companies can become future Fortune 100 businesses. … We're looking at the Western side of the state too: Grand Rapids, Battle Creek, Kalamazoo. That's a big health-care area and there's lots of potential. We have someone going in there all the time from our office. … The biggest struggle is in the north. There's tourism, but that's about it. They'll be challenged to do as well as other areas, without some radical changes.

Q: How did you end up on the Huffington Post? Shouldn't you have some tiny spot on the Web first before hitting the Big Time?

A: I had a friend when I lived in California who was a reporter for CNN that is friends with former CNN anchorwoman Willow Bay. Willow is now an editor at the Huffington Post. She came to Detroit to meet with Ford Motor Co., and one of my friends said, ‘Jeff's here, why don't you meet with him, too?' We talked and I gave her the first version of what ended up being my first post. The angle is more of a Midwestern view. I'm on the ground working with my firm, trying to revitalize the economy that's beaten down, trying to get them to do something different than they have in the past. I'm working with companies, sitting on boards, talking to entrepreneurs. We're actually investing and writing checks here. So I'm different than the typical talking head. I won't quit my day job for my blog, but I'm having a great time with it. The reaction to my first post was so humbling. It's a great platform to have to get the word out there about what's happening here.

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  • 1

    This is definitely the type of content I come to this blog looking for. There's no doubt that we in Michigan (especially the Detroit are) got set in our ways and our automotive economy allowed us to do this. The good news is that we have a generation coming up that grew up in a different environment and don't have the same mental crutch. He's right that it will take time, but this is the ideal time to turn it around.

    I recently wrote about this from my perspective, as someone who has worked in employment and technology in the region:

  • 2

    At the risk of sounding like a broken record, great interview Karen.

  • 3

    How do Michigan's tax rates discourage business? Outside of the film industry, what types of incentives are offered for business and business start-ups?

    Does the rate of Michigan personal income tax discourage people from living and working here? Are there surcharges due to the high rate of unemployment, or is enough money streaming from the federal government to make up for the loss of taxpayers?

    In some states, it is a huge burden on business to support the unemployed, (I had to pay a large surcharge elsewhere when unemployment went up) and to support the welfare class, such as for Medicaid, which often exceeds budgets.

    • 3.1

      From the feedback I've gotten, it's the chaotic fight over taxes that hurt Michigan the most. We were in the middle of the states in terms of tax burdens, but we keep yo-yoing now due to the fights in Lansing. People want to know the house is in order before coming in.

      And let's not make the mistake of making the entire fight over taxes. They are a factor, but if they were all that matters, CA and MA would be impoverished. I don't want their level of taxation, but the question is what other factors were in play that allowed them to grow despite it.

  • 4

    I like Bocan's tempered optimism. Will MI turn around in 5 years? No. 10-15? Yeah, if we do things right, I believe that could totally happen.

    "History has shown us numerous times that desperation and misery are often the muses of creativity and innovation." For Detroit (and Michigan's) sake, I hope that's still true. What's the idiom? Necessity is the mother of invention? Time for Michiganders to find something else to do with themselves!

    Good to have you, Jeff!

  • 5

    djtrudeau: I think California just might have better weather. Massachusetts is having a lot of problems now, due to their expensive health plan, and a shrinking tax base.

  • 6

    I would lke to see the "vision" of the future for Michigan, with out a direction to head we will all wander lost in ourselves for a long time. We have very little city community to speak of, little pockets here and there that eventually get run over with popularity then wither and die.

    Artistically Michigan is kinda a dud, small galleries that pop up form time to time then disappear. Sure we have ccs but what has really come out of there but a few good desiners for the automotive industry. And when some one truly is a fantastic artist no one wants to buy their stuff.

    Food wise, we might as well be one big applebee's. Nothing really ground breaking that lasts. Resaurants come and go as well.

    The foundations of haveing a good life are being robbed from us by corporation that are only concerned with massive profits, and by our government leaders concerned with voter approval for the misdeeds they disguise as being in the best intrest of the public.

    People are getting tired, tired of the deciept and the lies that have been told to us, all the fasle promisses of future employment don't count when there is no future path laid out for us.

    Every one talks about "finding a new path" Well when the public is thrust into povery by the very people we have trusted to govern and keep us all employed it is no wonde the people don't want to give back, when every thing the y gave to begin with got them nothing but an eviction notice.

    I think 10 or 15 years is even too soon. more like 20 to 25 before we start to see the hay day of cash flow and prosperity in our lives again. We just put all of our eggs in one basket, and we may have just borrowed a few from others to make our basket look even bigger and fuller then it was. The price we will all pay as taxpayers is less money and less spending that will impact everything around us for a long time to come.

  • 7

    Apparently it's just human nature to "pile on" and Detroit and Michigan are certainly the favored subjects for this treatment. As an example, this quote appeared in the Dec. 29, 2008 issue of The Weekly Standard : "Detroit has ranked as the most murderous city, the poorest city, the most segregated city, and the place with the most heart attacks, slowest income growth, and fewest sunny days."
    Wow! Most heart attacks ... fewest sunny days? Fortunately, for what's left of our image, they forgot to mention that it snows here in the winter.
    There are many more nationally publicized slams on us - too many to mention here. My point is - Are there no murders in New York or Los Angeles? Is it always sunny in Chicago, Boston and Philadelphia? With publicity like this, who would want to live here? What business will locate here? What local business will stay here? But maybe that's the whole objective.
    There is no denying that Detroit has its problems, but what is the point of totally destroying the city's image? This type of publicity only contributes to and accelerates our decline.

  • 8

    Karen, thanks for this blog, and I went and read Jeff's blog on Huffington Post. There were only 2 entries, but I liked them. They were insightful and it's apparent his move from sunny California to Michigan was done with a lot of thought.

    Michigan has many resources, both natural and human. I'm very pleased to see that someone is recognizing this and has money to invest in the area, for non-auto related businesses.

    Detroit's poor image has lasted far too long. As Jeff9809 points out, the stories about Detroit are always negative, in spite of the fact that the same things that happen here happen in other locations. I'd like to think turning that around will only take time, but it's lasted since the 1967 riots (and other cities have had riots) through the 1984 celebration by "Bubba" who overturned and set fire to a car while celebration the Tiger's championship (and other cities have had similar riotous sports-related celebrations), to the recent Kwame fiasco (Chicago and NY both have corruption in their governments), through the demise of the auto industry.

    The Michigan travel ads won awards, and are lovely. Upper Michigan's, and lakeside tourism has probably been positively affected. Until there are hundreds of positive stories about the Detroit area, especially the city itself, nothing in the Detroit area will change. This blog can help, but most of the people posting or reading are former or current Detroit area residents.

    So, TIME correspondents, you have a huge job ahead of you. After spending a year here, please make sure you do not add to the negativity surrounding Detroit. If you do, you will only reduce any chance we have of recovering, and returning, to be a great city in many people's eyes, not just our own.

  • 9

    I appreciate everyone's comments and thank you again for doing what you do, Karen.

    Having grown up with a Detroiter who constantly reminds me of how Detroit is not what it used to be, and how this or that needs to be done in order for it to "return" to being a city with a positive, nationally recognized image, while at the same time seeing all the unique local efforts (some that I've never seen as a resident of other cities) to build positive micro-communities over my lifetime time and time again, I often wonder if "returning" to anything is the best focus.

    In other words, maybe Detroit will never again be comparable to its supposed peers -- but that's okay. I'm not saying that things don't need to drastically change on many levels, but maybe they need to change to achieve a different outcome -- to achieve "smaller" goals in a local context as opposed to those that might be nationally recognized/celebrated.

    I think this is happening right now and those that are doing the work (as opposed to writing about it like myself) aren't so much worried about being compared to another city as much as improving what is for those who more directly participate in the community. With a shift from "global" to "local" happening in many places, maybe Detroit is a pioneer in this context and meant to travel its own path, for better and for worse.

  • 10

    ..Man!...,.. I'm sure tired of Millio-Billion-aires telling us how fat, lazy, and had "it' coming , to us! Could it JUST BE bvecause of Elected-Elite whose half-assed -Ivy League Economics have sold out the working-middle class?... Just wondeering.. PS What about ALL those CA. and CHI. and NYC Investment thieves who actually BELIEVE THE GLOBAL ECONOMY IS A GOOD THING! PSS I also went to DET CC and was classmates with the Nadirs(who lived on Ardmore a half block away). This Det. family innovated (I believe Hollywood Video?), then helped started BOSTON-CHICKEN_MARKET, and now is in charge of THE DOLLAR GENERALS( I think?).. SAAD Nadir went to Boston College, or whatever! Don't forget , DAWN DONUTS had a chance to buy out DUNKIN' Donuts a few years ago! Detroit--- The only Corporate City whose companies buy out other cities 'companies AND THEN MOVE TO THAT CITY!~! Bendix, Burroughs, NBD, Comerica, HUDSONS, etc.,. It seems that our local business people believe all the Negat-Hype...Let's get going!

  • 11

    [...] blog post from Jeff Bocan, Assignment Detroit's ventural capitalist friend, from the Huffington Post. He focuses on the wind [...]

  • 12

    [...] late on posting this, but here is Jeff Bocan's lastest entry at the Huffington Post. Bocan's blog series focuses on venture investing in [...]

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