Becoming Fully Invested in Detroit
About a month ago, a friend of mine posted a quote on Facebook that caught my eye. It was from Charlie Rothstein, co-founder and senior managing director of venture-capital company Beringea LLC in Farmington Hills. He said: “Detroit needs to be fixed or forgotten.”
So I called him up and asked if he wanted to explain what he meant…and, thankfully, he did. The question he was answering was something like, “If you were governor of Michigan for one day, what would you do?” He said his answer was to fix Detroit, specifically. Here's a paraphrase of our conversation: If Rothstein is anything, he is honest. Venture capitalists are that way – they are a mix of financial discipline and enthusiasm. And Detroit honestly needs radical change and change-makers – NOW. He's tired of old, tired approaches. It's time to fix this mess.
“We all depend on Detroit. There is no great state in the county that doesn't have a thriving central city,” Rothstein said. “There is no ‘forgetting' Detroit. It's time to be honest with each other. Stop the baby steps and stop the bickering.
“We need to understand how important Detroit is and to make it a great place.”
While he's realistic, he's also optimistic. “It's really complicated. There's no one lever to pull. But if we're together for one goal, it can happen,” Rothstein said.
That means getting more companies to put their headquarters here. To encourage businesses to at least put some of their investments here. To get people to become entrepreneurs and grow from within.
“Being in Michigan, we (at Beringea) feel like the eyes of the world are on us,” Rothstein said. “If we get this right, we could be a case study. … You plant the seed. It's going to take some time.”
We need to be a place that takes chances – and become meaningful players in growth areas like batteries or solar panels. Michigan has to mean something again in terms of an industry, Rothstein said. We're getting back to that in terms of automotive, but we cannot obviously focus only on one area. That should have happened a decade ago…but lesson learned.
“Venture capital can be the cure for an economically depressed area,” Rothstein said. Like Beringea, they are generally regionally managed, so they are intimately involved in the community. They can push through the changes that are needed – and that can remake the economy.
Some background: Rothstein, who has a BA and MBA from the University of Michigan, is a board member of the Michigan Strategic Fund, the State's lead economic development and finance agency. He is also a board member of the Venture Michigan Fund, a $100 million fund-of-funds, and sits on the investment committee of Global Rights Fund II and InvestCare Partners. Rothstein is also the manager of the InvestMichigan! Growth Capital Fund, a $185 million venture capital fund targeting emerging businesses domiciled in the state of Michigan.
Prior to establishing Beringea, Rothstein was a vice president of Corporate Finance at J.W. Korth and Company, a Michigan-based broker/dealer where he developed the Firm's public offerings, private placement and leveraged buyout activities.
Beringea, by the way, is an international private equity and investment banking firm with offices in Los Angeles, London, Shanghai and Detroit. Beringea is the manager of Global Rights Fund II, a global media venture capital fund, among others and has $270 million under management.
Beringea is walking the walk; it is investing in Michigan companies. Rothstein also is giving of his time and expertise; he is on these boards and going to these meetings with the likes of Roger Penske, Mike Ilitch and Dan Gilbert. They are fully invested here – and they know where the region (and them in particular) has dropped the ball in the past, Rothstein said.
On the bright side, the landscape is much different now than it was five years ago. There is brainpower here and companies ready to grow. There is unbelievable value in real estate. There are employees ready to be employed. There is a core here, and something has to be done with it.
“When there's a full-blown economic crisis, everybody drops the veneer. Now, we're all in this together,” Rothstein said of his powerful cohorts. “The outcry that we need to do something is greater and louder.
“There is a commonality of the heart; they all want to make this region great.”
So – Detroit will be fixed. You heard it here. Let's hold ourselves accountable.
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1
One of the areas that needs to be fixed is windpower.
We are plopping up those low efficiency 3 bladed fans all over the place and despite the fact that they have become the ubiquitous symbol of hope, they simply are a symbol of bum engineering.
A retired Automotive engineer proved that you could design wind engines that could hit the theoretical maximum efficiency of 59%. And yup he did that in his basement in Grosse Pointe.
But there needs to be a facility where they can be tested and what better place for fine engineering than Detroit.
Someone has got to step up to the plate and do it... Some university or private entity.
Next Energy is a putz.
Bill
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2
No you do not need a wind tunnel in the conventional sense... they supercharge the situation and give false results... it needs to be a free air flow situation with a dynamometer.
B
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3
Henry Trusted Stout...
There needs to be a similar situation with some good brains.
A special combination of the practical and the theoretical.
Michigan could become the experts on wind engines.
Moving from less than 30% efficiency to less than 60% efficiency is simply not trivial.
b
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4
Here is another idea:
http://alsoftiphone.com/i41CXplus/
For the past year I have been working with a Quantum Physicist from Adelaide on his emulator of the HP41CX.
That was released 30 years ago and immediately killed the sliderule and it remains the finest calculator in the world. It's a beauty in so many ways.
I have helped him for free and the i41 was recently #2 in the what's hot category of iTunes Apps.
And we are finalists in the Business Review of Western Michigan's Innovation Awards program.
Now here is the rub. Barbara Byrd-Bennett has decreed the TI Nspire as the one to use in the School System.
Bad decision! But TI has it's hooks into the school systems with their clunky clutzy stuff that no proper engineer would ever be caught dead with. $135 is what every parent will have to come up with. It cannot compare with the i41CX+ which costs 25$
This is simply stupid but remember it was the teachers with their new math that have ruined 3 generations now so what should we expect? Sudden lucidity. Not.
This is one more crime being foisted upon the kids and their unknowing parents.
And for word to get out about the iHP41+ it will require some real venture capital. Otherwise it's costly crap for the kids.
Bill
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5
The secret to Detroit's recovery is our engineering pool. The coasts have their "brain labs" but we have the people who know how to design complicated technology you can mass produce at a specific price point. I work in staffing for companies all over the US and folks here don't even realize what a special engineering force we have right in our own back yard. A lot of the technologies we need in the future are here already. The problem is they're too expensive and not efficient enough. We have the engineering culture that can change all this. That's why so many automotive companies have put their tech centers here and so many battery companies are setting up shop.
Given the fact many production jobs are gone for good, the US needs to have better paying jobs to replace them. Service jobs just won't cut it. Detroit set the standard at the start of the 20th Century through the automotive industry. We may now be able to do the same thing with energy.
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6
So when is Beringea moving downtown?
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6.1
Well, there are two directives going on here. There is "fix Detroit" and there is "bring business & start-ups into Michigan".
One does not necessarily include the other.
Detroit "can be" a critical part of SE Michigan again, but everyone--EVERYONE--will have to make it happen. If not, SE Michigan will look to reinvent itself without Detroit. This is how I read Mr. Rothstein's comments.
I don't know how the author jumped to the conclusion "Detroit will be fixed. You heard it here."
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6.2
^Actually, Mr. Rothstein clarifies himself in the article that he meant Detroit cannot be ignored:
“We all depend on Detroit. There is no great state in the county that doesn't have a thriving central city,” Rothstein said. “There is no ‘forgetting' Detroit. It's time to be honest with each other. Stop the baby steps and stop the bickering.
“We need to understand how important Detroit is and to make it a great place.”While he's realistic, he's also optimistic. “It's really complicated. There's no one lever to pull. But if we're together for one goal, it can happen,” Rothstein said.
That means getting more companies to put their headquarters here. To encourage businesses to at least put some of their investments here. To get people to become entrepreneurs and grow from within.And I commend him for his frankness. I also commend Beringea for opting to identify their location as "Detroit" instead of the generic and without-sense-of-place "Michigan" that suburban based companies have tried to do lately.
But as the old saying goes... "Be the change you want to see." If Mr. Rothstein isn't willing to move Beringea to the city as a vote of confidence for the future of the city and state then how does he expect to be the shepherd to lead anyone else there?
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7
Yes, his wish to see Detroit be important to the region is there but I didn't hear any solid commitment to fix Detroit in his answer.
Why isn't Beringea downtown? Well, that probably deserves another blog post.
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8
Paris of the Midwest
Detroit was known in the 1920's as the Paris of the Midwest. Wide tree lined avenues. An extensive streetcar system converging on downtown. Grand Boulevard modeled on Vienna's Ringstrasse. The 1960's saw the creation of Mies van der Rohe's Lafayette Park, a signature European style development celebrated around the globe. It was 'the Paris of the Midwest' vision that drew people from all across North America to settle, to make their lives here, raise familes here. Cosmopolitan, straddling an international border. That's what Detroit was. The bones are still here. Our vison could be restoration of "the Paris of the Midwest". Restore the wide sidewalks the length of Woodward, Gratiot, Grand River, Michigan & Jefferson Avenues, planting desease resistant elm trees, mixed with oak & maple & beech. Encourage neighborhood sidewalk cafes along the newly widened sidewalks as gathering places. Rebuild the streetcar system with local & express. With the freeways handling heavy traffic our wide avenues could be restored to the grand experiences they used to be. The streetcar system would encourage developers to plunk money down on building new condos at major intersections. Condos prompt stores & cafes. City leaders could encourage a cosmopolitan rebirth of the city to induce people to move back. "The Paris of the Midwest" a once and future vision. Such a vison worked once. It captured the imagination of generations past Why not let such a vison energise the imagination of future generations?
- <a href="http://twitter.com/TheDetroitHouse" target="_blank" class="beforetweet">TheDetroitHouse</a> After a year of learning, observing and understanding, TIME says goodbye to Detroit. Podcast: All Good Things... http://shar.es/0V3I7 - 2 years ago
- <a href="http://twitter.com/TheDetroitHouse" target="_blank" class="beforetweet">TheDetroitHouse</a> Our Donation to Detroit http://shar.es/0FX2T - 2 years ago
- <a href="http://twitter.com/TheDetroitHouse" target="_blank" class="beforetweet">TheDetroitHouse</a> Read Kristy Erdodi's "How Detroit Became My Sexy City" http://bit.ly/9zG13z - 2 years ago
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