Tech-Savvy 'Boomerangs' Come Back Home to Rebuild Detroit

The continuing transformation of the core of Detroit, from urban blight to tech-startup hub, can be summed up in a word:

Boomerang.

The allure of the city on the mend has inspired a return by young people who grew up here, whose families still live nearby and who feel a sense of loyalty to the place. There are hundreds of thousands of people who meet that description from Detroit and the nearby suburbs. The city itself holds less than half the population it did 65 years ago.

Just about everyone involved in technology in Detroit has a story about the moment they decided to come back home. In Detroit tech, these “boomerangs” are leading the charge for change.

“I didn’t want to turn my back from my hometown,” says Bryan Barnhill, head of talent for Detroit Mayor Mike Duggan. Barnhill moved back to Detroit after graduating Harvard in 2008. “I saw the city of Detroit’s crisis presented an opportunity for me — and for motivated and talented people — to participate in one of the greatest turnaround stories ever,” he says.

As I reported this Re/code special series on the tech-startup-sparked revival of Detroit, the city’s spirit of cooperation and Midwestern humility was apparent and infectious. And there are good, solid reasons for boomerangs to build new businesses here, founders and investors say. It’s cheaper. They have ties to the area. They want to be a part of something.

Angel Gambino was born in Detroit, but at this point in her life she could live anywhere. She was part of the management team that sold the social networking site Bebo to AOL for $850 million in 2008. Three years later, Gambino bought a labyrinth of an industrial building in Corktown, a neighborhood adjacent to Gilbert’s developments. She rents space out to tenants including a music school, and hopes to attract other startups, particularly those working on car technology.

“For me, it was, I’ve done all this stuff with digital communities, so how do I apply that to the physical world,” Gambino tells me. “The space is the bridge.”

But while Detroit may be relatively cheap and space may be plentiful, renovating old architecture comes with challenges. Detroit is not a blank canvas. Gambino’s ongoing construction problems include a botched roofing job and city bureaucracy that sends her $20,000 electricity bills for lighting she doesn’t believe she’s using. She paid $270,000 for the building, and she has put $1.9 million into it. So far.

Boomerangs tend to cluster together in neighborhoods like Downtown and Midtown, which will soon be connected by the mostly privately funded three-mile-long M1 light-rail project. One of the original tech magnets is TechTown, an incubator space in Midtown.

TechTown’s head of entrepreneurship, Paul Riser, is not a boomerang himself — he has been here the whole time, working in biotech and at Sun Microsystems, supporting the auto industry. But he sees quite a lot of them. Riser’s father, who shares the same name, was a Motown trombonist.

“We had automotive, we had Motown — but this is a first-generation startup space,” says Riser.

“Anything you’re doing here makes a statement,” says Ben Bator, founder of Texts From Last Night. “The conscious decision to move to Detroit and to make it your home says something.”

Over beers and cheddar waffle fries at Slows Bar B Q, the one restaurant in town that everyone seems to agree is worth visiting, Bator says Texts From Last Night — a frequently updated site that collects embarrassing and funny text messages — is a uniquely Detroit startup because it is about sharing vicarious experiences, something that comes in handy post-college when all your friends move away.

“We were collecting the experiences of all our friends who had moved elsewhere,” says Bator. Founded in 2009, Texts From Last Night predates the current Detroit startup boom, as well as the rise of viral anonymous secrets on apps and sites like Whisper, Yik Yak and BuzzFeed. It continues to run profitably.

Vjeran Pavic

Still, many Detroit natives are waiting for stronger signs of a comeback before relocating themselves back home.

Charles Hudson, a San Francisco-based venture capitalist who is from Detroit, whose wife is from Detroit and whose family still lives here, tells me he’d love to move back — if only he were convinced that the tech industry had staying power.

Speaking at a cafe near his offices in the South of Market neighborhood in San Francisco, Hudson says Detroit needs an “anchor” from which talent and resources would be spawned.

“It’s really hard to build a tech ecosystem without an anchor company,” Hudson says. “There’s no startup culture. They don’t know what to do. You need an anchor engineering company.”

While Hudson might be watching from afar, back in Detroit, people are diving right in.

Nick Sarafa, the 23-year-old founder of Pause, an Android app that sends automated “I’m-not-available” replies to calls and texts, has one of the shorter travel times for a boomerang, having graduated from the University of Michigan in 2013 and briefly moved to Dallas to work for Hewlett-Packard.

When I visit Sarafa one evening last fall at a co-working space called Bamboo Detroit, he is sucking down Wi-Fi while keeping tabs on new apps on Product Hunt, alongside a friend who makes a video-transferring site. Nearby, an 11-year-old candle-making entrepreneur’s devoted parents are finishing up a new batch. Everyone except the 11-year-old is hard at work at 10 pm when I stop by one night.

“People ask me, ‘Why Detroit?'” says Sarafa, whose grandfather immigrated from Iraq to Detroit in 1963. “The reason is: My app is beta. I’m in a city that’s in beta. I want them to grow together.”

Nostalgia — even for an era most boomerangs have never experienced — is a powerful force underpinning the motivation and marketing of Detroit’s revitalization. It’s similar to how Chrysler famously got a reputation bump from its 2011 Super Bowl ad with the slogan “Imported from Detroit,” and how the watchmaker Shinola has been able to quickly construct a heartland luxury brand around “Made in Detroit.”

In market testing a few years back, Fossil founder Tom Kartsosis reportedly found that people said they’d pay more for a product made in Detroit than the same item branded as “made in the USA.” So he came to town to set up shop using the name of an old shoe-polish brand. Shinola is now doing $60 million in annual revenue.

“People my age romanticize about having Detroit come back to a really great place to be,” says Jeff Epstein, founder of Ambassador, a startup based just outside the city limits that helps T-Mobile and other companies reward their customers for referring friends.

“When we left the state, we said we were ‘from Detroit.’ We didn’t nitpick ‘the suburbs.’ Maybe it’s because we wanted it to come back to the glory days.”

The excitement around the Detroit tech scene has swept up people who have no ties to the area. Investor Ted Serbinski of TechStars Mobility, who coined the term “newpats” to describe them, says it was a play on “expats” to describe people like himself, who relocated to Detroit without any family or history in the region, but are excited about what it could be.

Although there are far fewer newpats than boomerangs, a few notable ones come to mind. They include Jill Ford, mayor Mike Duggan’s head of entrepreneurship and innovation and a former angel investor and exec at Motorola and Disney; and Shawn Geller of the SMS contest startup Quikly, who defected from Philadelphia three years ago when he got funding for his tiny startup from Detroit Venture Partners.

There is also a small colony of recent college grads who moved to Detroit as part of the Venture for America program (like Teach for America, but for tech). They bought a run-down house for $8,000, and are now running their own startups out of its living room.

“I came to Detroit to create my own legacy,” Serbinksi says, perched on a sleek, flared accent chair in an open meeting space at the Madison Building, the clubby epicenter of downtown Detroit tech. Serbinski moved from San Francisco in 2011, after developing community websites including one for moms that was acquired.

“I think Detroit has the potential to be the next-best American great city,” says Serbinski. “It was, at one point in the ’30s, ’40s, ’50s, this iconic city — and it has the potential to be that again.”

This article originally appeared on Recode.net.

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