In honor of National Startup Day, U.S. Rep. Debbie Dingell (D-Dearborn) and Ann Arbor SPARK hosted a conversation with local companies on the current climate for startups in Ann Arbor.
Speaking to the non-profit economic development organization Wednesday, Dingell highlighted what she described as an increasingly open atmosphere for new businesses.
“The world has changed,” Dingell said. “I am not old, but I will admit that I am seasoned. It was far more difficult a couple of decades ago if you had an idea to start a business to have anybody take you seriously.”
She said National Startup Day aimed to discuss the kinds of government mechanisms that help foster economic development and those that hinder the success of new businesses.
The Ann Arbor-based SPARK organization, funded in part by several municipalities, as well as local universities and companies, aids companies by providing them with resources and funds to get their businesses off the ground.
“I have been a supporter of SPARK, a watcher of SPARK and SPARK is a very effective organization,” Dingell said.
Representatives from the companies in attendance on Wednesday identified several factors as important to success in the Ann Arbor and Ypsilanti area, namely the combination of resources like SPARK and proximity to several colleges.
Both Danny Ellis, CEO and co-founder of SkySpecs, a commercial drone company, and Grace Hsai, CEO and co-Founder of Warmilu, a non-electric warming technology company for reducing infant death from hypothermia, said they would not have started their projects without those resources.
“Being able to walk into this ecosystem and getting tons of information dumped on us as to what it even means to be a startup — all the terminology, everything you need to know to raise money, everything you need to know to attract the right talent,” Ellis said. “I’ve met a lot of people in other smaller towns— other college towns — and they don’t have that.”
Hsai added that the combination provides an important pairing of both resources and opportunity.
“This ecosystem sparked in all of us not only the motivation and the catalyst to go and dive into entrepreneurship, but a recognition that there was this wealth of resources here and mentors and advisers as well as opportunities to see companies of many different stages,” she said.
Several companies mentioned that a common challenge facing successful tech startups is the temptation to relocate to cities such as San Francisco or Austin, where there are a higher volume of startups.
However, the Skyspecs team said being in a lower-volume area also has its advantages — namely, more resources to go around, and more local talent — when certain other factors are met. In particular, Ellis cited low salaries, affordable housing,and access to resources like venture capital in Ann Arbor as primary reasons for their startup’s success.
“If we were in most other cities, we wouldn’t have been able to do it,” he said.
Companies also cited several new ideas for policy.
Brady said more support in helping small tech companies get to conferences, such as the annual Consumer Electronics Show conference, would make a difference.
“Those conferences are typically very prohibited for startups to get into, but it’s where you meet the most customers, where you find your competitors, where you find resources,” Brady said.
Hsai cited the need to create a more streamlined pathway for companies seeking approval of their products through the Food and Drug Administration.
“Right now it is very challenging to navigate,” Hsai said. “Even if you go to that FDA website and they say talk to this group it can be very challenging to really get an answer on the timeframe.”
Skip Simms, SPARK senior vice president, also noted difficulties obtaining visas to retain international employees due to political controversy over immigration.
“That whole issue is getting distracted by what’s going on along the Mexican border,” Simms said. “We’d just as soon they not go back to their country, we’d rather they go work for SkySpecs, or Grace (Hsai). And facilitate those visas so we can keep that talent here.”
After the discussion, Dingell told the group it was exciting to be among first-time entrepreneurs.
“I think that there are many people that have ideas that can contribute to so many things that we’re not encouraging enough,” she said. “I think all of us want to keep working with you to make sure we’re helping you and helping others that want to do the same thing.”