Out west, the tech and startup scene is a little different. While Henry Ford was dreaming up assembly lines and the Model T, Grand Rapids, a quarter the size of Detroit, was a hub for the logging and furniture industries. The latter still holds sway in town; Herman Miller, Steelcase and Haworth all have headquarters there. The metro area also has a rapidly expanding medical-research scene, a number of well-regarded craft breweries and Amway's global headquarters. Rather than assembly-line jobs, many of the automotive plants in town focused on stamping or tool-and-die making, like the 1,500-employee stamping plant that made sheet metal parts for GM trucks and SUVs that was shuttered in 2009 or Riviera Tool, which was acquired by Tesla in 2015.
Unlike Detroit, the city is incredibly conservative, both socially and fiscally. The former comes from a predominant Catholic and Christian Reformed culture, with a combined quarter of residents identifying as either denomination in 2010. There's a distinct irony in tourism boards calling the nearby Lake Michigan shoreline "Michigan's West Coast" when the region is anything but liberal. In Detroit, Weedmaps billboards dot the highways; in Grand Rapids, it's hospital advertisements with a photo of a Dutch wooden shoe on a prosthesis under "Keep on klompin!" Alcohol sales are restricted before noon on Sundays, when plenty of local businesses are closed all day. Finding anything to do after 10 PM that isn't sitting at a bar is close to impossible. As in many Rust Belt towns, mom-and-pop shops reign supreme.
When Detroit fell, Grand Rapids merely stumbled. In 2009, unemployment hovered near 10 percent, a little over half of Detroit's jobless rate. Even with its fiscal conservatism and diversity of businesses, though, numerous businesses downsized and closed, just not at the rate they did on the east side of the state.
This January, unemployment in Grand Rapids dropped to 3.1 percent.
Grand Rapids' battles following the economic downturn were different than Detroit's, Tim Mroz, vice president at The Right Place, said. "Our biggest challenge in 2012, 2013 and 2014 was that there was so damn much cash in the bank for these manufacturers that it was just sitting, waiting for something to do with it."
That's where Start Garden, the incubator founded by Amway heir and Secretary of Education Betsy DeVos' son Rick DeVos, comes in. The accelerator works to match tech startups with established local businesses like Steelcase as a way of marrying tech ideas with manufacturing. From its outset in 2012 until 2015, Start Garden offered $5,000 per week for a good startup pitch. On monthly Update Nights, previous winners would compete for an additional $20,000 in funding. One of its biggest early successes? Boxed Water Is Better, the purified tap water that comes in minimalistic paper cartons.
"That [funding system] was almost like us teaching ourselves what would really work here," Start Garden Director Paul Moore said. Now Start Garden's business model has changed.
"What started to become really clear was that we had these large enterprises that really needed to make a bridge into the startup community, [and] startups that wanted to bridge to them," Moore said. "A small startup isn't going to build up the capacity to build 30,000 pieces of furniture and ship them around North America from a facility every month, and that company that's 100 years old isn't going to just suddenly turn itself into a tech company overnight."
Local investors don't see the value in something that isn't tied to manufacturing in some way. "If a young person were pulling together a Snapchat-like app, I don't think this is the place for that," Moore said. Michigan is known for making things and, for better or for worse, probably always will be. Local firms aren't excited about an app for sending photos; they want something that's tangible and plays to their logistic and production strengths.
"The whole concept of a unicorn is pretty lost on our culture."
"We find that, oddly enough, that's a really hard sell in a place like the Valley," Moore said. That's because the cultures are different. When someone in San Francisco dreams up a piece of hardware, the first thing that comes to mind are the year-plus shipping and production bottlenecks of dealing with China or Korea. Hence a focus on software. Michigan is the exact opposite. "The whole concept of a unicorn is pretty lost on our culture," Moore said, laughing. "[Grand Rapids startups] aren't like 'ship it in three months to the cloud and you're up and running' kind of things."
Here, industrial designers and engineers are familiar with the timeline and process of getting a manufactured good to market. Rent is going up, but compared to San Francisco, Boston or even nearby Chicago, it's cheap enough that waiting a year or more for your product to come to market might not drain the bank account.