There's disruption in the business and cultural life of Southeast Michigan. And it may be the tipping point that jolts the region back into prominence.
Making it new isn't enough. Risk-taking entrepreneurs need to make new. To do that, you must be disruptive.
Disruptive innovation creates a market where there wasn't one before, explains James Eliason, Ph.D., director of stem cell commercialization at Detroit's
Tech Town. "Clearly, mass production made the automobile achievable by ordinary people; whereas it was a toy of the rich. … Usually when one speaks of disruptive technology, one thinks about electronics and Silicon Valley."
It's a matter of degree, adds Thomas C. Kinnear, Ph.D., professor of Entrepreneurial Studies and Marketing at the
Stephen M. Ross School of Business, University of Michigan. "How disruptive do you have to be to be disruptive, as opposed to what's there now?"
You need to up-end the status quo with a way of doing things that has never been thought of before – like a moving manufacturing assembly line. It's a creative risk that's shared by scientists, business innovators, and artists alike – and financed by someone. Art may or not be appreciated, but if it invokes a reaction, it's "profoundly disruptive," notes Luis Croquer, director,
Museum of Contemporary Art Detroit. "If you can't stop thinking about it, it means that it has touched you at a level that's beyond your intellectual comprehension, whether it's making you sick or making you happy or making you wonder that there's something uncracked there."
Though admittedly imperfect, Apple and its founder Steve Jobs have continually developed products that define new ways of experiencing technology. "Jobs has proven himself unrivaled in the art of managing disruption," notes Fred Vogelstein in a
Fortune magazine article. "Many entrepreneurs talk about turning ideas into products that change the world. … Jobs has been able to simultaneously harness technology in a way that throws the status quo into disorder and rides that chaos to the front of the pack."
Disruption is critical to the future of Southeast Michigan. "The must-have game-changing products of the future (are) based on disruptive technologies," says Jayson D. Pankin, New Venture Creation Specialist,
Delphi Corporation. Innovation improves on existing products and services, but, "disruptive technology can change everything." That's how new businesses are born, he says. "You create tremendous amount of wealth and, obviously, jobs."
Pankin and Ann Arbor entrepreneur Tafun Ozdemir, Ph.D., developed
Monarch Antennae, Inc., a
Delphi spin-off company that produces a smart antenna. "The technology enables the antenna to electrically turn its physical configuration, which changes the reception, based on sensing the environment," Pankin says.
President of
Virtual EM, Inc, in Ann Arbor, Dr. Ozdemir is an "accidental entrepreneur." While completing his doctorate in engineering at the University of Michigan, he learned of a business opportunity through the federal government but had to start his own company to bid for the job. "It was so juicy," he recalls. After winning the bid, he never looked back.
"There are two kinds of people who innovate and eventually succeed," Dr. Ozdemir says. "The first group is restless, willing to take risks; they're people who often don't calculate beyond four steps. If they had calculated, they would have gotten scared and would not have taken the steps. The second group finds themselves in an environment – human beings are affected by their surroundings big time – in which they're pushed in a direction…"
In either case, it's very risky. It's difficult to get access to investors and it may take a long time to sell the idea. "You have to work harder to get the attention of venture capitalists," says Dr. Kinnear. "That's why this world is not for everybody." It's not good enough to come up with something that's disruptive, adds Dr. Ozdemir. "You really need to educate the money [source]."
But is there an environment that fosters disruption in Southeast Michigan? To some extent, creative people are naturally disruptive and are likely to disrupt wherever they are. Why do it here? Depending on who you talk to, there are several reasons: This region is home to several universities with engineering and business schools, an automotive research and development capacity second to none in the world, thousands of engineers – many of them idle automotive engineers – and innovation is part of the region's culture.
"Disruptive technology will be created here," says Dr. Ozdemir. "The question is how is it generated? How is it funded? How is it commercialized? Right now, the rule is that [investors] need to get a return on investment in five years. It's possible, but only if the market is ready. It's rarely ready for disruptive technology."
Dr. Ozdemir says the Ann Arbor environment has been a catalyst for his academic and business development as a disruptive inventor. He chose Ann Arbor over Boston and San Jose to develop his technology businesses. "Three years ago, anyone in my situation would have picked up and left. I didn't want to move. My wife didn't want to move. We really like Ann Arbor. And I like Michigan. So, now I need to make it work here."
To some extent, the inventor creates wherever he is, says Dr. Eliason. "Whether he can see it come to fruition or not is another point." Henry Ford might have developed his Model T and assembly line anywhere, but Detroit had skilled tradesmen, engineers, and other support systems that helped him accomplish his goal. "Usually, there's something that's permissive [of disruptive innovation] at the very least, if not supportive."
Dr. Eliason hopes the region becomes conducive to disruption, but last year he would have said, "definitely not."
"Nearly all capital was frozen. Five or 10 years ago, there were no [venture capitalists] here, just a few small sources of capital. The people who had the money here were extremely conservative in their investments. If you were building another car, they might invest in it because that's what they knew." The culture for investment in Detroit was much different than California and other parts of the country that were more inclined to invest in entrepreneurial ventures. "Here, the people forgot that they made their money on disruptive technology…. Now it's really starting to take off. For a lot of people, they find it very difficult to take the risk because they grew up in a culture where they thought everything was sure and solid."
Dr. Kinnear argues that there definitely is a disruptive environment in Ann Arbor. "I'm surrounded by disruptive technologies going to market," he says. Some of the innovation coming out of the University of Michigan "is extremely disruptive.…. If people are saying there's not disruption going on in Southeast Michigan, then they're not aware of all of the new firms that are working on things that are game-changers."
If the environment is ready and the universities good, can disruption be learned? "I teach it," says Pankin, who lectures on disruptive innovation at
Michigan State University and
Lawrence Technological University. "It can be part of a curriculum… You can show by example that serendipities happen."
Can you teach curiosity? Dr. Kinnear questions whether you can teach a disinclined person to be inquisitive and disruptive. "Sometimes," he says, "it's just a way of looking at the world differently. What is Amazon.com? It's just a store. But Jeff Bezos had a vision of how that store would work."
If conditions are right, anything can happen. "I see in Detroit audiences a kind of openness that doesn't come from the desire to have a museum," observes Croquer. "It comes from a history of being used to change, to conflict. Even though the dialogue with creative industries on a larger scale isn't what it was in the 1950s or at the beginning of the century when Ford was doing those major innovations, I think there's something pervasive that has stayed in the DNA of this community in which there is a kind of acceptance [of change]."
This article originally ran in Metromode.
Dennis Archambault is a disruptive journalist (but in a good way). He is also a regular contributor to Metromode and freelance writer. His previous article was Natural Intelligence.
Send feedback here. Follow us on Facebook here.
All photos by Dave Lewinski
Photos:James Eliason
Luis Croquer
Jayson Pankin
Tayfun Ozdemir
Virtual EM
Dr. Thomas Kinnear