From Allmendinger to Duo Security: Ann Arbor is defined by its brightest businesses

When Duo Security moves into its new home in the Allmendinger Building in downtown Ann Arbor this August it will be able to check a number of things off its new economy workplace checklist. Room to grow, check. Industrial building turned offices, check. Downtown location, check. Historic character, check. A storied name from Ann Arbor's past, check.

In seven short years, Duo Security has established itself as one of the most promising names in Ann Arbor's entrepreneurial ecosystem, helping to define the city's identity as a center for tech innovation. Allmendinger is one of the city’s best-known names for more than a century. Its pianos and organs were staples in churches, theaters, and households across America. By the early 20th Century, Allmendinger had become the city's second biggest employer with a factory on the edge of Ann Arbor's downtown.

"David Friedrich Allmendinger was a true American success story," reads to a passage in Historic Buildings, Ann Arbor.

Duo Security is on a similar path. Each company was/is run by outsiders who came to Ann Arbor to make a home. Both started small and grew quickly. While the cloud-based security startup isn't close to being Ann Arbor's largest employer, it hires more and more people every year... in the same place Allmendinger did a century ago.

"We are growing rapidly," says Paul DiMarzo, CFO of Duo Security. "By next year we expect to be at more than 200 people in Ann Arbor."

Allmendinger's Ann Arbor

David Friedrich Allmendinger lived the classic American immigrant story. Born in Germany in 1848, he came to America as a child with his family, eventually landing in Washtenaw County as one of the first of many German families to move to Ann Arbor.

Allmendinger apprenticed as an organ builder, eventually marrying the daughter of his master organist and taking over the business in 1872. He renamed it the Allmendinger Organ Company and worked out of the back of his house, selling custom-made organs to German churches and families.

"His real success, however, lay in selling organs to German farm families throughout the country," according to Historic Buildings, Ann Arbor.

Allmendinger built his factory at the corner of South First and West Washington streets on the west side of downtown Ann Arbor. It expanded to making organs and pianos (it eventually became Ann Arbor Piano and Organ Co) and employed dozens of people at its peak, becoming the second largest employer in the city. It shipped 5,000 organs and 600 pianos across the U.S. and around the world in a year at its peak.

The industrialization of the early 20th Century wasn’t kind to Allmendinger or his business, however. He died in 1916 and his business went with him, swept away by a generation of new business models.

"By the 20th Century stores like Sears put them out of business, as did records," says Susan Wineberg, the author of Historic Buildings, Ann Arbor. "This happened in many communities with local factories producing goods that Sears and Montgomery Ward could sell cheaper."

Nevertheless, the factory remained. It manufactured automotive windshields in the 1920s, then went derelict during the early years of the Great Depression in 1930s. A local real-estate investor, Carroll Benz, breathed new life into the structure, renamed it the Benz Building, and kept it occupied until the University of Michigan bought it in 1969.

A budget crisis prompted U-M to sell it to First Martin Corp in 1984. Since then the Ann Arbor-based real-estate firm renovated the factory into offices, managed it, and renamed it the Allmendinger Building. A couple of original Allmendinger organs and pianos can now be found in its lobby. It has been fully occupied for decades as the demand for loft-like offices near downtown continued to climb in recent decades.

"The entire north end has a 6-inch wood floor," says Darren McKinnon, vice president of First Martin Corp.

That floor is a series of 2x6s sandwiched together to provide enough support for pianos and organs. The Allmendinger Building was built in a post-and-beam style that shows off exposed structural wood post and beams. It is filled with exposed brick and all of the cool little quirks and imperfections that make these former industrial buildings popular in the tech industry.

"What is important to most people is the character of the building, the type of construction," McKinnon says. "Also, it proximity to downtown is popular."

Duo Security's Ann Arbor

Duo Security is not one of those companies that many people would connect to a 19th century organ company. It's a tech startup that provides online security solutions for organizations big and small. Its bread and butter is its two-factor authentication platform that protects users, data and applications from hackers with a focus on streamlined usability. (Check out a video describing its two-factor authentication system here)

The firm is now arguably Michigan's most promising tech company. It doubled its customer base in 2015, serving companies and institutions ranging from American Public Media to Duke University. Duo Security analyzed nearly 2 million devices with 1 million users, and handled nearly 2 million authentication events per day by the end of last year.

Duo Security is also backed by some of the biggest names in the tech industry. It has raised well in excess of $40 million in venture capital, including a $30 million Series C last year. Among its investors are Silicon Valley heavyweights like Redpoint Ventures, Benchmark Capital, and Google Ventures. Duo Security recently received a $2.5 million performance-based grant from the state of Michigan for continuing to grow in downtown Ann Arbor and create hundreds of jobs.

"Duo's expansion in Michigan rather than Silicon Valley means excellent, well-paying jobs for Michigan residents and underscores the strength of the talent in the state's technology sector," Michigan Economic Development Corp CEO Steve Arwood said in a press release announcing Duo Security's expansion earlier this spring.

Duo Security has come a long way since Dug Song and Jon Oberheide launched it in 2009 in the Tech Brewery on Ann Arbor's north side. It employs 250 people in Ann Arbor, Silicon Valley, Austin, and London. The lion’s share of those, 160 people, work in Duo Security's Ann Arbor headquarters at 123 N Ashley, a space it intends to keep along with the new Allmendinger Building offices.

Both Oberheide and Song graduated from the University of Michigan and live in Ann Arbor. Song serves as Duo Security’s CEO and face of the company. Oberheide is its CTO. Song is a Washington, D.C., native who came to Ann Arbor for college and never left. He is raising his family, building a business, and making his adopted community a better place, much like Allmendinger once did.

Allmendinger was an influential member of the the local business community and a key leader in developing Ann Arbor's reputation as Tree Town, helping to establish a legacy of green spaces. His home was renowned as a bucolic wonderland and often compared to Belle Isle. Allmendinger Park, on the city’s near west side, is named after him.

Dug Song is a business leader cut from similar cloth - but with a Millennial twist. He was a driving force behind the creation the Ann Arbor's Skate Park and has been an enthusiastic part of building Ann Arbor's tech scene

It might be a bit premature to declare Song as the second coming of Allmendinger, or expect that Duo Security will become one of the city's largest private employers. Duo Security needs to quadruple in size to do be compared to the likes of Zingerman's and Domino's Pizza, and add another 1,000-plus employees to hit the employment levels of the Thomson Reuters or the Toyota Tech Center. But that doesn't mean the team at Duo Security isn't poignantly aware of what the Allmendinger Building means to Ann Arbor.

"All of the company’s employees are aware of its history," DiMarzo says.

Duo Security is taking control of 28,000 square feet of the 40,000-square-foot building through a five-year lease. It will be moving approximately half of its workforce (a little more than 100 people) in there in phases over the next year. The space, formerly occupied by Johnson & Johnson, was attractive to the company because of its close proximity to their current headquarters (two blocks away) and downtown Ann Arbor. Its historic character is also reminiscent of the company's original Tech Brewery location.

"The aesthetics of the building were very much a part of the decision," DiMarzo says. "It fits in well with the company's culture."

There is little doubt that Duo Security's culture is quickly helping to reshape Ann Arbor's economy and identity. While DiMarzo doesn't expect it to employ as many people as Zingerman's or Domino's Pizza anytime soon, it has emerged as one of hottest employers in the Michigan, attracting job candidates from all over the country. And, much as Allmendinger did a century ago, its name is quickly becoming synonymous with Ann Arbor.

Jon Zemke is the News Editor for Concentrate and its sister publications, Model D and Metromode. He has been covering Duo Security since its inception.