Michigan's culture doesn't do our startups any favors

March 8, 2024 Ryan Vaughn

Welcome entrepreneurs. I’m so glad you’re here.

Quick announcement, my friend

Steve Schlafman just launched the world’s first “decelerator program,” Downshift.me, designed for high performers in transition. If you’re interested in a structured way to pause, reflect, and reorient with a community over 8 weeks, highly encourage you checking it out (I get nothing for saying this, just really respect and appreciate Steve’s work).

Now then.

I’ve lived in Michigan my entire life but have spent enough time on the coasts raising money and building companies to see the very real ways in which the water we’re swimming in here costs us.

I care about our community. I love the people here. And I believe in our startups.

But there’s something that needs to be said.

And it’s about time someone says it.

Michigan's culture doesn't do our startups any favors

Don't get me wrong, I love our Michigan ethos. We are hardworking and humble. We put our heads down, don't complain, and get shit done. This is our superpower -- the willingness to push through things that others won't. I’ve previously described Michigan, admiringly, as having a “density of hustle.” And that’s not wrong. We are fucking kneecap biters (LINK) out here.

However, every virtue taken to the extreme becomes a vice. And we’ve reached that point in the Michigan startup ecosystem. Our virtues have helped us endure shit that other companies and founders wouldn’t have. Which is awesome and should give investors across the country confidence in investing in any founder from here. But those same virtues, when taken across an entire ecosystem, actively generate more hard shit for us to endure than other geographies.

How does our culture hold us back?

We’re Humble

We don’t talk about our successes. Ask someone from NYC or the Bay Area what they’re building and they’ll talk your ear off for five minutes, and then ask you for help. Ask a Michigan founder the same thing, and they’ll give you a well-polished sentence, maybe a paragraph, but will say no more lest they annoy you with their self-promotion.

We don’t talk big enough about our dreams, which causes us to dream smaller. In most major startup ecosystems, you’re encouraged to go for fucking broke. Go to Mars, build a humanoid robot. When you say you’re going to do something like that, people root you on. “Hell yeah, you go do that! How can I help?” In Michigan, if you have the gumption to say you’re building rockets to go to Mars, people look at you askance. Skeptically. Especially if you’re from here (implants get a bit of assumed leeway for no reason whatsoever). And if you try to raise money for something like that, investors immediately ask to break down the rocket or robot building company into its P&L, as if it’d existed for years. We downplay dreams and ask for hard proof from our earliest companies. No wonder it’s difficult to build something truly new and unique here.

And when we do something incredible, we downplay it, like anyone could have done it. Meanwhile, my friends in California dedicate a significant portion of their budgets to shouting their accomplishments from the rooftops. To painting a picture of themselves and their companies as the inevitable titans of industry.

I get it. If you’re from Michigan reading this, you’re thinking: “Yeah, but that shit is tacky. It’s gross to go around talking about how awesome you are all the time. Get over yourself.” Those thoughts go through my head as well. And I want you to consider that this is the way culture works. Insidiously, through the voices in our heads, the culture in Michigan holds us back from taking easy actions that have been proven to increase our odds of success.

Because when founders talk loudly about their accomplishments, some people think it’s tacky, sure. But other people champion it. They enjoy sharing other people’s tales of success. And those stories begin to define a company and a founder as they grow as people forget where they came from in the first place. Accomplishments, shared widely, build momentum and connectivity between interesting people doing interesting things, which translates into more opportunities and future success.

On the other hand, people simply putting their heads down and going to work in their holes leads to a lot of work getting done but almost none of the happy accidents that are the hallmark of successful ecosystems.

This isn’t rocket science. It’s just on the other side of our humility, which we hold dear (sometimes at our own expense).

We’re Hard Working

We bust our asses here. We’re blue collar, outwork-anyone-and-everyone folks, who understand nothing if not the value of wanting it more. Again, this is a virtue, which becomes a problem when we begin to deify hard work to the extent that it causes us to resent folks who have it easier.

I’ve heard so many elders (term used loosely) in our ecosystem talk about landing a pre-seed round from a local investor, saying something like, “well, it’s supposed to be hard. This is how investors learn who is talented and dedicated enough to invest in.” But instead of making it easier for founders and therefore building more winners, they frame a systemic issue (lack of available seed money, especially for underrepresented founders) as a vetting mechanism. If you’re not willing to suffer and struggle like I did, well, then you must not be up for building a company.

The thing is, the difficulty of getting seed funding (as an example) is not distributed equally. It’s much easier to get it done on the coasts than it is here. And the unicorns coming out of the coasts suggest that easier access to capital does not necessarily lead to less successful outcomes.

Culturally, we so value hard work that we resist making things easier for the next generation. But making things easier for the next generation is, in fact, the entire point of building a successful startup ecosystem, and the measurement by which its success is realized. Young entrepreneurs SHOUDN’T have to walk uphill both ways like you did back in the day. Our ecosystem, if we’re serious about building it, should support them BETTER than it did you. It should make the same processes EASIER.

When the virtue of hard work is taken to an extreme, it can lead people to focus on and optimize for the wrong things. What’s important in building a startup ecosystem is the size and frequency of great startup outcomes. Not how hard people have to work to get there.

Startups are hard enough. If we make finding seed funding easier, I promise there are 1,000 other things down the road that will build character in our founders.

The truth about Michigan

In spite of all this, the Michigan startup ecosystem is growing. In fact, it’s thriving. Detroit was ranked the #1 emerging startup ecosystem in the entire world by Startup Genome in 2022.

Only, I was at a startup event last week and literally everyone there was shocked by this news. I guarantee if someone from the Valley was responsible for promoting the Michigan ecosystem, no founder or funder in the state would have been able to miss news like that.

But in Michigan? We whisper our wins and wonder why nobody hears us.

Our success is amazing. But increasingly, it’s happening despite our culture rather than because of it.

So what can you do?

As any founder who’s worked with me to change their company culture can attest, culture does not shift from the top down. The solution to this problem isn’t asking government or the ESOs in the region to step up and provide more support. We need to change this culture from the inside out.

So if you’re a founder in Michigan, or an investor, or another person with a stake in the region’s success, here’s what I’d suggest:

Keep your humility. But find a way to talk about your work that feels authentic.

If you don’t feel comfortable (yet) talking about your accomplishments, talk about why you care so deeply about what you’re building. About what the world would look like once you’re successful. Begin to build your company/fund/org in public. You’ll be shocked at how people rally around you.

Or if that feels too weird, promote the hell out of the work of other companies in the ecosystem (notice how much easier this feels, and therein see the impact of culture again). If you have a fund, take the promotion of your companies seriously. Their accomplishments, but also their needs. And founders, do the same for your friends. If you know a founder or company doing awesome things, tell people about it. Not because it’ll be useful to you. But because it’ll be useful to them. They may have the same hangup about self promotion as you do. Friends don’t let friends do something awesome without the world knowing about it.

(And funny enough, promoting the hell out of others is probably the best way to have others promote the hell out of you. And around and around the ecosystem spins.)

Keep your work ethic. But embrace the idea that we’re building an ecosystem here and that the measurement of its success is that milestones that were hard for you get progressively easier for other entrepreneurs over time.

If founders get funded for wacky ideas that you think would never work, that means the ecosystem is working. Because some of those ideas will work.

If you’re an investor, an ESO, or someone else who cares about the ecosystem (not founders; the most impactful thing you can do for the ecosystem is make your company successful), make the journey smoother for founders, and don’t let yourself off the hook with the idea that one part or another of building a company “is supposed to be hard.” If you know a founder who needs help, give it to them. Introduce them to an investor or partner. Use your connections to get them in front of the people who will matter to them (especially if they don’t look like you). Don’t leave them to struggle the way you did. Make it easy for them.

And if this resonates, and you care about the Michigan ecosystem, one thing you can do immediately is share this email with your contacts.

Other founders, leaders, employees, investors, ESOs, government. Anyone with a stake in the state. Please help us do the hard work of shifting the way we relate to startups here, for all our benefits.

In the process, you may have to get over your instinct not to annoy people with emails about something important to you. Notice the culture inhibiting growth and change, and then send the email anyway. It’s great practice, and I promise you can do it.

—

I love living in Michigan. It’s home and always has been for my family and me, through one, two, three, and now four startups. As a native Michigander, I’m just as guilty of extreme hard working-humility as anyone, and I myself have said the words “well, it’s supposed to be hard.” So I’m not letting myself off the hook here by any means.

But you know what’s really supposed to be hard? Changing the culture of an entire ecosystem. Leveling ourselves up, such that we can keep our work ethic and our humility, and balance them with a healthy dose of self-promotion and paying it forward such that the youngsters have it easier than we did in every way.

Once we’ve done that hard ass work, we can go ahead and pretend to the rest of the country that it was NBD.

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