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IMPACT 2023

Dug Song
November 03, 2023

IMPACT 2023

Keynote for A2Y Chamber IMPACT 2023

Dug Song

November 03, 2023
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  1. IMPACT 2023 
    Dug Song 

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  2. Apr 2021
    $3.8B
    Apr 2021
    $6B
    Feb 2023
    $1.2B
    Sept 2018
    $2.4B
    Nov 2020
    $1.4B
    Jan 2021
    $6B

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  3. Change is Inevitable.
    Growth is a Choice.

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  4. Execution != Innovation

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  5. From Industrial to Digital Revolution
    Rank Metropolitan Statistical Area State Avg Earnings Metropolitan Statistical Area State Avg Earnings
    1 Bridgeport-Stamford-Norwalk CT $54,194 Bridgeport-Stamford-Norwalk CT $83,470
    2 Flint MI $53,463 San Jose-Sunnyvale-Santa Clara CA $81,541
    3 Detroit-Warren-Dearborn MI $53,290 San Francisco-Oakland-Hayward CA $76,697
    4 Midland MI $51,043 Washington-Arlington-Alexandria DC-VA $69,890
    5 Washington-Arlington-Alexandria DC-VA $50,093 Seattle-Tacoma-Bellevue WA $65,580
    6 Saginaw MI $49,469 Boston-Cambridge-Newton MA $65,131
    7 Midland TX $49,319 Trenton NJ $64,939
    8 Casper WY $49,310 New York-Newark-Jersey City NY-NJ $64,055
    9 Monroe MI $49,107 Boulder CO $61,161
    10 Bremerton-Silverdale WA $48,987 Baltimore-Columbia-Towson MD $60,418
    Source: Jonathan Gruber & Simon Johnson, Jump-Starting America
    1980 2016

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  6. New Businesses Create All Net New Jobs
    Net Job Creation Rate (%)

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  7. The Jobs We Need To Grow
    Small Main St
    Businesses
    Medium Main St
    Businesses
    Early Tech
    Startups
    Growth &
    Scale Startups
    Large
    Enterprises
    Typical Employees < 10 10 – 50 3 – 50 50 – 1000 1000
    Typical Wages Annual:
    $10k – 30k
    $8 – $15 per hour,
    often only part-time
    Annual:
    $10k – $75k
    Annual:
    $40k – $250k+
    + equity ownership
    Annual:
    $40k – $500k+
    + equity ownership
    Annual:
    $25k – $1m+
    Widely varied,
    based on sector
    Wage Mobility Extremely limited Limited Strong Generally yes
    Depends on type
    of company
    Often yes
    Depends on type
    of company
    Employee Benefits Rarely Sometimes Generally yes Generally yes Generally yes
    Source: Upsurge Baltimore 2022

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  8. 2013: Development, Affordability

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  9. 2016: Transit

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  10. Transit
    Walkable retail & entertainment
    Public safety
    Cultural amenities
    Housing options
    Public spaces & infrastructure
    2016: Austin

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  11. Young & Educated Hierarchy of Needs
    15%
    PRIORITY
    50%
    Politics
    Social Policies,
    Taxes
    People & Place
    Walkability, Affordability, Transit,
    Weather, Amenities, Safety,
    Schools (property values)
    Economy
    Career Opportunities In
    Growth Industries
    MASLOW SAYS
    Adulting
    Chill Vibes
    Get Paid
    35%

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  12. Growth →
    Young People →
    Careers, not Jobs →
    Growth Industries →
    Startups →
    Founders & Funders →
    Culture of Innovation

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  13. Where We Shine
    Affinity & Community
    • 50% of Michigan college graduates
    who moved away indicated they might
    return within five years
    • 120+ founders and VCs have pledged
    1% of personal or company equity or
    investment carry to Michigan Founders
    Fund for grantmaking / placemaking
    R&D
    • Business R&D spend: 7th
    • Patents produced: 7th
    • Academic R&D spend: UMich ranked 3rd
    Growth & Opportunity
    • Michigan is the fastest growing state for VC
    investment (886% 2016-2020)
    • Ann Arbor was ranked at the top of MSAs for
    women-founded VC-backed startups, a top 25
    innovative US city, and a top new tech hub
    • Greater Detroit is #1 global emerging startup
    ecosystem and has seen 37% growth in high-tech
    employment since 2010
    • Growing 4% faster than national average for
    median wage - ranked 3rd fastest
    Sources: Crunchbase, Center for American Entrepreneurship, Bloomberg, Entrypoint Detroit Entrepreneurial Ecosystem Report 2021, NSF, NCES FY20 data BCG Analysis, NCES FY21 data, Occupational
    Employment and Wage Statistics (OEWS) by US Bureau of Labor statistics (BLS), accessed 04/24/2023, BCG Analysis, Survey of more than 6,600 2017 graduates conducted by The Office for Survey
    Research at Michigan State University’s Institute for Public Policy and Social Research

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  14. UMich #8 in VC-Backed Founders (undergraduate)
    PitchBook Universities: Top 100 colleges ranked by startup founders: https://pitchbook.com/news/articles/pitchbook-university-rankings

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  15. Where We Struggle
    Startup Density
    • Low founder density: 35th
    • # of startups per 1,000
    businesses: 33rd
    • # of VC-backed companies
    per million residents: 34th
    Capital
    • Less than 1% of all US VC
    investment
    • Forbes best states to start a
    business in 2023: 47th
    • Michigan startups take 2 years
    longer on average to raise first
    $500k than coastal startups
    • Median individual angel
    investment in 2020 was $30k
    Talent
    • % of workforce in tech roles: 30th
    • Residents’ education levels: 27th
    • Post-secondary attainment is 41.7%
    (43.5% White, 26.2% Black)
    • Negative net migration
    • Lowest national % of non-homegrown
    residents ages 25-34; second-lowest
    ages 35-44
    • % of adults who were born elsewhere,
    either in another state or another
    country: 49th
    Equity
    • Black population 14%; Startups
    with at least one black founder: 4.5%
    • 17% of VCs are persons of color,
    compared to 24% nationally
    • 17% of VCs are women, compared
    to 21% nationally
    Sources: Crunchbase; Expert interviews; BCG Analysis, Kauffman; WalletHub, IRS.gov; BCG Analysis, Occupational Employment and Wage Statistics (OEWS) by US Bureau of Labor statistics (BLS), LEO, US
    Census Bureau 2016 data; Bridge Michigan Analysis, Forbes, "Michigan's Great Inflection" report MICHauto, NBER Working Paper - Funding Black High-Growth Startups, 2021 MVCA Report

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  16. Innovation as US Industrial Policy
    SSBCI 2.0: $10B via American Rescue Plan -
    Michigan allocated $236.9m, $75m going to
    Michigan Strategic Fund (toward VC, etc.)
    NSF Engines: $6.5B over 5 years:
    Up to $160m per hub to fund 10 years of R&D,
    translation, workforce development
    CHIPS & Science Act: $280B to bolster
    semiconductor capacity, catalyze R&D, create
    regional high-tech hubs and grow a more
    inclusive STEM workforce
    Inflation Reduction Act: $370B to fund clean
    energy and lower carbon emissions
    Bipartisan Infrastructure Law: $70B of
    clean-energy tech and demonstration projects
    Developing & retaining
    high-growth founders?
    Support risk taking?
    Placemaking?
    Affordability? Transit?
    Build Back Better Regional Challenge:
    $1B via American Rescue Plan -
    Michigan awarded $52m for Global
    Epicenter of Mobility (GEM)

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  17. Equitable Tech Economic Development
    Access to
    Opportunity
    A level playing field that
    reduces barriers
    Access to
    Knowledge
    Real-world experience for
    workforce & founders
    Access to
    Funding
    A holistic, accessible
    approach to capital
    Access to
    Support
    The ability for all to
    take risks & succeed
    America’s New Business Plan: https://www.startusupnow.org/anbp

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  18. Startup Culture is Verbs, Not Nouns
    Advocate
    Partner with business, education, and policymakers to ensure tech & innovation benefits all
    Promote
    Celebrate and amplify startup success; broadcast our startup culture
    Connect
    Social infrastructure for founder-led ecosystem development, learning, inclusion
    Founders & Startups
    Engaging, attracting, supporting
    startups
    Capital
    Grow local capital and attract outside
    capital into the ecosystem
    Talent
    Attract, retain, and develop new talent
    and pathways

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  19. Bottom-Up: Startup Communities, vs Programs
    ● Entrepreneurs must lead the startup community
    ● The leaders must have a long-term commitment
    ● The startup community must be inclusive for
    anyone to participate
    ● The community must continuously engage the
    entire entrepreneurial stack
    Entrepreneurs-
    Must Lead The-
    Startup Community-

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  20. Culture, Community, Connection
    Trista Van Tine
    Exec Director
    Sarah Craft
    Head of Community
    Pete Martin
    Head of Connection

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  21. Mission
    Grow the presence of high-growth ventures and advance civic leadership in Michigan’s
    entrepreneurial ecosystem by
    1. Creating an inclusive, diverse, and active founder-to-founder support network to
    help high-growth company leaders succeed in their ventures
    2. Driving a purposeful, founders-for-founders culture
    3. Providing founders with a simple platform for philanthropic giving, and
    opportunities to become community leaders as well as business leaders

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  22. Vision
    Michigan is the most successful, inclusive, community-minded
    startup ecosystem in the country, reflective of the state demographics

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  23. 110+ companies
    $180m raised
    15+ industry verticals

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  24. Semiconductor Talent &
    Automotive Research
    (STAR) Center: Ann Arbor

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  25. UM Robotics, AI Lab, Innovation Partnerships

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  26. Michigan Central: Detroit

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  27. Culture: Cahoots & Bamboo (now in A2!)

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  28. Culture: #givefirst

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  29. Silicon Valley works because there is such a high
    density of people working on startups and they
    are inclined to help each other…
    One of the biggest misconceptions about us is that
    you need to have pre-existing connections to get
    value from the network.
    Remarkably, you don’t. Silicon Valley is a community
    of outsiders that have come together.
    If you build something good, people will help you.
    – Sam Altman (YCombinator)
    Culture Matters

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  30. Recommended Reading

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