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What Drives The University Of Michigan’s Entrepreneurial Success

In preparation of speaking at the Michigan Tech Week (MTW) on October 12 and 13, I discovered so many connections to the University of Michigan (U-M) that I decided to dig into what powers U-M’s entrepreneurial success.

Seemingly everyone knows that the University of Michigan (U-M) is the world’s leading public research institution. What’s not as widely known is how Ann Arbor has a storied and growing entrepreneurship ecosystem that shows no signs of slowing down. From the pioneering machine vision, medical device, and digital manufacturing startups of the 1980s and 1990s to the groundbreaking pharmaceutical and medical device spinouts of the 2000s, and the cybersecurity leadership of the 2000s and 2010s into current-day, Ann Arbor and the broader U-M-affiliated entrepreneurial ecosystem continues to make a positive impact on the world.

While the University of Michigan has been formally educating students on entrepreneurship for decades, the region’s entrepreneurial ecosystem has notably ramped up in the last ten years and has effectively used its powerful alumni network to amplify its growth. I found that the university has more than 15 programs and centers in entrepreneurship and exceeds 30 entrepreneurial student organizations.

Among the most notable activity is emerging from the College of Engineering, Ross School of Business, and the College of Literature, Science, and the Arts – respectively the homes of the Center of Entrepreneurship, the Zell Lurie Institute, and optiMize. The U-M’s Center for Entrepreneurship (CFE) is one of the key engines driving that growth. The CFE is a unit of the College of Engineering and the Center has helped more than 30,000 researchers and students since 2008.

Perhaps the most distinctive feature of U-M’s entrepreneurship ecosystem is its large and engaged alumni network. With more than 500,000 members, ambitious students and researchers can always count on an alum (if not several) to work at the forefront of any given industry. Like many of the programs at the university, the CFE connects more than 3,000 students to this dynamic audience and grants its next-gen leaders the ability to learn directly from remotely-based founders like:

• Jeff Lawson, John Wolthuis, and Evan Cooke, Co-Founders of Twilio – A startup that pioneered the programmable communication tools behind much of our everyday calls, texts, and APIs. Notably, Twilio recently became a publicly-traded corporation.
• Kate Ryder, CEO and Founder of Maven Clinic – A unicorn-valued startup transforming digital healthcare.
• Henry Ward, CEO and Founder of Carta – A paradigm-changing unicorn specializing in capitalization table management and valuation software.
• Sara Spangelo, CEO and Co-Founder of Swarm Technologies – An industry-leading cube-sat producer that was acquired by SpaceX last year.

When CFE was founded by famed NASA administrator and former U-M professor Thomas Zurbuchan in 2008, its aim was to evangelize entrepreneurship in Ann Arbor and to help instill the entrepreneurial mindset into the regional culture. In the mid-2010s, that focus began to evolve. Alums Dug Song and Jon Oberheide were on the verge of having their Ann Arbor-based cybersecurity startup acquired. Just as the $2.4B acquisition of Duo Security gave Ann Arbor its first modern unicorn, the CFE was experiencing record demand for more entrepreneurship education and opportunities. The Center shifted its effort from evangelizing entrepreneurship to servicing the overwhelming student demand.

Here are a couple of stats to give a sense of the state of entrepreneurship at Michigan: U-M’s minor in Entrepreneurship is the second most popular minor across the entire campus (15% of undergraduates are enrolled in this minor) and one-third of the College of Engineering students take an entrepreneurship class.

With the region’s recent transformation into a top-tier entrepreneurial producer (ranked in 2019 as the nation’s #1 undergraduate entrepreneurship education by the Princeton Review), the CFE is able to send students down the street to learn from real-world founders and entrepreneurs. Ann Arbor’s entrepreneurship ecosystem has become quite robust and is home to venture-backed startups like:

• WorkIt Health – Raised $118 million to pioneer addiction recovery via telehealth; co-founded by alums Lisa McLaughlin and Robin McIntosh.
• Blumira – Series A cybersecurity startup that makes threat detection software and response best practices accessible to organizations of all sizes; co-founded by an alum of U-M, Steve Fuller, and with U-M and Duo Security alum Jim Simpson at the helm as CEO.
• SkySpecs – Novel clean-tech engineering series D startup that utilizes drones to inspect wind turbines for critical maintenance, hailing from U-M’s TechArb student venture accelerator and founded by former students Danny Ellis, Jonathan Bendes, Ryan Morton, Sam DeBruin, and Tom Brady.

Like CFE, the Zell Lurie Institute (ZLI) helps Wolverines who value action over talk. ZLI immerses students into entrepreneurial environments where they can create, lead, and shape innovative ventures. The institute helps them develop an entrepreneurial mindset and adapt quickly to an ever-changing business world.

Sam Zell co-founded the Zell Lurie Institute for Entrepreneurial Studies at the University of Michigan in 1999 with Ann Lurie, on behalf of her late husband, Robert H. Lurie, Zell’s business partner. Sam, a U-M alum, is the founder and chairman of Equity Group Investments, a private investment firm. Since the school’s inception in 1920, ZLI has become one of the best resourced, top-ranked University-based entrepreneurship and venture investing programs around the globe. With more than 7,200 students participating, the ZLI has helped to create over 2,000 U-M student startup ventures.

Focused on leading the development of the next generation of serial entrepreneurs and venture investors, ZLI supports many powerful programs including:

• The Michigan Business Challenge is a campus-wide, multi-round business plan competition where student teams have the opportunity to win cash prizes totaling over $100,000, gain feedback from leaders in the business community, and expand their business network. Students who advance in the competition have the opportunity to compete in intercollegiate competitions at universities around the nation – with fees and travel sponsored by the Zell Lurie Institute.
• Zell Entrepreneurs is an elite program designed to provide support to students who are dedicated to work on their businesses full-time upon graduation. Students selected to participate in this immersive, year-long program will receive support, mentorship, resources, and funding to get their ventures launch-ready. Once the program has been completed, students remain engaged through the global ZGen network – sister programs run simultaneously at Kellogg School of Management at Northwestern University in Chicago and Reichman University in Israel.
• The Desai Accelerator offers an intensive, seven-month program for tech-enabled startups that provides funding, mentorship, staff, and resources necessary for early-stage ventures to rapidly grow and build their business. Entrepreneurs receive up to $50,000 in investment in their business and over $500,000 in resources, including skilled student interns, cloud credits, and legal support.
• One of the five student-led venture funds at the University of Michigan, the Wolverine Venture Fund is the first student venture capital fund in the nation. Founded in 1997, the fund’s mission is to enrich student development by providing education through hands-on experience while achieving returns on capital.
• The Zell Founders Fund is a $10M student-led seed fund that evaluates and invests in extraordinary student entrepreneurs whose business venture needs a helping hand to move from idea to profitability. The Fund is designed for all University of Michigan students, either graduating or in their final year of their undergraduate or graduate program, who are seeking funding to support a startup they wish to continue after graduation.

Some incredible talent has emerged from ZLI such as Jordan Shamir founder of Yofi, Shaily Baranwall founder of Elevate K-12, and Julie Saltman founder of Standd. These emerging entrepreneurs are hopeful to join the ranks of other U-M alums like Larry Page, co-founder of Google, Andrew Friedman co-founder of SkinnyPop Popcorn, and Brad Keywell, founder of Uptake and co-founder of Groupon and Lightbank.

Notably, Brad was an early investor in Tempus, founded by his long-time business partner and fellow U-M alum, Eric Lefkofsky. Eric, also the CEO of Tempus, is enabling physicians to deliver personalized care for patients through the company’s interactive analytical and machine learning platform. They provide genomic sequencing services and analyze molecular and therapeutic data to empower physicians and researchers to make real-time, data-driven decisions. Their goal is for each patient to benefit from the treatment of others who came before them by providing healthcare professionals with tools that learn as more data is gathered.

Purpose first entrepreneurs who are making a positive impact on the world are in abundant supply at the University of Michigan. Many find the resources they need at optiMize, a social innovation incubator program housed in the College of Literature, Science and the Arts. The program supports students from all 19 schools and colleges, ranging from undergraduates through Ph.D., along with students from UM-Flint, UM-Dearborn, and community colleges across the state of Michigan.

Additionally, optiMize focuses heavily on self-directed projects, encouraging students to ask themselves, “why not me?” when thinking about solutions to some of the world’s most pressing challenges. The program has incubated over 2,200 student projects over the past 10 years and has been able to provide over $2 million in funding to students continuing their endeavors; ventures like FoodFinder, which is powering a “different way” of fighting hunger; Go Nanas, the #1 banana bread mix in the country; Innovending, which is tackling racial inequity on college campuses one vending machine at a time; and Paani whose work has been on an international scale to build wells in communities in Pakistan to provide better access to clean water. Other notable social impact startups include Warmilu, SkySpecs, Blue Prints for Pangea, Oshki, the Michigan Urban Farming Initiative, Oldtime Surfcraft, Comme Homme, and TUFF.

Unsurprisingly, Michigan is at the forefront of equipping these entrepreneurs with the intelligence yielded from data to transform their businesses and the world. The Michigan Institute for Data Science (MIDAS) is a campus-wide organization that enables scientific breakthroughs and positive societal impact through the transformative use of data science and Artificial Intelligence (AI) in a wide range of research disciplines.

MIDAS is a convening place for innovative research ideas and researchers. The MIDAS community includes more than 460 affiliate faculty members from all schools and colleges at U-M Ann Arbor, U-M Dearborn and U-M Flint campuses, making MIDAS one of the largest and most scientifically diverse data science institutes at a U.S. university. MIDAS enables faculty members across disciplines to develop groundbreaking research ideas, create research resources, provide technical training for researchers, and connect faculty researchers with students and with private and public sector collaborators.

The institute advocates for responsible and reproducible data science and AI research by developing resources and building momentum on campus and beyond. Its annual Future Leaders Summit convenes outstanding students and postdocs from around the country to promote responsible data science and AI and to foster the next generation of research leaders. Its Data for Social Good effort uses cutting-edge research to support the data strategy of government and communities, including the City of Detroit, the Native American Tribal Nations in Michigan, and the US Environmental Protection Agency. The Center for Data-Driven Drug Development and Treatment Assessment is their latest example.

The University of Michigan’s commitment to entrepreneurial success spills over to benefit Ann Arbor and the rest of Michigan. Look no further than the entrepreneurs hunkered down at Cahoots, Ann Arbors’ premier tech hub or the companies that make up the robust tech community in Ann Arbor.

Evidence of this tech ecosystem became more clear to me as I worked with the folks who were at the center of putting on the inaugural Michigan Tech Week. As I prepared for speaking at the event, I learned that many of the organizers were U-M alumni such as Trista Van Tine from Michigan Founders Fund, Ted Velie from Michigan House, Heidi Craun from Intermitten and Blumira, Alison Todak from Plymouth Growth, Diana Callaghan from Endeavor Great Lakes, and Monica Wheat from Techstars Detroit. Find out more about those partners and sponsors supporting their efforts. (Disclosure: my firm HPA is a sponsor.)

These all-stars are putting on two full days of premier events to celebrate Michigan’s high-growth tech ecosystem. Their goals for the conference are big, which is not surprising coming from U-M alumni. They want to 1) drive best-in-class resources to support Michigan-based entrepreneurs, 2) build a stronger network for founders and investors, 3) ensure the Michigan ecosystem is equitable, inclusive, and more reflective of the state demographics, and 4) help Michigan policymakers with data and insights to allocate resources.

These aspiring goals are in line with what’s been catalyzed at the University of Michigan in developing the next generation of startup founders and entrepreneurial-minded innovators. Together, I am confident Michigan entrepreneurs will continue to make a positive impact on the world.