
After Years, Michigan’s Attempts To Build A Startup Ecosystem Bear Fruit - jasonlmk
http://techcrunch.com/2014/05/05/after-years-michigans-attempts-to-build-a-startup-ecosystem-bear-fruit/
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mikeyouse
There is a ton of value waiting to be created in Michigan, especially centered
around the auto industry. The margins aren't anywhere near as high as they are
in software companies, but would you believe that "List 1" and "List 2" below
have about the same combined annual revenues (~$375B).

1\. GM, Ford, Chrysler

2\. Apple, Google, Microsoft, Oracle, Salesforce, Yahoo!, Facebook, Adobe,
Netflix, Tesla, Twitter, Pandora

There is a lot of value in the supply chain that could be captured by clever
software or manufacturing techniques.

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lifeisstillgood
Really?

My (UK based, vaguely remembered) understanding is at least two of those
companies in list 1 went bust in the last five years, and that over the past
twenty or more years an _awful_ lot of effort has been spent squeezing
inefficiencies out of the supply chain (the auto industry is the poster boy
for JIT manufacturing, for pushing debt fueled capital expenditure into your
own supply chain etc)

Manufacturing scares me as the incumbent software providers (SAP etc) are huge
beasts, well embedded and actually good at writing software.

My preference would be to find industries where the main software provider was
actually Excel, or just pen and paper.

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mikeyouse
The good thing about trying to size a market with only a few major players is
that all of the expenses are obvious. Auto makers typically have COGS nearing
80% of their revenue, so for that $375B in annual sales, you'd see $300B in
annual COGS. Some of that is in-house but much of it is spent on suppliers and
the rest of the value chain.

It's obviously easier to make a MVP of a chat app than to design a ML painting
algorithm to save 1% in paint every year (or whatever the specifics may be),
but there are definitely opportunities there if you're looking for a 'big
market'.

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lifeisstillgood
I _think_ that's confirming my intuition. Getting that innovative paint
algorithm to the point it can simply plug and play with current robo-paint-arm
in 8/10 factories will involve:

\- developing the algo (ie knowing the domain intimately) \- verifying the
algo against the four major robo-paint-arms in production (probably more) \-
meeting the safety testing criteria (expensive) \- demonstrating the savings
in paint vs cost of other expenses (ie we save 1% paint but the stop start
nature clogs up 10% more often which is a manual fix) \- sales and marketing

wow, I just see problems don't I ?

But compare that to "If you tie this box to every cow, you will be able to
tell which ones are active, which lethargic, which have eaten grass from the
top of the field and can then sell their milk for more"

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g0atbutt
I'm in West Michigan. If anyone is in the area, I'd be happy to grab a drink.
Contact info in profile.

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therobot24
my brother is working at a startup that was recently acquired by Ford
([http://www.wired.com/2013/09/ford-aquires-
livio/](http://www.wired.com/2013/09/ford-aquires-livio/)) - there are lots of
opportunities with auto companies (especially in software).

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chrisjlee84
Great to see finally some good news for Michigan.

