Michigan app-makers moving up

The Real World News Independent True Unbiased Alternative Truthful Press Media Truth Sources Resources | Metro Detroit is becoming a magnet for the fast-growing mobile industry, sprouting small companies often started by college students who develop smartphone software. The start-ups are slowly creating jobs, but not in large numbers. They sometimes even have difficulty filling positions.

But the expanding concentration of young mobile applications or "apps" developers is helping Michigan fight its "brain drain" of college graduates who leave the state for better job prospects elsewhere.

The "dorm room entrepreneurs" hope to compete with technology hubs like Silicon Valley, New York City and Boston, said University of Michigan Professor Elliot Soloway, who teaches a class on building mobile applications or "apps" and co-founded his own education app company.

"Michigan's economy needs to be based on brainpower, not back power," Soloway said. "Ann Arbor could be the Silicon Valley of mobile."

The entrepreneurs, many in their 20s, are starting in business incubators that lower office costs and are attracted by a growing concentration of app builders. Wayne State University's TechTown has five to 10 start-ups developing mobile apps out of the 117 firms in the mentoring program, said Faris Alami, who works with mobile and other companies at the Detroit research and technology park. The number will jump to 25 to 30 next year, he expects.

Ann Arbor SPARK, an incubator that helps new companies find office space, loans and talent, also predicts a bright future for app builders. An estimated 21 of the 300 information technology companies it works with build apps, said Elizabeth Parkinson, its vice president of marketing and communications. A separate incubator, U-M's TechArb, has housed as many as three app firms at any one time.

"Students are creating more mobile apps than you would see out of any other generation or business sector," Parkinson said.

The University of Michigan's Center for Entrepreneurship reports that it gets asked for students who can build apps "at least once a day, if not twice," said Amy Klinke, assistant director of the small company initiative at the center, which also oversees TechArb.

"The mobile industry is a fast-growing industry, and there's a high demand for talent," Klinke said.

The industry is so new and loose-knit that a networking group of mobile industry professionals called Mobile Monday Michigan plans to start their own state industry organization next year — in part to help recruit workers to fill the growing number of app jobs here.

"We do need to diversify into other areas, and mobile is one of those industries," said Cynthia Grubbs, small business liaison for the Michigan Economic Development Corporation, a quasi-public group that tries to recruit businesses to the state.

Homegrown startups
Mobatech, a Birmingham company that develops personal finance applications, is an example of a homegrown app designer. Greg Schwartz founded Mobatech as a U-M student and moved to New York City after graduation in 2003 to take a job with Warner Music Group. But when the smartphone industry took off, following the 2007 launch of the iPhone, he came back to Michigan to build apps.

"We've been profitable almost since day one," Schwartz said.

"Michigan gets so much grief about losing work," he said, "but there's a little mobile momentum rooted right here, and it's bringing jobs to our local economy."

Mobatech's claim to fame is Mobile Checkbook, which consistently ranks among the 25 most popular paid apps in the BlackBerry store. Schwartz has four employees and said he wants to hire another three workers.

It's the same success story for Mobiata, which has grown with iPhone applications. Mobiata received a boost of publicity in June when Apple Computer Inc. CEO Steve Jobs praised the Ann Arbor company's iPad version of its popular iPhone and iPod Touch app that tracks airline flights.

The company began in November 2008 when former Apple software engineer Ben Kazez developed the FlightTrack app while living in Minnesota. But he needed to find a long-term location.

Ann Arbor stuck out, Kazez said. So in 2009 Mobiata was one of the first companies to take advantage of U-M's TechArb, where it got free office space for eight months and could recruit students who were being trained to build apps.

Mobiata has grown from a one-man operation to a 15-employee company that in 2009 topped $1 million in sales for the FlightTrack app.

"Every area needs a first company to encourage others to realize that this is possible," Kazez said. "People look at our company and say, 'Oh my gosh. They're in Ann Arbor? That's interesting.'"

Students attract firms
Both companies, like others, said they settled in Michigan to recruit students from schools like U-M and Wayne State.

Many students, like Schwartz whom U-M's Soloway mentored in college, form their own start-ups. Others go on to work for successful mobile companies.

Jason Bornhorst did both. As a student in Soloway's class in the spring of 2009, he and two friends developed DoGood, a simple app that encourages people to do a good deed each day, such as "call a relative" or "go to bed an hour early." That summer, they formed Mobil33t and brought the app to market. The free app has been downloaded about 100,000 times.

So far, the approach has worked well. Ask the six U-M students whom Mobiata has hired since moving to Ann Arbor, including Bornhorst.

"Many students talk about a lack of jobs, and it's depressing," Bornhorst said. "But coming out of U-M, let us be proof that there are tons of jobs available in the mobile industry."

The Detroit News