Building Communities Free Enterprise Staff  | March 9, 2017

This Detroit Drone Startup is Helping Lift the City’s Economy to New Heights

In economic terms, Detroit’s transition into the 21st century has been a bumpy road, with industrial upheaval and the recent global recession dealing a series of crippling blows to the Motor City. However, Detroit has bounced back in a big way in recent years, and the future is again looking bright in what was once regarded as America’s innovation capital.

In large part, that turnaround has been fueled by a new generation of technology-minded entrepreneurs – including innovators like Danny Ellis.

Ellis is one of many tech startup founders helping propel Detroit into the high-flying digital future — in his case quite literally. The aerospace engineer co-founded an automated drone inspection company, called SkySpecs, that launched out of a University of Michigan incubator in 2012.

“Our inspiration to found SkySpecs grew from our desire to develop automated aerial robots that could benefit people in challenging jobs and environments,” Ellis told Free Enterprise. “Our ‘ah-ha’ entrepreneurial moment was never a specific moment in time, but more of a trial-and-error experience through business competitions, incubators and accelerators, and testing ideas with customers.”

The pioneering startup — which has raised more than $4 million in funding between venture capital-led rounds, business competitions and government grants — purchases industrial drones and equips them with its proprietary navigation and inspection sensors and software. It then deploys the high-tech autonomous flyers to execute extraordinarily close-up inspections of industrial wind turbine blades. SkySpecs’ deft drones examine all three turbine blades in a single flight, remarkably in less than 15 minutes per inspection.

“It requires the technician on the ground to push a single button then stand back and watch,” Ellis said. “Faster inspections means a faster turnaround, from identifying a problem to fixing it. It means lower overall operations and maintenance costs. It means the job is safer than it has ever been before.”

When asked why he anchored his startup out of the Greater Detroit area, versus out of, say, Silicon Valley or another more stable (and more drone-friendly) U.S. tech hub, Ellis listed a host of reasons, several of them you might not automatically associate with the rebounding metropolis, now home to less than an estimated 700,000 people, its lowest number of residents since 1850.

“We see this region as the perfect place for a high-tech startup because of the ecosystem, abundance of talent, collaboration opportunities and access to capital,” he said. “The only way the ecosystem here is possible is because of the startups, investors, mentors and accelerators that have chosen to call this region home, and that all help each other succeed.”

Some of the standout tech startups joining SkySpecs in fueling Detroit’s entrepreneurial comeback include: Sentinl, Omer Kiyani’s “smart gun” venture that embeds fingerprint sensors on firearms triggers, enabling only authorized users to unlock their firearms; Duo Security, Dug Song’s Google-Ventures-backed two-factor authentication cybersecurity upstart that provides services to Facebook, Etsy, Toyota, Yelp and other large companies; and Grand Circus, a coding boot camp and coworking space that equips locals with the tech skills they need to compete in today’s increasingly digital jobs market.

The local trend of larger businesses helping smaller businesses succeed — as part of the area’s rising and exceptionally collaborative entrepreneurial culture — played a large role in what initially attracted Ellis to start up in Greater Detroit. And it’s also a driving factor in what’s keeping the CEO and his three fellow University of Michigan alum co-founders there for the long haul.

“Companies regularly open their doors to small startups that need a few desks or space when they aren’t big enough to afford their own space,” Ellis said. “Coworking spaces are opening, makerspaces are available for access to equipment, and universities have developed programs to give students designated space. Everyone helps each other find the right talent, capital and resources. Employees are very loyal to their companies in Michigan and turnover to other startups is very rare in comparison to the coasts.”

Ellis also cited the region’s low cost of living as another reason Detroit is attracting a new wave of lean tech startups like his. “The money that is raised here goes a lot further than the money raised by companies on the coasts. Space is extremely affordable, contract services are reasonable and salaries for employees are significantly lower than most major cities.”

To give back to the supportive ecosystem from which their ambitious startup took off, Ellis and his SkySpecs colleagues regularly mentor other nascent tech companies through various avenues. Among them are Techstars Mobility and the University of Michigan’s Desai accelerator, as well as the school’s renowned Center for Entrepreneurship.

“If startups in Detroit can avoid even just one of our mistakes, they will have a much better chance at success,” he said. “Along with mentoring through advice, we are very willing to share our network with other startups, if it’s going to be helpful to them. This could be for talent hiring, customer introductions, investor introductions or simply other mentors for advice.”