Saving Detroit: How visionary business leaders are transforming America’s cities and towns

The following is guest blog post from Dallas Summit speaker Andrew Davis.

What happens when you market the place in which you do business just as much, if not more, than the business you do? The answer is nothing short of amazing.

Three years ago, I set out to understand why some American towns and cities are booming while others are bust. I crisscrossed the nation visiting 50 cities, towns, and neighborhoods looking for an answer. I expected to uncover innovative economic development models that fostered growth. I imagined I might discover smart tax incentives or development zones that could be replicated to save America’s dying towns. But that’s not what I found.

My journey revealed something much more enlightening and even more accessible:

The difference between prosperity and economic struggle comes down to one simple thing: a visionary business leader or leaders relentlessly fostering an audacious claim.

Those visionaries make a claim larger than their business, even larger than their town. Tomorrow’s Fords and Hewlett-Packards are being built right now in towns you’ve never heard of by visionaries you’ve never met. These leaders are accelerating the growth of their businesses by marketing their town. They’re staking their claim. And they are transforming America, one town at a time.

Saving Detroit

No other town typifies the desperation of America’s reinvention better than the Motor City. In the summer of 2013, Detroit became the largest municipal bankruptcy in the history of the United States. A claim no one wants to stake.

By January of 2015, the unemployment rate in Detroit had fallen to 14.3% from its peak in 2010 of 28.4%. Detroit’s downfall and decay is easy to spot. Crumbling buildings and shuttered homes seem a constant reminder of the city’s prosperous past and its precipitous demise.

If any town needs to stake an audacious claim to resurrect its economy, it is Detroit. If any city needs a visionary to fill the vacuum, it is Detroit. If someone is going to save Detroit he or she is going to need to create unfathomable amounts of location-envy. Detroit needs a modern-day Henry Ford, and it looks like a college drop-out from Texas just might fit the bill.

In 1984, Tom Kartsotis started importing and retailing inexpensive watches from Hong Kong. Within a decade, Fossil, the name of the watch company he founded, grew into a $3.2 billion lifestyle brand selling everything from watches to handbags and clothing. In 2011, at the Plano, Texas offices of his private equity firm Bedrock Manufacturing, Tom launched a new venture by reviving an old brand: Shinola.

Shinola shoe polish was standard issue equipment for American soldiers in WWII. As legend has it, a disgruntled GI polished his commander’s boots with dog feces. The prank went unnoticed by his superior and the phrase “you don’t know shit from Shinola” was born. Shinola shut its doors in the 1960’s. Tom decided it was time the brand was resurrected and reinvented. The new Shinola would manufacture luxury watches. However, this time Tom wouldn’t import watches from China, he would make them right here in America. Shinola was an American brand with a rich heritage and history. To capitalize on any remaining brand equity the Shinola team had to find the perfect place to build their business.

“We knew we wanted to localize our brand,” said Shinola’s CEO Heath Carr in an interview. “When we researched cities known for manufacturing, and as the birthplace of modern manufacturing, Detroit was at the top of the list.”

So as Detroit’s financial crisis hit a crescendo, Shinola set up shop in the former General Motors Argonaut research building, also home to an arts college. In 2013, the first 2500 Shinola watches hit the market, and they sold out in a week at $550 each.[1] Eighteen months later, Shinola grossed $80 million, selling watches to clients as American as President Bill Clinton (a proud owner of twelve watches.)[2] In 2015, Shinola plans to sell 250,000 watches and a whole host of other Detroit made luxury-goods.

Why Detroit?

Indeed, why manufacture luxury goods in Detroit? Because the mere fact that they’re made in Detroit allows a luxury manufacturer to command a higher price. Rumor has it that before Shinola set up shop in Detroit, Tom Kartsotis commissioned a study to ensure the Detroit brand alone added value to the products he planned to produce.

The study asked participants “if they preferred pens made in China, the USA, or Detroit at price points of $5, $10 and $15 respectively.” The result? Given a choice between a pen made in China or the USA, participants consistently chose the Chinese pen. As soon as they added the option to buy the $15, Detroit-made pen to the mix, subjects immediately decided they would gladly pay the higher price point[3]. For any luxury good manufacturer the choice should be clear: a product made in Detroit is worth three times as much as one made in China. That should be reason enough to help grow and attract luxury manufacturers to the Luxury Good’s Manufacturing Capital of America.

If you want to save Detroit, all you have to do is start marketing it as the Luxury Goods Manufacturing Capital of America. All they need to do is stake their claim.

Former Shinola Chief Executive Steve Bock sums up the opportunity for any luxury manufacturer interested in moving to Detroit. “People keep telling us how much Shinola has done for Detroit, but it’s the absolute opposite: It’s what Detroit has done for Shinola.”

What if…
… you marketed the place in which you do business just as much, if not more, than the business you do?

Ask Yourself…
What if you stake your claim?

[3] Fossil founder digs the D, Daniel Duggan, Crain’s Detroit Business, May 27, 2012
[1] Time flies when it’s Shinola, as 2500 Detriot-made watches sell-out, Crain’s, March 19, 2013
[2] The luxury-goods company Shinola is capitalizing on Detroit, Karen Heller, The Washington Post, November 17, 2014

Andrew Davis’ 20-year career has taken him from local television to The Today Show. He’s worked for The Muppets in New York, written for Charles Kuralt and marketed for tiny start-ups as well as Fortune 500 brands. In 2001, Andrew Davis co-founded Tippingpoint Labs, where he changed the way publishers think and how brands market their products. His most recent book, Brandscaping: Unleashing the Power of Partnerships hit shelves in September, 2012.

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