Can the Guy Who Lured LeBron Back to Cleveland Convince You to Live and Work in Detroit?

by Derek Loosvelt | October 01, 2014

  • My Vault

The new Forbes 400 was announced this week, and although the same guy (Bill Gates) ranked No. 1 for the 21st year in a row, there are a handful of notable new billionaires on the list.

The highest-ranking newbie, at No. 62, is WhatsApp co-founder Jan Koum. Earlier this year, Koum sold his mobile messaging business to Facebook for an extremely cool $19 billion. (Incidentally, Facebook CEO Mark Zuckerberg, though no longer the world's youngest billionaire, did grow his fortune by $15 billion this year, more than anyone else on the 400).

Another notable newcomer is Elizabeth Holmes, who, at 30 years of age, is the youngest woman of the 400. Ranked No. 110, Holmes, like Gates and Zuckerberg, is a college dropout. She quit Stanford to found Palo Alto-based Theranos, a company that's revolutionizing the world of blood testing. Holmes has a deal in place with Walgreen's, Henry Kissinger on her board, and is now worth about $4.5 billion.

It probably comes as no surprise that someone behind the ride-sharing service Uber cracked the list this year, too. Travis Kalanick, one of the firm's co-founders, came in at No. 190. At one point, Kalanick attended UCLA, but he also ditched school (he left to start a search engine, one of the companies he founded prior to starting Uber).

So much for it being cool to stay in school.

Other new billionaires are Rockstar Energy drink founder Russ Weiner at No. 249 (who knew so many people drink that stuff?) and David Walentas at No. 368. Walentas, for better or worse, is the man who turned the DUMBO neighborhood of Brooklyn into a de facto neighborhood of Manhattan with rents higher than those in Silicon Valley (at least in part thanks to luring tech darlings like Etsy to the hood).

As for the old standbys, Gates' pal Warren Buffett held steady at No. 2, Oracle co-founder Larry Ellison ranked No. 3 (Ellison, by the way, is also a college dropout, which leads me to believe that perhaps there should be Forbes 400 list for dropouts and a different one for degree holders), the uber-conservative Koch brothers took the No. 4 and 5 spots, a couple of the Wal-Mart Waltons ranked No. 6 and 7, former New York Mayor Michael Bloomberg took the No. 8 spot, and more of the Wal-Mart Waltons ranked No. 9 and 10.

Another old-timer on the list is Dan Gilbert, who was one of this year's five cover-people (Forbes released five different covers for its new issue: others that made the front were the aforementioned Holmes; Yahoo!'s Jerry Yang; former Microsoft CEO Steve Ballmer, and Leslie Wexner, the man behind Victoria's Secret). Gilbert, whom I've written about previously, is the founder and CEO of the online mortgage behemoth Quicken Loans. He's also the guy who brought LeBron James back to Cleveland (Gilbert owns the NBA's Cavaliers) and is single-handedly trying to revive the down-but-not-yet-out Detroit. And though Gilbert is up against a formidable opponent, he's putting up a good fight.

If you think luring LeBron James back to Cleveland from Miami, which Gilbert famously did earlier this year was an impressive piece of corporate headhunting, it is nothing compared with the h.r. challenge Gilbert faces every day. His empire rests on luring the kind of young, educated, technologically savvy employees that every employer in the nation craves. To get them he must compete with the golden glow of places like Palo Alto and Manhattan. Gilbert’s genius is to see Detroit—the most dilapidated, forlorn urban environment in North America—not as a hindrance but rather as a unique opportunity to build the kind of place that Millennial workers crave: authentic, inspiring, edgy and cheap. 
And it’s working. “We turned down 21,000 kids who raised their hands and said, ‘I want to work in downtown Detroit,’ ” says Gilbert, who got 22,000 résumés for 1,300 internships this summer. “They were from everywhere. Of all the metrics you’re looking at, that’s the one that makes me the most optimistic.”

As for why so many young people are sending resumes Gilbert's way, there are two main reasons. One is the fact that Quicken Loans has a Silicon Valley-like culture and a Silicon Valley-like headquarters. Former interns call the culture "cool" and "fun" and say, "People are walking around while they’re selling loans and throwing a football to each other." People can also frequent the firm's candy bar, get around the office on scooters, and shoot hoops on the company's in-house basketball court. As a result, Quicken Loans often shows up near, or at the top of most of the major annual "best companies to work for" lists.

Two is Detroit. Though hurting, and hurting badly, the city is perhaps the perfect alternative to New York and San Francisco for young people with great entrepreneurial spirit who want to be a part of rebuilding a city and don't want to struggle to eke out a meager living.

Quicken alone employs some 2,000 bankers and 1,100 IT workers from more than 30 countries. That means Gilbert has to compete in two of the most cutthroat talent markets in the world: IT and finance. While unemployment in the U.S. is 6.1%, it’s 3% in IT and 3.5% in finance. But even as this technological savvy has proved a huge competitive advantage, it is also, ironically, Gilbert’s Achilles’ heel. Systems that make it simple to apply for a loan online are, by their very nature, complex to engineer. Even midlevel coders command salaries in excess of $100,000 in many markets—double or triple that in headhunting hot zones like bubble-buoyed Silicon Valley. 

That’s where Detroit comes in handy.
Earning just $43,000 in the Motor City puts you on the same level for earning power as someone raking in $100,000 in New York and $142,000 in San Francisco, thanks largely to housing costs (the former is some 1,200% more expensive, the latter twice that number). Everything—from food to utilities to health care—costs far less in Detroit.

Of course, there are many things that aren't necessarily better in Detroit. Streetlights might not work. Electricity might all of a sudden cut off. And amenities are few and far between. But Quicken Loans, as well as other employers in the city, do offer "young workers a perk that rival employers can't equal"—the opportunity to be "urban pioneers, part of something exciting, important, and wondrous."

Convinced?

Follow me @VaultFinance.

Read More:
Gilbertville: A Billionaire's Drive To Rebuild The Motor City (Forbes)
Detroit: The City of Opportunity for the Class of 2014
From Intern to CEO: Mary Barra Named GM’s First Female Chief
Destination Detroit: Finance Jobs in the 313

Filed Under: Finance | Job Search

Tags: dan gilbert | detroit | forbes 400 | quicken loans | tech jobs

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