A VC in Vacationland

English: City seal of Detroit, Michigan. (Photo credit: Wikipedia)

As fireworks bloom in the night sky over Comerica, we’re idling in a Detroit Bus Company bus across the street, in front of the Fox Theatre, and Lanzon is driving. A Detroit Department of Transportation bus has jumped the curb a half block in front of us, and an ambulance puts on its flashers so the bus can back up without getting rammed by impatient drivers. “Oh my God, are you kidding me?” Lanzon says with exasperation. Andy Didorosi, the 25-year-old founder of the Detroit Bus Company and Lanzon’s patient co-pilot, passenger ambassador, and all-around transit cheerleader, turns to me and says with pride, “Gail drives this thing like a Corvette.”

“This thing” would be a 1995 Ford Bluebird bus known as Bettis, which for Pittsburgh Steelers fans is self-explanatory. (It’s named after Detroit native Jerome Bettis, a running back better known by his nickname: The Bus.) It runs on biodiesel and sports a spray-painted mural by a local artist on the side. Inside, there’s a mounted iPad playing tunes off Spotify. Bettis is one of two Detroit Bus Company rigs out on the road this busy Labor Day weekend, which also counts music festivals in Hamtramck and Royal Oak among its offerings.

This is also the first night of the Detroit Bus Company’s new on-demand method of delivery. “Routes are super old hat,” Didorosi says. “We switched to on-demand—we were taking data all along on where people were riding. It opened the range within the city and every time the bus is parked, we save money.”

Instead of one bus traveling all night between downtown and the immediate suburbs to the north, Royal Oak and Ferndale, and another bus doing a downtown “party loop,” riders can now call for a ride from anywhere in a “green zone” that encompasses the neighborhoods of Woodbridge, Corktown, Midtown, downtown, Eastern Market, and Lafayette Park/East Jefferson. For $5 per person, cash or credit, they can get a ride to anywhere within this green zone or to suburban drop-off points. The buses run on the weekends from 6:00 p.m. to 2:30 a.m.

Didorosi describes his self-funded startup as “the bus company built on the back of social media.” Though it’s only been in operation since June, it already has 2,746 likes on Facebook and 472 followers on Twitter. His clientele comes to him almost entirely via word-of-mouth, and he has already purchased three more buses—one of which may be running as soon as next weekend—in the hopes of expanding to more suburbs like Birmingham and running buses during the day.

Didorosi created the Detroit Bus Company as a reaction to Detroit’s well-known public transportation issues. In short: The buses are always late or sometimes don’t run at all. And the suburbs have their own system entirely, which makes getting outside the city a hassle. Didorosi’s operation is almost the opposite of the Detroit People Mover, a $210 million system opened in in 1987 that circles the downtown area in an endless 3-mile loop and attracts only a tenth of its projected ridership.

Didorosi, who is in favor of regional transit authorities that combine private ingenuity and dollars with the public domain, points to the game Sim City as a good lesson for city planners everywhere. “If you cut out transportation funding, your city immediately turns to shit,” he says. “Transit is the secret linchpin—cities live and die by public transportation.”

Though Detroit’s city bus system is trying to modernize, and in fact just launched a new transit app designed by Code for America at the end of August, funding shortfalls have meant that progress is slow. As Didorosi puts it: “What good is an app telling you when the bus is coming if the bus is three hours late? Technology can only support a good bus system, not create it.”

The Detroit Bus Company app, launching any day now, will allow riders to summon a bus using their smart phones. Didorosi, who currently serves as the dispatcher, says he hopes the app puts him out of a job. The Detroit Bus Company is also working with another local startup, Flocktag, to create a frequent rider loyalty program that he hopes to have up and running at the end of the month.

New tech aside, what Didorosi enjoys most is exposing new riders to the city. He plans to start hosting all-inclusive dinners, where riders will enjoy food and drink while taking “guided expeditions” of Detroit. He wants his riders to use the Detroit Bus Company to get comfortable with downtown, which he calls “the DMZ” of Detroit, and eventually want to venture further and further outside the green zone. “I’m so excited to bring people downtown—it’s a great, non-committal way for people to see the city.”

Lanz0n, a Roseville, MI native, actually typifies the kind of rider Didorosi hopes to attract. “I’ve seen more of Detroit on this job than I have my whole 43 years of living here,” she explains. “It’s actually a beautiful place. It’s a whole new world that I never knew existed.”

The Detroit Bus Company isn’t Didorosi’s first entrepreneurial gig. As a teenager, he started a business buying distressed vehicles and fixing them in a shop at Detroit City Airport. He later went on to found the Paper Street incubator in Ferndale, which he has since sold. He also spent a year writing for Jalopnik, the Gawker Media site devoted to automotive news. (Didorosi still freelances forPopular Mechanics, Hell for Leather, and other niche publications as a way to raise capital for the Detroit Bus Company.)

Didorosi represents the new brand of Detroit entrepreneur frustrated with a city government that doesn’t always seem eager to partner with them, and sometimes even seems to throw up bureaucratic roadblocks just because it can. What he sees himself doing with the Detroit Bus Company most of all, perhaps, is disrupting an old model of doing things that seems to hold progress at bay and frustrate residents and business owners alike.

“The city should be a lubricant instead of a hindrance,” Didorosi adds. “There are real structural issues behind why people don’t do businesses with the city. It’s just upside down. There’s demand, there’s people, but the last thing in the way is the city itself.”

As Lanzon swings the bus back around and heads toward the suburbs to drop off the passengers who hopped on downtown, Didorosi chats with the riders and passes them his phone so they can see pictures of an accident that occurred a few weeks ago when a drunk driver slammed into one of the buses. (Thankfully, nobody was hurt, and Didorosi says the bus was built so solidly that riders barely felt it.) 

As Bettis pulls up to the drop-off point in Royal Oak, Didorosi says that he plans to grow the company by continuing to court his prime demographic: Digitally aware early adopters who are interested in Detroit."

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A photochrom postcard published by the Detroit Photographic Company. (Photo credit: Wikipedia)

According to Xconomy,  Jenile Brooks was born in raised in Detroit, and she always knew that one day she’d be back.
Brooks headed East after high school and eventually settled in New York City, where she was working as a film producer. It was in that capacity that she finally returned to the Motor City last year. She was in town working on a documentary about Detroit’s “food desert.”

Though Detroit’s lack-of-grocery-stores situation isn’t quite as dire as some national media outlets have claimed, it is true that there are too many neighborhoods where the only groceries within walking distance are found at a liquor store. “While working on the film, I learned there are less than three grocery stores per 10,000 people in Detroit,” Brooks adds.
That got her thinking about the larger question of food access. She was a customer of Fresh Direct, an online grocer that services metro New York City. The Fresh Direct model works, she says, because New York is densely populated with people who have relatively high incomes and no cars. How would that model work, she wondered, in much less dense and less affluent Detroit?
“Fresh Direct wouldn’t consider Detroit because of the perceived buying power of Detroiters and what it would take to maintain a store,” Brooks explains. “By operating online, we can take a minimal capital investment to prove that it works and then expand it throughout the city.”

In January, Brooks plans to launch Harvest Express in five Detroit ZIP codes encompassing the neighborhoods of Midtown, Downtown, Woodbridge, Corktown, and Indian Village. Online groceries are a somewhat risky proposition in a city known for high rates of poverty and relatively low rates of home Internet service, but Brooks already has the support of two partners, one of whom is Jared Saverino, whose family owned Phil’s Market for generations. She’s also lined up some seed money from the Enterprising Health accelerator.

 “Getting people to change behaviors is always a tough sell,” Brooks notes. “But our research has shown that a lot of people are interested, and they’re already shopping online.”
Brooks plans to use the same “just-in-time” processing model as Fresh Direct, meaning Harvest Express will keep dry goods stocked in the company’s warehouse on the North End and will coordinate perishables with wholesalers, many located at Eastern Market, on a daily basis depending on what customers have ordered. Brooks says as long as a customer orders by midnight, they’ll get their groceries delivered the next day. She compares Harvest Express’s prices with those at Trader Joe’s, and plans charge a $4 delivery fee per order or an annual membership fee of $99, which would cover delivery charges for a year.

Brooks wants to highlight local farms and food manufacturers, so Harvest Express will offer detailed information to customers about who’s producing the food it carries. “The goal is to source locally as much as possible,” she says. “Those kinds of partnerships are perfect for promoting on the site. You’ll always have a name, a face, and a backstory.” To help personalize the experience, the Harvest Express website will also be able to suggest products based on a customer’s dietary restrictions, save shopping lists, and remind regular shoppers if they’ve forgotten an item that they usually order.
Brooks says Harvest Express is putting the funding from Enterprising Health, a business accelerator for startups with solutions to improve health in Detroit and the surrounding communities, toward launching the beta test in January.

New York-based Zipments, an online service platform for same-day delivery, has received an undisclosed amount of funding from the New York-based  venture capital firm FirstMark Capital, the New York City Economic Development Council, and the Windquest Group of Grand Rapids, Mich.

Here is the press release.

Our society keeps wanting everything instanly, resulting in solid long term prospects for same day delivery models.