CEO Podcast: Governor Rick Snyder, SensCy

Paul Krutko: Welcome to Ann SPARK’s CEO podcast, Conversations on Economic Opportunity. My name’s Paul Krutko and I’m the president and CEO of Ann SPARK.

In celebration of Ann Arbor SPARK’s twentieth year, we’re going to have a series of podcast episodes with our past chairpersons of the SPARK Board of Directors. Each will share their unique perspectives on SPARK’s impact over the past two decades, proud moments during their tenure, and their thoughts on the future of the Ann Arbor region.

Today we welcome Governor Rick Snyder, who was the Governor of the State of Michigan from 2011 to 2018 and was SPARK’s first chair. What people may or may not know is that he was active and has been an active entrepreneur leader in technology. He founded Avalon Investments and Ardesta, two $100 million venture capital firms with notable successes like Health Media and Esperion. As chairman and president of Gateway, he led its expansion from 600 employees to 13,000. He’s been deeply involved in a variety of nonprofits, including roles before he was Governor, at the Michigan Economic Development Corporation, and as I already mentioned, serving as the chair of the Ann Ann SPARKs board from 2005 to 2009 and was, as I said earlier, the founding chair. So Governor, thank you for joining us today.

Gov. Rick Synder: Well, it’s great to be with you Paul, and congratulations on all of the great things you’ve done with SPARK since the days I’ve left. It’s really impressive and has been critically important, not only in Ann Arbor, but Michigan.

Paul: Well, thank you, Governor. And I think the other thing that was important in that story is the significant partnership we’ve had as an economic development organization with the State of Michigan and with MEDC, and under your tenure as governor, significant partnership in terms of the things we were able to do.

I kind of alluded to it, but what was your initial involvement with SPARK, and what motivated that involvement?

Gov. Snyder: Yeah, well, to put it in context, I was involved with SPARK before SPARK existed. Actually, it was about the creation of SPARK, which probably was about a two-year period, and some of the real genesis that goes back to that period when the University’s [of Michigan] Mary Sue Coleman created the Tech Transfer Advisory Board, and I was the first chair of that board, but we had great membership on that group.

The other group that sort of existed that was, well, it did exist, but it was active, was the IT zone. That was another Ann Arbor organization that the University was a key part of. Ken Nesbitt did fabulous work helping create that organization.

There was the Washington Development Council, so there were two or three of these entities sort of out there. And then it became clear that we needed one guiding organization not to be in command and control, but to help bring people together to be that clearinghouse place for activity. And so we talked about creating Ann Arbor SPARK before we even had a name for it, and we kicked off the process. To give you a context of my role in that is actually I wrote the business plan and I was the key fundraiser, so I was the guy. I went around with my tin cup asking people for money.

Paul: Which we still do to this day, Governor!

Gov. Snyder: Let’s see. I’m the guy that recruited Mike Finney. Mike and I had worked together at the MEDC when I was the first chair there. He was actually a senior person there. And so when we were creating SPARK, it became clear to me we wanted great leadership and Mike came to mind immediately. So those were my kind of activities – to help pull the organization to create it. And it wasn’t just me. We had a fabulous team. Again, I mentioned Mary Sue, Foz Ube, Marvin Perms, Ken Nesbitt from the University, other great people, your chairs, Tim Marshall, David Parsigian, Cynthia Wilbanks, were all great people. One person I should mention is Bob Guenzel. He was the County Administrator and Bob was a rock through this whole process of creating it.

Paul: Yeah, Bob was important to me because as you know, when you go into a new role in a new community, somebody needs to sort of be your guide, your scout, because things that the community had already tried to do and it didn’t work out, you needed some signing board, and Bob was very important to me when I came. He helped me integrate myself into the community.

I do want to also share, and we’ve talked about this in the conversations with your peers that were chairs, that the platform that you all created at the beginning, and as you described, the business plan, is essentially the platform that we still operate with to this day. It’s an entrepreneurial economic development organization that because we have the academic sector, the private sector, and government around the table, we’re able to be very successful and flexible and do things, and that was what you all set up at the very beginning. So that’s something that I compliment always because it creates the opportunity for us to always do new things and be what the community needs at any given time.

Do you have a particular, obviously the origin story is a particularly memorable experience, but is there anything else that sticks out in your mind as a memorable project or experience that SPARK was involved in during your time?

Gov. Snyder: Well, I’ll mention two or three, if that’s okay. I’ll do these quickly. But one of the first ones, it’s a classic story, is I was out doing fundraising and the first party that was solicited, even before the University— they were reviewing what they would contribute, was the Dow Foundation, who was being led by Ted Doan back in those days. And Ted has since passed, just an incredible guy. And I went to Dearborn to meet with him to ask him for money, and I said, “I’m asking for a three-year commitment of so many dollars per year,” and I made the pitch. And so he listened to my pitch and he goes, “I’ll get back with you.” A few days later I got a letter from him actually saying, “We’re going to contribute for the three-year period, but we’re going to double the amount you asked for because you didn’t ask for enough money. You don’t understand what it’s like to do a startup.” That was just incredible. That had great ramifications through the whole rest of the process. So I wanted to share that because that’s a story most people wouldn’t know.

Paul: Yeah, that’s a great one.

Gov. Snyder: A couple other ones I would share quickly, though, one was getting Mike on board. Mike Finney was one of the finest people I’ve known in my entire life, but I do want to give him credit. He coined a phrase that I think has been one of the fundamental values of SPARK, which is “open-source economic development.“

Paul: Absolutely.

Gov. Snyder: And we took it to the State of Michigan when he came there with me, but open source economic development is the right answer and the right way to do things and treat people and being inclusive versus exclusive. And that should be highlighted, noted, in my view about the history of this organization.

Paul: So thank you for bringing that up because when I was saying about you all setting the platform, yeah, the notion of open source economic development is even core to this day, in our strategic plan, is the way we approach things. And I always kind of articulate it that we’re ready to partner, lead, convene with anybody that has an agenda or a program that’s going to advance the economic future of the region. So yeah, thank you for bringing that up.

How do you assess our impact? You’ve been involved since the beginning and you had the opportunity to lead the entire State. As you look at SPARK’s impact, how do you assess that over the years?

Gov. Snyder: Well, SPARK has been a spark. I mean, literally, when we picked the name, that was the goal. It was to be a spark and to be a catalyst. And so I think in the context of not just Washtenaw County, but the entire state, if you looked at, we’re fortunate, we have the University of Michigan, one of the world’s greatest academic and research institutions in the world. But if you ever looked at creating organizations, it’s always called the Valley of Death where you have this gap in between research and academia and commercialization and creating businesses. And SPARK was the catalyst that helped marry up with the university to pull things through to make it work. And then SPARK’s gone well beyond that about doing traditional economic development. And when I say traditional, they’ve done it better than the traditional model. You guys have done a great job and you always go, what’s the proof in the pudding? Can you back up what I just said? And the classic case I would give you, Paul, was we faced a crisis a couple of years after we created the organization, which was when Pfizer closed down. They closed one of their global R&D campuses. We lost 2000 jobs that probably averaged better than $100,000 per job and another thousand contractor jobs, 3000 jobs. And because of SPARK, we had that rallying point. So I remember the meeting clearly where Mike called everyone together. We had the entire community there to talk about how we’re going to come back and we came back better and stronger than having Pfizer because of SPARK existing.

Paul: And I think one of the other early opportunities that was a proof point and led to what has happened since then, was you guys’ ability to, and this was in your tenure, I believe in Mike’s, the attraction to Google here to Ann Arbor, and then making a significant investment at that time in downtown, which was really important in the context of revitalizing downtown Ann Arbor. And then they’ve obviously moved forward with a much larger campus up near where Pfizer was.

 So I enjoy these conversations, particularly with you all that were in the chair position, but also who have been leaders in other organizations. What are key lessons that you’ve learned from your experience in being involved in this kind of initiative that you would think would be valuable for future leaders to know?

Gov. Snyder: Yeah, a couple. One, we mentioned already the open source economic development, being inclusive versus exclusive. Bring in as many people as you can. I mean, there’s no ownership of these ideas. Let’s share ’em. Let’s make each other better. We’re neighbors with one another. If it’s a surrounding community, any way we can help, let’s help one another.

The other one is to innovate. And I’ll give you a classic innovation that goes back to the original business plan when we got going. We added a talent element that was not part of traditional economic development, and it’s still not in most places, and we were fortunate to get Amy Cell to take that role, but it was amazing when we added talent and said, we’re going to go after that as a category, we took criticism from traditional economic development groups. We took criticism from the MEDC at the time. They told us we’re nuts. Why are you going to highlight the smart people you have? And we said, well, we think it’s just the opposite. And it proved it was an innovation whereby showing off the talent we had, people would come here and say, well, I could hire one or two people, but I see so many talented people. I want to hire a dozen, I want to hire 20. So if you looked at the early history of our organization, I think it accounted for more than a third of the companies coming to our community were coming solely because of that talent.

Paul: Right? Because a lot of people looked it back because I’ve been an economic development professional for more years than I want to talk about right now. But the notion is, well, it’s just all about incentives. It’s all about giving a tax relief or a grant. And the fact of the matter is, the main thing that drives a company anywhere is the talent pool that they can access. And so our ability to do that, and you’re right, the irony, but I think it happened once you went to Lansing, is now MEDC has a whole division that is devoted to talent, and we have the LEO organization that is all focused on talent. So there’s a bit of, sometimes you get to be a leader and lead others to good things.

What do you think about the region? I mean, I’m going to ask you a little later for you to share what you’re doing now, but what do you think, what’s your prognostication on the Ann Arbor region in the next 10 to 20 years?

Gov. Snyder: Well, I think it’s got a tremendously bright future. If you look at, I would give you the simple line: Ann Arbor is one of the most wonderful places in the world to live, work, play. So it’s the whole combination of business environment, quality of life, everything. So when people ask me, well, you live in Ann Arbor? And I say, yeah, I live in a town of a hundred thousand that has the culture and sports of a town of 2 million without the hassles of the big city.

But the other one is the energy, the entrepreneurial spirit, the startups that have taken place, all that make it an exciting environment professionally. Then at one point, we actually lived right downtown. So I did the famous index that you go on to say, what’s your walkability index? So it was a hundred.

So I think there’s a bright future. The only thing I would say is we need to be cautious and thoughtful not to get complacent nor content. So that would be the one kind of caveat, not a caveat, but really something to remember. Because when you have great success, sometimes you sort of get in that thing of just saying, we can go on cruise control, and you’ve done a great job, Paul, and your team, of continuing to innovate, push the horizon, look at new trends, and we need to keep that up rather than resting on our laurels. How Michigan ended up going downhill for all those decades is we were the most successful entrepreneurial place in the world. We built the modern corporation, but then we rode it into the ground, and we just need to make sure we don’t let that happen in either Ann Arbor or our state again.

Paul: Yeah, I think it’s also that, as you described too, having a broader view about what economic development is and what can impact economic progress. And the point I’m trying to make is there are models of other communities around the country who’ve got this kind of engine going, and then by not attending to the quality of the place, the housing market, transportation issues, they have missed their opportunity for their full potential. And I think we’ve got some opportunities to learn from that, and I think we are doing well in that regard, but it’s something we definitely have to pay attention to.

So hey, I guess as I’m closing this out, I want to give you an opportunity to talk about what you’ve been up to since leaving Lansing. I think you might even be spending some time at SPARK as a client, which is an interesting turnabout. So describe what you’re up to these days.

Gov. Snyder: Yeah, I’m in my fifth career,  I can’t hold down a job. So what do you do with an old governor? And when I looked at it, I was fortunate. I found some colleagues here in Ann Arbor, two that I worked with at the State and one that had been a serial entrepreneur in Ann Arbor forever. We formed SensCy, which is short for sensible cyber. So we’re doing cybersecurity for small and medium-sized organizations, and we’re a true startup. We’re doing very well for being about a year and a half old. We have clients and good revenue. But the one thing I need to thank SPARK for is SPARK was one of the reasons we’ve been that successful in getting there. So I like to joke to people, it’s like, this has been a unique relationship that I’ve had with SPARK in some ways. I feel like I was one of the parents of the organization.

Paul: You are!

Gov. Snyder: And now I’m one of the children, so I’ve regressed. And the classic part is when we first started talking about going is there’s a good intake process where you do an interview to see if you get accepted into SPARK’s program. And actually, I did the interview. People said, well, why are you doing that? Well, I got to, I’m a startup guy. Let’s do it. And I passed. So that made me feel very good that there’s a rigorous process to say, hopefully we’ve earned our stripes and can now help contribute to that ecosystem in Ann Arbor on an ongoing basis with an exciting company.

Paul: So is the product, the service that you’re describing, it’s a sensitivity to cybersecurity issues for smaller types of enterprises? Is that the notion of it?

Gov. Snyder: Yeah, absolutely. There is a huge cybersecurity industry, and it’s all geared towards medium and large organizations. They talk small, but they really don’t know how to help someone that’s unsophisticated. If you gave most cyber tools to an entrepreneur or the person running a small 20-, 30-, 50-, or 100-person organization, they wouldn’t know what to do with it. So we’re a wraparound service to be their virtual cybersecurity presence and be their trusted guide. And it’s something that’s dramatically needed, whether you’re for-profit, not-for-profit or government, and we really want to help people. So I view this as a way to keep giving back, Paul. It’s a for-profit company, but I still want to help people. And if you look at societal needs, cybersecurity is one of the most pressing and most concerning. And so I have a great group, David Behen, Dave Kelly, and Bhushan Kulkarni have been great partners, and we’re up to 14 people now and growing.

Paul: Fabulous. Well, I wish you all the good luck with that. And as always, all the tools we have at our disposal at SPARK are ready and able to help with that growth.

So as we close out, are there any last thoughts you have that you’d like to share about your journey at SPARK or just about all the things we’ve talked about so far?

Gov. Snyder: Well, it has just been a wonderful journey, and I’ve been fortunate in my life. I’ve had more than one unique experience. Gateway was unique. Going from $600 million to $6 billion in sales, being Governor of a state like Michigan and helping reinvent Michigan was an incredible one. But SPARK was also an incredible experience and still is because I perceive myself to be part of the SPARK family still.

So it was a special group that we created, but I tell people that the most important thing when you create something like SPARK is that it has endurance and longevity beyond your tenure. So that’s where I’m really proud of what you guys are doing, that better, smarter people take it over and keep going, and it’s not based on any one person or one personality. It’s the right thing to do and has its own life and livelihood. And so that’s where I’m so proud of where SPARK is today, and thank you for your work doing that.

Paul: Well, thank you for saying that. I think that I would circle back though on that thought that I truly believe that the way SPARK was founded in the principles and ethos that was established then, there are many reasons why you have longevity as an organization, but I think that’s one of them that if the organizational template is sound, it’ll resonate for years to come.

Then I think the other thing that is important is that you and others who were involved at the beginning, many are still involved. We chatted about that a little bit earlier, and they have continued to have the organizations that they happen to lead continue to be a part of it. And so that’s gratifying, I think, that we’ve had that commitment over the years to implement that strategy.

Well, Governor, I want to thank you for relentless positive action, I should say, and you’re relentless about that. And hard work has really been instrumental, as I just described, in setting the stage for the success we’ve had at SPARK, and we’re grateful for your role and we’re grateful that you’re now doing this fifth career that you’re saying, because that’s important. People that have entrepreneurial experience, starting new companies and continuing that cycle is really, really important. So thank you for your time today.

Gov. Snyder: Oh, it’s great to be with you. And yeah, that 20-year anniversary is very exciting.

Paul: It is. We’re really pleased to be able to showcase this, and we’re really looking forward to this year’s Annual Meeting, which I know you’re going to be a part of.

I want to thank our audience for listening and learning more about those leaders and organizations working hard to create the Ann Region’s economic future. These conversations are brought to you by Ann Arbor SPARK. For more information about Ann Arbor SPARK, you can find us on the web at annarborusa.org and also at Facebook, Instagram, and LinkedIn.