Startup Lowdown: Detroit Labs

We bring it back to our hometown of Detroit this week to interview Nathan Hughes, co-founder of Detroit Labs, one of the hottest up-and-coming startups in the Midwest. Detroit Labs specializes in creating web, iOS, and Android applications for clients ranging from local startups to Fortune 500 clients. The company also builds their own applications by allowing employees to spend 20% of their time on personal projects. Since its launch in 2011, Detroit Labs has steadily and profitably grown, gaining accolades along the way. In this interview, Nathan shares about Detroit Labs, its underlying values, and team.

StartupLowdown: Nathan, I first just want to say thank you for your time. Can you tell our readers what Detroit Labs does and some of your biggest accomplishments?

Nathan: We build native mobile apps for iOS, Android, and we’re working right now on a Windows8 mobile project.Personally I feel our biggest accomplishments in our first 18 months have to do with the growth and stability of our business. Almost out of the gate winning projects that allowed us to pay our bills ourselves, rather than dipping into credit or funding sources. We landed two huge projects very early with Dominos and Commonwealth/Chevy which were giant in our ability to grow and land even more projects. We’ve gone from 0 to 30 employees in less than two years (I think we’ve earned the title of fastest growing startup in Detroit).

Almost as important, we’ve achieved that growth while running a grand meritocracy and self organizing team. We have no managers, or PTO policies, or top down command and control. Everyone has a voice and contributes to our decision making. Leading an organization with that kind of makeup can be challenging – there’s no rulebooks to follow or best practices to rely on. You really have to trust your team and yourself that with everyone pushing in the right direction, the right things will happen. So far, it’s been a victory.

StartupLodown: While ultimately a service company, Detroit Labs allows employees to spend one day a week working on their own projects. Could you give us your take on any opportunities or challenges that this model presents?

Nathan: We have both Friday Hack Days and Lab Time.

In terms of opportunities, we are seeking out the best, most independent, most motivated, most personally driven developers in the area and putting them all on our team. You don’t keep that kind of talent interested and excited with culture posters, free bagels, and trust-fall team outings. These are people that want to build and create, and we have to create a space where no matter what the service side of the business is doing, we can work on things that we are interested and excited about. That’s a big part of our Friday Hack Days, where everyone can work on something that is new, exciting, interesting, or challenging to them. The only rule is that if you Hack, you must Demo at the end of the day. Hack Day is about learning and we want to share that learning with everyone on the team.

In addition, there is a vocal group of us that want to figure out and develop non-service revenue sources with product. Lab Time is our proving ground and product development arena, where we can take our hits and misses and keep experimenting with apps we’re building and development of those apps as products with revenue models and business plans. We’re currently pushing product iterations for three projects: Koha, Landmarked, and Emochi. Two of those are out in the app stores right now, Emochi is coming soon(tm).

Outside of the normal learning that goes along with people building new software, one of the biggest things we’ve worked with is the internal communication and expectations around Hack Day and Lab Time. We discovered that there is a small but very vocal minority of team members that are extremely passionate about product, but this isn’t something that is 100% across the team, and once we understood that enough, we made changes to improve the situation.

StartupLowdown: Having done work with industry giants like General Motors and Domino’s Pizza, your clientele speaks to the quality of your team. Can you talk about how you went about assembling your team and what attributes you were looking for?

Nathan: Recruiting and hiring is probably my biggest single responsibility, and something I personally love to do. I bring a lot of my personal bias into the role. A couple of my crazy beliefs are that everyone on a team should be in constant problem solving mode, and everyone should be someone you’d want to spend 60 hours/week in crunch time sitting next to. So when I’m looking at candidates I’m in that mindset.

We make sure to look at how everyone that applies communicates in writing, communicates in person, and also how they perform under pressure doing actual work. We of course push hard on our internal networks, and we encourage people to bring people in from other jobs or other lives that impressed them. Every single person in the team is invited to participate in every single application – it’s a full team sport. No one gets into the company if anyone in the company is dead set against it.

StartupLowdown: Why Detroit?

Nathan: Oh, this question again! There’s a lot of activity downtown, and we want to be right in the middle of that. Our initial venture funding came from Detroit Venture Partners, which started us off in Detroit. The community of companies making things happen in Detroit is supportive, collaborative, and full of energy. This is a city where anything you do is a big deal, and worth celebrating; people celebrate and make a big deal out of every win, and that is extremely motivating. And our team is having a ton of fun working and playing downtown; it has a character, energy, and grit that a tech park in Troy just can’t compete with.

StartupLowdown: What are some underlying principles/pillars that define Detroit Labs?

Nathan: We are all about shipping, delivery, and execution. We place a high value on people that get things done and ship their work. We’re less interested in pedigrees and talking about shipping products. Internally we are very transparent and self-organizing. There aren’t layers and levels and management and all the trappings of a traditional company. We spend the additional time and energy to let everyone into the decision making process. Not everyone does, because not everyone needs to or wants to for every thing, but the opening is always there.

StartupLowdown: I’ve read that Detroit Labs is already profitable, a noteworthy and uncommon feat for a young company in today’s startup world. Can you share anything about the strategy you and your co-founders employed to guide Detroit Labs along this successful growth path?

Nathan: Our revenues come from our services contracts so if we can win projects, there is a straightforward mechanism to getting to profitability. That’s a bonus. Our strategy for that revolved around assembling the most amazing team of developers in the area and being able to win business a little outside our league, delivering wildly beyond expectations, and using that reputation to repeat. So far so good.

StartupLowdown: Any apps we should keep an eye out for? (I love Koha, by the way)

Nathan: We are spending a lot of time on Koha and Landmarked, our two products already out in the marketplace. A third labtime project, a crazy fun game you play against your friends will be showing up soon. We have a couple client projects we are really excited about that we’re hammering on right now, but until they hit the app store we can’t talk about them. But as soon as we can, we’ll let you know.

StartupLowdown: Nathan, thanks again for your time. It’s been a pleasure speaking with you.

If you’d like to find out more about Detroit Labs, you can follow them on Twitter at @DetroitLabs or check out their website at detroitlabs.com. I also encourage you to check some out their apps:

Koha – Makes bill-sharing with your friends super easy by taking the guesswork out of who’s turn it is to pay
Landmarked Detroit – An app that helps you explore Detroit and all that it has to offer

Looking at what they’ve done already, keep an eye on Detroit Labs as I’m sure they’ll be putting out some awesome apps for a long while.

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