UP’s technology hub for $105 million

Where can you drive a boat to work and build a rocket? The Upper Peninsula.

Some of the state’s—and the nation’s—most innovative technology is being developed along Lake Superior’s rugged shoreline.

In one year, technology companies across the UP generated $105.9 million in sales, according to data collected by Michigan SmartZones, a technology business accelerator funded by the state.

From aerospace to electric vehicles to streamlining industries like hospitality, manufacturing and logging, Northern Michigan tech companies are leveraging a Midwestern work ethic and the technical prowess of public research universities.

Being rural, remote and cold is no longer a deterrent in the age of telecommuting, said David Rowe, executive director of MTEC SmartZone in Houghton.

From October 2021 to September 2022, entrepreneurs formed 34 new technology companies, creating 294 new jobs in UP. In addition, 1,076 people there continued to work in technology jobs.

“We tend not to make excuses for location anymore. We sell it as a feature,” Rowe said.

Yoopers peel off their “aw shucks” humility and rebrand themselves as the lucky ones who live and work where the rest of the population vacations. Both investors and innovators have taken note and are willing to invest.

Related: ‘Michigan’s secret weapon:’ UP business missing link in semiconductor solution

When Tom Dolaski returned to Munising in 2008, it felt like the town was stuck in time. The paper mill, the prison, the cruise ships – not much had changed since he left in 1997.

Dolaski, 43, went from high school to the Air Force and then used his electrical engineering background to create DeployedTech, or DTech, a technology general contractor for hotel openings. He carved a career path in hospitality in Florida and California. Then a family emergency brought him home a decade later.

Setting up shop in Munising during a recession wasn’t the planned trajectory for his growing tech business. Dolaski may have been one of the Upper Peninsula’s first remote tech workers, as he went on to forge relationships from the Caribbean to Miami to Manhattan to Chicago.

As DTech took off, Dolaski was traveling 300 days a year, he said. Traveling in and out of a small regional airport with changing schedules became unsustainable, and Dolaski moved to Manhattan for a year.

While New York offered convenience, Michigan had the infrastructure to build a foundation and grow. In 2013, Dolaski returned and purchased a vacant building to house DTech’s Munising office. Nevertheless, he describes the economic development at that time as static.

“There were just a lot of things that didn’t happen that I felt should have happened,” he said. “So we just did it. We put our money where our mouth was.”

Fast forward 10 years, and Dolaski’s company has invested more than $12 million in the community. On the tech side, DTech has three offices, including in Munising, and employs 18 full-time employees.

On the development side, Deployed Capital owns and operates nine businesses ranging from a gas station store to a coffee roastery and concert venue.

“We were able to build experiences for the workforce that increased the value of downtown being seen as a place to work,” Dolaski said.

When Dolaski built his team of design engineers, he didn’t think about degrees or previous internships. He wanted the right personalities.

“I can always teach (skills), so I found the people who were in love with UP, who really wanted to be here, and we built our talent pool around that mentality,” he said.

Brain power has never been a problem for Orbion Space Technology in Houghton, said CEO Brad King. And it’s not just because King has been a professor of space systems engineering at Michigan Technological University for 23 years—though that certainly helps.

“There’s this perception that if you have a startup and it’s in technology, you should be in Silicon Valley. You can’t compete with the Silicon Valley companies. I totally reject that,” King said.

“We have an advantage that our lifestyle is so comfortable in Michigan and northern Michigan that we don’t have any issues with employee turnover,” he said.

In six years, Orbion has skyrocketed from start-up territory with $30 million invested in the company’s development and manufacturing of plasma propulsion systems for small satellites.

At first, there was a stigma to break, King said. Investors from Boston to San Francisco weren’t convinced there would be a large enough talent pool in UP, much less a line of career engineers eager to uproot to a remote, rural location.

But that’s exactly what happened.

Engineers left for careers at NASA, the Massachusetts Institute of Technology, and aerospace giants in California and Florida. King estimates that half of the 50 engineers on his team are Michigan Tech alums.

UP’s remoteness is no longer something to be feared – a king of emotions, 51, has seen change during his lifetime as a native of tiny Calumet on the Keweenaw Peninsula.

“Growing up in that geographic isolation was always seen as an obstacle,” he said. “Over the last 30 years, it’s evolved into that’s what we have. It’s what we brag about and it’s our identity. And now people come here because of it.”

Orbion’s staff has an informal competition for the coolest commute: canoeing in the summer and snowmobiling in the winter.

“We always joke where you can take your boat to work and build rockets,” King said.

By the time Jeff Halonen, 29, was looking for investors for his Calumet-based software company in 2022, the secret to UP’s growing tech hub was out.

“Zero times I ever had to explain or apologize or say, ‘I know we’re in the Midwest, but’. There was none of that,” he said.

Growth at Halonen’s company Steelhead Technologies has been rapid since its founding in 2021. Last year, they raised $2.5 million in investment and expanded their team to 20.

Halonen, a Michigan Tech alum with a degree in mechanical engineering, graduated with a job offer from General Motors in 2016. Four years later, he, his cousin and uncle went to go-to-market technology business ventures, working as contractors to launch products or services.

It was through this line of work that they diagnosed a problem plaguing small job shops: There was too much paperwork to track every step. And so Steelhead, a factory operating system, was born.

UP’s low cost of living combined with resources at Michigan Tech have kept the headquarters firmly planted up north for the technical team, even as the sales team spreads out across Michigan and the Great Lakes region.

The final secret ingredient? Midwest gravel.

“People from the Midwest, they just show up and get the job done,” Halonen said. “There’s not a ton of drama. It’s worked really well for us,”

More about MLive:

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Michigan’s Keweenaw Peninsula invites visitors to work remotely in this magnificent place of adventure

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