Q&A: San Francisco web start-up moves to Detroit

Nathan Bomey| Detroit Free Press

A start-up Web referral business founded by Michigan natives recently moved from San Francisco to downtown Detroit.

The two-year-old company, called Stik, has also been negotiating a venture capital investment from Silicon Valley investor Tim Draper and Michigan firms, including North Coast Technology Investors.

Stik recently moved to an office in Quicken Loans founder Dan Gilbert’s M@dison building, an entrepreneurial hub that also houses a Twitter sales office and Detroit Venture Partners.

Stik founders, 2002 University of Detroit Jesuit High School graduate Jay Gierak and 2002 Chippewa Valley High School graduate Nathan Labenz, created a service that leverages Facebook data to help businesses and consumers find product and service recommendations from trusted friends.

Draper, co-founder of venture capital firm Draper Fisher Jurvetson, told the Free Press that Stik was about to become one of his first Michigan investments.

Stik, which has generated more than 2 million recommendations, has six employees and expects to double its staff soon.

The founders, 2006 Harvard graduates who knew Facebook founder Mark Zuckerberg when the social network was in its infancy, discussed Stik with the Free Press. The following has been edited for clarity and brevity:

QUESTION: How did you start your business?

Gierak: We started this business in San Francisco and were actually classmates with the Facebook guys at Harvard. We saw this word-of-mouth referrals process, which is simply asking your friends who they recommend for a mortgage or insurance or who’s going to help with your house. Using Facebook (was a way) to help personalize the experience and find folks you can trust. As we’ve grown the business, we’ve got 100,000 businesses on the platform and millions of folks coming to create recommendations.

For the next phase of the business we wanted to come home, and we saw Detroit as the best place to build our business and help it grow.

Q: How are you going to drive more users going forward?

Labenz: User-to-user marketing is always the most effective. This is the fundamental premise of the business. It’s far more effective, far more trusted to get something from a friend saying, ‘This is cool, check it out,’ than it is for us to advertise, for example.

Q: So why move to Detroit? What makes you think you can grow your business here?

Gierak: It is still home for us. But from a raw business perspective, I think it’s talent. Detroit has a lot of technical talent that’s not currently being competed for by other consumer Internet properties.

Q: Have you identified a revenue model yet?

Gierak: We do generate revenue. Today, we do it via premium subscriptions for small businesses. I think the primary model will be, as people are looking to find these service providers and making these purchases, there’s the opportunity to sell affiliate ads.

Contact Nathan Bomey: 313-223-4743 or nbomey@freepress.com

 

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