On MKE Startups

UPDATE: Since posting this entry several months ago, I have been blown away by a number of very exciting and very positive efforts in Madison and Milwaukee. These efforts include the launch of Ward4 in Milwaukee, 100State in Madison, a host of interesting new startups in both cities as well as 100 Cups of Coffee, for which I hope to participate.

This post is a humbling reminder to me of some things that I got wrong. I look forward to engaging more in the Midwest rather than continuing to overlook it.

Since 2008, I have started a few companies in Milwaukee. And while the companies have been reasonably successful, I have always wondered whether I would have found more success, or easier success, if I would have started my companies in more startup-friendly places like San Francisco, Boulder, Austin or New York.

To me, Milwaukee is the tale of two cities: one that fosters a sense of community and another that is handicapping itself with its shortsightedness. I love the way of life, the neighborhoods and the strong connection to tradition. I also appreciate the work ethic of Milwaukeeans and the Midwestern values they hold. My wife and I have roots here. It is home. But the business community leaves something to be desired.

My bitterness toward the Milwaukee business community stems from what I have long suggested was its parochial view in favor of boringly traditional businesses and processes.

I will never forget something that happened when I was starting my second company, an online venture. I was explaining to a banker that in an effort to keep overhead low, we would not have an office. The banker’s response was not admiration for my fiscally conservative efforts, but disbelief. “It is not a real business if you do not have an office,” he chided. Five years later that business still does not have an office, but is doing quite well, thank you.

In another conversation, a local business leader told me that the best advice he could give is to not start a business at all. “Who needs the trouble?” he asked.

These two conversations are not outliers, but rather a reflection of the collective attitude of the Milwaukee business community toward startups. It seems that every time I have told these stories to a fellow Milwaukee-area entrepreneurs, they counter with similar tales. It is with this in mind that I was not surprised to learn that Kauffman named Wisconsin last in terms of startups (which reminds me why the largest of my companies now operates out of Portland).

So what is a Milwaukee entrepreneur to do?

I have long found that to connect with those who truly embrace startups and are excited about new businesses I need to get on an airplane and go east or west. For years I have told serious entrepreneurs that it is okay to start your businesses in Milwaukee, so long as you can raise money and find mentors on the coasts. For my part, travel to New York City, where I connect with other entrepreneurs, is the price of doing business in Milwaukee.

Toward that end, I have also said, bitterly, that the single most important economic development effort the city and county of Milwaukee could undertake is to seek more flights from MKE to New York City, Portland and San Francisco. People think I am joking when I say this: I am not.

Unfortunately, it is not just the business culture of the city and state that is bad, it is the political environment.

As a Wisconsin business owner, it seems reasonable that I would join the state’s leading business group: Wisconsin Manufacturers and Commerce. But a review of that group’s legislative agenda paints a truly regressive picture, one that does not reflect my values or, I should think, the values of any modern entrepreneur. And while my governor and state legislators say they are pro-business (though they have never been business owners themselves), they are focused on undoing the single most important economic engine of our state — its public schools.

So, yes, I am a bit jaded. But, perhaps a little self-reflection on my part is needed.

While I have found more in common with the startup community in New York, I can recognize that there are good things happening in my adopted hometown of Milwaukee. While I have not been a huge fan of the fresh water initiative, it appears that my outlook should be brighter and on that score, these leaders should be commended. Second, the increase in co-working space and accelerator programs around town is exciting and should not be ignored. Finally, folks like Tom Still, who have been evangelizing for years, seemingly without the bitterness that I carry, continue to push our state forward and are doing great things for our business community.

Recently, while pitching an idea for a new business I was asked if it would be based in Milwaukee. The answer, I said honestly, was I didn’t know. While Milwaukee has a lot of catching up to do, the good news is that if entrepreneurs in our state can ignore most of the region’s old guard business leaders and its governor, we might have something really special here. But for now, it is also really easy to get on an airplane and head to one of the coasts.