Historically a manufacturing hub, Wisconsin is known for producing iconic products such as tractors, motorcycles, and, of course, beer, but its economy has significantly changed in recent years. In Milwaukee, Wisconsin’s largest city, manufacturing has ceased to dominate the local economy. Instead, businesses in the service sector, as well as startups, now employ most workers.
While there has been a lot of recent growth in the Milwaukee startup scene, the startup community has historically faced challenges. Many have reported a lack of support resources available to local startups, including a lack of capital. This has made it difficult for startups to stay and grow their businesses in the greater Milwaukee area. Recent reports have also cited that millennial population growth in Milwaukee is lower than in other major cities around the U.S., posing a challenge for attracting and retaining young talent in the area.
Now, Milwaukee organizations are working to address these challenges by finding ways to support a united source of capital, resources for entrepreneurs and startups, and other efforts to make Milwaukee a vibrant tech hub for 21st century businesses and talent.
Fostering a statewide tech workforce
Several universities in the state, including the University of Wisconsin system — a network of 13 universities — have faced some challenges. Enrollment at some of the campuses has decreased over the past two years. But universities are responding by pioneering new ways of learning, developing interdisciplinary programs in fields such as entrepreneurship, and collaborating closely with industry.
The Milwaukee School of Engineering recently announced a $34 million grant to build a dedicated computer science facility focused on artificial intelligence, deep learning, cybersecurity, robotics, cloud computing, and other next-generation technologies. The grant will prepare undergraduates for jobs in these emerging technologies. Engineering, business, and nursing students will also have the opportunity to take these courses, putting them on the cutting edge of advancing technologies in their fields.
Promise also lies in Wisconsin’s Technical College System. According to an Outcomes Report for 2016, 93 percent of graduates choose to stay in Wisconsin, indicating that they see opportunity in the state thanks to a lower cost of living and more job opportunities.
Making Milwaukee a tech hub
Economic factors, such as low business costs compared to places like Silicon Valley, and the growing availability of tech talent make Milwaukee an attractive place for early-stage companies and entrepreneurs seeking investments. In 2017, we saw many cases of both Milwaukee and Wisconsin-based companies investing in startups in their own backyard, as well as outside investors looking to the Heartland for new investments.
Examples of this include household names like the Green Bay Packers. In October 2017, the Packers and Microsoft announced that they are each investing $5 million in Wisconsin startups. The partnership, dubbed TitletownTech, will create a new building in Titletown District in Ashwaubenon, Wisconsin, located two hours north of Milwaukee, that will house a VC fund, accelerator, and labs for technology development. Elsewhere, Aurora Health Care established a $5 million InvestMKE fund, and Northwestern Mutual started Cream City Venture Capital, a $5 million early stage fund for Milwaukee startups.
These established companies have helped aid recent organic growth in the Milwaukee startup community, giving small, emerging companies the means to grow their businesses.
Milwaukee and the surrounding areas have also drawn interest from Silicon Valley investors. This past fall, three Milwaukee startups pitched at the Green Bay Rise of the Rest competition, a VC bus tour led by cofounder of America Online Steve Case and JD Vance, author of Hillbilly Elegy. Rise of the Rest is now a $150 million fund with additional backing from other tech giants like Jeff Bezos. The fund will continue to invest in companies throughout the Midwest, which means more potential opportunities for Milwaukee-based startups. Heavy hitters at a national level investing locally in Wisconsin provides an opportunity for startups across the state — and the Midwest region as a whole — that need seed money.
While Milwaukee’s startup scene is still young, some of its most notable organizations now have several years’ worth of experience. Ward4, a Milwaukee coworking space, is home to tech startups like Scanalytics, a fast-growing Internet of Things company, and Gener8tor, a well-known Wisconsin startup accelerator that now has a program in Minnesota and soon-to-be-opened programs in Cincinnati and Indianapolis. BREW Accelerator, a Milwaukee-based accelerator program dedicated to water-focused technology startups, has trained dozens of startups since it was founded in 2013.
Additionally, organizations have become increasingly aware of the need to not just provide startups with the resources to launch, but to scale as well. Scale Up Milwaukee, an initiative of the Greater Milwaukee Committee, has recently launched Sparc, a new training program for Milwaukee-based startups. Gener8tor has hosted a conference series since 2013 called OnRamp (which Northwestern Mutual has participated in) that brings together investors and startups to discuss potential partnerships.
Milwaukee has a strong state talent pool to draw from and the entrepreneurial spirit necessary to become a premier ecosystem for startups. With increased support from more established companies, as well as local and national investors, we can help the local startup community grow and thrive at a quicker pace.
Tim Schaefer is an executive vice president at Northwestern Mutual.