By Tom Still
MADISON, Wis. – Few are surprised to learn Madison and Milwaukee are hubs for tech-based innovation involving young companies. Visual evidence, surveys, rankings and studies have shown as much over time. It’s a familiar story to many Wisconsin observers and now getting the national attention it deserves.
What may surprise people is the extent to which young companies are emerging in places outside the state’s largest urban centers. Some recent events illustrate the point.
Companies applying to the annual Wisconsin Early Stage Symposium, which will be held Nov. 9-10 in Madison, included a mix of young firms from the Capitol area and the Milwaukee region – as is often the case.
This year’s crop also included companies from farther afield in Wisconsin, demonstrating that tech-based enterprises can be built in smaller communities if conditions are right: Adequate broadband connections, a support structure that may include accelerators or other mentors, and at least a decent shot at access to early stage capital.
Wisconsin communities with at least one qualified applicant to this year’s conference are Appleton, Beloit, Eau Claire, Fontana, Fort Atkinson, Kenosha, Manitowoc, Oconomowoc, Pardeeville, Sturgeon Bay, Waupun and Wittenberg.
Out-of-state firms are taking notice of Wisconsin, as well, with applications from Kansas, Texas and Minnesota.
Applicants may be selected to make five-minute presentations, a 90-second “elevator pitch,” or to meet briefly one-on-one with investors. It’s often a combination of two out of the three, as investor groups attend from Wisconsin, the Midwest and beyond.
Earlier this year, a similar pattern showed up in the annual Governor’s Business Plan Contest, in which more than half of Wisconsin’s 72 counties were represented by at least one entry. Among the 55 semi-finalists, 30 came from outside the state’s two largest cities.
There are a handful of reasons behind the growth in entrepreneurism outside the biggest cities.
- Remote work has allowed more people to live where they want while still working for a large company elsewhere – or themselves. In that environment, mid-sized cities and even smaller communities can be attractive places to live.
- Some communities are blessed with successful business patrons who want to give back by backing investors, entrepreneurs or accelerator projects that can spur economic growth. These patrons are usually entrepreneurs who made it big and want to help others do so. Eau Claire, Beloit and La Crosse are solid examples.
- Investors outside Wisconsin are putting more money into more deals, in part because they believe the talent is solid, the valuations are reasonable and the costs of doing business are lower than what is found in coastal tech hubs.
- State-backed and private support systems are much more developed than even five or 10 years ago. A nationally known private accelerator, gener8tor, began in Madison and Milwaukee but has a growing presence elsewhere in Wisconsin. The Badger Fund of Funds has five “recipient funds” statewide that have invested in about three-dozen companies thus far. Faculty and students in UW System schools outside Madison and Milwaukee are filing more disclosures and patents, which sometimes sparks company formation. For example: WiSys, which handles intellectual property filings for 11 campuses, has created a “Venture Home” program to help young firms get a start. The Wisconsin Economic Development Corp. has an arm dedicated to spurring startups.
- A final factor is harder to prove, but some people who lost jobs during the peak of COVID-19 may have elected to strike out on their own rather than rejoin the workforce in roles they held before. That may explain a recent surge in state business filings.
It’s too early to declare an irreversible trend, but it’s clear that promising startups can be found in places beyond Madison and Milwaukee. Wisconsin needs them all to prosper.
Still is president of the Wisconsin Technology Council. He can be reached at firstname.lastname@example.org.