In the world of economic development, the grass always seems greener someplace else.
Some people in Milwaukee think Madison is roaring ahead because of its head start in the tech-based economy — but the view from Madison is that Wisconsin’s capital city isn’t growing as fast as Austin, Lincoln, Des Moines or other U.S. techie hubs.
Some say Ohio is the model for stimulating a tech-based economy — still others proclaim Michigan … or Utah … or Maryland. It all depends on what patch of grass you’re standing, it would seem.
Read this commentary in the Milwaukee Journal Sentinel here.
No matter where you live, however, everyone points to California’s Silicon Valley as a shining star of economic growth … except for some of the business people who live and work there. They cite the region’s high cost of living, the never-ending musical chair game for talent, state regulations and other factors contributing to a mini-exodus from the Valley.
Four Silicon Valley entrepreneurs and investors with Wisconsin ties returned to the state this month for the annual Wisconsin Entrepreneurs’ Conference. Their message: Don’t try to be Silicon Valley, but don’t ignore what made it successful, either.
“Business isn’t about staying busy; it’s about making money,” said Sanjeev Chitre, one of four University of Wisconsin-Madison engineering alumni who spoke at the conference. All are members of the Badger Entrepreneurship Forum, a San Francisco group that helps California start-ups with Wisconsin ties.
Chitre said Wisconsin needs to be infused with a healthy dose of “greed,” meaning it should be more culturally acceptable here to pursue creation of personal wealth. That, he said, is ultimately the best way to spur even more economic growth. In California’s Silicon Valley, “greed is good” and it’s a powerful motivator.
Mark Reinstra, another Wisconsin engineering grad and entrepreneur who now works as an attorney for a leading Bay Area firm, said the Madison campus lacks the kind of excitement about private-sector development he sees in California.
“It seems like a lot of (UW) professors are only concerned with landing the next government research grants,” he said. “Compare that to Stanford, where just about every professor is looking to start a new company.”
Two other California Badgers who spoke, Norman Koo and Roy Thiele-Sardina, seconded those observations and joined Chitre and Reinstra in noting Wisconsin has plenty of advantages, as well. Those include workers who want to work, a strong research and technology base, and an attractive quality of life.
In fact, they see enough opportunity in Wisconsin to consider forming a venture capital fund here that would focus on getting quick exits within 18 to 24 months of making an investment.
They’re not alone. The State of Wisconsin Investment Board and the Wisconsin Alumni Research Foundation announced creation of a $30 million fund a few months ago to invest primarily in information technology, materials science and engineered products. Almost half of the angel and venture capital deals reported in Wisconsin in 2012 involved at least one out-of-state or international investor, a sign that outside investors are “discovering” Wisconsin as a place to do business.
In the Wisconsin Legislature, a vote could take place this week to create a state-leveraged venture capital fund that would tap into this rising tide of activity — and at precisely the right time. The bill now pending in the Senate would earmark $25million in state money to be matched by $50 million in private investment dollars and invested over time, beginning most likely in 2014.
Add it all up and Wisconsin might soon lose its status as a “flyover state” when it comes to venture capital.
Of course, capital is not the only factor that will drive Wisconsin’s economic evolution. The UW System is working on ways to improve its performance around company start-ups and growth. A mix of public and private groups is trying to encourage entrepreneurs. However, some important legal barriers prevent talent from being fully leveraged — such as “noncompete” clauses in too many contracts.
It won’t be a Silicon Valley model, or perhaps not even an Ohio or Michigan model, but Wisconsin is growing its own grass and it’s beginning to take on a more vibrant shade of green.