The secret of how Wisconsin became a hotbed of innovation

Posted on Oct 29, 2019 :: Partner
Posted by Brian Gaumont, partner, Wipfli

At first thought, you probably don’t think of Wisconsin as a hotbed of innovation. What comes to mind is more Silicon Valley, Seattle, Boston and New York City — the coasts of the United States. But what about the Midwest?

It turns out Americans have been overlooking a lot of entrepreneurs, startups and increasingly innovative companies in Wisconsin.

The startup scene
When people think of innovative companies, they tend to think of startups that are floating creative solutions to fill gaps. But filling a gap isn’t enough. They need support from the start to help survive, expand and mature.

To help, two organizations in Madison are building an ecosystem to provide that support.

One of those groups — StartingBlock — serves as a hub where technology-focused members and startups can find the connections they need, whether it’s investors, corporate sponsors or even fellow startups.

Innovative ideas can’t become reality without a startup ecosystem builder like StartingBlock, says Chandra Miller Fienen, executive director.

Her organization’s goals are to cultivate entrepreneurs, accelerate startups’ growth and foster innovative ideas. And StartingBlock has been successful. In just its first six months, the 37 companies it worked with raised $12.7 million and created 159 jobs.

Like StartingBlock, 100state is a nonprofit that provides a community and home for entrepreneurs, but its scope spans beyond startups in the technology arena.

“A board member once referred to 100state as a primordial soup of innovation,” says Claudia Seidenberg, 100state’s executive director. “In the entrepreneur ecosystem, we’ve opened ourselves up as a testing and discovery ground for innovation and the development of new companies.”

These two organizations are critical resources for startups looking to succeed in a state that has traditionally been dominated by manufacturing, agriculture and retail. But the road to filling that need required some innovation on their part. When both were founded in 2013, their biggest challenge was just demonstrating how community-based spaces could be valuable.

While awareness and understanding have gotten better, the products 100state is pursuing, the programming it’s offering and the data it’s collecting are all focused on telling the story of how successful community-based innovation and investment is.

“We’re trying to prove that collaboration and collaborative communities lead to brilliant innovation,” says Seidenberg. “It’s a long-term investment, but it’s one that will come back to you in spades.”

100state and StartingBlock are finally getting to see Wisconsin become more known as a place of exciting innovation.

Not just for startups
For Wisconsin, innovation must come from more than just startups, and it must come from more than just hotspots like Madison and Milwaukee.

In 2001, the Wisconsin Technology Council was formed to foster connections in the technology scene and advise the governor and legislature.

“(We) come up with creative ideas and present them to policymakers in a way that they can embrace it,” says Tom Still, president of the council. “That policy part of our mission is much more of a marathon than a sprint. We try to do this in a very bipartisan way, realizing that an idea that didn’t make it past the finish line in one budget cycle or session may come back in the next session or the one after that.”

Though he’s seeing some success, Still says his biggest challenge is actually capital formation.

Despite seeing two $100 million venture funds launch, there still isn’t enough angel and venture capital at play. A lot of companies can find that first round of angel investing, but it’s often more difficult to find Series A financing and above.

So what’s the solution? Awareness, Still says. “For many people around the country, they may not think of us as a state that has a lot of diverse technology assets, but we have a lot that really deserve more attention.”

The Wisconsin Innovation Awards were founded to provide some of that attention, including among some well-established companies in Wisconsin, which need to revert to their innovative roots as a wave of creative destruction generated by startups hits older companies throughout the United States, Still says.

Strategic partnerships to create change
Partnerships can be key to everything. Each area has its own unique innovation ecosystems, which can only survive and grow because of partnerships between innovators, investors, incubators, community-builders and government stakeholders.

StartingBlock, 100state, the Wisconsin Technology Council and the Wisconsin Innovation Awards all pursued corporate partnerships to help them achieve their missions.

“Partnerships are a way for these established companies to perceive disruptive risks to themselves by seeing the problems startups are grappling and engaging with,” Miller Fienen says.

Corporate partnerships also foster sharing of experienced advice.

“Entrepreneurs need a lot of things: money, time and the right technology. But they also need people who can help them manage and grow their companies,” Still says.

The Wisconsin Technology Council also relies on its board of directors, which is 54 members strong, to provide different viewpoints of the entrepreneurial world.

As Still puts it, everyone has a hand on a different part of the elephant, and together, they can identify the trunk, ears, feet and tail to create a complete picture. It helps not only with the success of their organization but also with the success of the Wisconsin economy as a whole.

All four organizations know it takes collaboration, new ideas and continuous improvement to keep growing Wisconsin as a hotbed of innovation and spreading awareness of its capabilities. But with their differing missions, abilities and reach, you could say they, too, each have a different hand on the elephant.

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Brian Gaumont is a partner within Wipfli’s nonprofit and government practice. He has more than seven years of experience at Wipfli. During this time, Gaumont has served as an experienced facilitator, working with small and large groups and specializing in work with grant-funded and community-based nonprofit organizations. Gaumont helps clients develop their strategic goals and works hand-in-hand with the client to develop a path for achieving those goals.