Try 1 month for 99¢
Invenra

Invenra, 505 S. Rosa Road, is a Madison startup working on drug development.

In 2018, Wisconsinites can expect their candidates for governor to discuss and debate the state's unemployment rate, the recent Foxconn deal and its accompanying $3 billion incentive package and private-sector job creation. But those aren’t the only issues that are likely to come up as candidates evaluate Wisconsin's business climate.

“If you're looking for a sleeper issue in this year’s race for governor, keep an eye on how Wisconsin is doing with startups,” host Mike Gousha on his Sunday talk show “UpFront."

Gousha dedicated the entirety of his show this week to the state of startups in Wisconsin, which has historically struggled with startups. That “lackluster performance,” Gousha said, is “starting to emerge as an issue in the 2018 governor’s race.”

Earlier this year, the Kauffman Foundation ranked Wisconsin dead last among states for startup activity. Of large metro areas, Milwaukee ranked 39 out of 40.

Gov. Scott Walker defended himself on a previous “UpFront” by saying that Wisconsin has consistently ranked poorly in the area of startups “long before,” he took office as governor. He said that Wisconsin is “fairly conservative” when it comes to venture capital and startups.

But he noted that Wisconsin has been ranked in the top 10 of states for startups remaining in business after seven and 10 years. 

“A lot of states throw money all the time and they have startups, but within two to three years they’re gone,” Walker said. “We want companies that don’t just start up, but stick around for a while.”

And, as Gousha noted on Sunday’s episode, there are signs that Wisconsin is changing for the better.

Ten cities around the state participated in “Wisconsin Startup Week” earlier this month, he said, and Madison is a “hub for tech startups.” There are also promising partnerships: Microsoft and the Packers are building a technology and innovation center in Green Bay and Aurora Health Care and insurance company Northwestern Mutual have both promised $5 million to support startups in Milwaukee.

John Schlifske, president and CEO of Northwestern Mutual, appeared on the show to explain the company's reasons for investing in entrepreneurs. A “robust technological community,” is important for recruiting digital talent (including those who can code or run digital businesses) to work at Northwestern, he said.

Potential employees care about the company’s mission and expanding their skills, but they’re also looking for a community of startups, venture capital and digital workshops they can engage with after they clock out, he said.

“The digital talent that we want actually looks for the digital ecosystem outside of work as much as they look inside of the company they’re going to work for,” Schlifske said.

Northwestern hopes their investment will help build a “vibrant startup community” in the area, and that other area companies will follow their lead.

Richard Yau, co-founder of Bright Cellars, is one Milwaukee entrepreneur who believes the area could be on to something good. Bright Cellars is an online monthly wine subscription service that uses an algorithm to better understand customers’ preferences.

As Madison as it gets: Get Cap Times' highlights sent daily to your inbox

Yau is an MIT grad, but he and two others located in Wisconsin after a three-month accelerator program in 2015. While he acknowledged that Wisconsin doesn’t see the same level of venture capital activity as elsewhere in the country, he had an optimistic outlook.

“We really saw what could be the genesis of a great startup ecosystem,” Yau said.

Yau said Bright Cellars has been able to recruit from a ready talent pool. The company has grown to 38 employees, primarily graduates of UW-Madison, UW-Milwaukee and Marquette University.

Asked about the role of government in encouraging startups, Yau said the state had a “big opportunity to help in a more meaningful way.”

While he said there was clear state interest in supporting entrepreneurs, there were “opportunities to move a little bit faster. He pointed to his organization's’ work with the Wisconsin Economic Development Corporation (WEDC).

“As a startup, (we have) a much faster, shorter timeline to get things turned around than probably they’re used to,” he said.