Articles

Vindication for Madison, Wis., Chamber of Commerce’s Startup Strategy

Rather than focusing on appeasing large scale employers, the Madison Chamber of Commerce turned its attention to building a strong startup community.

by Kathleen Gallagher, Milwaukee Journal Sentinel / July 11, 2016

(TNS) -- Starting with his very first interview for the job of president of the Greater Madison Chamber of Commerce, Zach Brandon made it clear: His was not a traditional plan.

Rather than focus solely on established businesses, Brandon wanted to embrace start-ups, the "scalable and salable" companies, as he called them.

Some called it a flash-in-the-pan strategy. They criticized how he never even mentioned major local employer Oscar Mayer in his vision statement.

But four years later, as Oscar Mayer is closing its Madison plant and moving 1,000 jobs out of town, Brandon's strategy is looking more and more on target. He says start-ups and technology companies have accounted for about 25% of the Madison chamber's new memberships since he took the top job in 2012.

"Madison's self concept is starting to change because the chamber decided we can't follow the business community, we have to lead it," Brandon said.

Now he wants to get the rest of Wisconsin involved.

Brandon, who previously headed the Wisconsin Angel Network and was deputy secretary of the Wisconsin Department of Commerce, has been handing out copies of Steve Case's new book, "The Third Wave: An Entrepreneur's Vision of the Future." The first 450 registrants for the chamber's annual Icebreaker lunch in April, where Case was the keynote speaker, received the book for free.

Case, co-founder of America Online, suggests the United States is entering a new chapter in the history of its economy, a third wave, during which entrepreneurs will leverage the internet to challenge and disrupt the world's largest industries, such as health, education, transportation, energy and food. They won't do it by simply building new apps; they will have to build partnerships across sectors, navigate the policy landscape and overcome formidable barriers to entry, Case says.

Madison has a running start toward this third wave. While the state lost 40,000 millennials during the past decade, Madison gained 10,000, Brandon said.

The city is home to the University of Wisconsin-Madison, which regularly ranks among the top five schools in the country for research spending. Madison ranked 14th in the nation for venture capital per capita, the highest ranking in the Midwest, according to an analysis earlier this year by urban policy expert Richard Florida and an associate. And Madison was the 11th "most prosperous" among the nation's 100 largest cities in a recent analysis by the Economic Innovation Group.

However, it will require more than Madison for Wisconsin to truly participate in the third wave, Brandon said.

A case in point: the "health highway" — the almost 100 companies between Madison and Milwaukee that Brandon says are operating in the health data space.

Madison has the second-highest density of software publishing jobs in the country, he said. Add in Milwaukee, and the 68 miles between the two cities has 3.8% of the country's software publishing jobs. That concentration is nearly as high as Wisconsin's 4% share of the nation's agricultural jobs, and it tops the state's 3.7% share of the country's manufacturing jobs, he said.

"If that 68 miles were anywhere else in the country, it would be on the cover of Site Selection magazine," Brandon said.

Brandon has shown the software publishing data to Gov. Scott Walker. Brandon informed Walker that 23,000 new jobs have been added in Madison's growing innovation clusters during the past 10 years, including 8,677 in biomedical/biotech and 7,287 in information technology. Brandon successfully prodded Walker to tour Epic Systems, the industry-leading medical records software maker that was started by a UW-Madison computer science professor.

Brandon plans to share his vision with state legislators. He has talked with other local chambers around the state. The Waukesha County Business Alliance asked him to be the keynote speaker at its inaugural emerging-leaders award breakfast in May.

"He's a great example of an emerging leader and has a tremendous background," said Amanda Payne, vice president of public policy for the Waukesha agency.

According to Brandon's playbook, Madison needs to build a business brand that sells itself not only to the world, but to the rest of the state. There needs to be, as well, a greater appreciation for the key role of UW-Madison, Wisconsin's flagship research university.

The role of a large research university, like the role of Milwaukee in its heyday as toolmaker to the world, is not to solve a state's economic problems.

"It's to solve the world's problems — then you'll have products, services and technologies the world wants, and the money will come," Brandon said. "If our role is just to solve problems within our borders, then it's a slide downward."

Brandon represents a new generation of business leaders, said Jay Loewi, chief executive officer of The QTI Group Inc., who headed the search committee for Brandon's position. Brandon has shined a spotlight on the start-up community, bringing a broader understanding of its size and scope. And he has helped established businesses and start-ups realize that they need each other, Loewi said.

"It's a circle, and you can't be missing a wedge from that circle, otherwise things don't go around," Loewi said.

Oscar Mayer was a "workhorse" in the Madison ecosystem for years, said Gary Wolter, top executive at Madison Gas and Electric and a member of the search committee that selected Brandon. Now, with Oscar Mayer leaving, the community is focusing on discovering the city's future workhorses, Wolter said.

"We have a lot of creative energy, and taking advantage of that and helping young entrepreneurs commercialize their ideas are good things and necessary for the community," Wolter said.

The chamber's events have become more thought-provoking, too, Wolter said. Recent speakers have included J.B. Pritzker, who is behind many of Chicago's entrepreneurial efforts; Case, discussing his "Third Wave" theory; Steve Johnson, presenter of the "How We Got to Now" PBS series that explored the legacy of great ideas; and Richard Reeves, who talks about social mobility and the need for an inclusive economy.

"Once you start introducing people who think about the world differently, it builds upon itself, and you start ingraining new ideas and creative thinking into the entire community," Wolter said.

It will take collaboration and rethinking, but Wisconsin has the ability to brand itself as an entrepreneurial state, Brandon said. For that to happen, different factions need to come together, and Milwaukee, in particular, needs to expand its entrepreneurial ecosystem, Brandon said.

"We're in the right place at the right time with the right set of industries," he said. "But if we don't act, it's ours to lose."

"Madison's self concept is starting to change because the chamber decided we can't follow the business community, we have to lead it," Brandon said.

©2016 the Milwaukee Journal Sentinel Distributed by Tribune Content Agency, LLC.