Project Milwaukee: What’s Stifling Entrepreneurship?

Mar 17, 2016

Study after study ranks Wisconsin poorly when it comes to the number of new startups. In fact, the Kauffman Foundation puts the state last on its list when it comes to the number of business start-ups.

When you think about a place to start a new tech business, Milwaukee might not be the city that comes to mind.

“You will have a thousand engineers at your disposal in the Bay area and you will have 10 here and that’s a challenge. But you will also have 100 companies to compete with in the Bay area and you will have one or two here,” business owner Jalem Getz says.

For Getz, Milwaukee is perfect. “I went to the Bay area and stayed with a friend of mine for a few weeks just to get a feel for the Bay area. And I decided that Milwaukee was better for me,” he says.

Back in 2012, Getz started Wantable, a subscription based online personal shopping service for women. What started with three employees now has more than 50, and 24,000 square feet of warehouse space in the Walker’s Point neighborhood.

Before Wantable, Getz started another successful company by the name of BuySeasons, which he later sold. Yet he admits he’s also had failures.

“We sat down, we came up with a company which was called Hopscotch, which I won’t talk about, but that failed miserably," he says.

But Getz says what he learned from that failure put him back on the path to success. “To be honest, I learned that I should go back to what I’m very good at, which is retail,” he says.

If there's anything Getz would change about the climate surrounding entrepreneurship here, it would be people’s fear of failure.

Erik Thomas, founder of Getter.

Erik Thomas agrees people are risk averse. “I think the mentality here is very conservative,” he says.

Last year, Thomas started Getter, a company that uses software to show companies how they’re doing targeting people via digital marketing – and how competitors are doing.

"People in general that I’ve encountered are not really looking to take risks, and that’ really what in my mind entrepreneurialism is,” he says.

Thomas says that mindset also transfers over to people looking to invest in businesses.

He also wishes attitudes about race would change. By all accounts, Thomas shouldn’t be doing what he’s doing. Thomas is African American, running a tech business out of Milwaukee and he and his wife had their first kid when he was 16.

While the new Milwaukee is much more diverse than generations ago, segregation and equal access are still problems. Thomas says it sometimes takes maneuvering to fit in.

“You kind of know that you have what it takes to be invited to an event or be included in a certain gathering or so forth. But it just doesn’t take place sometimes. And people tell me all the time I’m a very engaging person, I’m very likeable, what have you. But I know that problem is very real here,” Thomas says.

About seven years ago, Dan Steininger founded a company called BizStarts.

“The times they are a changing and the world is changing,” Steininger says.

The goal is to connect people with resources needed to venture out on their own. Steininger says, for generations Milwaukee was a hotbed of innovation. It’s what put us on the map. But those successes also became our Achilles Heel.

“Most of the people coming out of college decided they wanted to work for the existing companies. We had so many major employers you didn’t have to be as creative to get a job. Even the low skilled employees could get jobs at these big companies. It was pretty easy to get a job, so why start a business?” he says.

Steininger says more and more people today are becoming what he calls accidental entrepreneurs because they can’t find work. The trend seems to have started during the Great Recession.

“In Wisconsin, we were starting somewhere between 5,000 and 8,000 a year back in '08. It’s now jumped to almost 60,000 new businesses in Wisconsin in a year,” he says. 

Steininger says these businesses range from people opening child care centers or restaurants to becoming Uber drivers.

He says that while it’s unclear where Milwaukee will end up, the city’s success will depend on the people willing to step out of their comfort zone and forge a path for themselves.

According to Steininger, by 2020 nearly 50 percent of Americans will work for themselves in one form or another.