Techstars Chicago’s Troy Henikoff Intrigued by Wisconsin Startups
Wisconsin has proven a fertile recruiting area for Techstars programs nationwide, but so far no Badger State startups have gotten into the nearest Techstars startup accelerator in Chicago. Troy Henikoff wants to change that.
Henikoff, the managing director of Techstars Chicago, plans to visit Milwaukee next month to meet with area startups and recruit candidates for the Windy City branch of the national startup accelerator.
Henikoff is an experienced entrepreneur—his career includes founding SurePayroll, a Chicago-based payroll software provider that was acquired in 2011 by Paychex for $115 million—who in 2010 founded an accelerator program called Excelerate Labs. Last year, Excelerate became the Chicago branch of Techstars. On the upcoming Milwaukee trip, Henikoff will be accompanied by Match.com CEO Sam Yagan, who was a co-founder of Excelerate.
Henikoff is intrigued by the tech startup scene here, but admits he doesn’t know as much about it as he would like. Techstars Chicago officials pitched their program to Madison entrepreneurs in March, and Henikoff spoke at the Wisconsin Early Stage Symposium in Madison last November. And he says local entrepreneurs can expect to see more of Techstars Chicago.
Xconomy spoke with Henikoff recently about his take on Wisconsin startups, how smoothly it went integrating Excelerate into Techstars, and how he envisions accelerators evolving. The following is an edited transcript.
Xconomy: Why are you interested in visiting with Milwaukee tech startups? Should we take this as a signal that Milwaukee’s tech scene is growing and gaining traction?
Troy Henikoff: We as Techstars Chicago are looking to find the 10 best companies we can, frankly anywhere we can on the globe, for our program this summer. … We’re trying to extend our reach beyond just Chicago. Milwaukee is a natural extension. We hope to attract people from Madison as well for the Milwaukee event.
X: What’s your assessment of the tech startup environment in Wisconsin?
TH: There’s a lot of interesting stuff going on up there. Honestly, I haven’t been exposed to enough of it. Part of this is an attempt at getting up there and seeing what’s going on. … We’re pretty tightly involved with the Golden Angels [Investors, an angel investment group based near Milwaukee that has invested in Techstars Chicago’s fund]. They’ve encouraged us to come up as well. I think it’s going to be great. You’re going to see us more.
X: Excelerate Labs became Techstars Chicago last year. Was it a difficult transition?
TH: The transition went very well. When Techstars approached us and asked if we wanted to partner with them … it was a pretty easy decision. We initially built Excelerate in the model of Techstars, so fundamentally we were already aligned. They add incremental value to a number of things, [and becoming Techstars Chicago] didn’t take anything away. [The benefits were] a little more capital for the entrepreneurs, access to a greater mentor base, access to a greater investor base for the entrepreneurs.
It was likely that the brand was going to bring us more exposure to be able to find entrepreneurs. That was true. We got twice as many applications in 2013 (904) as we did in 2012 (400). They do the back-office accounting and management stuff. No one of those things was enough [to decide to join Techstars’ network] but when you add them all together, that’s really interesting.
Now instead of the entrepreneurs being part of just our alumni network [of 30 companies], now they’re part of the Techstars network. If you think of the 400 companies that have been through Techstars in the last seven years … that network of people are some of the most ambitious, smartest people I know. They are going to build some awesome things. To be part of that network is a real privilege and a real asset.
X: What’s the relationship like between the various Techstars locations? Do you work together a lot?
TH: If you think about the programs as nodes on a network, there isn’t any hierarchy where one is the boss of the other. We are involved with each other. Two weeks from now I’ll be in Boston meeting with the managers of the various programs. … We do that a minimum of four times a year.
We have a lot of autonomy. We in Chicago select our 10 companies. We can ask for help if we want it, but [Techstars founder and CEO] David Cohen doesn’t come in from Denver and say ‘these are the 10 companies [you’re going to pick for this program].’ Every program will have a slightly different personality depending on the managing directors and what they like to emphasize. We’re tightly connected and share best practices, but we each maintain our own autonomy and personality.
X: What’s Techstars Chicago’s personality like?
TH: Chicago and the Midwest in general tend to have a bias toward business models with revenue that is transactional. We’re really good at enabling commerce. If you look at the businesses that have been successful in Chicago, most of them have transactions behind them [like Groupon and GrubHub]. … They tend not to be as much the B2C, grow huge networks, and then figure out how to monetize them later. That’s reflective of the bias of the Midwest investors a little bit.
We’re pretty open-minded [at Techstars Chicago]. We’ve done B2B, we’ve done B2C, we’ve done mobile. We tend to steer away from things that are really capital-intensive or take a lot of time because we only have 90 days, so we don’t do a lot with hardware.
My vision is that what’s going to happen with accelerators is sort of like what happens with universities. While you could … do well at any one of them, there will be specific areas of expertise. And so we’re just starting to see that evolve. … I think it makes sense. It’s a big, broad world out there; you can only be an expert in so many things.