Madison’s Tech Future: 5 Ways It Could Succeed, 5 Ways It Could Fail

6/12/14Follow @XconomyWI

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Jellyfish’s sale to Microsoft for a reported $50 million in 2007. When a startup gets acquired or goes public, it brings visibility and credibility to the local startup community. And although acquisitions sometimes result in the new parent company consolidating and shutting down the local operations, the deals often mint new millionaires who might become investors and start more companies, Brandon says. Investors have placed big bets on some promising Madison tech startups in the past few years, and now they need to deliver by expanding their businesses and achieving an exit.

3. Small airport: Madison’s Midwest location is a double-edged sword: It’s centrally located, which is nice for a West Coast company like Zendesk that wants to have an office closer to clients on the other side of the country, Raimondi says. But Madison is still 2,000 miles from the San Francisco Bay Area, and its airport has no direct flights to the West Coast. (The closest is Salt Lake City.)

Brandon admits the small airport presents some challenges for turning Madison into a tech hub, but he says the Dane County Regional Airport is one of the fastest-growing among similar-sized airports. It has added three new direct flights in as many years, and could add a direct West Coast flight in the next year or two, Brandon says. Epic, which flies its employees in droves to work on site with clients around the country, is spurring much of the airport’s growth, he adds.

4. Climate: Wisconsin winters suck. There’s no way around it. Yes, the snow is beautiful and provides ample opportunity for those who love skiing, snowboarding, snowmobiling, and ice skating. But winter here can be bitterly cold (polar vortex, anyone?) and unbearably long. And that will always be a problem for recruiting a certain segment of recent college grads and seasoned executives from outside the area.

Again, Brandon finds a silver lining: “Not everybody wants to live in Silicon Valley, Austin, or New York City,” he says. He points out that Madison is a good option for those who want four seasons, enjoy winter sports, and are “attracted to the Midwest quality of life and work ethic.”

“I think Madison…can play to its strengths without wringing its hands about not having the same weather as Austin or San Jose,” Brandon says. (Just ask Bostonians.)

Zendesk execs occasionally hear minor grumbling about the weather from San Francisco employees who relocated to the Madison office, Raimondi says. “But that’s a result of people being really spoiled in California,” she says.

5. Culture and policy: Assuming Madison has the right pieces to make this tech dream a reality, it will need the support of the community, Brandon says—from residents to business leaders to politicians. His chamber of commerce is committed to integrating the tech industry into the broader business community, Brandon says, pointing to his organization’s recent acquisition of Accelerate Madison, a networking and support group for local digital tech firms.

Startups have been paid more lip service and funding by state politicians in recent years, including a new state-backed “fund of funds.” On a local level, Madison city council members like Scott Resnick and Mark Clear, who both have day jobs with software companies, are advancing ordinances to benefit the local tech sector. Grassroots organizations like Capital Entrepreneurs are convening local tech workers and putting a spotlight on the sector.

All of those efforts will likely need to continue and be amplified in order for Madison’s tech play to succeed.

The city needs to “create a culture that’s accepting and celebratory of the tech sector and doesn’t view it as a one-off,” Brandon says. “We need to convince the rest of the [community] that tech is a viable place to put resources and energy and promotion.”

Jeff Engel is the editor of Xconomy Wisconsin. Email: jengel@xconomy.com Follow @XconomyWI

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