How You Define ‘Success’ Could Make All the Difference For Your Startup
The allure of Silicon Valley is hard to resist, but there’s a lot to be said for the heartland.
PHOTO CREDIT: Getty Images
Here's an idea whose time has come. Actually, it's long overdue.
Northwestern Mutual has launched two venture funds aimed at investing in startups in and around Milwaukee. The funds are, frankly, relatively small potatoes in the grand scheme of venture capital. But it's one of a handful of initiatives seeking to address the need for startup support infrastructure outside of Silicon Valley, and raises a critical issue that founders often overlook: What does 'success' really look like?
The dream for many, of course, is to start the next Facebook or Google....but that doesn't have to be the goal for every company and every founder. In short, you can find success outside of Silicon Valley if your goals are something other than 'global domination'.
The trick is that it's hard to fine the concentration of financing, mentorship, and talent in places outside of Silicon Valley. That's why reports of startups "fleeing" the high costs of the Bay Area appear to be greatly exaggerated. But that doesn't mean there isn't a big opportunity for some other region to be the next Austin, Boston, New York City, or Seattle.
And that's what makes what Northwestern Mutual is doing so intriguing.
"The startup ecosystem [in Milwaukee] is nascent and needs some catalyst to help grow and expand," Craig Schedler, a venture partner with Northwestern Mutual Future Ventures, tells me. "We hope to be one of the catalysts to...help create a much broader ecosystem here."
To be sure, Northwestern Mutual certainly wouldn't object to funding a fledgling that turns into a global colossus. But at the risk of sounding naive, this type of venture funding is about more than money. It's about helping build up local economic activity in small- to mid-sized cities that are struggling to create jobs and keep young talent from fleeing to larger urban centers.
Just this week, Harley-Davidson announced plans to shift some of its motorcycle manufacturing capacity overseas amid rising trade tensions between the U.S. and the European Union. These are the kind of quality jobs that cities like Milwaukee can ill-afford to lose. They're also the kind of quality jobs Northwestern Mutual hopes to funnel toward the Midwest's burgeoning startup world.
One of the funds, Cream City Venture Capital, recently made its second and third investments since launching in late 2017, participating in:
- A $1 million seed round for Lumanu, a marketing platform built to scale influencer marketing programs.
- A $2.8 million funding round for Bright Cellars, a personalized wine subscription service.
Again, those are small pieces of news in the traditional VC world. The larger news was buried in a press release announcing the Lumanu deal: The company will receive mentorship, co-working space, and "business support resources" from Northwestern Mutual.
"Entrepreneurship is an incredibly grueling and frequently lonely world," Schedler explains. "Having more of a psychologist background would be helpful -- knowing how to help [founders] manage through having a bad day. We try to be supportive as best we can."
The Next Big Thing
Just as Microsoft spawned a generation of millionaires (and billionaires) who went on to become entrepreneurs and angel investors in and around Seattle, Schedler says the key is to find that "one luminary investment" that can trigger "a great multiplier effect" across the Midwest, a region which features:
- Lower cost of living, with housing in major cities as much as 75 percent more affordable versus the Bay Area, according to The Hustle.
- A large concentration of top-tier universities producing 25 percent of the country's computer science grads.
- 60 percent of U.S. manufacturing capacity and 19 percent of the nation's patents.
Milwaukee is "never going to be the Bay Area -- and shouldn't try," Schedler says. "There's a belief among some that there's nothing happening [outside the Valley]. I don't believe that to be the case."
Tipping a cap to Steve Case's Rise of the Rest campaign, "each region needs to figure out what works for them, play to their strengths and develop their own ecosystem," he says.
And every founder has have an honest conversation about what "success" looks like for you: If it's a better quality of life vs. the bright lights of traditional Valley startup life, there's a lot to be said for the heartland.