Madison will never be Silicon Valley, but a New York City venture capitalist said Tuesday he believes the city has the potential to become a hotbed for startup tech companies.
“From my perspective, Madison holds great promise as a center for entrepreneurship,” said John Philosophos, a partner with the Manhattan-based Great Oaks Venture Capital firm. The Brookfield native is a graduate of UW-Madison and in charge of his company’s investments in the Midwest.
Madison can become a startup hub for a variety of reasons, Philosophos told a Wisconsin Innovation Network luncheon at the Sheraton Hotel in Madison. His company has roughly 160 companies in its portfolio. It’s backing 15 in Madison, making it the largest cluster outside the east or west coasts.
He was joined in a panel discussion by fellow UW-Madison grads and entrepreneurs Mateen Aini and Andy Walker. Aini, who went to Memorial High School, runs a marketing, gaming and analytics startup called Plyfe in New York City. But he intimated he’d like to move it to Madison.
Walker, a Stoughton native, is the chief technology officer of a Madison startup called “Fetch Rewards,” a grocery shopping app that gives shoppers mobile coupons aimed at influencing the way they buy groceries while they are in stores. Both men have started and sold other startup tech companies.
Walker said he and his wife decided to move to Madison to raise their four children here.
“I thought it would be career suicide,” he said. “But I can’t tell you how pleasantly surprised I’ve been. I had no idea. When I graduated in 2002, there was not as much going on here. Now, though, I couldn’t be happier with where the city is right now and I think there is a lot more runway for where things are going to go.”
Philosophos said Madison has an advantage over many other communities because UW-Madison is home to one of the country’s top computer science departments.
“If you look at centers of entrepreneurship, they are all built around good computer science schools. Austin has the University of Texas; Boulder the University of Colorado; Seattle, the University of Washington and Stanford in the Silicon Valley. We have that same opportunity because of our great computer science school.”
He said the challenge is for the university to push entrepreneurship.
“This is a research university, so a lot of our talent goes on to get PhDs or they migrate out to the Silicon Valley and work there,” he said. “We have a little work to do to keep more of that talent here. But I think that’s something that is starting to happen and will continue to happen.”
Philosophos said the Madison area is already developing a thriving “health tech ecosystem” that is rapidly evolving because of Epic Systems and what he called Epic “consultancies.”
“So there are reasons to be very positive about our prospects as a cluster for tech start-up activity,” he said. “It’s different here than in other markets like Silicon Valley though, where it’s very easy to find the connections, mentorship and support that you need in any facet of your business.”
But he said the area has talented startup veterans, calling Madison resident and Great Oaks advisor Scott Cooper – who attended the luncheon – “probably the best early stage strategic advisor we have on either coast.”
“There are (key) people here, but as an entrepreneur, you have to actively seek and engage them. They won’t find you and you probably won’t run into them at the coffee shop in the way you would in broader and deeper ecosystems in other areas.”
Philosophos said Silicon Valley venture capitalists often tell Madison startups they will back them only if they move to the West Coast. He said he wants nascent companies to thrive here.
“One of the things we’ve been trying to do at Great Oaks is pull together and foster the environment in Madison so that tech startups can stay here and succeed,” he said.
— By Brian E. Clark