Last updated on August 19th, 2019 at 04:20 pm
When software engineer Roman Reynebeau decided to switch jobs five years ago, he faced a decision: stay in Milwaukee, or move to a more traditionally tech-focused city like Seattle, San Francisco or Denver.
The Little Chute native and his wife, Katlynn, decided to stay here because they wanted to be close to family and friends.
“At the time, my perception of Milwaukee was there just wasn’t a whole lot going on in the tech community,” Reynebeau said. “Little did I know, there was actually a ton going on. Five years later, not only am I more familiar with the tech ecosystem, but I’ve personally seen a huge uptick in activity.”
Now vice president of product development at Milwaukee-based logistics software firm MacGregor Partners, Reynebeau helps recruit other developers to work at the company – and sometimes to choose Milwaukee themselves.
“We’ve got a lot of really cool things that are happening in Milwaukee that everybody’s been working towards and we just don’t do a great job of necessarily telling stories and talking to each other about it and being proud about it and promoting it,” he said.
Milwaukee hasn’t fared well in attracting and retaining tech talent, according to a recent report from global commercial real estate firm CBRE.
It ranked 44th among the 50 largest U.S. and Canadian markets (by number of tech talent professionals) in CBRE’s 2019 Tech Talent Report. The report reviewed 13 metrics, including tech talent supply, growth, concentration, cost, completed tech degrees, industry outlook for job growth, and market outlook for office and apartment rent growth.
Milwaukee scored 29.26 on CBRE’s metrics. As of 2018, it had 31,620 employed in tech occupations, up 10.1% from 2013, with an average wage of $82,775, up 7.5% from 2013. About 800 tech degrees were awarded in Milwaukee in 2017, up 26.8% from 2012. The living cost in Milwaukee is 1% below the national average, while business costs are 3% above the national average. But Milwaukee is losing 20-somethings, at -2.9% from 2012 to 2017, while the average U.S. city gained 2.5% during that time. And it is a brain drain city, with 636 fewer tech jobs added than tech degrees awarded over roughly the past five years.
And Milwaukee’s tech talent efforts haven’t improved since last year. In CBRE’s 2018 Scoring Tech Talent report, Milwaukee ranked 43rd.
Madison, on the other hand, scored a 47.96 on CBRE’s 2019 metrics, rocketing up 10 spots in the rankings to 25th, which CBRE attributed to strong tech-centric universities. Madison had 23,470 employed in tech occupations in 2018, up 47% from 2013, with an average wage of $84,169, up 15% from 2013. Its labor force pipeline is strong, with 1,790 tech degree completions in 2017, up 42.6% from 2012. Madison’s living cost is 1% higher than the national average and business cost is 1% lower than the national average. Madison is still considered a brain drain city, with 205 fewer tech jobs added than tech degrees awarded over roughly the past five years.
What’s lacking here
Teresa Esser, managing director of Milwaukee angel investing organization Silicon Pastures, said a real estate company like CBRE may overlook the fact that there are brilliant engineers working inside some of the large Fortune 500 companies in Milwaukee.
“In my opinion, CBRE is specifically looking for where are rents going to go up,” Esser said. “I’m looking at something different. I’m looking at where can we build a good business that will have good incomes for investors and where you can make a good profit as an investor.”
“From there, we have to look at brand. We just have to look at how we’re promoting ourselves as a city. I think we’ve got a lot of opportunity to reinvent ourselves,” she added.
The startup community is achieving small wins, but Milwaukee hasn’t secured a major early-stage exit to hang its hat on – a success story to point to, said Tom Still, president of the Wisconsin Technology Council.
The relationship among the city and surrounding suburbs could also be more coherent, with the region uniting behind a common mission like Denver has done, he said.
“Madison, it worked on being funky and eclectic and Epic (Systems Corp. in Verona) is a great example,” Still said. “Milwaukee now, the Third Ward, other parts of the city, it’s coming on and it’s starting to get a reputation for being an attractive place to work and live, but it’s a bit more of a recent phenomenon.”
The pieces of the puzzle are there in Milwaukee, but its tech ecosystem is still developing, Still said. Madison had about a 25-year head start with companies like Epic and Promega Corp. seeing earlier success. Milwaukee has more of a traditional corporate culture, and had resistance to change until recently, he said.
“What else is Madison doing right? I think the region is big enough to be effective and small enough to be collaborative,” Still said. “Business, academia, government, independent groups like ourselves come together, talk regularly about common problems, opportunities and challenges.”
Pittsburgh is another city Milwaukee would do well to emulate, said Brian Kennedy, senior vice president of operations and strategic programs at the Pittsburgh Technology Council. Both have experienced deindustrialization and declining populations, and have sought creative solutions to those challenges.
In 1983, after unemployment reached more than 17% amidst the steel industry collapse, a group of Pittsburgh executives declared the city could no longer depend on steel and had to focus on high-tech jobs for growth, leveraging Carnegie Mellon University to reinvent itself, Kennedy said.
They created the PTC and the Ben Franklin Technology Development Authority. BFTDA formed four quasi-venture capital accelerators to invest in startups, he said.
“They had the right vision and the region rallied in a way that most places have a hard time doing,” Kennedy said. “Everybody got on the same page and focused and it took 20 years.”
Pittsburgh now has attracted Apple, Uber, Facebook, Google and other tech companies to open large offices in the city, and has developed a regional specialization in robotics and autonomous vehicles. One autonomous vehicle startup, Argo AI, raised $2.6 billion in July.
“We didn’t actually believe in ourselves until 2009 when the president brought the G20 to Pittsburgh,” Kennedy said. “At that point in time, Pittsburghers saw themselves differently and they were OK to start thinking beyond steel. The G20 was showcasing our city, but the more transformative change was on people from Pittsburgh: ‘Oh, we’re cool.’”
Defining Milwaukee’s identity
Over the past few years, Milwaukee-based Northwestern Mutual Life Insurance Co. has been leading the charge on improving Milwaukee’s pipeline of tech talent with the idea that not only the more tech-focused insurer but also the rest of the region’s tech community will benefit.
“The goal of the Milwaukee Tech Hub effort is to build a vibrant tech ecosystem and culture where people want to live and work, as well as create a thriving, innovation-based economy where technology and entrepreneurship are core to its success,” said James Hischke, senior director of tech advancement and outreach at Northwestern Mutual, in a statement. “Our overarching measurable goal is driving up the number of tech workers in the region.”
The effort also entails increasing the volume and velocity of innovation in the region; changing perceptions around the identity of Milwaukee; and improving the reality of living and working in Milwaukee for everyone, Hischke said.
Northwestern Mutual has worked to bring in other corporate partners on the initiative, including Milwaukee- and Downers Grove, Illinois-based Advocate Aurora Health. In 2017, the companies simultaneously launched $5 million venture capital funds, Cream City Venture Capital and InvestMKE, which are investing solely in Milwaukee startup companies. Advocate Aurora also joined Northwestern Mutual in organizing the second iteration of its Tech Hub Summit in 2018.
“Additionally, there are other nontraditional partnerships that have been formed and silos being broken,” Hischke said. “For example, there is more collaboration in the tech communities in Milwaukee and Madison, and the Northwestern Mutual Data Science Institute brought together both Marquette University and (the University of Wisconsin-Milwaukee).”
In March, Reynebeau and Philadelphia-based consultant Archna Sahay hosted a public event at MacGregor called #MKETech 101. Each gave a short presentation on their work in the tech space and the resources available to entrepreneurs in Milwaukee, and then an unscripted conversation ensued among attendees about what Milwaukee needs to do to succeed in the field.
Everything from duplicated, siloed efforts to convene the tech community, to the segregated nature of Milwaukee – and the need for economic successes to reach disinvested neighborhoods – were discussed.
Sahay, who has been active in building the Philadelphia tech community for several years and is now consulting with Northwestern Mutual on the Tech Hub effort, said building a sustainable tech ecosystem takes time. It took Philadelphia about 10 years to become a tech hub, she said, and Milwaukee is probably in year one or two.
“We’re in the digital economy. It’s not even like we’re preparing for it. It’s here, it’s moving at a fast pace, so how do we stay relevant as a city, as a community? How do we keep our citizens there and creating and building and innovating within our city? So, it was an economic growth imperative for us,” Sahay said of Philadelphia.
She pointed to research done at the University of California-Berkeley which found for every one job created in tech, another five non-tech jobs are created around it.
“So what tech does is it serves as a really strong catalyst for communities that are interested in growing jobs and growing their communities,” she said.
Asked what attainable thing Philadelphia did that Milwaukee could emulate, Sahay said: Communicate with each other.
“Get involved, have conversations – online, offline, whatever – but you have to create that critical mass,” she said. “You have all the raw material, because you’re so similar to Philadelphia. What you benefit from: So many Fortune 500s that we do not have.”
As Milwaukee is working to make itself a tech hub, diversity and inclusion are an integral piece of the puzzle – and they could be harnessed as a differentiator, said Nadiyah Johnson, founder of Milwaukee-based software company Jet Constellations. She calls it the Milky Way Tech Hub.
“To me, a tech hub is a place that fosters innovation and allows for collaboration and cooperation with tech companies and academic organizations … to advance the city leveraging technology,” Johnson said. “It’s really important when moving forward with a mission such as this to take on a grassroots effort and empower individuals that are not necessarily well-represented in the typical tech scene.”
Milwaukee should set its sights on being the coolest city in the United States, starting with a wacky marketing campaign such as: “the polar vortex: certified cooler than Antarctica,” Esser said.
“We need to make a new Milwaukee that’s cool and knows it,” she said. “Because people who work in technology want to be where it’s cool. I think it’s going to take a lot of work to change the mentality.”
A major event like the 2020 Democratic National Convention is a huge opportunity to showcase what’s going on in Milwaukee and tell its positive stories on a broader scale, Sahay said.
“But you have to have an organized message about what it is that’s happening,” she said. “It has to come from conversations like this; it has to resonate with what is authentic to Milwaukee.”
Laws of attraction
Amanda Daering, chief executive officer of Milwaukee-based tech recruitment firm Newance, works with area employers like Panorama Mortgage Group, Layer One Media and HealthChampion to fill roles in areas like software development and data and business analytics.
“Typically, companies come to us when they’re interested in engaging with really high-quality passive talent, particularly with high-skilled technical talent,” Daering said. “Those people are getting a lot of messages daily.”
While it’s not always possible to woo someone to Milwaukee, newance has had some success.
“We just had a data scientist start at Bright Cellars. He moved here from New York,” she said.
He and his family were looking for a change of pace in their lifestyle, but the data scientist still wanted to have good tech challenges to solve and access to the tech community while making a big difference, Daering said.
“The combination of lifestyle and the ability to work on interesting, dynamic teams is really important,” she said. “So, when you can show someone that they can find interesting work here, when they get here they tend to really love the city. The challenge is to get people to come here and experience the city.”
Newance and sister company NEWaukee give job candidates concierge tours of southeastern Wisconsin tailored to their interests to try to demonstrate where they would fit within the region, Daering said.
Milky Way Tech Hub is working to recruit diverse employees to Milwaukee tech jobs, creating a talent pipeline, Johnson said.
“It’s just been a constant effort to brand Milwaukee as a place where black and brown people…can thrive in tech,” she said. “More and more people are seeing that Milwaukee is a city that fosters a culture that embraces diversity and has great potential for people with all sorts of backgrounds, which I know has been a huge struggle with larger tech hubs in the past.”
“We believe in investing in people so we’re not necessarily going to find an industry expert that has 30 years of experience that lives in Manhattan and we’re going to somehow pitch them on Milwaukee. That’s just not realistic,” Reynebeau said.
Instead, he has taken advantage of Milwaukee’s strong education cluster to find hungry, young, local talent seeking opportunities. Founded in 2012, MacGregor has grown to about 75 employees and $11 million in revenue. It also offers perks like unlimited sick days, paid maternity and paternity leave, and a paid sabbatical program.
“The other strategy I would love to see more companies embrace is just being willing to allow more employees to work remotely,” Reynebeau said. “That’s unlocked a plethora of talented employees, a massive labor pool that we otherwise wouldn’t have access to.”
Selling the city
In 2011, Facebook’s Mark Zuckerberg told a group of startup companies if he could do it all over again, he would have kept the company’s headquarters in Boston. He said it’s not necessary for a startup to be based in Silicon Valley to succeed.
The factors that make Milwaukee appealing for tech talent include the lower cost of living, lower home prices and lower business costs, as well as the lack of traffic and the arts and cultural amenities, including its renowned festivals.
“A smaller mid-sized city, there’s so much more opportunity to make a name for yourself and make a lasting impact on the community, and that was really attractive to me,” Reynebeau said.
Daering said she finds there is a misconception that people have a negative view of Milwaukee. More often, they don’t have an opinion yet at all.
“I believe people come here because they see the opportunity and the momentum that’s currently building,” Daering said. “I believe people stay here because they’re able to keep their roots and also to blossom where they’re planted. People who have been given great opportunities early in their careers grow into those companies and they stay here in the region.”
In Milwaukee, some employees are seeing they can make a bigger impact than in larger markets, Johnson said.
“One thing that I’ve noticed is that within the young professional network, it’s been said that it’s easy enough to establish a good personal brand for yourself and progress your career here in Milwaukee,” she said.
Larry Hitchcock grew up in Shorewood and graduated from UW-Madison in 1983. He went to work for a startup in Madison, which then moved him to San Francisco. Hitchcock has stayed in California, working in the tech field, ever since.
He was in town visiting his parents at the Cudahy Tower in downtown Milwaukee in fall 2017 when he realized it was Startup Milwaukee Week.
On a whim, he attended the Reverse Pitch MKE session, in which Northwestern Mutual asked enterprising technologists to help it solve some of its biggest challenges. Hitchcock had an idea.
“I was there randomly, but I got really excited about it because it’s rare that you get a company of the size and the scale of Northwestern Mutual to stand up and say, ‘We tried buying something for this problem but there’s nothing available.’”
He and Matthew Salzer created social media lead generating tool Socialeads, and ended up winning the contest. Hitchcock decided to move back to Milwaukee to be closer to his client. He’s what recruiters call a “boomerang” employee.
“Overall, (Milwaukee) wasn’t on my list five years ago, but it certainly wasn’t out of my consciousness because of my family being here and them constantly sending me more news about Milwaukee,” Hitchcock said. “Now once I’m here, of course, I’m really excited about how changed everything is. I’m super encouraged at the potential to create a pipeline of people discovering Milwaukee from the West Coast because there’s just so much more quality of life here that I’ve experienced just in the last nine or 10 months since I’ve been back here.”
Leaders at Northwestern Mutual and Advocate Aurora have been working to spin off the Milwaukee Tech Hub effort into its own organization that Hischke described as an “independent, standalone coalition.”
Sources have indicated the organization would be a nonprofit funded equally by the companies and headed by Hischke.
Last July, Northwestern Mutual created a website for the Tech Hub effort where it details the region’s tech ecosystem and keeps the community apprised of its efforts on the initiative. The company has now hosted two Milwaukee Tech Hub Summit events to garner additional corporate support for attracting tech talent to the region, and in October is hosting its second Fall Experiment event, a local take on South by Southwest.
Meanwhile, individuals in the space are continuing to preach the gospel of Milwaukee.
“All of the large companies would benefit from an increased pool of highly motivated, highly intelligent, well-trained, well-educated technology workers, and I think that’s the point of the tech talent effort,” Esser said.