SurveyMonkey has come a long way since Ryan Finley started the company in his Madison, WI, apartment.
The online polling service, which counts Facebook and Harvard among its customers, began in 1999 after Finley earned his computer science degree from the state’s flagship university.
It survived the dot-com era’s collapse, reportedly bootstrapping its way to $30 million in sales before selling to Spectrum Equity and Bain Capital in 2009.
Last year, a huge new financing round valued the company at $1.35 billion. SurveyMonkey now employs more than 250 people in the U.S. and Europe.
But Wisconsin is reaping none of the benefits of SurveyMonkey’s growth—no jobs, no tax revenue, and none of the industry buzz that comes with housing such a valuable company. That’s because Finley moved SurveyMonkey to Portland, OR, in the company’s early years, and later established its corporate headquarters in (you guessed it) Silicon Valley.
SurveyMonkey isn’t the only prosperous startup that Wisconsin has missed out on. Silver Spring Networks was founded in the Milwaukee area in 2002, but relocated two years later to California. That company, which makes software for smart grids, raised $81 million in an initial public offering last year.
More recently, tech startups like TrustEgg, Spill, and Understory have left America’s Dairyland for what founders see as greener pastures in other parts of the country. Others, like StudyBlue, remain incorporated here and have kept a few key staff members local, but have shifted most of their operations and employees elsewhere.
There’s no doubt losing those companies hurts Wisconsin’s efforts to wean its economy off a dependence on agriculture and old-school manufacturing by building a high-tech cluster. Although the state continues to rank poorly in entrepreneurship rates and venture capital investments, it’s starting to build some momentum with new micro-VC funds, groups striving to nurture the nascent startup community, and a small-but-promising crop of growing young companies.
But Wisconsin still has few tech startup wins to its name—which underscores the missed opportunities with success stories like SurveyMonkey and Silver Spring Networks.
“Had both of those companies stayed in Wisconsin, we’d even be further along today,” says Tom Still, who has helmed the Madison-based Wisconsin Technology Council since 2002. “They would have been significant players in this state to this very day. But I don’t think anyone is dwelling on the fact that they felt they had to leave at that point in time.”
These company relocations still occur. But Still points out that there are more reasons now for a startup to stay here than there were a decade ago.
“I think our ecosystem is as strong as it’s ever been in my experience,” Still says.
Joe Kirgues, who co-founded Wisconsin startup accelerator Gener8tor in 2012, has watched that strength grow. The 23 companies that have graduated from Gener8tor’s program have gone on to raise about $25 million and create more than 150 jobs, Gener8tor says.
“The number of companies that are being funded [in Wisconsin], the quality of those companies, and the velocity of activity is almost unrecognizable” compared with four years ago, when Kirgues began directing angel investments, he says. “I think we’d all admit that as far as we have come, it almost underscores for us how much farther we have to go before we hit our full potential.”
So what’s holding the state back from realizing that potential?
