Greg Maier is a hard man to keep up with. So is Emmanuel Mamalakis, his partner at Spreenkler Talent Lab in Milwaukee. They both move at hyperactive speed as they work to reinvent the entrepreneurial culture of the city with the fourth highest poverty rate in the country.
They are impatient with the amount of dough and the length of time it takes to get a typical new venture off the ground, so they are part of a growing national movement to sharply accelerate the process of launching new technology companies.
In effect, they take the business concepts of young code writers and put them in a pressure cooker. They have only been in action for a couple of months, but they already have five teams of would-be entrepreneurs writing code around the clock.
Their sparse space on the second floor of an old office building has been repainted, but that’s about it for amenities. There’s cold pizza, doughnuts and soda on a table, the meal of choice for geeks.
Both men are seasoned, successful entrepreneurs and lawyers. They don’t need to do this. But they clearly love the creativity of what they are doing. Maier does the mentoring of the IT projects, and Mamalakis provides small doses of seed capital and business smarts to each venture.
The young programmers work in close quarters on their laptops, kibitzing and helping one another with code development for their “apps.”
The accelerated development of their new business models relies on an iterative process. First, work furiously to develop a prototype. Second, find a customer who will help with the development and serve as a test site. Third, receive corrective feedback. Fourth, adapt code to customers’ desires. Fifth, do that over and over until the prototype and business model are ready for a real, paying customers. Then, go to market, expand the customer base and grow the business.
The goal is to have version one of the product and a paying customer in four weeks. Startup costs are less than $25,000.
Most high growth launches in Southeastern Wisconsin have taken a year or more to develop, and the launch costs average a half million dollars. Not all startups are in the IT area, and other technologies take longer to gestate. New drug companies take years to get to market, as much as 12 years.
So the Spreenkler formula is not for all ventures, but it offers great promise in the IT arena. Other similar labs are forming across the Heartland and the country. Spreenkler will lead a national level Hackathon next month that involves three other sites, including a software lab at Madison.
Once a new IT app has real customers, it will go for a second round of early stage investment. That is the ram-up money.
The collection of entrepreneurial players in Southeastern Wisconsin is starting about one high growth venture, called a gazelle, a month. The goal of BizStarts Milwaukee is to double that pace. Spreenkler should help with the acceleration.
And, how about this for a switch? Instead of a proverbial Wisconsin brain drain, the Spreenkler sponsored teams are attracting talent from other states to move to join the creative class on the east side, including talent from UW – Milwaukee and the Milwaukee School of Engineering. Young people are moving in, not out.
The Maier-Mamalakis model is part of the reinvention of the Rust Belt.