The poster is bright white with big red letters. You can't miss it on the wall at Facebook's headquarters in Menlo Park, Calif.

It asks:

"What would you do if you weren't afraid?"

It's a provocative idea, the notion that fear can paralyze but absence of fear can liberate. Good advice for Facebook's employees.

And good advice for a risk-averse city.

There is, of course, reason for fear. Over the past few weeks we've been told that Milwaukee is one of the nation's most "distressed cities," that the city has an eviction epidemic and that poverty is the worst it's been in 30 years.

The Great Recession carved a swath of hurt through old industrial cities. Workers, homes and dreams were abandoned. Since then, state budget-cutting has made matters even worse. For every dollar Milwaukee taxpayers sent to state government in 2014, they received only 80 cents in return, far below what they got back in years past.

Milwaukee also has a poor track record for business development. The area was 39th out of 40 large metros for entrepreneurial activity, according to the Ewing Marion Kauffman Foundation's 2015 report.

A recreation of the poster at Facebook’s headquarters in Menlo Park, Calif., which was created by graphic designer Ben Barry.

These statistics matter: Start-up businesses account for nearly all net new job growth in the United States, according to a 2013 study led by John C. Haltiwanger of the University of Maryland, which echoes what the experts at the Kauffman Foundation have found. More new companies can equal more new jobs. If a city or region isn't creating new companies, its economy likely will lag.

Milwaukee needs a better, bigger pipeline so good ideas can flow faster into the market and so more new companies can create jobs.

What could we do if we weren't afraid?

Developing the culture

Joe Kirgues is a pipeline builder. He is co-founder of gener8tor, a successful business accelerator that works in both Madison and Milwaukee and has helped launch dozens of young companies over the past several years.

Kirgues asks this question:

What would it mean if five more start-ups a year backed by venture capital were created in Milwaukee?

If that happened, at least $10 million would be "imported" into the community and 200 new jobs would be created in the first year, he says. And the number of jobs could double for the foreseeable future as tens of millions of additional dollars helped finance a new Milwaukee.

It's a big dream, especially since many young companies fail. But the regions that do the best have a ready pipeline of high-quality young companies ready to go. Milwaukee does not have that — at least not yet.

Best and worst U.S. metro areas for startups Source: The Kauffman Index

"In communities that work," Kirgues notes. "It's all about raising the ceiling."

As Milwaukee leans into the entrepreneurial economy, a few simple metrics matter the most:

How many new companies are being founded? How many new jobs are they creating? How much new revenue are these companies generating? How many new dollars are flowing into the region to finance new ventures?

Milwaukee's leaders in business, education and government can help by "identifying what the problem is, setting the goals and aligning people around those goals," John Lettieri, co-founder of the Economic Innovation Group, told me. "You see some cities that have made entrepreneurism and developing that culture a central goal."

This hasn't happened in Milwaukee, where a variety of groups in recent years have been doing their own thing and calling it economic development. Some of the work is productive. Some is not.

But recently, I've seen signs of better cohesion.

'A lighthouse'

I toured Ward4 Milwaukee last week — another pipeline builder. The start-up hub and co-working space is on the second floor of a six-building complex at St. Paul and Plankinton avenues that for years was the home of the John Pritzlaff Hardware Co., a hardware wholesaler and the Amazon of its time. By aggregating a variety of players in one place, Ward4 might have the effect of creating a more strategic, cohesive approach to building out Milwaukee's start-up scene.

The law firm Quarles & Brady has space there as do gener8tor and Startup Milwaukee, a support organization for young companies. The Commons, an entrepreneurship program developed by a consortium of academic institutions, is there and so is the Greater Milwaukee Committee's MiKE program, which aims to foster innovation.

Ward4 has individual offices for lease but also shared space set amid exposed sturdy old wooden beams and posts that evoke Milwaukee permanence. There are conference rooms for group meetings and smaller "huddle rooms" for pitches. The morning I visited, 1 million Cups was using a conference room for its weekly meeting. Developed by the Kauffman Foundation, 1 Million Cups is a national program to educate and connect entrepreneurs.

Here's what can happen: An entrepreneur has an idea. She gets accepted into gener8tor's program for coaching and initial financing. After finishing gener8tor's program, she rents space at Ward4. From there, she can run her company, make pitches to investors, rub shoulders with other like-minded innovators and learn how to be an entrepreneur in a safe harbor. She can make the contacts that will help her idea set sail.

Bright Cellars, a monthly wine club, which co-founder Richard Yau calls the "Pandora of wine," is at Ward4. It has 15 employees and 6,000 members. Yau and co-founder Joe Laurendi were MIT roommates when they founded the company. They were lured to Madison by gener8tor's program and then to Milwaukee after they completed the program.

Ward4 encouraging entrepreneurial culture Mike De Sisti The entrepreneurial culture has developed substantially in Milwaukee as of late. Ward4 Milwaukee, a start-up in the Pritzlaff building complex south of downtown, is one of the best places to see the entrepreneurial culture. Photo Gallery: Ward4 encouraging entrepreneurial culture

Scanalytics Inc., founded by Joe Scanlin, is right down the hall. The Madison native develops intelligent floors that collect data that he markets to retailers and other customers to help them understand foot traffic patterns. Scanalytics has 14 employees.

Nearby is devCodeCamp, a 14-week software boot camp founded by Jim Brent. The company has 20 graduates so far and 50 more are enrolled.

Until last June, Milwaukee didn't have anything like Ward4. Brian Taffora, managing director of CSA Partners, the venture capital firm started in 2013 with funding from Milwaukee County Executive Chris Abele and others, said it's based on similar spaces such as 1871 in Chicago or COCO in Minneapolis. It has the look and feel of American Underground in Durham, N.C., which I toured last fall.

Any city serious about building a pipeline of young companies needs a start-up hub such as Ward4. So far, Ward4 has 25 tenants/members across 35,000 square feet.

Taffora says the idea was: "Let's create something that serves as a lighthouse...a place where you come to innovate."

Abele, who is actively involved with Ward4, says: "The whole point of the space is to have as many productive collisions as possible."

Where the recovery never reached

A lot of the building of a smarter entrepreneurial culture has to happen on the ground in places such as Ward4 and gener8tor. But there are policy issues for the state and federal government to address as well. And that's where the Economic Innovation Group might prove helpful.

Lettieri, who previously worked for Republican Sen. Chuck Hagel of Nebraska, founded EIG last year with Steve Glickman, a former economic adviser to President Barack Obama. It produced the recent study showing Milwaukee among the top 10 most "distressed" large American cities.

The study illustrated gaping geographic gaps in vitality after the Great Recession. "The recovery never reached some of those areas, period," Lettieri said. Milwaukee was one of those shorshortchanged. EIG aims to advocate for policies that encourage entrepreneurship and promote investment in communities that have fallen behind. It has the backing of Napster founder and venture capitalist Sean Parker and also Ron Conway, who has been called the "godfather" of Silicon Valley.

Percentage of state in poverty, 1980-2014; Percentage of state children in poverty, by county, 2010-’14 Source: University of Wisconsin-Madison, Applied Population Laboratory

Glickman and Lettieri are frustrated with "legacy programs that have fallen short" and want to catalyze new thinking about the problems of devastated urban areas. While they do not have a legislative agenda yet, EIG is working with a bipartisan group of policy-makers to bring new capital to and encourage entrepreneurship in distressed areas. Don't be surprised if they suggest using the tax system to incentivize investors. A smart set of targeted tax credits could work wonders.

"There is not some magic federal government tooth fairy stimulus that's going to come into Milwaukee and solve all these problems," Lettieri says.

"There is a central role for the private sector to play," Glickman adds. "If the capital isn't going to come from the private sector, it's probably not going to come." America Online founder Steve Case is traveling a similar path with his Rise of the Rest tour, aimed at showing how high-growth companies can start and scale up anywhere — not just on the coasts.

More entrepreneurial growth could begin to fill in the gaps in aging industrial towns such as Milwaukee, and universities can be part of the solution. Regions that are doing the best often have a knowledge hub at their core. Think Austin, Texas; San Jose, Calif.; or Raleigh/Durham, N.C.

Or think Madison, home to state government and the University of Wisconsin-Madison, a billion-dollar research engine.

Madison and Milwaukee

Wisconsin's capital has a much more vibrant start-up scene than its bigger neighbor to the east. In the EIG report, Madison was 11th "most prosperous" among the nation's 100 largest cities.

Over the past 20 years, the Madison area has drawn on its natural advantages to develop a reliable entrepreneurial strategy that makes deals easier to do. Well more than 100 companies fill University Research Park on the city's west side and thousands of people work there. For years, the Wisconsin Alumni Research Foundation has been a powerhouse licensing agent for the university's intellectual property.

"Up until the last couple of years, Madison's brand was the university, the state capital, natural beauty, athletics and recreation," says Zach Brandon, president of the Greater Madison Chamber of Commerce. "Nobody ever talked about Madison and business. That's changing, and people are beginning to see Madison as a place of industry and a place of innovation."

Change in median income for selected Dane County and Milwaukee County groups Source: U.S. Census Bureau

In Milwaukee, UW-Milwaukee and the Medical College of Wisconsin have had some success in commercializing their research, but judging them on the metrics that really matter — jobs and private investment — the successes have been modest. Both are trying, though, and there is a lot of potential if they can figure out how to tap more of their intellectual property.

UWM relies on industry partnerships to help fund research and has worked to develop what Research Foundation President Brian Thompson calls "well-worn pathways" to help researchers commercialize their work. "In the 10 years I've been here, it's dramatically different," Thompson says of the attitude of UWM's faculty toward commercialization. And now with the new Lubar Center for Entrepreneurship about to rise on Kenwood Blvd., "I would very much like to see entrepreneurship deeply embedded in what we're doing."

UWM and other state-funded schools face daunting challenges because of the decision by Gov. Scott Walker and the Republican-controlled Legislature to carve $250 million out of the university system in the last budget. It was a politically convenient decision for Walker, then on the cusp of a presidential run, that is doing untold harm to the mission of Milwaukee's UW campus. In a word: Dumb.

"We believe universities are operating at one-tenth of their commercialization potential," says Kirgues of gener8tor. "In Milwaukee, that commercialization gap is the lowest hanging fruit for translating the incredibly talented work that is going on in the universities into commercial opportunities."

And what about the big ideas, smart people and intellectual property locked up in Milwaukee's big companies? Is that a competitive advantage in brewing a start-up culture here? It should be.

Brandon of the Madison chamber says the right tax incentives might help. "If I had a magic wand and I was in Milwaukee, I would want...every one of those companies to be incentivized to do their research and development in our own backyard," he said.

To cook up the right brew, though, we need the right ingredients, including a bigger appetite for risk.

Are we hungry enough?

Late last year, WARF provided funding for gener8tor to run a farm team program in Madison to help more local companies grow enough to be accepted into its premier program, which on March 11 was named one of the 16 best in the country.

No one in Milwaukee has stepped up to help gener8tor build such companies here.

•••


I spent a morning at Facebook's sprawling headquarters last fall as part of a fellowship that took a group of journalists to the West Coast. The first thing you notice: The Frank Gehry-designed building stretches half a mile (it's all one room, really) and is "finished" in plywood and concrete. The reason: Facebook isn't finished connecting the world, and so its building is designed to remind workers of that.

Art is an integral part of the culture at Facebook. Posters say things such as "We are 1% finished" or "Nothing at Facebook is somebody else's problem."

I found my favorite poster online and hung it in a prominent place in our office.

"What would you do if you weren't afraid?"

It's how we have to think in a challenging business. What else can we do but keep innovating?

What else can Milwaukee do?

Like Facebook, the city is nowhere close to being finished.

The Journal Sentinel regularly reports on innovation and entrepreneurship at OnRamp at JS Online.

David D. Haynes is editorial page editor for the Journal Sentinel. Email dhaynes@jrn.com Twitter: @DavidDHaynes