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Saturday, October 25, 2014 |  Madison, WI: 56.0° F  Fair
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Nathan Lustig takes his talent abroad
What can Madison learn from the UW grad's work with Chilean startups?
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Lustig: 'Madison is one step below the Austins and Boulders of the tech world.'
Lustig: 'Madison is one step below the Austins and Boulders of the tech world.'
Credit:Carolyn Fath

It's revealing how often Nathan Lustig uses the pronoun "we" when he discusses the tightly connected world of Madison's tech entrepreneurs.

Just a tender 27 years old, Lustig ran two celebrated Madison enterprises as a UW-Madison undergraduate. ExchangeHut.com enabled sellers and buyers of UW football tickets to do their business online. And with Jesse Davis, Lustig launched Entrustet, a digital will that allowed people to transfer and delete online accounts upon death and their passage to the no-service hereafter.

When we talked over the past month (all praise to Skype!), Lustig, who comes from the Milwaukee suburbs, seemed as connected to Madison as ever - and its biggest booster.

"Madison is one step below the Austins and Boulders of the tech world," he says. "We could easily be at their level in five to seven years if we keep at it."

But here's the thing: Lustig is 5,400 miles away, waist-deep in a new adventure. In 2010 he was accepted in Start-up Chile, a much-talked-about venture program that brings entrepreneurs from across the globe to the South American nation of 17 million.

In return for a $40,000 grant, free office space and a one-year visa, entrepreneurs like Lustig move to Santiago and join the nascent Chilean startup community. Now in its seventh generation, the program has funded 580 startups launched by entrepreneurs from 50 countries, according to Start-up Chile's press officer Maite Larraechea.

Lustig bootstrapped and expanded Entrustet for his project. He and Davis wound up selling it to a Swiss rival, SecureSafe. Lustig, after learning Spanish, remains in Chile lecturing in entrepreneurism at two universities and brainstorming new projects. He'll be in town for one of his periodic visits in June.

The question for Madison, and perhaps more so for the state: Will this homegrown tech wunderkind return to Wisconsin to live and work? And might we learn something from the Start-up Chile program?

Given the results of the just released Kauffman Index of Entrepreneurial Activity (PDF), these are critical questions. Wisconsin had the fourth-worst record for entrepreneurial activity among all the states in 2012.

Lustig followed the familiar template of tech innovators. Even as a kid, he challenged convention.

By his own admission, Lustig was "a terror" in school. Hated homework. Rushed through his assignments. Refused to keep a work notebook. His parents, both lawyers, cut him slack...as long as he stayed on track to get into UW-Madison.

Lustig found his groove refereeing soccer. He says he became an independent contractor at 12 - booking games at his own choosing, biking to parks and making $15 or $20 per outing. He learned a lesson his very first game when a coach started swearing at him.

"I was the one with the whistle," he says, which pretty much defines his outlook on life. "I got used to making money and not having a boss. I was running my own show."

At UW-Madison, Lustig became expert at scoring football tickets. He'd charge a small fee for his friends and a larger fee for strangers. That led him to buy a rudimentary ticket website from a graduating senior. He and partners turned it into a seven-campus ticket marketplace that they sold "for the high six figures." Entrustet became his next project.

School was a drag. Lustig wound up a political science major on the five-year plan because he hated - that's his word - business school classes. They "offered nothing that helped me as an entrepreneur," he says. They were geared, instead, to advancing students whose ambitions were to land high-paying jobs in corporate America.

"They were very cutthroat because they needed a high rank in their class," he says. Lustig, on the other hand, wanted to launch his own business, and he had that IT instinct for collaboration and reaching out to colleagues.

He was, in short, a catalyst. A guy who makes things happen.

"What Nate says, he does," notes Joe Boucher, his lawyer and mentor.

"He's very resourceful in bringing people together," says Forrest Woolworth, cofounder of the PerBlue mobile gaming operation.

"He thinks very strategically about startup ecosystems and what it takes to build them from the grassroots," says Matt Younkle, cofounder of the music marketplace murfie.com.

Two examples: Lustig joined Younkle and SupraNet founder Bryan Chan to launch the annual Forward Technology Festival, which pulls in creative types and entrepreneurs from across the Midwest. He also brainstormed the formation of Capital Entrepreneurs, an influential founders group, with Woolworth and his PerBlue partner Justin Beck.

"So many of my friends were graduating and moving," Lustig says. "I figured, 'Let's meet up once a month for a beer.' I wanted to build a group where I could have more friends, and we could share our day-to-day struggles. It gets lonely as an entrepreneur."

Capital Entrepreneurs has an email list of 200 today. And Lustig's blog, the aptly named Staying Out of the Cubicle, is featured on the group's website even though Lustig works on another continent in another hemisphere, building a startup culture in another community.

Dude, are you coming back to Madison?

Guys like Lustig have helped put Chile on the map as a hotbed for entrepreneurs. The last round of grants drew 1,421 applicants for 92 slots, according to Start-up Chile's Larraechea. The newest round, which will be selected in late May, has 1,577 applicants pending from 68 countries.

Lustig has cashed in with the obvious product, available from Amazon: Start-up Chile 101: Everything You Wanted to Know About Living, Working and Doing Business in Chile.

So, Mr. Expert, would the Chilean program work in Madison or in Wisconsin? Lustig replies: Yes. Offering a $15,000 or $20,000 inducement and a place to work in return for select startups settling here for six months would probably result in 20% sticking here for good. "Those are the kind of smart young people you need to push the economy along," he advises. But the techy Ald. Scott Resnick, who is vice president of Hardin Design & Development (and Lustig's old friend from college), disagrees, arguing that "it's better to develop talent within the region than pay to import it."

A modest experiment is already under way. The Wisconsin Economic Development Corp., as part of the effort to establish Milwaukee as the center of freshwater research, is dangling six $50,000 grants, plus free office space, to select water technology startups willing to relocate. But the wide-scale adoption of the Chilean model seems laughably improbable given that the governor and the Legislature have failed for two years to advance a venture capital program to fund startups.

A more pertinent question is if Lustig himself will come back to Madison. He hints maybe yes, maybe no, maybe part-time if he's doing business in both Santiago and Madison.

Lustig's thinking is revealing of a 27-year-old's view of Madison. While he approves of how business-friendly the city and the university have become in the past few years, Madison doesn't appeal to him right now for distinctly personal reasons. "Basically, I don't think there's enough going on for a single young person if you're not interested in dating a student or going to student bars."

He explains: "Madison is one of the best cities in the world for an 18-to-24-year-old, and it's one of the best cities if you're married and thinking of a family. But it's got some work to do for people like me who are post-college and pre-family."

There was no detectable "we" in this sentiment.

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