By Becky Beaupre Gillespie, Crain's Chicago Business
Mobile media entrepreneur Elisa All is leading me through the airy space at 1871, talking about the contagious whir of energy that flows through the digital startup hub that has been her work home since last month. The founder of 30Second Mom is still in the gender minority at the Chicagoland Entrepreneurial Center's incubator, which opened in May, but there's significant grass-roots enthusiasm among female members to draw more women applicants — no easy task in an industry still dominated by men.
“I know a lot of women have ideas but they are intimidated by, 'How do I do it?' " said Ms. All, an early dot-commer who founded iParenting Media, a multimedia publishing company she sold to Walt Disney Co. in 2007, and whose new venture was the subject of a Crain's "Entrepreneurs in Action" video back in March. “This is the bridge. It ties the entrepreneur to this community of people from the VCs to the dealmakers to all these amazing people. Being accepted in 1871 automatically gives you a credibility — it's a warmer lead.”
The Ewing Marion Kauffman Foundation estimates that only about 10 percent of high-growth tech startups have female founders, but 28 percent of businesses at 1871 have female founders or founding members. These entrepreneurs aren't just changing the digital landscape; they are part of a broader movement, navigating a final frontier in industries where female faces are still scarce.
Last week I spent some time with female entrepreneurs in some of these fields: technology, engineering and — just to shake things up a bit — meat cutting. Their common message: Glass walls can be broken, self-confidence is key, and mentors abound: Sometimes you just have to find them. Sometimes, you just have to be them.
A Grassroots Effort at 1871
Serial entrepreneur Genevieve Thiers, a CEC board member and a member of 1871, wrote in this space last February that she hoped to see women-led startups representing at least one-fifth of the 1871 membership. They have exceeded the number, and Ms. Thiers hopes it will continue to rise.
"1871 is hugely committed to women entrepreneurs ... unfortunately, not as many as we'd like to have are applying," Ms. Thiers told me an email last week. “Being a woman does not mean that you get in automatically — you're held to the same standards as all other applicants — but it does mean that you'll get some instant mentorship from entrepreneurs like me who really, really want to see more women in the tech space."
According to a Kauffman Foundation report, although women have climbed the corporate hierarchy as tech employees, they are lagging as entrepreneurs in this field. The glass ceiling may be breaking, but glass walls — built partly from a lack of access to networks, mentors and capital — are still holding many back from big business growth.
The fact that 1871 offers access to the right kinds of people and advice is precisely why Ms. All would like to see more women there: “This is the land of opportunity for digital entrepreneurs,” she said.
Although there are no formal initiatives to attract women members, technology has “often been a male-dominated industry, and that's changing, and we want to support that,” said Melissa Lederer, the CEC's chief marketing officer.
The effort to draw women to 1871 has grown fairly organically. There's an informal “Ladies Who Lunch” gathering that meets weekly, and women like Ms. Thiers and Ms. All are determined to act as mentors and spread the message.
“People here are so motivated and creative, and they want to be a part of what's around the corner in digital media, and so do I,” Ms. All said. “Being around like-minded people is not only inspiring, it's validating. And that feels good. In normal life, people can look at you like you're crazy: 'What are you doing on social media all day? How are you ever going to make money doing that?' ”
Climbing to the Top in Meat Cutting
Kari Underly built her business in a different sort of male-dominated environment. She's a third-generation butcher and the owner of Range — an education, research and marketing firm that serves the meat industry and will celebrate its 10th anniversary next month. (Ms. Underly was also the subject of a Crain's "Innovators" profile back in June.) When she began her career in meat cutting — a field in which only about one-fifth of workers are women, according to the Bureau of Labor Statistics — she was essentially told to lower her expectations. She didn't. Instead, through hard work and sheer determination, she rose through the ranks.
“There were no other women. I was told I would work at a small store, I wouldn't work in a large store. They didn't think I could handle the work. But eventually that all went away,” Ms. Underly said, adding with a laugh: “I became their boss.”
When she was starting Range, she had to fight mental hurdles typical for many new entrepreneurs — waking up in a panic at night, wondering what she'd gotten herself into. But she pushed on. Her biggest mistake along the way was underestimating her own value; after all, she'd become accustomed to seeing men outearn women. But as she gained success, media attention and recognition — including for her 2011 book, “The Art of Beef Cutting: A Meat Professional's Guide to Cutting Techniques and Merchandising,” which was nominated for a James Beard Foundation Award — much of that melted away.
Today, she knows her value — “I'm Kari Underly and that's worth something” — and she's happy to share with other women what she's learned.
“Pave your own way,” Ms. Underly said. “Just because the men have dominated an industry doesn't necessarily mean that's the right way. You have a unique perspective and skill set that could help advance that industry.
“You have to be tenacious. It's hard, I know, because as women we tend to have our feelings on our sleeves sometimes, but try not let that be your focus.”
And, of course, there are some upsides: When you're the only woman in the room, people tend to notice you.
“If I'm at a trade show and I'm doing a workshop or something like that, people will stop just because I'm a woman talking about a meat,” she said.
Recruiting Female Engineers
Regina Webster, who owns a Chicago-based traffic engineering firm that employs 30 full-time and 10 part-time staff, certainly remembers the benefit of being a rare female face when she was starting out. Engineering has long been dominated by men; women account for about 14 percent of engineers, according to 2009data from the U.S. Department of Commerce.
“There were plusses and minuses. People would remember who I was, I was the only woman,” said Ms. Webster, 58. But “it was lonely. I wound up bonding with the secretaries at work.”
That loneliness was part of what led her to set up shop on her own in 1990. But, when she was ready to expand from a sole proprietorship and start hiring, surrounding herself with other women engineers wasn't always easy. After all, it's not always a lack of interest in hiring women that holds firms back, especially in the male-heavy STEM (science, technology, engineering and math) fields. Although women make up nearly half the U.S. workforce, they fill less than a quarter of STEM jobs.
“I was very sensitive” to wanting to hire women, she said. “I was like, 'Shoot, I'm a woman-owned business, I should be having women in here. This is nuts.' I was embarrassed."
But now, women engineers outnumber men at Regina Webster & Associates, 7-to-4. She doesn't turn away talented candidates because of gender — she's happy to have men — but when she brings in a woman, she's “extra excited,” knowing she's doing her part to help change her industry.
She believes women should embrace the characteristics they bring to business. Her message to other women in male-dominated fields is simple: “Have confidence in yourself. Believe what you have to offer is worthy,” she said. “There is no need to change who you are to get business, to make the connections. Just be who you are.”
Read more: http://www.chicagobusiness.com/article/20120919/BLOGS06/120919732/where-the-boys-are-women-building-businesses-in-male-dominated-fields#ixzz26wl3CPO8
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By Alter NOW
Chicago’s high-tech community wants to lure the area’s start-up companies back to 1871 — the year that the Chicago Fire burned the city to the ground. 1871 is the name of a 50,000 SF space on the Merchandise Mart’s 12th floor designed to house entrepreneurs seeking a collaborative and flexible work environment. The name reflects the spirit of innovation that rebuilt the city after the 1871 fire, said Kevin Willer, president of the Chicagoland Entrepreneurial Center (CEC).
The non-profit CEC operates the space with support from venture capitalist J.B. Pritzker and the State of Illinois, as well corporate sponsorship from companies such as Comcast and Cisco Systems, Inc. Willer and Matt Moog, founder and chief executive of Viewpoints Network, led efforts to create a focal point for Chicago digital technology start-ups.
Chicago is a national leader in start-up companies. Writing in Forbes, Kelly Reid notes that a new start-up is formed in Chicago every 48 hours. “It takes about 10 years for a first wave of start-ups to succeed or fail, and those that make successful exits begin investing their own money and mentoring the next generation. According to Built in Chicago, it takes about two of these cycles — or 20 years — to build an entrepreneurship community.” Chicago is “right at the beginning of the boom. There were about as many digital start-ups founded in 2009 (72) as there were in the prior two years (73). In 2010, the trend continued; 107 between 2008 and 2009 and 98 in 2010. The 193 companies founded in 2011 buck the trend; there were only 170 companies founded in the prior two years, indicating very positive growth. 193 start-ups in a year amounts to a new company founded every two days.”
According to USA Today and the National Capital Venture Association, San Francisco (not surprisingly) is the nation’s leading home of start-up tech firms, with Boston occupying second place. These are followed by New York, Los Angeles, Washington, D.C., San Diego, Chicago, Boulder/Denver and Seattle.
Employment growth in the high-tech sector is fueling strong rental rate growth and declining vacancies in tech-oriented office markets of San Francisco, New York and Seattle, among others, according to CB Richard Ellis. “The strengths of these tech-centric office sub-markets, with the strong rental rate growth and declining vacancies, are major factors supporting the overall office market recovery,” said Colin Yasukochi, CBRE’s director of research and analysis. According to Yasukochi, “With the high-tech economy growing nearly six times faster than the national average, we expect that these sub-markets will continue to outperform.”
Willer points out that the CEC isn’’t an incubator, but a collaborative workspace where entrepreneurs can bounce ideas off each other. Venture capital and angel investors also have a presence at the CEC. “Economic development is about creating new enterprises as well as supporting corporations that are already here,” Willer said, noting that he hopes 1871 will become part of the Chicago’s tech “ecosystem”. Chicago start-ups raised $1.45 billion raised in 2010, the majority from Groupon which is evidence that there is an energetic tech community in the city.
Demand for 1871 space exceeds the supply. “On the first day we had 50 applications from companies come in,” said Steve Collens, senior vice president with The Pritzker Group. “They continue to pour in,” he said. “The reality is that there are just very few co-working spaces here. People are scattered from Ravenswood to River North to the West Loop.”
Chicago’s largest tech company lease in seven years was 572,000 SF, which Google leased for its Motorola Mobile subsidiary, also in the Merchandise Mart.
By Melissa Delaney, BizTech
After leaving IBM to start his own business,Erik Severinghaus heard about space in Chicago’s Merchandise Mart — the world’s largest commercial building — where a handful of digital startups were trying to make a go of it. People found the space through word of mouth and dubbed it Fail Cube, after the startup philosophy that success comes through failure and quick rebuilding.
“It became the worst-kept secret,” says Severinghaus, founder and CEO ofSimpleRelevance, which helps businesses personalize their online communications. “Its reputation preceded it.”
Less than a year later, Fail Cube morphed into 1871, a small-business incubator that opened its doors last spring to 100 digital startups. With 50,000 square feet of office space on the 12th floor of the Merchandise Mart, the public-private nonprofit offers fledgling businesses everything from desks, Internet access and meeting space to beer and pizza on Fridays. “It takes a lot off my mind,” Severinghaus says.
The amenities are great, but 1871’s real value is in the networking and educational opportunities it offers. Members pay between $125 and $400 per desk for month-to-month leases and have access to educational seminars, business advisers, mentors and networking events.
The number of business incubators in the United States, up from 12 in 1980
Source: National Business Incubation Association
“That’s the value-add,” says Kevin Willer, president and CEO of the nonprofit Chicagoland Entrepreneurial Center, which operates 1871. In addition to the startups, the space is occupied by four local universities; three venture capital firms; a traditional incubator that offers a four-month program; and Code Academy, a web development course that runs for three months. Illinois Gov. Pat Quinn and British Prime Minister David Cameron are among 1871’s high-profile visitors.
Those who lease space in 1871 are surrounded not only by powerful connections, but also by “incredibly smart entrepreneurs” who encourage each other, Severinghaus says. “It creates a friendly rivalry where we’re all pushing each other, helping each other. We talk a lot about creating the opportunity for serendipity.”
The 1871 Approach
But the creation of 1871’s startup community had more to do with hard work than with chance. During meetings last year to discuss opportunities, entrepreneurs agreed there was little available office space in the city for startups. So Willer and Steven Collens, senior vice president at The Pritzker Group, a private investment firm, set out to solve that problem. They visited some of the top incubators in the country for ideas before opening 1871. Today, the Chicago-based group serves as a model for other cities looking to start small-business programs.
“The big difference between what others have done around the country and what we’re doing here is this is a nonprofit, an economic development tool,” explains Willer. Unlike traditional incubators, 1871 doesn’t take equity in companies.
“If we’re competing with anyone, we’re competing with other cities around the country,” Willer added during an interview in July, just days after Chicago’s Mayor Rahm Emanuel gave a speech at 1871 about creating a home for new businesses.
As for the name, 1871 was the year of the great Chicago fire. “The real story is not the fire, but what happened after the fire,” says Willer, adding that modern Chicago was built by people who started over. “So we named this space to reflect that spirit of innovation. We could be literally changing the face of the Chicago business world.”
Wide Open Spaces
The 1871 layout is open; reserved desks cost $400 a month and shared desks, $250 a month ($125 for nights and weekends). There are 100 assigned desks and about 300 shared spaces, where it’s first come, first served.
Photo: Todd Winters
“It creates a friendly rivalry where we’re all pushing each other, helping each other. We talk a lot about creating the opportunity for serendipity,” says SimpleRelevance CEO Erik Severinghaus.
“It’s like a giant coffee shop,” says Matthew Furlong, founder of ViderExto, an 1871 interactive marketing company that produces and displays high-definition engaging experiences of premier destinations on its web platform.
The 1871 space has an actual coffee shop, as well as a meeting space that holds 400 people. “It has everything you could ever need in one place,” saysErica Bethe Levin, cofounder and editor in chief of CheekyChicago, an online lifestyle magazine and one of the startups at 1871. “It’s so big that there are scooters all over the place,” she says.
The nonprofit’s build-out and daily management is funded by The Pritzker Group, a state grant and corporate donations. “CDW was one of our best supporters early on,” Willer says. “They’ve been doing a lot of work in the Chicago startup community. It’s really great to see their commitment to entrepreneurs in Chicago.”
In addition to the workspaces, businesses in 1871 have access to conference rooms with projectors, 70-inch flat-screen TVs, printers, copiers, networking equipment and other essential office equipment donated by CDW. Beyond that, CDW’s goal, say Sales Director Adam Weiss, is to help startups determine what they need when they move to their own spaces, such as hardware, software, hosting and data center space.
“We’re doing more than just giving money,” Weiss says. CDW’s goal is to help companies get started and even patronize them or introduce them to customers. “If we find leads for them, we’ll pass them along. What I really want to do is help these companies make it in business.”
CDW first became involved with 1871 through Account Manager Edgar Mendoza, who attended regular startup community events. Knowing CDW’s history, he wanted to support Chicago-area startups.
“We were started in Chicago in 1984 out of Michael Krasny’s garage, and today we’re a $9.8 billion company,” Weiss says. “It’s time to give back.”
CDW is a logical partner for 1871, adds Willer. “The story of CDW is a great entrepreneurial story in the city of Chicago. It’s great to see entrepreneurs helping entrepreneurs. That’s what this is all about.”
The People Who Call 1871 Home
Before starting ViderExto, Furlong had a great idea, business know-how and experience. But because he had just moved to Chicago, he didn’t have local contacts. When he heard about 1871, he thought it was a great idea. On Furlong’s second day there, Willer, a former sales executive at Google, decided his old colleagues needed to see what Furlong was up to, so he arranged an introduction.
Photo: Todd Winters
“The big difference between what others have done around the country and what we’re doing here is this is a nonprofit, an economic development tool,” says Kevin Willer, CEO of the Chicagoland Entrepreneurial Center.
“The biggest challenge for startups is reaching the right people,” Furlong says. But at 1871, digital marketing companies like his have access to big-name corporate executives as well as lawyers, accountants and IT professionals.
That access has been invaluable to Levin, who, along with CheekyChicago cofounder Jessica Zweig, hosts real-world events for women, such as fashion shows, a Top 10 Cheeky Chicks of the Year awards ceremony and a membership program that gives exclusive perks at local businesses.
The 4-year-old company’s founders had been renting space from a larger business. “We were at the point in our business where we were like, ‘What’s next?’” At 1871, they’ve met people who have helped answer that question. CheekyChicago plans to expand next year to San Francisco and possibly New York or Austin.
“We’re creative people,” says Levin, “but we’re not in that venture capital world.” To get feedback from those who are is invaluable, she says.
Within 24 hours of announcing 1871’s name and location in January, the founders received 50 applications. By early July, more than 500 companies had applied. The 1871 team reviews the applications, meets with candidates and passes along their information to an independent panel of nine entrepreneurs who review and approve the applications.
Because of the popularity and selectivity of 1871, having space there is almost a stamp of credibility, says Severinghaus. Clients who might otherwise be reluctant to work with a startup have more confidence in them.
Willer predicts that the average tenancy will be about six months. Some stay as long as 12 to 18 months. “A lot of these businesses will fail,” he admits. “That’s just the nature of this world.”
The average company at 1871 has between two and five employees. “If you get to 10 people, this is not the right place for you,” Willer says, adding that none have flown the coop yet, though a few are getting close. “Which is kind of the plan — you actually want people to leave. That is a good measure of success.”
The CEC, the non-profit organization committed to supporting, promoting and growing the startup community in Chicago, today announced the three finalists for its prestigious Merrick Momentum Award to be celebrated at the organization’s 2012 Momentum Award Dinner on October 24th. The finalists include:
Braintree – a payment platform that enables businesses to accept online and mobile payments by providing a merchant account, payment gateway, and recurring billing and credit card storage.
Narrative Science – a data analytics startup that automatically transforms vast amounts of data into stories in plain English, helping companies understand and communicate the insight they need to improve decision-making, create new products and optimize customer interactions.
Trunk Club – a technology-powered, personalized high-end shopping service designed specifically for busy guys who want to look good but don’t have time to upgrade their wardrobes. Personal stylists hand pick trunks of clothing and ship them directly to customers' doorsteps free of charge.
As one of the primary drivers promoting entrepreneurship in Chicago, the CEC develops programming, provides resources, and facilitates relationships for startups in order to encourage growth. The CEC supports a wide-range of entrepreneurs including digital startups at its flagship project, the co-working space at the Merchandise Mart, 1871.
The CEC’s Fifth Annual Momentum Awards Dinner will be held on October 24 at Millennium Park. At the event, Michael Ferro, Chairman and CEO of Merrick Ventures LLC, will be honored with the CEC’s 2012 Entrepreneurial Champion Award. The Entrepreneurial Champion Award honors a prominent member of the business and entrepreneurial community who not only is successful in their own business ventures, but is also concerned with the success of their surrounding entrepreneurial community.
Previous Entrepreneurial Champions include J.B. Pritzker, Jack Sandner, Rich Melman, and BradKeywell and Eric Lefkofsky.
JP Morgan Chase will be honored as the CEC’s inaugural Corporate Champion with Glenn Tilton, the financial institution’s Midwest Chairman and Chairman of United Continental Holdings, Inc. accepting the award on its behalf. The Corporate Champion Award is presented to a leader of one of Chicago’s great, established companies. Once mere startups themselves, these companies today are success stories of American industry. The Corporate Champion is selected for demonstrating exceptional vision and business outcomes in leading landmark Chicago companies while maintaining a commitment to entrepreneurship and innovation.
“This is an exciting time to be in Chicago where we now have a thriving community of entrepreneurs,” said Kevin Willer, President and CEO of the CEC. “Every great community needs great leaders. We’re honored to be recognizing Michael Ferro and Glenn Tilton for their incredible leadership and support of the community and their great personal accomplishments.”
The Merrick Momentum Award is named after Merrick Ventures, LLC. Merrick Ventures has sponsored the award every year to recognize startups with innovative services, disruptive business models and talented management teams. Previous winners include The Savo Group, Eved, Sittercity, and GrubHub. Finalists are selected based on the companies’ revenue traction and near-term growthplans.
“The Merrick Momentum Award recognizes the entrepreneurial stars that have demonstrated momentum since their inception and are poised for continued growth. This year’s finalists represent three of the best companies in Chicago. They are all well positioned to become our city’s next big suc cess stories,” said Laura Ferris Anderson, Managing Director of JPMorgan Chase, CEC BoardMember, and Co-Chair of the Momentum Awards Dinner.
The CEC is co-chaired by Jim O’Connor, Jr., Managing Director of MVC Capital, and Bryant Keil, Chairman and Founder of Potbelly Sandwich Works. The Momentum Awards Dinner is presented by Title Sponsor JPMorgan Chase and Official Media Sponsor the Chicago Sun-Times.
For more information or to register, visit www.CECMomentumAwards.org.
By David Wolinsky, NBC Chicago
It's gotta be pretty tough to be an entrepreneur in Chicago without having heard of 1871. That's a number that has a lot of significance in this town because, yes, it was when that scapegoated cow allegedly started the Great Chicago Fire. But in 2012, 1871 refers not just to the fire but the city's resurgence thereafter. Kevin Willer, the president of the Chicagoland Entrepreneurial Center, has taken back that blaze and since May 2 turned it into a metaphor for the fiery passion local entrepreneurs have. How?
By turning a 50,000-square foot work space in the Merchandise Mart into an inspiring tech hub where startups can thrive, flourish and then hopefully graduate. In its slightly more than 100 days of existence, it's already been the proud pop-pop of one graduate: Food Genius.
To clarify, though, 1871 is not an incubator. Willer and the CEC provide the space for entrepreneurs to do their thing and reap all the benefits of a fantastic, spacious and extremely presentable co-working space. I could go on and on telling you about it, or I could do one better by showing you it. Hop over to the gallery to see the shots and my thoughts on what I saw, thanks to an invitation from Willer and Melissa Lederer, 1871's marketing consultant. Thanks guys!
Want us to come tour your offices? Gives us a shout-out on Twitter with your best elevator pitch!
By Sandra Guy, Chicago Sun-Times
If downtown Chicago is the city’s economic patriarch, River North is its relaxed cousin — younger, tech-friendly and wanting to be entertained. A lot of cities would love to have a place like it.
The infusion of 3,000 workers that Google is transferring to River North from Libertyville attests to the neighborhood’s popularity with younger workers, who, compared with the classic Organization Man of decades past, would much rather ride the CTA to work and socialize with friends at night. Who knows? They might even stick around to raise families.
But their arrival could herald changes to River North, too.
Certainly, the former Motorola Mobility workers coming to the Merchandise Mart will add to the street life and support the businesses, though some familiar with the area said they wish for more casual dining nearby.
Albert Friedman, developer and leading property owner in River North, said Google’s arrival supports his vision of the area being alive for 24 hours, with corporate workers and creative professionals mingling, living and shopping within just a few blocks. He called the Google coming “a natural and wonderful thing to happen” for the mart and the neighborhood.
“Today, you go where the brainpower is,” Friedman said. “That’s generally an urban area.”
A few blocks east of the mart, Hubbard Street brims with nightlife. Neil Stern, senior partner at the retail consulting firm McMillanDoolittle LLP, said Google might inspire some of that vibe to migrate west.
“The area is still underserved by fast-casual restaurants or just casual dining options,” he said.
Bob Goldin, executive vice president of Chicago food industry consultancy Technomic, sees opportunities for new restaurants serving gourmet pizza, beer and burgers and ethnic and small-plate eateries, and a reinvention of some tired restaurant concepts already in River North.
But what must the bars and restaurants do to appeal to the tech crowd? After all, if the Merchandise Mart is becoming an anchor for River North tech jobs, it will be similar to the 600 W. Chicago site on the neighborhood’s north end, the home of Groupon. It’s as if Google and Groupon will bookend the neighborhood.
Consider the mart’s tech incubator, called 1871, where workers for an array of tiny companies toil in hopes of attaining Groupon-like riches. When they head out, they look for cheap eats, free Wi-Fi, local craft beers and a casual atmosphere.
After work, River North sites that fit the bill such as Bull & Bear, Moe’s Cantina, Citizen Bar and Untitled teem with twenty- and thirty-somethings looking to unwind, commiserate and watch sports on TV and each other.
“Especially after an event, everyone goes to the closest large bar — Moe’s Cantina,” said Jin Hwang, 32, co-founder and CEO of Eveningflow.com, a startup aiming to help people find nearby bars and restaurants that fit their mood at the time.
Many are fans of bourbon, whiskey and locally brewed craft beers such as Goose Island’s 312 and Two Brothers Cane & Ebel. “It would be great to have more bars with local brews,” Hwang said.
Spence Davenport, 27, director of business development of SimpleRelevance, a startup that helps companies send targeted emails and messages to their customers, said Moe’s and Bull & Bear attract entrepreneurs because of the youthful, fun and relaxed environment that still allows for people to have a conversation without shouting.
The crowds also flock to sites with outdoor seating and patios, since the sunshine and fresh air are welcome relief after a daylong series of meetings in windowless rooms, he said.
Neal Sales-Griffin, 25, co-founder of Code Academy, where people learn how to do web design and development, said proximity is a key factor in favored hangouts sites, along with Wi-Fi and good drinks.
What does the River North area still need?
Hwang would like to see food trucks parking regularly in the Merchandise Mart’s driveway. Davenport yearns for a special breakfast place with fresh-cooked meals. Sales-Griffin pines for a bar with a startup tech theme.
But when everything is added up, the Google arrival may be more important in symbolism than in business impact.
Economist Enrico Moretti said the move’s impact is muted by Motorola Mobility taking more than $100 million in state tax credits to retain those jobs in the next 10 years and by the long climb that the Chicago area must make from No. 58 in Moretti’s ranking of 318 metro areas nationwide as innovation hubs.
The Chicago area is home to at least 21 incubators, accelerators and co-working spaces, 16 of them within the city limits. The tech startup support system varies from those that charge rent per desk to independent workers, to those that seek to create a sense of community and networking space for start-up teams.
The number of people working in these spaces varies each day, but the total could go as high as 1,600 if the spaces were to fill to capacity, according to Desktimeapp Directory, which lists co-working spaces in Chicago.
by John Presta, The Examiner
Mayor Emanuel announced that ThinkChicago, a program established last year to introduce top students from Midwest universities to cutting-edge companies in Chicago, will double in size in 2012.
Founder Brad Keywell of Lightbank, University of Illinois President Dr. Robert Easter, Kevin Willer of 1871, and Neil Gupta, a student who participated in the Think Chicago program last year, joined Mayor Emanuel for the announcement on the 12th floor of the Merchandise Mart.
“ThinkChicago is exactly the sort of program that we’re looking to have in Chicago. It is essential that we attract young people and get them excited about our city,” said Mayor Emanuel. “Every student that comes to Chicago for this program will see firsthand the tremendous companies that the city has. There is nothing more important than attracting young leaders to our city.
“We are excited to be partnering with the City of Chicago and the University of Illinois to make ThinkChicago an even more powerful platform in its second year,” Chicago Ideas Week Founder and Co-Chairman Brad Keywell said. “Our collective vision for CIW and ThinkChicago is to showcase Chicago as a hub of innovation and ideas that encourages the incredible talent in our local and regional academic institutions to choose Chicago to work and build new ventures.”
ThinkChicago had 50 students in 2011. This year, 50 outstanding juniors and seniors from the University of Illinois will join their peers from throughout the Midwest for the program.
Applicants can come from Michigan, Minnesota, Ohio, Missouri, Illinois, Indiana, and Wisconsin, and both juniors and seniors are invited to participate in ThinkChicago. Applications are online at the ThinkChicago website. Applications are due by September 7.
“Illinois is home to thousands of bright young people, many of whom are college students,” said Dr. Robert Easter, president of the University of Illinois. “Showcasing the creativity and innovation of Chicago for these students and their peers around the Midwest will provide a strong example to our future leaders of the opportunity that awaits them if they choose to come to Chicago.”
Results from the first year of ThinkChicago were outstanding. Approximately 50 students attended, enjoying formal programs and exploring Chicago’s cultural and nightlife scene. This year, students will again visit leading companies, meet with business leadership, and have the opportunity to attend Chicago Ideas Week in October 2011.
Each student attending ThinkChicago will have a chance to attend information sessions at Chicago-based businesses. Companies participating include: Excelerate Labs, Groupon, Google, Grubhub, Accenture, Coudal Partners, Threadless, 37 Signals, Microsoft and Classified Ventures.
Mayor Emanuel made the ThinkChicago announcement at 1871, in Merchandise Mart, a new startup center that provides resources to entrepreneurs, including access to mentors, investors, partners and peers.
“The mission of 1871 to bring together the vibrant and growing entrepreneurial community here in Chicago is perfectly in sync with what the ThinkChicago program is striving for,” said Kevin Willer, president of the non-profit CEC, who manages 1871 a co-working center for digital startups. “There is an incredible amount of technology and business innovation coming out of our city with successful startups launching every day. This is an exciting time for Chicago.”
Supporting entrepreneurship and fostering innovation in Chicago is a key focus of the Emanuel administration, and is additionally one of the ten strategies highlighted by World Business Chicago in that organization’s comprehensive Plan for Economic Growth and Jobs, released earlier this year. The strategy is focused on leveraging Chicago’s core assets – ease of transportation, talent, business climate, and infrastructure – to attract entrepreneurs and emerging industries to locate in the city, creating jobs and additional economic growth. ThinkChicago is a perfect path towards achieving this goal.
by Pat Ryan, INCISENT Technologies
Open Table Founder Chuck Templeton was our featured Founder at June’s Chicago Founders’ Stories @ 1871 (watch all videos here). We had another sold out crowd join us at 1871 for pizza, beer and Chuck’s remarkable story of creating Open Table in 1998 (click here to view video of last month’s Chicago Founders’ Stories with Grub Hub Founders Matt Maloney and Mike Evans).
It was fascinating to learn how Chuck survived the bursting of the dot com bubble and navigated Open Table to a position where it has been able to become the undisputed leader in online restaurant reservations and the associated software powering restaurants internal systems. Chuck talked about the Chicago start up scene, companies he is excited by and made an exciting announcement about his newest endeavor
My INCISENT teammates and I continue to have a great time partnering with the CEC to create and present Chicago Founders’ Stories. Since we were sold out again we recorded the event so anyone who couldn’t make it can see it online. We broke up the hour into five segments:
In the initial segment, Chuck talks about where the idea for Open Table came from and his background prior to founding it (little known fact: Chuck is a graduate of the Army’s legendary Ranger School and was trained as a sniper). He also talked about why he started in both the Chicago and San Francisco markets at the same time.
In the second segment, Chuck talks about the challenges in creating a 2-sided network: “How do you seed one side of the marketplace before the other side shows up?” and how Open Table came to change its revenue model to a subscription-based approach from the traditional purchased software model (they were very early in this trend).
In the third segment, Chuck shares what he learned from his early fundraising as well as his five keys to finding the right investor. He tells the story of how Open Table was one day away from not making payroll and how a critical investment from Michael Dell’s brother, Adam brought the company back from the brink.
In the fourth segment Chuck discusses how he connected with Silicon Valley’s Benchmark Capital and the bold move Open Table had to make to survive the dot com bust and vanquish their remaining dot com competitors.
In the final part of the evening, we discuss the Chicago start up scene, startups that Chuck is excited about and the benefits of starting a company in Chicago today. Chuck talked about his newest venture – Impact Engine – and announced that it will be housed at 1871 (applications are due June 30; check them out at www.theimpactengine.com).
We hope you enjoy Chuck’s story and the insights of his experiences and hope to see everyone for our next Chicago Founders’ Stories @ 1871 on July 10.
* I want to thank Chris Dixon for his great series – Founder Stories – on Tech Crunch which served as inspiration for the idea of creating a live interview series of Chicago founders’ stories at 1871. Apologies that my creative skills don’t extend to a more original title.
by Pat Ryan, Built In Chicago
Grub Hub Founders Matt Maloney and Mike Evans shared the highlights and lessons of Grub Hub's remarkable journey with a sold out crowd to close out 1871's opening week. The evening kicked off a new tradition: Chicago Founder's Stories @ 1871 - a casual evening of pizza and beer with special guest founders sharing their stories.
My INCISENT teammates and I have had fun creating and sponsoring this series with 1871 and we're excited to start with the incredible story of Grub Hub's growth from 2 guys putting menus online to the undisputed leader in the online take-out and delivery space in the U.S. serving over 300,000 diners a month in over 300 cities across the U.S.
Since the event sold out we recorded it and are putting it online for those who couldn't make it. We broke up the hour into five segments:
In the initial section, Matt and Mike talk about how Grub Hub got started. They share the story of their getting their first customer, how Mike quit his job as a software engineer after their first $140 of revenue, why they bought "Selling for Dummies" to learn how to sell and their most important lesson from the early days.
In the second part of the evening (click here to view), Matt and Mike talk about how and why they pivoted from a subscription to a marketplace model, the secret to how they made a two sided marketplace model work and how embracing a 1980s technology - the fax machine - was critical to Grub Hub getting traction.
In the third segment, Matt and Mike talk about what they've learned about how to get to product-market fit, why they decided to make San Francisco their second market and their point of view on leveraging their core competencies in other verticals as well as going international.
In the fourth segment, Matt and Mike talk about how raising money, how they ended up with Silicon Valley's Benchmark Capital as a major investor, what to look for in finding the "right" investor and why it was a big advantage to start Grub Hub in Chicago instead of another city.
In the final segment, Matt and Mike share what advice they give entrepreneurs in the early stages, exciting new companies that they have seen emerging recently and answer questions from the crowd.
We look forward to making this a great tradition and will continue tomorrow evening at 1871 with OpenTable Founder Chuck Templeton. I hope you can join us for pizza, beer and Founder's Stories.
I want to thank Chris Dixon for his great series - Founder's Stories - on Tech Crunch which served as inspiration for the idea of creating a live interview series of Chicago founder's stories at 1871.
by Dean Debiase, Innovation Excellence
140 years ago, the aftermath of Great Chicago Fire of 1871 presented an opportunity to not only Chicago but world community of innovators, as they came together to rethink the next-generation city.
What came out of that historical period was nothing short of remarkable, as teams stepped up to the daunting task of redesigning and rebuilding a metropolis that also would provide a new growth blueprint for engineers, architects and inventors around the world. But beyond blueprints, they also rekindled an innovative spirit, inspiring people with out of the ashes thinking, on rebooting everything from the way they approached problems to driving economic growth.
And it’s happening again.
In the midst of a down economy, the Chicagoland Entrepreneurial Center (CEC) has just opened 1871where the best designers, engineers and entrepreneurs from around the world are creating the next wave of products and services for the digital economy.
With many companies facing uncertain financial futures it’s hard for leaders to think about making bold innovative moves now. Julie Anixter, Chief Innovation Officer at Maga Design and a Founder of Innovation Excellence, speaks with Dean DeBiase, a CEC board member and the Chairman and CEO of Entertainment.com and RebootPartners.com, about the importance of rebooting one’s company as a vital survival and growth tool during good times and challenging economic environments.
by Mark Schaefer, BusinessesGrow
I had the chance to be a guest speaker at Chicago’s rocking new digital innovation center, 1871. Located in an expansive space in the downtown Merchandise Mart. This video interview with Managing Director Una Pipic provides a perspective of the entrepreneurial opportunities being created through this exciting project.
The organizers of “1871” – the number refers to the year of the Great Chicago Fire and the Chicago that was eventually rebuilt – believe they have built something important. And, apparently, hundreds of entrepreneurs seem to think so, too. The center just opened a few weeks ago and it is already bursting with activity.
1871 will be an incubator of new ideas and digital businesses by putting a lot of smart entrepreneurs in a closed space, let them talk, mentor each other, and dream up the next big thing.
Tom Drugan is one of the founders of a tech-start up called Naymz. Although he already had office space in another part of town, he found the entrepreneurial process lonely and loves the energy and camaraderie of his new tech homebase.
The organizers of this enterprise, the Chicagoland Entrepreneurial Center, have been around since 2003 and say they have raised $160 million to help finance new businesses. Funding also comes from entrepreneurial memberships from the individuals using the center.
Isn’t this a great concept? What is your city or region doing to support entrepreneurs?
by Mike Lippitz, Innovation Excellence
The Chicagoland Entrepreneurial Center (CEC) is a non-profit organization focused on promoting and growing the startup community in Chicago. The CEC works with high-potential entrepreneurs and offers them business advisory services and educational programming; organizes events that facilitate relationship development and networking; and in 2012 will launch a physical center and co-working space for startups known as 1871. While it identifies and seeks to serve promising entrepreneur clients, the CEC also partners and works with large corporations and service firms, the investor community, as well as the civic organizations, non-profits and academic institutions.
Among its public events, the CEC hosts the Momentum Awards, an annual dinner launched in 2008 to honor early-stage growth entrepreneurs who have demonstrated success and who have businesses in similar industry verticals to CEC’s existing constituency, including alternative energy, consumer products and services, information technology, financial services and healthcare. In December 2011, the CEC also introduced Startup Forecast, a half-day conference that brings prominent entrepreneurs, venture capitalists and other speakers to address trends and forecasts for Chicago-based startups for the following year.
The CEC also organizes informal monthly dinners for small groups of high-potential entrepreneurs, to share ideas and build relationships. CEC carefully curates a group of early-stage entrepreneurs who have complementary services of skillsets or may benefit from partnerships. Held in the private room of a local restaurant, and not publicized, these dinners are meant to generate new ideas, share challenges and opportunities, and to promote activities among the selected companies. The CEC does not permit outside investors, service providers or sponsors to partake in these dinners, in order to facilitate more open sharing and networking.
Since 2003, the CEC has helped client entrepreneurs secure $268.5 million in revenue, raise $160 million in financing, and create or retain 6,350 jobs. To build on this success, the CEC just established 1871 in May, a 50,000 square-foot startup incubation center located in Chicago’s Merchandise Mart. The center will eventually host 100 dedicated co-working seats for early-stage companies on flexible lease terms. And there will be 200 shared co-working seats throughout the center.
The center will also house classrooms to help startup with technical training (e.g. coding, programming), design, marketing, operations, financing, and legal. It intends to foster a model through which companies that have graduated from 1871 come back to lead and teach classes to newer startups that are renting space in the center.
Entrepreneurs at Chicago's new hub for digital start-ups, 1871, got a surprise visit Sunday from British Prime Minister David Cameron prior to the start of the NATO Summit. The Prime Minister spoke with several entrepreneurs about their businesses and Chicago's strong technology innovation sector, then toured the shared work space for digital start-ups that openedMay 2 in the historic Merchandise Mart building.
Mr. Cameron had asked to visit 1871 as part of his ongoing mission to strengthen economic ties between the UK and the United States -- especially in the technology sector, which he has described as having tremendous potential to fuel economic growth and job creation.
The 1871 entrepreneurs were only told the identity of their VIP guest moments before his arrival, for security purposes.
Upon his arrival, Mr. Cameron had a spirited conversation with three entrepreneurs, quizzing them about their businesses and the advantages of working in a tech "ecosystem" such as 1871:
- Neal Sales-Griffin, founder of Code Academy, an immersive three-month training program housed in 1871 for people – often those who started in other careers -- who want to become web developers, designers and entrepreneurs.
- Louise Monger, a UK native who recently located in 1871 to start up the US version of an interactive silent auction fundraising company, FunRaising Events USA.
- Erik Severinghaus, founder of SimpleRelevance, which improves digital marketing conversion by using data to segment customers and personalize their messaging.
In his exchange with Monger, Mr. Cameron offered his view that "there's a great market" for her interactive fundraising service, and that the technology available to power her start-up is "fantastic." Perhaps her greatest challenge, he quipped, is making sure the technology can be used by "an 80-year-old philanthropist."
During his visit to 1871, the Prime Minister cited Tech City in East London, an area with a network of start-ups and incubators alongside established technology companies such as Google and Cisco as well as university researchers and investors. He has said he intends for Tech City to become "one of the world's great technology centers."
The Prime Minister's tour was led by Kevin Willer, president and CEO of the Chicagoland Entrepreneurial Center (CEC). The CEC, which manages 1871, is a not-for-profit organization dedicated to growing Chicago's entrepreneurial community.
After talking with the digital entrepreneurs and touring their co-working space, Mr. Cameron also met privately with a handful of Chicago-area business leaders, including J.B. Pritzker, World Business Chicago Board member and one of the founders of 1871, to promote investment in the UK and invite them to visit Tech City.
In addition to providing co-working space and a sense of community, 1871 features educational programming, events and seminars to help foster the growth of digital startups in Chicago, which has seen an explosion of growth in the sector. The name "1871" was inspired by the period of rapid innovation that followed immediately after The Great Chicago Fire in October of that year, when leading engineers, designers and builders came together to build a new city.
by Caroline O'Donovan and Kate Dries, WBEZ
Trevor Gilbert is only 19 years old, but that didn’t stop him from causing a stir in Chicago’s tech scene back in March, when he published an article titled “The Midwest Mentality” for the popular tech blog Pando Daily. Gilbert wrote the piece after a trip to Chicago, during which he observed the unique character of Midwesterners trying to make their way in the tech startup world.
Taking fewer risks and making stable growth the goal, a hallmark of the Midwest according to Gilbert, “does allow people to have lives...[w]hich is another thing that Chicagoans and Midwesterners are rather enthusiastic about.” Funny, that.
Gilbert caught flak for saying that Chicagoans marry too young to achieve the sky-rocketing profits that are sought after on the West Coast, but he did make a few points that actual Midwest tech entrepreneurs agree with: Ignoring the hype machine, pursuing modest goals and a steady work ethic allows the Midwest to create a crop of midgrade, dependable companies.
Justin DeLay, co-founder of the cloud-based data gathering site TempoDB, says those are the reasons he returned to Chicago after spending time in a tech incubator in San Antonio, Tex. He defines that Midwestern qualiy Gilbert tries to understand as a type of modesty. In the Midwest, DeLay says, “We’re not going to shout that we’ve raised a bunch of money. Until we’ve built a sustainable business that can provide jobs and growth, there’s nothing to say.”
DeLay sees Silicon Valley as an echo chamber, where major dollar signs fuel the media and there are all-out wars over talented young engineers. Why battle Google, Facebook and Apple for the cream of the engineering crop, DeLay says, when schools like the University of Michigan (of which he is a graduate), the University of Illinois and Ohio all have top tier programs?
Sue Khim, a graduate of the University of Chicago, considered things differently when it was time to think about relocating her start-up, Alltuition. Khim got her start as the CEO of Edulender (which later became Alltuition), a website that helps students understand their student loans. It found a home in the Excelerate Labs incubator, an organization that has since moved to Chicago’s new tech hub, 1871.
Housed in Merchandise Mart, 1871 is a collaborative operation of dozens of very young start-ups organized by the Chicagoland Entrepreneurial Center. While many, including Justin DeLay, are excited by the new space and its capacity to create spontaneous creative collaboration, it wasn’t enough to keep Khim in Chicago. Looking to work side by side with companies that had found success in California, she moved Alltuition to San Francisco. Chicago has made huge progress, Khim says, but California has the connections, infrastructure and experience that made 25-year-old Khim feel more sure of herself.
Friday morning on Eight Forty-Eight, we put these two young entrepreneurs in conversation with Kevin Willer of the Chicagoland Entrepreneurial Center. Willer has a great deal of experience on the scene here; he opened Chicago's Google office in 2000. He credits companies like Groupon for putting "Chicago on the map" -- whether or not they end up being successful. And, he says the city has something its often not given credit for: the managerial experience that comes from traditional industries.
According to Willer though, going forward, Chicago needs more acquisitions and more IPOs to be a sustainable tech-oriented city. Otherwise, it might just become a stomping ground for companies that are just starting out -- who then leave us for the bright, big lights of the coastal cities.
by Wailin Wong, Chicago Tribune
Nearly 140 people from 65 local startups moved into new digs Wednesday at 1871, a 50,000-square foot work space for digital entrepreneurs at the Merchandise Mart.
The space on the 12th floor of the building can accommodate up to 500 individuals, or more than 100 startups, who are seeking flexible terms and a collaborative environment. Venture capitalist J.B. Pritzker and the state of Illinois are among the backers of the space, which is named for the year that the city rebuilt itself after the Chicago Fire. The Chicagoland Entrepreneurial Center is managing 1871.
More than 400 startups have applied to rent space in the hub since mid-January and 65 have been accepted, organizers said.
Other tenants include local universities, business incubator Excelerate Labs, and Chicago-based investors such as I2A Fund, Hyde Park Angels, New World Ventures and Sandbox Industries.
by John Pletz, Crain's Chicago Business
The tech startup hub in the Merchandise Mart called 1871 is lining up venture funds, universities and other long-term tenants along with young companies.
New World Ventures, the fund backed by J.B. Pritzker (who helped launch 1871), as well as venture funds I2A, Sandbox Ventures and Hyde Park Angels will lease office space in the building. OCA Ventures and Lightbank will sponsor conference rooms in the facility.
University of Chicago, Northwestern University, Illinois Institute of Technology and University of Illinois also will have offices in the space. Excelerate Labs, the startup accelerator, says it's leaving a loft in Greektown to move into 1871. The Illinois Science and Technology Coalition and Chicagoland Entrepreneurial Center, which is managing the programs at the facility, also are moving in.
“We've got two of the top five business schools in the country, a top design school and a top computer-science program — they'll all be in one hallway,” says Kevin Willer, CEO of the Chicagoland Entrepreneurial Center.
The facility, which formally opens next week, is designed to have flexible space for about 400 entrepreneurs to launch new companies. So far, startups moving into the space include Code Academy and Food Genius. Entrepreneurs pay $125 to $400 a month for space.
“We have enough applicants to fill it,” Mr. Willer says. “We have gotten a great response. We're trying to be deliberate and select the best of the best.”
Applicants are selected by an independent review committee.
By Sarah Needleman, Wall Street Journal
Dan Salcedo left Chicago last year for Silicon Valley to take a three-month course in launching a technology business, but the entrepreneur plans to return to Chicago this spring as a member of a growing group of tech founders drawn to the city's brewing start-up scene.
Mr. Salcedo, 26 years old, aims to launch a social-network-based online shopping business. He and other local founders are inspired by Chicago-based stars like Groupon Inc., the daily deals site launched in 2008 that now has a market capitalization of roughly $10 billion, and GrubHub Inc., an online restaurant delivery service started in 2004 that has raised $84.1 million in investor capital.
"Good things can happen in Chicago," Mr. Salcedo says.
Overall, Chicago-area start-ups raised $654 million in venture capital funding in 70 deals last year, a 40% increase in deals from 2010, according to VentureSource, a unit of News Corp.'s Dow Jones. (News Corp. also owns The Wall Street Journal.) Thirty-six Chicago-area start-ups, mostly tech, closed on initial rounds of venture capital last year, more than double the 14 that did so in 2009, it says.
Investments by angels, or wealthy investors, in Chicago digital-technology companies increased 54% last year to $16.2 million from 2010, according to BuiltInChicago.org, a tech community website.
Also growing is the number of collaborative work spaces and support programs to help entrepreneurs build businesses in Chicago. Recent additions include nonprofits Catapult Chicago and soon-to-open 1871.
"When you see your peers gaining success at being an entrepreneur, it is inspirational," says Amish Tolia, co-founder of Apparel Media Group Inc., a Chicago-based online provider of brand sponsorships that has raised $1.8 million.
Brad Weisberg, founder of year-old online auto-repair estimation service BodyShopBids Inc., wants to emulate Groupon's success. "I always had the idea for BodyShopBids, but I didn't have the confidence," he says. "I finally thought, if they can do it, so can I."
Mr. Weisberg, 31, has raised $1.3 million from venture-capital firms including Lightbank LLC, a two-year-old Chicago firm whose managing partners include Groupon founders Eric Lefkofsky and Brad Keywell. BodyShopBids shares office space in Chicago's River North area and receives hands-on operational support from Lightbank's investment team.
"What used to be a flyover stop is becoming a spot for finding really good scalable technology businesses," says Paul Lee, a Lightbank partner.
Of course, Chicago's level of investor activity is dwarfed by the Silicon Valley area, where start-ups raised $12.6 billion last year, or the New York-area, where companies raised $3 billion last year, according to data from VentureSource.
What's more, being based in Chicago comes with a few significant trade-offs, founders here say.
One trade-off is a relative shortage of qualified engineers. At a time when engineers are in high demand nationally, attracting candidates to Chicago start-ups can be especially difficult.
"We struggle sometimes finding talent," says Jake Nickell, the 31-year-old founder of SkinnyCorp LLC's Threadless.com, an online T-shirt design company and online community of graphic-artists since 2000. The profitable company has about 100 employees.
As Groupon has grown from a small website to a 10,000-person organization, it has had to supplement its Chicago employee base. In late 2010, Groupon opened an office in Palo Alto, Calif. It has also added engineering talent by acquiring other start-ups. "We've creatively looked for ways to fill in any talent gaps," says Julie Mossler, a spokeswoman for Groupon, whose technology center is in the River North area.
Another drawback: Chicago's distance from Silicon Valley may hinder the ability to cultivate key relationships.
"Partnerships would be easier if we had more social connections," says Matt Maloney, co-founder of GrubHub.
"If half of our engineering staff worked at Facebook in the past and the other half at Zynga, you'd have more connections to similar organizations," Mr. Maloney says. Both Facebook Inc. and social games maker Zynga Inc. are based in the San Francisco area.
New co-working and collaborative spaces for tech start-ups in Chicago are intended to help overcome those hurdles, by creating breeding grounds for the next Groupon. Catapult Chicago, which opened March 5, for instance, occupies 12,000 square feet, donated by a law firm, on the 25th floor of a skyscraper in the River North area.
Catapult's designated space is limited to about 15 tech start-ups. The project charges $500 to $1,000 a month for office space.
"By building communities and generating more awareness about the growing start-up ecosystem in Chicago, we will be able to attract more development talent from the local universities and other areas throughout the country," says entrepreneurRyan Leavitt, Catapult's co-founder and president.
Nonprofit 1871 on May 2 will open its doors to about 100 start-ups seeking affordable office space and a collaborative work environment in a new 50,000-square-foot center, which is now under construction in the city's Merchandise Mart. The space allows participants to reserve desks and extras like conference rooms and rentable lockers, for $400 a month or less.
Since January, 1871 has hosted groups of around 100 people for "hard hat" tours of the area under renovation about once a week, according to Matt Moog, chair of the project to launch 1871. It is run by the Chicagoland Entrepreneurial Center, an organization dedicated to promoting and growing the start-up community in Chicago.
Mr. Moog, who is also the founder of the FireStarter Fund—a $5.7 million fund backed by more than 40 heads of Chicago-area companies that invests mainly in local start-ups, says he believes such initiatives like 1871 will provide tech entrepreneurs with a strong incentive to stay in—or in some cases, return to—Chicago.
Mr. Salcedo's start-up, Mobcart Inc., was one of the 300 companies that applied to get into 1871. This week, he got a notice that his start-up was accepted.
The collaborative space will help create "an ecosystem of high-level, experienced entrepreneurs" in Chicago, says Mr. Salcedo. "It's going to help."
State officials say a new digital technology center in downtown Chicago will help early-stage start-up companies.
The 50,000-square-foot center will provide space for up to 400 people or roughly 100 new companies. The center has office space, work space and is designed to let new businesses collaborate.
The center is named “1871” after the period of massive rebuilding during the year of the Great Chicago Fire. The center is located at the Merchandise Mart in Chicago and is scheduled to open in May.
Gov. Pat Quinn says the state is providing $2.3 million from a capital plan.
More than a dozen of the first tenants were announced on Wednesday, including SimpleRelevance. It’s a company that provides personalized technology for e-commerce merchants.
By Wailin Wong, Chicago Tribune
May 2 is the opening date for 1871, the collaborative work space for digital technology entrepreneurs under construction at the Merchandise Mart.
The state of Illinois contributed $2.3 million in the form of a capital grant to 1871, which is being run by the Chicagoland Entrepreneurial Center.
Gov. Pat Quinn appeared at a press conference at 1871 Wednesday morning to announce the opening date. Backers had said the hub would be up and running in the spring but had not specified a date. In the meantime, organizers have been taking groups on "hard hat tours" through the unfinished space, which occupies 50,000 square feet on the 12th floor of the Merchandise Mart.
Code Academy, a local startup that offers classes on Web development and design, said in February that it is moving operations to 1871 and expects 60 students for its spring session.
Chicago-based Intelligentsia will also be opening a coffee bar in the space.
Governor Pat Quinn today announced the first 15 digital start-up companies and new entrepreneurs that will be housed at “1871,” the new digital technology center located at the Merchandise Mart in Chicago. Designed to help launch and grow early-stage tech start-ups, the new 50,000 square foot tech center will have the capacity to house up to 400 individuals or more than 100 start-ups when it opens on May 2. The space will gather start-ups together, creating a community of mentors, partners, peers, developers and investors to spark innovation and create good-paying jobs.
“We want Illinois to be the nation’s high-tech and innovation capital,” Governor Quinn said. “This new center will provide up-and-coming technology entrepreneurs with the resources they need to expand their businesses, create jobs and grow our economy.”
With a recent surge of entrepreneurship, Illinois now ranks second in the nation, trailing only California, for its number of high-tech start-ups, according to the Illinois Innovation Index. In recent years, annual venture capital investments to Chicago’s start-up firms have risen to more than $1 billion for the first time since 2000.
To advance that growth, Governor Quinn was one of the center’s earliest supporters, helping to take the center from planning stages to reality. During his 2012 State of the State Address, the Governor announced that the state is providing a $2.3 million investment in “1871” through the Illinois Jobs Now! capital plan, to help foster and launch digital start-ups. Scheduled to open on May 2, the new space will help meet the critical need for affordable, flexible space among Chicago’s growing digital technology community.
“We are so grateful for Governor Quinn and the state of Illinois’ support for 1871 and innovation throughout Illinois,” said Kevin Willer, a member of the Governor’s Innovation Council and president and CEO of the Chicagoland Entrepreneurial Center, which will manage operations at 1871. “There has been an incredible response from the community in building this co-working center for digital entrepreneurs and we look forward to catalyzing digital tech expansion in Chicago when we open our doors on May 2.”
Located on the 12th floor of the Merchandise Mart, this 50,000 square foot tech center can accommodate up to 400 individuals. Since the application period began in January, more than 300 tech start-ups have already submitted applications to rent space in 1871. The name and concept for the center was motivated by the period of innovation that followed the Great Chicago Fire in October 1871.
The first group of tenants includes: SimpleRelevance, personalized technology provider for e-commerce merchants; ProOnGo, maker of QuickBooks-compatible web and mobile applications; and the Illinois Science and Technology Coalition.
Also locating at “1871” will be Code Academy, which teaches up-and-coming innovators the basics of web development and design. Code Academy will collaborate with 1871 to advance the educational initiatives for tenants by hosting, sponsoring, and coordinating programming focused on technology, design and business.
As part of his ongoing commitment to boosting innovation in Illinois, Governor Quinn has been aggressive in leveraging Illinois' strengths to capture the knowledge economy. The Quinn Administration has made significant progress in fostering innovation with strategies for financing, leadership and access, and state support for public-private partnerships. Launched in February 2011, the Illinois Innovation Council (www.IllinoisInnovation.com) works to ensure the state remains on the cutting-edge in the global economy. The council is actively working to advance innovation in Illinois.
Today’s announcement is part of Governor Quinn’s aggressive business agenda that is helping move the Illinois economy forward. The state maintains a large portfolio of programs, which is designed to help Illinois businesses thrive in today’s economy
Chicago's tech community — on a roll with the success of Groupon, GrubHub and Braintree — is looking to further raise its profile with a trip to Austin, Texas, for the annual South by Southwest festival.
New World Ventures and Techweek, a Chicago-based tech event company, are sponsoring a party at South by Southwest Interactive on March 12. The high-tech sibling to Austin's popular music fest is one of the industry's top gatherings for startups and dealmakers. The hippest of the hip like to attend.
It's the first time Chicago's tech community has thrown a formal party in the land of music, margaritas and barbecue in recent years.
The idea came from New World associate Rishi Roongta and Jon Pasky, CEO of Techweek.
“We decided the world needs to know what's going on in Chicago,” Mr. Pasky told Crain's senior reporter John Pletz.
More than 1,400 people have RSVP'd, Mr. Pasky says.
It's a chance to introduce money and talent from Silicon Valley, Austin and elsewhere to Chicago's money and talent, says Kevin Willer, president of the Chicagoland Entrepreneurial Center. He'll be making the trip along with representatives from several startups, including GTrot, Belly, FeeFighters and Give Forward. And of course GrubHub, Braintree, Threadless and SitterCity will be there, too.
Code Academy, a Chicago-based startup that offers intensive courses in Web development and design, will be moving its operations into the 1871 technology hub opening this spring at Merchandise Mart.
The 50,000-square foot space on the twelfth floor of the Merchandise Mart will house digital startup entrepreneurs looking for flexible workspace and a creative environment. Code Academy will have eight paid employees based in 1871 and hold its classes there, with 60 enrollees expected for the spring session. The program is structured to teach a software novice how to build Web applications from scratch in just 11 weeks. Previous classes were held at Groupon Inc.'s offices and in the John Hancock Center.
Code Academy co-founder Neal Sales-Griffin said he sees opportunities to partner with 1871 beyond just renting space. While the program won’t be offering tuition discounts for other 1871 tenants, it will sponsor and host programming at the hub. And it is a natural resource for budding entrepreneurs at 1871 seeking to boost their technical skills.
“Through our mission, we will also provide a lot of the talent and resources many of the soon-to-be tenants will need in order to grow and make their organizations successful,” Sales-Griffin said in an e-mail. “By putting tech education and entrepreneurship at the heart of 1871, it will become the vessel to pump life into every other part of the facility and beyond.”
The Chicagoland Entrepreneurial Center will operate 1871, which has financial support from the state of Illinois and local venture capitalist J.B. Pritzker.
Building a startup from a simple idea to a million-dollar business can be tough, and Kevin Willar knows it.
Part of that struggle, the president of the Chicagoland Entrepreneurial Center said, is finding a place for a young tech startup to call home base for its operations. That means high-speed Internet, phones, workspace, some meeting rooms and storage—all of which can be overwhelming for a fledgling business just getting its feet wet.
Enter 1871, a nonprofit, 50,000-square-foot space in the Merchandise Mart. The venture will house hundreds of entrepreneurs who pay month to month for a shared workspace as they launch their ventures. Set to open in the spring, more than 100 companies have requested space in the office.
"Entrepreneurs represent a massive amount of people in this city," Willar said. "We're building a place where new companies can be built."
Willar said 1871 will serve as a "steppingstone" for young tech startups, which later may raise enough capital to move to spaces of their own. But while they grow, Willar said, 1871 will offer classes and workshops for startups inside the center. Space also will be set aside for various Chicago universities and investment firms to have a presence.
He said he hopes companies such as Groupon continue to fund small startups, and said that sort of reinvestment in the startup community will make Chicago a more desirable place for entrepreneurs.
"Right now we are really hitting our stride," Willar said. "There will be a clear sign of success or failure [with 1871]; you're not going to be able to spin that very much."
By Rose Tibayan, Chicago Venture Media
"If you build it, he will come."
It’s a memorable scene in the movie “Field of Dreams.” A mystery voice inspires the baffled character played by Kevin Costner: Build a baseball diamond in a cornfield and something important will happen.
The organizers of "1871" – the number refers to the year of the Great Chicago Fire and the Chicago that was eventually rebuilt – believe they have built something important. And, apparently, hundreds of entrepreneurs seem to think so.
Located at the Merchandise Mart on the near North Side of Chicago, 1871 will be an incubator of new ideas and digital businesses, they say. How? They want to put a lot of smart entrepreneurs in a closed space, let them talk, mentor each other, and dream.
The organizers, the Chicagoland Entrepreneurial Center, have been around since 2003 and say they have raised $160 million to help finance new businesses. The center put out an initial call for applications for the space last month.
Steve Collens, one of the founders of the center and a senior vice president of The Pritzker Group, says that they didn’t know what would happen. It was like buying a lot of food and drink, putting out the word, and hoping someone would show up, says Collens, who leads the hardhat tours.
"On the first day we had 50 applications from companies come in," says Collens. Eventually, applications began streaming in. "They continue to pour in," he says.
The demand for space at 1871 now exceeds the supply.
Located on the 11th floor of the Merchandise Mart, 1871 has 220 work desks. The desks rent for $125 to $400 a month, depending on access.
One entrepreneur who took a tour of 1871 was Todd O’Hara, of Toodalu, an online network that funnels "micro" donations to charities. He said he would relish the opportunity to rub elbows with like-minded entrepreneurs in a set-up like 1871.
"Any startup would be crazy to think they wouldn’t fit in here," O’Hara says. "It would be a great opportunity to meet other people in the technology community. Right now, Chicago’s pretty fractured. So, unless you’re going to an event every night, there’s really no landing base for lots of entrepreneurs, like a Google or Facebook office that has hundreds and hundreds of people."
Entrepreneurs see value in serendipitous encounters, which are frequent in Silicon Valley, the Boston area or Manhattan, but still rare in Chicago.
"The reality is that there are just very few co-working spaces here," says Collens, of the center. "People are scattered from Ravenswood to River North to the West Loop."
Eventually, someone will have the difficult task of deciding who gets a desk at 1871. Collens says that an independent team will review the applications and decide what the makeup of the space will be. The strongest candidates will have the following qualifications:
First, and foremost, is the startup a digital venture? It should be online, have mobile applications, and not be a mom-and-pop shop.
Second, does the venture have a good chance of success? Does it have funding, mentors, a qualified and experienced team, and scalability?
Finally, will the venture fit into the give-and-take culture of 1871 – a vibrant culture of collaboration, mentoring, and learning?
“It is very much intended to be a space where people give back,” says Collens, of the center. “People contribute to the classes, people contribute as mentors, and then also take from those things.”
Currently, there are three options from which applicants can choose.
1) Reserved, full-time space at $400 a month, which includes 24/7 access; wireless and Ethernet; use of all conference rooms; a reserved and powered desk; and locking storage space under the desk.
2) Shared space at $250 a month, which includes 24/7 access; wireless; access to some conference rooms; and first-come/first-serve desks. A locker is available for $25 a month.
3) Night and weekend shared option at $125 a month, includes the same benefits as No. 2 but for fewer weekly hours.
Those who apply for the reserved full-time space and are not selected will be rolled into the pool of those vying for the shared co-working space.
“There’s a lot more flexibility on the shared co-working” space, says Collens. “Not everybody is gonna be here every day. We really don’t know what the percentage is quite yet, we’ll figure that out as we sort of go, but if we have 220 desks, we can sell somewhat more than 220 memberships” because of the part-time access.
In addition, the applicant team has to be tiny. Memberships at 1871 are designed for no more than two people at the start.
It's a perfect fit for Robbie Abed, of European Mobile Consulting. "There’s just a couple of us, so just a smaller office space in the communal area, even if shared, that’s totally fine," he says.
Alas, entrepreneurial success will eventually mean goodbye. Like a mother bird, 1871 will kick teams out of the nest that grow to more than 10 people.
"If you become too successful," says Collens, "you’ve got to leave." It's a good problem to have for any startup because, most likely, it will also mean the enterprise has a strong enough cash flow to afford office space elsewhere.
Veronica Ludwig, of Venchure.com, a business-strategy company, toured 1871. "There’s been a lot of hype and I don’t always follow hype ."
Her opinion of 1871 after the tour? "I think what they’re doing is great. I think it's needed," she says. "It's good to have an initiative like this because others will follow and the Chicago community definitely needs more of it."
1871 is scheduled to open sometime this spring.
By Genevieve Thiers
Since I last blogged for Crain's I have had a set of adorable twins. It has not really registered for me that I am a mom yet. At events where moms are called out by speakers, I still keep looking around wondering where the moms are. The fact that we have an amazing baby nurse (through Sittercity, of course!) is actually making this issue worse. Dan and I have a lot of freedom in terms of our daily schedule, even with twins. It's an amazing, novel thing to come home at night and hold our warm, tiny little fuzzy guys and feel like something that was not completed before is somehow, now, complete.
In short, life is awesome.
Life was made more awesome when I recently toured 1871 with Kevin Willer. Backed by J.B. Pritzker, this project is meant to speed up the rate at which successful tech companies take root in Chicago, and boy, is it ever poised to make a difference. It's over 50,000 square feet, in the bustling Merchandise Mart, and can accommodate up to 300 companies, both with long-standing desk arrangements and short-term desk arrangements. The space has been laid out ingeniously. There's a large open area built on a grid with desks, meant to mimic the design of the city of Chicago, and a winding wall through the area that symbolizes the river. It's a beautiful thing to walk into, even while it is under construction.
The thing that makes this space special, however, is just how much it can accommodate. There are multiple meeting spaces, meant to be both conference areas and classrooms. Entrepreneurs around the Chicago area will rotate within a regular schedule of speakers, on everything from sales to marketing to tech to PR. (I signed up to teach several courses . . . but I expect I will attend many more than I teach.)
There's a kitchen area, phone and rest areas, bathrooms that are frankly much nicer than they need to be, a coffee shop that will welcome weary travelers in the front as they stagger in each morning, and even a tiny equivalent of Sand Hill Road, in the form of a long hallway with offices down each side that investors from the area can conduct meetings in. Startups get access to phone systems, WIFI, copier services and so on, for no extra hidden fees. Which means that not only can entrepreneurs build companies within this space, they can grow, push their teams to grow and even seal funding without ever leaving the space (much less the building). Blend all this with the ongoing motion and excitement of the Merchandise Mart and its gorgeous view of city and river, and you have a perfect combination.
My personal goal for this space? I want to make sure that at least 20 percent of the companies in it are women-run or women-led. I think that this is perfectly doable. I'll lead the charge by sending in my application for a desk today. Ladies of the Chicago tech world, I hope to see you there!
'Desktime' software, the brainchild of One Design and Coop chief Sam Rosen, has paying customer in soon-to-open '1871' collaborative technology hub in Merchandise Mart
By Wailin Wong, Chicago Tribune
Sam Rosen wears a lot of hats. The 26-year-old Chicagoan is the head of One Design Company, a Web development firm. He runs the Coop, a shared workspace in River North with 35 desks and 5,500 square feet. He's a member of a local artists' collective called The Post Family.
Now Rosen is tackling yet another project: a startup called Desktime, which makes software that helps manage co-working spaces. These hubs, which have sprung up across the country, bring together people with different jobs to work alongside each other in a shared environment. They are organized to be flexible — a person might rent a desk for just one day, while another might pop in for a week out of every month.
This dynamic creates challenges in scheduling and billing, as Rosen has learned in his years running the Coop. He started building Desktime a year ago to make his management of the space easier.
"We build products for people all the time," said Rosen, referring to his work at One Design. "But at the end of the day, we really wanted to solve our own problems."
Groupon'sformer chief technology officer, Ken Pelletier, provided seed money as an angel investor in Desktime about six months ago. And the startup has its first paying customer in 1871, the 50,000-square-foot space on the 12th floor of the Merchandise Mart that will open this spring as a collaborative hub for digital technology entrepreneurs.
The six months since his angel investment is "a short time, in my experience, to go from idea to monetization," said Pelletier, who got to know Rosen and One Design after the firm did early design work for Groupon. "We're pretty excited that we've got a revenue stream coming soon."
Desktime started as a directory service where co-working spaces or offices with extra desks to rent could list their spots for free. Rosen and his team are now building additional features, such as booking and payment processing, that will be rolled out later this year. As the first customer, 1871 is playing an important role in designing the platform.
The partnership "enables us to work with someone to build it together instead of just taking an off-the-shelf thing," said Kevin Willer, president of the Chicagoland Entrepreneurial Center, which will operate 1871.
In addition, Willer said, 1871 organizers liked that "we're building a place for startups in Chicago and (Desktime) is a startup in Chicago."
Desktime will eventually add communication tools so that members of a co-working space can send a group invite for happy hour drinks, for example, or complain anonymously about a stinky desk mate. The first priority, however, is making sure 1871 gets filled up, and this means finishing up construction of the space by spring.
"We've been really excited about the response," Willer said. "We saw 50 applications in the first 24 hours and a steady stream of them since."
Last month, Chicago welcomed the official launch of 1871– a 50,000-square-foot digital forge for startup entrepreneurs currently taking applications and set to open in the spring. It is the culmination of an unprecedented collaborative effort that brought together hundreds of builders and doers from throughout Chicago’s digital landscape, all lending their minds and vision to a common purpose.
With a cityscape view from its 12th floor perch in the Merchandise Mart, 1871 will provide a collaborative home dedicated to supporting those startups and individuals - designers, developers & innovators – who set their sights on solving challenging problems and seek to be surrounded by an ecosystem of supportive like minds and creative thinkers.
Longtime entrepreneurial champion, venture capitalist and current World Business Chicago board member J.B. Pritzker conceived of its creation and committed the resources to allow 1871 to take root. His vision was inclusive and drew from all points of the community – universities, serial entrepreneurs, civic organizations, investors, designers, corporate leaders and beyond. Its very DNA is derived from the hundreds of contributors who have chiseled their mark on its foundation.
Its time is now. This month, two major sources for national venture capital (VC) information, Dow Jones Co’s VentureSource and Thompson Reuters’ / PWC MoneyTree published investment data for 2011 – both illustrating a measurable increase in the amount of money and number of companies funded across the nation in 2011.
Chicago has also seen a tremendous amount of activity and excitement around its startup community and venture capital funding for companies in the past year. Each report shows the number of Chicago companies that received VC funding in 2011 has increased dramatically over 2010.
In addition, Built In Chicago (BIC),an online portal that serves as a resource for digital professionals by connecting, educating and promoting Chicago’s growing digital community, has compiled an extensive report on VC activity in Chicago bysourcing data from the community. In its reporting, BIC has been able to capture local first stage funding deals, which are often missed by other reporting systems and are arguably where the dynamism of the startup community lives.
Built in Chicago cross references its internal data with VentureSource, CB Insights, SEC Filings, New World Venturesand several other sources in attempt to build the most comprehensive data set on Chicago digital tech funding (you can view the full report for 2011 here).
The findings showed the total dollars raised by Chicago digital technology companies were 431% higher than 2010 and 37% higher than the peak of 2000. Specifically, $1,452M was raised by 77 digital technology companies in 2011. This compares with 41 companies that raised $273M in 2010.
The Illinois Innovation Index also reports venture capital information on a regular basis, as well as data on new business starts by industry in the metro area and statewide. The most recent issue showed that in 2011, more than 13,000 new businesses were established in the seven-county Chicago metropolitan region, generating almost 23,000 jobs.
One thing is for certain and the data is quite clear no matter how it is cut – Chicago’s startup scene is hitting on all cylinders. With VC funding on the rise, and following a meteoric year-over-year increase of investment activity in Chicago’s startup community, 1871 will be a critical asset when it opens this spring. The Chicagoland Entrepreneurial Center will manage 1871, curating the ongoing success of this vital addition to Chicago’s landscape.
The year is 2012, but a group of Chicago's technology boosters want to bring the local startup community back to 1871.
That's the name of a 50,000-square-foot space that will open this spring on the 12th floor of the Merchandise Mart to house entrepreneurs seeking a collaborative and flexible work environment. The moniker was chosen to reflect the spirit of renewal and innovation that rebuilt the city after the Chicago Fire in 1871, said Kevin Willer, president of the Chicagoland Entrepreneurial Center.
The nonprofit Chicagoland Entrepreneurial Center will operate the space with initial support from venture capitalist J.B. Pritzker and the state of Illinois, as well corporate sponsorship from companies such asComcast Corp.andCisco Systems Inc.Willer and Matt Moog, founder and chief executive of review site company Viewpoints Network, led the nearly yearlong effort to establish a hub for early stage digital technology startups in Chicago.
Moog wryly referred to the project as "one of the worst kept secrets in Chicago," as organizers met with more than 100 local entrepreneurs to gather feedback on how the space should look.
"It's about building something that merges all of the pieces that digital entrepreneurs want in their lives," Willer said.
These wish-list items include a central location close to public transportation and bike lanes, flexible lease terms and an open environment where people working on different projects can swap ideas.
"One of the most important concepts is serendipity," Moog said.
The space, designed by architectural firm Gensler, can hold about 400 people. The area has reserved desks that will start at a monthly rate of $400 per seat, as well as shared workspaces that are priced at $250 a month. The hub is also outfitted with glass walls that can be written on, private conference rooms, a cafe, classrooms and an event space seating 250 people.
An independent selection committee, whose composition will be disclosed at a future date, will review tenant applications. The hub is aiming to draw early stage companies with two to eight employees.
Dan Salcedo, a startup founder who relocated from Chicago to Silicon Valley in June, is planning to move back and submitted his 1871 application Wednesday. He said he's been encouraged by cooperation between private entities and local government in Illinois to build a nurturing environment for entrepreneurs.
"1871 is a huge landmark show of how that's really coming together in a tangible way," said Salcedo, who plans to launch his startup, mobcart.co, in the coming months. His technology recognizes what products people are viewing online and allows them to team up to present a wholesale-buying deal to a retailer.
The 1871 organizers declined to release financial details but said they have a 12-year lease. The new center joins several similar spaces in the city, including TechNexus, a Loop facility supported by the Illinois Technology Association, and Fail Cube, a 19,000-square-foot space shared by several startups on the 19th floor of the Merchandise Mart.
Speaking of startups: When Lance Pressl joined the Chicagoland Chamber of Commerce more than seven years ago, he looked for data on the number of new local startups, as well as the number of local companies that had gone out of business. He came up empty-handed.
Pressl's unsuccessful search was one of the reasons the chamber, along with three other city and state agencies, decided to compile the Illinois Innovation Index. The monthly indicator, which was launched in September, tackles a different subject each month.
The January edition of the index shows that more than 13,000 new businesses were created in the seven-county Chicago region, generating nearly 23,000 jobs. The most active sector was professional, scientific and technical services, accounting for 18.6 percent of new business starts.
"This edition is really the catalyst for the entire index," said Pressl, who is president of the Chicagoland Chamber Foundation.
The January index also showed that while 244 companies representing 6,883 employees moved to Illinois between January and September 2011, the state lost 269 companies representing 8,894 employees. This came to a net loss of 25 companies and 2,011 jobs, a decline that the report called "negligible."
Pressl said the index underscores the need for local groups to support a wide range of businesses, whether that means startups or legacy companies.
"We as a chamber like to think of us as helping you who've got an idea in your garage to helping Kraft figure out how they can be competitive and innovative in the global marketplace," he said. "It's the complete spectrum."
By Sandra Guy, Chicago Sun-Times
The Merchandise Mart will be the site of a 50,000-square-foot technology center that will open this spring to provide collaborative working space for digital and technology entrepreneurs, the center’s backers announced Wednesday.
The venture, to be run as a non-profit by the Chicagoland Entrepreneurial Center (CEC), is aimed at enhancing the growth and visibility of Chicago’s fast-growing tech community, which saw 124 digital startups launch last year — a 51 percent increase from 2010, according to data provided by Chicago venture and startup sources.
That growth is on pace for another 50 percent jump this year, said Matt Moog, entrepreneur, chairman of the project, CEO of Viewpoints Network and head of tech networking group BuiltInChicago.org.
"There is a new digital technology company starting every other day in the city of Chicago," Moog said at a news conference to unveil the tech center.
The center, to be called 1871 (1871.com) — reflecting Chicago’s can-do rebuilding spirit after the Great Chicago Fire of that year — will open this spring on the Mart’s 12th floor.
The center aims to house as many as 400 startups who have viable ideas and are looking to grow and hire, but need access to capital, new ideas and a community, Moog said.
Startups may apply for space at www.1871.com. An independent board yet to be named will judge the applications.
The "smart work" center is being fashioned by Gensler architects to enable startups to rent desks and flexible workspace, and have a common area for major events, educational courses and other programs. A reserved desk will rent for $400 a month, and a shared coworking space will rent for $250 a month. The tenants may use lunchrooms, quiet rooms, conference rooms, whiteboard space and see-through walls that may be used as whiteboards.
TechAmerica, a tech-industry trade association, will move its Midwest regional office into the 1871 Center from its current Naperville site, relocating two employees and adding a third.
"We are excited to make this the new center of all activities related to innovation and technology in our state," said Ed Longanecker, TechAmerica Midwest executive director. TechAmerica will keep its Springfield office in the capital.
Initial funding supporters are Comcast, the networking router company Cisco Systems, venture capitalist J.B. Pritzker and the state of Illinois.
Comcast will give the center’s tenants free access to its high-speed metro Ethernet Internet service and will provide TV service in the common areas, said Jeffrey M. Buzzelli, regional vice president for Comcast Business Services.
Unlike conventional technology incubators, the center will take no equity stake in the companies housed inside it. Center operators hope that the startups will be successful enough to expand elsewhere within a year or so, Moog said.
"The idea is this is a jumping-off point," Moog said.
Kevin Willer, CEO of the Chicagoland Entrepreneurial Center, said the Merchandise Mart has another 120,000 square feet adjacent to the tech center that could be used for future expansion.
The center, whose budget is not yet being made public, is expected to house some angel and venture capital firms to allow the startups easy access to potential capital. Last year, 14 Chicago startups raised a collective $250 million, and when daily deals site Groupon is added, the total leapt to $1.4 billion.
The center’s lease at the Merchandise Mart is for 12 years.
Also Wednesday, TechNexus, Chicago’s five-year-old tech collaborative and incubator space, announced that more than 130 companies have grown at its facility at 200 S. Wacker Drive, and those companies have gone on to create 400 jobs and to raise $75 million in investment capital.
A new downtown hub for tech startups, promising affordable space and other assistance, is coming to the Merchandise Mart.
The center is called 1871, a reference to the city's rebirth after the Great Chicago Fire.
The Chicagoland Entrepreneurial Center has leased 50,000 square feet on the 12th floor of the Merchandise Mart, the same floor as digital-ad agency Razorfish. It will provide entrepreneurs with that office space, which can be a struggle for startups with little cash or track record.
“This will address that problem,” says Matt Moog, an entrepreneur, investor and CEO of Viewpoints Network, an online site that provides consumer reviews. He described how his own startup moved four times in as many years as it was growing.
The center will open in the spring, said Mr. Moog. The idea came about last spring and the group spent about six months putting together the deal.
The operation of the space, which could accommodate 300 to 400 people, will be overseen by the Chicagoland Entrepreneurial Center. That group is headed by Kevin Willer, a former Google Inc.. sales executive who recently took over the non-profit that advises startups.
“One of the biggest challenges entrepreneurs face is, where do I get started, where can I go and work?” Mr. Willer says.
Entrepreneurs will pay $400 a month for assigned desks and $250 for desks in communal space. The center also will have suites of about 800 square feet and is intended to accommodate companies with up to about eight people. It's not designed as a long-term location for companies that organizers expect will move on after a year or two.
They can apply for space at 1871.com. Applicants will be chosen by an independent committee, which hasn't been named yet.
The creation of the center was spearheaded by J. B. Pritzker, a former CEC board member who runs Chicago-based venture fund New World Ventures. Other supporters include Comcast and Cisco Systems.
“Comcast's investment in the CEC will give tenants free access to our advanced, high-speed Metro Ethernet Dedicated Internet Service,” says Jeffrey M. Buzzelli, regional vice-president of Comcast Business Services. "We also plan to provide TV service in common areas and Business Class phone service for the CEC administrative offices.”
It will be the first US deployment of Cisco's “smart work center” concept aimed at promoting digital collaboration and telecommuting.
The effort is seen as both a needed assist for startups and a way to raise the profile of Chicago's startup community, which has long been viewed as fragmented, with a more visible space downtown where multiple companies can spring up.
With high-profile successes such as Groupon Inc., which went from idea to huge IPO in three years, the city's tech scene is on a roll. Mu Sigma Inc. raised $133 million in the past year; GrubHub Inc. has raised $70 million.
The state of Illinois is expected to announce its support soon.
While the city didn't create the space, Mayor Rahm Emmanuel, who courted the tech community during his election campaign, lent support.
“This is about the larger digital tech ecosystem evolving in the city of Chicago,” says Mr. Moog, who founded Built in Chicago, a tech social-networking site. He estimates there were 124 digital technology companies started in the Chicago area last year, and overall employment at digital-tech companies is about 30,000. He says public-sector support also is evolving with state and local government that's “much more progressive and much more savvy about technology.”
“The question is: How do we get more companies into the funnel?” he adds.
Anthony Driver Jr. had no idea what the word “entrepreneur” meant when he enrolled in an elective class with his favorite teacher to ensure a good grade during his senior year at CICS Ralph Ellison charter school.
Driver figured it out quickly, since he ended up winning a citywide business-plan competition at the end of the year. His winning idea is to put cellphone-charging kiosks at malls, airports, grocery stores and other sites where people are in a hurry. A 10-minute charge at the Charge N Go kiosk would cost $1, and would juice up smartphones, laptops and tablet computers. Users could lock their device inside the kiosk while they ran a quick errand.
Driver competed against 200 rivals.
“It all started when I joked that my phone was always going dead when I was at the mall,” said Driver, an 18-year-old freshman at Howard University in Washington, D.C.
Driver won his entrepreneurial bona fides through the Future Founders program, sponsored by the Chicago-based Future Founders Foundation. The foundation is a newly created spinoff from the Chicagoland Entrepreneurial Center, aimed at introducing young people to a variety of career ideas.
“I learned that you don’t have to have an idea that’s typical or an idea that you can create right now,” Driver said.
Driver also was named a finalist in a citywide business plan competition sponsored by the Network for Teaching Entrepreneurship (NFTE), a national organization that provides entrepreneurship curriculum and programming to 2,000 students in Chicago.
Driver is now struggling with his choice of career. He always wanted to be a lawyer and a politician, but he’s realizing that he could have an impact as both a business owner and a politician.
“I had so much fun, and I think the charging kiosk could become a reality,” he said. “The kiosk business is booming. At Howard University, Pepsi has set up kiosks to reward students who recycle with money credited to their student accounts.”
Driver is eyeing a contest at Howard University that rewards business students who submit promising proposals with sponsorships and funding opportunities.
A key part of the appeal of the Future Founders program is the young entrepreneurs who volunteer to mentor students. Driver said he was impressed that people close to his age served as role models.
One of them, Logan LaHive, 29, is the CEO and founder of Belly, a Chicago-based startup that designs “punch” cards that businesses give to customers to build rewards each time they buy goods. Belly (BellyCard.com) won more than $1 million in mid-December from Groupon co-founders Eric Lefkofsky and Brad Keywell’s Lightbank investment fund.
LaHive volunteered to judge the business plan competition for CICS Ralph Ellison school when he was director of new business at Redbox, the Oakbrook Terrace-based company that rents DVDs through red kiosks familiar at supermarkets and discount stores.
“Anthony gave a fabulous presentation,” LaHive said. “I loved his drive and his passion.”
LaHive was so taken with Driver’s kiosk idea, he offered to take Driver to Redbox’s headquarters to get an up-close look at what insiders call “automated retail.”
LaHive said he did so because he always knew he wanted to be an entrepreneur but had no resources to call on when he was a teenager.
“I think it’s incredibly important to offer kids an experience outside of the everyday opportunities they have in their communities and in the classroom,” LaHive said. “They need to get out in the world and meet people running their own businesses.”
Driver said he was amazed at the intricacies of the business of selling DVDs and videos. He learned that his electronic device-charging kiosk would cost $7,940 to build, and that he could make $68,000 in revenues in his first year in business.
Scott Issen, a Glenview native who helped launch and leads the non-profit Future Founders Foundation, is aiming to expand Future Founders’ reach beyond the seven high schools it serves with the entrepreneurship curriculum.
His goal is to work this fall with 12 middle- and high schools and to expand more aggressively in Fall 2012 with Future Founders and Connect to the Future, the foundation’s other program that connects professionals with students in 7th through 12th grades.
Each summer, Future Founders runs a week-long academy for 25 to 30 students who compete for spots. The program takes the kids on field trips to companies such as Microsoft, the Ford Motor Co. assembly plant and Kim & Scott’s Gourmet Pretzels, and teaches the kids presentation skills, business etiquette, and investment and financing strategies through game playing.
Issen aims to increase the number of Foundation volunteers who judge business-plan competitions, talk to students in classrooms and mentor students in all sorts of ways.
“It’s a great way for Chicago’s entrepreneurs to give back and show appreciation for the mentoring and support they’ve received,” he said.
Here’s how to double attendance and revenue at a fundraising dinner: Invite the guys from Groupon.
The presence of Brad Keywell, Groupon Inc. co-founder and director, and Eric Lefkofsky, the daily deal site’s co-founder and chairman, had much to do with boosting attendance and gross proceeds at Thursday night’s Chicagoland Entrepreneurial Center’s 2011 Momentum Awards Dinner.
(Chicago Mayor Rahm Emanuel, who had agreed to attend the event, was arguably a draw as well, though the mayor canceled, sending Deputy Mayor Mark Angelson in his place.)
About 950 attended the dinner, more than double last year’s number, and the event grossed $1 million, also more than double. The money will help finance the center’s programs for start-up companies.
“It’s a historic evening,” said gala chair Dean DeBiase, Chicagoland Entrepreneurial Center board member and chairman of Entertainment.com, a Troy, Mich.-based coupon company. “I love the energy,” he said. “This is a great city — a great country — for startups.”
(Read Crain’s interview with Mr. DeBiase.)
The dinner, at the Chicago Hilton, started with a 90-minute cocktail reception, so lively that presenters blasted dance music into the ballroom in order to halt conversation and herd attendees to dinner. During dinner, the din continued, so aggressively that organizers tapped on glasses to get the crowd’s attention.
It was an awards dinner, so honors abounded: The Founders Award, the organization’s inaugural, went to Gerald Roper, president and chief executive officer of the Chicagoland Chamber of Commerce. Messrs. Keywell and Lefkofsky received the Entrepreneurial Champion Award, the first time it has been given to two people.
Restaurant delivery site GrubHub.com won the Merrick Momentum Award, beating out finalists Viewpoints.com, an online citizen review site, and Ifbyphone.com, which helps clients with telemarketing. “We’re the No. 2 two-syllable startup in Chicago,” joked Matt Maloney, GrubHub co-founder and chief executive officer, as he cradled the award.
In lieu of speeches, Messrs. Lefkofsky and Keywell sat for a talk-show-style Q&A, moderated by Kevin Willer, Chicagoland Entrepreneurial Center president and chief executive officer.
“Groupon proves that tech companies can grow and flourish in Chicago,” Mr. Keywell said, while Mr. Lefkofsky noted that “people are making money here — there needs to be more of that.” He urged budding entrepreneurs to “hustle while you wait,” and Mr. Keywell riffed on a line from the late abstract expressionist painter Mark Rothko.
“He said, ‘Do something new,’ ” Mr. Keywell said. “I say, ‘Do something bold.’ ”
Fitting for an event stocked with tech entrepreneurs, technology increased the evening’s take. Chicagoland Entrepreneurial Center Co-chairman James O’Connor Jr. invited guests to help boost the evening’s proceeds over the $1-million mark by texting a donation amount to a number (82257). Mr. O’Connor kicked off the give-fest with a donation of $5,000. Within an hour, the ploy raised $98,000; by the end of the evening, the amount had passed $100,000.
In other entrepreneurial touches, products from local companies, not candles or flower arrangements, served as centerpieces, and guests were encouraged not to turn off or even silence their mobile devices.
As part of its ongoing efforts to promote and grow the startup community in Chicago, the Chicagoland Entrepreneurial Center (CEC) held its fourth annual Momentum Awards Dinner on October 6th at the Hilton Chicago and raised more than $1 million.
This year's event brought together 950 leaders from Chicago's vast business ecosystem, including entrepreneurs, Fortune 500 CEOs, mid-market executives, academic innovators and investors, to celebrate the present energy and enthusiasm in the Chicago startup community.
During the event, Brad Keywell and Eric Lefkofsky, Co-Founders of Groupon, Inc., received the Entrepreneurial Champion Award sponsored by BMO Harris Bank for being prominent members of the business and entrepreneurial community who not only are successful in their own business ventures, but also invested in the success of their surrounding community. GrubHub was recognized with the Merrick Momentum Award to acknowledge this high-growth, startup business based in Chicago.
"As the 'central address for entrepreneurship' in Chicago, the CEC supports and celebrates successful entrepreneurs from our city," said Kevin Willer, CEO of the CEC. "It is in that spirit that we recognize Brad Keywell and Eric Lefkofsky as true entrepreneurial champions and celebrate companies like Groupon and GrubHub for bringing national and global attention to our city and giving Chicago, its startups, and its people the momentum to grow."
The 2011 Entrepreneurial Champions, Keywell and Lefkofsky, co-founded Groupon (along with Groupon CEO Andrew Mason) in October 2008. Groupon now has more than 9,600 employees with operations in 175 North American markets and 45 countries, selling 3.2 million Groupons in the second quarter of 2011.
Keywell and Lefkofsky are also founders of several other successful companies, including InnerWorkings, Echo Global Logistics and MediaBank, and the Lightbank venture capital fund, and are deeply involved in the Chicago community, both serving as adjunct professors at the University of Chicago Booth School of Business and on the boards of several major Chicago-based organizations.
"We are honored to receive the CEC's Entrepreneurial Champion Award and hope to continue to be a part of building the entrepreneurial spirit in Chicago," said Lefkofsky. "Chicago is one of the world's great cities, and our vibrant culture of innovation deserves global recognition."
The CEC Board of Directors selected GrubHub for the 2011 Merrick Momentum Award from a field of other prominent startup companies with strong growth potential including Ifbyphone and Viewpoints Network.
"The Merrick Momentum Award recognizes startup companies that have shown a solid business track record and will continue to experience tremendous growth," said Michael Ferro, Chairman and CEO of Merrick Ventures and CEC board member. "Our board saw the remarkable potential in GrubHub and believes they are deserving of this honor not only for past success, but also for their opportunity to be a dynamic, flourishing company in Chicago."
GrubHub, an internet startup that connects consumers with restaurants that deliver to their neighborhoods, recently expanded in 50 new markets across the county and has expansion plans to increase one market per week. The company's growth is expanding on the diner's side, restaurant side and the market side, increasing restaurateurs business by 10-20 percent.
"Receiving the Merrick Momentum Award is an incredible honor for GrubHub and reinforces that our company is positioned for continued growth and success," said Co-Founders Matt Maloney and Mike Evans. "We are very proud to be rooted in a city that is so open-minded, supportive and responsive to new ideas and concepts and to be honored the same night as Brad and Eric."
The Momentum Awards Dinner was made possible by our generous supporters including Ernst & Young and the J.B. and M.K. Pritzker Family Foundation. The event was co-chaired by CEC Board members Leslie Anderson, Senior VP, District Market Manager, BMO Harris Bank and Dean DeBiase, Chairman and CEO, Entertainment.com.
In 20 years, when Chicago power brokers look back at how the city evolved into (what might be) a high-tech mecca, they are likely to point to Thursday evening as the night that bridged the gap between old and new.
Billionaire J. B. Pritzker sat next to President Barack Obama's tech guru, Harper Reed. CME legend Jack Sandner introduced GrubHub founders Matt Maloney and Mike Evans. And it was James O'Connor Jr. at the podium, looking out at his father, former ComEd CEO James O'Connor Sr., who took in the evening with the crowd.
More than 1,100 guests gathered at the Hilton hotel on South Michigan Avenue for the Chicago Entrepreneurial Center's annual awards, this year honoring Groupon co-founders Brad Keywell and Eric Lefkofsky.
Some of the biggest names in Chicago's entrepreneurial world — noticeable by their open-neck collars — mingled with old-school bankers and CEOs whose titles are as long as their ties.
Names in the crowd included PrivateBank CEO Larry Richman, Invenergy CEO Michael Polsky, Corporate Cleaning CEO Neal Zucker, Ernst & Young Midwest Vice- chairman and Managing Partner Tony Anderson, Ariel Investments Vice-Chairman Charles Bobrinskoy, marketing entrepreneur Pat Pulido Sanchez, Apex Venture partner Lon Chow, Lightbank partner Paul Lee, Viewpoints founder Matt Moog, real estate exec Jerry Lasky and his wife, Whitney; Potbelly Sandwich Shop founder and former CEO Bryant Keil; and entrepreneur Mark Tebbe and Magellan Development's Robin Berger.
There was no auction at this event, but guests were encouraged to donate via texting, with their donations shown on big screens in the ballroom. Cheers erupted when Mr. Keywell donated $5,000 and later when it was revealed that attendees had pledged more than $100,000 altogether.
Messrs. Keywell and Lefkofsky, who had accepted the award on the condition they not have to make speeches, sat for an onstage interview with Kevin Willer, CEO of the Chicago Entrepreneurial Center.
Though the questions went a little long for a crowd passionate about networking, the Groupon executives held the audience's attention with stories about how they landed at the top of Chicago's tech scene.
They acknowledged that they haven't always been good at business and that they've made plenty of mistakes (remember StarBelly?). They said they learned a lot from law school — they both graduated from the University of Michigan's — but wanted something more exciting. (They said they were the only two in their graduating class not to pursue law.)
And though they remain passionate about Detroit, where they both grew up and were friends, they love Chicago. They were drawn here in part because Mr. Keywell's girlfriend at the time was here, plus the food was better than in Wisconsin, where they had first gone after graduation.
A group of influential Chicago businessmen, led by billionaire venture capitalist J.B. Pritzker, plans to open a new center for technology startups early next year.
Pritzker and the other leading organizers — Troy Henikoff of incubator Excelerate Labs, Kevin Willer of the Chicagoland Entrepreneurial Center and Matt Moog of startup Viewpoints Network — are searching for a nearly 50,000-square-foot space near public transit.
The project has not been named. As a model for the local effort, Henikoff said, the organizers are looking at a gathering spot, shared working environment and education center in New York City's Flatiron District dedicated to helping entrepreneurs. Called General Assembly, the New York effort offers classes on topics from "Facebook Strategy" to "Startup Tax and Accounting," in addition to housing companies. It opened this year.
San Francisco and Boston also have centers that are serving as models, Willer said.
"World leaders go visit General Assembly; it's very cool, but our plans are far more ambitious," he said, adding that the Chicago group hopes to lease a space more than double the size of General Assembly's.
Willer said that Chicago's tech community is scattered from the West Loop to Ravenswood. The center would be a centrally located site that the community can show off to visitors, but it also would relieve "a pain point" for fledgling businesses.
"Startups have a hard time figuring out where to live," Willer said. "They have no credit. They have no capital. They can't sign up for long-term leases. So our idea is to create a flexible environment where entrepreneurs can rent a desk month to month and work with other folks."
More than 100 people are involved in giving advice and input on the project, which has been in the works for several months, said Moog, who also founded Built in Chicago, a Facebook-like site for local entrepreneurs.
"It's an idea whose time is overdue," he said.
Moog said the tech center would not be a traditional incubator, in which entrepreneurs receive free rent in exchange for giving the landlord equity in their companies. Instead, it would be a nonprofit. Startups would be charged rent by the desk or by the small suite. And the organizers would raise money from corporations and philanthropists to cover the remaining operating expenses.
The Chicagoland Entrepreneurial Center and Excelerate Labs, which "graduates" 10 startups from its summer boot camp every year, also plan to be tenants, leaders of both groups said. Excelerate's graduates could then remain closely linked to their mentors and each other by moving into another space in the tech center.
Organizers are keeping city and state officials informed about their plans, but, at this point, the project will be privately financed.
"Our hope is that people today working off their kitchen tables see this as an opportunity to step out and move into a space," Moog said.
News broke today that sent a jolt throughout the Midwest startup community: A massive new center is set to open early next year in Chicago that will house myriad young companies. And perhaps crucially, it’s backed by J.B. Pritzker, an individual worth over $1 billion, providing it with a firm financial footing.
Pritzker is not alone in the venture, and is joined by three other founders: Matt Moog (Built in Chicago), Troy Henikoff (Excelerate Labs), and Kevin Willer (Chicagoland Entrepreneurial Center). One individual who is well-known in the Chicago technology community described the founding team of the project as “all the usual suspects.”
The center itself will be massive, around 50,000 square feet when it opens in the first months of 2012. Interestingly, the entire operation is not-for-profit. It will also not, as incubators do, take equity in the companies that populate its offices and desks. Instead, it will charge fees to its occupants, making it very much a coworking location, and not an investor of any stripe.
The projects of two of the founders, Excelerate Labs and the Chicagoland Entrepreneurial Center, will likely move into the center when it opens. The space itself has yet to be rented, but the lease should be signed within the next two months.
Chicago has a somewhat troubled history with this sort of project, oddly. Previously in the city there was a much vaunted 18,000 square foot venue called the Syncubator which had similar goals, if a slightly more investment oriented focus. It eventually collapsed under its own weight when its founder stopped paying the rent and whose fund of money ended up being little more than mirage. It was a rather public failing.
Sue Khim, of Chicag0-based AllTuition, had this to say on the endeavour: “Nurturing winning startups is hard. What has been hard for people in Chicago to realize is that a lot of people who like to work on startups also like to be part of something cool. It will probably take a few tries to get it right but I do think we’ll get there.”
While Groupon has provided much of the startup gravity in the city for sometime, this center has the potential to form a new nexus. We will cover its launch when the time comes.
Brad Keywell, Co-Founder of Lightbank, and Kevin Willer, President & CEO, Chicagoland Entrepreneurial Center (CEC) today joined entrepreneurial forces as they announced the Future Founders Foundation, a new nonprofit organization that will expand entrepreneurship and career exploration programs for underserved students in the Chicagoland area.
The new partnership, the Future Founders Foundation, combines the missions of the CEC’s Future Founders program and the Connect to the Future program, which was started by Brad Keywell. The Foundation will inspire teenagers to explore new careers and connect them with successful mentors from various business professions. During the 2011-12 school year, the organization will work with a dozen middle schools and high schools in Chicago.
“Future Founders has been a shining success for the CEC over the last six years,” said Kevin Willer, President & CEO, CEC. “This partnership will unlock the full potential of the program – especially with all of the great momentum in Chicago’s startup community.”
“The Foundation will enable us to scale Connect to the Future and provide more resources to the people who need them: our students,” said Brad Keywell. “We are excited to expand our mission – inspiring students by showing them the doors that are opened up through education, and bringing professionals from the community into classrooms to share their expertise and their stories.”
Brad Keywell is the Chairman of the Future Founders Foundation and the new Board of Directors includes Kevin Willer; Jim O’Connor, Jr., Managing Director, MVC Capital, Inc. and Co-Chairman, CEC; Phyllis Lockett, President & CEO, New Schools for Chicago and Mark Hoyt, CFO, International, Groupon. Scott Issen, Managing Director, CEC, is the President & CEO of the new organization.
“Nurturing tomorrow’s entrepreneurs and business leaders is critical to the continued success of Chicago’s economy,” said Scott Issen, President & CEO, Future Founders Foundation. “Through this partnership, we can expand our efforts and help more students discover what opportunities are possible and how they can achieve them.”
Future Founders provides motivated high school students in Chicago’s underserved neighborhoods the opportunity to learn about and experience entrepreneurship during the school year from some of the city’s most successful entrepreneurs. The goal of Future Founders is to expose students to entrepreneurial careers and have them create complete business plans. Since the program’s inception in 2005, Future Founders has provided over 7,000 hours of mentoring to 700 high school students on Chicago’s South and West Sides.
Connect to the Future unites middle school and high school students with successful entrepreneurs and business professionals from a variety of fields. Connect gives students a chance to ask questions, explore possibilities, and engage with potential role models who can validate the importance of hard work and the relevance of education to career success. Since the program’s inception in 2006, Connect to the Future has connected hundreds of professionals with students and classrooms in Chicago area middle schools and high schools.
Future Founders was created through a partnership between the CEC, the Chicagoland Chamber of Commerce and the Network for Teaching Entrepreneurship. The program is sponsored by the Motorola Solutions Foundation, AT&T, BMO Harris Bank, CME Group Foundation, the Ford Motor Company Fund, Microsoft, the Motorola Mobility Foundation and Smart Bet Charity, in partnership with the SME Education Foundation, the University of Illinois at Chicago College of Business Administration and the University of Chicago Booth School of Business.
Connect to the Future was created based on the experience of a local entrepreneur who adopted a classroom at Jenner School for the Arts, a Chicago Public School, for the 2006-07 and 2007-08 school years. This successful program involved the entrepreneur adopting a 5th and 6th grade classroom, and bringing over a dozen different professionals to enlighten the students about the possibilities that await them in the world. When word got out about this program, there was extensive interest from many entrepreneurs and professionals wanting to volunteer their time and get involved. The Connect program is a response to this interest, and provides an organized and professional format in which Resources can connect with students to share their success.
For more information, visit www.futurefounders.com and www.cttfuture.com or contact Scott Issen at firstname.lastname@example.org.
With all this talk of the debt ceiling and everything else nasty going on in the world right now, it can be easy to lose sight of the things to remain optimistic about. Fortunately for the entrepreneurial community in Chicago, there's plenty to look forward to -- and that's coming straight from the Chicagoland Entrepreneurial Center's new CEO, Kevin Willer.
If you aren't familiar, the CEC, in Willer's own words, "Work[s] with high-potential entrepreneurs to help build and grow their companies."
Naturally, it's a new hire's job to speak in rosy tones about the future, but a lot of what Willer says in a recent interview with World Business Chicago seems measured even if it's also extremely glowing.
This is a really exciting time for the City—a lot of Chicago organizations are collaborating to support a self-sustaining entrepreneurial eco-system in Chicago, so it’s an ideal time to start a company here... Overall, there is much more activity and interest now than just a few years ago.
Where we're lacking in activity, though, is connecting corporate Chicago with start-up Chicago, for entrepreneurs to be less segmented, and to accrue more tech talent. Though, Willer says, the entire country needs more tech talent in general.
At World Business Chicago, it’s all hands on deck in support of Chicago’s growing entrepreneurial community and that’s why we work closely with the Chicagoland Entrepreneurial Center (CEC). In fact, we’re currently expanding our partnership and collaboration on research, marketing, and access to professional advisory services and qualified mentors.
Through this strengthened relationship, our objective is to provide CEC’s clients with extended access to Chicago’s broader business leadership, enabling high-growth innovators to gain industry traction as they bring new products and services to market.
We recently had an opportunity to interview Kevin Willer, the newly appointed CEO of the CEC, and gain his insights into Chicago’s rich and growing entrepreneurial ecosystem:
If it’s your job to help incubate tech-centric businesses, it helps to have Google on your resume right? Tell us about your history within the Chicago tech landscape:
I grew up in the Chicago ‘burbs and worked for U.S. Robotics in Skokie, one of those old-school tech companies, and in 2000 I co-founded the Chicago Google office. That was back when there were less than 200 employees in the whole company (Google currently employs 26,000 people worldwide and 450 of them are based in Chicago). Most recently I headed up Google’s civic development efforts here so I was the ‘outside face’ of Chicago’s Google office.
What does the CEC do exactly?
We work with high potential entrepreneurs to help build and grow their companies. The folks we meet with have some traction already--some revenue or a product—but still need help getting to the next level, so they can meet with investors and raise real capital. We connect entrepreneurs with advisors and mentors in their industry, help them refine their business models and goals, and then we introduce them to venture capitalists and angel investors.
Do you have a favorite success story?
I have a few, actually. There’s Savo Group, Sitter City, Grub Hub and Zorch. We helped all of them get up and running, and now these companies are that much more likely to do the same for a start-up that just needs a little guidance on their way to becoming the next success story.
Talk to me about the entrepreneurial community in Chicago. How does our city rank in comparison to others?
This is a really exciting time for the City—a lot of Chicago organizations are collaborating to support a self-sustaining entrepreneurial eco-system in Chicago, so it’s an ideal time to start a company here. We’ve got the talented human capital, more of whom are choosing to stay here after graduating from say an IIT or University of Chicago. We’ve got venture capital firms here and we also have more angel investors than ever before. Plus, we have the social capital–-an enthusiastic infrastructure of people who know how important all of the above is. In short, everything an entrepreneur needs to get a business up and running is available right here in Chicago.
Overall, there is much more activity and interest now than just a few years ago. The recession was actually helpful to that energy level. Over the past few years, Chicagoans who lost their jobs and recent college graduates assessed the recessionary job landscape and basically said, “I want to have some control over my career path,” so many of them decided to start their businesses or join a startup.
What does Chicago still need to keep its ‘entrepreneurial edge’?
Chicago is probably the hottest city right now in terms of start-up activity, but I’d say we still need three things:
- More tech talent, but that’s true all over the country.
- Connecting corporate Chicago with start-up Chicago. Think what it would mean for a company like Boeing to meet with an entrepreneur who has a new piece of software that could help Boeing be an even better company. I’m not talking charity—I’m saying support your young companies.
- Chicago needs a place for entrepreneurs to do their thing. Signing a five-year lease just isn’t the right model for a new start-up. They need flexibility and, ideally, a space where they can be near other young entrepreneurs to feed off of each other’s energy.
If you could ask one thing from Chicago’s overall business community, what would it be?
I’d encourage them to “take a meeting.” Just meet with that entrepreneur even if you’re not sure how you can help or what you might advise. These connections are invaluable to start-ups.
Do you have ways of making ‘Chicagoland Entrepreneurial Center’ pop up in every Google search?
Well no, but what I’d like to see is ‘Chicago’ pop up first in any search about the best place to start a business. I don’t have any special powers and anyway I don’t need to because that’s already the case.
The Chicagoland Entrepreneurial Center (CEC) today announced the three finalists for its prestigious Merrick Momentum Award:
- GrubHub – an internet startup that connects consumers with restaurants that deliver to their neighborhood.
- Ifbyphone – a voice-based marketing automation platform that helps companies drive sales, reduce collection cycles, measure marketing effectiveness and improve customer experience.
- Viewpoints – an internet startup that operates a hosted technology service for user reviews and social engagement as well as a leading user reviews and advice website.
The Merrick Momentum Award recognizes the entrepreneurial stars that have demonstrated momentum since their inception and are poised for continued growth. The Award is named after Merrick Ventures, LLC, the company that has sponsored it for four straight years.
“This year’s finalists represent three of the best companies in Chicago – all with innovative services, disruptive business models and talented management teams. Based on the companies’ revenue traction and near-term growth plans, they are all well positioned to become our city’s next big success stories,” said Michael Ferro, Chairman and CEO, Merrick Ventures, LLC.
Last year’s Merrick Momentum Award winner, Sittercity, the inventor of online caregiving, recently received $22.6 million in equity financing to assist with expansion both domestically and overseas. Previous winners include Eved and SAVO, companies that are making tremendous strides in their industry while creating economic value and jobs at a time when others find it most difficult.
“There has never been a better time to be an entrepreneur in Chicago than today,” said Kevin Willer, President & CEO, CEC. “The success of companies like Sittercity, Eved and SAVO demonstrate the continued momentum that is building in Chicago’s entrepreneurial community.”
The Merrick Momentum Award winner will be announced at the CEC’s 2011 Momentum Awards Dinner on September 14 at the Hilton Chicago. At the event, Brad Keywell, Co-Founder and Director, Groupon & Managing Partner, Lightbank and Eric Lefkofsky, Co-Founder and Chairman, Groupon & Managing Partner, Lightbank, will be honored with the CEC’s 2011 Entrepreneurial Champion Award.
For more information or to register, visit www.CECMomentumAwards.org.
Anthony Driver, a senior at Chicago International Charter School – Ralph Ellison Campus, was recently crowned the 2011 Future Founders Citywide Business Plan Champion at the Chicagoland Entrepreneurial Center (CEC)’s Future Founders competition on May 4, 2011.
Driver’s business concept, known as “Charge ‘N’ Go,” places electronic recharging stations throughout the city to ensure that consumers’ mobile devices can stay charged on the go. Charge ‘N’ Go comes at a unique time when more people are using mobile devices than ever before and the power needs for those devices also continues to grow.
“Future Founders inspires students to create scalable business concepts like Charge ‘N’ Go and consider entrepreneurship as a viable career option,” said Scott Issen, Managing Director of the CEC. “The program provides the mentoring and guidance students need to succeed as entrepreneurs today and in the future.”
Competition judges selected Driver the overall champion from three category winners (see below) focused on technology, products and services. Student finalists presented their business concepts in front of 300 guests consisting of students, family members, entrepreneurs, and business leaders at the Hard Rock Café Chicago. The competition was the culmination of a year-long program during which 200 students from seven South Side Chicago high schools received insight on creating and running businesses of their own from 125 of the city’s top entrepreneurs and business leaders.
The CEC awarded more than $25,000 in prizes, including $10,000 in scholarships to the Future Founders Academy, an entrepreneurship camp that will take place in June. Prizes included college scholarships, laptops, Microsoft-branded accessories, and a personal shopping experience to provide the winner with a new business wardrobe.
2011 Future Founders Citywide Business Plan Champion & Technology Category Winner:
Anthony Driver (Senior,Chicago International Charter School – Ralph Ellison Campus), whose “Charge ‘N’ Go” concept uses an electronic device to charge everyday consumer electronics in various places.
Product Category Winner:
Karalyn Kelley (Junior, Gwendolyn Brooks College Preparatory Academy), whose “Food Girl” concept focuses on preparing and delivering homemade, healthy and organic lunches for high school students.
Service Category Winner:
Michael Padilla (Freshman, EPIC Academy), whose “Off the Map Tutoring” concept offers tutoring to students struggling with various academic subjects. Padilla is the first freshman to win in the competition finals.
Sponsored by the Motorola Solutions Foundation, Motorola Mobility Foundation, AT&T, Ford Motor Company Fund, Harris Bank, Smart Bet Charity, Microsoft and CME Group Foundation, in partnership with the Chicagoland Chamber of Commerce and the Network for Teaching Entrepreneurship (NFTE), the CEC’s Future Founders program consists of mentoring and specialized activities which give students the opportunity to learn the public speaking, presentation, technology, and financial literacy skills needed to create and grow a business.
Only a couple years ago, the billion dollar sale of OptionsXpress and the $20 million venture capital round raised by grubHub.com would have been interpreted as landmark events for Chicago’s technology and entrepreneurial communities.
Today, in the backdrop of Groupon’s multi-billion dollar valuation and the greater availability of early-stage financing opportunities, happenings once thought to be remarkable are now increasingly commonplace. Yet Chicago’s entrepreneurial renaissance did not occur overnight.
“Groupon was a symptom of all of the great things going on already,” said Kevin Willer, who Monday became the CEO of the Chicagoland Entrepreneurial Center after working for more than a decade at Google. “We’ve been building this up for a long period of time.”
As a co-founder of Google’s now 400-person Chicago office, Willer played an early and significant role in helping to grow the most important company of our generation. While Chicago’s tech community dusted itself off after the dot-com crash ten years ago, Willer saw first-hand how a couple of smart Internet entrepreneurs could literally change the world. Closer to home, Willer forged connections with the leaders of Chicago’s sprawling technology, business and entrepreneurial communities serving on the boards of TiE Midwest, the Illinois Technology Association and multiple civic, educational and philanthropic groups.
“One of the things that made me an attractive candidate is that through Google I’ve already forged partnerships with many key organizations in Chicago,” he said.
The CEC, which was founded in 1999 and is an affiliate of the Chicagoland Chamber of Commerce, currently helps approximately 75 young businesses in high-growth sectors (not just technology) with financing and business introductions. The nine-employee organization (which has an expansive board of directors) also serves the community through programs like Future Founders, which teaches entrepreneurship to high school students from economically under-served areas.
Willer, who is also an active angel investor, through the CEC will also sit on the board of the I2A early-stage venture capital fund. He will have a first-hand look at Chicago’s — and maybe the world’s — next crop of startups.
“We are in a transformative moment where all the elements are in place,” he said. “Now it’s time to move forward and build the next generation of companies.”
Lightbank, Ashton Kutcher and others invest $1 million in Seattle-based startup
In a world where everything and everybody has a price, one-month-old Seattle-based startup Zaarly already has $1 million in the bank.
Lightbank, the investment vehicle of Groupon founders Eric Lefkofsky and Brad Keywell (and most recently former Groupon president Rob Solomon), is among the first investors in the person-to-person e-commerce company. Zaarly helps individuals broker favors and errand-like transactions between people in the same location. Think of it as a service for those willing to pay a hundred bucks to get their favorite slab of ribs delivered in their hotel room (and conversely others willing to run the errand for some extra scratch.)
Other seed investors include actor Ashton Kutcher and Palo Alto-based Felicis Ventures.
The Chicagoland Entrepreneurial Center (CEC) today announced Google executive Kevin Willer will take over as the organization’s CEO on April 4, 2011. An affiliate of the Chicagoland Chamber of Commerce, the CEC identifies the region’s most promising entrepreneurs and helps them build high-growth, sustainable businesses that serve as platforms for economic development and civic leadership.
“There is an entrepreneurial renaissance emerging in Chicago and the Chicagoland Entrepreneurial Center is at its epicenter,” says James J. O’Connor, CEC board co-chairman. “Kevin is the ideal leader at the ideal time. Who better to put entrepreneurism into hyper-drive in Chicago than one of Google’s original members who took Google to new heights in Chicago.”
Willer co-founded Google’s Chicago office in late 2000. Over the last decade, he has helped grow the Google Chicago office to more than 400 professionals. In this leadership role, he spearheaded partnerships with some of the world’s most successful companies, such as Dell, United Airlines, Sears, AT&T, Sprint and Motorola among others. He also developed partnerships early on with successful Chicago-area start-ups, such as TicketsNow, Performics and optionsXpress.
As part of his executive responsibilities, Willer advanced Google’s civic development efforts in Chicagoland. Over 10 years as a leader of Google’s Chicago office, he formed partnerships with various stakeholders including city and state governments, universities, non-profits, industry associations and entrepreneurial organizations.
“Being on the frontlines of Google’s growth from start-up to global technology leader gave me a deep understanding of how important business mentorship and support from the civic community is for entrepreneurs,” says Kevin Willer, CEO of the CEC. ”I’m excited about this opportunity to support the next generation of high-potential entrepreneurs to drive new economic activity in Chicagoland.”
Willer’s genuine commitment to civic and economic advancement is reflected in his active involvement with several civic and charitable organizations. He serves as a director of The Economic Club of Chicago and is a trustee of his alma mater, Loyola Academy in Wilmette. He is a member of the 2010 Class of Emerging Leaders at the Chicago Council on Global Affairs. And, he serves on Mayor Richard M. Daley’s Council of Technology Advisers. He also serves on the boards of TiE Midwest, Children’s Memorial Hospital, WHITIA, World Sport Chicago, Urban Students Empowered, Illinois Technology Association, and Chicago Architecture Foundation.
“The rare mix of entrepreneurial genius and civic engagement is part of Kevin’s DNA,” says Jerry Roper, Chicagoland Chamber of Commerce CEO. “His record of success in both domains overlays perfectly with the CEC mission to make an impact on jobs, growth and society in the Chicagoland area.”
Willer earned his MBA from the University of Chicago Booth School of Business and his Bachelor’s degree from Boston College. In addition, he has studied at the London School of Economics.
Chicago has always been a city of entrepreneurs. They have defined our City from its beginnings and continue to do so today, driving economic vitality and new job growth through inspired innovation. We have assembled a distinguished panel of Chicago startup entrepreneurs who have built $100 million to $1 billion+ businesses across a spectrum of industries and technologies. As Chicago gains national awareness for its technology innovation, this panel will offer insights into emerging areas of investment, highlighting key competitive differentiating features for Chicagoland companies and entrepreneurs.
<iframe width="560" height="315" src="http://www.youtube.com/embed/0fz7VhOZBZc" frameborder="0" allowfullscreen></iframe>
Jim O'Connor, Jr., MVC Capital, CEC Co-Chairman
J.B. Pritzker, The Pritzker Group, CEC Board Member
John Aiello, SAVO, CEC Board Member and CEC Client Alum
Eric Lunt, BrightTag
Jai Shekhawat, Fieldglass, CEC Client Alum
Howard Tullman, Flashpoint Academy, Experiencia and Kendall College
The CEC would like to recognize the 11 companies that were selected for the second "CAP 20" class of clients: Balanced IT Solutions, FinanceSeer, Innovative Exams, Intellihot, Mata Traders, Power2Switch, PVPower, Rover Enterprises, School Town, Shift Worldwide and SOL Elixirs LLC.
The CAP 20 group is part of the broader Cluster Acceleration Program (CAP), which fosters the growth of emerging companies by linking them to strategic resources throughout the state. Through educational conferences, networking forums and one-on-one advisory services, CAP unites entrepreneurial ventures and seasoned professionals in five target industries: alternative energy, consumer products and services, and information technology for the new media, financial services and healthcare markets. The program's goal is to accelerate the overall growth and job creation rates of these industries within Illinois. CAP is sponsored by a two-year grant from the U.S. Department of Commerce, Economic Development Administration with funds awarded under the American Recovery and Reinvestment Act of 2009. The CAP program is also sponsored by PNC.
The CAP 20 participants consist of 20 of the most promising ventures in target industries in Illinois. CAP 20 clients are selected through a competitive process which evaluates applicants based on their business model, product and service offerings, outside investment, revenue traction to date, and the management team's relevant industry knowledge and professional experience. CAP 20 companies benefit from customized planning, expert mentoring and unique business exposure opportunities over 24 months.
"The CAP 20 program connects entrepreneurs with the critical resources and mentor relationships they need to be successful," said John Roberson, Executive Vice President of the CEC.
Companies recently selected for CAP 20 program are:(These companies are located in Chicagoland unless otherwise noted.)
Intellihot: (Peoria, IL) Intellihot manufactures state-of-the-art tankless water heaters for residential and commercial applications. These water heaters provide endless hot water on demand using 30-40% less energy than conventional water heaters. Visit www.intellihot.com.
Power2Switch: Power2Switch is a website that enables commercial electricity customers in Illinois to compare and switch electricity suppliers to save costs or access renewable energy. It's like Expedia for electricity and the company has reduced the process from weeks to minutes. Visit www.power2switch.com.
PVPower: PVPower is a virtual distributor of solar components, making solar power simple for those installing it. PVPower helps solar installers increase productivity through their SolarBear web application. SolarBear enables installers to plan, pitch and purchase their solar projects seamlessly by tapping into the PVPower product catalog and automatically generating a highly polished customer-facing proposal. Visit www.pvpower.com.
Consumer Products & Services
Mata Traders: Mata Traders is a fair trade women's clothing and accessories company that works directly with women's cooperatives in India and Nepal to produce all of their handmade products. The company has a store in the Andersonville Galleria, and wholesales its products to over 250 boutiques nationwide. Visit www.matatraders.com.
Solixir: SOL Elixirs LLC is the creator of the Solixir® brand of botanical beverages. They create great tasting beverages made from all-natural ingredients. Solixir is sold nationwide in Whole Foods Market and The Vitamin Shoppe. Visit www.solixir.com.
IT – Financial Services
Balanced IT Solutions: (Rockford, IL) Balanced IT Solutions provides a platform integrating autonomous compliance management systems across different company departments so that they can track the status of files sent to employees. The software is critical for highly regulated industries such as Aviation. Visit www.balancedits.com.
FinanceSeer: FinanceSeer is a web-based software solution for performing long-range strategic planning at the enterprise, divisional and strategic business unit levels. FinanceSeer enables users to rapidly model and test numerous marketplace and strategy scenarios in fewer steps and with more mobility than alternative solutions. Visit www.financeseer.com.
IT – New Media
Innovative Exams: Innovative Exams provides testing services through highly secure, remotely proctored testing stations. Their convenient testing stations can be installed in offices, public locations, schools, or partner sites. Testers benefit from the convenience and exam providers benefit from cutting-edge technologies that offer the highest level of security in the testing industry. Visit www.innovativexams.com.
Rover Enterprises: (Carbondale, IL) Rover Enterprises is a mobile marketing firm that is targeted to university communities. Rover provides solutions connecting small businesses to college students through cutting-edge marketing techniques. Visit www.roverenterprise.com.
School Town: School Town's eLearning and collaboration platform allows districts and teachers to build private learning communities. These communities feature rich digital media for assignments, events, and announcements, providing an engaging, collaborative learning experience. The intuitive interface ensures that all of those resources are accessible within two clicks. Visit www.schooltown.net.
Shift Worldwide: Shift Worldwide powers and produces "high stakes" virtual events. By combining production services with its customizable virtual communication platform, they help to bring marketers, executives and trainers to audiences live via multi-point web video. Visit www.shiftworldwide.com.
Four Illinois companies were selected as winners of the statewide Innovate Illinois competition following a day of final pitches by some of the state's brightest entrepreneurs. The top two companies, Lumec Control Products, Inc. and Neurowave Medical Devices LLC, received $30,000 each to help commercialize their products. The two runner-ups, Diagnostic Photonics, Inc. and Dr. Paul’s Piggy Paste, each received $10,000. The Innovate Illinois competition is sponsored by the Illinois Department of Commerce and Economic Opportunity (DCEO) and administered by the Chicago Entrepreneurial Center (CEC).
“Innovate Illinois gives promising entrepreneurs the resources they need to turn their innovative concepts and ideas into market successes, and is one way the state is assisting entrepreneurs in reaching the next level,” said DCEO Director Warren Ribley. “Through this competition, we're helping to drive innovation, strengthen the economy and create jobs.”
Across the state, 96 companies competed in the 2010 Innovate Illinois program. Thirty-eight companies then competed in three regional semi-finals hosted by DCEO's regional Entrepreneurship Centers in the Northern Area, Central Area and Southern Area throughout October. Twelve companies competed in the final round held Tuesday at the University of Chicago’s Gleacher Center.
“It is critical to our state’s growth to provide economic assistance to Illinois’ most innovative companies. By identifying, promoting and funding these scalable local ventures, Innovate Illinois has become a catalyst for job creation. Over the last six years, the program has provided $610,000 in cash and prizes to the winners,” said John Roberson, Executive Vice President, Chicagoland Entrepreneurial Center (CEC).
The Innovate Illinois program is fully funded by DCEO and administered by the CEC, in partnership with:
• Chicago Urban League Entrepreneurship Center• iBIO Entrepreneurship Center• Illini Entrepreneurship Center• Illinois Hispanic Entrepreneurship Center• North Central Entrepreneurship Center at Bradley University• Renew Moline• Rock River Valley Entrepreneurship Center• Southwestern IL Entrepreneurship Center• Illinois Small Business Development Center at the University of Illinois at Chicago• Southern Illinois University Entrepreneurship Center
To learn more about the program, visit www.innovateillinois.org.
2010 Innovate Illinois Winners
Early Stage WinnerName: Lumec Control Products, Inc.Location: PeoriaContact: Paul Luebbers, 309-683-9601Company Description: The Dynamic Orifice Valve, a flow control device for commercial natural gas combustion processes.
Later Stage WinnerCompany Name: Neurowave Medical Technologies LLCLocation: ChicagoContact: Farhan Hussain, 312-334-2502Company Description: Neuromodulation devices for the treatment of a range of acute and chronic conditions.
Early Stage Runner-UpCompany Name: Diagnostic Photonics, Inc.Location: ChampaignContact: Scott Carney, 217-265-5428Company Description: State-of-the-art, high resolution imaging technology for real-time, in vivo use in the surgical suite.
Later Stage Runner-UpCompany Name: Dr. Paul’s Piggy PasteLocation: WashingtonContact: Paul Kinsinger, MD, 309-444-3627Company Description: Topical, over-the-counter product to improve the appearance of thick, unsightly toenails.
Wondering if the time is right to add the next position to grow your small business? Act now and earn a tax credit.Small businesses are the foundation of a great economy. To help spur on your success, the State of Illinois is offering tax credits when you create a new, full-time position. After hiring the employee, your business can apply online to receive a $2500 tax credit against withholding taxes which will be awarded after July 1, 2011. The credits are available on a first-come, first-served, basis.
To apply, simply go online to jobstaxcredit.illinois.gov. You’ll need to provide basic information including your FEIN. In a year, eligible companies will receive a tax credit certificate.