Tuesday, December 10, 2013

1871 Has A New Boss, And He’s Ready To Crack The Whip On Chicago’s Startups

1871 Has A New Boss, And He’s Ready To Crack The Whip On Chicago’s Startups
The incubator is a little comfy for Howard Tullman's tastes.

When the board of the Chicagoland Entrepreneurial Center tapped serial entrepreneur Howard Tullman to run tech incubator 1871, the dynamic surrounding the tech incubator changed immediately.
Tullman brings decades of experience and a litany of proven business successes, but his greatest benefit may be his irreverence. He’s made plenty of money — two of his companies sold for nine figures — and at 68, he is “not looking for my next job or a big score.”
If Tullman has his way, the tech incubator will transform from a feel-good community hub into a rigorous boot camp that’s hard to get into and harder to get out of. We talked with the new CEO about his efforts to ensure graduation from 1871 is a strong credential in the tech community.
The party line on 1871 has been pretty rosy. You come in and you’re not pulling any punches. Have you gotten any pressure from the powers that be to rein your criticism in?
They knew what they hired. I’m not sugarcoating anything here. I don’t work for Rahm, I don’t work for the Governor. There’s nothing without warts, there’s nothing that can’t be better. My entire life is about iteration, so I just want to keep raising the bar.
There’s going to be stuff that’s going to be hard and different and changed, but we’re going to tell it like it is because in today’s world, if you’re not transparent, someone will do you the favor of ratting you out anyway.
What kind of things will be ‘hard and different and changed’?

The largest single issue has been who’s doing the selection for people coming in and who’s doing the
ongoing evaluation, if it’s even occurred. I’m not sure to date that anybody’s been asked to leave or move on.
I don’t think that can be done on a random basis. I think that the current thought is that we’ll find people who have domain expertise and maybe every 90 days or six months, we’ll have a group of the [1871] companies that are in an area meet with evaluators in that area. I don’t want some guy from Abbott Laboratories evaluating a donut business.
What kind of reactions have you received to taking that harder line?

One of my favorite expressions is everybody wants to change the world, they just don’t want to change themselves. I’ve had at least 20 different emails saying, ‘so glad you’re going to throw these guys out,’ whoever these theoretical dirtbags and posers are. And if you wait long enough, everyone in the joint will send you the same email. So I’m sure there’s a feeling that, everyone has their own favorite candidate for who shouldn’t be there, this guy is too loud, this guy’s not serious. There’s no magic to this. To a certain extent, as you improve the culture and make it a little more serious place, I’m not sure we’ll have to be pushing people out, they’ll just find it’s not an environment that makes sense for them after a certain period of time, or
their money will run out.

There’s a spatial challenge here. 1871 is a big place. Would you rather see a full joint or some empty desks but everyone there has a shoulder against the wheel?
I’d rather have 50 successful companies than 250. If you have a highly selective, challenging and difficult place to get into, you have a much higher likelihood that the companies coming out of it are going to be successful. It’s not a student union and it’s not an entertainment center. It’s great that there’s a lot of community — I’m trying to figure out how to phrase the idea that community is not an umbrella for every kind of activity, it’s community in a way that’s additive and helpful to the core mission, which is building successful businesses – not to be the JCC.
What’s the downside to having 250 companies if among them are those 50 serious successful companies you’re talking about?

Noise and distraction
are very challenging. Focus is everything - you can't be a mile wide and an inch deep. There’s a sense that, if you talk to [former Obama campaign CTO] Harper Reed or [MarklTx CTO] Ben Blair, who are more hardcore engineer, programmer types, they would tell you that their vision of a work environment is a bunch of people who are head down, ear pods in, working. We need to try to get those people back to take an active role in 1871. Their perception, right now, is that 1871 is not a serious place, and that’s horrible. If there are just too many people wandering around the place, you get a different feeling. I’d be more than happy to have just 50 serious companies and have this be a place where every single company had a solid story, good team, a business that might not succeed but at least, if you ran through the standard components of what a biz needs to have a shot at succeeding, you could state with a straight face that everyone here is doing it. I don’t mind if you're here for 60 days for a fantasy, as long as they’re not here for two years.

What’s your ideal acceptance rate?

Maybe one out of ten. It’s not that we want to turn down anyone who’s viable.
We just want people who are passionate, committed and working their butts off. I don’t see a huge number of the existing people at 1871 being there well into the evening. It empties out. I don’t know what the deal is other than the fact that I do a lot of speaking about wiki work, the idea that you can work anywhere. It’s perfectly fine to say that the 1871 model is you spend your day there, eat dinner, work more from home. [But] I hope people don’t think you build a successful business on 35 hours a week. I just don’t think that works.

Is that what you think is happening at 1871 now?

I don’t know. We’re starting to do more surveys and get better info about what is going on, but I think that if everybody is leaving and thinks you put in a finite amount of time and then you get to go home, they’ll be rudely awakened as to the success of their businesses. I’m not going to say you need to burn the midnight oil
every night. But it’s a very tough time to start a business. It’s a great time because the barriers to entry are very low, but the barriers to success are 10x.

I go into 1871, and in no way does it reflect the diversity of the city. It’s mostly a lot of young white guys who dress pretty well.
Here’s what I would tell you. Smaller community incubators that have been started, like the one in Pilsen, I don’t think we want to say to their people, leave Pilsen and come downtown. What I want to figure out how to do is to let them have access and reciprocity. That’s what I’m interested in. If they have a meeting downtown and they want a space and they don’t think 40 people will come out to Pilsen or Englewood or wherever, I want to help them have a presence here.  But if they’re working in a former church and there’s five little businesses, the truth is you want them there because you want them to connect and enable those communities. So the way I’d like to initially work with them is to welcome them and make them a part of what we do, invite them to come down for these evening educational events or things, without saying, the only cool place to be is downtown and we need four token black guys and five Hispanics and three more women or whatever.
ABOVE: Sun-Times Media file photo 

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