Thursday, May 01, 2014

Daily Whale: 1871 CEO wants Chicago tech sector to grow up

1871 CEO wants Chicago tech sector to grow up

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Howard Tullman, the CEO of Chicago’s preeminent tech incubator and working space, 1871, spoke to the City Club of Chicago Thursday about moving the two-year-old tech hub into the future.
According to Tullman, 1871 “is where the change is happening” and that tech start-ups now account for more post-recession job creation than any other industry. “If you don’t care about change, that’s OK. It’s optional. So is survival,” Tullman said.
Called “something of a godfather” of Chicago’s tech industry by the Chicago Tribune, Tullman oversees a stable of start-up companies as they move an idea through the first stages of funding, while also being the public face of 1871.
1871 has fostered the development of 240 startups, 32 of which have “graduated,” or outgrown the incubator to stand on their own. Collectively these companies have raised $33 million from investors.
But Tullman told the City Club audience that measuring the success of 1871 could no longer be about fundraising levels or exciting product demos, but “about real jobs, real revenues and real job creation.” Start-ups need to step off “this sort of treadmill of repetitive fundraising,” Tullman continued, and become self-sustainable.
To that end, Tullman called on the “enlightened self interest” of Chicago’s more established business community to partner with start-ups and also purchase products and services made by the new firms.
“We’re not looking for good Samaritans,” Tullman said. “We want you to do it because you’re smart and because you’re selfish and because you’re competitive.”
In order to better cultivate new businesses and bring new resources to its start-ups, 1871 is partnering with a number of existing corporations and organizations, including Google and Indiegogo.  
Also, School of the Art Institute students will design applications, while Second City improv comedy members will teach budding entrepreneurs how to be better “storytellers” when making a pitch.
Together, these measures will foster what Tullman called “start-up engineering,” a process by which 1871 will learn the best practices of the tech field and apply new methods.
The tech incubator will also announce an expansion of its Merchandise Mart offices to include space for “Alumni” businesses, or those successful start-ups that have grown beyond incubation but still want to be involved at 1871. Also, 1871 would like to host venture capitalist firms – and Tullman used the speech to tell venture capitalists to come to the Windy City.
“Nobody has more customers than Chicago. There are no customers in [Silicon Valley]. It’s awful to live in New York, because among things you don’t really live in New York, you live in some forgotten part of Brooklyn,” Tullman said.
Asked by an audience member if Illinois, like New York, should offer tax breaks and other incentives to start-up incubators, Tullman re-iterated his earlier point that sound businesses do not need government assistance to survive.
“I think the best way to compete is on the merits, not by additional grants, not by incentives that nobody will be able to really pay for, but by making it in the selfish interests of these businesses to be here to work with our companies and to grow with our economy,” Tullman said.

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