Saturday, June 20, 2015

New City Article on 1871 by Emerson Dameron

The Company Factory: Is 1871 an 

Incubator, a Community, Endless 

Summer Camp or All Three?  

Photo: Emerson Dameron
By Emerson Dameron
It is not a typical Tuesday at 1871, the labyrinthine tech-startup hub located on the twelfth floor of the Merchandise Mart, because there are no typical Tuesdays here.
David Johnston is here. He is Canada’s Governor General, a position noble enough to merit a large floating entourage and the attention of much of 1871’s leadership. Thus, as I wait for my afternoon date with CEO Howard Tullman, I am left largely to my own devices. I explore. I chat up various people who don’t appear too engrossed in their work. I struggle to find the men’s restroom, which is about as far from the women’s room as it could physically be.
1871 does have a ping-pong table, but it’s stashed in the mailroom and does not seem to have seen much use of late. The closest thing I can find to an interactive game is the Higi Station, which measures BMI, pulse and blood pressure. It is one of several such kiosks scattered around the city.
Quantification is not a perfect paradigm for measuring success, but it may be the most useful we’ve currently got as a species. In some respects, I’ve done well enough trusting my intuition—it’s led me to fruitful creative work, wonderful friendships, and a marriage that saved my life with no facilitation from OKCupid or eHarmony. In other respects, it has not served me so well. My personal finances were a wreck until I discovered the Mint app. And although my health has ticked up since my hard-partying days, it has always been a source of painful anxiety.
Nerves aflutter, I submit to the cold, numerical wisdom of the Higi Station. My BMI is safely in the “normal” range for my height and age. That’s an improvement. My blood pressure, though, is dangerously high. That’s… disheartening.
Mo Yeiha
Mo Yehia/Photo: Emerson Dameron
Glancing around 1871, I imagine I’m not the only one here with such concerns. Entrepreneurial types of all ages and aesthetic tastes hold close eye contact as they chat or pound aggressively on their laptops. I notice many pairs of fancy sound-canceling headphones. The atmosphere is one of sprawling intensity. A lot of these people are not building apps.
I wander past Mo Yehia, a New Yorker and founder of the startup Sidewalk, based at 1871 for less than a year. Although I sense I am interrupting, he agrees to chat with me about the unusual setup of his workspace. He has placed his laptop on a chair atop his desk.
“I spend a lot of time on the computer, unfortunately,” Yehia says. “I used to spend a lot of time sitting.” That was before he experienced a TED Talk called Sitting Kills You. “This is a version of a very cheap standing desk. When I’m working at 1871, I usually stand. When I go home on the weekends, all bets are off.”
He describes 1871 as “a semi-permanent summer camp. It’s a bunch of your peers, with a loose structure, all in the same place, doing the same thing. A bit of a rollercoaster.”
Good Food Business Accelerator/Photo: Emerson Dameron
Kim Bartko, program manager of the Good Food Business Accelerator, has a more succinct description of what, exactly, goes on in this place. The Good Food Business Accelerator works with businesses throughout the Midwestern food supply chain who subscribe to its local, sustainable values. Many of these companies are not strictly tech firms, but, Bartko emphasizes, technology is a part of almost every business endeavor now.
She lists 1871’s core attributes as “technology, innovation and community… We are now in a world where technology touches every aspect of life.”
To that list, I would add tech-enabled connectivity and quantification.
The Higi Station has already become one of my minor obsessions. Using techniques I learned from Shambhala meditation (a purely intuitive practice, if such a thing exists), I have brought down my blood pressure into the “at risk” range. Yes! Math works.
In describing the benefits of working in such a seemingly chaotic environment, Joel Blechman, the Good Food Business Accelerator’s director, hints at the growing sense of sociability that has spurred an up-and-coming generation of entrepreneurs who never knew life without the internet, along with those of us from the “Oregon Trail Generation” and before who have consciously reshaped our perspectives to work toward the future.
“The thing that is oddest to me, coming out of a corporate, cutthroat career, spending twenty, thirty years trying to outdo everyone else, is that we’re in this space, and people are walking in at all hours of the day, and saying ‘How can I help? What are you doing? Is there a way we can collaborate?’ There’s never money changing hands. It’s how can people help each other, from different areas.
“People just do here,” Blechman says. “If they’re here, they want to know if they can help someone else get a leg up.”
Kate Drane
Kate Drane/Photo: Emerson Dameron
If there is a person here who best embodies the spirit of that we’re-all-in-this-together optimism, it’s Kate Drane, the director of Midwest outreach for the crowdfunding platform Indiegogo. She recently arrived from San Francisco. Howard Tullman was one of Indiegogo’s earliest investors. Although she works with businesses throughout the metro area, 1871 is Drane’s home base.
“We’ve been in talks with [1871] since earlier last year, and it just made sense because there are so many companies here looking for funding, looking to get off the ground, and get market traction and validation,” says Drane. “And that’s the role that Indiegogo serves.”
The more technology proliferates, the more meaningful face-to-face connectivity has become. “It’s nice to have me in house,” Drane continues. “I offer office hours to members of 1871. Typically, I offer four slots each week, and they’re always full. People are excited about being able to tap into the power of the community and the 1871 community to make amazing things happen.”
That community. How would you define it, exactly, Kate? I’ve heard different things from different people. It’s not strictly about tech, as strictly defined, or about startups, as strictly defined. What isit?
“It’s the hub for innovation and technology to come to life,” Drane says. 1871 members are “here to create what they want to see exist in the world. 1871 helps provide their tools.” She raves about 1871’s many extracurricular events, open to the wider community but available to member companies first. She’s particularly enthused about a recent guest speaker teaching “improv for businesses.”
I’m beginning to understand that this sort of lesson fits right into 1871’s mission. Everyone I’ve broken bread with lately wants to learn entrepreneurial skills in general and public speaking in particular. Traditional head-down bureaucratic career tracks are a lot less secure since the U.S. economic collapse of 2008, if they were ever all that secure. Not everyone can found a company, but more and more people crave the skills associated with entrepreneurs.
1871 entry/Photo: Emerson Dameron
1871 entry/Photo: Emerson Dameron
Take, for example, crowdfunding. In a quick history lesson, Drane assures me that the concept of crowdfunding existed long before households in the hinterlands plugged into AOL, and even before the internet was an idea.
“The Statue of Liberty was crowdfunded,” she says. “The base of it. France gave the gift of the statue but not the base. Through small contributions [solicited through newspaper advertising], that’s how the base got funded by people all across the country. Through small contributions, that’s how something incredible happens.”
I’ve quite enjoyed meeting Drane, and I get a jolt of her trademark enthusiasm when, minutes after we part company, she sends me a connection request through LinkedIn. However, this does not bring my blood pressure out of the “at risk” range.
Like many here, Conor Butkus, business development program coordinator for the Good Food Business Accelerator, has a favorite Howard Tullman story. “One day,” he recalls, “a robot-like thing came riding down the hall with Howard Tullman’s face on it. I think he was controlling it from a remote area. He was just surveying his domain. He could talk to you. He was there. That was one of the first things that happened when we got here.”
When I arrived in Chicago as a recent journalism grad who had seen his chosen trade decimated by Craigslist and Google before I turned in my final projects, I had a number of service-industry bosses who intimidated me and directly challenged my la-di-da warm-weather personality. With his thick Midwestern accent and no-nonsense self-assurance, Howard Tullman reminds me of them.
Howard Tullman/Photo: Joe Mazza/Brave Lux
Howard Tullman/Photo: Joe Mazza/Brave Lux
Tullman is both the CEO of 1871 and its designated mouthpiece. He regularly publishes books and broadsides elaborating on his core philosophy of business and life: “You don’t get what you wish for. You get what you work for.” Effort trumps ability. Effort trumps talent.
“You get by on your raw talent, and once you fail a couple of times, you realize that it’s a thinking person’s game,” he says.
This ain’t Silicon Valley, and it certainly ain’t HBO’s “Silicon Valley.” Like the rest of 1871’s inner circle with whom I’ve spoken, Tullman isn’t particularly satisfied with classifying 1871 as part of thetech industry.
“It’s not an industry because we serve every industry,” Tullman says. “It’s a factory. We manufacture companies. What the companies, in turn, create, are jobs. And that’s our entire mission. To create jobs for the city of Chicago and the state of Illinois.
“When it started three years ago,” he continues, “it was limited, not only to the tech sector, but to companies that were going to be technology-enabled. And even more so, companies that were going to be intensely technical. What’s happened in the three years has been that there are no industries left that aren’t technically enabled.” Tullman and I collaborate on a joke—even Amish woodworking shops may eventually embrace 3D printing.
Photo: Emerson Dameron
Photo: Emerson Dameron
“In the first year,” says Tullman, “companies were rejected that were not hugely dependent on new technologies. Today, fifty percent of the companies here, or more, are in verticals that would not have been admitted in the first year of 1871. If you came in and said, ‘I’m a real estate company,’ they would have said, ‘we’re not interested.’ Today, there are sixteen different companies here in the real estate incubator that are applying technology to everything from, ‘How do I find a home?’ to ‘How do I value a home? How do I close a transaction? How do I describe my apartment units to perspective buyers?’ All within the penumbra of real estate. And all perfectly appropriate here.
“We’re not interested on moonshots,” Tullman says. “We’re interested in people who are making businesses more successful by saving those businesses money, saving those businesses time, or increasing the productivity of those businesses. Those are the three metrics that we measure to see if you have a business.”
I ask Tullman if there is a rhyme or reason behind the sprawl and frenetic activity enabled by 1871’s design. “It’s a focused concentration,” he says. “It’s not frenzied. Most civilians, when they come in here, that is the first thing they remark on. The volume of motion and activity. Most of the people who work here wish that would go away almost entirely, because they actually have to work here every day.” He directs me to “Open Is Over,” one of his latest published riffs on the culture of work, and suggests that the future of 1871 will involve more enclosed spaces and a less intense ambience. But he still believes in some aspects of the tarnished open-office promise.
“There’s a tremendous amount of cross-pollination. You see a solution that’s being used in one business or instance, and you say, ‘I can migrate that.’ These days, technology jumps from industry to industry quite rapidly. We manufacture a lot of happy accidents, a lot of serendipity, a lot of synergy… There’s nothing you need in the development of a technology-based business that isn’t physically present here. It’s probably something that doesn’t exist anywhere else in the United States.”
Howard Tullman and David Johnston/Photo: 1871
Howard Tullman and David Johnston/Photo: 1871
We’re beginning to warm up to each other, and Tullman fields my tougher questions without hesitation.
A few friends closer to the periphery of Chicago’s startup world have quietly shared concerns, and SEC documents, involving some of 1871’s major players and their aggressive support for Comcast. The corporate giant has been intertwined with 1871 since its beginnings and is now widely considered an arch-villain in the seemingly endless battle over Net Neutrality, an egalitarian principle that has allowed a lot of smaller tech-enabled businesses to get as far as they have.
“I’m not crazy about my cable service either,” says Tullman, “but they’re very responsive! When you’re building a technology-based company, you have to be platform-agnostic. We’re Switzerland. We need to have partnerships and relationships with all the people who work in the space.”
Lately, several high-profile, big-talking Silicon Valley venture capitalists have openly suggested that we may be in the midst of a tech bubble more absurd than the one that exploded about fifteen years ago. Among them is Dallas Mavericks owner Mark Cuban.
“Mark is a very good friend of mine,” says Tullman. “And he’s been here, obviously. He’s invested in a lot of our companies here. I was just with him in Phoenix. He believes that there is a tremendous amount of money sloshing around on the West Coast. There are clearly valuations for things that are inconceivable. Having said that, he’s continuing to invest. He’s very active as an investor. He’s a smart guy. He knows what we’re doing here, which is very focused, so I don’t think he would think we’re doing anything other than a very rational operation.”
Heavy hitters such as Steve Case, Steve Ballmer and Sheryl Sandberg have visited the space as well, Tullman says. And they have agreed that there’s something distinctively Chicagoan afoot here. “Wherever else you may be in the country where people are trying to do similar things, there’s not the kind of structure and discipline we have.”
When the last bubble popped, Indiegogo and other such funding avenues did not yet widely exist. And Tullman might argue that his pragmatic Midwestern work ethic was not part of that world, either. It’s somewhat reassuring. But I still need to use my Obamacare and see a doc about my blood pressure.
Photo: Emerson Dameron

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