Chicago Tech's Next Chapter
At Tempus, Ocient and Catalytic, Chicago's most prominent entrepreneurs are moving on to their next big thing.
Jim Dallke - Associate Editor
8/16/16 @5:40pm in Tech
Chicago tech is growing up.
One sign of a maturing tech ecosystem is the success of a city's serial entrepreneurs, and recently we've seen some of Chicago's most high-profile founders and technologists move on to their next companies, and tackle big industries like the Internet-of-Things, cancer research, and artificial intelligence.
Look no further than Groupon founders Brad Keywell and Eric Lefkofsky. Keywell brought Uptake out of stealth in 2015, and the fast-growing IoT startup has already raised $45 million at a $1.1 billion valuation. Lefkofsky left his CEO role at Groupon last November and, as we first reported in July, has since been working on Tempus, a health-tech startup that's "building the infrastructure to modernize cancer treatment."
Also in July, Cleversafe founder Chris Gladwin, who sold his data storage company to IBM in 2015 for $1.3 billion,unveiled his next startup Ocient. Gladwin is yet to make Ocient's product plans public, but the software company expects to "ultimately hire hundreds of local employees."
Sean Chou, the former CTO and employee No. 2 at Fieldglass--which sold to SAP for more than $1 billion--recently launched Catalytic, a startup building chatbots for businesses. The company's platform Pushbot helps enterprises "build, run, and improve your processes."
You can also look at Jeff Judge, the founder of Signal (acquired by BrightTag in 2014) who's now building business metrics platform Bright; Kickstarter co-founder Charles Adler is giving entrepreneurs, creatives and makers a better place to work with the Center for Lost Arts; Motorola veterans are spinning out to create new hardware startups like John Renaldi's "invisible wearable" company Jio; along with many, many other founders who are on to their next project and have committed to building in Chicago.
"Certainly, as a community, I think we are maturing," said Illinois Technology Association CEO Fred Hoch. "It's being driven a lot by those serial entrepreneurs that are coming back and doing their next thing."
Hoch described how the city experienced an "excitement period" 3-4 years ago where a lot of startup activity was taking place, but "a lot of bullshit was being developed ... Things that don’t have a long-term revenue stream."
Chicago's strength as a tech city is in B2B, Hoch said, and Chicago tech has started to get back who it is as a community.
"What’s happened over the last 18 months is that we’ve come back to realize who we are," he said. "[Entrepreneurs] are not thinking about dog walking apps. They’re thinking about big things that affect businesses nationally and globally."
1871 CEO Howard Tullman added that Chicago also has a handful of who he calls "benchers," successful entrepreneurs who are taking some time off but will likely "be back in the action in a reasonably short time." This list includes Fieldglass founder Jai Shekhawat, AKTA founder John Roa, and Roger Liew, the former CTO of Orbitz.
Tullman also said that 1871 isn't just full of first-time founders. There are dozens of serial entrepreneurs working out of the Chicago tech hub.
"PEOPLE DON’T UNDERSTAND THAT THE 1871 MEMBERS AREN’T REMOTELY ALL FIRST TIMERS"
"People don’t understand that the 1871 members aren’t remotely all first timers," Tullman said via email. "We have several dozen serial entrepreneurs working here and building their next businesses who are smart enough to avoid making sizeable infrastructure and other capital commitments until they determine whether the dogs will be eating their new dog food ... We are definitely seeing a wave of more seasoned, more talented and more aggressive serial entrepreneurs--all working in Chicago--and largely using their own resources to start the next group of great tech businesses right here."
Of course, as Chicago's tech community matures, it doesn't come without growing pains. Some of the city's most prominent startups have gone through layoffs in recent months, with Avant firing 60 employees and Raise trimming 15% by cutting 45 people. And the city is still well behind other markets like New York and Boston when it comes to total venture funding.
But Chicago is proving to be a city where entrepreneurs are willing to double down after successful exits, and that's good news for the future of Chicago tech.
"We’ve come a long way in the last 10 years," Hoch said. "[Entrepreneurs] are choosing to stay and be a part of this community because it's a strong community now."