How
Chicago's Startup Ecosystem Is Meeting the Covid-19 Challenge
A
champion of the Chicago startup scene offers his views on its prospects through
the pandemic--and beyond it.
BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS@TULLMAN
Chicago's last mayor, Rahm Emanuel, was fond
of suggesting that "You never want a serious crisis to go to waste."
Although Chicago, along with every other major urban city and the rest of the
country, has and continues to suffer mightily thru this pandemic, the truth is
that--just as Rahm would often also note--the Covid-19 crisis has presented and
accelerated opportunities for the city to accomplish things which people here
thought were virtually impossible. New levels of cooperation, collaboration and
commitment from businesses, civic and religious groups, and organizations of
all sizes have positioned the city to enter 2021 with a vitality and vision for
a better future that no virus can dim or vanquish.
In many ways, this exciting path forward
started with and continues to depend on a strong and stable startup community.
In the past three decades, startups have created 40 million jobs and these
jobs were the only net new jobs created in the U.S. economy. Chicago's startup
scene today is stronger, broader, more diverse, and more productive than it has
ever been. Nowhere has the transformative power of passionate and persistent
business builders been demonstrated more clearly and convincingly than right
here in the City of the Big Shoulders. Creative destruction and disruptive
innovation are the heart of entrepreneurship. Carl Sandburg's poem Chicago called out the
critical iterative steps of:
Wrecking,
Planning,
Building, breaking,
rebuilding.
It's every great entrepreneur's credo.
Startups create new companies, which generate
new jobs and create the kind of novel solutions essential to saving lives
and surviving the past year. Since 2012, Chicago-based startups have created
more than 16,500 jobs and raised close to $2 billion in investor capital,
according to ChicagoNEXT and World Business Chicago. When the virus hit in
March, early-stage Chicago companies, such as Rheaply, partnered
with the city and built tools and exchanges to help local nonprofits and
businesses source PPE. Others, like InstaShield,
shifted production lines to quickly create masks and shields. Still others,
like Lisa, developed
service offerings and teams to provide support and assistance to frontline
caregivers. Chicago's central technology hub, 1871, which I led for many years
as CEO, combined its efforts with other newer incubators focused on medical and
manufacturing solutions, including MATTER and mHUB, to help develop new solutions and to expand
access to their content, mentors and other resources across the tech and
startup community.
The Covid-19 virus forcibly accelerated 1871's
plans to move from an emphasis on a single physical location to a wider focus
on the 1871 learning experience which could be more broadly shared. Moving
digitally beyond its long-time home at The Merchandise Mart in the central
business district, 1871 is piloting the delivery of its content and on-demand
instruction to hundreds of online learners in 15 different Chicago
neighborhoods and expects its reach to eventually touch every neighborhood in
the city.
These kinds of broadened and shared resource
and access strategies are going to be essential in every major urban city to
address pressing social and educational needs and demands. Once the virus is
under control, and we have vaccines, we'll need to address the historic vacuums
in our cities and apply the many virtual tools we've developed and depended on
to weather the current storms in order to avoid future and more painful
societal disruptions. Covid-19 has taught us that we are all inextricably
connected and that no one is an insulated or isolated island. No city can
succeed in the long term that excludes or ignores important parts of its
community and every business needs to be part of the solution.
Interestingly, more traditional and larger
businesses (with enormous, fixed costs and other overhead) have been far more
adversely affected by the virus than Chicago's agile and resilient startups,
which have adapted and successfully seized upon new business opportunities
across the board. In fact, many of the city's largest corporations are looking
to startups for support, suggestions and new approaches and solutions. For
example, Abbvie and Mayo Clinic are working closely with THYNG to develop augmented
reality medical applications.
While retail, restaurants, entertainment
venues and real estate have probably been the hardest hit industries,
aggressive tech-enabled startups have grown at a rapid pace in increasingly
critical areas, such as telemedicine (Livongo, for example),
digital learning (eSpark Learning and others), and
especially logistics (FourKites, for example), as we move from
a "just in time" world to a more conservative "just in
case" approach. Chicago startups, like Forager, are enabling and leading the migration
of large and small companies as they focus far more today on redundancy and
resilience, rather than simply inventory management and cost reduction.
Chicago has risen before from
catastrophes--mostly famously, the Chicago fire of 1871. Overcoming
Covid-19 and its lengthy and painful aftermath will not be an easy journey or
one which the city, state, or even a well-intentioned federal government
might simply solve for us. Success will require the commitment, sacrifice
and cooperation of each and every citizen in every city. Chicago's strong
startup ecosystem and our people's passion, persistence and work ethic have
positioned our city to help lead the charge forward.
DEC 1, 2020
The
opinions expressed here by Inc.com columnists are their own, not those of
Inc.com.
