HAT REMARKS
I want to start by saying how flattered I am to be honored by
this group of peers and people I’ve admired for decades for their leadership
and contributions to the growth of our entrepreneurial community and to our
city as well. I also want to especially thank Maura and the IVCA team.
Seeing people here from Pritzker, Frontenac, GTCR, MK, KB,
OCA, Origin, and my G2 investors as well is like attending a Reunion Weekend on
steroids. I’m also proud to be invested alongside many of you in such exciting
Chicago-based deals as Spot Hero, Snapsheet, Tock, Xaptum, UpShow, Peanut
Butter, THYNG and KnowledgeHound, among many others, and in a number of your
funds.
And, looking at the amazing list of past honorees, many of
whom have also been friends of mine for decades, I’m grateful to be the latest
in a distinguished line which includes several of our 1871 officers and board
members.
For many years, I was close to both Mayors Daley and I was a
member of the original Tech Advisory Council so it’s especially meaningful for
me to receive this particular award in the name of – as you might say – the
father.
I have also attended this IVCA Dinner for many years (as a
guest of my dear friend Al Kutchins) and I’ve always thought that this was one
of the year’s most important and unique gatherings. It’s a humbling reminder to
see so many familiar faces and remember so many deals that went up, sideways,
or into the toilet over the years. But the good news is that at least we’re almost
all still here to complain about them.
On that note, I want to remember that my first venture deal
was funded by Stan Golder who was one of the giants in this business, who I
miss to this day, and who was a friend, a mentor, and someone it was an honor
and a privilege to know. The bag boy on that deal was a guy named Bruce Rauner
– not sure what became of him.
Finally, I will also admit that I’ve rarely stayed all the
way through dessert at these events, but tonight I hope to make an exception.
I said when I was interviewed about the award that what I
thought distinguished and set Chicago’s investment community apart from the
rest was the amazing extent to which we see various investor groups working collaboratively
together here rather than purely as adversaries and competitors. I think this is
a very healthy way to make more resources and connections (beyond mere cash)
available to both startups and growth businesses and to grow the pie as well. In 1871 alone, we have half a dozen early
stage venture funds and co-investments seem to happen on a monthly basis. This
is great for the startups and also great for the city. We need to keep it up.
But I also want to inject a word or two of caution. You get
to do that once you’re over 70 years old. It turns out that raises aren’t
revenue (never have been) and that invoices are still more important in the
early days than additional investments. I think that – driven in part by the
abundance of media covering digital businesses these days – and the omnipresence
of social media as well - we’re seeing an unfortunate tendency to celebrate too
soon.
Let’s give our startups (and the dough) a little time to rise
before we bring out the candles and start cutting up the cake. I can think of a
dozen no-more businesses that were once toast of the town and which are now just
toast. We brag a lot about being a
revenue-first town, but – especially from where I’m sitting – I feel like we’re
getting a little too carried away. Let’s rob a few trains before we start
splitting up the loot.
And I want to make one other observation which I feel that I
need to credit in part to Jason Fried of Basecamp who once said that “your dog
doesn’t need email”. His point was that not every product, service or
application needed to be larded up with an email function for no good reason,
but it was sadly very likely to happen.
Today, I feel that we are seeing the same issue and
associated BS with virtually every company now claiming that their product or
service incorporates powerful machine learning and AI systems. Building a
behind-the-scenes bot or a series of macros or tagging a bunch of pixs as a library
for future image recognition isn’t AI and the fact that your CRM program knows
my shoe size isn’t machine learning.
Some of these claims may be real and accurate, but a bunch
are just smoke and mirrors likely to give us all the bad name. Can we put a
stake in it before it goes completely crazy? It’ll save us all a lot of
headaches and heartaches down the line.
So, thanks again for the award – all the best for the
holidays – and I wish each of you a Happy, Healthy and Prosperous New Year.