Password-security company boosting space, tripling local staff

Password-security company boosting space, tripling local staff

Keeper, which got its start with consumers, is getting a boost from the B2B market. 

Keeper Security’s move into the corporate market appears to be paying off.

The password-security software company is moving into larger space in Greektown and plans to triple its headcount in Chicago, hiring 130 people here by year-end. 

The company outgrew its space at 850 W. Jackson Blvd., so it’s moving next door to 820 W. Jackson, where it leased 16,000 square feet, with an option for another 5,000.

Keeper was founded in 2011 as a consumer product, but it’s getting a boost from the corporate market. Headcount doubled last year, says CEO Darren Guccione.

Keeper has 145 employees, including 60 in Chicago. The rest are in Northern California, where its technology team is based, and Cork, Ireland.

Most of the new hires in Chicago will be in enterprise sales. Guccione says Keeper has nearly 7,000 corporate customers, mostly small and midsize businesses.

“Keeper Security, like many password managers, gained popularity in the consumer space and is now jumping to the enterprise market," said Karl Sigler, threat intelligence manager at Trustwave, a Chicago-based computer-security company. "This makes sense because passwords are not only some of the most sought-after pieces of data when thieves attack, weak passwords are often the reason why a breach occurs in the first place."

The password-security industry is heating up. SolarWinds, an IT software maker based in Austin, Texas, recently bought Canadian password-security manger Passportal for an undisclosed price. 

Bosch opens a co-working space in 1871 by John Pletz

Bosch opens a co-working space in 1871

JOHN PLETZ ON TECH

Looking for an edge in the Internet of Things race, German industrial giant Robert Bosch wants to hang out with the cool kids.

The company is starting in Chicago with a new 19,000-square-foot co-working space in the Merchandise Mart called the Connectory that will house startups and some employees. The facility, on the fifth floor of the Mart, is jointly operated by Bosch and 1871. They're also partnering with local universities, including the School of the Art Institute and Northwestern University, to help mentor entrepreneurs and tackle new ideas and old challenges.

"It will focus on co-creation with startup, university and corporate partners," says Dennis Boecker, head of global IT innovation for Bosch, who is here, where it employs nearly 2,000 people in the city and suburbs. "There will be corporate projects, educational experiences and an open environment. We have several startups at 1871 that we're in discussion with already."

Some startups, such as IoT-security company Xaptum, an existing 1871 tenant, will move to the space. Bosch will offer training on IoT equipment such as sensors, as well as prototyping capability with 3-D printers.

The Connectory is the latest expansion for 1871, a hub for tech startups that celebrates its fifth anniversary tonight. Bosch is one of about 200 companies in a wide range of industries have partnered with 1871, which has become an anchor for the city's growing tech economy.

Bosch may roll out Connectorys to other cities, depending on how well this prototype works. Like a lot of big, longstanding companies—Bosch is 130 years old and has nearly 400,000 employees—it sees startup partnerships as a way to stay ahead of new technologies. "We want to work with startups, have our corporate projects there and foster an entrepreneurial mindset," Boecker says.

The concept grew out of Bosch's work with co-working spaces, incubators and startup accelerators over the past several years, including 1871 and Plug and Play in Palo Alto, Calif.

Bosch knows IoT—the idea that all sorts of devices, from appliances to cars, produce data that can be uploaded, monitored and analyzed—is already transforming the world. Five million devices are connected to Bosch's IoT cloud today. The company has long been a supplier of sensors to the automotive industry, and its products are found in cell phones. The Connectory is part of a companywide strategy called 3-S: sensors, software and services. "It's affecting all our business units," Boecker says. "Our target is, by 2020, that all our electronic products will be web-enabled and connected."

CHICAGO AS IOT HUB

Although it's based in Stuttgart, Germany, and its U.S. headquarters are outside Detroit, Bosch has a major presence in Chicago, employing more than 1,800 people across four locations: a power tools unit in Mt. Prospect; an automotive after-market division in Broadview; a Rexroth industrial drives and controllers operation in Hoffman Estates; and a software innovation group in the Loop. It's about to open a showroom for home appliances on the first floor of the Merchandise Mart, too.

Bosch's move comes as Chicago angles to become a bigger player in IoT, which could be a $450 billion market by 2020, according to consulting firm Bain.

Bosch is a potential anchor, alongside companies such as Here, a digital-mapping software company; Zebra Technologies, which makes bar-code and RFID equipment; and startups such as Uptake Technologies. Other key players include insurers such as Allstate, which is doubling its 400-employee innovation center in the Mart. The Illinois Technology Association launched an IoT collaboration project two years ago.

"Just like five years ago, when mobility and digital were core competencies, IoT is next," says 1871 CEO Howard Tullman. "There isn't going to be a more powerful tech play than IoT in the next few years. There won't be anything that won't be connected. We just can't be behind in IoT."

J.B. Pritzker, a venture capitalist who was the driving force behind 1871's launch in 2012 and now is running for governor, says the incubator has grown into a much bigger deals than its founders had hoped. Since Tullman became CEO in late 2013, it has expanded from 50,000 square feet of space and 225 companies to 150,000 square feet and 500 companies. "It's the Chicago entrepreneurs who have transformed the tech community in the past five years," Pritzker says.

But 1871 itself plays a starring role. "The momentum of 1871 is still there," he says. "It evolves as it needs to, into new areas like IoT. It's something Chicago should be really proud of."

Technology Panel at Accenture

Crain's Tech 50 Event at IIT with Andrew Mason

One Entrepreneur's Startup Odyssey- RENTALUTIONS

One entrepreneur's startup odyssey

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Real Estate Startups 1871 John Pletz on Technology Starter League

Ryan Coon

Ryan Coon's journey to land $750,000 in seed funding took him three years and went from Silicon Valley to New York.

His company Rentalutions, is an online platform to make it easier for small landlords manage their properties. It's signed up 14,000 landlords in 5,400 Zip codes.

Coon and his partner, Laurence Jankelow, signed up their first customers in 2013. The two finance majors from the University of Illinois at Urbana-Champaign decided to start the company after they explored buying some properties during 2010 and 2011.

“We found out it was kind of a pain to own and manage a small portfolio if you're an individual owner,” Coon said.

He learned to code at Starter League, then called Code Academy, and later moved into 1871. Coon moved to Silicon Valley for four months as part of the Plug and Play accelerator program. More recently, Rentalutions signed up with New York-based Metaprop, a real estate accelerator that's run by Chicagoan Aaron Block, former CEO of Bay.ru and former Cushman & Wakefield executive.

The $750,000 funding round was led by Metaprop and included Steve Olechowski, a Feedburner cofounder helped Plug and Play establish a foothold in Chicago last year.

About half the investment from Rentalutions customers, small landlords rely on the product to help them advertise, screen tenants, lease their rental properties and keep track of maintenance requests from tenants.

The subscription service is free for landlords with a single unit, but costs $25 for two to five units and grows from there. Rentalutions has customers with up to 150 units, Coon said.

“We handle rent collection, rent processing and scheduling reminders when rent is due,” he said. “We also help with maintenance.”

The funding will help Rentalutions add to five-person staff and step up its marketing.

“That's been the biggest challenge,” he said. “With individual owners, it's highly fragmented."

Coon estimates there are 8 million independent landlords who own about half of all rental properties. That's a lot of potential customers, and a lot of doors to knock on. This entrepreneur's journey is just beginning.

We're tops for women-led startups

JOHN PLETZ ON TECH

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Chicago still has catching up to do when it comes to its startup scene, but there's one place where the city leads the pack: It has the highest percentage of women-led startups among 35 cities worldwide that were studied by San Francisco-based Compass, a provider of benchmarking software.

The report says Chicago, with 30 percent female founders, has the greatest percentage of women entrepreneurs out of the top 20 startup ecosystems. The data is based on surveys of 11,000 respondents from startups, as well as investors and others. The figure is similar to one cited by Chicago-based startup hub 1871.

Overall, Chicago moved up to No. 7 from 10th place in the last survey by this group, conducted in late 2012. Silicon Valley ranked first, followed by New York; Los Angeles; Boston; Tel Aviv, Israel; and London.

Chicago was among the startup ecosystems that made the biggest leaps in the top 20, along with New York; Austin, Texas; Bangalore, India; and Singapore.

One factor in Chicago's favor is an increase in exit activity, acquisitions and IPOs, such as GrubHub, Fieldglass and Braintree. A sharp rise in venture financing totals, fueled by huge rounds such as Avant's $225 million investment and $56 million pulled by Raise.com, also helped.

Chicago's biggest asset? Its market for startups to sell their products and services.

1871 3.0 already is in the works

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JOHN PLETZ ON TECH

 

Photo by Tech Cocktail via Flickr.comWith new expansion space already full, some 1871 companies are moving upstairs at the Merchandise Mart.

When Howard Tullman took over 1871 a year ago, he talked a lot about instilling more of an "up or out" culture.

After expanding out—taking 50 percent more space next to 1871's original home on the 12th floor of the Merchandise Mart—he's focusing on up.

Howard Tullman

There are three or four companies, including ThinkCerca and Gramovox, with 35 workers that have moved into recently vacated space on the 13th floor, with others planning to move in.

Tullman didn't say how much space he wants, but he's in talks with Mart management. The recent expansion of 25,000 square feet was full almost as soon as it opened in October. 1871 recently added Loyola to its growing roster of university partners who have space there.

As the startup incubator and co-working space heads toward its third birthday, 1871 has established enough of a track record and corporate support that it may not be dependent on state grants to expand. So far, the state has provided two grants worth $4.8 million. But Tullman says he has discussed the expansion plans with Gov. Bruce Rauner's transition team.

JOHN PLETZ ON INTELLIGENTSIA

Intelligentsia exits 1871 — what's taking the cafe's place?

October 21, 2014

Intelligentsia at 1871

Crain's photo

You won't be able to get your Intelligentsia fix at 1871 after Halloween.

The Chicago-based gourmet coffee shop is leaving the 12th floor of the Merchandise Mart that's home to the city's best-known tech incubator. As the folks at 1871 consider a replacement, they're thinking about the potential beyond coffee, perhaps a Genius Bar.

Intelligentsia was beloved for its java, but its prices and speed of service seemed less than a perfect fit for a place full of young tech entrepreneurs with little money or time to spare. Barred from advertising in the Mart as a condition of its lease, Intelligentsia struggled to draw a clientele beyond the 1,000 or so people who pass through 1871 each day. Intelligentsia exercised an option to exit its lease, said Howard Tullman, CEO of 1871.

"It was purely a revenue thing," Mr. Tullman said.

A spokesman for Intelligentsia did not return a call for comment.

It's not clear whether another coffee shop will move into the space, which is a high-traffic location just inside the door of 1871.

Howard Tullman

With a new 25,000-foot expansion of 1871 recently completed, Mr. Tullman said, "We'll probably rethink the entire entryway.

"One of the things I want to do is see is if there could be a use beyond coffee – more food, different food – anything from Jamba Juice to Freshii. Who knows? The other thought is that location is fairly prominent, so one of the ideas we were talking about is potentially an Apple Genius Bar."

In the meantime, high-end coffee machines will be installed.

Tech community steps out to honor Segals at Momentum Awards

JOHN PLETZ ON TECHNOLOGY

 

Tech community steps out to honor Segals at Momentum Awards

October 10, 2014

Crate & Barrel founder Gordon Segal

Even the most successful entrepreneurs often make rookie mistakes.

While being honored for their accomplishments by the Chicagoland Entrepreneurial Center, Carole and Gordon Segal, founders of retailer Crate & Barrel, surprised the crowd with a couple of humbling tales about the company's early days.

The Segals received the Entrepreneurial Champions Award at the annual fundraiser for the CEC, which operates the 1871 incubator for tech startups at the Merchandise Mart. J.B. Pritzker, who helped launch the CEC, praised the Segals for “bringing parts of the world to Chicago and bringing parts of Chicago to the world.”

Ms. Segal recalled the company's roots, when they were 23-year-old newlyweds fresh out of Northwestern University, and came up with a business idea after discovering the simple, sophisticated and inexpensive housewares of the Scandinavian Design Shop in St. Thomas.

“We didn't know anything about profit margins or anything else,” she said. “We could have used 1871.”

Her husband, Gordon, recalled: “We needed $20,000” to start the business. “We had $10,000, so I went around offering 50 percent of the company for the other $10,000,” which drew gasps from the venture capitalists and entrepreneurs in the audience at the Radisson Blu Aqua Hotel. “Luckily, I never found anyone who would invest.”

The Momentum Awards attracted a broad mix of entrepreneurs from 20-somethings to old-school entrepreneurs who were doing startups before it was cool.

KCura Corp., a fast-growing maker of legal software, won the Merrick Momentum Award, which spotlights one of the city's fastest-growing tech startups. Michael Ferro, founder of venture firm Merrick Ventures and founder of the awards dinner, gave an enthusiastic presentation, channeling Howard Dean, when he reminded the crowd that Chicago tech startups aren't a recent phenomenon. “This is not a new thing,” he said. “We've been doing this for 15 years.”

He also gave a shout-out to former Mayor Richard M. Daley for his support of tech startups and emphatically proclaimed that Crate & Barrel, despite being best known as a retailer, is a “tech company.”

Motorola Mobility won the Corporate Champion award for its support of entrepreneurs and startups. The company, which recently moved its headquarters into the Merchandise Mart, is a backer of an accelerator for women-run tech startups that's set to launch at 1871. It also has partnered with startups under a program launched by Gov. Pat Quinn's Innovation Council called the Corporate/Startup Challenge.

CEO Howard Tullman noted that 1871's 25,000-square-foot expansion at the Merchandise Mart will open next week "on time and on budget,” two things not often associated with Chicago construction projects.

Follow John on Twitter at @JohnPletz.

DeVry schools startups with 1871 education incubator

DeVry schools startups with 1871 education incubator

September 09, 2014

Jeff Dunn, senior director of DV X, DeVry Education Group Inc.'s research and development unit

DeVry Education Group Inc. is teaming up with 1871 on an incubator for education-technology startups.

DeVry, already an 1871 sponsor, is launching the EdTech Incubator, expecting to admit up to 10 startups spread over two classes annually. The program will take applications from entrepreneurs nationwide.

The Downers Grove-based company, which runs a for-profit network of schools and has an enrollment of more than 100,000, will provide the startups with access to and mentoring from its executives. They'll offer feedback on the startups' ideas and test the most promising ones at its campuses. The company also will host education programs at 1871, which is housed in the Merchandise Mart.

"It will help us improve teaching and learning. We'll co-create solutions we can pilot across DeVry," said Jeff Dunn, senior director of DV X, DeVry's research and development unit.

1871 CEO Howard Tullman

It's the latest incubator at 1871 to focus on a specific industry — part of an effort by CEO Howard Tullman to increase corporate sponsorship and get the region's large companies more involved with its startups. Other incubators and accelerators announced so far will focus on real estate and startups led by military veterans.

Large companies such as DeVry are paying closer attention to startups as they look to reinvent their businesses.

"Chicago's vast network of schools, educators and students presents a wide range of opportunities for technology to dramatically improve the way students receive education," Mr. Tullman said in a statement.

For DeVry, the education-technology incubator at 1871 is an evolution of a program it has been running for several years. DeVry has piloted more than a half-dozen experimental programs based on work done by startups such as Civitas Learning, an Austin, Texas-based company that provides analytics about student performance.

Civitas helped DeVry better identify specific test scores that were better indicators of students' eventual success. "It changed how we rated test scores," Mr. Dunn told me. "We first engaged them over two years ago. It was very much a co-creation. We learned firsthand what works."

DeVry is on the verge of small-scale adoption of technology developed by two or three other startups, with plans for wider adoption, Mr. Dunn said.

Follow John on Twitter at @JohnPletz.