Chicago has transformed into a prime hub for digital business thanks to a host of new ventures seeded by the success of Groupon, Orbitz, and Feedburner. As the tech landscape grows more crowded, here's some expert advice on standing out.
UNITED STATES
OF INNOVATION
New Ideas, New Markets, New Insights
It used to be, if you were serious about starting a tech company, you went to Silicon Valley. But emerging entrepreneurial hubs around the country are giving startups new options. In this series, we talk to leading figures in those communities about what makes them tick.
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Though Chicago has spawned such Internet giants as Groupon and Orbitz, its local business leaders agree that Silicon Valley has a 30-year head start on building the critical mass needed to engender widespread innovation. That doesn’t mean the Windy City isn't a thriving tech center. Troy Henikoff, CEO of Excelerate Labs, says Chicago is building a strong startup cluster, especially for businesses that enable commerce. The challenge for new entrepreneurs now is how to stand out.
Kevin Willer, CEO of the two-month-old coworking space 1871 (the year after the Great Fire, get it?), believes Chicago has all the ingredients needed to take the local tech scene to the next level including several top universities and a group of established corporations that can power the next generation of startups, both as partners and investors.
He notes that Feedburner, which was bought by Google for $100 million, seeded businesses such as TellApart thanks to its cofounder Dick Costolo who is now CEO (and an investor) of Twitter. “Brad [Keywell] and Eric [Lefkofsky] of Groupon started and invested in other companies, too,” Willer says.
For its part, Excelerate (the No. 3 accelerator in the country) has helped launch 20 companies--all in less than two years. Don't expect a slew of Groupon clones, though. “In 2011, we got dozens of applications for daily deal sites,” Henikoff says, “and we took none of them. That space is really crowded.” New ventures that made the grade include GiveForward and SpotHero (the latter has been dubbed the Orbitz of parking spaces).
Hundreds of hopefuls throw their hats in the ring each year, but Excelerate only selects 10 to go through the incubator program to launch. As the tech landscape becomes more fluid and mini-hubs form far from Silicon Valley, “the only measure of Chicago’s success will be the great companies coming out of here," Willer says.
With that in mind, Henikoff and Willer offer four tips for distinguishing yourself from other startups in Chi-town or any town.
The Right Stuff.
“We are looking for people with the right DNA,” Henikoff says. That means you need to be comfortable with uncertainty, have a passion for your idea, and have a bias toward action, he says: “The best entrepreneurs have a viable business plan that doesn’t burn a lot of money."
Don’t Fall In Love.
1871’s coworking space features Technori pitch events at which startups defend their ideas in front of 500 people . These events foster a culture of sharing and no-nonsense feedback, which Henikoff says can prevent the biggest mistake entrepreneurs make: falling in love with their idea too soon. “All ideas need a lot of work at the start,” Henikoff says. “If you close yourself to feedback you won’t be able to pivot and find bigger and better ways to solve problems.”
Multiply and Conquer.
Another trick to increase your chances of getting chosen is to have multiple versions of an idea and be able to execute them quickly. “If you are trying to make a widget, and you spend an hour each on making five, you are not wedded to any one the way you would if you spent six months to make the perfect one,” Henikoff says. There’s also a better chance you’ll hit something the market will pay for, he says.
Find Great People.
Willer says coworking spaces like 1871 address a simple, but critical, need for most entrepreneurs: It gives them a place to sit every day. And that seat just might be next to another early-stage startup impresario willing to share tips for raising angel funds. Likewise, workshops in SEO, law, and accounting, and one-on-one mentoring courses with business leaders, can help aspiring entrepreneurs both learn much-needed skills and plug into the tech community, Willer says.
And you never know when foreign heads of state might be on hand to offer a bit of wisdom. British prime minister David Cameron asked to tour 1871 prior to the recent NATO summit, in part to strengthen economic ties with the United States. But Cameron is also hip to digital's potential to create jobs and boost the global economy. His advice to Louise Monger, founder of FunRaising Events USA: "Make sure the technology can be used by an 80-year-old philanthopist."
Follow the conversation on Twitter using the tag #USInnovation.
[Image: Flickr user Christopher F. Photography]