(Re)building the Windy City
Chicago’s most innovative new companies are ones you’ve never heard of.
As regions go, the Midwest is pretty true to its character: humble and preferring to stay out of the limelight. The region has been dubbed ‘flyover country’ for much of its recent existence in American cultural memory, mainly consisting of agricultural and manufacturing operations. Given the heavy mechanization and automation of the former and the decline of the latter, the Midwest doesn’t draw a whole lot of national attention. While Chicago is the shining metropolis on the prairie, national attention tends to overlook it for New York or Los Angeles.
The tech scene in the Midwest functions in a similar way; although not many Midwestern or Chicago startups have entered popular conscience (like Groupon and GrubHub), a lack of talent isn’t indicated so much as a difference in priorities. Given that the Midwest is not a major attraction for venture capital, startups do not have the same consumer focus as in other areas, nor should they.
While the Googles and Amazons of the world hold the attention of mainstream tech consciousness, there are plenty of companies that are solving unsexy problems in unsexy ways, but lead to very sexy stacks of cash. The B2B side of the tech revolution is a lot drier, but just as profitable as its more popular cousin.
Hidden deep inside the Civic Opera Center lie the next wave of innovative companies to make their way to Chicago. Although it does not have the same glamorous appeal as Silicon Valley or the more well-known Chicago incubator 1871, TechNexus serves as the destination for companies seeking to solve real world issues. While at first glance, TechNexus does not look much different than the typical accelerator, it focuses on an idea many in the Valley have forgotten: solving real-world issues.
TechNexus bases its mission on solving issues visible to companies, yet invisible to most entrepreneurs. By creating a pathway for collaboration and partnership, organizations are able to solve mission-critical problems by tapping into the creative energies of entrepreneurs. This creates an environment of ‘internal disruption’, as entrepeneurs are able to innovate within the business while having access to resources that would normally be out of reach.
In such partnerships, startup energy can be focused on creating innovative gear for emergency first responders, or creating new insights in customer analytics. These kinds of projects would otherwise be difficult to dive into without years of industry experience and close connections with decision-makers. In other words, the current high barriers in many industries to market entry make it difficult for well-meaning entrepreneurs to disrupt the status quo. TechNexus also benefits from its strategic location in Chicago, which boasts a highly diversified economy that allows individuals to participate in a number of different industries.
Chicago itself has struggled on the entrepreneurial scene, as it struggles to attract the type of talent and ecosystem that draws numerous Illinois graduates to the coasts. The city is lowly ranked in venture capital and its diversified economy is a double-edged sword. While diversification has allowed Chicago to avoid the decline of other rust-belt metropolitans, there is no dominant industry that has its draw in Chicago in the same way that San Francisco and New York have for finance or tech.
However, this is not a call mimic the SF ecosystem. Rather it is a call to use but to use its lessons to improve the tech scene in Chicago for fledgling entrepreneurs. Competing against the Valley on its key advantages is foolhardy; Chicago must be able to exploit its own economic and social advantages to create a scene that differs from the traditional approach. One can argue that the tremendous success of the Silicon Valley Model tempts other tech scenes to replicate the results by replicating the entire system. This ignores the unique local conditions that allowed the Valley to proliferate into a major technological center. Chicago can’t and shouldn’t replicate this, but must focus on its advantages as the hub of the American heartland.
TechNexus plays to Chicago’s natural advantages in terms of economic reach and local talent. By creating partnerships with private sector actors and public insititutions such as the University of Illinois Urbana-Champaign, TechNexus is grooming the next generation of innovation in the city. At its core, the incubator serves to create a major incentive for programmers, designers, and other entrepreneurs to stay in Chicago rather than migrate to the Valley in search of opportunity. As a recent Chicago Tribune article highlighted, the brain drain from the state’s and city’s major universities is a serious concern for the local tech scene.
It is through partnerships and expansions of programs such as those of TechNexus and other organizational-focused startup incubators that Chicago can emerge as a center of real-world innovation.
