While Chicago is home to startups GrubHub and Groupon, as well as Fortune 500 companies Walgreens, Allstate, and United Airlines, it is the seed stage digital community and hasty development of the tech scene that have begun to capture peoples attention.
According to Built In Chicago’s president Maria Christopoulous Katris, it takes about 10 years for the first wave of startups to either succeed or fail. The companies that are successful then begin to invest their money and offer mentorship to the next generation of startups. It takes approximately two of these cycles, or 20 years, for a city to reach maturity and build an entrepreneurship community. Luckily for Chicago, the city is in the beginning stages of the boom. Bernhard Kappa, chief executive officer of Chicago’s Pathfinder Software, claims we’re about six to seven years in the cycle, and definitely on the way towards acceleration.
In 2011, there were 193 new startups founded in Chicago. That number alone is more than the amount that was founded in 2009 and 2010 combined (170). Additionally, in the first quarter of this past year, there was $61 million raised in funding for local digital companies, twice as much as was raised in the first quarter of 2012. Chicago tech companies have also raised over $1 billion in the last two years.
The sheer number of resources and organizations are a majority of the reason that this growth is possible. The amount of successful individuals that rising entrepreneurs are able to reach out to is remarkable. Something about Chicagoan’s willingness to help one another make this community a nurturing and phenomenal web of people that aid each other in achieving success. If there is one thing that both rising and successful entrepreneurs want for Chicago, its for Chicago to be the best ‘entrepreneurial Chicago’ it can possibly be.
Built In Chicago, Technori Pitch, and Techweek Chicago are some of the few organizations that drive the city’s entrepreneurial community. Other organizations such as Excelerate Labs, the Lean Startup Circle, Dashfire, Entrepreneurs Unplugged, and FireStarted Fund have also played huge roles in Chicago’s digital community progression. Additionally, the co-working space and startup hub 1871, otherwise known as Quick2LAUNCH’s home, boasts some of the most brilliant and tech-savvy minds in the industry. Of course, we’re a little biased.
The Merchandise Mart, which resides in the River North area, is becoming a pivotal center for digital startups. Within one mile of the Mart resides 71 of the top 100 digital companies in Chicago, and inside the Mart itself is where 1871 is located. River North also houses Groupon headquarters and Google Chicago. The Motorola Mobility division plans to move inside the Merchandise Mart over the next year – the relocation is leading the Mart to be deemed as “the digital tech capital of the Midwest,” by Major Rahm Emanuel.
Why Chicago? Between the community, resources, and the mere city in itself (did we mention the pizza?), it’s hard for a rising entrepreneur to go wrong. The rent is cheaper than New York, and the community is potentially less intimidating that the massive Silicon Valley – but Chicago also yields similar brain power and tech-savvy mentorship opportunities when compared to California. Additionally, Chicago has the funding, government, and state support to aid in the development of the startup community. Both human and financial capital is abundant, and local VC’s continue to invest sizeable amounts of money while national VC’s are traveling to Chicago looking for deals. An “Angel” community also provides support for developing companies.
While Chicago may still have a long way to go before beginning to catch up to the Silicon Valley, the city has all the ingredients to create generations of high-growth startups. Between the capital support, social support, universities, community, and resources, the digital technology ecosystem is able to make the fundamental shift towards becoming one of the biggest startup cities in the nation.
BigMarker, one of Chicago’s startups, created this infographic to show the progression of Chicago’s Tech Scene.
