Chicago’s Role in theInternational Tech Community (aka “Railroads. Stockyards. Silicon?”)

2015.08.07 International Tech Breakfast @

Darius Vaskelis

@vaskelis

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@vaskelis

HI, I’M DARIUS

• Son of Lithuanian immigrants, lucky to have had amazing global business clients

• Product of East Coast and Chicago

• Started career at IBM, later in corporate IT, part of Inforte leadership team for IPO, then Cognizant, and former CEO of Safepole, patient care device startup

• Was CEO and co-founder of Sakonent since 2009, a leading Gartner-recognized CRM tech consultancy, which was acquired by Tectonic in 2014; now Tectonic’s SVP of CRM

• Visit Silicon Valley 6-10x/year, although focused on the sales, marketing and customer service tech scene

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It all started in Silicon Valley(isn’t the HBO show great?)

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SILICON VALLEY

• Undisputed leading hub and startup ecosystem for high-tech innovation and development

• Accounts for one-third of all of the venture capital investment in the United States

• “The people who built Silicon Valley were engineers. They learned business, they learned a lot of different things, but they had a real belief that humans, if they worked hard with other creative, smart people, could solve most of humankind's problems. I believe that very much.” – Steve Jobs

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HOW DID SILICON VALLEY EVOLVE?

• 1940s: Stanford University encourage faculty and students to start businesses

• 1960s: Private R&D from companies like Bell Labs and Xerox coupled with public R&D like ARPANET

• 1960s: Immigration reform helped find educated high-tech and production workforce

• 1970s: Venture capital industry starts, explodes after Apple IPO in 1980

• 1980s: Legal infrastructure to support the rapid formation, funding, and expansion of high-tech companies

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WHAT MAKES SILICON VALLEY WORK?

• Unique culture: risk-taking, multi-cultural, meritocratic, entrepreneurial

• Well-trained engineers, business people, marketers, researchers

• Vibrant venture capital community and a highly available stock market appetite for stock flotations

• Failure is considered experience

• Legal and business climate allows easy development and formation of startups

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Innovation Clusters(the engines behind tech)

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INTERNATIONAL INNOVATION CLUSTERS (MCKINSEY DIGITAL)

• Dynamic oceans: large and vibrant ecosystems with continuous creation and destruction of new businesses

• Silicon Valley leads in size (number of patents), momentum (growth of patents) and diversity (number of companies)

• Silent lakes: older, slower-growing hubs with a narrow range of large established companies

• Chicago has similar size as many global centers, lower momentum, but very high diversity in companies

Source: Juan Alcacer, Harvard Business School and New York University; McKinsey analysis

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CHICAGO: FEWER PATENTS, MANY ESTABLISHMENTS

Source: Professor Michael E. Porter’s U.S. Cluster Mapping Project , Harvard Business School

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Chicago as an Innovation Cluster(and no, it’s not the next Silicon Valley)

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HOW DID CHICAGO EVOLVE?

Sorry for the eye chart, but note this 2013 timeline’s focus on innovative application of technologies rather than Silicon Valley-style new invention tech.

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WHAT MAKES CHICAGO WORK AS AN INNOVATION CLUSTER?

• Allure of an affordable Midwestern big city draws employees

• Many companies that are leaders in applied technology

• Highly diversified and more stable economy

• Private equity more important and some venture capital, but many are customer-funded and bootstrapped… with a focus on revenue and profitability!

• Pockets of innovation and entrepreneurship, like services

• Supportive networks and less saturated community, smaller incubator community

• Large market for established tech companies

• Local government support, although not always clear where it’s beneficial

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Chicago Cases(one is only partly Chicago)

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CASE: SPRINGCM

SpringCM is a cloud platform that manages documents, contracts and all related collateral.

Highly focused on application to solve sales/legal interactions.

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CASE: MOBSS

Early stage company with Chicago and Los Angeles roots.

A mobile solutions company for access control readers with a strong background in hardware design.

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CASE: DEVBRIDGE

Consultancy that to accelerate product-to-market through a metrics- driven agile process, dedicated Product Teams, and a blend of UX and Software Engineering.

Midwest services base with global delivery.

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The Future for Tech in Chicago(my perspective)

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WHAT’S RIGHT AND WRONG – AND WHAT TO DO ABOUT IT

Things I Worry About

Chicago tends to be conservative in business, so disruptive

innovation isn’t embraced overall, and the diverse economy doesn’t

favor tech (e.g. “the cloud tax”) and looks for silver bullets like

incubators.

Things I Like

Less focus on raising capital puts more focus on economics, which makes us better business people. Also, not all failure is good failure,

we recognize stupid failures so have better appreciation for risk.

Unsolicited AdviceUniversities should encourage

entrepreneurship by faculty. Don’t require “made in Chicago” when

the real answer is more complex. Recognize tech startups in

services and not just products, which often act as midwest

incubators before going west.

Chicago’s Role in theInternational Tech Community (aka “Railroads. Stockyards. Silicon?”)

2015.08.07 International Tech Breakfast @

Darius Vaskelis

@vaskelis