When I moved from Atlanta to Chicago about a year ago to start my own company and explore a new city, attending the inaugural midVenturesLaunch was my first exposure to the local startup technology scene. The event, highlighted by Brad Keywell’s keynote, was an affirmation that I was in good company helping Chicago transform from a flyover afterthought between the Alley and the Valley to a hub of online innovation. This year’s midVenturesLaunch felt like a grandiose coronation compared with last year’s coming out party, yet it was tinged with cautionary overtones that we should work towards solidifying our entrepreneurial identity before drinking too much of our new-age Old Style.
After navigating the frustratingly complex elevator system at the Merchandise Mart and nabbing my press credentials (being a tech blogger actually does have a few perks), my first stop was a 9:30 panel discussion leadingly titled “Why Chicago is the Best Place to Start a Company”. Kevin Willer, in perhaps his last act as CEO of the Chicago Entrepreneurial Center before joining New World Ventures as a seed-stage venture partner, did an admirable job moderating the impressive panel, which included such investment heavy hitters as Apex Venture’s Lon Chow and the Tribune Company’s Brian Fields. Collin Wallace from FanGO and Joshua Hernandez from Tap.me provided the entrepreneurial hip factor with Matt Spiegel (formerly of Resolution Media and now investing under Analect Ventures) bridging the gap. Despite the session’s name, the tone was more indicative of Chicago being a good place to start a company rather than being the ‘best’. There was palpable resentment, maybe even mockery, for the loosey-goosey nature of the West Coast (“La-La Land”), as well some undeniable envy for what New York City has accomplished in the last decade. Here are some themes and (fairly accurate) quotes:
- If nothing else, Chicago is convenient for travel.
- Duh, but Lon, Matt and Collin all commented about how much easier it is to buzz around the country seeing clients, partners and investors when based here.
- Midwestern business sensibility has finally reached a level of risk tolerance where acquiring capital is possible for startups, but the market for early-stage capital is widely underserved.
- Lon: “Make no mistake, I’m still in the business of making money.”
- Matt: “Living in ‘La-La Land’ is alienating, but it is jarring to realize how much harder it is to acquire early stage capital here in Chicago.”
- There is a still plenty of work to do building a startup ecosystem in Chicago.
- Lon: “Demand for money is still far ahead of supply.”
- Collin: “Chicago needs more marketing and PR agencies that specialize in startups.”
- There is good talent for startups in Chicago though.
- Matt: “Not having a Google, Microsoft or Facebook to suck up all the talent is a good thing.”
- Josh: “Universities are providing risk-tolerant talent for when you can’t find or afford veterans.”
- Collin: “Talent here is more mission-driven, and expects less cushy perks.”
- Chicago should not in any way aspire to be Silicon Valley…but maybe it should aspire to be more like New York. Either way, the connection between money, technology and talent is coming together, but we need to maintain our own unique identity.
- Lon: “There is a new entrepreneurial class developing in Chicago”… “Chicago is NY 4-5 years ago”… “We should NOT aspire to be Silicon Valley.”
- Brian: “Give more credit to our past successes, like Orbitz and CareerBuilder in addition to Groupon.”
- Tech.li rules! *Thanks for the shout out, Josh*
Next up was a “Viral Marketing” session with a diversely geeky panel of social media gurus. Sean Everett from Evolyte, who is so Web 2.0 he wears thick-frame glasses without the lenses, told a humorous war story about his failed efforts to promote his company by comparing their services to his chiseled abs, and provided probably the most useful wisdom of the mostly ‘heard-it-before’ session when explaining that “People will only pass along content that hits on a combination of comedy, cuteness, sex, and/or shock.” Phil Tadros of Doejo picked his spots wisely, promoting Doejo’s involvement with virtually every notable investor and startup in town, pimping his SPARK involvement with DuckDuckDish and relaying the importance of “being consistent without selling” and “not sucking at life” as key to social media dominance. Jon Immerman of Immerman Angels won over the crowd instantly with his tale of cancer survival and his mission to help others do the same, and had some in the room almost oddly jealous of his viral-friendly “just keep helping people and they will share what you’re doing” message. Joel Barnes, who joked that he’d formally changed his name to @JoelDavidBarnes, stressed the importance of planning, learning and adapting over simply throwing content out there in hopes that it spreads. And Jason Seiden from Ajax Social Media played the role of moderator and trustworthy uncle, reminding everyone to take risks genuinely blending their personal lives with professional efforts. If there was a theme, it was that relatable content will find a way to get shared and that the new K-Swiss videos are awesome.
I arrived late to the 12:30 “Capital and Cash Flow: Should I Raise Money?” session, so it was difficult to attribute quotes to the right people. What I do know is that Karan Goel of PrepMe was the dominant voice of irreverent entrepreneurial hope in a room full of curmudgeonly investors. His notable contributions included “Taking dumb money is OK if you have a good plan.”… “Worry about your business and dream, not somebody who checks in once a month asking about numbers”…and “Don’t be afraid to start selling before you actually have a product.” Irv Shapiro of Ifbyphone warned against building too many features before releasing a product and working with investors who are not a cultural fit for your organization, and he also reinforced that some ‘lifestyle businesses’ are best off not raising capital at all in order to grow slowly while preserving long-term equity. “Fail fast making mistakes quickly and cheaply” was the core message from Excelerate Lab co-founder Troy Henikoff, along with advice to “talk openly about bad news, eliminating the fear that comes with uncertainty.” Some friendly bickering took place between revolving around whether Chicago was meeting the capital needs of the entrepreneurial community. The consensus was that we needed more money willing to take more risks.
My last big event of the day was Dave McClure’s keynote address. Looking every bit the potty-mouthed uber-geek, he took the stage with a Missy Elliot-soundtracked funky-chicken-vs-running-man dance shtick that I assume he uses to loosen up crowds and himself whenever he does speaking engagements. “Yeah, you like that shit?” he asks the crowd before requesting that “If you want to talk to me about your startup getting money from 500 Startups, buy me a beer later. Don’t bum-rush me when I get off the stage.” His resume, candor and zeal make me feel like a lazy loser, and I especially appreciated when he got the roughly 300 person audience to scream “shut up” at the rest of the conference for daring to make noise. He covered a ton of ground while talking in zigzags. Here are the points I found interesting:
- Android needs another year for its ecosystem to mature before being ready for mass adoption.
- Right now we’re just re-inventing Web 1.0 with social and e-commerce elements.
- Social media is an over-crowded space. Sell stuff instead. (Not welcome feedback for a guy trying to raise money for a social media startup).
- If you’re going to build a platform, get (1) users, (2) money and then (3) advanced features in that order.
- Creating keyword relevant videos on YouTube is a fantastic way to drive traffic from competitive keyword categories right now before others catch on.
- ‘Social’ is not a goal in itself, and you can’t sell ‘Likes’, so stop worrying about them.
- Digital Media is a bad vertical because it’s too hard to make money on advertising alone.
- Pick a segment. Take a shot. Iterate. Keep optimizing until you succeed or fail. (Re-word this a billion times over)
- Making a large number of small investments (say 500 at $50k-$100k each) gives you a better chance of success than making a few big ones, and it creates a better learning environment for those who fail alongside the successes.
- The world needs more incubators and less MBAs, although he did apply to get an MBA at Stanford.
- If you sell a $9/month subscription service, you can easily make millions.
- If nobody buys your stuff upfront, you’re not worth investing in ever.
- Going international is now as easy as translating your site into another language, but be careful of cultural sensitivities.
- “There is not a lack of talent outside Silicon Valley. There is a lack of local investment fortitude.”
- He’d like to fund another startup in Chicago (right now there’s just one out of 500), but somehow getting lucky finding him at the bar is the best way to begin the process.
Overall, it was a first-class affair in a world-class venue that I’m sure gave every entrepreneur in attendance the jolt they needed to pursue their next endeavor. I wish I had more time to spend with all the presenting startups and their passionate founding teams, but being a tech blogger has its disadvantages too, as there are only so many pitches you can hear in a day before your head explodes. I’m sure there are hipper conferences on the West Coast and bigger pockets milling around incubators in New York. Neither of those would be very Chicago-like though. We are about as far along on the hip-scale as I think our culture will tolerate, and our deep pockets are not as easily emptied by the promise of the next big thing. In the end, midVenturesLaunch is a symbol that Chicago needs to stay comfortable doing what it has always done best — lead proudly from the middle.