Sweet Tech Chicago
In its March 2014 issue, Chicago magazine unveiled its Power 100—an annual list of the most influential, clout-wielding Chicagoans. Sitting at number three, with only mayor Rahm Emanuel and the state’s Speaker of the House Mike Madigan ahead of him, is J.B. Pritzker.
Pritzker is the kind of guy who gets things done. A respected venture capitalist heavily invested in growing Chicago’s technology industry, he was integral to the launch of 1871, the downtown tech hub that has galvanized Chicago’s entrepreneurial community since it opened in 2012. That’s just one of Pritzker’s dozens of contributions to the city’s entrepreneurial ecosystem.
Pritzker will be in Madison April 8 to keynote the Greater Madison Chamber of Commerce’s neXXpo event, an updated, forward-focused version of the traditional business expo. Given Pritzker’s experience revving up the Windy City’s tech scene, he’s a fitting mentor. Chicago we are not, but we are a Midwestern city in the throes of growing our own startups and strengthening our own ecosystem.
Ahead of Pritzker taking the stage at Alliant Energy Center, Madison Magazine chatted with the down-to-earth billionaire financier about what he’s learned and how those lessons apply here in Madison. As our city looks to build its own 1871—a proposed tech hub and makerspace called that would take over the old Mautz Paint building on the corner of East Washington Avenue and South Paterson Street—three of Pritzker’s lessons are particularly salient.
1) Getting buy-in from the entrepreneurial community is difficult but crucial.
When asked about the challenges he faced in launching 1871, Pritzker said this was the biggest. First, you need the right leadership in place. “[We] really had a representative of all the major … pieces of the ecosystem, and particularly the successful entrepreneurs and successful venture capitalists in the community.” They needed a leadership team that people knew and respected and who had already had some success.
Next, the steering committee needed the entrepreneurs and VCs who would be using the space to agree that 1871 was something the community wanted—”that this was a solution to a problem that many people had outlined,” Pritzker says.
The third step: “It’s important for everybody around the ecosystem to feel like this belongs to them,” Pritzker says. “We didn’t really even put pencil to paper until we had entrepreneurs—and hundreds of them—at different times in groups of ten, twenty, sometimes thirty or forty, in a room telling the architects and the leaders [of the project] what it is they really wanted in a place like this. Because we think we know, but we don’t until you sit people down and have them look at you and say, ‘I don’t really need a nice chair to sit in … but I sure do need a place to plug in my laptop.'”
2) Building the space in the right location matters, especially when it comes to attracting and retaining talent.
Location is everything. Especially for the Millennial generation, Pritzker says. When deciding where to build 1871, it was clear from the start: “The location in this case needed to be downtown, in the Loop or very close to the Loop in downtown Chicago … We could have chosen a place that was $5 per square foot that was somewhere outside of the Loop in some area of town that’s not well traveled, but that wouldn’t have made for a successful 1871.”
But building a tech hub in a desirable neighborhood goes beyond making local entrepreneurs happy. It’s a huge asset in attracting new talent. Pritzker says Chicago has had challenges in luring University of Illinois at Urbana-Champaign graduates to Chicago, similar to how Madison has struggled to keep UW grads in town. So in Chicago 1871 became as much a symbolic place as it was a literal one. “They need a place to go,” Pritzker says. Now they have one—a place they actually want to be, with people their own age and entertainment and dining options within a stone’s throw.
The same, Pritzker says, can happen here. “If you can help people visualize that they can do it in Madison, then they will at least have that as something in their minds in their last year or two before graduating.”
3) Enterprise companies need to get on board.
“We’re still working very hard on this here in Chicago and in Illinois,” Pritzker says. “[We’re] making sure that the big corporate community is engaged with the technology startup community, and it can’t be in a way that they view it as charity. It really has to be viewed by those companies as business: ‘I’m engaging with technology startup companies because they can solve a problem for me.'”
Pritzker urges larger corporations to think of startups as their own outsourced R&D. “It is very difficult for large companies to get an entrepreneurial endeavor going within their four walls. It’s just a fact of bureaucracies of large organizations.”
And having the big shots on board makes it so much easier for the startups themselves. “It’s a big deal to a technology entrepreneur to get their first opportunity with some of the largest companies within the community.”
Greater Madison Chamber of Commerce president Zach Brandon says he’s seen how this can work here. Brandon recalls a conversation with Dan Neely, founder of Networked Insights, a startup that launched in Madison in 2006. Neely’s first contract was with Oscar Mayer and its parent company Kraft. “[Neely] was able then to go out to others and say, ‘I have Oscar Mayer and Kraft as a client,’ and it made all the difference,” Brandon says.
So already pieces of Pritzker’s advice resonate here. But can what worked for Pritzker—the “other mayor of Chicago,” as Chicago magazine calls him—work here?
“There isn’t that J.B. Pritzker in Madison like they have in Chicago,” says Brandon. “But we can do a version of it, and put a Madison spin on something very similar and really achieve the same goals.”
J.B. Pritzker will be in Madison April 8 for the Greater Madison Chamber of Commerce’s neXXpo at the Alliant Energy Center Exhibition Hall. For more information, visit greatermadisonchamber.com.