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Chicago Tribune
Tony W. Hunter, Publisher
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Jane Hirt, Managing Editor
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Peter Kendall, Deputy Managing Editor
Ebook edition 1.0 March 2014
ISBN-13 978-1-57284-480-3
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Contents
About This Book
Innovation in Chicago
3-D technology reshapes Chicago manufacturing
Tribune reporter duplicated in plastic
3-D printers debut at Chicago library; future uses still to be imagined
Making a not-so-basic bourbon
Rand McNally navigates digital turnaround
Nokia anchors location data strategy in Chicago
‘Nerds’ play the hands they were dealt
Giving would-be entrepreneurs a head start
In growing field of big data, jobs go unfilled
Alliances to get push from two sides
Finding ‘real people’ to test civic apps
A selection of civic apps that aid Chicagoans
Pritzker’s big push for U of C data
Keeping genius in Illinois
Profiles in Innovation
Andrew Sieja, founder and chief executive, kCura
Linda Darragh, head of innovation, Kellogg School of Management
Chad Mirkin, professor of chemistry, Northwestern
Saqib Nadeem, owner, Paradise 4 Paws
Nina Nashif, CEO, Healthbox
Richard Thaler, University of Chicago Booth School of Business professor
Marianne Markowitz, regional administrator of the U.S. Small Business Administration
Talia Mashiach, founder and CEO of Eved
Amanda Lannert, CEO, Jellyvision Lab
Amy Francetic, executive director of Clean Energy Trust
Rishad Tobaccowala, chief strategy and innovation officer at VivaKi
Ron May, 1956–2013
Technology in the News
Chicagoans test out Google Glass wearable computer
Google headsets raise privacy concerns
Drawing insight into Google’s Doodles
Google certain to make cold-storage building cool
Rethinking startup a ‘pivotal’ experience
Entrepreneurs bringing meals to downtown office workers
Delivery firms take another stab at same-day service
Bioscience startups to open in Chicago in next year
With 24/7 streaming, local TV finds growing mobile audience
Belly raises $12.1M from investors including 7-Eleven
With new logo, focus, Motorola touts latest phone at Techweek
Motorola Mobility introduces Moto X smartphone
$25M Hyde Park VC fund looking for Midwest tech startups
I2A Fund goes private, becomes Chicago Ventures
Chicago-based tech company offers email tool to collect employee feedback
2 students’ dream leads to Logitech deal
UIC launches $10M seed fund to advance startups
Sources
Photo Credits
About This Book
This book was created using articles originally published in the Chicago Tribune. The
material has been carefully selected to feature the best recent reporting on innovation
and technology by Tribune columnists and reporters.
Innovation in Chicago
3-D technology reshapes Chicago manufacturing
Digital production lowers costs, eases production for hardware startups
By Wailin Wong
April 21, 2013
The machine, no larger than a coffee maker and encased in black like Darth Vader’s helmet, hums at a whisper.
Swinging open the shell’s door reveals a slim metal nozzle moving smoothly over a
platform, putting down melted black filament in thin layers that form a set of simple
chess pieces.
The plastic figures might not look like much, but to Zach Kaplan, the 3-D printing
technology creating them represents the early promise of digital manufacturing, powered
by desktop machines, user-friendly design software and creative people tinkering away
in basements and garages.
As CEO of Chicago-based Inventables, an online retailer of materials for product designers and artists, Kaplan is finding new customers among small businesses and budget-strapped hardware startups. He and other proponents of digital fabrication say the
technology’s increasing accessibility is emboldening a new generation of participants in
the manufacturing sector, reinvigorating the industry in traditional hubs like Chicago,
as the creation of a single item or a small batch of products becomes as affordable as
mass production.
The 3-D printer making the chess set at Inventables costs $899 on the company’s
website, and one spool of filament, enough to make 360 pieces, is $39. The accompanying design software can be run on a basic computer connected to the printer with a USB
cord.
“Inventables used to only be able to service the most well-funded R&D groups,” said
Kaplan, who launched his business in 2002 to cater to big corporations. “Now we’re servicing R&D labs in garages all over the world.”
Unlike previous generations of 3-D printers, milling machines and laser cutters, many
of today’s models fit on a desktop and are designed for micromanufacturing. That means
a custom job or small run, from one to 1,000 units, can be as inexpensive as outsourcing production but without the fear of giving up quality control to an overseas manufacturer. Inventables has a U.S. customer, for example, that uses a digital milling machine
for a skateboard business, cutting three longboards from a $30 sheet of Baltic birch in
40 minutes.
The technology’s flexibility and forgiving economics are particularly attractive to hardware startups that are using digital manufacturing for rapid prototyping and small-scale
production of their goods. They say making a prototype with a 3-D printer can save thousands of dollars over handing off the work to a design company.
“It’s awesome,” said Alan Hurt, founder of Light Up Africa, a local startup whose device attaches to a moving object, such as a bicycle, and captures enough kinetic energy
to charge a cellphone. “I never knew it was possible to make products at little or no cost.”
Hurt borrowed a 3-D printer from Inventables to make prototypes of his product while
participating in Impact Engine, a Chicago-based accelerator program for startups with a
social or environmental mission. The digital fabrication technology he used was a major
improvement over his earliest efforts, which involved fashioning a lunchbox-size case
from plastic clipboards that he bought at Wal-Mart and cut apart.
The ability to quickly and inexpensively make quality prototypes also allows startups
to experiment without running up a huge bill.
“There’s something about being able to hold and physically interact with a design that
feels more real and allows you to get feedback more directly than looking at a 3-D image
on a screen,” said Eduardo Torrealba, co-founder and CEO of Oso Technologies, a company started by engineering graduate students at the University of Illinois at UrbanaChampaign. Oso makes sensors that measure soil moisture content and send alerts to a
computer or mobile phone when plants need to be watered.
The startup went through nearly 10 versions of its Plant Link sensor prototype using the 3-D printer at the U. of I’s mechanical engineering laboratory. In February, Oso
raised nearly $97,000 on crowd-funding website Kickstarter.
The startup will use 3-D printing to create a small run of Plant Link sets for Kickstarter donors who want to get their hands on the products sooner. But Oso will mass
produce the majority of its sensors through an Illinois manufacturer. The proceeds from
the Kickstarter campaign will pay for the injection mold needed for that process.
“We haven’t totally thrown away the idea of doing production in Asia at some point,”
Torrealba said. “But for the short term we want to stay local and keep production in the
United States, if it’s possible economically. People respond to that.”
Like Oso, other startups are using digital fabrication technology for prototypes and
turning to traditional manufacturers for mass production. That’s the case with Chicagobased venture firm and incubator Sandbox Industries, which is introducing a wireless
home security system called Scout.
Sandbox used 3-D printing equipment at the School of the Art Institute of Chicago
to make prototypes of its sensors, saving thousands of dollars over hiring a company to
fashion a clay or foam mold. Lindsay Cohen, a vice president at Sandbox, said that while
today’s 3-D printing technology is inadequate for large-scale production, she expects
that to change.
“Where we are with 3-D printing today is probably where the big card-reading computers were in the ’70s,” Cohen said.
Digital manufacturing is part of a broader “maker” culture that unites hobbyists and
professionals by their love of tinkering with stuff. George Page, founder of local startup
Portapure, which makes a water filter for use in developing countries or disaster-struck
areas, used 3-D printing to make prototypes of the smaller parts that fit into his device.
“I’ve always been really handy,” said Page, a former water filtration engineer for the
city of Chicago who also completed the Impact Engine accelerator program. “For me,
prototyping is using components, plastics, resins and other materials to shape an idea.”
The hobbyist end of the maker spectrum includes local “hackerspaces” such as Pumping Station: One in Chicago’s Avondale neighborhood. Members there include “carpenters and game developers and microbrewers and old retired college professors and seamstresses,” said spokesman Adam Dzak, whose day job is in information technology.
Pumping Station: One provides equipment, including 3-D printers, for dues-paying
members to work on projects. And while the club is focused on personal rather than
commercial pursuits, it benefits from the same technological advances and creative impulses driving hardware startups.
Educational institutions are also involved. The Museum of Science and Industry
opened a “Fab Lab” in 2007 to provide hands-on experience with digital manufacturing
technology.
“There’s been a perfect storm of general public awareness of ‘making’ … the increased
accessibility to some of the technology and a lot of spaces coming out of the woodwork,”
said Rabiah Mayas, the museum’s director of science and integrated strategies. “We’re
seeing young people discover new interests in engineering.”
And while the maker movement is a worldwide phenomenon, its local advocates say
Chicago is a major center of activity.
“There’s a huge opportunity to really put (not just) Chicago’s manufacturing history
and legacy, but also the present and future of manufacturing in Chicago, squarely on the
map with this movement,” Mayas said.
Tribune reporter duplicated in plastic
3-D printing used to create likeness
By Mugambi Mutegi
April 21, 2013
Bust of reporter Mugambi Mutegi, created with 3-D printing technology
It wasn’t exactly like stepping into a spaceship’s control room, but close.
I was at the 3D Printer Experience, 316 N. Clark St., which opened in April 2013.
As the name suggests, its aim is to educate the public about 3-D printing and the
opportunities it offers businesses and people.
The first order was to get the top half of my body scanned.
Employee Mike Moceri handed me a light brown plastic violin and ushered me onto a
circular platform.
“Hold the violin to your collarbone and maintain your gaze just slightly above that
scanner right in front of you,” Moceri said. The violin, which could be played, had been
created with a 3-D printer by German firm EOS and was featured on the cover of The
Economist in February 2011.
The scanner was rigged on a mast about 5 feet ahead of the platform. Moceri told me
the platform would rotate 360 degrees in a process lasting one minute.
I had to remain motionless as the scanner shot infrared beams at my body. The beams
return signals that are used to create a model on the computer.
“You’re doing fine, you’re almost there,” Moceri said with about 15 seconds left on the
rotation.
I was told that a green shadowy image on a nearby computer screen was me, and that
my computer image would be sent to 3-D printers so the “magic” could begin.
When the printing of my 3-D bust started, a nozzle sprayed what looked like melted
blue plastic goo onto the printer’s platform in a back-and-forth and side-to-side motion.
I was witnessing my “rebirth,” thin layer upon thin layer of blue plastic in the belly of
a $2,000 printer.
The printing, I was told, would last about 25 minutes.
To pass time, I sampled other offerings in the store. Employee Matt Spergel invited
me to his exhibition stand where he had fired up software that allows people to design
pendants. I tried my hand at it, and in five minutes I had a design that I was proud of.
The pendants retail for $20.
Other 3-D software allows you to personalize and design things like curtain rings and
doorknobs.
Another much larger printer, priced at $250,000, uses powdered nylon, a much harder plastic used to create custom-designed doorknobs, for example, instead of the lighter
corn-based plastic used to print my bust.
The busts, I was told, are perfect to put atop wedding cakes or given as gifts.
Prices start at $25 for a 1.5-inch bust and increase to $115 for a 4.5-inch piece.
Now I understand why President Barack Obama was so keen on 3-D printing during
his State of the Union speech in February. He hailed the technology as having the potential to “revolutionize the way we make almost everything.”
3-D printers debut at Chicago library; future uses still to be
imagined
By Christopher Borrelli
July 9, 2013
Octopus created with one of the 3-D printers at the Maker Lab
Welcome to the dawn of 3-D printing.
As with the dawn of the computer, the dawn of the telephone and the dawn of the television, expect a period of confusion: What is 3-D printing, you will wonder. (Answer: The
printing of solid objects, often from a square machine that drops liquid plastic through
a heated nozzle onto a flat surface, layer upon layer until an object forms.) What are the
ramifications of this technology, you will wonder. (Answer: Still unknown.)
As with those other emerging technologies, also expect a period of excitement and opportunity: For instance, this week [July 10-11, 2013] at McCormick Place there is Inside
3D Printing, a trade show for the burgeoning printed-object industry. And 3D Printer
Experience, Chicago’s first commercial 3-D print shop, recently opened on North Clark
Street.
As for everyday use: Architects now routinely print small plastic objects (think fences,
furniture) to complement their scale model buildings (as do set designers for film and
theater). At the Art Institute of Chicago, Liz Neely, director of digital information and
access (and proud owner of a personal 3-D printer), said the museum’s curators have
started to think about using its 3-D printers to plan the layout of their exhibitions.
“The 3-D printer means nothing less than the ability to think of something, then create that thing,” she said.
Heady days!
“I’m going to print an octopus,” said librarian John Christensen. This wasat the Harold Washington Library Center. Christensen was demonstrating for me one of the 3-D
printers the library recently acquired for its Maker Lab, a kind of pop-up tech space
on the third floor. Here, for six months, the Chicago Public Library system will test the
public viability of the 3-D printer, allowing patrons full access to its trio of 3-D printers.
Within limits: “We don’t want people printing weapons or anything offensive, of course,”
said Mark Andersen, who runs the system’s business, science and technology division.
(Use of a MakerBot Replicator 2 is free, but librarians must approve whatever you design.)
Christensen leaned over the square, bulky, unsexy MakerBot. He squirted hair
spray on the flat surface where the machine builds its objects.
“Hair spray or double-sided tape, both work with MakerBot Replicator 2,” he explained. A few pumps should be enough to hold in place whatever is being built.
Which, in this case, was a purple octopus trinket. He pressed the red light at the
front of the MakerBot.
We stepped back.
We watched the MakerBot Replicator 2, which resembles a microwave without walls.
At its center is a mechanical arm with a kind of liquid-plastic jet cartridge, which sprung
into action, softly bleeping like R2-D2.
“There is a musicality to it,” he said.
A thin outline of an octopus — the blueprint for which was already loaded into
the MakerBot, therefore convenient — appeared, then slowly, over 45 minutes, its body
gathered, assembling itself in purple layers.
“To me this is akin to the way we viewed personal computers,” he said. “If you remember, at first it was a hobbyist thing, which (3-D printing) definitely is right now. Then
eventually there was desktop publishing, which is now so familiar no one even calls it
that anymore. But it has to start somewhere.”
As the printer continued unspooling layer after layer of liquid plastic, Christensen
stepped over to a second MakerBot and fiddled with the rendering surface. “Anyway, I
was thinking maybe I would make a Ganesh with this printer.”
The small, renovated space, which held a longtime exhibition on the history of a
Chicago and is now the CPL Innovation Lab (of which the Maker Lab is its first innovation), buzzed with activity. On one side of the room, Christensen demonstrated the printer, which costs about $2,000; on the other side, there was the first of a series of weekly
workshops that teach the basics of 3-D printing. Rebecca Wurtz, a doctor who specializes in infectious diseases at Northwestern University’s Feinberg School of Medicine, was
taking the workshop. She wandered over and squinted at the octopus shape.
She told me that she wants to learn how to use “these printers so that someday I
can design the technology that allows people to print out customized prosthetic limbs.
It’s a ways off, but definitely going to happen.”
Eventually.
“This is really intended as a demonstration lab,” Brian Bannon, Chicago Public Library commissioner, told me later, adding that libraries elsewhere have “big fabrication
labs with 3-D printers, but that’s not the direction we’re taking. We want to explore the
possibilities, familiarize people with the equipment first.”
Making a not-so-basic bourbon
At Beam lab, researchers search for next hot flavor
By Emily Bryson York
Feb. 10, 2013
Beam Inc. creates new products at its Global Innovation Center in Clermont, Ky.
Maria Yost is making margaritas. If everything works out, ladies could be sipping them
at book club get-togethers 18 months from now.
Surrounded by test tubes and liquor bottles at Beam Inc.’s Clermont, Ky., lab, the
research scientist is working on a prototype flavor for the Skinnygirl brand of alcoholic
beverages aimed at calorie-conscious women.
“Right now I’ve found a flavor I like — this one happens to be a citrus product — and
I’m dosing at different levels,” Yost said while holding a pipette over 10 test tubes filled
with a basic margarita solution. “I’m trying to get some sweetness to come through and
some tartness to come through.”
She also needs to keep the drink below 100 calories per 4-ounce serving, the guidelines for a Skinnygirl margarita.
“Some of them are going to be terrible,” she said with a shrug.
It’s painstaking but important work at Beam, the nation’s No. 2 spirits company
based on volume. The maker of Jim Beam, Sauza tequila and Pinnacle vodka has promised that 25 percent of sales will come from new products like the one Yost is working on.
It’s an ambitious goal, but key to maintaining investor confidence in the new stand-alone
company.
Once a conglomerate known as Fortune Brands, Deerfield-based Beam spun off its
home and security business in October 2011 to focus on spirits, which as a category is
growing faster than wine and taking share from beer.
In 16 months since the split, Beam has acquired Pinnacle vodka and Cooley Distillery,
an Irish whiskey company. It’s also ginned up advertising by 11 percent, to $399 million
during 2012, including a 20 percent increase during the holiday-heavy fourth quarter.
At the same time, it’s expanding existing brands like Skinnygirl, once a low-calorie
bottled margarita, to flavored vodkas, wine, and other drinks like sangria or white cranberry cosmopolitan.
Still, with 2012 sales of $2.5 billion, Beam is dwarfed by industry-leading Diageo, the
London-based maker of Smirnoff, Tanqueray, Captain Morgan and Johnnie Walker and
its $14.4 billion in sales.
So far, analysts describe Beam’s post-spin results as encouraging. From an initial split
price of $44.75, Beam shares have risen nearly 40 percent, slightly ahead of the S&P
500, closing Friday at $61.52. Company performance also beat Morningstar’s Consumer
Defensive Index, which includes food, beverage, household and personal care products.
Ken Perkins, an analyst with Morningstar, said the more recent flavor experimentation with bourbon and tequila is bolstering consumption among existing drinkers and
bringing new consumers into the category. Flavored spirits accounted for 46 percent of
the industry’s volume growth in 2012, according to the Distilled Spirits Council of the
United States.
“I think their innovation strategy is right on,” Perkins said. “They know they need to
do it to be successful.”
Beam CEO Matt Shattock told investors last month they should expect to see continued sales growth in brands like Jim Beam as the brand adds flavors.
“We’ve talked before about the fact that we brought, for example, more females into
the bourbon category,” he said. In vodka, he said, “flavor is driving all of the growth.”
Beam is hopping on the flavored-vodka bandwagon with the newly acquired Pinnacle
vodka brand.
The challenge, he said, “is to continue to be on the front end of those trends, to bring
interesting, relevant and, frankly, very good-tasting products to consumers.”
Julian Cohen, vice president of global insights and innovation at Beam, said the company evaluates a variety of factors to start the product development process, drawing on
food and fashion trends as well consumer lifestyle research.
“We look at consumers’ needs and what they do to fulfill those needs and then the occasions, where, when, who they drink with, and what brands can play in that and what
drink types play in that,” he said.
An increase in moonshine sales, for example, spurred Beam to create Jacob’s Ghost,
which launched in March 2013. The “white whiskey” is aged one year to soften the flavor
but has a cleaner taste than the regular bourbon, which is aged four years.
A black cherry trend turned up in 2009 as Red Stag by Jim Beam. The product has
posted sales gains in excess of 30 percent each year, according to Euromonitor. Last
year, Beam launched two more Red Stag flavors, honey tea and spiced.
Cohen’s team isn’t shy about following leads, visiting die-hard Beam fans as well as
those Beam is interested in attracting at home and in bars to find out what they’re drinking and where.
“We see what they have in their liquor cabinet versus what they’re drinking when they
go out, and we see the difference depending on what they use their home for,” Cohen
said. Consumers who entertain more stock better liquor, he said.
When the company has settled on an idea, it’s passed on to research scientists who
develop flavors to specifications.
Enter Beam’s Global Innovation Center, where researchers may experiment with 100
versions of a single product in the hope that one or two might make it to store shelves.
At the new building, which opened in October 2012, Beam can conduct on-site testing of its bottles and packaging, simulate store and bar displays, and make carbonated
beverage prototypes. The building also allows closer collaboration between disciplines
like production, global operations, quality and engineering.
The center is part of a $30 million investment in its Clermont campus, which opened
in 1933, at the end of Prohibition. To help tell its story, Beam added a replica of the
Beam still house from the 1930s, which serves as a jumping-off point for tours of the
mashing, distilling, bottling and aging done on site.
Yost said her citrus margarita will go through a few tastings with the marketing department before one is chosen for early consumer testing, perhaps in a few weeks.
MaryKay Bolles, vice president of global research and development, said that while
Yost is working on her prototype, Beam’s marketing team is working on how the product
will be positioned in the market and what it will look like, from the bottle design to the
label and the cap.
Early on, the company also conducts “stability testing,” to ensure that the liquor’s
flavor will hold up under stresses like heat, light and time. Beam products are expected
to retain their flavor for at least one year.
Once the bottles and case packages have been designed, Beam will ensure they’re durable — using machines to simulate any dropping or shaking that might happen during
transit.
Beam’s first consumer test may be based on a few dozen samples and be done with
bartenders or a specific consumer group. Early tests are qualitative, trying to assess
what the target consumer would like.
“If I recruit you for a consumer test, I’ll ask if you even like the smell: ‘Is it too intense,
is this too sweet for you?’” Yost said.
After that, chemists work up a formula that can be mass-produced, from a few hundred samples to thousands of cases, and, equally important, profitable.
The second consumer test, consisting of a few hundred samples, may comprise one
or two final versions of the product and seek to make small refinements, such as look of
the bottle.
Researchers are “constantly playing,” Bolles said, acknowledging that what winds up
on shelves is a tiny piece of the original consideration set.
The goal, she said, is “being nimble and being able to capitalize on ideas when you see
them,” because “being first to market is important.”
Rand McNally navigates digital turnaround
Famed mapmaker pins comeback on specialized GPS devices for truckers, recreation
enthusiasts
By Wailin Wong
May 3, 2013
Rand McNally is finding its way out of the wilderness.
The Skokie-based mapmaker, known for its road atlases that could be found in gas
stations and cars across the country, was once the biggest name in navigation. But the
company stumbled badly in the transition from paper to digital content and, despite
working on everything from online maps to iPhone applications, allowed the likes of
Google and Garmin to overtake it.
The privately held company filed for bankruptcy a decade ago and in late 2007 was
acquired by Patriarch Partners, a New York-based private equity firm that rehabilitates
distressed companies. Rand McNally was close to liquidating, but Patriarch recognized
that the company still boasted a venerable brand, strong relationships with retailers and
a loyal following in the trucking industry.
Now the 157-year-old company is staking a comeback on specialized navigation devices for niche markets, combining hardware with Web-based content to appeal to truckers, recreational vehicle owners and outdoor enthusiasts. Those new products are designed not to steal share from Garmin and TomTom in mass-market GPS devices, but to
appeal to small, passionate groups of users looking for gadgets tailored to their needs.
“We already had these amazing relationships with customers who bought the maps
that would also buy the hardware,” said Lynn Tilton, chief executive of Patriarch Partners. “Also, because we were not going to be able to compete with a Google or some of the
other app providers that truly were built on cultures of innovation and technology, I had
to … get into a digital technology space (where) I would have the best position to drive a
leading product in the market.”
On May 1, 2013, Rand McNally launched the newest version of its IntelliRoute TND,
a GPS device for truckers that provides customized route information unavailable on a
consumer-oriented product.
It plans to release the Good Sam GPS for RV drivers by Memorial Day, followed by the
June launch of the Foris 850, a gadget for bicyclists and hikers that comes loaded with
more than 5 million miles of trails and roads.
The company introduced its first GPS product for truckers in 2009, channeling years
of expertise in the commercial trucking business into a specialized navigation device.
The first generation of its RV product came in 2011.
With the planned launch of the Foris, Rand McNally is hoping to make a strong foray
into the growing market for outdoor- and fitness-oriented gadgets. Players in this industry include Garmin, which has a line of hand-held GPS devices for hikers, as well as
makers of wireless pedometers that monitor users’ activity levels.
The Foris is priced at $399.99, comparable to the midrange of Garmin’s lineup. Rand
McNally’s device will be sold at bike and specialty outdoor retailers, among other locations.
“We’re looking at the next generation in the retail space, and outdoor made a lot
of sense,” said Dave Muscatel, Rand McNally’s chief executive. “We’ve had success (in
which) we purposely stayed away from general car navigation just because by the time
Lynn acquired the company, you could already see … smartphones were starting to get
solid penetration in that space and replacing the Garmins out there.”
According to ABI Research, global shipments of personal navigation devices hit a peak
of 39 million units in 2009 and have declined since then, falling to about 26 million last
year. Analyst Patrick Connolly said Rand McNally is one of several companies looking to
make GPS devices for niche segments, given that smartphones and in-vehicle navigation
systems are gradually replacing stand-alone GPS devices.
Dedicated products for motorcyclists or truckers can be a “healthy business for someone looking to ship a few hundred thousand units a year,” Connolly said. “It’s quite
cheap and easy to make a navigation device now. … You don’t need to be shipping millions to make a good profit there. For anyone looking to get into this space, that’s where
the opportunities are.”
Patriarch Partners’ Tilton and Muscatel said Rand McNally’s dedicated navigation
products serve the needs of their users better than mass-market GPS devices. On the
hardware side, drivers of trucks and RVs need larger screens with more powerful speakers; the products are also sturdier to withstand cab vibrations. Designing a rugged gadget was important for the Foris outdoor device as well; Muscatel was recently biking in
Germany when he hit a rock, and his Foris fell into a puddle. It survived.
The content is also specialized. The IntelliRoute helps truckers avoid low-hanging
bridges and roads with vehicle-size restrictions, while the Good Sam device allows drivers to enter the dimensions of their RVs.
“A dedicated GPS device like the one we’re doing, powered by Rand, is safer than using your phone because the phone isn’t going to give you routing based on the vehicle
you’re driving,” said Seth Rosenberg, senior vice president of sales, marketing and business development at Lincolnshire-based Good Sam, a worldwide RV club with 1.2 million
members.
The Good Sam GPS will cost $349.99, pricier than basic car navigation devices but
on par with other truck- and RV-focused products. Rand McNally and Good Sam also
partnered on a Web-based trip planner in which RV owners can create an itinerary of
campgrounds and points of interest along a route and download it to their device.
While Rand McNally does not disclose revenue, the company said it has nearly a 50
percent market share in truck GPS devices and 60 percent in the RV category, making it
the No. 1 player in both segments.
The company sees potential for its GPS devices to become smarter and offer more features beyond navigation. In July, Rand McNally is launching a product for trucks that
captures data on the vehicle’s location, speed, fuel consumption, hours of service and
engine diagnostics. The device sends this information to a truck company’s headquarters, allowing for real-time fleet management.
On the consumer side, Rand McNally wants to expand its line of outdoor and sports
products. Muscatel said a future version of the Foris will have built-in heart rate sensors, and the company might even want to make a golf club sensor to record data on a
user’s swing.
“In the case of outdoor, it’s a huge market already, and it makes sense for us to jump
into it,” he said. “It fits the profiles where we’ve had success and where our brand resonates.”
As for Rand McNally’s old-fashioned paper maps and atlases, Muscatel said sales of
state and national products have remained stable because drivers still like to have them
in their cars as fail-safe measures. Local maps have fared less well, and the company
either updates those products less frequently or discontinues them, depending on sales.
Tilton said ensuring success in digital navigation will actually help preserve Rand
McNally’s print legacy in the Internet age.
“It’s not that maps aren’t still sold or atlases aren’t still sold, but no one really wants
your maps if you’re not going to be the future,” she said. “The truth is our map business
increased and our margins got better once we advanced into the digital world because
Rand McNally (showed it) was going to be the name into maps way into the future. … To
hold onto an older business that will persist, you still need to be in the innovation technology side of your business, advancing into the future, or you render yourself irrelevant
— even if you’re a well-known name.”
Nokia anchors location data strategy in Chicago
Company hopes massive database, apps built on platform, will help it gain ground in
smartphone market
By Wailin Wong
April 4, 2013
Nokia CEO Stephen Elop
Stephen Elop uses an application on his Nokia Lumia 920 smartphone called “Track My
Life” that records the device’s location every 30 minutes or so and presents the information on a world map, with variously sized colored bubbles representing time spent in
those cities.
Elop’s map shows an outsize pink halo around Helsinki, where he lives and works as
chief executive of Nokia. Europe and North America are densely covered with overlapping
bubbles, a testament to the amount of travel he logs. Elop also sees the app as a basic
example of the utility generated by tapping into location data — a major part of Nokia’s
strategy that is anchored in Chicago.
“The operations we have in Chicago are very much at the foundation of what we’re
doing with location-based services,” Elop said in an interview at Nokia’s office in the Citigroup Center above the Ogilvie Transportation Center.
Nokia’s location technology comes partly as a result of its 2008 acquisition of Chicago
digital mapmaker Navteq, and the company licenses its data to makers of hardware and
autos, such as Amazon, Toyota and Garmin. Elop said 4 of every 5 cars with an in-dash
navigation system rely on content from Nokia.
The company believes its massive database of location information, as well as the
apps that can be built on that platform, will help it regain lost ground in the ultracompetitive race between smartphone-makers. While it is still the No. 2 mobile phone company worldwide, it has fallen far behind Apple and Samsung in the smartphone segment.
The troubles at Nokia prompted the company to announce in 2012 that it was cutting
10,000 jobs by the end of 2013. A spokesman said Chicago reductions were “limited”
and noted that the net local head count has increased with new hires, as well as with the
transfer of employees from other U.S. and international offices.
About 200 of Nokia’s 1,200 Chicago employees work in the company’s new Traffic
Center, which opened in November 2012 and crunches real-time traffic data for North
America. When local traffic reporters say their information is brought to listeners via
“Navteq Traffic,” they’re referring to Nokia’s operations. That attribution will eventually
change from “Navteq” to “HERE” to reflect the new brand the company introduced in November for its map products.
Nokia’s digital cartography is based on data collected from more than 80,000 sources, including local transportation agencies worldwide and the company’s fleet of cars
equipped with cameras and sensors. In 2012, Nokia acquired a Berkeley, Calif.-based
company called earthmine, which specializes in collecting 3-D street-level images. It is
planning to send out more than 100 cars upgraded with earthmine technology in the
coming months.
Another crucial source of data is the personal mobile devices that accompany consumers everywhere, essentially turning those people into roving traffic reporters.
“When a device is sensing the world, it’s also sensing you. … It’s more intelligent
about how you live your life,” Elop said.
Nokia amasses about 17 billion points of location-related data every month. The information flow improves with the number of devices in circulation that send information to
the company about users’ whereabouts and habits. That creates a challenge for Nokia,
whose 2012 smartphone sales were down more than 50 percent from 2011, according to
research firm Gartner Inc.
And Microsoft’s smartphone operating system, which Nokia uses, accounted for just
3 percent of worldwide smartphone sales in the fourth quarter of 2012, compared with
69.7 percent for Google’s Android platform and 20.9 percent for Apple’s iOS.
Still, Elop said he believes the applications Nokia and outside developers can build
off the company’s map platform will win over consumers, especially as location data is
integrated with social data in novel and useful ways.
“In order for Nokia to sell phones, we need experiences that are differentiated,” he
said.
Making sense of the vast amount of location-based data flowing into Nokia is the task
of its Chicago workforce, and the company is expanding its presence here. It added 351
people in Chicago in 2012 and has brought on an additional 61 employees this year,
bringing its city head count to about 1,200.
In October 2012, Nokia announced alongside Mayor Rahm Emanuel that it will be
relocating an Itasca-based mobile phones team to its downtown Chicago offices. When
that transition is complete, the company will have about 1,400 people working in the
city, and it is recruiting for about 50 open positions, mostly looking for engineers with
skills in cloud computing, 3-D technology and robotics.
Elop said Emanuel had reached out to him as part of the mayor’s broader efforts to
recruit businesses to the city and raise Chicago’s profile as a technology hub. Emanuel
sent the executive a message via a BlackBerry — a “problem we aim to correct,” Elop
said, jokingly.
‘Nerds’ play the hands they were dealt
8 friends from Highland Park have found success with Cards Against Humanity
By Melissa Harris
Aug. 18, 2013
Josh Dillon’s sister nicknamed them “the nerd herd.”
That was back when Dillon and seven friends from Highland Park High School would
lug their computers and monitors to their parents’ basements, wire them together and
play games until the wee hours.
Now in their mid-20s, the group has created the top-selling toy or game on Amazon.
Called Cards Against Humanity — “a party game for horrible people” — the edgy card
game and its three expansion packs occupied Nos. 1, 3, 4 and 6 on Amazon’s best-seller
list as of Aug. 16, 2013.
“This game has corrupted my children,” one mom told two of the co-creators at the
company’s booth at Gen Con, a large gaming convention here. Then she bought all three
expansion packs.
“We hoped it was a good idea, and we thought it was funny,” said Max Temkin, a cocreator who has become something of the public face of Cards Against Humanity. “But
it’s our weird nerd humor that we were, like, made fun of for our whole lives. So how are
we supposed to know?”
Here’s how it works. One player, the judge, picks up a black card: “In the new Disney Channel Original Movie, Hannah Montana struggles with _______ for the first time.”
Players then submit the funniest card in their hand that completes the sentence. Some
combinations end up absurd, others are obscene.
My answer: “Horrifying laser hair removal accidents.” Or option B: “Poor people.” (Offensive, we know, but that’s by design.)
The judge selects a favorite response, and the player who supplied it wins the round.
The contest repeats itself with a new judge and a new black card until “someone flips the
table over in frustration,” the creators say.
“My daughter brought this game home from college, and it is the most tasteless and
disturbing game I’ve ever seen,” a fan from Houston wrote on the company’s Facebook
page. “We played for hours and laughed until we peed ourselves. … Make more cards!”
That’s what they’re doing. A UK edition and carrying case are set to launch this year
[2013]. Temkin will reveal little about other upcoming projects and declined to disclose
revenue figures other than to say the co-creators have sold hundreds of thousands of
decks. They also are working on a new comedy game for release in 2014.
Meanwhile, at Gen Con, the Cards team is holding a contest to find an undiscovered
board game to support. They received more than 500 entries in their “Tabletop Deathmatch” competition. The group will promote and fund the first printing of the winning
game in return for bragging rights and more industry experience.
Cards Against Humanity “certainly isn’t the type of thing we ever expected from this
particular group of boys,” said Karen Dillon, Josh’s mom. “I don’t know if Josh told you
what he’s doing for a living.”
Yes. He’s working on his Ph.D. in astrophysics at MIT.
“Well that didn’t surprise us,” Karen said. “He’s been on that path since he was 4. This
was totally …”
She was at a loss for words.
In addition to Dillon and Temkin, the other co-creators are Eli Halpern, David Munk
and Eliot Weinstein of Chicago; Daniel Dranove, who recently moved from Hawaii to
Sweden; and Ben Hantoot and David Pinsof of Los Angeles. Those who do more work on
the game get higher salaries, but profit — revenue minus expenses — is split evenly. No
one lives with their parents anymore, and some have quit their jobs or stopped looking
for them.
Temkin said he was the only one of the eight who didn’t overachieve in high school.
(Dillon, Weinstein and Hantoot finished one, two and three in their class.)
Yet it was Temkin who had the crucial business experience. He had already helped
turn a game into a worldwide phenomenon.
During his freshman year at Baltimore’s Goucher College, Temkin befriended Chris
Weed and Brad Sappington, creators of Humans vs. Zombies, or HvZ, an elaborate version of tag played with Nerf guns and sock grenades. Temkin participated in the very first
HvZ match and built the game’s website.
“Very early on, he made a 40-minute documentary about one of the games we were
running,” Weed said during an interview at Gen Con. “And then that went online, and
then that actually spread the game incredibly.”
The HvZ creators give away the rights to organize the game for free under a creative
commons license, meaning anyone can play the game for free but not profit from it.
It’s the same business model the Cards team is using; fans are allowed to download a
home version for free.
By the end of spring break 2009, Temkin and Hantoot, the most experienced Web designers of the eight, had posted PDFs of the Cards Against Humanity deck online for free
download. (It’s still available there for free.) The most important thing they did was post
a field where fans could enter their email addresses if they wanted updates on the game.
More than 1,600 people did so.
Temkin had organized a Kickstarter fundraising campaign for Humans vs. Zombies,
so he took the lead on the Cards Against Humanity campaign, which launched in December 2010. Early on, Temkin shot an email to their database of fans announcing the
Kickstarter. It began: “Dear horrible friends.”
The campaign closed in January 2011 with $15,570, exceeding the goal by more than
300 percent.
But word of the game’s rapidly growing popularity hadn’t spread to the printing industry. The Chicago printer who produced the prototype and with whom Temkin had
worked on the 2008 Obama presidential campaign declined the job.
Hantoot, who oversees production, initially wanted to order 800 sets of 550 unique
cards. The printers who were willing to work with that much customization at that volume wanted to charge more than $20 a set.
So they turned to a New Jersey company, Ad Magic, which found them a printer in
China.
Temkin said the guys inserted an answer card in one of the decks to express their
guilt over the manufacturing decision. It reads: “The tiny, calloused hands of the Chinese
children that made this card.”
Moving forward after the Kickstarter campaign, the co-creators wanted to retain control and be able to refresh the deck regularly. So they decided to sell directly to consumers for $25 on Amazon. The decision was savvy. Selling direct is potentially more profitable than sharing revenue with retailers, and it avoids the potential headache of putting
a taste-challenged game on toy store shelves.
“Pinsof was the one who really had been pushing us to make the game in the first
place, just to play it for fun,” Hantoot said. “It was Max’s idea to do Kickstarter. It was
sort of my idea to say, ‘Hey, we’re making more money, let me take this over and manufacture it properly overseas.’ And it was Josh’s idea to take the overflow from Kickstarter
and sell it on Amazon. But that’s not the way we think about the business. People don’t
come up with these ideas in a vacuum.”
Cards Against Humanity hit No. 1 in its category the day it launched on Amazon in
2010, Hantoot said.
And then they ran out.
A black market formed on eBay and Craigslist. Periodic shortages didn’t cease until
March, when the Cards team added a second production facility in Texas.
“The thing that our parents would have worried about — we were lucky — we didn’t
have to really ever risk that much,” Dillon said. “We never took out any loans. Individual
members put in a little bit of their own money at the very beginning. ... The only thing
we could have ever possibly wasted was time.”
Every Monday night, the co-creators organize a video conference call on Google Plus
Hangouts. It starts at 10 p.m. and goes past midnight.
On Monday’s call, Halpern munched on chips. Hantoot held his dog on his lap. Temkin stroked his cat in his Logan Square living room.
They debated topics like “whether there’s anything funny about eviction” as they
weighed a black card along the lines of “I knew I was in trouble when I had my _______
repossessed by Bank of America.”
The card selection process may begin with instinct, but it ends with science.
Hantoot created an online “lab” where anyone can play a simulated version of the
game. The lab tracks which cards are used most often and in what combinations. And
Dillon wrote a computer program to analyze the results.
“We write every one of our cards stone-cold sober,” Pinsof said. “So we can have analytical debates about semantics, verb tenses and punctuation marks, etc., because when
we’re writing a boob joke every little detail counts.”
The eight friends’ next step is to “dip their toes” into game publishing. They’re not taking an ownership stake in or a cut of the profits from the games they invest in — for now.
Essentially, they’re making a non-tax-deductible donation to a competitor.
“I didn’t say I was smart,” Temkin said when pressed to explain why.
Of course Temkin is smart, but the bigger story is that he and the others have become
... cool.
Even the pope of nerddom — Wil Wheaton of “Star Trek: The Next Generation” —
stopped by the Cards booth to buy the most recent expansion pack. Although it was the
first day of a four-day convention, they had sold out of that item. Wheaton accepted two
Temkin-designed Werewolf card packs instead.
“Oh, dude, thank you!” Wheaton gushed to Temkin as he opened one.
“The whole culture is having a ‘Revenge of the Nerds’ moment,” Temkin said. “Being
able to go to (these conventions), which are these celebrations of gaming culture and of
weirdness and weird people and feeling like I fit in. It’s an incredibly emotional experience. I wish I had had that as a kid.”
Giving would-be entrepreneurs a head start
Bethel New Life program aiding startups on Chicago’s West Side with education and access to loans
By Becky Yerak
Aug. 11, 2013
In a West Side neighborhood where nearly one-third of residents live in poverty, Marshawn Feltus, 38, lights five candles, steps onto a blue mat and begins his poses.
The quiet is interrupted by the first student to arrive at his new yoga class in Chicago’s Austin neighborhood.
“Come on up to the front,” Feltus beckons to her. The regular cost for walk-ins is $12,
but his grand opening Aug. 3, 2013 special was $6.
“We’re in an area that has economic challenges, so we want to price our classes such
that people don’t have to choose between getting a part for their car or buying an item
for their household,” Feltus, a former prison inmate, later explains.
The day marked more than the official start of Feltus’ business. Feltus was among
a group of 27 West Side entrepreneurs who recently graduated from a Bethel New Life
training program for startups in which they learned skills such as completing business
plans, developing elevator pitches and determining break-even points. The West Side
community group and the program’s financial backers hope Feltus’ ACT Yoga is a tiny
step in fostering new businesses in rough and tattered neighborhoods.
The ZIP code that includes Bethel’s Lamon campus has nearly 64,300 residents, according to 2010 census data. Nearly 30 percent of residents older than 25 haven’t graduated from high school, and fewer than 10 percent have a bachelor’s degree. In a Woodstock Institute study of 55 Chicago neighborhoods, Austin residents had the third-lowest
credit scores.
About 160 entrepreneurs applied to the program. Of those, about 50 were asked to
make presentations a la “Shark Tank,” a TV-show competition for entrepreneurs. Thirty
were accepted.
If they attended at least 12 of 15 classes and saved $1,500 to fund their startups,
they received additional seed money in the form of a $6,000 grant from Thrivent Financial for Lutherans. They’ve also been paired with mentors for a year and are eligible to
receive loans of up to $10,000 from Chicago-based PrivateBank. Five additional banks
also participated in the program, and the startups were required to open and maintain
a free business account with U.S. Bank.
The classes met from 6 to 9 p.m. Tuesdays at Bethel’s Lamon Street offices, south of
Division Street and west of Cicero Avenue.
Twenty-seven of the 30 graduated.
Here’s an update on two of the businesses:
ACT Yoga
Feltus began doing yoga in prison, where he spent nearly 19 years for murder.
“It was a senseless rivalry,” he said of the killing. Now, “my life has to yield more than
the average guy’s.”
Upon his release, he volunteered at Bethel New Life and later got a job there, eventually as convenience store manager.
Feltus, who lives nearby with family, said he found it easy to save $1,500 because he
had been setting aside money from paychecks.
“I was giddy because I knew I could do it,” he said.
The day before graduating from the entrepreneurship program, he lost his Bethel job
in a restructuring, so the stakes are higher for ACT Yoga, which offers four classes a
week.
Besides little nearby competition, Feltus says his business’ strengths include ample
free parking and the chapel space in Bethel’s Lamon facility, where he conducts classes.
“It’s nice, open and airy,” one customer said of the Prairie-style architecture in St.
Anne’s Chapel. A total of a dozen people attended his first two classes.
Feltus had received 110 hours of yoga instructor training this year at Chicago Yoga
Center. He’ll take another course before year’s end, putting him over the 200-hour mark
and making him a registered yoga teacher under guidelines of Yoga Alliance, a national
registry that sets training guidelines.
He also plans to expand his social media presence.
“My aunt pushed me very aggressively on Facebook after I got out,” Feltus said.
Feltus, who believes that his biggest challenge is getting exposure, plans to set up a
website and do what he calls “vide-views” in which he’ll interview people about yoga and
post sound bites online.
He is setting up as a limited liability company because an owner’s personal assets are
less exposed should the business run into problems such as injury claims.
“There’s a propensity for people to be injured if they don’t follow instructions correctly, or to claim an erroneous injury,” Feltus said.
Insurance, which he got from LaDarris Hunt of Insurance Exchange, was required to
lease office and chapel space at Bethel.
Feltus also plans to approach companies, offering yoga sessions of 12 to 25 minutes,
with discounts based on the number of employees signing up.
After he was featured in the publication Yoga Chicago, Feltus received a donation of
yoga mats from a reader. He said his mentors include Yoga Chicago editor Sharon Steffensen.
Elevator pitch: “I sell shares of the fountain of youth. I’m a yoga instructor.”
Goal: To franchise ACT Yoga.
Lacy’s Life Line
Diana Lacy’s startup on the West Side offers classes in cardiopulmonary resuscitation.
A 22-year employee of Rush University Medical Center, where her duties include coordinating blood donations and keeping staffers current in CPR, Lacy, 59, has a personal
interest in the lifesaving technique: She said her father died of a heart attack in front of
her about 30 years ago when she didn’t know how to give CPR.
“I never want anyone to have to feel that helplessness,” she said from her rented
second-story office, not far from her home, near West Harrison Street and Central Park
Avenue. Her duties at Rush have also included teaching CPR to parents in the specialcare nursery.
The mother of three has been teaching on the side for seven years. Last month, she
got the incorporation papers for Lacy’s Life Line Corp.
Prices for classes range from $30 to $80 a person. They last two to eight hours. She is
promoting her business through cold calling, word of mouth, fliers, church newsletters
and community newspapers.
She said her strengths include being professional, precise and punctual, and her
weaknesses the fact that she hasn’t been in business for long and has only been doing
it part time. She said one potential threat is getting sick when she has a class scheduled
and not being able to honor her contract.
With the grant, she has been able to buy such equipment as a computer and eight
adult and four baby CPR dummies, as well as three defibrillators.
“Those are things that I had to rent before, but with the grant, I was able to buy them,”
she said. “Once I buy my equipment, I don’t have a weekly expense like other businesses
where they have to constantly replenish their supplies.”
Lacy, who estimates her startup costs at about $7,600, is taking a Bethel New Life
class on patents and trademarks. She is also setting up a website for her business.
Her mentor through the program is Teresa Handley, who works on Community Reinvestment Act programs for Wintrust Financial Corp.
“She has been exceptional,” Lacy said of Handley. “Whatever advice I need, I can
always call her.”
Elevator pitch: “You may one day be faced with an emergency when a family member or friend has a heart attack. Would you be prepared for your lifesaving moment? And
if you have a heart attack, will your family or friends be prepared for their lifesaving moment?”
Goal: To grow the business in a year or two, and to hire and train people who are
capable in CPR, giving me the time to secure new contracts and send out trained instructors, with the ultimate goal of having a mobile unit.
Bethel New Life program changes
The West Side community group will hold a second entrepreneurship program this fall
[2013], but there will be some changes.
One notable change is that there won’t be $6,000 grants this time; members of the
first class, including Marshawn Feltus and Diana Lacy, each received one when they
saved $1,500 on their own and completed the program.
“And while we are again planning to have students in the startup stage, we also plan
to recruit existing businesses up to 5 years old,” said Curtis Roeschley, who oversees
Bethel New Life’s Small Business Development Center.
Registration for the next program is primarily for residents and businesses from 10
West Side ZIP codes, but “consideration will also be given to other candidates from other
low- to moderate-income areas that have strong potential to create jobs,” Roeschley said.
“While the $6,000 grant was helpful to a number of entrepreneurship training program participants, for some participants it became a focal point, whereas the main focus of the program is intended to be planning, starting and managing a successful and
sustainable business,” said Edward Coleman, Bethel’s vice president of community economic development. It was Bethel’s decision to end the grant, he said.
Participants will continue to be eligible for loans from Chicago-based PrivateBank.
PrivateBank has made four loans to people who were in the first class, and it is completing three more for others in the inaugural class, PrivateBank spokeswoman Amy
Yuhn said. The startups getting loans are involved in general contracting, cleaning, property management, medical transportation, online clothing sales and accessory sales.
Loan sizes range from $2,000 to the $10,000 cap.
“We were very pleased with the inaugural program, so we are excited to continue participating,” Yuhn said. “We will continue to provide loan funding for qualified startups up
to $10,000, and new this year, for businesses that have been in existence for one to five
years, we will provide loans of up to $25,000 for those that qualify.”
In growing field of big data, jobs go unfilled
Demand outpaces the supply of workers needed to glean useful information from businesses’ large data intake from customers, sensors, social media and the market
By Becky Yerak
Aug. 25, 2013
Professionals in big data are big deals in today’s largely sluggish U.S. job market.
The demand for talent capable of gleaning useful information from businesses’ increasingly large and diverse data sets — generated by sensors, electronic payments, online sales, social media and more — is outpacing the supply of workers.
Take Enova International, which analyzes more than two dozen data sources to determine, in less than 10 minutes, whether an applicant will qualify for one of its three-year,
$10,000 loans.
Over the past three years the growing Chicago online lender has doubled the size of its
analytic team to 25 people, and in 2014, it would like to increase it by 50 percent, said
Adam McElhinney, Enova’s head of business analytics. “There’s a shortage of talent that
we’re looking to address,” McElhinney said.
By 2018, the United States might face a shortfall of about 35 percent in the number of
people with advanced training in statistics and other disciplines who can help companies
realize the potential of digital information generated from their own operations as well as
from suppliers and customers, according to McKinsey & Co.
That deficit represents more than 140,000 workers, the consulting firm estimates.
Workers in big data are hard to come by in the short term. A recent survey by CareerBuilder, an affiliate of Tribune Co., which also owns the Chicago Tribune, found that
“jobs tied to managing and interpreting big data” were among the “hot areas for hiring”
in the second half of 2013.
“There aren’t enough of them. Period. End of story,” said Linda Burtch, founder of
Burtch Works, an Evanston-based executive recruitment firm. “The demand for quantitative professionals has grown so across industries that there aren’t enough kids coming
out of school studying math and statistics.”
As a result, about half of Enova’s data analysts have visas or green cards.
Historically, Enova typically hired people with degrees in statistics, computer science and industrial engineering, but it has broadened its potential talent pool to include
people with backgrounds in astrophysics and computational chemistry.
Enova, a unit of Texas-based Cash America International Inc., visits with Northwestern University and the University of Chicago several times a year, recommending that
they adjust their curriculum to help turn out graduates with the skills for big data.
“Over the past five years, there has been a convergence of data analysis and computer
science,” McElhinney said, noting that big data requires proficiency at both. “Five years
ago, that was not the case.”
On Oct. 11, 2013 at the University of Chicago, Enova, which has more than 1,000
Chicago-area workers, is sponsoring a “data smackdown” in which it will provide students with a data set and business case, and the students have six hours to make rec-
ommendations. Meanwhile, IBM said Aug. 14 that it has now partnered with more than
1,000 colleges and universities, including those at Northwestern and DePaul, to try to
narrow the skills gap on big data.
Thanks partly to advances in software and database systems, companies find it easier
to capture, store, crunch and share the data in ways that help their business serve customers, predict their behavior, innovate, improve productivity and cut costs. The computing power of the average desktop computer, for example, has risen by 75 times from
2000 to 2013, McKinsey said.
Big data pays well. Median base salaries for nonmanagement workers is $90,000, according to a 47-page Burtch Works report published last month that surveyed 2,845 of
the quantitative professionals in the firm’s database.
Burtch said West Coast companies such as Facebook, Google and LinkedIn have a
recruiting advantage, but she said Midwest companies can make a good impression.
A Washington, D.C., data candidate, for example, was partly won over by a Downers
Grove-based packaging supplier when it sent deep dish Chicago pizza to the prospective
worker.
Nearly 9 of 10 big data professionals have at least a master’s in a quantitative discipline such as statistics, applied mathematics, operations research or economics, according to Burtch Works.
At companies, they work in such areas as analytical database marketing, analytics
management and business intelligence. Nearly 40 percent are foreign citizens, Burtch
Works found in its study.
Nine out of 10 quantitative professionals are recruited over LinkedIn at least once a
month, Burtch said.
“Candidates with a strong breadth of knowledge in big data are challenging to find,”
said Rona Borre, chief executive of Instant Technology, a Chicago-based talent management firm.
She said junior-level professionals in big data can start out earning $80,000, with
senior technicians making as much as $140,000.
Bill Franks, chief analytics officer for Teradata Corp., which has about 100 Chicagoarea workers, said his Dayton, Ohio-based company has turned to external recruiters to
help fill jobs in big data “because it’s so difficult to find people.”
Also, traditionally, Teradata’s analytics team considered people with at least 10 years
of experience, but now it is looking more closely at applicants with less experience, said
Franks, also author of “Taming the Big Data Tidal Wave.”
Joe DeCosmo, director of advanced analytics for West Monroe Partners’ technology
solutions practice, said his Chicago-based consulting firm has 55 professionals specializing in data management warehousing and analyzing big data. Of those, 10 have been
added this year, and West Monroe has plans to add at least 10 more by year’s end, he
said.
West Monroe has stepped up its recruiting and networking events, and it encourages
current workers to get involved in the local chapter of the American Statistical Association to meet potential job candidates and to do more speaking at local colleges.
Big data professionals are also becoming more important to insurance companies,
which need help sorting through and learning from data to provide better services and
savings for their policyholders.
For example, Progressive Corp.’s Snapshot device, which is installed in the car and
collects driving data, has pulled in more than 8 billion miles of driving data, and that
number increases by the second.
As such, Progressive has “become much more proactive” about finding big data talent, including having a staff of “sourcing specialists” who home in on finding people with
big data skills, said Adam Kornick, Progressive’s big data and analytics business leader.
“As part of our recruiting efforts, we spend a lot of time highlighting Cleveland as a great
place to live and work.”
Chicago-based Datascope Analytics, which calls itself a “data-driven design firm,”
had three full-time “data scientists” in 2012. It has grown to eight and plans to expand
to 20 to 25 over the next two years.
Dean Malmgren, co-founder of Datascope, said his hiring challenge has less to do
with technical abilities — “almost anyone with minimal programming experience can
teach themselves all the necessary tools, like many of us have” — and much more to do
with a shortage of soft skills and creative potential.
“On the one hand, I disagree with the McKinsey numbers because many people have
the potential to retool their existing skill set,” Malmgren said. “But on the other hand, I
think the McKinsey numbers vastly underestimate the magnitude of the problem, which
is that there are far fewer ‘creative thinkers’ than there are ‘nerds in the back room.’”
Another company is trying to grow its own big data talent.
Northbrook-based Mu Sigma has more than 2,500 “decision scientists” worldwide
who provide big data analytics to Fortune 500 companies in 10 industries.
“There are few ready-made ‘decision sciences’ professionals in the market, and so we
focus on getting the right raw talent and then training them to become decision science
professionals via our Mu Sigma University,” said Deepinder Dhingra, head of products
and strategy.
“Over the past 12 months, we have hired close to 850 decision scientist trainees that
will be going through our Mu Sigma University and Decision Scientist Certification program,” Dhingra said. “We plan to hire more than 1,000 in the following year.”
Dhingra pointed out that the McKinsey report, in addition to citing a shortage of
140,000 to 190,000 qualified data scientists in coming years, also said there will be a
need for 1.5 million executives and support staff who understand data.
Mu Sigma’s entry-level trainee professionals go through “an intense recruitment program” that includes aptitude tests to determine who has a “quantitative bent of mind”;
group discussion, to spot individuals who can present and back their views and listen to
feedback; and a “synthesis” test in which a candidate is shown a video and then asked
to identify the key message. If they make it through those rounds, they undergo several
personal interviews, a process that includes “props and interesting puzzles and case
studies.”
Once a decision scientist trainee is recruited, they go through Mu Sigma University,
where they learn such skills as the basics of consulting, the “art of problem solving” and
the “art of insight generation.” They also take advanced statistics and are taught about
machine learning, natural language processing and visualization, along with behavioral
sciences and such big data technologies as Hadoop, Mahout and Cassandra.
Kristopher Kubicki — chief technology officer of Chicago-based Market Track, which
just acquired the company he co-founded, Dynamite Data — said hiring is a challenge
because advanced math skills are “desirable in basically every single knowledge profession right now.”
“Candidates with big data skill sets have lucrative options, and most companies
looking to hire them have to compete with deep-pocketed financial institutions,” said Kubicki, whose company, which provides pricing and promotional intelligence to the retail
industry, has 60 of its 400 employees at its Chicago-area headquarters.
“Chicago is still overcoming the (flyover country) stigma associated with its technology scene,” but 1871 — an office-sharing space and incubator for technology companies
in Chicago’s Merchandise Mart — “has done a lot to help overcome this, and the mayor
and his team have done an excellent job of showcasing our talents here.”
Glossary for big data
• Big data professionals: Individuals who can apply sophisticated quantitative skills
to data transactions, interactions or other behaviors to draw conclusions and recommend actions. They’re distinguished by the sheer quantity of data on which
they operate, due to new ways to measure behavior and technological advances in
the storage and retrieval of data.
• Internet of Things: The ubiquitous network of sensors, cameras and transmitters
embedded in devices around the world.
• Units of measure: Gigabytes eventually become terabytes, which then become
petabytes, which then become exabytes. Then it’s on to, respectively, zettabytes
and yottabytes.
• Unstructured data: Not as easily searched as the highly structured and clean
data sets of, say, customer purchase histories or inventory levels. It includes blog
posts, social-media feeds, GPS tracking data, online chat rooms, and most audio
and video content.
Alliances to get push from two sides
Illinois, Innovation Awards organizers to promote cooperation
By Wailin Wong
June 23, 2013
Gov. Pat Quinn’s office and the Chicago Innovation Awards are unveiling separate initiatives to link the area’s startups and large corporations, adding to a recent groundswell
of activity aimed at bridging these two groups.
On June 23, 2013, the governor is expected to announce the Illinois Corporate/StartUp Challenge, a four- to six-month pilot program in which four corporations — Allstate
Corp., Molex, Motorola Mobility and Walgreen Co. — will designate a senior-level employee as chief startup officer to work with emerging companies. The program came out
of Quinn’s Illinois Innovation Council, a group of technology, business and academic
leaders chaired by venture capitalist Brad Keywell and formed in 2011.
On June 24, organizers of the Chicago Innovation Awards are expected to announce
a program called The Innovators Connection, which will match startups with 10 participating companies: Coyote Logistics, Dell, Edelman, Elkay Manufacturing Co., Hillshire
Brands, Molex, Medline Industries Inc., UPS, Vedder Price and Wintrust Financial. Molex and the Chicago Innovation Awards, which includes events throughout the year in
addition to the annual awards ceremony, are funding the program.
In both cases, organizers are asking the corporations to identify needs or areas in
which they’re looking for a technology boost. The programs will then match the companies with startups that have potential solutions, whether a software product or a
technology-enabled service. These introductions should result in corporations becoming
customers or strategic partners of the startups.
“The goal here is to ensure that all of these Fortune 500 companies know what’s going on in the startup scene and (to give) an entree into the corporate world for these
startups that could provide great value for these corporations,” Andrew Ross, the state’s
chief operating officer, said of the governor’s initiative, which will be run by the Illinois
Science & Technology Coalition. “The bottom line is this is not charity or philanthropy
on the part of these major corporations. This is good for their business and good for their
bottom lines.”
As for The Innovators Connection, Tom Kuczmarski co-founder and co-chair of the
Chicago Innovation Awards, said he hopes to see another 20 to 30 corporations sign up
in the next few months. The program’s website will list the needs that companies seek
so entrepreneurs can gauge if they’re a fit. Startups can apply online to be considered.
By early fall, organizers will “start providing some vetted portfolios of (startups) to
the large companies,” Kuczmarski said. And at the October awards ceremony, organizers will give a Collaborators Award to a large company and a startup that “have created
some type of economic value and done something that is innovative and very different,”
he added.
Keywell said Quinn and the Illinois Innovation Council expect their program to be
widely adopted by Fortune 1000 companies across the state.
The initiative helps create “a culture of acceptance for startups to reach out to companies and companies to reach out to startups,” Keywell said. “In some parts of the country, it’s part of the corporate culture. In others, it’s not. There’s room for improvement.”
Finding ‘real people’ to test civic apps
Daniel O’Neil of the Smart Chicago Collaborative aims to engage city residents in the
process of building civic-minded technology
By Melissa Harris
July 7, 2013
Daniel O’Neil is one of the founders of Everyblock. The now shuttered hyperlocal news
website was among the first to exhume government data sets — reams of building permits, for instance — and publish them online for the curious and skilled to investigate.
O’Neil knows the curious and skilled type. His type. Often white and male. A citydweller who’s great with computers and numbers. Mature enough to care about his
neighbors, his city — yet a tad skeptical of authority. Usually sporting jeans, thickrimmed glasses and a collared button-down shirt featuring some sort of L.L. Bean-ish
checkered pattern.
O’Neil, 46, now runs a nonprofit group, called the Smart Chicago Collaborative, whose
mission is to help this community of hackers and journalists do better work. For instance, it hosts websites that do really clever and helpful things with data from City Hall.
(See WasMyCarTowed.com.)
The collaborative’s newest initiative is the civic user testing group. The group has recruited 400 “real people” — O’Neil’s words — to test new civic apps. Every person who
joins the group gets a $5 gift card. And test participants receive a $20 gift card and bus
fare.
“The big picture is to get residents engaged in the civic technology process — because
currently they’re not,” O’Neil said immediately after a recent test of Tom Kompare’s almost-finished app, go2school.org, at a public library in Uptown. “There’s a sort of practical goal — for this to happen right there. That’s an actual developer who usually goes
to Open Gov Hack Night on Tuesday nights at the Merchandise Mart and interacts with
25 white, male specimens and tries to make decisions about what the next app is that
they’re going to try to get somebody to write about.
“It’s a process I find maddening because I’ve been at this for a while. And I’ve done
that before. I’ve been the app-of the-day guy. It feels great. And then that’s it. … It’s not
of any use.”
Kompare, 43, of Rogers Park, has a full-time job at the University of Chicago. He
builds civic apps for fun in his free time. (See Kompare’s potholes.311services.org for a
map pothole complaints near you that haven’t been addressed.) For his most recent project — an app that helps people find the quickest, safest way to get their kids to school —
Kompare needed specific testers: Parents who take their kids to and from Chicago public
schools and have two hours to spare on a weeknight to give the app serious thought.
Kompare asked the three women who showed up for a recent test to describe their
typical morning.
“I look at the stove clock. If it says 7:43, I know I’m on target,” said Melissa Sanchez,
43, laughing.
“I like your very specific time, that’s good,” Kompare said.
“And then we get in the car. So as I pull out of the alley, I’ll look. If the Kennedy Expressway is moving, then I’ll jump on the expressway.”
“Oh, you can see it?” Kompare asked.
“Yes. If I know it’s not (moving), then I’ll head toward Diversey (Avenue). If Diversey
is packed, then I go toward Logan Boulevard to cut out Diversey. If I take Diversey and
I make it to Diversey and Ashland (Avenue) at 8 o’clock — 8:07 is tardy — so if I’m at
the red light at 8 o’clock then I know I can make it in four minutes, blind. Then it all depends. I’ll open the door and, if they have one minute, I’m like, ‘RRRUUUNNNN!’”
It doesn’t get more real than that. After sharing their stories, each participant tested
the app in a one-on-one conversation with Kompare, O’Neil or a member of the Smart
Chicago Collaborative’s staff.
Sanchez suggested that Kompare change the wording on a few buttons for clarity. She
said she liked Kompare’s clean design and that he had pre-programmed the addresses
of all of Chicago’s public schools. But she wanted the app to do more — to supply her
with a reverse route home; to store her home address; and to speak the route to her like
a GPS device.
“You’ll use this because you’re in a rush and in a crunch,” said Sanchez, who lives in
Logan Square and works for the schools’ head start program. “I’m not going to memorize the route because I’m already stressed and panicked. I’m going to need somebody to
coach me, guide me.”
On their way out of the library at 8 p.m., O’Neil asked Kompare what he thought of the
test. “A home run,” Kompare replied. “The woman I was working with. Faaantastic. She
gave me at least three (improvements) that are doable.” Kompare said the app suggested
the woman’s son take the Cermak bus to school, but she told Kompare that wasn’t an
option because that route crossed through unsafe gang territory.
“A better build-out of this is having the option to pick the bus stop where you want to
start,” Kompare said. “That way you can choose a bus stop you can logically use. That
was something I picked up today.”
O’Neil was relieved. Only six people had signed up to attend, and he had a reporter
coming. Worried about how the small group would look, he almost opened the test to
all 400 testers rather than limit participation to parents of children in Chicago Public
Schools.
“I have this desire to have like a big raucous, big meeting,” O’Neil said. “That’s my
nature. But we got three incredibly qualified, incredibly articulate people to give this guy
feedback. Now (after two tests), he’s got seven people. We’ve had geographic diversity.
Two men. It was mainly African-Americans, come to think of it. That’s worth it.”
A selection of civic apps that aid Chicagoans
Developers build technology that helps residents understand local government
By Melissa Harris
July 7, 2013
Chicago developers have built dozens of “civic” apps — websites and mobile downloads
aimed at helping people better communicate with and understand local government.
Here is a selection:
• Foodborne Chicago — Many people don’t report food poisoning to the health department, slowing responses to outbreaks of food-borne illnesses. This service
scans Twitter looking for anyone complaining of food poisoning and flags anything
that appears to be legitimate and local. A real person reviews the flagged tweet and,
if it checks out, sends a reply via Twitter asking them to report the poisoning to the
health department via an online form. (Developers: Joe Olson, Cory Nissen, Scott
Robbin, Raed Mansour, Daniel O’Neil)
• Chicago Bike Guide — This $1.99 download stores Chicago’s bike map on your
iPhone, iPod Touch or iPad — so no Wi-Fi or mobile connection is needed to find
bike paths, CTA stations and Divvy bike share locations. (Steven Vance)
• Chicago Potholes — This website displays all of the city’s reported pothole patch
requests and how long they’ve been waiting to be addressed. You can search for all
service requests within a half-mile radius of an address. (Tom Kompare)
• Spothole — Do you see a pothole? If so, click “Spot a Pothole” and easily file a
complaint from your mobile phone. The app then uses an algorithm to rank the
potholes, allowing city crews to address the most critical ones in a given area. (Stefan Draht, Brett Schnacky)
• Can I Bring My Bike on the Metra Right Now? — Simple question. Simple answer. Plus additional information on bike parking around Metra stations. (Steven
Vance, Francesco Villa)
• Clear Streets — A more muscular version of the city’s Plow Tracker. This site reports which streets have been cleared of snow and includes a “plow leader board”
of most active trucks. (Forest Gregg, Derek Eder and Juan-Pablo Velez)
• IFindit Chicago — An Android-only app that helps low-income and homeless people find medical clinics, food pantries, shelters, etc. (Elizabeth Park)
• Mobile Illinois Judges Guide — It’s hard to discern which judges to vote for, so
this simple site lists the judicial candidates recommended by the Chicago Council
on Lawyers. (Dan Sinker)
• Sweeparound.us — Type in your address and find out when your street will be
swept. Register for an email, text message or calendar alert — or all of the above —
to remind yourself to move your car to avoid a ticket or tow. (Scott Robbin)
• Was My Car Towed? — Supply your license plate number and find out whether
the city towed your car. (Scott Robbin)
Pritzker’s big push for U of C data
By Melissa Harris
April 14, 2013
Tom Pritzker (left) and his wife, Margot, talk with Melvin Gordon, the CEO of Tootsie Roll Industries, during
a fundraiser for University of Chicago.
University of Chicago computer scientist Ian Foster pressed the clicker and up popped a
map of the most sophisticated fiber-optic networks in the world.
On that map, at least, Chicago appeared to be the center of everything, a crossroads
of information dwarfing Beijing, London and New York in importance.
Fiber-optic lines lace this city. And the University of Chicago is working to use that
geographic advantage to build the largest storage hub in the world for genetic and medical information, called the bionimbus cloud. The goal is to harness massive amounts of
data and computing power to solve the riddle of diseases such as cancer.
Hyatt Hotels Corp. Chairman Tom Pritzker and his wife, Margot, hosted a fundraiser
in April 2013 at the Park Hyatt Chicago to introduce the project to about 50 friends,
including CDW Corp. founder Michael Krasny; Melvin and Ellen Gordon, the CEO and
president of Tootsie Roll Industries, respectively; Crate and Barrel founders Carole and
Gordon Segal; Wheels Inc. Chief Executive Jim Frank; and Charles Evans, president of
the Federal Reserve Bank of Chicago.
This was an all-star cast of Chicago’s business leaders, hand-chosen by one of their
own, for an evening of education and, presumably, fundraising. If you’ve ever wondered
how the wealthy are wooed, here was one example of how it’s done.
The Pritzkers began hosting annual dinners for University of Chicago Medicine, which
includes the hospital, medical school and a biological sciences division, in 2006 — but
this one was different. Tom Pritzker, a university trustee, wanted a smaller affair. He
helped pare down the guest list from the usual 150; personally invited guests via email;
selected the presentation format so everyone could sit on plush sofas rather than at banquet tables; and insisted the university’s doctors and researchers continue the conversation over dinner afterward.
“The idea (for the dinners) was that we needed to better integrate the University of
Chicago with downtown Chicago, civic leaders, community leaders, commercial leaders,”
Tom Pritzker said in an interview. He later added: “Frequently communities will get too
parochial, whether it’s researchers or business people or any other group. They’ll tend to
just keep seeing the same people they see all of the time.”
Seating researchers at every dinner table was one way to break that pattern. The
event became more of a seminar than a party. Terms such as a “zettabyte” — an amount
of storage capacity that has 21 zeros in it — were uttered.
“Frankly, I’ve walked away from any one of the dinners really excited about whatever
the topic was because it’s like a window into the future,” Pritzker said. “You get to sit
here, and for two hours someone is painting a picture for you of what the world is going
to be like 10 to 15 years from now.”
The first innovation behind the medical data hub was the sequencing of the human
genome. Scientists can translate a person’s genetic code into a unique, multibillion-long
combination of the letters A, T, C and G. More recently, scientists have built computers
and algorithms that enable these sequences to be analyzed in bulk.
“So we’ll sequence thousands of tumors, understand the genomic variations and use
that to guide how we diagnose and treat cancer,” said Robert Grossman, a professor at
the University of Chicago who specializes in big data. “This is one of the techniques that
will be at the center of personalized medicine.”
A typical study now might involve analyzing the DNA of 50 to 100 patients. “Precision
diagnosis” like Grossman described will require analyzing data from 5,000 to 10,000
patients — and eventually, 500,000 to 1 million patients. In two weeks, Grossman will
announce that the university has the computing power to analyze all the genomic data
of up to 10,000 patients.
“It costs about $1,000 to sequence a patient,” Grossman said. “So 1 million patients
would cost about $1 billion to sequence.”
Frank of Wheels Inc. and his wife, Karen, have pledged $10 million, $9 million of
which will go toward launching and hiring a director for a proposed Institute for Computational Biology and Medicine at the university.
“We don’t have the software,” Grossman said. “We don’t have the statistical algorithms. And we don’t have the infrastructure theoretically or practically to analyze (1
million patients), and that’s the scale we need to tease apart all of the cancers at the level
of understanding we would like.”
Grasping the magnitude of the data the medical community needs to collect and analyze is almost impossible.
But understanding a railroad hub — and the transport of grain, meat or oil — is not.
“Business, innovation, discovery, jobs still depend on taking raw materials and turning them into refined products,” Foster said. “Often, nowadays, the raw material is data
and the refined material is knowledge.”
Search starting at Chamber
A number of Chicago’s elite civic institutions will have new leaders by year-end.
Top posts are open at the Chicagoland Chamber of Commerce, where longtime CEO
Jerry Roper, 72, announced his retirement last week; World Business Chicago, where
Mayor Rahm Emanuel is seeking a replacement for retiring President Rita Athas; and the
Chicagoland Entrepreneurial Center, where Chief Executive Kevin Willer has announced
his plan to transition to the venture capital industry full time.
Earlier in 2013, the Chicago Council on Global Affairs announced that U.S. Ambassador to NATO Ivo Daalder would take over for President Marshall Bouton, who served
in the post for 12 years.
Many of these groups operate at the intersection of business and government, so the
transition from the Daley administration to the Emanuel administration accounts for
some of the change. Scott Swanson, the chairman of the chamber and the regional president of PNC Bank in Illinois, cited economic pressures.
“We’re entering another chapter as we’ve come out of the recession,” he said in an
interview. “So I think as a consequence all organizations are evaluating how they can be
more effective. The competition — I don’t care if it’s coming from Texas, Florida, Tennessee or Beijing — we’ve gotta be competitive, and this is that opportunity to step back.”
Swanson said the chamber’s search, which will be conducted by executive search
firm Spencer Stuart, will focus on candidates from Chicago, including the chamber’s
chief operating officer, John Carpenter, a retired American Airlines executive.
He said the succession planning process started at Roper’s “encouragement.” Asked
whether the chamber would select a retired executive, Swanson said the requirement is
that the individual be well-connected in Chicago business circles.
“The most significant civic leaders in Chicago today continue to be peers of Jerry’s,”
Swanson said. “So we’re not in an environment where there’s an evaluation about whether there needs to be a generational shift.”
Keeping genius in Illinois
Tendency is for U. of I. tech grads to head West
By Phil Rosenthal
June 23, 2013
There are 140 or so miles of highway between the heart of Chicago and the University of
Illinois at Urbana-Champaign. It’s not the most exciting stretch of road unless you look
at it as an asphalt umbilical cord.
Coming to terms with the fact that its historic role as a global hub cannot ensure
prosperity in a technology-infused future, Chicago must develop its tech sector. But the
effort has been hindered for years by the tendency of genius cultivated at U. of I. and other area hothouses of potential to bypass northern Illinois in favor of Northern California.
So the city whose 20th-century rise was fortified by its 19th-century determination
to reverse the Chicago River has its 21st-century hopes pinned to how effectively it can
divert to Chicago the regional brainpower flowing away to Silicon Valley and other tech
centers.
It will be an uphill struggle, and it’s way too soon to break out cigars. Although signs
are encouraging, it’s difficult to get a firm read on vitals.
“There is a sense of optimism that I don’t know how to describe,” University of Illinois
President Robert Easter said. “I’m not sure I can point my finger to why (that optimism)
is there, but we have become involved in some of the things that the city is doing.”
Recent years have brought a conscious effort to teach students — not just at the U.
of I., but also the University of Chicago, the University of Illinois at Chicago, Illinois Institute of Technology, Northwestern University, Loyola, DePaul and other institutions —
that Chicago is as ambitious as they are when it comes to digital startups.
Mayor Rahm Emanuel headed to Urbana last fall to make his Chicago-as-Startup-City
pitch in person to engineering and computer science students. Accompanied by reps of
the local tech scene, Emanuel urged would-be app entrepreneurs, mobile magnates and
Internet impresarios not to come to Chicago merely to board a plane bound for Silicon
Valley or Seattle.
Better to make one’s name in Chicago — and help make Chicago’s name in doing so,
the mayor said.
“Everybody is trying very hard,” said Avijit Ghosh, a University of Illinois business
professor and senior adviser to Easter. “I think over time we’ll learn how to do it much
better and be much more coordinated, but I have witnessed a definite change in perspective.”
Matt Moog, a leading light in Chicago’s growing digital business community of more
than 40,000, said some of Chicago’s improved standing is rooted in the success of homegrown startups such as GrubHub and an increase in early-stage investment money
coming into the market. Some is the result of initiatives such as 1871, the Merchandise
Mart-based community of startups.
“We’re definitely making progress in changing the general reputation and image and
profile of Chicago as a place that you’d want to come to if you were an ambitious, young,
aggressive engineer or entrepreneur choosing to start a tech business,” said Moog, who’s
an active angel investor in addition to heading digital business incubator Wavetable
Labs, consumer review site Viewpoints Inc. and BuiltInChicago.org, an online community of local digital entrepreneurs.
Chicago Deputy Mayor Steve Koch spoke to several hundred people connected with
the city’s digital startup sector, along with interested students, at BuiltInChicago’s annual Moxie Awards in June 2013. “There’s no question that success in building the tech
sector in Chicago, success in building what you do, is critical” to what the city is “going
to be for the rest of this century,” he told them.
A Chicago startup launched every two days last year, according to Koch, representing
an overall early-stage investment of around $400 million. “That’s an amazing statement
about people’s willingness to invest in Chicago as a great home for the technology sector,” Koch said. “Every job you add is an investment in the future of the city.”
One of the many stories of missed opportunities for Chicago owing to brain drain involves Max Levchin, who attended high school in Chicago, graduated from the University
of Illinois and then headed west from Urbana instead of north.
Chicago’s tech scene in the late 1990s was in no shape to support Levchin’s ambitions. He founded PayPal, and success begat more successes. Levchin went on to help
fund the launch of Yelp, which was co-founded by U. of I. and PayPal alum Russel Simmons. Also, while working at PayPal, two other U. of I. grads — Steve Chen and Jawed
Karim — met Chad Hurley, and the trio went on to create YouTube.
“The guys down (in Urbana) need to see Chicago as an exciting place to go … and not
necessarily go straight to California,” Dag Kittlaus, who co-founded the company that
created Apple’s Siri feature, once told me. “A steady stream” of great, newly minted engineers is critical to building an innovation ecosystem, he said.
One initiative, ThinkChicago, brings promising students to town from around the nation to experience the local tech and social scene. Participants pay their own way but get
a free ticket to the Lollapalooza music fest in addition to the chance to attend career fairs
and meet local leaders.
“Schools have definitely woken up to the importance and potential and benefit of encouraging their students to seriously consider Chicago as a place they should look either
for internship or postgraduate job opportunities,” Moog said.
The idea is not to supplant Silicon Valley, as if that were possible, but to carve out a
niche in much the way, say, the Chicago Board Options Exchange has. CBOE created its
own market by using advanced technology and proprietary products to seize opportunity
and fill a void.
Second City made Chicago a magnet for sketch comedy, giving the tech types a model
for creating gravitational pull.
“If there are not successful companies, it doesn’t matter what the city does, the state
does, the universities,” Moog said.
Said Ghosh, “One large success can change the perception in a very significant way.”
And that may be the only reliable way to make the road less traveled from school to
Chicago more exciting and stem the flow of traffic to the coasts.
Profiles in Innovation
Andrew Sieja, founder and chief executive, kCura
Like his legal-software provider company, founder, CEO has matured and is on firm footing
By Wailin Wong
June 24, 2013
Andrew Sieja
Sitting in the library of Harper High School in West Englewood, Andrew Sieja waited to
address a small audience gathered for the unveiling of new computers throughout the
building.
Volunteers from his company, legal-software provider kCura, had worked with Harper
students to install 275 new and refurbished computers, as well as to convert a former
teachers lounge into a college resource center with PCs for researching and applying to
schools.
Sieja had prepared some brief remarks, but inspiration hit while he was waiting his
turn. Setting aside his notes, Sieja spoke of how in 2010, when his company started
donating money every month to causes championed by employees, the philanthropic efforts planted a seed at kCura that grew into a program to outfit one Chicago school each
year with computer labs. His larger vision, he said, was to craft a playbook for other local
technology firms to conduct similar programs around the city and mentor new generations of technology workers.
Sieja helped cut a ceremonial ribbon of red and white crepe paper, then toured a
classroom and the new college room, which sports bright red walls and couches reminiscent of a dorm lounge. He looked more youthful than his 36 years as he joked with
students and posed for photos while wearing the red Harper baseball cap he received as
a thank-you present.
This is classic Andrew Sieja: gregarious and energetic, with a knack for spontaneity.
He winged it through an adolescence as the loner programmer kid and a young adulthood as the head of a small software consulting firm that came precariously close to going broke. But Sieja and kCura have matured; he is less emotional and more deliberate,
with a multiyear plan for his rapidly growing company to expand its software platform
from legal-document management to all stages of electronic discovery.
“I think about how we make decisions today,” Sieja said. “It’s not as fast and fluid,
I’ll tell you that. There’s definitely a lot more people involved. I think there’s a balance
between just doing it and trying to be very careful too.”
Privately held kCura doesn’t disclose revenues. Its flagship product, Relativity, has
more than 75,000 active users worldwide, with that number having grown 40 percent in
2012. The company’s 270 employees recently moved to new, larger office space on South
LaSalle Street, and it plans to hire 70 to 80 people this year.
The constant throughout kCura’s evolution is Sieja’s drive. He lined up customers
for Relativity by tirelessly pitching the software at legal-industry trade shows he crashed
when he couldn’t afford a badge, and he won clients’ loyalty by responding promptly to
questions and taking their feedback to heart.
“It’s strange, looking back on it — never did I feel that as a company we wouldn’t be
able to do what we promised to do,” said Keith Kaminski, a kCura software architect
and member of the early team that persisted through the company’s leanest period of
80-hour weeks and middle-of-the-night troubleshooting sessions. “Andrew, even today,
(is) very charismatic and very confident, and that rubs off on everyone around him. He
definitely believes in himself and what he can do, and by extension he makes us believe
we can get it done.”
It’s about time
Punctuality and meeting deadlines are important to Sieja (pronounced SAY-ja), who has
all 48 clocks at kCura’s offices synced with an atomic source. He also has set the display
on his smartphone to say “Don’t be lazy!” when the alarm goes off.
Sieja learned how to work on deadline as an employee at Lante Corp., an Internet
consulting firm where he was part of a group that had to quickly set up networks and
computer workstations at large conferences hosted by companies such as Microsoft and
Gartner.
In 2001, Sieja and two Lante co-workers, Steve Ankenbrandt and Mike Decker, formed
their own consultancy, building software and taking on technology projects for clients
such as Accenture and financial services firms. They named the firm kCura, the “k”
standing for “knowledge” and “cura” meaning “management” in Latin.
Decker described Sieja as “just an incredibly sharp technologist,” with an enthusiasm
that inspired him to drop his plans to attend business school and join kCura instead.
Sieja is a self-taught programmer, having gravitated toward coding as a shy teenager
who had a hard time making friends because he moved around so much, attending
seven grade schools and five high schools.
The kCura partnership lasted two years, after which Sieja bought out his co-founders’
stakes and essentially restarted the company.
“We were just young guys, and I think we all had different ideas of what we wanted
from the business,” Sieja said. “I wanted more of a lifestyle business — like I wanted to
work on the products I wanted to work on, I wanted to set my own schedule. … I enjoyed
being able to come to work at noon. And I wanted to take money out,” instead of reinvesting profits in the company.
The split was amicable. Both of Sieja’s co-founders ended up coming back into his orbit years later, with Ankenbrandt creating a software firm that does business with kCura
and Decker rejoining the company in 2008 as a contractor and eventually becoming vice
president of information technology.
Sieja didn’t set out to make software specifically for the legal industry. But in 2004,
Foley & Lardner hired kCura to craft a system for managing and reviewing documents,
an important task in legal discovery. The deal was structured so that Sieja’s company
could keep the intellectual property for the platform.
Bruce Blank, Foley’s director of litigation services and support, had met Sieja while
the young programmer was at Lante, and he was impressed enough to “roll the dice and
put it all on Andrew” years later.
Blank, who considers Sieja to be a son, was struck by “the same thing that always endears people to Andrew — he’s charming in a crazy way. He’s just charming as can be.”
Blank would become one of Sieja’s most important supporters, letting him stay in his
room at industry trade shows and buying him meals. He also helped shape the software
platform that would become Relativity. In 2006, kCura signed up two additional customers: law firm Sheppard Mullin and LDiscovery, a consulting firm that helps law firms
and corporations collect and process data for legal cases.
Chris Weiler, chief executive of LDiscovery, had learned of Relativity from an employee
who had met Sieja during a double date and found kCura’s product to be more userfriendly than existing review tools. LDiscovery became the first vendor to license the software and also hosted the first case with 1 million records on Relativity, a milestone that
required near-daily 4 p.m. conference calls with kCura for several months as the young
system was put to the test.
Sieja “had a real desire to make sure that no stone was left unturned in your relationship. … Even to this day, if I call him, he always makes time for me. He returns phone
calls and emails. The person he was back in 2006, when I first met him, is exactly who
he is today.”
The company’s watershed moment for customer support and accountability came
when kCura signed up DLA Piper as a consulting client to help the firm manage documents for a big class-action suit. Sieja had met several members of the law firm’s information technology department at a trade show in New York and had given them an
impromptu, late-night demonstration of his software after drinks at the hotel bar.
The launch of kCura’s software product for DLA Piper “was a huge disaster,” Sieja
said, with performance issues, as well as issues migrating messy data from dozens of
disparate databases. The paralegals using the tools “were supposed to be championing
the system, and they hated it, they hated us and there were all sorts of problems,” he
recalled.
Sieja and his team worked throughout the summer, fixing bugs and improving the
software. He was ready to forgo the entire $80,000 consulting fee, but DLA Piper insisted, and he took the money. In 2007, the law firm signed a site license to Relativity, and
that contract allowed kCura to stop taking on consulting jobs and focus on developing
its proprietary software product.
Mary Pat Poteet, DLA Piper’s national director of litigation support who inked the pivotal deal, has become part of kCura’s company lore.
To illustrate the importance of accountability, Sieja tells new employees the story of
how Poteet, as she slid the contract over the table at her San Diego office, said: “Andrew,
Relativity doesn’t even come close to doing what we need it to do today. … The one thing
that we know is that you, Keith, Nick — she named everyone in the company at the time;
there were eight of us — you guys will do whatever it takes in order for us to be successful.”
Poteet, now a consultant at the firm Project Leadership Associates, laughs when asked
about this story, saying that Sieja is like her “adopted little brother” who loves to embarrass her. Taking a chance on a young, hungry CEO with cutting-edge technology was a
shrewd move for her too, as the success of Relativity boosted her profile at the firm as a
forward thinker.
“Back at that time, he had no idea what the legal industry was like,” Poteet said. “He
was a fresh voice, a fresh face and had a nonstandard attitude toward the industry that
I think may have really helped him.”
Hardships endured
Armed with the DLA Piper deal, Sieja finally had the software-centric business he wanted, but 2007 was still a tough year. He borrowed money from friends and his father
— $30,000 here, $50,000 there — to make payroll. He convinced Weiler at LDiscovery
to prepay for a six-year license for Relativity. His credit cards were maxed out. And his
meetings with venture capitalists and potential investors were fruitless.
“I felt stupid — I didn’t really know how to raise money,” Sieja said. “I didn’t really
know how to talk about the business. … I didn’t do any of my homework or couldn’t ar-
ticulate what we were trying to do, or what the value was, you know? I didn’t have those
skills.”
Then, at another trade show, Sieja bumped into a client. He admitted that his company was in a tough spot, and the customer told him to visit when they were back in
Chicago. There, the client handed him a $50,000 check as a prepayment for to-be-determined services.
“We had payroll that week,” Sieja said. “The next week, we had a pretty good deal. And
after that, money was never a problem. That was it.”
Sieja is no stranger to financial hardship. He grew up mostly in Detroit but spent his
childhood summers with his mother’s family in Poland, whose economy at the time was
severely troubled. Sieja remembers ration cards for meat and sugar, and one summer of
using newspaper for toilet paper.
Those summers in Poland also introduced Sieja to the entrepreneurial life, as he
helped his uncle make flip-flops to sell at the local flea market and used his novelty status as “the American kid with the really broken Polish” to make sales.
Looking back at kCura’s tough year, Sieja shrugs off the personal sacrifices he made,
saying that he “wasn’t buying fancy stuff or anything.” His social life revolved around his
kCura co-workers, mostly guys in their 20s with the energy to stay up late on projects
and go out afterward.
Kaminski remembers Sieja coding side by side with the others until the wee hours of
the morning. The group ate lunch together almost every day, with Fridays designated as
“spicy chicken day” at the nearby Asian restaurant.
They also hung out at night.
“Andrew was always the guy who would buy everyone drinks and make sure they
were having a good time,” Kaminski said.
To remind employees of kCura’s modest beginnings, Sieja has kept a saggy green
couch that was purchased for $25 at a garage sale and has served as a bed and intern’s
desk, among other uses. At kCura’s new digs, the couch occupies a prominent spot in
the lobby, with a large sign explaining its significance. Every kCura employee receives
a small poster with a drawing of the couch and the words “Be humble. Stay hungry. Do
more with less.”
Decker, kCura’s vice president of IT, said Sieja’s work ethic and dedication to the
business are baked into the company’s culture. While he has seen his former partner
evolve in important ways — Sieja is a more confident public speaker and has developed a
commitment to philanthropy — his drive to move the company forward is rooted in those
scrappy days of Sieja “doing whatever it takes on a shoestring budget.”
That included going to legal conferences and “crashing on someone else’s floor in a
hotel room, weaseling (his) way” into events and, Decker recalled, dealing with the many
times the company “was just teetering on the edge and things always worked out in the
end.”
As kCura has grown, though, Sieja has needed to temper his natural proclivity for
winging it with a more deliberate approach. He has orange sticky notes with the words
“Stop. Think.” — pithy advice from a management coach he works with — on his computer monitor and on the inside of his office door frame.
The little reminders don’t stop there. Affixed to Sieja’s framed copy of kCura’s mission
statement is a yellow sticky note whose words reflect his characteristic bluntness: “Don’t
suck.”
Andrew Sieja
Lives in: Ukrainian Village
• Education: Attended Northern Illinois University, DeVry, Oakton Community College and DePaul University but never earned a degree.
• Memberships: Serves on the executive advisory board of startup conference Techweek.
• Hobbies: Heli-boarding, or snowboarding after being dropped from a helicopter;
squash and tennis.
• The past: Still remembers the smell of the Microsoft QuickBASIC manual that was
his first foray into computer programming.
• The future: “I can see Andrew turning his platform into a billion-dollar industry.
The question is how, but ask me that question 10 years ago, and I would have said,
‘I don’t know,’ and look at him — he’s halfway there,” said Bruce Blank, of kCura’s
founding client, Foley & Lardner.
Linda Darragh, head of innovation, Kellogg School of Management
Working to push Northwestern back to top of world’s elite business schools
By Janet Kidd Stewart
March 4, 2013
Linda Darragh
From the back of a lecture hall in Evanston, the innovation chief at the Kellogg School
of Management fires questions at a student team presenting a business plan for healthy
meals delivered to Chinese workplaces.
For Linda Darragh, executive director of Kellogg’s Innovation and Entrepreneurship
Initiative, this could be any real-world pitch session with venture capitalists or a startup
accelerator. She has been trying to boost the city’s startup climate since before Groupon
Inc. founder Andrew Mason was born.
“This is great. This partner in China, though, what’s the deal with them?” Darragh
calls to the team. “Could they run away with this now? I want you to think about the
downside risk. What if someone gets sick (during test marketing)? It could be a liability
problem.
“There are a lot of positives here, but always think about what could go wrong.”
It’s a classic business lesson Darragh takes to heart as she works through her first
academic year since Kellogg Dean Sally Blount poached her from crosstown rival University of Chicago Booth School of Business.
Blount’s marching orders are clear: Get Northwestern University back to the top of
the world’s elite business schools, even as the number of traditional two-year students
shrinks and the entire industry grapples with massive amounts of learning resources
offered online for free.
When it comes to entrepreneurship, it means inserting Kellogg more squarely into
Chicago’s long-awaited startup wave.
That’s where Darragh comes in. She’s deeply rooted in the startup community as it
finally enjoys some successes and has backing from Blount to weave her ideas for innovation across Kellogg and to other schools within the university.
And she’s on good terms with her former boss at Booth, she said, adding that she’s
scheduled to golf this month in Arizona with Ellen Rudnick, executive director of Booth’s
Polsky Center for Entrepreneurship and Innovation.
All of that should make her piece of Blount’s strategic plan to reinvigorate the school
and boost its relationships a little easier, but it also raises expectations among students
and alumni. Managing those expectations will be a challenge, Darragh conceded.
“I’ve already got a full inbox of messages from alumni, and some of the new classes
are so popular, there weren’t enough seats for everyone who wanted to take them,” she
said. “As you continue to raise opportunities, people are always expecting more.”
Organizational realignment
In her office, she pulls out copies of Blount’s reorganization plans, which Darragh said
are also hauled out at just about every staff meeting.
Blount, an alum, was named dean in 2010 and has overseen a rebranding initiative,
a scaling back of the two-year MBA to focus on the one-year program, plans for a $200
million campus expansion and several new hires.
Under Blount’s plan, called Envision Kellogg, major curriculum changes will cut across
the traditional silos of graduate business education — accounting, finance, management
strategy, marketing and the like.
There are now four themes: entrepreneurship and innovation; collaboration, or teamwork; customer management; and the increasing demand for business to address public
policy issues.
It’s Darragh’s job to tackle the first of those efforts, picking up on strides she made
at Booth in an entrepreneurship role. During her tenure, the Hyde Park neighborhood
school consistently pumped out more startups than its North Shore rival.
“We had a headhunting firm look across the country, but it was clear that one of the
best people lived here in Evanston, and I simply offered to shorten her commute,” Blount
quipped. “She’s already met all of her first-year benchmarks.”
Darragh was an adjunct and then an assistant professor at Kellogg from 1999 to
2005, until she clashed with Steven Rogers, who was director of the school’s Larry and
Carol Levy Institute for Entrepreneurial Practice under former Kellogg Dean Dipak Jain.
She left the school in what she calls a mutual decision. Rogers, now at Harvard University, did not respond to messages seeking comment.
“We had two very different philosophies, and it just wasn’t going anywhere,” Darragh
said. “Ultimately, you take a tough situation and learn that it’s not the end of the world.”
It proved to be the most difficult time in her career, said her husband, Alex, who
leads CBRE Group Inc.’s global corporate real estate services business in Canada, Latin
America and the Caribbean.
The couple met as undergraduates at Queen’s University in Canada and came to Chicago so he could pursue a graduate urban planning degree at Northwestern. They married in 1978.
“Her first tenure obviously didn’t end very nicely,” Alex said. Without an MBA herself,
Darragh found herself a nonacademic in a very academic institution and began to question whether she could stay in academics at all, he recalled.
Though she didn’t have the business degree, she did graduate second in her class at
Queen’s (behind Alex) and received a master’s degree in urban planning at the University
of Toronto.
Ultimately, Darragh found her groove again at Booth, becoming director of entrepreneurship programs at the Polsky Center and launching international and social enterprise versions of the school’s popular business competition, New Venture Challenge.
Meanwhile, under Blount, Rogers stepped down from the Levy post in 2011 and left
the university last year.
Now, it’s Darragh who is executive director of the Levy Institute. She also leads the
Heizer Center for Private Equity and Venture Capital, in addition to directing the Innovation and Entrepreneurship Initiative along with Benjamin Jones, who serves as faculty
director of the program.
Class makeover
Since her July start, Darragh has launched, or is in the process of launching, nine new
entrepreneurship classes and is in the midst of faculty meetings about collaborating
across the business school’s various departments and with other schools within the university.
Blount’s new vision gives Darragh the mandate to cross department lines as she helps
students not only create startups, but also manage growth as a business matures and
help larger corporations innovate, Darragh said.
Few schools are focusing on the middle phase of helping companies scale their business as they grow, she said, and that’s a perfect fit for Northwestern, with its large international student base as well as the Midwestern family businesses in its backyard.
“What we’ve developed with Linda’s leadership is a real road map so that in one year
at Kellogg, (students) can really develop and test an idea, from raising money to product
sales to digital marketing,” Jones said.
“Linda has the capacity to connect with people that is 15 steps ahead of anyone I
know and in advance of the need,” Blount said. “A lot of times when you bring someone
on board, you have to spend a lot of time launching them in the community. I didn’t have
to do that with her.”
Current and former students said she has got that covered.
“There’s been a noticeable uptick in the energy and the push for innovation since
she’s been here,” said Patrick Merfert, a second-year Kellogg student who has worked
with Darragh on the school’s Private Equity & Venture Capital Club.
What’s the rush?
Darragh said it was important from a practical standpoint to move fast to get some
classes up and running for the fall term, but it clearly wasn’t just the calendar driving
her.
“There’s a lot to be said about a sense of urgency in galvanizing action among everyone,” she said.
Often, though, that urgency can be elusive absent a crisis, and Kellogg has consistently been ranked near the top of the nation’s best business schools. A two-year degree
exceeds $168,000 with tuition, room and board and other expenses. First-year tuition
for the current academic year is $56,550. Tuition for the one-year program is $75,400.
U.S. News & World Report pegged the school in a three-way tie for fourth last year,
with the University of Chicago and Massachusetts Institute of Technology.
But in Bloomberg Businessweek’s rankings last year, Kellogg slipped to No. 5 from
No. 4, its lowest finish ever, while Booth took its fourth consecutive top spot in the biennial rankings.
There has clearly been frustration at the slippage.
Kellogg’s early dominance in marketing and collaborative teams has been overshadowed in the Internet age, not unlike the way Chicago’s business community has been
routinely tagged as coming late to the startup revolution, particularly in the tech industry.
“For quite some time, (some) Kellogg alumni have been a bit underwhelmed at the way
the entrepreneurship program has developed,” said Raman Chadha, an alum who went
on to consulting stints for startups and teaching at DePaul University.
“It’s way too early to say there have been results. It takes awhile in academia for
change to bear fruit, but as soon as her hiring was announced, there was a great deal of
buzz in the Northwestern community and in Chicago,” Chadha said. “And Linda’s track
record at Booth speaks for itself. She has a long legacy in entrepreneurship in Chicago.”
History lessons
Sitting in her Sheridan Road office, it takes only seconds for Darragh, 59, to unearth an
artifact from Chicago’s earliest attempts at being a major player in fostering technology
startups.
It’s a copy of a 1982 report from Chicago Mayor Jane Byrne’s task force on the hightech industry, on which Darragh served as a staff member while working for the city’s
Department of Economic Development. She started at the department in 1979.
Also, she spent 14 years at the Women’s Business Development Center, where she
launched the Midwest version of Springboard, a women’s venture capital forum, before
joining Kellogg.
During those years, she and Alex had three children, Christopher, Jeffrey and Hillary.
“After the kids were in bed, she’d have entrepreneurs come over at all hours of the
night to go over their business plans,” Alex recalled. “We were always buying stuff from
this bakery or that new little business. But it always worked.”
Today, her sons are in business careers and her daughter is a teacher. Christopher’s
graduation ceremony last year from Booth was also her last official day at the school.
As the children grew, she took on more outside entrepreneurial interests. Eventually,
informed by her stint helping women-owned businesses, she became interested in social
enterprise.
In 2011, with Kellogg’s director of social entrepreneurship, Jamie Jones, she founded
Impact Engine to accelerate the growth of for-profit companies working toward a social
mission. Selected companies win $20,000 in seed capital, networking, advice and workspace to build their markets.
“She’s passionate about business, period,” said Kathleen Wright, the 31-year-old
founder of The Collaborative Group, a company with a mission to alleviate world poverty
by connecting retailers with skilled artisans in underserved areas. Wright, one of the
incubator’s first winners, said presenting her business plans to Darragh was brutal and
rewarding.
“I was presenting what my differentiation point would be to her and she kept interrupting me, saying: ‘No, no, no, that’s not it,’” Wright said. “I was about ready to cry
when she said to come back when I knew my value proposition and how to differentiate
myself.”
The next week, Wright said, Darragh was full of praise when Wright presented her
revised plan.
Darragh is on the boards of the Chicagoland Entrepreneurial Center, Accion Chicago
(a microfinance lender) and TiE Midwest, a networking and mentoring organization for
global entrepreneurship. Now, she’s trying to channel all that networking energy and
practical experience into the academic world. One of her first moves in that direction was
tossing out a longtime course on how to write a business plan.
“They’d write these 50-page tomes, and by the time they got their first customer, the
plan had gone to hell in a handbasket,” Darragh said.
Now, students begin with a simple hypothesis about a business idea and start testing it right away in the real world, constantly tweaking it with real-market feedback and
rounding it out with academic theory as needed.
“If we’re trying to train leaders in a collaborative economy, we have to be leaders ourselves,” she said. “So we’re pushing collaboration across academic departments to make
sure everyone is practicing what we preach.”
Linda Darragh
• Born in: Toronto. The oldest of four children; she’s the only one living in the U.S.
• Lives in: Evanston, with husband, Alex. They have three children: Christopher,
30; Jeffrey, 27; and Hillary, 25.
• Trendsetter: Early in her career, she and a group of other moms formed a consulting business so they could work around their children’s schedules.
• Biggest mistake: “There were times when I didn’t read the tea leaves that were
happening around me because of a general trust I have. I’m now very attuned to
people.”
• Passions: Golf, tennis and skiing.
• Working on: Nurturing a gardenia plant. Her mother was an avid gardener too,
and Darragh says the solitude is a break from her otherwise frenetic pace.
Chad Mirkin, professor of chemistry, Northwestern
Northwestern professor is giant in the realm of the very, very small
By Ameet Sachdev
Aug. 5, 2013
Chad Mirkin
The audacity of the research going on at Chad Mirkin’s lab at Northwestern University
would make even the most imaginative science-fiction writers blush.
Mirkin and members of his research team have created microscopic particles out of
strands of DNA and RNA, the building blocks of human life, that can be absorbed by human cells. Once inside a cell, the balls of genetic material can be used like a light switch
to turn off disease-causing genes.
“We have a chance to treat some of the world’s most debilitating diseases,” said Mirkin, and he proceeds to tick off maladies like brain cancer, Alzheimer’s and Parkinson’s
disease.
Mirkin speaks with great conviction even though the microscopic particles have yet
to be tested in humans. He has the natural confidence and charisma of a politician, but
he’s not just selling hope.
His faith is backed by a stream of scientific discoveries, a list so long it’s hard to believe he’s only 49 years old. And unlike some highly accomplished academic researchers,
Mirkin places a premium on making sure the products of his research have some value
in the real world.
He has launched four companies, the latest focused on developing gene therapies using the spherical DNA he developed. Mirkin easily moves between the science and business worlds, able to discuss complex chemistry and initial public offerings in the same
breath.
Like a lot of brilliant minds, Mirkin doesn’t have a lot of patience for what he views
as incompetence, and he’s not afraid to express his opinions. Mirkin needles some professors at Northwestern’s highly ranked Kellogg School of Management as “highly paid
theoreticians.” He bristles at the short-term time horizons of many investors and scoffs
at corporate managers who should know better than to “piss off the inventor.” He even
criticizes mainstream science reporting as full of inaccuracies. The comments are often
accompanied by a hearty laugh.
“When you talk to him, he doesn’t sound like a scientist,” said Neil Kane, who works
with academic researchers to help commercialize their work. “He sounds like a businessman. He’s very attuned to the problems he’s trying to solve and to the societal benefits
of his work.”
But questions are starting to be raised about the commercial value of his research.
One of his companies, NanoInk Inc., went out of business this year after its biggest financial supporter, Chicago philanthropist Ann Lurie, stopped funding the company. A
second company, Nanosphere Inc., has yet to turn a profit since its launch in 2000.
Mirkin dismisses the setbacks not as failures of technology but of timing and execution. “In the high-tech space, the story takes a very, very long time to be told,” he said.
Leading the way
In nanotechnology, Mirkin is helping write the first few chapters in an emerging science.
Nanotechnology involves the ability to control matter at the scale of a nanometer, or onebillionth of a meter. Just how small is that? A human hair is about 80,000 to 100,000
nanometers wide.
Nanoscale particles are not new in nature or science. Many of the inner workings of
cells occur at the nanoscale. But the study of nanomaterials did not take off until advancements in microscopes in the late 20th century allowed scientists to see atoms.
A chemist by training, Mirkin started using the powerful microscopes, which made
him curious about the properties of nanoparticles. One thing he quickly learned: “When
you miniaturize something, it becomes different,” he said.
Gold is a perfect example. At the nanoscale, gold can appear red or purple. These optical properties first became apparent in the Middle Ages, when craftsmen manipulated
specks of gold chloride to make vibrant stained glass windows.
After joining Northwestern’s faculty in 1991, Mirkin started investigating how to bond
gold nanoparticles. After some trial and error, the glue he chose was DNA, because he
could control the bonds based on the genetic codes on the strands. Fortunately for him,
another Northwestern chemistry professor, Robert Letsinger, had already discovered how
to synthesize DNA.
Mirkin found a way to coat gold nanoparticles with DNA strands to create what he
calls a “chemical-specific ball of Velcro.” In 1996 he and his team made the first one,
which they called a spherical nucleic acid, and had their results published in Nature, an
influential scientific journal focused on groundbreaking research.
One of his graduate students experimenting later with the DNA balls noticed that
when the gold particles assembled, the solution turned from red to purple. When he
heated the solution, it turned back to red. What the student was watching was the raveling and unraveling of DNA, Mirkin said.
Almost immediately Mirkin and his team realized that gold nanoparticles could be
more than just building blocks.
“Now I can think about the nanoparticles as probes, and I can design them to recognize a DNA strand that’s unique to a disease,” Mirkin explained.
The discovery, he says, set in motion a career that has taken him into the realms of
biology and medicine, ironic considering that while in college, he decided he didn’t want
to be a doctor.
Mirkin was raised in Meyersdale, Pa., about 75 miles southeast of Pittsburgh, where
his parents settled after a tour in the Peace Corps that took the family to Malaysia and
South Korea. His late father, Mirkin said, was an idealist who took a while to find himself
after attending the University of Chicago and Stanford Law School. Mirkin recalled that
his dad often had his head buried in a book.
Mirkin attended Dickinson College, a small liberal arts school in Carlisle, Pa., and
took an interest in science like his three older brothers. (His parents also adopted a girl
from South Korea, who is the youngest child.) After deciding that he didn’t care for the
sight of blood, he pursued graduate studies in chemistry at Penn State University.
Forming a plan
Like most academic researchers, Mirkin didn’t have the first clue how to take an invention to market. He knocked on a few doors at Kellogg seeking help and came away empty.
But he persuaded one Kellogg professor to ask his students to design a business plan
for a nanotech-enabled medical diagnostic instrument. Mirkin then started shopping
the plan. Steven Rosen, the director of Northwestern’s cancer center, introduced him to
Lurie, who is passionate about improving health care, having lost her husband, wealthy
real estate developer Bob Lurie, to cancer. She gave Mirkin $3 million to launch Nanosphere.
Lurie’s support didn’t stop there, as the development of a molecular diagnostics system required a lot of capital and time. Lurie Investments and its affiliates provided about
$100 million to Nanosphere, according to Northwestern, and own about 26 percent of
the Northbrook-based company.
Lurie’s 14.7 million shares are worth about $45 million at the current market price.
After a management and board shake-up in February, her investment vehicles committed to hold on to the shares for the next 12 months.
But at about the same time Lurie withdrew from NanoInk, another spinoff from Mirkin’s lab, after investing $150 million in the company over the past decade. In the late
1990s, Mirkin developed a way to use powerful microscopes to deposit molecules on a
surface like ink on paper. The business plan was to use the “dip-pen” technology to create precise nanoscale structures that could have applications in a variety of fields from
electronics to biology.
But Lurie said in a statement that she could not continue being the company’s sole
funder “at the level required to achieve its commercialization” because the financial returns from her investments support her personal philanthropy.
Mirkin blamed NanoInk’s failure on a lack of focus. He said he had not been involved
with the company for about four years because he didn’t see eye to eye with management. “For better or for worse, they got very broad,” he said. “I don’t want to point fingers,
but there were a lot of bad decisions.”
Mirkin also left Nanosphere’s board in May 2013 to focus on his more recent entrepreneurial ventures and ongoing research in nanofabrication that stems from his dippen technology. He cautioned that his departure doesn’t reflect a loss of faith in Nanosphere’s future.
The company has spent the past few years developing more tests, including one that
can diagnose sepsis, a severe blood infection, in a matter of hours compared with a few
days by conventional methods, Mirkin said. Its tests are so sensitive it may allow for early detection of diseases, he added. Seven tests have been cleared by the Food and Drug
Administration, and more are in development.
The more tests the Nanosphere system can run, the more cost-effective it will be for
hospitals and labs, Mirkin said. The goal is for more hospitals to buy the system to allow
for more immediate diagnoses, rather than wait days for lab results to come back.
He then starts talking like a stock analyst, comparing Nanosphere’s performance
in the stock market with another biotech company, Illumina, which conducts gene sequencing. Illumina’s stock languished for years in the single digits and now is around
$80 a share, giving the company nearly a $10 billion market value.
“The real Nanosphere story and value proposition will be told over the next 18 to 24
months,” Mirkin said.
‘The whole package’
Mirkin’s entrepreneurial ups and downs take nothing away from his accomplishments
in the lab. He is the lead author of more than 500 scientific papers. He holds 237 patents worldwide, nearly 20 percent of Northwestern’s patent portfolio, said Alicia Loffler,
executive director of Northwestern’s innovation and new ventures office. She has one
attorney in her office dedicated solely to licensing Mirkin’s technology and filing and
maintaining his patents.
He has won a list of awards too long to number, but recent honors include the $500,000
Lemelson-MIT prize that recognizes innovation. In 2009, Mirkin was named to President
Barack Obama’s Council of Advisors on Science and Technology, where he rubs shoulders with other distinguished professors and corporate luminaries such as Eric Schmidt,
executive chairman of Google, and Craig Mundie, Microsoft’s former research and strategy chief.
His scientific prowess led to the creation in 2000 of the International Institute for Nanotechnology at Northwestern, which has attracted about $600 million in federal funding,
Mirkin said. He has raised more than $100 million in federal funds for his own research
in which he is the principal investigator.
“Chad is the whole package,” Loffler said. “He’s a great scientist and an amazing communicator. Very few scientists have the skills he has.”
As the scope of his research and fundraising grew, Mirkin was invited to join other
departments at Northwestern. In addition to chemistry, Mirkin is a professor of chemical
and biological engineering, biomedical engineering, materials science and engineering,
and medicine.
He enjoys some of the trappings of his success. His office on Northwestern’s Evanston
campus is comparable in size and elegance to that of a Fortune 500 CEO. It’s decorated
with numerous plaques recognizing his accomplishments and also with pictures of his
wife, Elizabeth, and their three children, Ben, 21, Sarah, 18, and Rachel, 16.
On a recent Saturday afternoon, he sank into an oversize leather chair in his office
to do some reading. Mirkin doesn’t spend much time in the lab anymore. He’s on the
road lecturing, raising money and visiting his research lab in Singapore. He said he flew
more than 150,000 miles on United Airlines last year and is a member of the airline’s
invitation-only Global Services club, reserved for its best customers.
His lab employs about 70 graduate students and postdoctoral researchers from 12
countries. “My job is part scientist, part cheerleader and part psychologist,” Mirkin said.
“I have kids who are hypermotivated and hyperaccomplished. But I tell them when they
join the lab that they better get used to failure because they are working on some tough
problems.”
David Giljohann, who worked in Mirkin’s lab from 2003 to 2009, said the professor
pushes the pace and keeps students on their toes.
“He has high expectations, and that translates into a work environment that is challenging and exciting,” said Giljohann, who left the lab to become the chief operating officer of another Mirkin startup, AuraSense.
Mirkin launched AuraSense to commercialize the use of his engineered gold nanoparticle as a detector of genetic material or protein inside living cells. Detecting a small number of diseased cells in a large population of healthy cells is one of the main challenges
in the research of cancer and other illnesses. Skokie-based AuraSense has already attracted a business partner, EMD Millipore, the life-science division of Merck KgaA, that
is selling the technology as SmartFlares.
Mirkin and AuraSense co-founder Dr. Shad Thaxton, another former student, recently created a subsidiary at AuraSense to focus on using the gold nanoparticle as a
therapy agent. They tweaked the spherical nucleic acids by dissolving the gold particle,
leaving a hollow core that reduces the threat of toxicity while also holding the potential
for carrying drugs.
It’s the kind of creativity and innovation that has been a hallmark of Mirkin’s career,
said Mark Ratner, a Northwestern chemistry professor who recruited Mirkin to the university.
The therapeutics business has attracted investors, such as Schmidt and Mundie,
Mirkin’s colleagues from the president’s technology council, as well as AbbVie Inc., the
pharmaceutical company recently spun off from Abbott Laboratories.
“Chad is clearly an outlier in his ability to raise money on behalf of his companies,”
Kane said. “It’s notable too that he’s demonstrated that he can raise money other than
from Ann Lurie.”
Though he doesn’t spend as much time in the lab anymore, Mirkin said he still is
driven by research and the thirst for knowledge. He says his business experience has
made him a better scientist.
“This isn’t just about trying to get a paper published in a journal,” Mirkin said. “We’re
trying to produce works to impact real problems.”
Chad Mirkin
• Lives: In Wilmette with his wife, Elizabeth. They have three children.
• Education: Bachelor of science in chemistry, 1986, Dickinson College; doctorate
in organic chemistry, 1989, Penn State University.
• Full titles: George B. Rathmann professor of chemistry at Northwestern University, professor of chemical and biological engineering, professor of biomedical engineering, professor of materials science and engineering, professor of medicine,
director of the International Institute of Nanotechnology.
• Business experience: Founder of NanoInk and Nanosphere; co-founder of AuraSense and AuraSense Therapeutics.
• Patents: 237 issued worldwide
• Downtime: Spends time at beach home in North Carolina; enjoys watching sports,
including Chicago Bulls and Northwestern football and basketball.
Saqib Nadeem, owner, Paradise 4 Paws
Pakistan native has combined business sense, people skills and love of animals to create
wildly successful pet project
By Erin Chan Ding
July 29, 2013
Saqib Nadeem (left) with Chief Marketing Officer Johanna Newcomb
Saqib Nadeem walks into work — or rather, is pulled by his two blue Weimaraners, Vera
and Miuccia. They amble past a black poodle named Dusty, who stands on a table with
his head held high while being groomed.
The Weimaraners stroll past George, who’s busy cavorting with other dogs on rubberized turf, before settling in for the afternoon in what Nadeem’s business, Paradise 4
Paws, has deemed doggy executive suites: rooms with webcams and flat-screen televisions tuned to Animal Planet.
Nadeem, 36, who often goes by “Saq,” began his career 15 years ago at Ernst & Young
as an auditor. He continued at Diamond Management and Technology Consultants,
which has since been acquired by PricewaterhouseCoopers LLC. While pursuing his
MBA, he developed the idea for Paradise 4 Paws and six years ago left the corporate world
to pursue his entrepreneurial ambitions.
Headquartered a seven-minute drive from O’Hare International Airport, Paradise 4
Paws targets travelers looking to board their animals, enhancing the concept of luxury
kennels by adding airport proximity and 24-hour pickup and drop-off.
Paradise 4 Paws offers parking options for customers, as well as shuttle service to the
airport. With its cuddle times and slumber party rooms, spa services and splash pools,
the facility is designed to be more of a pet resort than a kennel — a kind of boutique hotel for the furry set. Rates at the O’Hare location, a 25,740-square-foot space in Schiller
Park, range from $27 to $37 per night for cat bungalows to $49 to $80 a night for dog
suites.
“When you leave your pets behind, you feel guilty about it,” Nadeem said. “Our concept is, you should not feel guilty about it. You should actually feel good about it. ... So
that’s how the whole concept was based, matching that part of it with the convenience
aspect, not just one or the other.”
So far, it’s working. In the past five years, Nadeem has grown Paradise 4 Paws to 79
employees from eight. Annual revenue is expected to surpass $3 million by the end of
2013, up from $358,000 in the last two quarters of 2008. In the past two years, Nadeem
has opened Paradise 4 Paws locations near Midway International Airport and at Dallas/
Fort Worth International Airport. Two more airport locations are set to open this year,
with expansion plans calling for a minimum of 10 total locations within the next five
years.
In June 2013, the U.S. Small Business Administration named Nadeem its Illinois
Small Business Person of the Year.
“He found a good market and figured out a way to really drive an innovation to build
a business around,” said Bo Steiner, deputy district director for the Illinois District of the
SBA, who helped oversee the selection process. “He’s got a great business, and he knows
that he can continue to grow.”
Idea is hatched
Between his jobs at Ernst & Young and Diamond, Nadeem attended Northwestern University’s Kellogg School of Management. He was in an entrepreneurship class with Johanna Newcomb, now Paradise 4 Paws’ chief marketing officer, and they had a weekend
to brainstorm ideas they could turn into a business plan.
“I had just gotten my puppy, George,” Newcomb said, “and my mom was like, ‘You are
so into that dog, why don’t you do something with the dog?’”
Newcomb had seen a pet hotel in Springfield and thought it could work in a larger
market like Chicago. With his experience crisscrossing the country for Ernst & Young,
Nadeem contributed thoughts on the traveling aspect of the business. A student from
Japan suggested the airport angle, having seen something similar near Narita International Airport near Tokyo.
The more research they did, the more they realized “it’s not just a fun idea, there’s a
business merit to it,” Nadeem said. “Usually, people don’t think about pets as a business
because, hey, there’s an emotional value to it, but it’s a very, very valid business model.”
Americans spent $53.3 billion on their pets in 2012, according to the American Pet
Products Association, with $4.2 billion going toward pet services like grooming and
boarding.
“We had to pitch the potential business to professors, and the professors are brutally
honest,” Nadeem said. “I mean, they tell you if your idea sucks. We were one of the last
groups to present, and they were like, ‘Why aren’t you doing this?’ So we knew there was
something there.”
After business school, however, Nadeem went to work for Diamond, and Newcomb
moved to the Bay Area to work for Macy’s Inc.
Still, Nadeem held on to the idea. He had a series of meetings in which Julie Hennessy, a professor of marketing at Kellogg, told him she would like to invest, as did Don
Jacobs, a former dean and current professor at Kellogg. Shortly after, Nadeem took a
leave of absence from Diamond to launch Paradise 4 Paws, later asking Newcomb to join
him as a part-time consultant and then as a full-time member of the executive team.
“Look, he gave up a great job to do this,” said Jacobs, who said that in more than five
decades at Kellogg, he had invested his own money in just three or four student businesses. “It was just something that he was excited about, and the excitement is very
catching.”
Paradise 4 Paws now has a core of about 20 investors, with Nadeem the largest shareholder. Though the business is profitable, Nadeem said, investors have yet to receive
dividends because cash is invested in opening additional locations.
The nonmedical area of pet services, including grooming and boarding, is the fastestgrowing segment of the industry at 6 percent annually, according to Marketing Daily,
which cited the 2013-2014 “U.S. Pet Market Outlook” by Packaged Facts, a research
firm.
Adrienne Doster, manager at Airport Park ‘N Bark a mile from Hartsfield-Jackson
Atlanta International Airport, said the pet resort and day care, operating for a decade,
took a small hit when a competitor opened nearby. But, for the most part, the businesses
have been able to coexist comfortably.
“There’s room for others to open up, especially around a really congested area by the
airport, because there’s always going to be that kind of demand,” she said.
Doug Meyer, who worked with Nadeem at Ernst & Young, said he has put about
$200,000 of his own money into Paradise 4 Paws.
“One of the things when you’re investing is that you’re investing in a person more
than an idea or a concept,” Meyer said. “You really have to believe that a person has the
abilities and the ideas.
“Saqib lays out facts and balances things, but the thing that really comes through
with him is his passion. When you talk to him and see passion and belief and drive to get
there, that’s what sells me.”
Mother’s lessons
Nadeem lives with his partner in a third-floor condo in Buena Park, more than 7,500
miles from his birthplace in Karachi, Pakistan.
It was in Karachi that Nadeem, the youngest of three children — his nickname in
Urdu is “munna,” or “baby” — learned about entrepreneurship by watching his mother.
He tells of early memories of a two-room house with a leaky roof in which he, his siblings and his mother squeezed onto a single wooden bed. His dad, he says, was in the
military and often traveling to posts in Pakistan. (Though his father is still in Pakistan,
his mother and sister live in Vancouver, British Columbia, while his brother moved to
Oak Park.)
His mother, Farhat Nadeem, set up a sewing machine in the home’s second room,
where she made dresses that she would sell at the Friday market in Karachi. At age 5,
Nadeem began working for his mother at the market. By age 12, he was training others
in sales. When he wasn’t attending school, Nadeem would often work from 7 a.m. to 9
p.m. at the market.
His mother’s stall, he said, grew into a series of retail stores called Nadia’s Frocks. She
began an export business, too, called Nadia’s Exclusives. One of the greatest lessons she
taught, Nadeem said, was the value of treating customers well.
“My mom, she did not have any tolerance for bad customer service,” he said. “She
would fire people on the spot for bad customer service. So she ingrained that in me in
the very, very beginning.”
Nadeem also traces his passion for puppies and kittens to Karachi. There is a photo
of him, at about age 13 or 14, on his street, surrounded by dogs.
In their Buena Park condo, Nadeem and his partner, Nick Rutan, are outnumbered
by animals, including, in addition to Vera and Miuccia, two cats named Gucci and Sace,
short for Versace.
“Looking back at it,” Nadeem said, “of course I would be doing what I’m doing.”
And while Paradise 4 Paws has received mostly positive reviews on social media sites
like Yelp, Nadeem is acutely aware of the impact of this more modern reflection of customer service. People who spend freely on their pets, after all, tend to be exacting about
their care.
“Any time there’s a positive or negative review, all of us get involved,” he said, referring to the executive team. “I’m very upfront. We are not perfect. We will treat your pets
as we would treat our own, and we’re going to do the best job we can. Sometimes we fall
short. But the guarantee we give our customers is, we will always be honest with you. We
critically look at where did we falter in this and how do we improve it?”
‘I’m going to do this’
After attending private schools in Pakistan, Nadeem left Karachi in 1995 for Decorah,
Iowa, to attend Luther College.
He had some scholarships but needed to work to pay the balance of the tuition, so
he attended a job expo and heard a presentation about selling books door-to-door for
Southwestern Publishing Co.
“Generally, international students don’t do it because you have a language barrier,
and people get threatened by you because you have somebody foreign-looking coming to
the door,” Nadeem said. “(The recruiter) was like, ‘You can’t do this. It’s too hard for you.’
And I’m like, ‘Hell no! No, I’m going to do this.’”
Nadeem ended up racking up every incentive sales award the company offered —
plaques, a gold watch, a pair of shorts — selling $20,000 worth of books in eight weeks.
The training, he said, helped him slow his speech and relate to a palette of potential
customers.
“People yelled at me. People tried to hit me,” he said. “Anything you could imagine.
That’s on the bad side. The great thing, I would be sitting down with parents who were
asking me how to help their children. It was just eye-opening, emotional. I cried many
times.”
In 1998 he graduated from Luther with a bachelor’s degree in accounting and management information systems, and took a job as a Des Moines, Iowa-based auditor with
Ernst & Young, where he showed a talent for team-building.
Meyer, his co-worker, said his friend thrived in team settings. Once, Meyer recalled,
when Nadeem was put in charge of managing an auditing project for a client in Omaha,
Neb., he took his team to the zoo.
“I tell you what, his team loved him,” said Meyer, now the director of internal audit and
financial controls at Exelon Corp. “He was one person that would give direct feedback,
and even if it was feedback that was hard to receive, he formed very trusting relationships with peers and direct reports that allowed him to have these open conversations.”
Years later, working for Diamond, Nadeem took charge of coordinating the company’s
annual showcase of projects called the “Bizarre Bazaar.”
Ed Brady, then head of human resources at Diamond, said the bazaar maintained a
bit of a carnivallike atmosphere. Amid that, Nadeem arranged for a trained monkey to
appear during the cocktail hour.
“The monkey was perching on people’s shoulders, and it kind of freaked them out,”
Brady said. “(Saq) definitely made a big impression by doing little things like that where
he made the event richer. He wanted to make things memorable, and he wanted to make
things fun.”
Nadeem still places a priority on activities that promote togetherness among his employees, most of whom are hourly workers earning $10 or more per hour. He takes them
to rooftop parties at Cubs games, as well as to bowling and WhirlyBall outings.
“Work has become such a big part of everybody’s life, and if you’re not enjoying the
work that you do, it’s not right,” Nadeem said. “It shouldn’t just be about work, work,
work. And if you are working a lot, there have to be aspects that you enjoy.”
With the reputation of his business riding on the work of these employees, there’s a
practical payoff too.
“If I knew somebody, I would feel more comfortable saying, ‘I need help with this,’”
Nadeem said. “It’s very difficult to have those kind of interactions if you haven’t taken the
time to get to know the person you’re working with.”
He adds that Paradise 4 Paws offers health care, dental coverage and paid vacation
to its full-time employees, including hourly workers. He invests in personal development
to ensure team members pursue their career goals, even elsewhere, the way he was able
to at Diamond.
“If you have happy people,” he said, “you’ll have happy service.”
Jamie Damato Migdal, a dog-behavior expert and owner of CanineLink, which offers
pet-related education within the industry, has trained some of Paradise 4 Paws’ employees in breed behavior and best practices. She said Nadeem has distinguished the business with its efficiency and quality of care.
“He has built a team of really successful, hardworking, smart people, but when you
throw in his background, he was not some pet-crazed person who just found the right
people. He’s a businessperson,” she said. “He’s a thinker and analytical and ethical, and
when you put that together, all of a sudden, you’ve got great operations.”
Saqib Nadeem
• Born in: Karachi, Pakistan; speaks English, Urdu and Hindi.
• Family: Lives in Buena Park with partner Nick Rutan, two dogs and two cats.
• Eats at: Sabri Nihari, a Pakistani restaurant on Devon Avenue (“their focus is on
grilled Pakistani food, which I really like”) and House of Sushi & Noodles on Belmont Avenue.
• Standard work outfit: Shorts or jeans and a Paradise 4 Paws polo shirt.
• Favorite outdoor place for his dogs: Montrose Dog Beach. “My dogs love going
in the water.”
• If he could work on one thing about himself: “It is very hard to have a personal
life and balance it when you love your work so much. It’s very easy for me to work
a lot and neglect my personal life a lot. It’s important to have a balanced life, both
making the business better and making personal life better.”
Nina Nashif, CEO, Healthbox
Founder pushes business accelerator in uncharted direction
By Janet Kidd Stewart
June 10, 2013
Nina Nashif
It’s another day in the startup sandbox, and Nina Nashif is leaving tracks.
The 38-year-old founder and chief executive of West Loop business accelerator Healthbox has hammered out a benefits package for the company’s London office, pressed an
international firm for an investment in a collaborative health care venture and grilled a
job candidate about whether he would fit in with the company.
Before the day is out, she’ll ask city officials to invite top Chicago area hospitals to
a Healthbox-led discussion on ways to foster health care technology innovations. She’ll
also accept a board position with Imerman Angels, a nonprofit organization that matches
cancer patients for mentoring and support.
She moves as if a clock is ticking over her head, and in a sense it is.
Though she has solid experience in health care consulting and business development
here and abroad, she’s a newcomer to venture capital, and the tech-heavy VC world
doesn’t have a lot of experience yet with health care startups. She wants Healthbox to
plant those flags fast.
Since 2012, the company has already run four-month accelerator programs in Chicago, Boston and London and in April 2013 kicked off applications for one in Jacksonville,
Fla., that will begin in July. Another is planned for Nashville, Tenn.
Healthbox is an offshoot of Sandbox Industries, the tech venture capital firm started
a decade ago by retired NutraSweet Co. executives Nick Rosa and Robert Shapiro. Sandbox manages a venture fund for BlueCross BlueShield Venture Partners that invests in
promising health care startups.
With investments from those two firms and others, Healthbox finds promising health
care companies and funds them in exchange for equity if the companies survive.
“People were shocked we raised the money as fast as we did in London,” Nashif said.
“We have a lot of opportunity.”
She also has bigger designs for the company, envisioning an ongoing, national collaboration of major health-related companies funding promising new products. Hence,
the ask at City Hall.
“Like a lot of entrepreneurs, she’s got a big vision and wants to move fast,” said Peter
Newell, a former Obama campaign aide who began working for Healthbox a couple of
months ago and who helped get the meeting with the city. “She wants concrete results,
and so do I, so I like working for people like that who have a sense of urgency.”
Rosa says he hired Nashif for Sandbox, where she remains a director, before he even
knew whether Healthbox would become a company.
“I love to have people like Nina join the company without a specific mission because
she finds things we didn’t even know were there,” he said.
Entrepreneurial drive
It’s a role Nashif is comfortable with, having spent most of her career creating her own
job descriptions. In her previous job as vice president of Skokie-based Sg2 LLC, a health
care analytics and consulting firm, she created the company’s international division
from scratch, logging $2.5 million in revenue in its first two years.
“I took one analyst to London with me from Chicago, and we worked out of a Starbucks until we got going,” she said.
In 2010, after five years at Sg2, while networking in Chicago and San Francisco to
think about her next move, her health care consulting work and that startup experience
won her an introduction at Sandbox.
It was the entrepreneurial drive that appealed to Rosa.
“I’ve seen her be tough even with potential investors,” said Rosa. “She’ll ask them if
they’re really serious, because otherwise she doesn’t want to waste the time (pitching
them). She comes across as really straightforward and not glad-handing, and corporations love that. Sometimes she surprises herself with her own audacity.”
Nashif grew up in Elgin with parents who came from Israel. She speaks some Arabic,
which she learned from her mother, Maria, and has lived in London and Abu Dhabi since
graduating from the University of Illinois at Urbana-Champaign.
While in elementary school and taking dance lessons, Nashif wrote to McDonald’s
Corp. asking for a chance to meet with the company and try out for a spot in a commercial.
“I received a very kind note back saying they have professional actors in those commercials, but I was welcome to enjoy the enclosed gift certificates,” she recalled. “It was
common for me to do things like that.”
Nashif can be intense, and she’s frank about having high expectations for her staff of
about 15 employees, 10 of whom are Chicago-based. Workers can bring their dogs to the
office and pretty much dictate their own vacation policy, but it’s clear that those without
passion for the work needn’t apply.
“She’s a tough boss, but people love being around her because she’s got that magnetic
part of leadership,” Rosa said. “She also sees things ahead that others don’t see.”
Jill Seidman, research director for Healthbox, recently got an email from Nashif at
8:30 on a Sunday morning.
“She sent this email saying, ‘Get your notebooks ready,’ because she’d arrived at a
conference two hours ago and already had a lot of ideas for us,” Seidman said with a
laugh, adding that Nashif’s attitude comes across as energizing rather than overworking
her employees.
Michael Sachs, chairman and CEO at Sg2, points out that several Sg2 alums, including Seidman, have ended up at Healthbox, which speaks to Nashif’s management style.
“There are people who will walk all over everybody to get what they want, but that’s
not Nina,” Sachs said.
But will it work?
Nashif’s first job after graduate school was an administration and business development role with a Houston hospital, where she developed an international business and
marketing plan. She helped stabilize an affiliate office in Istanbul, and that experience
led her to start a luxury Turkish robe and bath towel distribution business in New York
before joining Sg2.
Despite her health care and startup experience, not everyone thinks Nashif can succeed in getting venture capital investors interested in health care ventures.
Venture capital investors she spoke with early on, she said, thought the health care
world was too complicated to tackle. “They said, ‘We’ve seen the incubator model start up
and fail. So, good luck.’”
“I said thank you very much,” Nashif said, “but I do think it’s going to work.”
With the fragmented industry facing dramatic pressure to cut costs and improve care,
she believes now is the time health care companies will be amenable to trying new products.
Like Sandbox, Healthbox funds startup companies with seed money in exchange for
future equity. Healthbox matches entrepreneurs with investors and major health care
organizations as mentors while their businesses get off the ground.
To date, the company has launched 37 health care startups — making products ranging from a wearable hand sanitizer dispenser for nurses to an imaging device patients
use to send results to a dermatologist — with 30 more planned by the fall.
Among the startups that came through the first Chicago program in 2012 was Coupon Doc, a New York-based company that provides online and point-of-sale coupons for
prescriptions and over-the-counter medications. Another is PUSH Wellness, a Chicagobased provider of employee incentive programs that pay cash incentives for improving
blood pressure, losing weight and other healthy behaviors.
Healthbox provides the startups with $50,000 in capital in exchange for 7 percent
equity in the ongoing ventures. The private company does not disclose revenue.
Beyond expanding the accelerator to more cities, Nashif wants to build a framework
that supports not only short-term startup situations, but later-stage growth.
“As (our startups) grow and once they are generating revenue, they need a different
kind of help,” she said. “We’re thinking about what these companies need at different
stages of the life cycle.”
International mix
Nashif spent a week at The Forum of Young Global Leaders, an annual gathering just
ahead of the World Economic Forum on East Asia, held in Myanmar. She was chosen to
attend as one of 199 promising leaders under 40 from around the world. Chelsea Clinton
was also among the U.S. invitees, along with Zappos’ Tony Hseih.
Her family’s cultural background and study-abroad programs at U. of I. sparked a
passion early on for travel, and at Sg2, Sachs said, she developed the company’s international division with a keen sense of cultural understanding.
Down the road, she said, she can envision helping Sandbox with its global aspirations
too.
“Nick has always said he wants Sandbox to become a global company, sort of a Sandbox in every village,” she said.
The challenge ahead for her? Winning acceptance as more than just a one-off business accelerator and entrenching herself in the health care startup world.
“Lack of experience is always a roadblock, and she’ll have competition. But timing is
everything, and being out there in front” positions Nashif nicely in a venture field that is
relatively uncrowded, Sachs said.
Meanwhile, she’s been consciously keeping her workload in check, said Denise Brosseau, a California-based executive coach working with Nashif.
“In the beginning she was on a plane all the time, but now she’s getting more control
over her schedule,” Brosseau said. Still, traveling three days a week is common.
Nashif spends her downtime with a significant other and her family, including her
parents and two brothers.
“We were always a close-knit family,” said her younger brother, Rommie Nashif, a
manager for a Chicago-area insurance firm. Older brother Manar is an engineer. “We
didn’t have the sibling rivalries” common in many families, he said.
Her father, Omar, is a semi-retired civil engineer. She recalled a recent conversation
with him about the career restlessness that has gotten her to this point.
“I told him I’m just wired a certain way,” she said. “I need to be in a place where I can
push the boundaries.”
Nina Nashif
• Graduated: Bachelor of science, community health, University of Illinois at Urbana-Champaign (1996); master of health administration, Washington University
(1998)
• Hobbies: “I think a lot about this because I don’t want to burn out, and I’m more
effective with my work if I have diverse experiences and am around interesting
people. I pick a few new things to do each year. This year it’s learning about beekeeping and hiking in the Swiss Alps.”
• Office mascot: A fish named Brody, after “Homeland” character Nicholas Brody.
Many on the staff are fans of the Showtime series.
• Using: Uber, a new mobile app for taxi service
• Go-to office lunch: Butterfly Sushi Bar, delivered
• Organizations: International Women’s Forum; Arab International Women’s Forum; Imerman Angels.
Richard Thaler, University of Chicago Booth School of
Business professor
Professor spent years trying to convince colleagues that there’s more than math behind
economics, and some peers say he’ll be a Nobel Prize winner someday
By Gregory Karp
April 30, 2013
Richard Thaler
If there’s one thing to know about world-renowned behavioral economist Richard Thaler,
it’s that he’s human.
Just as important? He thinks you are too. And that’s more profound than it seems.
Economic theory long held that consumers behave like smart robots, always making
rational and logical decisions. But as Thaler began observing more than 30 years ago,
that’s not what happens in real life. Instead, humans make irrational decisions in systematically warped ways, time and again, for the same reasons.
His insertion of human psychology into the hard-core mathematical field of economics was once so heretical that Thaler couldn’t even get his ideas published.
But it made sense to him.
“I’m pretty stubborn, and this was fun,” he said. “Besides, I enjoy stirring the pot.”
A Lincoln Park resident and professor at the University of Chicago Booth School of
Business, Thaler is now revered as a founding father of the relatively new field of behavioral economics. It considers biases, lack of willpower and a host of other human frailties
that lead people to make bad decisions about everything from the money they spend to
the food they eat.
For his contributions, Thaler, 66, is likely in line for a Nobel Memorial Prize in Economic Sciences, some colleagues say.
“It would be a scandal if he were not short-listed,” said Daniel Kahneman, a Nobel
laureate and longtime friend and collaborator of Thaler. “I’m sure he is.”
He’s an informal adviser to President Barack Obama’s administration and to his reelection campaign, and a formal adviser to the “Behavioural Insight Team” in Prime Minister David Cameron’s administration in the United Kingdom.
Thaler is famous for devising easily understood scenarios that show how human behavior bucks economics and, sometimes, logic. Consider:
• Why, during a hazardous snowstorm, would we skip driving to a concert if the tickets were free, but risk life and limb to go if we had paid for the tickets? The risk on
the roads is the same, and we don’t get the money back either way. This illustrates
the “sunk cost fallacy.”
• Experiments repeatedly show that people are willing to pay $3 to buy a coffee mug
but demand $6 to sell a mug they have been given. The phenomenon is called the
“endowment effect,” where we assign greater value to things we possess.
• You bring $200 to a casino to gamble. You win another $200. If you separate the
money and lose only the winnings, you may not feel much pain because you consider that money to be the casino’s anyway. Yet you still lost $200. This is a good
example of “mental accounting.”
The wide-ranging implications of such behavior stretch to decisions made daily by
consumers, marketers, companies and governments. In recent years, Thaler has turned
to weightier issues of public policy.
He explains how governments can use behavioral economics to “nudge” citizens into
making better choices for themselves. His ideas and those of Cass R. Sunstein, now
Obama’s regulation czar, are outlined in his best-selling book, “Nudge: Improving Decisions about Health, Wealth and Happiness.” This led Thaler, along with Sunstein, to be
named a finalist for Time Magazine’s most influential people in the world in 2009.
“During most of the 1980s he was dismissed as a crank,” said David Laibson, economics professor at Harvard University. “It takes a lot of courage to get a decade of rejection and to stick to your guns. Dick kept fighting, and eventually almost everyone came
around to his view.”
Not quite by the numbers
Thaler was born and raised in northern New Jersey with two younger brothers. His
mother was a school teacher turned stay-at-home-mom. His father rode the train daily
to Newark, where he was an actuary at Prudential.
“He thought that if I was a real man, I would have become an actuary, that economics
was a poor-man’s actuary,” Thaler said, seemingly only half joking. “He was an influence
in that I knew I didn’t want to do that.”
Reflecting further, he said, “It’s not so much that I didn’t want to be an actuary, it’s
that I didn’t want to be a businessman.”
Why?
“Lousy subordinate,” Thaler said of himself.
His telling of the story is typical of his speech pattern: Slow. Contemplative. Halting.
Until he unloads a zinger.
Thaler graduated in 1967 from Case Western Reserve University in Cleveland with a
degree in economics. “I was interested in psychology, but I thought economics was more
practical, in the sense that you could probably get a job if you studied economics,” he
said.
He received master’s and doctorate degrees from the University of Rochester in upstate New York and taught there before moving to teaching positions at Cornell University and then in 1995 at the University of Chicago.
“I always tell my students I’ve never had a real job in my life,” Thaler said.
Still, the high-level mathematics of economics weren’t exactly up Thaler’s alley. “I’m
not going to win any math contests among my colleagues,” he said. “By any normal standard, I’m pretty good at math. But if you put me in a group of economists, I’m going to
be below average.”
So he continued his quest to explain economic phenomena with more words and
fewer numbers.
Early in his career, Thaler began keeping a list of “anomalies,” real-life examples of
how people made decisions about their money that couldn’t be explained by the logic of
economics. “It was a professional activity, but I couldn’t figure out how to do anything
with it,” Thaler said.
Then he learned about two Israeli psychology researchers, Kahneman and Amos Tversky, who were doing groundbreaking work on human decision-making. When he found
out the duo would be spending a year at Stanford University in 1977-78, he arranged “by
hook or by crook” to join them, persuading the University of Rochester to let him leave
and others to pay his salary for what ended up being a year of collaboration.
“They didn’t know anything about economics. I didn’t really know anything about
psychology. We were equally ignorant of each other’s fields,” Thaler said.
Despite the lack of familiarity, or perhaps because of it, behavioral economics was
born.
“In many ways, Dick played the key role in bringing behavioral economics to life, since
he was the bridge between psychology and economics,” said Laibson, the Harvard professor.
Bringing concepts to life
During that academic year, the trio worked on several important concepts, including
mental accounting and the endowment effect, putting labels and frameworks to some of
the items on Thaler’s list of anomalies. They came up with examples that were obviously
true but that flew in the face of traditional economics.
Resistance was more aimed at the ideas than the man, said Kahneman, who has described Thaler as “blessed with a sharp and irreverent mind” and having an “ironic eye”
and “boisterous temperament.”
“People always took him seriously because he’s so obviously intelligent and so funny,”
Kahneman said. “So, people never ignored him personally. They thought the ideas were
not important. And that took some time.”
Eric Wanner has known Thaler for about 30 years and funded some of Thaler’s early
work. He is president of the Russell Sage Foundation, a group devoted to research in social sciences. Wanner calls Thaler “the key ingredient, the indispensable person,” in the
birthing of behavioral economics.
“Dick’s strong suit is this incredible, intuitive, innovative capacity to look at human
economic behavior and see its quirks — and then make some good social science out of
it,” Wanner said.
Eventually, Thaler landed a regular column about economic oddities in the well-respected Journal of Economic Perspectives. The columns, which ran from 1987 to 1990,
“were beautifully written, and they tended to be quite funny,” Kahneman said. “I think
that got behavioral economics started as a field. Then, it became respectable.”
Nicholas Barberis, a behavioral finance professor at Yale University, said the difficult
early days should not be overlooked. “It is only now that he is rightly lionized,” he said of
Thaler. “He took a lot of hits back then, but he paved the way and made life much easier
for the next generation of behavioral scholars.”
Said Thaler: “I don’t want to give the impression that life has treated me unfairly. It’s
obviously not true. I have a great job at a top university, live a good life. But like all new
ideas, it was a struggle to get it accepted.”
A growing influence
Through the 1980s and 1990s, Thaler evangelized behavioral economics, carefully choosing research that would advance the field.
“I always say that one of the things that makes him great is he doesn’t like to work,”
Kahneman said. “He hits only home runs, because the small stuff isn’t worth his time.
If you want to tease him, you’ll say he’s lazy, but if you want to praise him, you’ll say he
has very good taste in problems. He’s very selective in the things he invests energy in.”
Along the way, Thaler also contended that behavioral economics applies to financial
markets, and a related field became known as behavioral finance. Indeed, Thaler is a
principal of Fuller & Thaler Asset Management, a California firm that manages money
for pension funds and other clients. It attempts to make money by investing in stocks
that are mispriced because investors have biased expectations about a firm’s future.
Russell Fuller, who conducts daily operations of the firm, said Thaler has changed the
economics profession. “People now accept that you have to think about human behavior when you’re thinking about economics … that’s a major contribution,” Fuller said.
“He doesn’t write papers that are full of math. He writes papers that are full of common
sense.”
As behavioral economics gained approval, applying it to governments and other organizations of power became a natural progression. And it was a way to help people make
better decisions, given their sometimes irrational natures.
That’s what Thaler’s best-selling book was largely about.
“Nudge” was born during lunch at a booth in the back of the restaurant Noodles Etc.
on East 57th Street in Chicago. That’s where Thaler and Sunstein, then a law professor
at the University of Chicago, discussed an odd term Thaler had come up with, “libertar-
ian paternalism,” a combination of seemingly opposite ideas. The phrase attempted to
describe how a government or employer could structure choices for people so they were
more likely to make good decisions.
In short, people would receive a “nudge.”
Skeptics say the whole thing sounds socialistic, that you can’t trust employers and
government to be benevolent or competent enough to guide choices. That may be true,
Thaler said, but any method of presenting options to consumers will inherently influence
what they choose. Given a list of choices, for example, people will often choose the first
one whether or not it’s a good one. So you might as well design a system that will likely
lead to something good.
For example, most people agree that saving for retirement is good. But many young
workers don’t sign up for their employer’s plan. What if employers made enrollment in a
401(k) plan automatic for new employees, requiring them to opt out if they didn’t want to
participate? By changing the 401(k) default from opt-in to opt-out, participation grows.
Thaler, with frequent collaborator Shlomo Benartzi, went a step further with “Save
More Tomorrow,” which invites participants to commit in advance to a series of automatic retirement contribution increases, timed to coincide with pay raises. That way,
workers contribute more to savings but never see their take-home pay decrease.
The idea has been adopted by thousands of employer retirement plans, with an estimated 9 million workers enrolled.
“He has successfully challenged the assumption of economic theory, and, more importantly, he has explained otherwise unexplainable phenomena in the market,” Kahneman
said. “He has provided a framework for understanding what happens when the housing
market dries up, for understanding why people don’t save enough, for why negotiations
quite often fail.”
Kahneman cites Thaler’s idea of applying behavioral economics to public policy as yet
another major contribution.
Will his numerous accomplishments be enough to earn that Nobel Prize one day?
“The Nobel Prize in economics is typically awarded at least 30 years after the research
has been published, so at my age there is nothing I can do to increase my chances,”
Thaler said. “As a result, I devote more time to filling in my NCAA basketball bracket
than to worrying about whether I will win a Nobel Prize.”
Richard Thaler
• Full title: The Ralph and Dorothy Keller Distinguished Service Professor of Economics and Behavioral Science at the Booth School of Business, University of Chicago
• Personal: Father of three by his first marriage. Married to France Leclerc, a former
marketing professor at the University of Chicago.
• On wine: Thaler belongs to a wine-tasting group, although he says his wife has
the expert palate. But don’t call him a wine collector. “My view is the purpose is to
drink it. At my age, what that means is there are some kinds of wines I no longer
buy because they are wines that I don’t like to drink until they’re 20. … I’m now in
the drawing-down-inventory phase.”
• Odd pairing: One of Thaler’s frequent golf partners is Eugene Fama. Fama, also
a U. of C. economics professor, is known as the father of the “efficient market hypothesis.” Each man is world-renowned, but for contradictory points of view. They
once warned a young guest they’d be quizzing him for 18 holes about economics,
until Thaler let him off the hook: “I told him he shouldn’t worry because we won’t
agree on any of the answers.” Another golf partner: “Freakonomics” author Steven
Levitt.
• On prospects for a Nobel Prize: “Having been invited by my friend Daniel Kahneman to join his entourage when he won in 2002, I can tell you that the Swedes
throw a great party. So if they do call, I will not turn it down.”
Marianne Markowitz, regional administrator of the U.S.
Small Business Administration
Regional director is a fierce advocate for all that the U.S. Small Business Administration
represents
By Erin Chan Ding
April 2, 2012
Marianne Markowitz (right) with Colleen Kramer, owner and president of Evergreen Supply Company
Marianne Markowitz strolls through a hallway at the regional headquarters of the U.S.
Small Business Administration in the Loop, not pausing to glance at the two official portraits, one of President Barack Obama, that are the only decor on a yawning stretch of
white wall.
She stops at a towering wooden door, fiddling with her keys before turning the knob
and entering a bland, taupe-and-tan space.
“I might have the ugliest office in the whole region,” she says, her grayish-blue eyes
sparkling.
It helps that she spends so little time inside it.
Since being appointed as a regional administrator of the Small Business Administration nearly three years ago, Markowitz has traversed the Midwest, bringing the message
of the SBA to small-business owners and lenders across Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin.
She spends nearly half her working time traveling, swooping into meetings in Minneapolis and summits in Milwaukee. In Chicago, she visits businesses as diverse as Evergreen Supply Co., which deals with electricity and lighting, and Diana’s Bananas, which
produces chocolate-smothered frozen fruit.
She heads roundtables, talking about changes since the Small Business Jobs Act was
signed into law in September 2010 and how the SBA, which was proposed by President
Dwight Eisenhower and created by Congress in 1953, can help entrepreneurs with access to capital, counseling and contracting.
She gives speeches about the traction the SBA has gained in recent years, like $2.2
billion in SBA-backed loans made in her region for this fiscal year to date and the $30
billion in SBA-approved loans made nationally in fiscal year 2011, an all-time high for
the agency.
“This job is like, you’re in a different place every day, there’s no routine, and it’s great
and it’s fun,” said Markowitz, 45. “I’ve really grown to like it, but it’s pushed me.”
When feeling drained, Markowitz, a finance guru and self-described introvert, finds
comfort in numbers.
“At the end of a long day of outreach, I’m like, ‘Where’s my spreadsheet? I just want
to relax,’” Markowitz said, laughing.
The SBA’s 10 regions fall under the supervision of SBA Administrator Karen Mills,
who Obama elevated to his Cabinet this year. Mills, the daughter of Melvin and Ellen
Gordon, the co-chief executives of Chicago-based Tootsie Roll Industries, appears in the
other portrait outside Markowitz’s office.
“She may be a little bit quiet,” Mills said of her Great Lakes Region chief. “But do not
be deceived, because she is extraordinarily competent, articulate and fierce as an advocate for small business.”
Spending time abroad
Markowitz spent 17 years in the private sector, including jobs with General Dynamics
Corp., where she had an entry-level finance position; Mallinckrodt Inc. of St. Louis (formerly Imcera Group of Chicago), where she worked in treasury and risk analysis; and
Express Scripts, where she performed integration work on an acquisition and set up the
company’s first professional treasury department.
In her mid-30s, she married Jeff Markowitz and lived in Europe for about two years
when he was president of CS Stars, a risk-management technology provider that’s a
business unit of Marsh, part of Marsh & McLennan. After six months of searching for a
job in Europe, Vivendi SA hired her to do documentation work, and “I was like, ‘Ugh, I
really don’t want this job.’”
Markowitz and her husband lived in London then, across from Harrods department
store. On her visits to Harrods’ Food Halls, Markowitz began to entertain the idea of entering the culinary world.
“(The chef was) like, ‘If you want to start cooking here, it would be chopping carrots,
and it would be like 12,000 (British) pounds a year,’ and I was like, ‘Maybe,’ because I
would enjoy it,” said Markowitz, driving her silver Volvo XC90 along Elston Avenue as
she recalled the memory. “And Jeff’s like, ‘Whatever you do, I don’t care what you do, as
long as you make enough to pay my taxes.’
“And I was like,” she paused, “‘Screw that! You should never have said that.’ He was
being nice, but I was like, ‘Oh, my God, how demeaning!’”
She rebooted her job search, and a recruiter pressed her to go on an interview with
Syngenta, the global agribusiness corporation. Based at Syngenta’s headquarters in Basel, Switzerland, Markowitz worked on the corporation’s initial public offering.
“It was fantastic,” she said. “It was like everything I had ever done, plus I learned a lot
and worked with a cool team of professionals.”
Then, she and Jeff had their daughter, Maura, and Markowitz halted her career for
five years.
For Jeff’s job, the family moved back to Chicago, where Markowitz had worked for Imcera and completed her Master of Business Administration degree at DePaul University
nearly a decade earlier.
Maura, now 9, has only a vague memory of her mother in a nightgown during those
years, but Markowitz said she treasured her time staying home with her daughter.
Working for Obama
Afterward, there was no easing back into the workforce: She went from staying home to
working 100-hour weeks.
When Maura was 5 years old, Markowitz was recruited into Obama’s first presidential
election campaign as a financial consultant on his exploratory committee. She sought
out other professional-turned-stay-at-home moms and set up an office at her kitchen
table in Lincoln Park.
“At first it was exciting because of the business challenge of it, honestly,” she said.
“The first couple of weeks it was like, ‘Wow, those guys are really far behind! We’ve got to
do this and this and this.’”
Markowitz then became chief financial officer for Obama for America. She watched as
hundreds of thousands of dollars in contributions blossomed into about a billion dollars,
counting Democratic National Committee funds.
Markowitz had assumed her path after the campaign would lead back to the private
sector, and she began interviewing for a top financial position with a large corporation.
But she felt ambivalent.
“I started to feel like I might have regrets if I didn’t at least take part in the administration for a while and see how I liked it, because it would be my only chance to do that,”
she said.
Markowitz told White House officials that she would like to be considered for a position. She was particularly interested in the SBA’s regional job because it suited her professional background and would allow her family to stay in Chicago.
“I felt pretty passionate about the SBA,” Markowitz said. “Because, you know, it’s
business, it’s finance, it’s stuff that I can speak to.”
Eye on the future
The job is also temporary.
As political appointees, Markowitz and the nine other SBA regional administrators
serve at the discretion of Mills, the custom being that they submit their resignations
when Obama’s presidency ends. (Markowitz reports directly to Rob Hill, the SBA’s associate administrator for field operations, who reports to Mills.) Because of this, Markowitz
has made it a priority to hire strong employees in positions not filled by political appointments.
If Obama wins re-election, she would like to stay on — she declined a position with his
re-election campaign, in part because of the arduous hours — but she imagines someday returning to the private sector.
Judith Roussel, who has been the Illinois District director for 12 years and has reported to four regional administrators, said Markowitz has brought energy to the region,
even as Roussel’s staff shrunk by about 30 percent in the past year.
In total, 109 people work in Markowitz’s region; about 10 percent of its staff has been
cut in the past year through buyouts and unfilled positions.
“She certainly understands the challenges that it presents, but she is certainly not
willing to say, ‘OK, we don’t have to do,’” Roussel said. “We do have to do. Let’s figure
out how to get it done, and tell me what you need and how we can work together to get
it done.”
At a roundtable at the Women’s Business Development Center on Michigan Avenue,
Markowitz told female business owners and stakeholders that in fiscal year 2010, 22.7
percent of government contracts were given to small businesses. That puts them very
near the goal set by federal statute of 23 percent of agency spending going to small businesses, or about $100 billion of $432 billion available for government contracts.
“She really lets people understand that there is access to the bureaucracy and that
the federal government is really there to provide access, opportunity and assistance,”
Hedy Ratner, co-president of the Women’s Business Development Center, said of Markowitz. “She’s a very, very brilliant woman who understands finance, banking and smallbusiness issues.”
During her talk, Markowitz said more pressure is being applied by top White House
advisers, including Valerie Jarrett, for the government not only to exceed the 23 percent
small-business contracting mark but also to ensure that the 5 percent of government
contracts required to go to majority women-owned businesses do so.
“She’s out here hearing our concerns, so you know that they will make it to the right
ears,” said Deborah Sawyer, president and CEO of Chicago-based Environmental Design
International Inc. for more than two decades. “Nobody at that level has ever tried to make
contact with our community.”
Building confidence
That contact almost always comes with Markowitz wearing 4-inch stiletto heels, not just
for fashion but also for the practical purpose of allowing people to see her over podiums.
She said she never ponders her height (she is 5 feet tall) or her appearance but is
acutely aware that others do.
“I don’t walk into a room thinking, ‘I’m blond, I’m short, I’m soft-spoken.’ … but other
people are thinking about it,” she said.
When she first started working, she noted, her colleagues could not hear her during
conference calls. “Do I have a dog-whistle voice?” she remembers thinking. “What is going on here?”
A few years back, Markowitz tried wearing her hair shorter, thinking people might
take her more seriously. That didn’t last.
“You know, your hair’s not going to do it,” she said. “It really has to be your own confidence and sort of how you put yourself out there.”
She took a two-day public speaking class and used a speech and media coach for a
daylong training session. She brought on another coach to help with her speaking volume.
She maintains a constant back and forth with Carol Wilkerson, regional communications director for the SBA, rehearsing speeches and interviews. Sometimes, Wilkerson
will record Markowitz’s speeches so they can analyze her delivery.
“It’s a constant struggle,” Markowitz said. “And I’m always working to improve that.”
Achieving balance
Just before he left for his job as an account manager at Microsoft one morning, Jeff
Markowitz shared stories about his wife, whom he met 14 years ago in Nashville, Tenn.,
while he was teaching a class on policy administration at a conference.
Marianne, in the front row, was vocal that day.
“She asked, like, every single question. I mean, if there were six questions asked, she
asked six questions, and this room had, like, 100 people in it,” he recalled, as both of
them laughed. “Clearly, she was probably the most intelligent, attractive, smart person
that I’ve ever met, and I couldn’t let her get away.”
He also has learned, in their dozen years of marriage, what can happen when people
misjudge his wife.
“She is driven,” he said. “I’ve seen her — I mean, men, sometimes, they’re just very
aggressive, they know it all, and Marianne, basically …”
Marianne, who had left briefly, walks into their living room and finishes his sentence,
saying, “Yeah, I take them down.”
They laugh again, with Jeff adding: “Yeah, she challenges them. It’s just a lot of confidence.”
Markowitz’s mother, Joan O’Brien, 77, recalled how Marianne, the youngest of her
and husband Joseph’s five children, volunteered as a candy striper while working two
jobs as a lifeguard. Also, she was captain of her suburban St. Louis swim team and
served with the National Honor Society.
“She always wanted to take pretty much a leadership role,” said her mother, who lives
in suburban St. Louis. “Sometimes I found her tiring, because as a young one, she had
to be driven around. … I was thinking, ‘Why does she have to do all this?’”
Immersed in the SBA, Markowitz has been inspired by the hard work of small-business owners and their companies’ potentially quick trajectories.
“I think deep down I really want to be an entrepreneur,” she said. “I just haven’t had
the guts.”
Markowitz is accustomed to waking at 4:15 a.m. to fit everything into her schedule,
including 400 crunches a day and, on most mornings, a four- to seven-mile run, and she
said she has had to achieve “work/life balance in a different way.”
In previous jobs, “it was just long hours, but I’ve always slept in my own bed. Now, it’s
just a different sort of calculation,” she said. “For me, it was learning to say, ‘Tomorrow,
I’ll take a vacation day in the middle of the week; not to go on vacation but to just live my
life, because so much of it is lived out of town.”
Despite her mother’s 110 days of business travel last year, Maura says, “I see her a
lot.”
On one Wednesday, Markowitz brought avocados and mangoes to Lycee Francais de
Chicago, where she is on the board of trustees and the finance committee. She had resolved to teach Maura and her classmates how to make tostadas, and, for that, she had
taken the day off.
Marianne Markowitz
• Born and raised in: Berkeley, Mo., a suburb of St. Louis.
• Lives in: Lincoln Park; she also has a condominium in Miami’s South Beach.
• Lives with: Husband, Jeff Markowitz, 45, daughter Maura, 9, and Sabu, 17, a
Rottweiler/cocker spaniel mix.
• Education: Bachelor’s degree in business administration from the University of
Missouri at St. Louis and a Master of Business Administration from DePaul University.
• Favorite hobby: Healthy cooking. Markowitz doesn’t eat meat, with the exception
of fish.
• Encouraged her daughter: To write a children’s book at age 6 called “Sabu & Me,”
using her first and middle name, Maura Lane. Markowitz and her husband published it, with some of the proceeds going to PAWS Chicago.
• The way she manages: “I do think you need to have authentic leadership. You
can’t be asking people to do something that you yourself wouldn’t be willing to do,
and they have to feel that and they have to see that.”
Talia Mashiach, founder and CEO of Eved
‘Can-do’ 12-year-old now a groundbreaking entrepreneur in venture that marries technology, event planning
By Wailin Wong
Nov. 5, 2012
Talia Mashiach
At Talia Mashiach’s bat mitzvah, guests told her mother that the 12-year-old was a “cando person.” It was an apt description for a girl who outshone the boys at sports and was
the one to organize teams at recess.
Mashiach (Meh-SHE-ah), 35, would go on to be eighth-grade class president, senior
class president and captain of the basketball team. After high school, she graduated with
honors from Loyola University Chicago while raising two toddlers.
Now her leadership ability, ambition and tireless work ethic are driving her forward
as she seeks to shake up the corporate meetings and events industry.
Eved, Mashiach’s most recently launched Chicago-based company, provides a technology platform that automates the buying and selling that takes place between participants along the entire supply chain: event companies, meeting and incentive companies,
hotels and other venues, and vendors ranging from large businesses to mom-and-pop
florists or linen rental services. Mashiach wants all of these players, many of whom still
rely on phone calls and faxes, to transact on Eved’s online marketplace.
Mashiach calls this business “event commerce” and sees massive potential: According
to one industry study, the U.S. meetings sector generated $263 billion in direct spending
in 2009. This figure includes corporate confabs, conventions, trade shows and incentive
meetings — nearly 1.8 million such gatherings took place in 2009.
“We’re building a company to be the market leader,” she said. “We’re going into an
industry where it’s still manual, and we’re taking this industry online. … Our goal is to
build it to a huge exit. We want to be a billion-dollar company, whether it’s an (initial
public offering) or a buy.”
Serendipity played a major role in Mashiach’s plunge into the corporate events industry, an area where she had virtually no firsthand experience. In 2003, she accompanied
her husband, Sam, to a wedding at the Hilton Chicago, where his band was playing. The
hotel’s director of catering, Ed Chen, mentioned in a conversation with Sam after the gig
that he wished there were a company to help him more easily arrange vendors for events.
What Chen tossed off as an offhand gripe became the seed for Mashiach’s big business
idea.
This year, Eved is poised to process more than $25 million in event commerce, more
than triple last year’s figure of $7.5 million. The company has 50 employees and raised
$9.5 million in venture capital investment from prominent local companies.
“I didn’t know anything about events,” said Mashiach, who at the time was running a
business out of her house reselling overstocked Dell computers. “I was an entrepreneur.
I liked technology. I just saw this really huge opportunity and originally I was like, ‘If we
build this company we can totally feed the band.’ And it just wound up being this crazy
ride.”
One-stop shop
The initial funds for the journey came from a $330,000 equity line on the Mashiachs’
West Rogers Park house, onto which they had recently built an addition using money
from the computer resale business. Mashiach hired a salesperson with events experience and started building a technology-enabled services company that would be a onestop shop for hotels to book vendors in everything from entertainment to transportation.
She still had much to learn about corporate events and hotels. Mashiach began calling Chen every weekday morning while he drove to work from his Mount Prospect home,
picking his brain about the nuances of running an events-related company and the
needs of hotels. The daily call became a fixture in both Chen and Mashiach’s lives for
more than a year. She even phoned him from the hospital while she was recovering from
the delivery of her fourth child.
“After awhile, I knew she’d be calling at 8:15 and literally be talking until I got out of
my car,” Chen said. “It was very clever of her … This became my project because she was
so eager to learn. I would give her advice on things not to do, (what) I got into trouble with
that cost me time and money, what she could bypass by thinking differently.”
Chen, whom Sam Mashiach describes as a “father figure” to him and Talia, provided
more than just advice. He convinced Hilton Chicago executives to sign on as Mashiach’s
first customer and made introductions to his counterparts at other area hotels. Eved
Services, later renamed Access Chicago, officially launched in 2004 and made $4 million
in revenue during its first full year in operation. The company grew to nearly 40 employees, most of them based inside local hotels such as the Hilton Chicago and Palmer House
Hilton.
Mashiach’s startup continued to expand, giving her a higher profile in the local business community and attracting interest from investors. But in 2007, she took a meeting
that, similar to her 2003 encounter with Chen, set her in a fresh direction.
Mashiach, who had been working with the Chicagoland Entrepreneurial Center, was
introduced to the organization’s co-chairman at the time, Michael Ferro. He reminded
Mashiach of her original ambitions to build a big technology company and provided her
with some investment money to start experimenting with a new venture that would be
larger in scope than her current event services company.
“I had worked so hard, gotten a business going and was finally enjoying the benefits of
it,” she said. “But he basically made me realize I wasn’t going to be happy just with where
I had gotten to, and I had set my mind originally to create a technology platform to move
an industry online — to be that first innovator, to create a company that could go IPO or
a huge exit. And unless I did that, I was never going to feel like I fulfilled my potential.”
Mashiach’s realization meant taking on a new set of entrepreneurial risks. She hired a
general manager to run Access Chicago, which was sold in 2011, and seeded a new company, Eved Online, with $1 million of her own money. Mashiach later received a further
funding boost from Joe Sitt, the chief executive of New York-based real estate investment
firm Thor Equities, which owns the Palmer House Hilton. The company dropped “Online”
from its name last year, becoming simply “Eved,” which is derived from the Hebrew word
for service.
That startup, launched in 2010, provides software that allows companies in the meetings and events industry to market themselves, make and receive payments, standardize
the process of booking suppliers, and communicate with the many participants involved
in putting on an event. Eved makes money by charging a subscription fee for premium
features or taking a cut of transactions, depending on the type of user.
In February 2012, Eved shifted its headquarters from Skokie to the West Loop, a move
designed to attract young talent and make it easier for employees to take meetings in the
city. The relocation took place shortly after Eved raised $9.5 million from investors led
by local firms New World Ventures and MK Capital. Ferro’s Merrick Ventures also participated in the funding round.
New World Ventures partner Matt McCall, who knew Mashiach for years before formally investing in Eved, said the company has a unique opportunity to become the de
facto online platform for the events industry, similar to the way eBay conquered the consumer marketplace. Eved already counts several global meetings and incentives companies as clients and continues to work its way down the supply chain to small vendors,
trying to convince businesses to adopt Eved’s technology.
“People talk about how a good entrepreneur gets up in the morning not just determined to make money, but gets up in the morning to change the world,” McCall said.
“When you talk to Talia, she redefines that passion of making a difference in the world, of
changing an industry. She’s not talking about, ‘Oh, I want to be a supply chain or marketplace infrastructure company.’ She’s talking about revolutionizing the event-planning
space. And it’s really exciting when you get around someone who has that kind of passion.”
Young mother
Mashiach’s relentless energy also powers her active home life, which centers around raising five children between the ages of 2 and 16. Talia and Sam met when she was a high
school junior; she was an adviser with a youth group that attended a convention where
he performed. They married during her freshman year in college and their first child, a
daughter, was born 15 months later. A son followed the next year, making Mashiach a
mother of two young children while she was also a full-time student and helping Sam
with his music business ventures.
Her mother and sister came in to help the couple with child care, allowing Mashiach
to keep working on her bachelor’s in business administration. She graduated magna
cum laude in 2000 at the top of her class among marketing majors.
“I have never met anyone (and I do know many) whose business mind, entrepreneurial spirit, honesty, loyalty and love are in sync as much as hers,” Sam Mashiach said of
his wife in an email. “She is as good a mom and wife as she is in business. She is a master at balancing 100 things at once without compromising one. … She is always busy,
yet always available.”
Today, Mashiach organizes her schedule so that on Mondays and Wednesdays, she
starts work early to be home by the time her children return from school. On Tuesdays
and Thursdays, she sees them off to school and gets home later. Fridays are generally
spent working from home or taking meetings outside of the office. Evenings are focused
on her family; Mashiach said she hasn’t watched a television program in years. Her
younger children are generally settled by 9 p.m., after which she can turn her attention
to returning emails or catching up with work. She hires household help to take care of
cleaning and cooking, allowing her to maximize time with her family while she’s home.
Weekends are hallowed time for the Mashiachs, who observe the Jewish Shabbat
and host family and friends for large meals on Friday nights and Saturday afternoons.
During this time, Mashiach also unplugs from her email and phone. She describes the
technology hiatus as the “secret sauce of my ability to totally re-energize for the week.”
“It is incredibly challenging, and it does take a great skill set in time management, for
a woman to have children and to build a business, and I don’t think it’s for everybody,”
Mashiach said. “But I think for the women who want it, it’s absolutely possible.”
As the Chicago startup community grows, Mashiach is also active in speaking at
events and mentoring younger entrepreneurs. McCall described her as “fabulous about
taking meetings with people and helping them.”
“The key element (where) you know an ecosystem is coming into its own is when
the high-profile entrepreneurs or the successful entrepreneurs are engaged in reaching
back and helping build the community, versus heading off into the sunset,” McCall said.
“Entrepreneurship is all about mentorship and pattern recognition and the kindness of
strangers. If you don’t have people like Talia who have been in the trenches for 10 years
and have a great network of people and are willing to help, the next generation of entrepreneurs has to find out the hard way, which means the pace of innovation comes to a
halt.”
Mashiach attributes much of her own professional drive and can-do spirit to her parents, who raised her and her two siblings to wholeheartedly pursue their interests. In
her view, successful entrepreneurs are defined by “true confidence,” which she believes
stems from being raised in a supportive home environment.
“I think I set a really good example for my daughters,” she said. “I say to them what
my parents said to me: Anything you want to do is possible.”
Talia Mashiach
• Childhood: Middle of three children; raised in the Milwaukee suburbs by her father, a managing partner at Foley & Lardner LLP, and her mother, a homemaker
and former teacher. In high school, she moved to Chicago and boarded with a family to attend Ida Crown Jewish Academy.
• Early ventures: In sixth grade, Mashiach copied music onto blank cassette tapes
that she bought for $1 apiece and sold them to friends for $5. “I thought that was
so smart until my parents realized what I was doing, and that was the first time
I learned about copyright and I had to stop doing that.” In high school, Mashiach
crocheted yarmulkes and sold them to customers for weddings and bar mitzvahs.
The little business became successful enough that she began paying friends to
help with production and even made a catalog with photos of different styles, along
with order sheets and receipts.
• Family: Lives in West Rogers Park with Sam, her husband of 17 years, who continues to help with strategy at Eved. They have three daughters and two sons between
the ages of 2 and 16.
• Pro tips: Although she’s been too busy to update it lately, Mashiach offers advice to both entrepreneurs and parents through her personal Twitter account, @
CEOmomof5. For startups: “Best advice I got on raising money — build relationships w/VCs way before U need $. Tell them what u are going to do, prove it, then
raise.” For parents: “A big white board monthly calendar works great to put the
kids schedules so they go to the board instead of asking u the schedule each day.”
• Organizations: Member of the Young Presidents’ Organization and serves on the
board of directors of the Chicagoland Entrepreneurial Center.
Amanda Lannert, CEO, Jellyvision Lab
CEO Amanda Lannert has shaped a culture of humor and hard work at Jellyvision Lab
By Wailin Wong
Aug. 13, 2013
Amanda Lannert
Sept. 21 is an important date at Jellyvision Lab. For starters, it’s Chief Executive Amanda Lannert’s birthday. It also happens to be Mustache Day, an annual tradition at the
Chicago-based technology company. Employees who are able to grow facial hair start
preparing a month in advance, while others don elaborate costumes. At lunchtime, the
entire staff decamps to Brazilian steakhouse Fogo de Chao in their mustaches.
“People walk out with their pants unbuttoned,” Lannert said. “It’s a very great, celebratory, stupid company holiday.”
Fun, jubilant and a little silly. Those elements, combined with a healthy work ethic,
make up a company culture that Lannert, 39, has shaped during more than a decade at
Jellyvision Lab, whose proprietary technology provides virtual advisers for large corporate clients such as Microsoft, Aetna and Comcast that want to communicate with customers or employees. These advisers conduct interactive, natural-sounding conversations with website visitors who might be shopping for new services or choosing a health
insurance plan.
Jellyvision Lab’s workplace banter and good-natured practical jokes may make it
seem like just another tech startup with a hang-loose vibe. But the atmosphere is a
product of a well-considered corporate philosophy that is serious about business and
has been tested during tough times as the company, under the leadership of Lannert
and Jellyvision Lab founder Harry Gottlieb, experimented with a variety of models before
landing on their current one.
Lannert “can go back and forth between being very serious and bursting out laughing within 10 seconds, so it makes it really fun to work with her because you’re (also) getting stuff done,” Gottlieb said. “It’s a big thing about the way Jellyvision is and Amanda’s
a huge part of modeling this for everyone, which is we want to have fun and be productive at the same time.”
The company, which is privately held, does not disclose financial information. Lannert said it has doubled revenues in three of the last four years and more than doubled
its head count to 68 employees since January 2010.
Gottlieb promoted Lannert from president to CEO on her birthday last year, stepping
aside from the top job to focus on product development. He took her to lunch at Terzo
Piano and then, on a bench outside the Art Institute, presented her with a box of business cards bearing her name and new title. The move took Lannert by surprise.
“Amanda’s very excitable, which is one of her charming qualities, and she did not
disappoint me,” Gottlieb said. “She opened up the box and immediately threw it down
and pushed it toward me and said, ‘No, no.’… All through lunch, she was trying to calm
herself down. But the reality is she’d been doing the job for a solid two, three years in
almost all respects. So it was really giving her the recognition she deserved.”
Early ups and downs
Lannert’s arc at Jellyvision started in 2000. She had finished a six-year stint at Leo Burnett in Chicago and was on the hunt for a job at a smaller company in emerging media.
Her interviews at Internet startups put her in touch with Troy Henikoff, a tech entrepreneur who was looking for someone to head up sales and marketing at his new company,
SurePayroll. The two struck up a friendship and professional camaraderie, acting as
sounding boards for each other’s businesses.
“She knows far more about marketing and positioning and branding than I ever will,
and she’s one of my go-to people for that kind of stuff because I think she just has a sixth
sense about consumers and how they will react,” Henikoff said.
When he offered her the SurePayroll job over lunch at Blind Faith Cafe in Evanston,
Lannert demurred, saying she was looking for “something a little more funky, a little
more consumer-facing and fun,” he recalled.
“I said, ‘Hey what could be more fun than payroll?’” said Henikoff, who is now CEO
of Chicago-based tech incubator Excelerate Labs, where Lannert serves as a mentor to
entrepreneurs. “I begged her. If I could have gotten down on one knee and begged and
that would have worked, I would have done that because I thought she was so smart and
she would be so great to work with.”
When Lannert declined Henikoff two more times, he introduced her to Jellyvision Inc.,
Gottlieb’s first company. The two men are friends, first overlapping at college and later
becoming office mates and roommates in Chicago.
Henikoff had also spent 18 months building the technology for Jellyvision, which was
making computer games at the time. Its big hit was “You Don’t Know Jack,” a comedic
quiz game that had expanded from CD-ROMs to the Internet, as well as merchandising
and even a short-lived television show on ABC.
Lannert became the first person in Jellyvision’s history to be hired without meeting
Gottlieb, who was on vacation during her interview process. But his reputation and creative design philosophy made an impression on Lannert, who was already a fan of “You
Don’t Know Jack” from playing the game with her Leo Burnett colleagues.
“I took the job mostly for the people, partly for the cult of Harry and the idea that the
world can be more beautiful, work better and be more effective,” Lannert said. “Really
reinventing systems can make life better. I’m intrigued by that.”
She was brought on board to manage the You Don’t Know Jack brand, but she realized shortly after arriving at Jellyvision that the gaming industry was undergoing massive changes, including the rise of Web-based content and the next generation of consoles, that would wipe out casual game developers.
Gottlieb credits Lannert for recognizing the early warning signs and acting on them.
“This is one of Amanda’s really fantastic qualities,” he said. “She is remarkably cleareyed about a business direction while still being in spirit an optimist.”
Jellyvision embarked on a tough restructuring effort, cutting its workforce from 70
people to about 17. The process was announced well in advance, with some employees
getting up to nine months’ notice so they could prepare.
The cuts didn’t affect just Jellyvision’s rank and file. Lannert laid herself off in September 2001, a decision she describes in matter-of-fact terms.
“I think (Gottlieb) sees it as a brave business decision,” she said. “I see it as a failure
to pivot and save the company.”
Tech twists
Despite her pragmatism about her own unemployment, the day she helped break the
layoff news to the staff remains “hands down, bar none the worst day of my professional
career,” Lannert said. She recalled walking outside at the end of the day and, despite
being a nonsmoker, bumming cigarettes off a smoker and drinking a beer while telling
herself: “It will get better.”
And it did, four months later. Gottlieb started another company, Jellyvision Lab, and
brought in Lannert as president. But the new startup faced a number of challenges in
crafting its mission. While the team wanted to deliver multimedia content through the
broadband Web, the company’s desired customers — Fortune 500 marketers — were
unwilling to “make investments in stuff that didn’t work on a 56K modem,” Lannert said.
Faced with those constraints, Jellyvision Lab conducted research and development
for clients on a number of technology projects, including voting booths and a talking carnavigation system. Later, the company shifted its focus to products based on an overthe-phone technology for interactive voice applications.
It wasn’t until 2005 that customers began showing interest in Jellyvision Lab’s audiovisual, broadband Web-enabled content, and it took several more years for these services
to begin showing traction.
Jellyvision’s transition from entertaining consumers with the “You Don’t Know Jack”
virtual game show host to providing corporate customers with virtual insurance agents
and salespeople looks straightforward in retrospect. But for Lannert, who took the company through three or four different business models, the journey had its share of twists
and detours.
“If I were to describe the challenge that plagued Jellyvision, it comes down to this:
The technology changes before the business model catches up,” said Lannert, who sees
this issue stretching back to the obsolescence of the CD-ROM. “You have to build things
twice if you want to hit a mainstream audience right now.”
The company’s long wait for the adoption of the broadband Web taught Lannert to
“sell the way the market has been used to buying” without trying to force revolutionary
change on customers, she said, acknowledging that many entrepreneurs disagree with
this philosophy.
Jellyvision Lab is now at a point where it is deferring some projects, which means
turning down revenue. Lannert acknowledges the need to scale the company to keep up
with growth, but she’s also reluctant to compromise on the company’s recruiting process, one of the pillars of its culture.
Applicants “audition” for their positions — Lannert wrote a marketing plan for “You
Don’t Know Jack” in 45 minutes as part of her interview. The bar is especially high for
writers, who must prove their mettle on the complex flow-chart logic that anchors Jellyvision Lab’s interactive conversations. The process can take three to six months or longer.
Cultural fit is given as much weight as talent, work ethic and judgment. At Jellyvision
Lab, this means demonstrating humor, kindness and honesty. Once, when Gottlieb and
Lannert were arguing over a candidate, she said, “I don’t feel the spark — I mean, jeez,
would you want to go to lunch with him?”
Lannert recalled Gottlieb responding, “‘Do we need to go to lunch with everyone we
hire?’ And I said, ‘Ultimately, the answer is no, but goodness gracious, doesn’t it make it
better?’ And we decided not to hire the candidate.”
Greg Gretsch, managing director at venture capital firm Sigma Partners, which invested $5 million in Jellyvision Lab in 2007, said that unlike many of the Silicon Valley
startups he works with, Jellyvision is able to retain employees over the long term and
boasts the strongest culture among the companies he knows.
“One of the things (Lannert) knows she has to do is hire more key team members,”
Gretsch said, noting the challenge of reconciling a competitive, commission-based sales
culture with the company’s prevailing philosophy of “We’re all in this together.”
“I think that Amanda is very much up for that challenge,” Gretsch said. “She understands it; she wants it. I think she has the support of the team.”
‘Pursuit of joy’
Lannert also has the full confidence of Gottlieb, who described making her CEO as “a
slam-dunk decision” that he should have acted on earlier. The working relationship between the two has developed into a close one over the last 12 years, and the success
that’s come from sticking it out through waves of technology changes and lean periods
is symbolized in part by a massage chair that has its own room at Jellyvision’s Lincoln
Park office.
Several years ago, to kill time waiting for a flight home from a business trip to Los Angeles, Gottlieb and Lannert stopped at a Brookstone and she tested out a massage chair.
“‘You’ve got to get me one of these things,’” she said to Gottlieb, who told her that he
would do it if the company hit a certain revenue milestone. Three years later, Jellyvision
Lab reached Gottlieb’s number.
On Lannert’s birthday in 2010 — important things tend to happen on her birthday
— Gottlieb had two employees blindfold her, walk her through the office and put her in
a car. They circled the block, changed cars in the nearby Whole Foods parking lot and
drove back to the office, with Gottlieb yelling at her through a voice-distorting megaphone the whole time. When they returned to Jellyvision Lab, Lannert was walked over
to the massage chair, which was switched on. She burst into tears at instant recognition
of “exactly what it was and why she got it,” Gottlieb remembered. Lannert took off her
blindfold to find the entire company present.
For Lannert, the moment was deeply meaningful because it was about “a guy I worked
with for a dozen years, taking a minute to be like, ‘We’ve come a long way, kid.’…(But) it
was about so much more — surviving the layoffs and surviving four bad business models
and tough wins … seeing the labor pay off.”
The HumanTouch HT 5320 WholeBody Massage Chair, which retails for $3,999, is
mentioned in job listings as a perk and has its own bio page on the company website. It’s
one of the many elements of Jellyvision Lab’s workplace culture that looks like a throwaway gag but speaks to values that Lannert treats with gravity.
“I put in the hours; I take this business very seriously, but I’m like, ‘Let’s go grab a
drink’ or ‘Did you guys see this funny thing?’” Lannert said. “So it’s really making sure
we institutionalize delight. I know that’s a terrible way of saying it, but I honestly think
about how can we be funny with each other, for our clients, how can we make sure we’re
enjoying the ride. We make sure we have made ourselves laugh today, and that we found
our moment to be like, ‘We are not investment bankers; thank goodness.’ And that sort
of pursuit of joy is something I think I brought.”
Amanda Lannert
• The company: Jellyvision Lab crafts interactive online conversations for big companies to communicate with employees or customers. Powered by proprietary software called Talkshow, Jellyvision Lab’s “virtual advisers” help users choose health
insurance, resolve a customer service issue or make a purchase. The company
traces its roots to computer game developer Jellyvision Inc., maker of comedic
trivia game show “You Don’t Know Jack.”
• Family: Lives in Hinsdale with Kevin, her husband of 14 years, and three daughters aged 9, 8 and 3. Lannert and her husband met at a Chicago bar on Halloween.
She was working with Kellogg Co. at Leo Burnett, and the company had given her
a giant Pop-Tarts box that she turned into “a killer costume” by cutting holes in it.
She even remembers the flavor: frosted strawberry.
• Southern roots: Grew up in Charlottesville, Va., where her father was chairman
of the University of Virginia’s neurology department and her mother was a stayat-home mom who later worked in health care. Lannert graduated from Haverford
College in Pennsylvania with a bachelor’s degree in English literature and also
studied Augustan to Romantic literature at the University of Edinburgh in Scotland.
• Road not taken: Chose the job at Jellyvision Inc. over a competing offer from
marketing and public relations firm Buzz Divine, part of the ill-fated Divine Interventures Inc. conglomerate that came to symbolize the dot-com bust for Chicago’s
high-tech community.
• Outside affiliations: Mentors entrepreneurs at Excelerate Labs and Healthbox,
two local business incubator programs, and serves on the independent panel for
admissions at the 1871 startup hub in the Merchandise Mart.
• Pop culture diet: Recently read Elizabeth Strout’s “Olive Kitteridge” and Jennifer
Egan’s “A Visit From the Goon Squad.” Admits to “horrific, 14-year-old taste” in
TV, from “American Idol” to real estate reality show “Million Dollar Listing Los Angeles.”
Amy Francetic, executive director of Clean Energy Trust
Her nonprofit is dedicated to accelerating development of clean-energy businesses in
the Midwest. Its measure of success would be extinction in 10 years.
By Julie Wernau
Oct. 30, 2012
Amy Francetic
Amy Francetic was at a child’s birthday party in 2004 when she decided it was time to
leave Silicon Valley.
“I was sitting there listening to 6-year-olds talk about IPOs and whose house was bigger and how much a wedding dress cost,” she said.
By then, she had traveled the world, making money for some of Silicon Valley’s most
brilliant innovators and investors. She had been a photographer, a toymaker and a video
game producer; a mother, a wife and a CEO.
“I said to my husband, ‘Jason, if our 6-year-old is talking about an IPO and the cost
of a wedding dress, we have failed as parents,’” Francetic said.
That’s how, after about 20 years in California, Francetic and her husband, Jason Rubinstein, made the difficult decision to escape the culture of the Valley and move back to
the Midwest with their two young girls.
“It was a life choice,” she said. “It wasn’t a career choice.”
Now, at 45, her mission is to change the world — preferably within 10 years.
As executive director of Clean Energy Trust, a nonprofit dedicated to accelerating
the development of clean-energy businesses in the Midwest, she works with a board of
Chicago’s most powerful and wealthy investors — Nicholas Pritzker, Michael Polsky and
Paula Crown among them.
“When you are a billionaire, you can pick and choose what you want to do,” she said.
“So they want to do stuff that matters.”
In returning to the Midwest, Francetic wanted to apply the lessons she had learned in
Silicon Valley to a broader policy problem.
“We think there’s a problem when you’re so dependent on hostile countries for your
energy — the lifeblood of your industry and your way of life,” she said. “We have the technology to become energy independent. It exists today. But it’s going to take investment.
The Midwest can be a leader in that.”
She’ll know the goal has been accomplished when Clean Energy Trust no longer needs
to do the work it’s doing; when scientists are busy creating companies and investors are
rolling their profits into an ever-longer list of them.
“If we’re really good at it” she said, “we’ll be extinct in 10 years.”
‘Something more fun’
Like all interesting stories, Francetic’s past is about someone who was on a straight path
then turned, who stumbled but discovered, who fell but got up.
If Francetic hadn’t done those things, she’d be a lawyer in Washington instead of at
the helm of one of the Midwest’s most powerful engines for clean-energy technology.
That was her plan when she left her middle-class family in Racine, Wis., to major in
political science and psychology at Stanford University on a scholarship. But a semester
as an intern at the National Organization for Women Legal Defense and Education Fund
and the Georgetown University Law Center made her change direction.
“I wanted something more fun,” she said. “I went back to school, I took this photography class and I loved it. I knew I wanted to do something more creative.”
Francetic dived into documentary photography and filmmaking. After college, she
said, “I decided I wanted to go to Africa with my camera.”
Although, ultimately, Francetic’s sole credit in the Internet Movie Database would be
for a video game version of Candy Land, a five-week experience in Ghana provided her
first experience with entrepreneurship in action. A group of women in a small farming
village had purchased palm oil processing equipment using a small grant and created
products to sell in the marketplace.
“It was pretty much economically the foundation of this village of maybe 100 people,”
she said.
Her documentary experience helped her snag her first professional job, as an assistant producer of video games at Electronic Arts in Silicon Valley, working on Sesame
Street-themed games for children.
“You did all the crummy work that the producers didn’t want to do: from game testing
to reading design documents to managing her calendar — you name it,” she said.
From there, she moved to toy company Hasbro, which was starting a children’s educational software division in Palo Alto, Calif. Her boss, Kathy Schlein, an irreverent,
smart and competitive woman, would soon become one of Francetic’s dear friends and
mentors.
Schlein knew she wanted to hire Francetic within minutes.
“I thought, ‘This person has the intelligence, the smarts, the gumption, the balls to
do this job,’” Schlein said. “We had to work with all these crazy people, from the software
developers who were wing nuts to LA writers, and never get mired in a formulaic way of
thinking.”
If Francetic was looking for fun, she had found it. Schlein was “always on the phone
fighting for money” with her bosses in Rhode Island. The office was late nights, pizza parties and Nerf gun wars. Children were constantly in and out of the office testing games.
“How bad can life be when you get to design the first interactive software for Mr. Potato Head?” said Schlein, who runs her family winery and is involved in several technology consulting ventures. “You were just hoping that nobody swallowed any small parts
or choked.”
More importantly, Schlein gave Francetic the room and the network she needed to
grow, introducing her to tech giants including Apple’s Steve Jobs.
“Amy has insatiable curiosity,” Schlein said, “intellectual curiosity, and she really understands the marriage between creativity and business. Most people don’t have that.”
Eventually, Hasbro decided to fold the interactive division of its business into its corporate headquarters in Rhode Island. Schlein, Francetic and the other employees took
severance packages rather than move.
“We were having too much fun in Silicon Valley,” Francetic said. “All this stuff was
starting up. It was really alive.”
In the mid-1990s, Francetic joined Interval Research Corp., a Silicon Valley-based
laboratory and business incubator that had 10 years of funding from Paul Allen, cofounder of Microsoft.
There, before age 30, Francetic created a business called Zowie, which used radio
frequency identification technology that, years before Wii, allowed children to play with
a toy while their actions were transmitted to a virtual world on their computer screen.
She hired several of her former Hasbro co-workers and spun the Zowie business out
of Interval. Suddenly, she was co-founder and CEO of her own company, traveling back
and forth to Asia to deal with manufacturing issues and negotiating pricing.
“It was really freaking hard,” Francetic said. “I tell people today — don’t do all that
stuff. Figure out the piece you can do better than anybody, work with other folks who
can do all that other stuff, because it’s really hard. It almost killed us.”
Meanwhile, Silicon Valley’s tech bubble was bursting. And Francetic was about to get
married. The honeymoon to Australia and New Zealand was already planned.
“She said to me, ‘I’m sorry, dear, we’ve got to sell the business right now, and I’ve got
to deal with that,’” said her husband, who is general manager in charge of Coinstar Inc.owned Redbox’s new ticketing venture, Redbox Tickets.
Seeking a buyer for Zowie, she set her sights on Lego, which had never purchased a
company. To seal the deal she also had to persuade Allen, her majority shareholder, to
sell the company.
They pushed back the wedding six months, setting the date for Jan. 1, 2000, “just
to tempt fate,” Rubinstein said with a laugh, referring to their Y2K wedding date, when
some feared a technology glitch would freeze the world’s computers.
Amid all the others she needed to convince in the deal, “I was the easy sell,” Rubinstein said of their upended plans.
Changing the world
By the early 2000s, Francetic was exhausted. She wanted to have children, and the timing was right. She had sold the business, negotiated an exit and ushered her team into
Lego. Everything was in place.
But as Dar Williams sang, sometimes life gives us lessons sent in ridiculous packaging. At a doctor’s visit, she mentioned a strange lump near her sternum. It turned out to
be an unusual cancer.
Ten years later, Francetic is cancer-free and only rarely thinks about that “dark period” of her life. But it would affect her choices from that moment onward.
“She came to the realization life can be short,” Rubinstein said. “Make the best decisions.”
After her first child, Francetic decided she wanted to make a difference, to delve deeper into the science of technology, to find the gems in America’s research labs that were
waiting to come out.
During her last year and a half in Silicon Valley, and for a couple of years after moving
to the Midwest, Francetic worked for the Stanford Research Institute (SRI International),
working with scientists to commercialize everything from the early version of what would
become Siri (the voice-recognition personal assistant technology on the iPhone) to fuel
cells, which produce electricity in cells from a chemical reaction.
In Chicago, she worked part time, and from home, while her children were young before she joined MVC Capital Inc., a middle-market private equity fund, where she learned
that making money and changing the world could go hand in hand.
“I would tell the people who worked for me, ‘Everyone who comes in here with an idea
thinks they’re going to change the world. Your job is to find the ones who will,’” said Warren Holtsberg, co-head and member of the board of directors at MVC Capital in Chicago.
While Francetic dreams big, ultimately, Holtsberg said, her success comes from the
fact she’s a realist. About 7 of 10 venture investments will fail completely, he said, and
of the three that succeed, only one will be wildly successful.
“Technology has to meet a need and has to be something that people will buy and put
to work,” Holtsberg said. “Amy has got that inquisitiveness. She keeps looking. If you
asked her, ‘Are you there yet?’ she’d say, ‘No, not yet.’”
At MVC, Francetic was given time to start a venture called Invention Bridge, an advisory firm working to commercialize science-based research that would eventually lead
her to meet Pritzker and Polsky.
At that time, Pritzker, a Tesla Motors investor, had been mulling the state of the nation’s energy supply. He saw potential to fix that problem in the Midwest, where more
than $1 billion in federal grants flows to Midwestern labs. But technology wasn’t being
commercialized fast enough.
“It’s lonely building any business, especially in Chicago,” said Tim Stojka, CEO and
co-founder of Agentis, an energy efficiency technology firm that receives free advice and
mentorship from Clean Energy Trust. “The landscape is changing, but building a technology is very hard, as is gaining access to capital. Clean Energy Trust is really about
building an ecosystem.”
Pritzker said it took him and Polsky “literally about a minute” to be convinced Francetic should help create, develop and lead what would eventually become Clean Energy
Trust.
“I’ve seen her deal with governmental agencies, with educational institutions, with
small entrepreneurs, with major corporations, and in each of those contexts be able to
communicate ideas and get people onboard,” he said.
For Francetic, it all made sense. At Invention Bridge, she had quickly embedded herself into Midwestern labs and universities, working across several tech sectors, including
energy.
“I was motivated by innovation,” she said. “I said to my husband, ‘If I’m going to work,
if I’m not going to be with my girls, I have to do something that matters.’”
She agreed to work with her staff at Invention Bridge as well as with Polsky, Pritzker
and the Chicagoland Chamber of Commerce for six months to figure out how to build an
entity that would bring together everyone from Argonne National Laboratory scientists
and tech firms to policymakers and billionaire investors. In April 2010, after settling on
the idea of a nonprofit, Polsky and Pritzker financed Clean Energy Trust along with other
board members. Francetic agreed to work there full time.
Clean Energy Trust is hosting its third Clean Energy Challenge, which offers more
than $300,000 in cash prizes to Midwest researchers, students and entrepreneurs with
“transformative” clean-energy business ideas. The trust also provides mentoring and
other services to clean-tech entrepreneurs.
In October 2012, the company hosted events bringing together entrepreneurs in biofuels with the Midwest’s biggest names in aerospace, Boeing Co. and United Airlines, to
figure out how to get Midwest-grown bio-based jet fuels into Midwest-grown airplanes.
“We tell our scientists and young companies, you need to get input from those people
very early,” Francetic said. “You can’t just throw something up on the Web, have people
react to it and then switch it around. You’ve got to talk to the utility companies, United
Airlines, Honeywell, Caterpillar, Johnson Controls — you’ve got to talk to those companies and get input from them. If you’re going to make batteries, you’ve got to talk to Dow
and LG. You need to know what their constraints are and not give away your science
before it’s ready.”
Francetic said she is working as hard as she ever did at a private company, helping
connect innovators and the people who can finance their ideas.
“It’s hard, but it’s important too, especially now. We’re under fire. We have lousy policy in the U.S.,” she said. “But this is about improving the quality of life for everybody.
You do have to invest in this; it is not free. You have to find a way.”
Amy Francetic
• Mission: To accelerate the development of Midwest clean-energy businesses.
• Raised: Racine, Wis. Lives in Lake Forest with husband Jason Rubinstein and
daughters Lucy, 9, and Sydney, 8.
• Education: Bachelor’s degree in psychology and political science from Stanford
University, where she also ran varsity track.
• How she met her husband: He was trying to negotiate the Internet rights for Monopoly from Francetic at Hasbro. “She looked at me with this tremendous smile
and she said, ‘I’m sorry, Jason, but the Monopoly licensing isn’t going to happen.’
It didn’t matter who I knew politically or that I knew the vice chairman of Hasbro.
It was, ‘You’re stuck with me, and you’re not getting the license.’”
• Organizations/boards: Chicago Council on Global Affairs Emerging Leaders; Illinois Institute of Technology Knapp Entrepreneurship Center; Museum of Science
and Industry Energy Advisory Committee; Northwestern University NUvention Energy Advisory Board.
• Reading: “The Secret Garden” by Frances Hodgson Burnett, with daughter Lucy.
Rishad Tobaccowala, chief strategy and innovation officer
at VivaKi
Indian-born adviser for Leo Burnett, affiliates imbues his role with a candid passion for
what’s next
By Ameet Sachdev
Nov. 12, 2013
Rishad Tobaccowala
On a warm September day in Chicago, Rishad Tobaccowala counseled a roomful of Leo
Burnett executives on how to sell high-tech gadgets — told in terms of hot dogs.
Tobaccowala, who has spent 30 years at Leo Burnett and affiliated agencies, described the $14 Chicago-style hot dog sold at the Allium restaurant inside the Four Seasons Hotel.
“Every single thing in that hot dog has been homemade,” he says. “They make the
ketchup, they make the mustard, they make the bread. But I don’t think they tell us how
they make the hot dog or the mustard or the bun.”
His point is that consumers want transparency, but only up to a point.
“They’re looking for magic where they can feel and see the result without necessarily
understanding how the hell it happened,” Tobaccowala says. “Any technology that tries
to explain how it’s done is like a magician showing his trick. It doesn’t work.”
Analogies and metaphors are tools of the trade in the advertising world. But Tobaccowala doesn’t aim to convey cute or clever messages to consumers. His audience, instead, is marketers and colleagues trying to understand how consumers will relate to
media and advertising in the future.
His pioneering work in online advertising and ability to convey complex concepts in
simpler terms has made Tobaccowala, a 53-year-old Indian-born executive, a go-to adviser among marketers and colleagues in a rapidly changing industry.
Unusual among advertising executives, he doesn’t have any direct clients, nor does
he run a business unit.
That relative freedom allows him to speak with refreshing candor, said Doug Moore,
vice president of advertising and media at General Mills Inc., which uses Leo Burnett’s
sister agencies for advertising and media planning. Moore credits Tobaccowala for encouraging the company behind Cheerios and other wholesome brands to try bolder marketing, which led to a campaign using the Cheech and Chong comedy duo to promote
Fiber One cereal.
“He’s not pitching a particular agency or a particular project,” Moore said. “He’s very
generous in how he puts our agenda first. That’s very unusual in the advertising or consulting space.”
Tobaccowala’s role inside Publicis Groupe, the giant French advertising and marketing firm that owns Leo Burnett, is to be a student of culture, think deep thoughts and
spot trends. His official title is chief strategy and innovation officer at Chicago-based
VivaKi, which Publicis started in 2008 to accelerate the digital activities within its media
and digital companies.
Tobaccowala is known for his linguistic flourishes and profanity, which he uses for
dramatic effect rather than to express anger.
“He’s a provocateur,” said Andrew Swinand, the former president of Starcom MediaVest Group, a media agency owned by Publicis. “Part of Rishad’s genius is to say you’re
doing everything wrong, but in a really polite and funny way that makes you feel good
about it.”
Morning reading awakens the right brain
Tobaccowala’s dream job is a demanding one. He wakes every morning at 4:30, two
hours before his wife. He spends the first hour reading, often dipping into several books
at a time, usually fiction and nonfiction that has nothing to do with marketing or business. His current reads: “Sweet Tooth,” a novel by Ian McEwan; the massive “Infinite
Jest” by David Foster Wallace; and a book on contemporary architecture called “10 x 10.”
His choice in books has a purpose.
“The nature of my job, which has to do with where the world is going, tends to be
math-driven and very tech-driven and very digital and very science-driven,” said Tobaccowala, who majored in mathematics at the University of Bombay. “It’s a lot left brain.”
The most successful companies, though, fuse left brain and right brain, or science
and art, he says. Tobaccowala finds a lesson for marketers in this bit of truth. They are
trying to motivate human beings, after all.
“Marketers who basically believe this all about technology are mistaken,” he says.
“They think we are computing agents. Silicon chips compute, and carbon forms dream.”
His belief in stimulating both halves of his brain extends to his writing in two distinct
blogs. One is called “Re-imagining,” where he posts news and musings about the arts,
music and literature. He addresses marketing and workplace culture in his left-brained
blog, “Re-inventing.”
In a recent post, he wrote about how business people, particularly in meetings, “hide
reality within layers of protocol, diplomacy and dazzling multimedia shows.” He inelegantly calls the uncomfortable truth “the turd on the table.”
Tobaccowala’s morning routine also includes a run on a treadmill in the gym of the
Peninsula Hotel or his Lake Shore Drive condo he shares with his wife of 28 years. To
stay on top of trends, he reads four daily newspapers on his iPad: The Wall Street Journal, The New York Times, the Financial Times and the Chicago Tribune, or another local
paper when he’s traveling to another city.
In addition to scanning headlines, he likes to peruse lists of most-viewed or mostemailed stories. “It’s the way people read online,” he said.
He usually walks from home to his office on the 32nd floor of the Leo Burnett Building
at 35 W. Wacker Drive His office, like his study at home, is cluttered with books. Most
are business or marketing tomes that he dismisses as fluff. “You can figure out the book
just by reading the first chapter,” he said.
Signs of his influence hang on a hook near his door: dozens of name tags from speaking engagements all over the world. On this morning, he gets a call from a pharmaceutical trade group asking him to be a keynote speaker.
A sign on his wall challenges: “What would you do if you weren’t afraid?” He received
it as a gift after speaking to a room full of Facebook executives. The sign speaks to his
third professional responsibility, for talent and culture in the company. He says they are
directly tied to strategy and innovation.
“We have to innovate by giving clients new ideas,” Tobaccowala said. “We have to innovate by showing them stuff that inspires them, that stretches their imagination. But
in order to do that we ourselves have to be inspired and have to stretch our minds.”
Sounds cliche, right?
But clients and peers pay attention because of Tobaccowala’s reputation for forward
thinking along with a wealth of experience spanning years in which Internet ad revenues
in the United States have grown from nearly nothing to $17 billion in the first half of
2012.
The Internet wasn’t yet a factor when he arrived in the U.S. in 1980 as a student at
the University of Chicago’s graduate business school, where his father also studied.
After earning his MBA, Tobaccowala joined Leo Burnett in part because it was willing to hire him even though he didn’t have a green card. He also realized that, there, he
would be exposed to blue-chip American companies that were clients, such as McDonald’s, General Motors and Procter & Gamble.
He started as an account manager and later moved into media buying, research and
direct marketing.
In 1993, he went to his bosses and persuaded them to start an interactive marketing
unit. The idea was ahead of its time, coming before the rise of the World Wide Web.
Tobaccowala has always had an interest in technology. His first personal computer
was an Apple Macintosh with 512K of memory, introduced in 1984. He also was familiar
with CompuServe, the first major commercial online service.
On America Online, Tobaccowala helped launched a nightly celebrity talk show sponsored by Oldsmobile, a Leo Burnett client looking to reinvent itself. In order to get into the
chat room, AOL users first saw a virtual showroom of cars on their computer screens. The
sponsorship was an attempt to reconnect Oldsmobile with younger consumers, though
the General Motors brand eventually disappeared.
Tobaccowala’s group also took McMom’s, a direct-mail program run by McDonald’s to
target advertising to mothers, and shifted it to AOL.
But selling clients on a new medium wasn’t easy. His pitch: “A lot of people say if you
move first there will be arrows in your back. Our idea was if you move first, you’ll be a
trailblazer and get the first look at new ideas.”
Always thinking about what’s next
Those initial forays into online advertising were the beginnings of his evolution into a
leading digital strategist. Leo Burnett repeatedly turned to him to launch new digital
ventures in both advertising and media. He became president of Starcom IP, the Internet media unit of Starcom MediaVest Group, which helps clients decide where to spend
advertising dollars.
Tobaccowala later helped incubate SMG’s video-gaming unit, Play, and another unit
dedicated to Internet searches. In 2006, Publicis created Denuo — “anew” in Latin, dedicated to spotting the latest media and marketing technologies — and put Tobaccowala in
charge. The venture included specialists in mobile advertising and viral marketing, the
practice of using social media and other technologies to create buzz.
“Rishad has a tremendous appetite for the next thing in marketing,” said Jack Klues,
VivaKi’s chief executive officer, who has known Tobaccowala for 30 years. “He never allows me to look back for a minute on what got accomplished. He’s always insisting on
leaning forward.”
VivaKi said that Klues will be retiring at the end of 2013. Chief Financial Officer Frank
Voris will succeed Klues and work closely with Tobaccowala.
Despite the decline of traditional media, Tobaccowala said he believes advertising is
entering a golden age. Brands are growing more important in an era of information overload, and technology allows marketers to target their audiences and measure returns
like never before.
But technology can’t be allowed to overshadow the emotional side of advertising, Tobaccowala said.
“Advertising is still about people,” he said. “And we like to be told stories.”
That’s why he’s not sold on mobile advertising yet. Banner ads, he believes, clutter
screens or even creep people out because of privacy concerns.
That message is not something David Petersen wants to hear. The CEO of Sense Networks, a startup mobile advertising platform, called Tobaccowala one afternoon to get
feedback about his business.
Tobaccowala told Petersen he believes the future of mobile is marketing utilities and
services rather than advertising. As an example, Tobaccowala touted a Walgreen app
that allows him to refill a prescription in seconds.
“The stem of your business is the idea to find people,” Tobaccowala told Petersen. “One
of the flowers of your business is display advertising. See what other flowers bloom.”
The irony about Tobaccowala is that while he preaches change, he has a lot of stability in his life. He has worked for Klues for 13 years, lived in Hyde Park for 24 years before
moving downtown in 2005, and has known his wife, Rekha, for 41 years, since growing
up in the same apartment building in Bombay, now known as Mumbai.
Tobaccowala’s parents were progressive for their generation in India. His father was
a Muslim and his mother was Hindu. His father was in management at the Tata Group,
one of India’s largest conglomerates. The family’s surname indicates his father’s family’s
roots in the tobacco business. “Wala” or “Wallah” in Hindi means one who performs a
specific task.
When Tobaccowala moved to Chicago, Rekha was studying journalism at the University of Georgia.
“He would religiously write me every day,” Rekha said. “He would write poems and
send me songs.”
They were married in 1984 and settled in Hyde Park, where they raised two daughters. Rekha, 53, taught at the University of Chicago Laboratory Schools before retiring
last year to travel with her husband and focus on philanthropy.
After Tobaccowala’s father died in 2010, the couple started a foundation to help the
poor in India. One of the first gifts they made was a $1 million donation to the University
of Chicago’s Booth School of Business to establish a scholarship for students from India.
Tobaccowala takes the scholars under his wing, giving them a hand that he didn’t
have when he was a young immigrant looking to make his way in a foreign land.
“Rishad was very determined to make it on his own,” said Rekha. “If we were in India,
he would have been known as ‘Mr. Tobaccowala’s son.’”
Rishad Tobaccowala
• Education: Bachelor’s degree in mathematics from the University of Bombay; MBA
from the University of Chicago Booth School of Business.
• Family: Lives in Chicago with his wife, Rekha. They have two daughters: Ria, 24,
graduated from Harvard University and works for Google Inc. Rohini, 21, is a senior at Boston University.
• Twitter followers: 9,068 as of press time @Rishadt.
• Recent tweet: “Wisdom: 1. Find something/somebody to admire. 2. Be open. Be
Flexible. 3. Modern methods but ancient values. 4. Become who you are”
• Favorite iPad apps: He has so many he divides them into categories. News: The
New York Times and Financial Times. Video: HBOGo and PBS. Music: Spotify. Social: Facebook. Utility: Flight Pro and Open Table.
Ron May, 1956–2013
Online newsletter founder won prominence in Chicago’s tech community
By Wailin Wong
June 25, 2013
Ron May, a longtime chronicler of Chicago’s technology and startup community who
made a name for himself through force of personality as well as journalistic persistence,
died Sunday, June 23, 2013 at 57.
His brother Paul said he died of complications from diabetes.
Mr. May preceded the current renaissance in the Chicago startup scene, having become a well-known figure during the first dot-com boom. In 1997, he launched an email
newsletter called the May Report that was stuffed with his commentary on Chicago tech
news. It included missives from readers and sources reprinted wholesale, sometimes
without their permission; rants against companies or people with whom he took issue;
and musings on his personal life, including details on his deteriorating health in recent
years.
“Ron had a curiosity about life and people,” said Paul May, who recalled his brother’s
love of books and music, from classical to Billy Joel. “Underneath all his gruff, he had a
heart of gold. And he had a desire to continually learn and share his knowledge. … He
always wanted to know what’s up, what are you doing, how are you contributing. He hit
you right between the eyes — are you doing anything useful or are you a sycophant?”
Mr. May, who seemed to endear himself to as many startup founders and community
members as he alienated, was impossible to miss at networking events around town.
One of his most well-known traits was asking attendees at tech mixers — sometimes
demanding them, actually — for their business cards, which he would collect in a plastic grocery bag. Later he would type them up for his newsletters, publishing everyone’s
phone numbers and email addresses. He also carried a tape recorder and wasn’t shy
about grilling people in search of a scoop.
“One of the things people ask me all the time is what are the most important traits of
entrepreneurs,” said Nik Rokop, managing director of the Jules F. Knapp Entrepreneurship Center at the Illinois Institute of Technology, who recalled many instances of Mr.
May harassing him with his cane and sticking a tape recorder in his face. “One of them
that I say is persistence, and Ron had that entrepreneurial trait — persistence — in life.
He persisted a whole lot longer than we thought he would.”
Mr. May’s stature during the first tech boom earned him a 2000 profile in The New
York Times by David Barboza, who wrote that “the cantankerous Mr. May is running,
virtually by himself, one of the most influential high-tech publications in the Midwest.”
Mr. May grew up in St. Louis and attended the University of Chicago, although he did
not graduate. He worked as a recruiter and later wrote a column for the Chicago Computer Guide. After being hospitalized for a diabetic condition, he restarted his writing
career, this time launching his own newsletter, according to the Times profile.
With its stream-of-consciousness style and long personal asides, the May Report preceded the kind of quick-hit reporting and confessional candor later made commonplace
by blogs and social media. And while Mr. May angered many of the people he wrote
about, they also eagerly combed through his reports looking for their names.
“Way before Twitter, way before social media, his reporting methodology was to hear a
rumor, throw it out there and then let people say why it’s not true,” said Brad Spirrison,
who edited a competing online publication called ePrairie in the early 2000s.
“He got under our skin, but I’ll certainly miss him,” Spirrison added.
Mr. May’s quirks were honored by Chicago-based Web developer Tim Saylor, who several years ago created a site called ronmayfacts.com modeled after the hyperbolic parody
site Chuck Norris Facts.
“If you haven’t been insulted by Ron May, you haven’t made it in Chicago,” one of
the facts reads, accompanied by a drawing of Mr. May in profile, Alfred Hitchcock-style,
holding a tape recorder.
Those who knew Mr. May, however, said he had started to take a gentler approach.
Longtime friend and frequent newsletter subject Jeff Willinger said he would try to talk
Mr. May out of publishing some of the negative items he had collected.
“Over the years, I think he softened up and didn’t go as hard on people,” said Willinger, who described Mr. May as taking “pride in being a professional disrupter.”
Mr. May, whose health had slowed him down in recent years, sent his last report on
June 12, 2013. The following Monday, subscribers to the May Report received a farewell
missive, written in Mr. May’s style by his family members.
“There are no doubts that many of you are a breathing a sigh of relief that they’ll never
be the subject of another snarky headline or personally intrusive investigation,” the final
newsletter read. “You know who you are; I don’t have to remind anyone of my favorite
subjects.”
The newsletter also thanked everyone for their contributions to the May Report, which
it described as Mr. May’s “labor of love and passion.”
Mr. May also is survived by his mother, Harriet; a sister, Lisa Jean Cortez; and two
brothers, Paul and David.
Technology in the News
Chicagoans test out Google Glass wearable computer
About 40 people in the area were invited to participate in a program to try out the hightech headset
By Wailin Wong
July 14, 2013
Manny Almagro films his partner, Brad Kleinman (on screen), wearing Google Glass.
OK, Glass, show me some Chicagoans who are testing Google’s new, wearable computer.
About 40 people in the Chicago area are participating in the Glass Explorers program,
plunking down $1,500 to get their hands on the high-tech headset before it goes on sale
in 2014.
Google Glass, a slim, lensless device, responds to voice commands such as, “OK,
Glass, take a picture,” and its right stem includes a touchpad that users can swipe or
tap. Via a tiny display in the corner above the right eye, wearers can also read Twitter
posts and emails, browse the Web, scan CNN headlines or check the weather. More features are being rolled out all the time.
So far, these early adopters say they’ve attracted plenty of stares, questions and requests from total strangers to try on the glasses. Chicagoan Christian Picciolini wore
Glass to a recent conference at the Merchandise Mart and became an instant celebrity.
“Jenny McCarthy was there, and people were leaving her to come talk to me,” Picciolini said.
About 2,000 developers were selected to be Explorers. Another 8,000 received invitations after applying to the program via a Twitter post using the hashtag “#ifihadglass.”
Google plans to expand the Explorers program later in 2013 before introducing it to
the masses in 2014, with a price of less than $1,500 for its wider consumer launch, said
spokesman Chris Dale. The current cost reflects the investment required for a rare crack
at testing emerging technology, he said.
“One of the things that Explorers have the opportunity to do is test a new platform in
computing, and that’s very unusual,” Dale said.
Here’s a look at how some Chicago testers are using Glass:
Christian Picciolini, 39
Christian Picciolini is a multitasker, and he’s using Google Glass to document the many
facets of his life: Running Goldmill Talent, the artist management and music consulting firm he founded; serving as a board member at Life After Hate, a non-profit he cofounded to combat violent extremism and racism; and renovating the West Loop loft that
he and his wife bought last year.
A recent transplant to the neighborhood, he takes frequent walks to discover new
haunts and check out ongoing construction. One of his favorite spots is the intersection
of Carpenter and Lake streets underneath the “L” tracks.
On a recent afternoon walk around the West Loop, Picciolini stood in the middle of the
empty street and looked upward in his Glass, tapping the right ear stem to snap a photo
of the tracks.
Strolling another block north to West Fulton Street, he paused in front of the Fulton
Market Cold Storage Building and took a picture of the concrete shell, where Google
plans to move its Chicago office in 2016. (Picciolini’s wife is a Google Chicago employee,
although her connection didn’t influence his acceptance into the Glass Explorers program.)
Picciolini wants to wear his Glass to the Great Wall of China and on a hot air balloon
at the yearly Albuquerque International Balloon Fiesta.
“I never want to have any regrets in life,” Picciolini said. “This has inspired me to go
and do my bucket list.”
He also envisions a future where Glass owners at a concert get exclusive access to a
virtual store to buy merchandise with just a tap on their headset, or consumers who are
listening to a song on their Glass can buy it instantly. Picciolini has ideas for Glass apps
(Google calls them “Glassware”) that he’s developing with Doejo, a local design firm.
Mike Santoro, 32
Mike Santoro says his 2- and 3-year-old sons are often doing cute or goofy things that
he wants to photograph, but taking out his phone or camera interrupts the moment and
makes them stop. With Google Glass, a quick tap snaps a photo without intruding on
the action.
“I’m really impressed by the photos I’ve been able to take just wobbling around,” said
Santoro, who is president of public relations firm Walker Sands Communications.
Santoro has an eight-block walk to the Metra station in the morning, and he can
glance at the time in the corner of his right eye to check if he needs to pick up the pace.
If he’s really running late, he’ll put the Glass away so passers-by don’t stop him to ask
about the device. Otherwise, he’s happy to field questions.
“My goal is to get it out and let people try it out,” he said.
He’s keeping the expensive gadget out of his young children’s hands, however, and so
far they haven’t suspected that the glasses have special technology built into them. Santoro also makes sure to give his clients a heads-up that he has Glass before going into
meetings with the device.
This week, Santoro is going deep sea fishing in Miami and hopes he can record a big
catch without taking his hands off the reel. And he’s looking forward to seeing what applications become available for Glass. He’d love to be able to request a pick-up from car
service Uber, for example, using just a couple taps and the glasses’ geolocation technology.
“They’re an early stage product, but there’s a lot of potential,” Santoro said.
Brad Kleinman, 32, and Manolo Almagro, 48
Kleinman and Almagro work together at retail marketing agency TPN, where Kleinman is
a digital strategist and Almagro is the senior vice president of digital. The two men, who
applied separately to the Glass program, are already adopters of wearable technology.
Kleinman wears a Nike+ Fuel Band, which tracks his steps and calories burned, while
Almagro sports a Jawbone wristband activity tracker.
Kleinman said he saw a research report estimating that consumers take out their
phones an average of 150 times a day. With a wearable product like Glass, “instead of
having to come to our pocket each time, the information will come to us,” Kleinman said.
For now, Glass is a magnet for curious onlookers. Standing outside Tribune Tower,
Kleinman was approached by a group of women on a scavenger hunt who asked if he
knew how many pages were in the Chicago Tribune’s first issue.
“Nope, but I bet Google does,” Kleinman said, and asked his Glass to search the Web.
About five seconds later, he had the answer: four pages.
Kleinman and Almagro see vast possibilities for Glass in the retail industry. An instore mapping application might direct consumers to where they can find items on a
virtual shopping list. Glass wearers could use Google Hangouts, a video chat platform,
while in a fitting room to get opinions from friends in real time.
Glass represents “a more natural way to experience things,” Almagro said, although
he doesn’t believe the headset can fully replace a smartphone because of its small display and lack of a way to input large amounts of information.
The duo is planning a “Glass Up” event where fellow local Explorers can convene and
share their experiences. There might also be the opportunity for some high jinks. Almagro is fond of sidling up to Kleinman and activating his colleague’s device by saying,
“OK, Glass, take a picture!”
Google headsets raise privacy concerns
Company’s Explorers tackle issues that arise as they test the device
By Wailin Wong
July 14, 2013
Portrait of Manny Almagro (left) and Brad Kleinman, executives at retail marketing agency TPN, wearing
Google Glass on July 10, 2013.
Google’s new wearable Glass headset has stirred privacy and safety concerns over its usage, and the company’s Explorers are on the front lines of tackling many of those worries
as they test the devices in their everyday lives.
Explorer Manolo Almagro recalled one visit to a Brookstone store when a clerk asked
him angrily, “Are you taking a video of me?” Almagro explained that he wasn’t. His strategy for putting others at ease is to push the Glass to the top of his head, a gesture he
calls a universal signal for, “I’m not doing anything.”
Explorers say they practice common sense and courtesy by not wearing the device
into public restrooms, for example, and giving advance notice if they’ll have the gadget
with them at a business meeting.
“Use it responsibly, just like you would your phone or your camera or your eyes,” advised Christian Picciolini, an Explorer.
Google addressed some safety issues with its design for Glass. Activating the device
requires speaking to it or tapping the side, making it difficult for a wearer to surreptitiously turn it on. The illumination of the glasses’ display is visible to other people, so
they know whether the device is running. Google also set the default video recording
time at 10 seconds and the battery can only accommodate about 45 minutes of straight
recording, so Glass is a poor tool for movie theater bootleggers.
In Illinois, audio recordings require consent from both parties. Photos and video recordings of other people without consent are explicitly prohibited in restrooms, tanning
salons, locker rooms, changing rooms and hotel bedrooms.
Elsewhere, casinos in Las Vegas and Atlantic City, N.J., have forbidden patrons from
using Glass while gambling, adding the wearable computers to a list of banned gadgets
that includes computers and recording devices, according to a recent report by The Associated Press.
And while Google wants developers to be creative in building applications for Glass,
they are barred from making software that uses facial recognition technology.
Google spokesman Chris Dale said that in addition to encouraging people to use
Glass in the real world, the Explorer program also aims to establish social norms for
these kinds of devices.
“We know that new technology raises new issues,” he said. “We didn’t just want to sit
in a conference room and develop it somewhere. We wanted to take the unprecedented
step of getting it out in the wild … (to have Explorers) develop social etiquette around it
and be ambassadors for the program. Based on a lot of that feedback, we can iterate it.
We can update it, change it, evolve our policies and so forth.”
Drawing insight into Google’s Doodles
By Christopher Borrelli
June 12, 2013
Google.com is the most visited online front door in the United States. According to Alexa,
a longtime Internet statistics firm, it is also the second most visited home page in the
world behind Facebook.com; roughly 40 percent of global Internet users visit Google’s
primary portal at least once a day. And yet, considering the culture-changing ubiquity of
the Silicon Valley-based tech giant — which reported more than $50 billion in revenue
in 2012 — what a user tends to find there is famously, comically austere. It is a digital
Antarctica: Sheer white for miles, no ads, no headlines, just a search bar and the Google
logo.
Six letters, four colors.
Blue, red, yellow, green.
It’s an image so taken for granted, a welcome so familiar, chances are you rarely consider it.
However, on June 10, 2013, Google.com users may have noticed a tweak: Max, the
wolf-costumed hero of the beloved Maurice Sendak children’s classic “Where the Wild
Things Are,” stomping alongside the Google logo. If you clicked the word balloon above
his head, the letters in Google (muted, to mimic Sendak’s palette) separated, and a
globe rose. Max stepped into its curving, churning landscape and embarked on his wild
rumpus, parading through perfectly rendered settings from “Wild Things,” only to be replaced with scenes from Sendak’s “In the Night Kitchen” then finally, his lesser-known
“Bumble-Ardy.”
Why the elaborate, intricately detailed, nearly two-minute Easter egg, an animation
feat that required a handful of artists working for several months? Well, because it was
Sendak’s posthumous 85th birthday.
But mostly — just because.
This is called a Google Doodle, and a Google Doodle is mostly just because.
At least that’s how Google regards its hundreds of often radical logo alterations, illustrations and animations that a small team of young, anonymous artists and engineers
within this company of 50,000 have been turning out with increasing frequency, inventiveness and beauty. If you once blew a workday playing Google’s salute to the 30th anniversary of “Pac-Man” — a spot-on replica, down to the glitches, shaped into a “Google”
— these are the people to blame. Or, if you spent a few extra moments recently admiring
its homage to graphic designer Saul Bass, marveling at how lovingly a tech logo can be
worked into renditions of movie posters and credit sequences for “West Side Story” and
“Vertigo,” these are the people to admire.
Specifically, Ryan Germick.
He is the chief doodler, the head of Google Doodle. He is 33 but looks 23. He grew up
in Lake County, Ind., south of Gary. His job is putting a warm, handmade face on what
often seems to be an information monolith.
On an early May 2013 evening, we met in a burrito joint around the corner from his
apartment in the Haight district of San Francisco, a former hippie enclave that, like
many former hippie enclaves in this city, still carries the feel of a tattered, open-air ’70s
rumpus room. Germick has long, straight hair that hangs in sheets and a mellow vibe,
which evaporated the moment he spoke, in the nervous-confident rush of a graduate
student:
“Sincerely, I see the Doodle as a space on the Internet for art, inspiration, this one
corner that’s not sold out, not given to the pressure of clicks, free from the constraints of
business demands, not meant to be my statement but Google’s statement. And Google is
your nerdy friend who wants to share stuff, who wants to tell you about (early computer
scientist) Alan Turing and share his enthusiasm for (Austrian artist) Gustav Klimt. It’s
not a sales pitch, it’s this little gift, and we have been incredibly conscious about keeping
it that.”
And that, unquestionably, is the odd feeling you get from Google Doodles.
What began as a corporate afterthought has evolved under Germick’s stewardship
into an ambitious, art/tech design project — a charming, occasionally challenging global
art show hiding in plain sight.
Google Doodles celebrate holidays, anniversaries, legendary geniuses (the 200th birthday of Charles Dickens) and obscure pioneers (the 154th birthday of George Ferris, inventor of the Ferris wheel). Google Doodles are eccentric (one day an interactive reminder of
Mother’s Day, the next, a 161st birthday salute to the inventor of the Petri dish). Google
Doodles speak in an endless number of aesthetic tongues, from modernist architecture
to wood carvings to comic books. The Google Doodle is international (recently, Canada
got an illustration honoring the Royal Canadian Mounted Police, Portugal a salute to
Portugal Day). And at times, Google Doodles have been surprisingly abstract (replacing
the logo with everything from “Google” in Morse code to a vaguely discernible “Google”
buried within the splatter of a Jackson Pollock impersonation).
But primarily, so say the doodlers, it’s art for art’s sake.
It’s also far more complicated — so say many branding experts, design professors and
technology critics.
“I spend all my time developing brands and considering ways that brands should
stick to identities,” said Tereasa Surratt, creative director for the marketing firm Oligvy &
Mather Chicago, “and what Google is doing here is incredibly unorthodox, breaking every
rule of consistency. They’re saying, ‘We’re going to use our massively influential identity
to celebrate an obscure mathematician, or whomever. The placement of our colors and
letters are so rooted, you don’t even need to read our logo to know what you’re dealing
with.’ And now I look forward to it.”
Said Robert Brinkerhoff, the chair of the illustration department at the Rhode Island
School of Design where several doodlers graduated: “A lot of (doodles) skirt legibility, so
much so that if you go to Google.com expecting that logo, they’re testing your visual literacy. Which is fascinating. On the other hand, if one of the goals is, ‘Hey, we’re Google,
but we’re not so enormous’ — if they’re seeking intimacy — then personalization can
make a company that pervasive — which many people already think sinister things
about — unsettling.”
Indeed, depending on whom you ask, the Google Doodle is clever and charming, or
shrewd and charming.
Germick was both.
Asked if he thought he was humanizing a massive corporation — if he was tasked
with putting a smiling face on a company that many critics believe wants to dictate the
flow of information worldwide, disseminate your personal details and corroborate with
censoring regimes and government spy programs, to name just a handful of the controversies that have landed at Google’s doorstep recently — he shrugged in such a way that
made the question sound not so much unreasonable as paranoid and cynical. Then he
said something remarkable: The doodle is a new medium, being figured out.
“We have this amazing billboard,” he said, “so why not show the fully realized capabilities of a major tech company?” Then he took a big bite of burrito.
The Googleplex — the bucolic, frictionless campus of more than 30 buildings that
make up Google’s headquarters — is about 40 miles south of San Francisco, in Mountain View, a prototypical Silicon Valley neighborhood, not quite suburb, not entirely office park. The sky here is pale white and the air is still; the sunlight would be blinding if
every street weren’t so shaded, every sidewalk bordered with large trees of uniform shape
and size, like rows of green champagne flutes. Driving through, you pass low, glass office buildings with modestly announced logos of familiar tech companies (Intuit, Mozilla,
YouTube), and less-than-obvious tech companies with impenetrable names that offer no
hint of what they do (Pixim, Egnyte).
But mostly you pass placards with that iconic Google logo.
As I waited at a corner, a Google Maps car, with its twirling rooftop camera, drove by
at the precise moment I was admiring a large Google Maps location marker placed cleverly at an intersection, the digital world made physical. Across the street, at 8 a.m. on a
Friday, the Google soccer fields were full of adults playing soccer, and employees wearing
cargo shorts, T-shirts and backpacks walked past looking like acclimated college students. Everything appeared as though it were landscaped yesterday. And everyone who
wasn’t on foot rode bikes — four-color, Google-themed bikes. Many building entrances
seemed marked by thickets of these twee, kaleidoscopic bicycles. The few cars parked
nearby appeared to be either Priuses or Chevy Volts, with long cords running from the
front ends to complimentary charging stations.
At the hub of the campus is a massive office quadrangle, and running between is a
courtyard with a sand volleyball court, a T. rex skeleton (complemented by pink flamingos) and a sculpture park. How typically Google to have a David Lynch statue, I thought,
until I realized, no, it’s Lloyd Bridges. Of course. Also nearby was a Google bowling alley,
a Google climbing wall and several Google swimming pools.
Later, putting this in perspective, Steven Levy, tech writer and author of “In the Plex:
How Google Thinks, Works and Shapes Our Lives,” told me that Google’s culture has
become “institutional whimsy.” Ken Auletta, who covers media for The New Yorker and
wrote “Googled: The End of the World As We Know it,” said: “They are an adolescent company. So they get in trouble, with questions of privacy, the aesthetics of Google glasses.
Like Microsoft in the ‘90s, they have an image problem. But its culture has remained
consistent, and the doodle is consistent with that.” He said that, businesswise, you’d
have to be naive not to regard the Google Doodle as clever marketing, “but do I think
that’s the motivation of the artists?”
It’s not.
The doodle office is on the ground floor of Building 41, kitty-corner from Google’s
search-function team in Building 43. Doodlers don’t have traditional cubicles so much
as spaces with drawing tables, walls covered in illustrations and a “doodle thinking cor-
ner,” an alcove canopied by a bedsheet, outfitted with beanbag chairs and holiday lights.
There are 10 artists and three engineers, not a typical mix for an engineer-driven company heavy with computer scientists.
“It’s strange to be a creative person in a tech place, an art-school graduate surrounded by people who make jokes about coding,” said Betsy Bauer, a 24-year-old doodler.
At the front of the office is Germick’s workspace, which, when I was there, was surrounded by a low metal fence to stop his dog (a small, sandy-colored rescue mutt named
Cleo) from escaping. We met and headed to a meeting about the Sendak doodle, Germick
carrying Cleo and a bag of freeze-dried dog treats. We passed a window that looked out
on a large sculpture of a shark fin.
“Every week it’s something,” he said. “Shark fins, dinosaurs — they just show up and
there’s really no explanation or memo sent out about it.”
In the meeting room, as Germick fed his dog (which, incidentally, wore a cone around
its neck), engineer Corrie Scalisi and artist Jennifer Hom slid in across the table.
“How’s it going?” Germick asked. Scalisi said they were 65-percent done, “but then
we’re, ‘Oh, we should totally add that,’ which will make it 50 percent.”
Hom flipped around her laptop to show what they had.
“I am extremely worried we’re going to make people dizzy,” Scalisi told Germick, who
watched the animation spin.
“I want to scratch it like a record,” he said.
Is that possible? I asked.
“Corrie?” Hom asked.
Scalisi smiled warily.
“You’re so mad at me now,” Hom said.
It was possible, Scalisi explained, but you don’t want to overwhelm people with too
many options. You also “don’t want to give the users this amazing art that takes five
minutes to load, slows everything, then they forget why they were there,” she said. Hom
added: “Yeah, we are still a search engine.”
Germick said afterward one reason the process has become arduous is partly because they weigh a practical need to get people off the home page as quickly as possible
against, well, what’s possible at a company with seemingly unlimited resources and ambitions. (As Ken Krayer, a Michigan-based design consultant, put it: “Google has so much
money it doesn’t have to ground its whims in real products, like everyone else.”) Plus,
being Google, they get to work with almost whomever they want; Germick has wrangled
doodles from artists as varied as Jeff Koons, Shepard Fairey, Takashi Murakami and DC
Comics’ Jim Lee.
“I was kind of amazed how much work they put in this little thing,” said Blakeley
White-McGuire, a principal dancer with Martha Graham Dance Company in New York,
which received a doodle to celebrate Graham’s 117th birthday in 2011. Several months
before, White-McGuire danced for the artists, who recorded and animated each of her
movements, then selected music and costumes iconically associated with Graham, creating an “incredibly compressed and detailed history of the signatures of this company,”
White-McGuire said.
In 2012, for a doodle of Mies van der Rohe’s Crown Hall on the campus of the Illinois
Institute of Technology, the team briefly considered hiring an architect to build a scale
model in Mountain View.
Said Lynn Caponera, who was Sendak’s assistant for decades and now manages his
estate: “They wanted to know what Maurice’s favorite foods were, about his love for dogs.
It was really clear to me the people who make these doodles are not Google paper pushers. They’re artists. Which is good, because Maurice was the least technological person
ever. He called my computer a ‘fax machine,’ but when he was researching, he would say
‘Google me owls’ or ‘Google me some fish.’ Google was the only computer thing he liked.”
The Google Doodle began soon after the company was founded in 1998 by Larry Page
and Sergey Brin; they were heading to the Burning Man Festival in Nevada and wanted
to acknowledge that they would be out of the office. So they placed a Burning Man stick
figure inside the second “o” of the logo. During those first couple of years the doodle
didn’t advance much beyond the level of clip art, not until Dennis Hwang, then a Stanford University undergraduate majoring in art and computer science (now a Google designer), joined the company in 2000. His first doodle was for Bastille Day, and within a
few years Hwang was duplicating “Google” in honor of Andy Warhol’s 74th birthday, abstracting Google into Braille and creating doodles for Google’s international home pages
(now a regular part of a doodler’s job). But the art itself remains modest.
In fact, though Google Doodles became a fairly regular occurrence (the company even
patented the Doodle in 2001), not until Germick arrived in 2006 — for his first full-time
job — did the format reveal its ambitions.
Germick grew up in a “creative family, the kind that gave performances to each other
instead of gifts.” His father ran a family-owned pharmacy, his mother was a teacher. He
fell in love with art watching Bob Ross on PBS (for whom he created a doodle last year,
to celebrate the art teacher’s 70th birthday) and studied illustration at Parsons design
school in New York under Frank Olinsky, co-creator of the MTV logo. But his most formative experience was in 2000, learning the art of sign painting in India, “where everywhere you looked there were portraits that gave human warmth to images of everyday
stuff and people.”
For his first couple of years at Google, Germick split his time between creating doodles and serving as an all-purpose in-house illustrator (among his ubiquitous creations
is the tiny directional man on Google Maps). Then, in late 2008, the doodle team became
a division. The following year, his boss, Marissa Mayer (now head of Yahoo), encouraged
him to try interactive doodles, ambitious doodles, starting with a week of “Sesame Street”
doodles.
“She installed commandments, that it should be this nerdy thing, about positive
things, it was not a commercial space …,” Germick said. In 2011, his “Pac-Man” Doodle
cemented the team’s importance within Google.
“I was personally anxious we would break the home page with that,” said Marcin
Wichary, who co-designed the “Pac-Man” doodle and left Google in 2012. “But Ryan
wanted so much more out of this: We talked a lot about how doodles didn’t have to be
a corporate handshake, how they might even become like this bridge between art and
technology.” Which led to a playable Les Paul-guitar doodle, a Moog synthesizer doodle,
a live-action Charlie Chaplin doodle (Germick played the sheriff), doodles in a dizzying
range of styles, aping cave paintings, Christmas lights, Latvian textiles.
“If you look at how film developed, how in the first 15 years nobody really knew what
to do with it, how it took 50 years to do something serious, it’s not a bad comparison,”
said journalist Clive Thompson, who has a book (“Smarter Than You Think”) coming fall
2013 about the ways technology is improving life. “Certainly with interactive doodles,
Google is testing ways of communicating online we don’t get yet. These are the early
days. Or, in the long run, it could be like any corporate-sponsored art: ‘Brought to you
by Philip Morris.’”
Indeed, despite following Mayer’s no-advertising doodle policy — and Germick said he
is pitched regularly by record companies, movie studios, even Google’s community outreach divisions — Germick wrestles with the thin line between promotional and celebratory, doodles born from admiration for an innovator and doodles that could be marketing. The Jim Henson Company successfully pitched a doodle celebrating Henson’s 75th
birthday, but a “Star Wars”-centric Father’s Day doodle from Chicago cartoonist Jeffrey
Brown, commissioned by Germick, was eventually deemed too commercial, too associated with an occasionally violent sci-fi property, and scrapped. (Don’t cry for Brown:
Google let him take its idea, which he turned into a pair of best-selling novelty books,
“Darth Vader and Son” and “Vader’s Little Princess.”)
Presenting art to a global audience is a sensitive daily tightrope walk.
“We stay away from partisan dates, political stuff,” Germick said. “We have to think of
all the ways a doodle could be misconstrued — I challenge you come up with a tasteful
way to doodle about the Titanic.” Yet in early spring 2013, Google took a fair amount of
media criticism for running a doodle honoring farm-worker activist Cesar Chavez’s 86th
birthday but not, on the same day, an Easter doodle. Which is what happens when a
huge company is “not thinking broadly enough and having a random policy about what
it celebrates,” said Danny Sullivan, editor of Search Engine Land, an online trade publication for the search engine business.
A doodle backlash is inevitable, said John Bowers, chair of the visual communication
design department at the School of the Art Institute of Chicago.
“Doodles appropriate images, Google has a perception as a company that controls
information and is only getting bigger — regardless of the (doodlers’) intent, people will
read into that,” he said. He noted that he worked in San Francisco for corporate branding consultant Landor Associates, specifically the team that tried to reframe the identity of BP as an environmentally minded petroleum company. “Your cynical side says,
‘They’re not green in any way,’ but then, ‘Wait, a company is not even supposed to try to
appear decent?’”
After the Sendak meeting I went to a spitballing idea meeting. Germick divided the
team in two and asked one half to come up with a water-based doodle and the other a
landmark-based doodle. The groups discussed, in no particular order: aqueducts, Thai
water festivals, a doodle based on the Venturi effect (which stops the gas pump when
your tank is full), Evel Knievel, bison, elk, wolves, non-Newtonian fluids, the national
parks, Evel Knievel again (jumping over a Google Maps image of your house), the Grand
Canyon (with a small “Google” at the bottom), the inventor of water parks, the Hudson
River School of art, landscape artist Thomas Moran, Jell-O, Ansel Adams, Mount Rushmore, Old Faithful and jumping the shark.
“One thing we get a lot of requests for is a doodle for Google’s science fair,” Germick
said.
No one replied.
Then someone asked: “You mean, the (science fair) project would have to look like the
logo?”
And someone replied: “Yeah, like ‘I cured cancer!’ And the solution spells ‘Google!’”
“So, then,” Germick said, “too sold-out?”
Replies were noncommittal, which seemed to mean, yes, too sold-out, even for a doodle for a Google property. Not even “The Internship,” the new Owen Wilson-Vince Vaughn
comedy set at Google, got a doodle. (Cartoonist Scott McCloud, who has consulted for
Google Doodle, said the doodle team’s work has been “thoughtful and magical, and it’s
funny because if they get bad you know someone’s clamping down on them — they are
surely as innocent as it gets at Google, the canary in the coal mine.”)
After the meeting broke up I walked over to artist Mike Dutton, who was working on
a Mother’s Day doodle: a Google-shaped machine that allowed users to print out an actual piece of art to hang on a refrigerator. He wore sneakers, no socks, his jeans rolled
up Tom Sawyer-style. He explained that the job is “about balancing personal taste with
what whatever you are celebrating while also co-branding.” He was very earnest and
considered. He showed me how, for this project, the team made real artwork with yarn
and boxes of macaroni and buttons and then painstakingly re-created each piece in the
doodle. A week later, on Mother’s Day, I tried it. The machine offered 27 different whimsical pieces of refrigerator-ready art, none of which had anything in common other than
the word “Google” embedded somewhere. It worked perfectly.
Google certain to make cold-storage building cool
New offices expected to help transform West Town
By Melissa Harris
June 30, 2013
In 2012, refrigerated rooms that once stored meat for distributors and pork traders in
the brick warehouse at 1000 W. Fulton Market were overgrown with stalactites and stalagmites of ice.
Less than a year later, the 10-story Fulton Market Cold Storage building, the tallest in
the West Town neighborhood, has been defrosted, skinned and stripped to its concrete
bones.
By early 2016, Google plans to move its 500-person Chicago office there from River
North, accelerating the neighborhood’s transformation from a place where food is processed and shipped to a place where it’s consumed — at chic, candlelit tables made of
reclaimed wood, no less.
The developer of the cold-storage building is capitalizing on the neighborhood’s hip
image, marketing the project as “1K Fulton: Work. Eat. Chill.”
“It’s huge. Huge,” Martha Goldstein, executive director of the West Loop Community
Organization, said of Google’s move. “It puts us on the map more than we’re already
there. ... The neighborhood is still in need of retail. It’s the one thing we’re lacking and,
as a result of Google coming, retail will follow.”
Jim Lecinski, head of Google’s Chicago office, said two neighborhood amenities attracted the company: A new “L” stop at Morgan Street on the Green and Pink lines and
nearby restaurants. The building’s developer, Chicago-based Sterling Bay Cos., agreed to
let Google employees bring their dogs to work and will supply indoor bike storage. “And,
for me, as a Hawks fan, it’s close to the United Center,” Lecinski said.
Meanwhile, the neighborhood’s long-standing food wholesalers and meatpackers
must work around the increased foot and car traffic, which complicates truck loading
and unloading. Tensions have risen as the neighborhood evolves.
“A lot of people moved into the neighborhood to be by trucks and carcasses,” said
Amit Hasak, former president and part-owner of Fulton Market Cold Storage Co., which
sold the building last year to Sterling Bay for $12 million.
“On the other hand, once they got here, our neighbors started complaining about the
trucks and carcasses,” said Hasak, who said the 1923 building had become obsolete for
his needs. Hasak moved the business to a rented facility in Lyons and renamed it Hasak
Cold Storage.
The Randolph-Fulton Market Association, which represents many businesses and
food companies, opposed Sterling Bay’s plans to create a 20,000-square-foot retail space
on the ground floor of the cold-storage building.
“We didn’t want big-box retail,” said Roger Romanelli, the association’s executive director. “Google is highly welcomed by the community because office uses mesh well
with light industrial, and office users are not bringing their kids to work every day. …
The street grid just isn’t wide enough to accommodate the volume a destination retailer
would bring.”
Artists often lead the first wave of gentrification. But in the West Loop’s case, it has
been condo dwellers and small businesses, especially restaurants.
Award-winning chefs and restaurateurs — Grant Achatz and Nick Kokonas (Next and
The Aviary); Stephanie Izard and Boka Restaurant Group (Girl & the Goat); and Paul Kahan and One Off Hospitality Group (Blackbird, avec and The Publican) — have brought
international attention to the neighborhood. And tech companies smaller than Google,
such as Sandbox Industries, Braintree and Threadless, have planted headquarters there
as well.
“Restaurants have always seemed to give the neighborhood its initial lifeblood,” said
Scott Maesel, executive managing director of commercial real estate brokerage Sperry
Van Ness, who lives in the neighborhood and owns real estate there. “Jerry Kleiner’s restaurants, Vivo and Marche, put the West Loop — and I’m talking West of Halsted — on
the map.”
Restaurateurs are attracted by more affordable ground-floor rents, compared with
those in Lincoln Park and the Gold Coast, and the warehouse aesthetic — large, open
floor plans, muscular columns and brick walls.
“The neighborhood is full of buildings with unique character,” said Jeffrey Shapack,
who is co-developing a private club and hotel, Soho House Chicago, on Green Street with
Chicago-based AJ Capital Partners. “Shapack Development owns other buildings in the
neighborhood which we plan to rehab with new interiors juxtaposed against incredibly
ornate, old 1900s facades.”
Many factories and distributors are protected by a city-created planned manufacturing district and a larger industrial corridor that stretches from Kedzie Avenue to Halsted
Street and from Grand Avenue to Randolph Street. These zoning restrictions may slow
— but are unlikely to reverse — the deindustrialization of Chicago’s core.
Shapack said much of the neighborhood’s zoning “is not great” for developers. “However, it fosters creativity with how you reuse buildings,” he said.
Andy Gloor, managing principal of Sterling Bay, said companies are “looking for creative office space,” and their executives “want to work in a neighborhood they like to
hang out in too.” The storage building also has “stunning” city views, he added.
Lecinski said Google didn’t ask “for any special treatment whatsoever” from the city
in making the move.
Still, taxpayers have contributed to the neighborhood’s growing popularity with a $38
million “L” station at Lake and Morgan streets, the first new CTA station to open in the
city in 15 years. The previous Morgan Street station was demolished in the late 1940s.
The CTA closed the station at Halsted and Lake streets in the mid-1990s.
On a morning visit to Google’s current office in River North, there was a line to get
into the elevator. Inside, the walls are awash in Google’s primary colors — blue, red, yellow, green. Rooms have Chicago themes and a college-campus vibe. Employees work in
pods. The cafeteria serves free lunch and breakfast Monday through Friday and offers
six types of vinegar at the salad bar.
“We try to balance two things: one is a sense of Google-y-ness,” Lecinski said. “That
no matter if you’re in our Singapore office, or our Berlin office, or Chicago, it feels like the
Google brand, but yet it feels like an expression of the Google brand in that locale. We
have rooms here called speak-easy and Ferris Bueller and 312 cafe. We will want to try
and capture not only Chicago, but that Chicago neighborhood essence, combined with
the essence of Google in the new space.”
Rethinking startup a ‘pivotal’ experience
Changing direction can be painful, but often necessary
By Wailin Wong
June 23, 2013
It requires emotional detachment yet total passion. It might involve killing a business
in order to save it. It’s by turns agonizing, rewarding, humbling and empowering. And
everyone who’s done it seems to have a slightly different idea of what it is.
It’s the pivot.
An essential concept in the startup world, pivoting means doing something differently,
often under time constraints as cash and investor patience dwindle. A pivot could involve
changing a product to reach the same target market, going after a different market with
the same product or preserving a small piece of existing technology to form an entirely
different business. Entrepreneurs and venture capitalists don’t always agree about when
a tweak becomes a full pivot, or when a pivot becomes a do-over. But they do say that
startups have to be open to change.
“There’s a mistaken belief by a lot of entrepreneurs that ‘Hey, I spent three years building this thing; I’ve put in a lot of time and effort, so inherently it’s worth something,’” said
Paul Lee, a partner at Chicago-based venture firm Lightbank. “But the market is telling
you what it’s worth, and it’s not the work you put into it. … If you look at it clinically and
take off the effort lens, it becomes a very easy decision.”
Startups certainly didn’t invent the idea of adapting to market forces. But it is a testament to Silicon Valley’s optimism and flair for salesmanship that it coined a euphemism
for, as veteran tech writer Kara Swisher put it in a recent Vanity Fair profile of mobile
photo-sharing service Instagram, “saying you’ve screwed up and are starting over.”
The most famous Chicago pivot in recent history belongs to Groupon, which started
out as The Point, a company focused on organizing collective social action. A campaign
would be activated only if a minimum number of people pledged support. This tipping
point model was later applied to negotiating discounted products and services with local
merchants.
Lightbank’s founders, Eric Lefkofsky and Brad Keywell, were also Groupon’s earliest
investors. The venture capital firm has guided many of its portfolio companies through
pivots. The process must be data-driven and move quickly, said Lee, who believes entrepreneurs can typically gauge whether an idea is working within 90 days.
This was roughly the timeline that Brad Weisberg and CJ Przybyl encountered. Weisberg had realized a 10-year dream in 2011 by launching BodyShopBids, a company
whose website and mobile application allowed car owners to upload photos of their damaged vehicles. Local body shops could submit quotes for repairs and customers could
book their appointments through the app.
Just months after completing a $1 million fundraising round from investors, including Lightbank, the team realized the car owners were unlikely to become repeat customers because car repair is an infrequent need. This dynamic made their marketing costs
high, and selling other services such as oil changes through the website didn’t fix the
problem.
“That’s what we thought a pivot was … just deviations within the same model,” said
Przybyl, whom Weisberg had brought on as co-founder after launching BodyShopBids.
“We didn’t get traction until we pulled a real pivot. That was ripping up the company.”
With their funds running low, Weisberg and Przybyl started attending body shop and
auto insurance conventions around the country in search of a new business model. In
July, they launched a new startup, Snapsheet. The company builds branded mobile
apps for auto insurance carriers. Drivers still take photos of their damaged vehicles using the app, and they can also use it to see their insurance company’s estimate.
“I had had this idea for BodyShopBids for 10 years, so it was not easy to let go of my
vision,” said Weisberg, who initially funded the company with money saved from his bar
mitzvah.
Swift decision-making is important in a pivot because most startups are strapped for
cash and can’t afford to dither. Venture-backed companies in particular face “more pressure to get to higher revenues faster,” said Phil Nevels, co-founder and chief operating
officer at Power2Switch, an online platform that allows consumers to compare electricity
providers and sign up with a different utility. The startup, which is backed by several
local investors, is mulling a pivot where it would package its software tools and license
that technology to other utility brokers.
“You might have a wonderful business that’s got traction — you’ve got revenues and
customers — but you’re still thinking, ‘I’m trying to get X revenue by here and the current trajectory just isn’t getting me there,’” Nevels said.
For Sharon Schneider, the pressure to find a winning business model was heightened
last summer when she entered startup boot camp summer program Excelerate Labs,
now called TechStars Chicago. Her subscription rental service for baby apparel, Good
Karma Clothing for Kids, had won a business pitch competition and gotten good press.
But it lacked paying customers.
Schneider decided in Excelerate’s third week to change. Knowing she would have
to present her startup to a crowd of potential investors in less than three months, she
kicked off a three-week process of converting the company into an online resale shop for
upscale children’s clothing. The startup needed new e-commerce technology, new product inventory and even a new name.
Moxie Jean, the result of Schneider’s pivot, launched to friends and family in mid-July. By the end of August, the company had five times more customers than Good Karma
had signed up in its lifetime.
“The data will tell you what’s not working, but it doesn’t tell you what to do instead,”
Schneider said. “You still have to go out and figure out what’s the right answer, and
that’s hard. … The weeks or the months before you pivot is the darkest, most miserable,
most horrible time of your life because your business is failing and you don’t know why.”
Some startups go through multiple transformations. Entrepreneur Zach Smith compared the process with a game of telephone, with the final company bearing little resemblance to the original concept. As an undergraduate at Harvard, Smith founded gtrot, a
website that allowed friends to tap their Facebook network for travel recommendations.
Like the BodyShopBids team, gtrot found that big trips happened too infrequently for the
site to amass a large base of users. The company turned its focus to local discovery, or
helping consumers collect personalized tips about enjoying their home cities.
For Smith, the shift to local recommendations was too small to constitute a pivot. But
then he made a big change. One of gtrot’s local features allowed Facebook friends to give
each other gifts furnished by a local merchant, such as a free appetizer or hang gliding
excursion. Smith decided to focus wholly on this concept of “social gifting” and launched
a new company, Boomerang.
The changes kept coming. Less than a year after launching, Boomerang shifted from
local gifts to virtual gift cards for national brands such as Shutterfly and Ghirardelli.
It introduced a technology platform for online publishers such as survey companies to
reward users with these gift cards. In essence, Smith and his team started with a consumer travel website and found themselves with an online advertising platform in less
than five years.
“We knew we had to move faster with Boomerang than we had at gtrot,” Smith said.
“We had this experience of failure and we knew what failure looked like. … If you can
pivot and iterate early on, before you get too much emotional devotion or credibility on
the line, it makes it a lot easier.”
Lightbank’s Lee said his firm will continue backing a portfolio company through multiple pivots if the startup is pursuing a viable market in a cash-efficient way.
“That said, if we come to the conclusion that the management team is not right or the
execution is not there, we’re not going to put good money after bad,” Lee said.
Sometimes the proper course of action is to shut down a startup instead of attempting
another pivot. At Chicago venture firm and startup incubator Sandbox Industries, “we
kill a lot of projects,” said Nick Rosa, co-founder and managing director.
Sandbox had launched a company called Morgan Street Document Systems to help
wealthy individuals and financial advisers with online storage and management of important documents. The startup ran into trouble in 2008 when two of its customers,
Lehman Brothers and AIG, buckled during the financial meltdown. Sandbox turned
Morgan Street into Orggit, a lower-cost online document management system for everyday consumers, but couldn’t make the business work and pulled the plug.
“We almost always fall prey — I think it’s just human nature — to ‘Can we try one
more thing with this business?’” Rosa said. “If you’ve invested in a business, it’s hard to
kill it. That’s the hardest part of what we do. You’d rather pivot and take advantage of
some of your sunk costs, but every once in a while, you realize this is a business that’s
not good for us.”
The term pivot is overused in startup circles to the point of parody — Moxie Jean’s
Schneider has heard entrepreneurs say “I pivoted my plans” if they go to lunch early.
But for those who have been through the process of revamping their startup, they have
emerged just as transformed as their business.
“There’s definitely some survivor bias, but I get a lot of credit as an entrepreneur for
having made a successful pivot,” Schneider said. “People take that not as, ‘Wow, she really screwed it up before,’ but, ‘She really figured it out. The team figured it out.’”
Entrepreneurs bringing meals to downtown office workers
Employees bored with lunch options are now seeing more variety thanks to ‘pop-up’
services and other food ventures
By Wailin Wong
June 2, 2013
The tech workers at 600 W. Chicago Ave. are a bit marooned at lunchtime. The former
Montgomery Ward catalog building, which houses Groupon Inc.’s headquarters and a
host of other startups, has a sandwich shop and bar on the ground level, along with upscale eatery Japonais, but little else within a half-mile.
Bored by those choices, several employees of Echo Global Logistics, a technology firm
in the building, started bringing in restaurants for “pop-up” meals several years ago.
When people from other companies started sneaking in to those lunches, the organizers
realized they had a viable business idea and created a startup called Fooda to arrange
pop-ups at offices and large residential buildings around downtown Chicago.
“There’s one universal truth we’ve found,” said Jason Stulberg, Fooda’s chief operating officer. “Regardless of where you work, you get tired of the food.”
Chicago’s downtown office workers are seeing a larger buffet of options for lunch,
thanks to a growing number of entrepreneurial ventures that are harnessing technology
to feed hungry cubicle dwellers who are bored with brown bags or sandwich shops. The
city’s burgeoning lunch scene includes food trucks, which use social media to reach diners in real time and mobile payment technology to swipe credit cards, as well as startups
that market their software-powered services to companies as a way to boost employee
happiness and productivity.
The wider lunch variety in Chicago comes amid increased activity in the broader food
technology sector. According to data tracker CB Insights, venture capitalists and private
equity investors funneled $348.5 million into food-oriented Web and mobile applications
in 2012, with the number of deals rising 37 percent from the previous year. And the recently announced merger of Chicago-based online food ordering startup GrubHub with
its New York rival, Seamless, underscores the opportunity that companies see in getting
food to diners more efficiently.
“Food is one of the most meaningful perks that a company can provide its employees,
and it’s pretty underutilized at this point,” said Nick Worswick, vice president and general manager of Seamless Corporate Accounts.
The companies competing to feed office workers take a number of approaches. Seamless, which at 14 years old is already well-established in feeding office workers, offers
a software platform to help large corporations such as law firms and investment banks
manage expenses for subsidized employee meals. Seamless’ strength in the corporate
segment was part of the appeal for GrubHub, which focuses on individual diners, typically consumers at home in the evenings.
In the case of Fooda, which has about 120 customers and 125 restaurant partners in
Chicago, the startup organizes temporary food stations at offices. Clients can subsidize
the meals or have employees pay for their own food.
Meanwhile, San Francisco-based Cater2.me, which launched in Chicago in March
2013, works with companies that provide regular employee meals. Both Fooda and Cater2.me use software to match customers with food vendors, creating a comprehensive
schedule to ensure that clients get enough variety and restaurants can adequately prepare.
In Cater2.me’s home base of Silicon Valley, a free, family-style lunch is a common
startup perk. Company co-founder Alex Lorton traces the amenity to the famous cafeterias on Google’s campus.
“All those startups needed to compete for that tech talent,” he said, adding that some
members of Chicago’s growing high-tech scene are starting to adopt the same mentality.
Chicago-based ContextMedia, which outfits health care provider offices with TV systems and customized video programming, signed up with Cater2.me to feed its 46 employees breakfast and lunch every weekday.
Brok Vandersteen, a ContextMedia sales executive, used to buy a bagel in the morning and a sandwich for lunch. He and a co-worker also tried buying groceries at a nearby
Mariano’s Fresh Market on Mondays and making their lunches, but he quickly grew
tired of his own creations.
With the company-provided meals, he now eats granola, yogurt and fruit for breakfast.
Lunch is a wide rotation of cuisines and vendors — Thai food one day, gyros and Greek
salads another, even “some really delicious pot pies with green beans and potatoes.”
“They’re doing a good job of finding meals that aren’t really heavy and greasy, and
including fruits and vegetables, which I don’t think people do very often,” said Vandersteen, 24.
Rishi Shah, founder and chief executive of ContextMedia, said he observed a productivity increase after introducing the food program. He also believes the communal meals
foster collaboration.
“You’ve got pretty large departments or teams that don’t always see each other every
day,” he said. “Now you’ve got network engineers talking to account managers talking to
logistics people. There’s an informal socialization.”
The increase in activity around office lunch carries appeal for restaurants, especially
those that aren’t located downtown. Jared Leonard, owner of Rub’s Backcountry Smokehouse in Rogers Park, said he had considered starting a food truck but was put off by
the expense. He liked that Fooda manages all the delivery logistics with downtown office
buildings.
“It’s a way for restaurants to market their brand a little bit, make some lunch sales
downtown and not spend money on a catering salesperson,” Leonard said. “We only have
to show up with food.”
Downtown restaurants are keen on the idea too. Wow Bao, the Asian bun chain owned
by Lettuce Entertain You, has four downtown outlets but also works with Fooda. The
menu and pricing are similar between the permanent locations and the office pop-up:
Two buns and a salad with tax comes to $6.87 at the restaurant and costs $7 through
the Fooda program, said Wow Bao regional supervisor Erin Waldron.
The pop-ups help Wow Bao reach workers in areas “where there simply isn’t the Starbucks or Potbelly’s around every single corner,” said Waldron, who added: “Just from an
exposure point of view, it’s a big opportunity for us.”
Even some downtown offices with many surrounding lunch options see benefits in
providing food programs.
At 35 W. Wacker St., the approximately 2,200 employees at Leo Burnett and Starcom
have the option of buying their lunch from whichever Fooda pop-up is scheduled for that
day. John Cowie, senior vice president and director of office administration, said at least
150 people typically show up. The meals, which have ranged from pre-packaged wraps
to pork sliders assembled to order, are convenient because on days “when it’s 52 (degrees) and the wind’s coming sideways and it’s raining, you’ve got a hot option for lunch,”
Cowie said.
Both the food companies and their customers say that the uptick in activity around
lunch, particularly employer-provided meals, is enabled by the economic recovery. General Growth Properties, which works with Fooda, covers $3 of each of its roughly 640
employees’ lunches and gives everyone a free soda or water.
Heather Margulis, vice president of human resources, said the shopping mall owner
would have been unlikely to offer such a perk several years ago, when it was in bankruptcy. Now General Growth is planning to add more seating in its cafeteria, and the
daily subsidized meal program “is definitely a great recruitment tool,” Margulis said.
Seamless also weathered the recession, during which law firms and investment banks
put caps on how much employees could spend on meals. Most of the company’s clients
kept those limits even as the economy improved, Worswick said. Seamless’ software allows employees to do online group ordering and pay for what they owe.
“I think people learned a lot from that 36-month period, and it has helped them recalibrate internally about how (they) feel about expenses,” Worswick said. “We haven’t seen
people come back to us and say, ‘Let’s start the party again and allow our employees to
order the Lobster Newberg every night.’”
Delivery firms take another stab at same-day service
Companies partner with local retailers, capitalize on advances in technology
By Wailin Wong
Aug. 1, 2013
Byron Zook, a courier for the new Chicago startup WeDeliver
Time-strapped and convenience-hungry consumers have long dreamed of getting their
dry cleaning or the newest Blu-ray release brought to their doorsteps with the ease of a
pizza delivery.
A growing crop of companies wants to make that kind of on-demand delivery a reality, taking a fresh stab at a concept that flopped during the dot-com bubble. From established players such as Google, Amazon and eBay to young startups, these technology
businesses are emboldened by the elimination of economic and technological barriers
that stymied the first wave. While many are still testing their services, they believe they
can make same-day delivery as commonplace as two- to three-day shipping.
“It’s getting hot,” Jimmy Odom, founder and chief executive of Chicago-based startup
WeDeliver, said about the competition. His company, which trains people who own cars
or bicycles to be couriers and dispatches them to local merchants, started testing its
concept in February 2013 and launched its beta version that July.
WeDeliver’s goal is “to make same-day delivery standard,” Odom said. “Imagine the
day I go to a website and (if) they don’t offer delivery the same day, I’m probably going to
shop somewhere else.”
The “war for the last mile” into U.S. consumers’ homes is a $2 trillion opportunity,
representing the amount of annual retail sales that has mostly remained offline, according to a recent report from JPMorgan Chase & Co. That figure includes $568 billion in
grocery purchases last year and $275 billion in health and personal products, for example.
Most of the companies vying for a piece of the local delivery marketplace do not operate their own virtual storefronts or hold physical inventory — a model that proved
expensive for dot-com failures such as Webvan which delivered groceries. Rather, they
sell technology that largely works behind the scenes, helping local merchants solve the
logistical challenge of offering same-day delivery. Fees can vary by item and distance,
with the tech companies typically taking a cut of each delivery fee.
Consumers’ and merchants’ growing comfort with doing business online is helping
pave the way. Having a large number of buyers and sellers in geographical proximity also
makes the economics of same-day delivery work. That means urban residents are likely
to see better availability and lower costs than those in outlying suburbs.
“The way you’re going to get local delivery down to an acceptable price point, i.e. the
same price you’re going to pay for two- to three-day shipping, is to get density in the market,” said Liesl Chang, general manager of New York-based Zipments, which contracts
with professional courier companies to provide delivery service for businesses and takes
a cut of each job. The startup is planning to launch in Chicago by the end of 2013.
Local delivery firms say they’re also being helped by falling costs for the development
of technology like software tools for tracking deliveries in real time. Companies such as
Chicago-based GrubHub and New York-based delivery.com, for example, collect menu
information from restaurants and display it on their websites so consumers can order
food online. Delivery.com recently acquired Brinkmat, a New York-based tech company
that links consumers with laundromats and dry cleaners for pickup and delivery.
“Having to ingest data from tens of thousands of merchants (is) a daunting task,” said
delivery.com CEO Jed Kleckner, who added that this technology “could not have been
built 10 years ago.”
Amazon stands out in the e-commerce world for its extensive warehouse infrastructure, which is costly to replicate. The company now owns Webvan and has introduced
AmazonFresh, a grocery delivery service, in Los Angeles and Seattle. It also offers Local
Express Delivery in select cities, including Chicago, where orders placed by 7 a.m. local
time are delivered that day. Rates start at $3.99 for gift cards.
Other companies, including Amazon’s e-commerce rivals, are jumping into local delivery while avoiding the inventory challenge by partnering with retailers that have physical
locations. Google is conducting a pilot of its Shopping Express service in the San Francisco Bay Area, offering its testers six months of free, unlimited same-day delivery from
local stores such as Walgreens and Staples. The company has not said how much the
service will cost when it is formally launched.
EBay is planning to expand its Now service to Chicago later this summer. EBay Now
works with retailers such as Best Buy, Home Depot and Target. Consumers who hit a
minimum of $25 for online orders pay $5 to have their goods delivered in about an hour
by an eBay “valet.”
Many consumers “research online and then buy in a local store,” Dane Glasgow,
eBay’s vice president of mobile and local, said in an email. EBay Now “offers a simple way
for both shoppers and retailers to take advantage of this trend.”
One notable incumbent in Chicago is Skokie-based Web grocer Peapod, which was
founded in 1989 and is now a unit of Dutch supermarket operator Ahold. It survived the
dot-com crash and operates in 24 U.S. markets. While its fastest delivery time is nextday, Peapod does offer same-day pickup in locations like Palatine and Deerfield.
“Customers can receive their groceries in-store, at convenient pickup points or by
home delivery,” the company said in a statement. “No other company offers that range
of options.”
Startups, for their part, are using a variety of approaches to woo merchant partners
and delivery personnel. WeDeliver’s “delivery specialists” go through a background check
and interview and receive training. They’re also required to have their own vehicle insurance. More than 150 people have applied so far, but Odom said WeDeliver is selective
because its merchant clients expect high-quality service.
“I view them as part of my team,” said Christine Noelle, owner of high-end floral design shop Dilly Lily, which uses WeDeliver for short-range orders. “It’s no longer an outside delivery service or something that I don’t claim as my delivery. Sometimes you have
a courier or a service that isn’t up to par, or they’re not personable. … I want something
representative of the caliber of my shop and product.”
WeDeliver’s fees depend on the business, item and distance. The average ticket is between $9 and $10. The company focuses on jobs within 4 miles of the merchant, with the
price rising significantly for longer hauls. Odom said getting merchandise from Lincoln
Park to Winnetka, for example, would cost $48. WeDeliver takes a 30 percent cut, and
the delivery specialist keeps the rest.
Other startups, such as Zipments and United Kingdom-based Shutl, work with existing professional courier companies. Shutl plans to introduce local service at the beginning of fall 2013. Chicago will be its first North American market.
Shutl founder and CEO Tom Allason said his company is “like a PayPal but for awesome delivery.” The company works with retailers that offer online ordering; shoppers
who want same-day delivery can select Shutl at checkout.
“We see opportunity as being offered where the customer already is,” Allason said.
“The opportunity is to make the consumer more likely to purchase by giving them a very
good reason not to drop out.”
Regardless of which business model emerges victorious, Chicago will be a crucial
battlefront. Shutl’s Allason said he felt the city was more representative of the U.S. than
either New York or San Francisco, where many of his rivals are starting.
“Chicago was the metro for us that made the most sense to launch in,” he said. “If we
get it right in Chicago, that tells us a lot more about the long-term opportunity in any
other metro.”
Bioscience startups to open in Chicago in next year
Gov. Pat Quinn to announce a $3.4 million, 12,000-square-foot hub on the Near West
Side
By Wailin Wong and Peter Frost
April 24, 2013
Two new collaborative work centers for bioscience startups are slated to open in Chicago
during the 2014 as local industry boosters hope to replicate the momentum and visibility
achieved by the area’s digital entrepreneurs.
Gov. Pat Quinn is scheduled to announce [April 24, 2013] a $3.4 million, 12,000-squarefoot hub on the Near West Side called Health, Technology, Innovation. The state provided
$1.7 million in capital that was matched by $1.7 million from the University of Illinois at
Chicago. The hub will be located near UIC’s medical school campus in the Illinois Medical District.
The space will open this summer and will offer wet and dry laboratory space, offices
and a classroom where entrepreneurs and academic researchers can work to develop
new technologies that can be brought to market. Development work at the hub could
include drugs, diagnostic tools, medical devices and health information technology.
Mayor Rahm Emanuel said his office is working with industry and civic groups to
launch a center in downtown Chicago for biotech startups. Organizers are not revealing
funding and don’t have a space lined up, but they are looking for 25,000 square feet to
house both startups and satellite offices of large pharmaceutical companies. The center,
which backers anticipate will open in March or April 2014, will not have lab space.
Organizers of the planned biotech incubator say they hope to collaborate with the UIC
venture, said Dan Lyne, executive director of ChicagoNEXT, the science and technology
group within World Business Chicago, the city’s economic development arm.
The leaders of the Health, Technology, Innovation venture “are at our table,” said
Lyne, who sits on the planned biotech incubator’s operations team.
He said the initiative is being led by entrepreneurs and aims to unite university researchers with startups, venture capitalists and the Chicago area’s large medical companies such as Abbott Laboratories, Baxter International Inc. and Hospira Inc. under one
roof.
These latest initiatives come as 1871, the 50,000-square-foot hub for digital startups
in the Merchandise Mart, gets ready to celebrate its first year in April 2013.
Chicago venture capitalist J.B. Pritzker and the state put up the funds for 1871, which
provides co-working and event space for entrepreneurs mostly creating Web and mobile
applications. Local universities and venture capital firms also have offices at 1871, and
the space has attracted visitors such as British Prime Minister David Cameron.
“Seeing (1871) develop over the past year has validated our thesis that we need a
place for people to gather,” said John Flavin, executive director of Chicago Innovation
Mentors, a program aimed at commercializing biomedical technology from several area
universities. Chicago Innovation Mentors is the founding member of the planned biotech
center that Emanuel announced.
Flavin said a group of local biotech boosters began working on the idea about 18
months ago and presented the concept to ChicagoNEXT. While Emanuel said he and the
city plan to “nurture and help promote” the center along with the area’s burgeoning bioscience industry, the city has not committed to funding the venture.
Organizers decided the center did not need labs, as there are already spaces for that
around the city, particularly at universities. Building labs would have required much
more time and capital, and “the economics of renting a space like that are more difficult
for startups,” Flavin said.
The city said it has already fielded interest from more than a dozen startups that want
to move into the space. The group includes Diagnostic Photonics, a company founded
by two University of Illinois at Urbana-Champaign faculty members that makes imaging
technology for surgeons. The startup currently has engineering staff in Champaign and
five other employees in a Regus shared office space in downtown Chicago.
Andrew Cittadine, the company’s chief executive, said he worked at a medical startup
more than a decade ago that participated in an incubator in San Jose, Calif. His team
shared advice with other entrepreneurs and brainstormed how to overcome challenges.
“For me, that’s one of the real values of being in a space like this,” Cittadine said.
“There’s a lot of opportunities to learn from others.”
Even companies that won’t be moving to the collaborative workspaces say they’re eager to see how these hubs help the entire sector grow.
Henry Applebaum, CEO of Novian Health, which specializes in minimally invasive
cancer treatments, said he plans to serve as a mentor for startups in the planned biotech
center.
His company, which used to be housed in the office of a biotech consulting firm before
moving to its own downtown office, could have benefited from such a space in its early
days.
“We can all learn from each other,” Applebaum said. “For the early-stage companies,
having a place to sit counts for a lot.”
With 24/7 streaming, local TV finds growing mobile audience
As part of the ‘TV Everywhere’ movement, ABC-7 is the first Chicago TV station to offer
its full programming schedule live on mobile devices.
By Robert Channick
July 28, 2013
Forget about big screens. The future of local television may well rest with how many
viewers want to watch “Modern Family” or the local news on a 4-inch smartphone, perhaps while riding a No. 36 bus.
That’s what Disney/ABC Television is betting on with the rollout of Watch ABC in Chicago, an app that enables 24/7 live streaming of network-owned WLS-Ch. 7 on a tablet,
smartphone or other mobile device.
While streaming video has been around for years, ABC-7 is the first Chicago TV station to offer its full programming schedule — network and local — live on mobile devices.
ABC, which launched the effort in May 2013 in New York and Philadelphia, plans to
stream all eight of its owned-and-operated stations by fall. Affiliated stations are also
coming online, with Hearst Television bringing Watch ABC to 13 markets in the coming
months.
“We have this technology, we have this approach and it doesn’t hurt to put it out there
and test it and show people what the possible future of television will look like,” said Albert Cheng, executive vice president and chief product officer of digital media at Disney/
ABC Television Group.
It’s all part of the nascent “TV Everywhere” movement, as the television industry begins to untether viewers from the cable box with fully portable programming. Driven in
part by increased competition from online services such as Netflix and Hulu, live linear
streaming further blurs the lines between first screens and second screens, disrupting
the traditional television model for programmers, cable and satellite providers, and local
stations alike.
“We’ve essentially been following the consumer,” Cheng said.
A survey released July 2013 by Harris Interactive for cable rep firm Viamedia, showed
that 33 percent of the U.S. watches TV — cable and broadcast programming — on a computer, tablet or smartphone.
Much of that device viewing involves so-called over-the-top streaming services such
as Hulu and Netflix, which bypass cable and satellite providers to offer TV shows, movies and more recently, original content, as video on demand. Netflix broke new ground
by garnering 14 Emmy nominations, including nine for “House of Cards” and three for
“Arrested Development,” the first such recognition for a nontraditional TV service.
In 2012, over-the-top streaming services generated $4.3 billion in revenue in the U.S.,
up from $2.9 billion in 2011, according to New York-based ABI Research. Revenue is
projected to reach $9.4 billion by 2016.
Cable, satellite and telco providers, collectively known as multichannel video program
distributors, or MVPDs, also saw revenue growth in 2012, generating $84.8 billion, up
$3 billion from 2011, according to ABI Research.
But pay TV revenue is flattening and the rise of online services has encouraged some
subscribers to cut the cable cord. In 2012, 86 percent of households subscribed to
MVPDs, down from 89 percent in 2011, according to Tom Godfrey, executive director of
mobile strategy for television consulting firm Frank N. Magid.
“There are people who are now getting all of their video content online,” Godfrey said.
“They can get everything they want to watch through Hulu and Netflix, and may not be
as interested in continuing to subscribe.”
The recent entry of New York-based Aereo, which retransmits local over-the-air TV
signals to online subscribers for $8 per month, may add some urgency to the digital imperative. Aereo is set to roll out in Chicago on Sept. 13, 2013.
While TV stations will be given credit by Nielsen for Aereo viewers, the use of their
over-the-air signals doesn’t include any direct compensation, shutting off a growing retransmission revenue stream. That prompted a consortium of broadcasters, including
Tribune Co.’s WPIX-TV in New York, to file a lawsuit against Aereo, but a federal appeals
court in New York ruled in the startup’s favor in April.
Google’s launch of Chromecast, a $35 dongle that allows users to air content from a
mobile device on a TV, may also give streaming services a boost in the battle for viewers.
Despite the uncertainty, broadcast companies are betting big on the future of local
TV, with station acquisitions topping $9 billion so far this year, according to media consultant SNL Kagan. In July 2013, Tribune Co. agreed to buy 19 stations from Cincinnatibased Local TV for $2.73 billion, a deal that will expand its portfolio to 42 TV stations.
That followed Gannett Co.’s $2.2 billion purchase of 20 TV stations from Texas-based
Belo Corp.
Chicago-based Tribune Co., which emerged in December 2012 from its four-year stay
in Chapter 11 bankruptcy with a broadcasting focus, also announced it plans to spin off
its eight daily newspapers, including the Chicago Tribune and Los Angeles Times, into a
separate entity.
In May 2013, Tribune Co. named Internet veteran Shashi Seth as president of Tribune Digital Ventures, a new standalone unit aimed at developing digital products to
capitalize on the company’s content, including formulating a strategy for streaming the
local TV stations.
“The business models are going to change significantly as these two worlds start coming together because it is a tectonic shift and it will take a lot of change,” Seth said. “That
means new business opportunities.”
Local TV stations generated $20.8 billion in revenue in 2012, a 13 percent increase
over 2011, mainly from over-the-air advertising, according to BIA/Kelsey. Online revenue represented about $600 million of that total.
Additionally, TV stations received $1.45 billion in net retransmission payments in
2012 from MVPDs, which represents 6.5 percent of total station revenues, according to
BIA/Kelsey.
Broadcasters want the migration to mobile platforms to include both revenue streams,
which is why only authenticated subscribers have access to the Watch ABC service. ABC
has negotiated mobile retransmission deals with a number of MVPDs including Comcast, Cablevision, Cox, Charter and AT&T U-verse, and recently announced an agreement with Verizon. But major providers such as Dish Network and DirecTV have yet to
sign on.
Dana Zimmer was named president of distribution for Tribune Broadcasting in April
2013, putting her in charge of negotiating deals with cable, satellite and telco providers
to carry the company’s television stations and WGN America.
“Our content is growing by way of the acquisition of Local TV, and now our platforms
are growing by the emergence of mobile,” Zimmer said. “Those are really great things for
us, provided that Nielsen is going to measure. That is going to be the real linchpin in all
of this, because it’s great if your content is seen everywhere, but we’ve got to figure out
a monetization strategy on both the distribution and the ad sales side.”
In fall 2013, Nielsen is adding broadband viewing to its TV ratings, and it plans to incorporate mobile viewing by 2014, allowing broadcasters to sell advertising across platforms and giving them an incentive to stream their programming live.
“Until it’s measured, there’s not a lot of impetus to do it,” said Pat McDonough, senior vice president of insights and analysis at Nielsen. “But the public is moving in that
direction. They want their content wherever they are, on whatever device they have with
them.”
With less than 10 percent of viewers receiving TV signals over the air, according to
Nielsen, the future of local stations — and their value — is clearly tied to a platform other
than broadcasting. Going mobile would seem a wise insurance policy.
Early returns for Watch ABC have been encouraging, according to Cheng.
“We are finding that the most popular use for our mobile application is actually with
commuters,” Cheng said. “We found more viewers for our local programs, particularly
local news and ‘Good Morning America.’”
ABC-7 has been streaming its local newscasts for less than two years. The rise in mobile has significantly boosted online viewership to an average of 110,000 daily streams
across all of its newscasts, a 59 percent increase over 2012, according to station executives.
The station is looking to grow both viewership and advertising revenue over the new
platform.
“Our television signal is still the primary source of our revenue, but we are monetizing our digital stream successfully,” said John Idler, president and general manager of
ABC-7 Chicago. “And there is an appetite for that advertising.”
Former ABC-7 Chicago general manager Emily Barr left the station in 2012 to become
president and CEO of Post-Newsweek Stations. Barr, who is still based in Chicago, oversees six television stations.
Two stations, in San Antonio and Miami, are ABC affiliates, and Barr said she is in
discussions with the network to bring the Watch ABC service online.
“Video is exploding in terms of growth on mobile devices,” Barr said. “I don’t think it’s
something that any television station or company can ignore.”
Belly raises $12.1M from investors including 7-Eleven
By Wailin Wong
Aug. 28, 2013
Chicago-based digital loyalty company Belly has raised $12.1 million from six investors,
including the newly created venture capital arm of convenience store chain 7-Eleven.
The new financing round puts two-year-old Belly’s total funding to date at $25 million. Its previous backers include Chicago-based Lightbank, Silicon Valley Bank and Andreessen Horowitz, one of the tech industry’s most well-known venture firms. Lightbank
and Andreessen Horowitz participated in the $12.1 million round, which also drew in
fresh investors New Enterprise Associates, DAG Ventures, Cisco Systems and 7-Eleven’s
7-Ventures.
Belly operates a digital loyalty network for brick-and-mortar businesses. Consumers
carry a card, available in either physical form or on a mobile device, that can be scanned
at a dedicated iPad at participating merchants. Repeat visits result in rewards, which are
determined by business owners and can range from free food to the opportunity to walk
in a runway show for local boutique Akira.
Logan LaHive, Belly’s founder and chief executive officer, said the company is present
in more than 6,500 locations in 18 markets. It counts more than 2 million members in
its network. Belly’s technology also analyzes data from customer check-ins so merchants
can better understand consumer behavior and what kinds of marketing efforts motivate
them to return.
“We never had an intent to just replace punch cards,” said LaHive, who described
Belly’s larger vision as “revolutionizing in-store technology.”
The majority of Belly’s merchants are small- and medium-sized businesses, but the
company supplies technology to large chains with multiple locations. These enterprise
customers include McDonald’s and 7-Eleven, and Belly’s Chicago-area pilot program
with the Dallas-based convenience store chain led to the investment.
Belly represents the second investment for 7-Ventures, which was created this summer out of 7-Eleven’s Innovation Team. The venture arm is tasked with learning about
new products and services in the food and beverage industry, as well as about emerging
retail business models. Belly fits into this second category of strategic interest for 7-Ventures. Raja Doddala, senior director of new business development for the Innovation
Team and the venture arm’s vice president of portfolio management, said 7-Eleven liked
Belly’s active, growing user base, mix of small and large businesses, and use of data science and analytics.
In addition, 7-Eleven wants to study how the functioning and benefits of a loyalty network–one comprising multiple merchants – might differ from a loyalty program tailored
to a specific retailer. The potential financial return on the venture investments is “an
added benefit” and not the end goal, Doddala said.
The chain’s message is “we have a track record working with startups,” he said. “We’re
open for experimentation and use our large, physical store network to provide a testing
ground for cool new ideas for products, services and technology.”
LaHive said Belly will use its new $12.1 million in funding to add employees to its
current staff of 100 people, invest in its core products and get its technology into more
merchants in existing markets.
“It’s not about just a land grab,” LaHive said of Belly’s expansion strategy. “It’s not
about being in a market, but being everywhere in a market…we want to make sure that
Belly members in those markets can use Belly at all of their favorite places.”
With new logo, focus, Motorola touts latest phone at Techweek
By Wailin Wong
June 27, 2013
The Motorola batwings are back — but with a new feel and focus as the company prepares to launch its first smartphone developed under Google ownership and open its new
headquarters downtown.
This was the message that senior Motorola Mobility executives brought to startup
conference Techweek. The Libertyville-based mobile devices maker, which was acquired
by Google in 2012, is sponsoring the confab and used the occasion to reintroduce itself
as a cutting-edge technology company that has exorcised its old demons.
The new Motorola is “not about churning out as many products as we can,” Iqbal
Arshad, senior vice president of engineering and global product development, said in a
keynote address to open Techweek. “It’s about taking back the roots of innovation.”
Motorola Mobility has a new logo with a thinned-out, lower-case, sans serif font that
drops the “Mobility” from the name and adds “a Google company” as a tagline. Beyond
the aesthetics, executives told the Techweek crowd that the company is reshaping its
culture to make innovative mobile products to appeal to consumers. It is also preparing
to move from Libertyville to the Merchandise Mart in 2014, starting with about about
2,000 employees in the first quarter.
The River North neighborhood is home to many startups and “Motorola believes being
in Chicago in the Merchandise Mart will make us a much more successful company,”
said Jim Wicks, senior vice president of consumer experience design.
Motorola plans to launch this summer its first “hero” phone, or flagship device, the
Moto X. The phone will be made in Texas, a geographic proximity that will help with prototyping, rapid design changes and quality control, Arshad said in an interview on the
sidelines of Techweek.
“We have a much larger vision about where we want to go,” Arshad said. “Bringing
back manufacturing to the U.S. is part of that broad strategy.”
The Moto X will incorporate some of Motorola’s longer-term vision around making
mobile devices into smart computing gadgets that have cognitive ability, moving beyond
being big calculators.
The way consumers use their mobile devices is also changing, Wicks said. Wicks, in
his keynote, said consumers will no longer “be hunched over these devices.” Rather, their
eyes will be up and they might be speaking to their gadgets rather than using their fingers on a touchscreen. Wearable devices — such as Google’s Glass eyewear — will also
proliferate.
Motorola has a challenging road ahead, as it’s ceded much of its market share in mobile devices to Apple and Samsung. Still, the company is betting that its backing from
Google will put it back in play.
“Today, Motorola feels like a startup,” Arshad said in his keynote, adding: “It’s great
to be back. We’re truly inspired.”
Motorola Mobility introduces Moto X smartphone
Customized device 1st of many company plans to bring to market in next year in bid to
reclaim lost market share, glory
By Wailin Wong
Aug. 2, 2013
Motorola Mobility has set out to reinvent itself. Again. This time, however, the company
is inviting consumers to join in the makeover.
Customization is the theme of the Moto X, the much-anticipated smartphone that
Motorola Mobility unveiled [Aug. 1, 2013] as its first flagship product since its acquisition by Google in May 2012. In a major departure from the uniform black slabs that have
defined smartphone design since Apple introduced the iPhone, the Moto X offers a bright
palette of colors for its front and back plates, as well as various hardware accents. The
company said more than 2,000 combinations are possible, with that number growing as
it rolls out more choices, such as wooden backs.
Beyond the aesthetics, the device responds to voice commands and is integrated with
Google Now, a personal assistant feature that understands natural language. It can answer questions and provide navigation directions, all without the user needing to touch
the device. And two twists of the wrist will activate the Moto X’s camera, a feature the
company said eliminates the cumbersome process of unlocking a phone and navigating
to the camera application.
“It’s the first device that was built really from scratch — literally from a whiteboard
— post-Google’s acquisition of Motorola,” Dennis Woodside, Motorola’s chief executive,
told the Tribune in an interview. “We really spent the last year retooling the company to
become much more focused … really getting Motorola back to its roots of innovation.”
The week prior to the unveiling, Motorola released three new smartphones for Verizon
Wireless that, like the Moto X, use Google’s Android operating system. But the Moto X,
with its individualized design and broad availability across all major U.S. carriers, is the
“hero” device on which Motorola is staking its re-entry into the smartphone market.
The mobile device industry is eager to see if the fresh talent and strategy injected into
Motorola can reclaim the company’s lost glory as a tech innovator. The market response
to the Moto X also is a gauge of whether Google’s acquisition was a smart move.
“It’s a very interesting point in this relationship, because this is Google’s way of testing: ‘Was this investment worth it and is it going to pan out?’” said Jefferson Wang, a
partner at IBB Consulting.
The Moto X costs $199 with a two-year contract and will be available in late August or
early September 2013 at AT&T, Sprint, T-Mobile, Verizon and U.S. Cellular. AT&T customers will get first crack at the company’s “Moto Maker” website, which it described as
an “online studio” for designing the phone.
Motorola has substantial ground to reclaim before it even makes a dent in worldwide
smartphone shipments, which are dominated by Apple and Samsung. According to data
tracker IDC, Motorola’s second-quarter market share is estimated at 1 percent or less.
During the same period, IDC measured Samsung’s market share at 30.4 percent and
Apple’s at 13.1 percent.
Motorola has been through many painful restructurings, including layoffs and leadership changes. In 2011, Motorola Inc. split into two companies, with Mobility becoming
an independent, publicly traded entity. Then Google swooped in and, after the $12.9 billion acquisition was closed, sold off business units that didn’t relate to Motorola’s new
mission of creating “devices that improve the lives of millions of people,” Woodside said.
Wang said the Moto X is a declaration that the days of the “very boring rectangular
dark slab” are numbered.
“It’s always been an arms race with smartphones — who has the most cores on your
processor, who has the highest (number of) megapixels on the camera, who has the largest screen,” Wang said. “We’ve hit a saturation point with all these specs on these quote,
iconic, unquote phones. … Now it’s a game (of) how can you change the experience.”
Motorola is betting that the touchless controls and voice command features of the
Moto X will distinguish the device from its rivals. The customization is also an important
selling point.
Woodside noted that consumers like choices and pointed to the fashion industry,
where programs such as NIKEiD allow people to design their own footwear. Smartphone
owners wanting to add personal flair to their devices have been mostly limited to cases
or the wallpapers on their screens.
Motorola hired about 2,000 people for a Texas facility that will assemble the Moto X.
The company said this proximity to U.S. consumers is what allows for rapid customization, as people who purchase the device and design it online will receive it in about four
days.
Woodside emphasized that the Moto X is the first in a series of products to be introduced during the next year that will demonstrate Motorola’s post-Google capabilities.
While the subsidiary remains a drag on Google’s earnings, Woodside said costs for the
business are falling significantly and Google is on track with its turnaround plan.
“The intention is not to be a drain on Google,” Woodside said. “We’ve gone through a
number of very painful changes to the shape of the business. We’ve had to let people go.
That’s behind us.”
$25M Hyde Park VC fund looking for Midwest tech startups
By Wailin Wong
June 13, 2013
Startups, it’s time to polish your pitches. Hyde Park Venture Partners has more than $20
million that it’s looking to put into early-stage technology companies in the Midwest.
The Chicago-based investment firm said that it has closed its first fund with $25 million in commitments.
Hyde Park Venture Partners has put $2.7 million into eight companies, with five of
those startups in Chicago, said Guy Turner, one of the firm’s principals.
The venture firm focuses mostly on early-stage companies doing software-as-a-service
or health care information technology. Its portfolio includes Food Genius, a local startup
that gathers and analyzes data from restaurant menus, and FarmLogs, a Michiganbased maker of farm management software.
Hyde Park Venture Partners came out of Hyde Park Angels in 2011. The venture firm
and the angel group have the right to co-invest with each other and can conduct shared
due diligence on investment opportunities, but are not obligated to overlap.
Hyde Park Angels was founded in 2006 by University of Chicago Booth School of
Business classmates. Angel networks typically consist of high-net-worth individuals and
entrepreneurs looking to make personal “friends and family” investments in early-stage
ventures, while also providing mentorship or serving on the board of directors.
Similar groups in the area include Wildcat Angels and IrishAngels, which have ties to
Northwestern University and the University of Notre Dame, respectively.
The venture firm, meanwhile, commands a dedicated fund. Turner said Hyde Park
Venture Partners’ typical seed stage investment will be $100,000 to $200,000, with the
angel group putting in a comparable amount if they are teaming up. Recipients of that
funding will be either — just pre- or just-post launch — and looking to raise a total of $1
million or less, Turner said.
Hyde Park Venture Partners will also look to make investments of $500,000 to $750,000
in companies that are further along and on track to make annual revenue between
$250,000 and $2 million. In those cases, the angel group would contribute $500,000 or
less. Startups at this stage typically will be raising a total of $1.5 million to $2.5 million
in their Series A, or first round of institutional funding.
Between one-quarter and one-third of the venture fund’s $25 million came from Hyde
Park Angels members, Turner said. Roughly half came from non-Midwestern investors.
“To us, it’s really exciting because it brings capital to Chicago that otherwise wouldn’t
be here,” he said.
Turner said that while startups in Chicago and the Midwest have been raising seed
capital, only a minority are able to reach a Series A. The number drops even further at
the Series B level, which typically pulls in venture capital firms from the coasts.
“Once (companies) are at a B stage, if they’re well-supported, funds outside the Midwest will take a chance,” Turner said. “But they need (local) funds on the board and involved. It’s hard for them to monitor their investments because they’re far away. They’re
not part of the same networks; they’re not at the same cocktail parties. So they like to
know that someone is involved locally, and it can make a big difference to the company.”
Hyde Park Venture Partners’ most recent investment was in SimpleRelevance, a digital marketing startup completing the TechStars Chicago accelerator program. In that
Series A round, which totaled $750,000, Hyde Park Venture Partners and Hyde Park
Angels were the lead investors.
The venture firm has seen one exit. In December 2012, Chicago-based Tap.Me, a mobile game advertising startup, was acquired by New York-based advertising technology
company MediaMath.
I2A Fund goes private, becomes Chicago Ventures
By Wailin Wong
June 17, 2013
Armed with $40 million in fresh capital and a new name, one of Chicago’s rising venture
funds is adding to the local pool of money for homegrown technology startups.
The I2A Fund, which was created in 2007 with contributions from the state of Illinois, announced that it has closed its second fund with $40 million and renamed itself
Chicago Ventures. The new fund is composed entirely of private capital, and the primary
investors are local venture capitalist J.B. Pritzker, The Duchossois Group and Pat Ryan
Jr. Pritzker and The Duchossois Group, along with the state, had been the main contributors to the first I2A Fund, which totaled $10 million.
“The really exciting thing for us as we close the fund is the number of local investors
and entrepreneurs,” said Chicago Ventures partner Stuart Larkins, a managing director
of I2A, which stands for Illinois Innovation Accelerator. “We purposely didn’t focus on
raising any money from the state.”
Larkins said the investors in Chicago Ventures are “all eager and active” to contribute mentorship and advice to the fund’s portfolio companies. The group includes John
Canning, co-founder and chairman of Madison Dearborn Partners; Gordon Segal, the
co-founder of Crate & Barrel; and James Gray, founder of OptionsXpress. (John Madigan, a former chairman and chief executive of Tribune Co., which publishes the Chicago
Tribune, is also an investor.) The majority of the investors are from the Chicago area.
Some of the participants in the $40 million fund have experience as angel investors,
meaning they’ve made personal investments in startups at their earliest stages. But others are new to venture capital and are eager to tap into the area’s growing startup scene,
said Kevin Willer, the former CEO of the Chicagoland Entrepreneurial Center who is joining Chicago Ventures as a partner.
“There’s a real interest from folks who haven’t really been into this asset class to make
some investments in this early stage,” Willer said.
Larkins said the new fund is about 20 percent committed, leaving “a lot of dry powder”
for new investments in young technology startups. Chicago Ventures’ portfolio consists
of 15 companies so far, with 14 of those based locally. These companies include Retrofit,
a provider of customized health and weight-loss advice; Shiftgig, an online network that
helps service workers find jobs; and Power2Switch, an online resource that lets consumers shop for cheaper electricity rates.
In May 2013, I2A logged its first exit. Cartavi, a Naperville-based maker of real estate
software was acquired for undisclosed terms by DocuSign, an electronic signature technology company in San Francisco. Cartavi and its 11 employees are continuing to run
the business from Naperville.
Larkins said that while I2A had been more of a “follow-on fund,” meaning it would
participate in rounds led by other investors, Chicago Ventures wants to be on the front
lines of finding opportunities and leading rounds.
“We’re the seed folks,” he said. “In some cases, we’ll be the very first money into the
deal.”
The launch of Chicago Ventures comes less than a week after Hyde Park Venture Partners, a firm created in 2011 from Hyde Park Angels, said it closed its first fund at $25
million. Hyde Park Venture Partners also focuses on early-stage technology companies
in Chicago and the Midwest. Both Hyde Park Venture Partners and Chicago Ventures
are investors in SimpleRelevance, a digital marketing startup, and Food Genius, which
collects and analyzes restaurant menu data.
Chicago Ventures has its offices at 1871, the collaborative workspace for startups at
the Merchandise Mart that is run by the Chicagoland Entrepreneurial Center. Willer is
leaving the CEC for his new role at the venture fund. His permanent replacement has
not been named.
Jim O’Connor Jr., co-chairman of the CEC, will fill in for Willer on an interim basis.
Chicago-based tech company offers email tool to collect
employee feedback
Know Your Company product stemmed from 37signals’ own growing pains
By Wailin Wong
June 14, 2013
Jason Fried wants the truth. Don’t worry — he can handle it.
The co-founder and chief executive of Chicago-based 37signals, which makes Webbased collaboration and project management tools, has launched a product for small
businesses that regularly collects nonanonymous feedback on how employees feel about
their jobs.
The email-based product, Know Your Company, was born out of Fried’s own concerns
over staying connected with his employees as the company grew. 37signals employs 38
people, with three-quarters of them spread across about 20 different cities. Fried started
to feel like he was having trouble keeping up in 2012, when the company crossed the
30-person mark.
“At a certain point, you just don’t rub shoulders with everyone because you physically
can’t,” he said.
Fried put together a small internal team and set to work on a simple software solution. What they came up with was Know Your Company, which poses one question to
all employees via email, three days a week. The queries vary from day to day. Responding is optional, and answers are attached to employee names. Workers can also choose
whether they want their replies shared with the whole group.
Know Your Company requires a high level of trust and openness, since employees
have to feel comfortable attaching their names to honest feedback and managers must
be prepared to hear it.
“If there’s something that we’re doing that’s wrong ... I need to know that because I’m
driving the ship here,” Fried said. “I need to know that so I can make changes or consider
making changes. If you can’t handle those sorts of answers, it’s probably not the right
product for you.”
37signals started testing Know Your Company earlier in 2013. Fried learned that his
customer support employees felt that those working on product could be more in touch
with clients’ needs, so he started a policy where everyone in the company, including himself, works on the support team one day a week in a rotation.
In another case, Fried asked, “Are we behind the curve on anything?” Employees said
they were concerned about lags in development of mobile products such as iPhone applications, so the company reshuffled priorities to put more resources into this area.
“Since you’re asking a very pointed, specific question of everyone in the company at a
certain time, you get a lot of feedback around one topic,” Fried said.
Know Your Company comes with a library of more than 100 questions, but business
owners can also customize their queries. At 37signals, Fried asks every week what his
employees are working on; the second question is about the company; and the Friday
question is typically more social in nature, such as “What have you cooked lately?” Fried
is currently reading Dan Ariely’s “Predictably Irrational: The Hidden Forces that Shape
Our Decisions,” which he picked up after asking his employees for book recommendations.
Fried said Know Your Company is designed for smaller businesses between 25 and 75
people. The product costs $100 per employee “forever,” meaning there are no subscription or recurring fees.
2 students’ dream leads to Logitech deal
TT Design Labs’ TidyTilt grew from class project at IIT Institute of Design
By Wailin Wong
June 8, 2013
When Derek Tarnow and Zahra Tashakorina launched a campaign on crowd-funding
website Kickstarter to raise money for their iPhone case-cum-earbud cord organizer,
they were worried about reaching their $10,000 goal.
Instead, the two graduate students at Chicago’s Illinois Institute of Technology Institute of Design ended up raising $223,174. And the fairy tale didn’t end there: Their
TidyTilt product, which they invented as part of a product design class, caught the eye
of Swiss technology accessories-maker Logitech, which wanted to buy their startup.
Logitech’s acquisition of TT Design Labs, marks the first time the company has struck
a deal with a startup discovered via Kickstarter. The transaction also underscores the
dramatic changes taking hold in the hardware world, where rapid prototyping technology and crowd-funding platforms are lowering the barriers to entry for emerging designers such as Tarnow and Tashakorina.
“We’re opening up much more to platforms such as Kickstarter to find sources of innovation and talent,” said Eric Kintz, senior vice president and general manager at Logitech, which bases its Americas headquarters in Newark, Calif.
Tarnow, 26, and Tashakorina, 28, invented TidyTilt for a class project that asked students to solve a common problem. They came up with an iPhone case that keeps earbud
cords from getting tangled, thanks to a thin, flexible case that can be folded to make a
mini stand for the smartphone or stuck to a magnetic surface. TT Design Labs launched
its Kickstarter campaign in late 2011.
“After a week, we hit our goal of $10,000 and then from there it really exploded,” said
Tarnow, adding that more than $30,000 came in during a 24-hour period after several
technology blogs wrote about TidyTilt.
Kintz said he and others at Logitech regularly monitor Kickstarter. They ordered several TidyTilts and tested them — even the company’s chief executive tried it out — and
found that TT Design Labs’ work was “consistent with our design philosophy and the
type of product we like making,” Kintz said.
Logitech executives sent Tarnow and Tashakorina a message through their Kickstarter campaign page. At first, the two designers thought it was a joke. Then they were
unsure about selling their startup to the large company, as they had turned down previous acquisition offers in favor of continuing to run their own business.
Ultimately, “it became for us a very ideal situation,” Tarnow said, pointing to Logitech’s advantages in distribution, supply chain logistics and marketing. “As two founders, we’re very new to this. We didn’t have the expertise or scale to bring our product
worldwide in the same way that Logitech does.”
TT Design Labs, which worked with a Chinese manufacturer for its initial production run, sold the original TidyTilt for the iPhone 4 until May 2013. It also developed an
iPhone wall mount called JustMount.
Tarnow declined to say how many products TT Design Labs has shipped. Financial
terms of the deal with Logitech were not disclosed.
Tarnow, who is from New York City, has relocated to the San Francisco area and will
join Logitech as a product designer. Tashakorina, who grew up in Tehran, Iran, will be a
consultant to the company and travel between Chicago and California. Both graduated
in May 2012 with master’s degrees in design.
Hardware startups are relatively rare in Chicago, where the entrepreneurial scene is
more focused on building mobile and Web applications. But the community has registered success among gadget-makers.
In 2012, Danish gaming accessories company SteelSeries acquired Chicago-based
startup Joystickers, which made buttons and a joystick that could be temporarily attached to a smartphone or tablet screen for game play. Joystickers was a graduate of
Chicago startup incubator Excelerate Labs, which is now known as TechStars Chicago.
As a result of the acquisition, Joystickers co-founder Russ Hakimiyan joined SteelSeries, whose North American headquarters are in Chicago. The company started selling the stick-on buttons and joystick at the end of 2012 through its website, as well as
online outlets such as Amazon.
TT Design Labs’ new TidyTilt for the iPhone 5 is available for pre-order on Logitech’s
website and sells for $34.95; a leather version costs $49.95. The JustMount costs $24.95.
UIC launches $10M seed fund to advance startups
By Wailin Wong
April 26, 2013
The University of Illinois at Chicago is launching a $10 million fund to help inventions
advance from the research stage toward potential commercial opportunities, becoming
the latest academic institution in the area to channel increased resources toward homegrown startup activity.
The Chancellor’s Innovation Fund will allocate $2 million a year for five years. Each
year, $1 million will go toward proof-of-concept funding and the other $1 million will be
used for equity seed investments in companies that are further along in the commercialization process. Proof-of-concept funding is used to plug the gap between basic research
and commercialization, a void that the industry calls “the valley of death.”
IllinoisVentures, an early stage technology investment firm launched by the University of Illinois, will manage the Chancellor’s Innovation Fund. But while IllinoisVentures
backs companies that come out of various Midwestern universities, the new fund is
dedicated to UIC projects. The money for the fund comes from proceeds of past commercialization efforts, and the idea is for the fund to become self-sustaining when projects
become successful.
“We’re working toward creating sustainable startups,” said Nancy Sullivan, CEO of IllinoisVentures and interim executive director of UIC’s Office of Technology Management.
“As some of these projects work through the process and hit their milestones, they might
be a licensing opportunity for a big company or they could be a startup opportunity.”
UIC’s new initiative is similar to ones underway at the University of Chicago and
Northwestern University. U. of C. has spent just over $1 million from a dedicated proofof-concept fund on 19 projects in the last two years. Northwestern is raising money for
such a fund.
These types of initiatives are “something that universities and peers are realizing are
important, but it’s not easy money to raise,” Sullivan said. “Chicago has seen a big upswing between the three institutions working very hard.”
Sullivan said UIC conducted a “proof of concept for proof of concept” before university
officials approved the fund. The Office of Technology Management raised $500,000 toward projects. Applicants had to first complete a one-page application about their technology and goals. Research deans selected a smaller group to apply for a second phase,
which required a five-page proposal and presentation similar to a venture capital pitch.
Seven to eight projects have been funded so far from the $500,000, which is separate
from the $10 million, Sullivan said.
The launch of the Chancellor’s Innovation Fund also underscores UIC’s successes in
getting research concepts to market, since those proceeds made the fund possible. One
of the highlights of recent years is Prezista, a treatment for HIV developed by medicinal
chemistry researchers at UIC and the National Institutes of Health. The university inked
a licensing deal with Johnson and Johnson and earned more than $10 million in royalties on the drug in fiscal year 2011. Prezista was also one of the top royalty-generating
technologies for UIC in 2012.
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Harris, Melissa. “A selection of civic apps that aid Chicagoans.” Melissa Harris’ Chicago Confidential. Sunday, July 7, 2013.
Harris, Melissa. “Pritzker’s big push for U of C data.” Sunday, April 14, 2013.
Rosenthal, Phil. “Keeping genius in Illinois.” Sunday, June 23, 2013.
Wong, Wailin. “Executive Profile: Andrew Sieja, kCura.” Monday, June 24, 2013.
Kidd Stewart, Janet. “Working to push Northwestern back to top of world’s elite business schools.” Monday, March 4, 2013.
Sachdev, Ameet. “Executive Profile: Chad Mirkin.” Monday, August 5, 2013.
Chan Ding, Erin. “Executive Profile: Saqib Nadeem, Paradise 4 Paws.” Thursday, July 29, 2013.
Kidd Stewart, Janet. “Founder pushes business accelerator in uncharted direction.” Monday, June 10, 2013.
Karp, Gregory. “Profile: Richard Thaler, University of Chicago Booth School of Business professor.” Tuesday, April 30, 2013.
Chan Ding, Erin. “Executive Profile: Marianna Markowitz, regional administrator of the U.S. Small Business Administration.”
Monday, April 2, 2012.
Wong, Wailin. “Executive Profile: Talia Mashiach, founder and CEO of Eved.” Monday, November 05, 2012.
Wong, Wailin. “A sense of play pays off.” Monday, August 13, 2012.
Wernau, Julie. “Executive Profile: Amy Francetic, executive director of Clean Energy Trust.” Tuesday, October 30, 2012.
Sachdev, Ameet. “Executive Profile: Rishad Tobaccowala is marketing’s digital provocateur.” Monday, November 12, 2012.
Wong, Wailin. “Ron May, 1956-2013.” Tuesday, June 25, 2013.
Wong, Wailin. “Chicagoans test out Google Glass wearable computer.” Sunday, July 14, 2013.
Wong, Wailin. “Google headsets raise privacy concerns.” Sunday, July 14, 2013.
Borrelli, Christopher. “Drawing insight into Google’s Doodles.” Friday, June 12, 2013.
Harris, Melissa. “Google certain to make cold-storage building cool.” Melissa Harris’ Chicago Confidential. Sunday, June 30,
2013.
Wong, Wailin. “Rethinking startup a ‘pivotal’ experience.” Sunday, June 23, 2013.
Wong, Wailin. “Entrepreneurs bringing meals to downtown office workers.” Mugambi Mutegi contributed. Sunday, June 2,
2013.
Wong, Wailin. “Delivery firms take another stab at same-day service.” Thursday, August 1, 2013.
Wong, Wailin and Peter Frost. “Bioscience startups to open in Chicago next year.” Wednesday, April 24, 2013.
Channick, Robert. “With 24/7 streaming, local TV finds growing mobile audience.” Sunday, July 28, 2013.
Wong, Wailin. “Belly raises $12.1M from investors including 7-Eleven.” Wednesday, August 28, 2013.
Wong, Wailin. “With new logo, focus, Motorola touts latest phone at Techweek.” Thursday, June 27, 2013.
Wong, Wailin. “Motorola Mobility introduces Moto X smartphone.” Friday, August 2, 2013.
Wong, Wailin. “$25M Hyde Park VC fund looking for Midwest tech startups.” Thursday, June 13, 2013.
Wong, Wailin. “I2A Fund goes private, becomes Chicago Ventures.” Monday, June 17, 2013.
Wong, Wailin. “Chicago-based tech company offers email tool to collect employee feedback.” Friday, June 14, 2013.
Wong, Wailin. “2 students’ dream leads to Logitech deal.” Saturday, June 8, 2013.
Wong, Wailin. “UIC launches $10M seed fund to advance startups.” Friday, April 26, 2013.
Photo Credits
Bill Hogan, April 21, 2013.
Michael Tercha, July 9, 2013.
John J. Kim, February 10, 2013.
Michael Tercha, April 4, 2013.
Nuccio DiNuzzo, April 8, 2013.
Chris Walker, June 24, 2013.
Zbigniew Bzdak, November 24, 2013.
Jose M. Osorio, August 5, 2013.
Phil Velasquez, July 29, 2013.
Nancy Stone, June 10, 2013.
Abel Uribe, June 18, 2012.
Zbigniew Bzdak, June 18, 2012.
Brian Cassella. November 5, 2012.
Brent Lewis, August 13, 2012.
Heather Charles, June 17, 2013.
Chris Walker, November 12, 2012.
Bill Hogan, July 14, 2013.
Bill Hogan, July 14, 2013.
E. Jason Wambsgans, August 1, 2013.