Tagged: Ventures

1871: Chicago’s Digital Startup Incubator


Thanking Troy Henikoff for a recent1871 walk-thru, which I joined as part of an MIT delegation. We first met at Techstars Demo Day back in 2014. Three years have gone by since, Troy is now a Managing Director with Math Venture Partners, an early to growth-stage fund focusing on entrepreneurial undertakings featuring “an unfair advantage in acquiring and retaining customers to produce outsized returns.” Here is a sample of Math’s portfolio.


image


1871 is a digital startup incubator and is positioned as Chicago’s premier center for entrepreneurship in the tech sector. Techstars is a startup accelerator and, as pointed out above, Math Venture Partners is an investment firm.

Long story short, 1871 is first and foremost optimized as a community environment. The underlying supporting framework provides collaborative workspaces, training focusing on design, technology and business, which includes senior mentorship, incubators and accelerators. All of these opportunities are available following the under-one-roof collocation practice downtown Chicago.


“What is 1871? The story of the Great Chicago Fire of 1871 isn’t really about the fire. It’s about what happened next: A remarkable moment when the most brilliant engineers, architects and inventors came together to build a new city. Their innovations — born of passion and practical ingenuity — shaped not just Chicago, but the modern world. What started 140 years ago continues to this day. Come to a place where you can share ideas, make mistakes, work hard, build your business and, with a little luck, change the world.” –  1871


Matter is 1871’s neighbor and Chicago’s healthcare startup incubator. As shared in this Chicago Tribune’s article, Chicago has major hospitals, medical schools, pharmaceutical and device companies, a powerful healthcare hub which Matter seeks to galvanize by supporting entrepreneurial initiatives and innovative tech.

Chicago’s area is also home to leading institutions such as University of Chicago, Northwestern University, Loyola University Chicago, The Illinois Institute of Technology, and DePaul University just to name a few. So, academia and industry intersect to take advantage of talent and business opportunities. 


image


My personal interest in environments such as 1871 has to do with a “give & take” experience. Born in Hispania and back in the distant Roman times, Seneca the Younger believed that we are learning even more when we share knowledge that we might already posses. Basically, he was talking about Human Factors and Information Interaction: a virtuous feedback loop kicks in when we strive to articulate thoughts and structure conceptual frameworks to better convey insights. That, in turn, springs new thoughts.

I pride myself about having developed a mix of creative and in-depth expertise on innovation practices thanks to a fortunate interdisciplinary career spanning 20+ years already. That personal belief is backed by specific achievements and, admittedly, some disappointments, both having delivered teachable moments worth reflecting upon.

So, in a “give and take” scenario, my “giving” has to do with sharing know-how and synthesizing relevant advice to entrepreneurs, which I have been able to provide by joining Dr. Moises Goldman’s 1871 mentoring sessions on several occasions.

Going back to Seneca the Younger’s thinking, in exchange for volunteering my time (and whichever insights I can provide) I always get to “take” away valuable experiences back home with me such as:

(1) a sense of great satisfaction and fulfillment that comes from helping others in a meaningful way,

(2) a contagious entrepreneurial spirit that one can instinctively embrace in discussions driven by passion and determination,

(3) their combined positive impact in my own work since they re-energize my thoughts and goals.

My grandma used to remind me about a Spanish saying that translates into “tell me who you walk with and I’ll tell you who you are,” which might equate to “birds of feather flock together” in English. In any case, and leveraging Human Factors again, social and professional networks can be graphically depicted by nodes (individuals) and links (relationships), which can carry information such as reputation and influence levels, as well as information dissemination paths. So, I’m glad to count those who I interact with at 1841 as part of my network and can only hope that this is a mutually beneficial relationship.

Some of the many innovator’s dilemmas

“Customers decided what brand is the leader, no matter how much energy and money service providers invest in trying to persuade them (…) customers do no seek out the service provider that know what they want; they seek out the one that knows what they will want.” – Customer Centered Telecommunications Services Marketing” by Karen G. Strouse.

“Many technologies initially get pulled into the market by enthusiasts, but later fail to get wider adoption. So to create a company that is worth hundreds of millions of dollars, entrepreneurs need to come up with strategies that will help them build a bridge across that gap (…) Crossing the chasm is all about getting a technology widely adopted.”Rethinking Crossing the Chasm” by Alex Iskold, ReadWrite.

“When superior technologies emerge, old ones usually don’t simply fade away. To the contrary, their performance often leaps suddenly, thereby extending their lives and slowing the adoption of the new technologies.” – “Beware of Old Technologies’ Last Gasps” by Daniel C. Snow, Harvard Business Review.

“Successful companies can put too much emphasis on customers’ current needs, and fail to adopt new technology or business models that will meet customers’ unstated or future needs.”Innovators’ Dilemma” by Wikipedia. Refers to Clayton Christensen’s research.

“If I had asked people what they wanted, they would have said faster horses.”Attributed to Henry Ford. “Henry Ford, Innovation, and That Faster Horse Quote” by Patrick Vlaskovits.

“Innovation has nothing to do with how many R&D dollars you have (…) It’s not about money. It’s about the people you have, how you’re led, and how much you get it (…) It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.”Steve Jobs Best Quotes Ever” by Own Linzmayer at Wired.


image

Hopefully, the above set of quotes got your attention and, perhaps, you have already started to connect the dots on your own. Here is my viewpoint, which I have structured under four sections.

 

KNOWING

Knowing that one can make a difference is a “condicio sine qua non” when undertaking a star-up’s journey. Otherwise, why bother? In today’s day and age, teamwork, networks and partnerships are of the essence. But, what I just stated does not negate the fact that an individual’s confidence, skills, independent thinking and decisive actions happen to be instrumental.

So, “knowing” in this context relates to achieving a confidence level at which we can logically articulate a compelling vision, one that is grounded on the art of the possible, and one that can be embraced by others. This is about outlining a guiding vision that we can believe in and commit to with passion.

We also talk about gut feelings and intuition when logic does not apparently reach far enough. This can happen when we might not know how to best verbalize or help others visualize a new construct. In any case, decisions need to be made in a timely fashion even when we are way out of our comfort zone and just happen to face overwhelming complexity, intractable unknowns and seemingly contradicting dilemmas.

Working with others in entrepreneurial environments involves rallying, supporting, leading and changing roles as necessary. It also means taking unequivocal steps to move forward. Couple that with experimenting early enough to shorten the learning curve, capturing teachable moments, while navigating changing environments and, possibly, tectonic-like shifts.

Addressing the human factor at works benefits from contextual and situational awareness. It raises one’s emotional intelligence, as well as mental toughness to overcome drawbacks. One’s ability to identify logical fallacies (mind traps and errors in reasoning, especially so in business cases) and applying cognitive restructuring (turning around negative thinking) to tackle dysfunctional views and “innovation antibodies” will be unavoidable.

 

TIMING

An innovator’s timing and the actual windows of opportunity happen to be critical success factors. Being too early or late to market are business issues of concern. Innovating is about sensing the future and getting to a given market before others do. Innovating is about being there ahead of the pack and leveraging any first mover advantages that might exist.

While production cycles happen to be accelerating in today’s business ecosystem, generally speaking, we are talking about months, if not years, of research, development and sales efforts in advance to launching a high tech application, platform, product or service. Basically, work that starts today under a given scenario might finally get to market at a time when industry conditions have changed, hence, early assumptions would no longer apply. So, innovating does take visionary spirit, foresight and agility for a new business to thrive. Some entrepreneurs share that what eventually made them successful was not necessarily what they started with.

 

COMPETING

Once there, there is no time to be complacent and overconfident. You have to “stay hungry and stay foolish” as Steve Jobs best put it.  In addition to fast followers entering the market, there can be other competitive challenges and, in any case, customers will be presented with a wider range of options in no time.

As pointed out in Clayton Christensen’s research, incumbents might not be able to react fast enough given their commitment to serving well established and sizeable markets, leaving a door open for nimbler enterprises to capture market segments under the radar. In some cases, the start-up becomes an acquisition target and is bought out by the existing power player, which can actually turn to be one of the founders’ exit strategies. In some other cases, conventional technologies can still take advantage of their embedded base and economies of scale when incremental innovation and partnerships help them delay the impact and even fence off next generation systems.

There also is a need for understanding the value proposition behind alternative technologies and subsequent substitute effects, as well tangential opportunities. Start ups cannot afford be left blindsided and get the ball knocked out of their hands by competitors who happen to come from adjacent sectors and are expanding into the company’s core market. By the way, coopetition (cooperative competition) and ecosystems , are relevant subjects which I am addressing in another series of articles.

 

GROWING

When satisfied early adopters have passionately adopted the novelty, they become the innovation’s best evangelists and help spread the word. Positive testimonials and references will assist with marketing the innovation even further.

Early adopters can be more open minded and far more understanding than other user groups when facing glitches or any other kinds of shortcomings due to the technology’s roadmap and maturity level. Some might have even personalized the product, performed hacks, customized fixes and add crafty adaptions themselves, which other users might not be interested in undertaking on their own, or not to that extent.

If the company’s sustainability calls for wider market adoption and growth, in addition to serving current customers, crossing the chasm is about figuring out what the next wave of users will require, which might (or might not) match what’s available or planned use cases. The same applies to broadening the company’s reach to other market segments.

Early in my career, a vice president of strategy who I enjoyed working for used to remind me that enterprise planning involves doing what it takes to win the business today while jumpstarting the work that will get us to remain relevant tomorrow.

 


”It’s the ultimate paradox for leaders: you can’t predict the future but you must make sense of it in order to thrive“ – Get There Early” by Bob Johansen.

“Do what you can, with what you have, where you are”Attributed to Theodore Roosevelt.

“It is today that we must create the world of the future” – Attributed to Eleanor Roosevelt.