WBEZ | risk http://www.wbez.org/tags/risk Latest from WBEZ Chicago Public Radio en Improvising to improve business http://www.wbez.org/news/improvising-improve-business-108914 <p><p>Back in the summer, librarians from all over the country flew into town for the American Library Association&rsquo;s annual conference. On a Friday morning a few dozen of them gathered in Second City&rsquo;s main theater. A big space was cleared in front of the stage.&nbsp;</p><p>Workshop leader Andy Eninger told the group what to expect.</p><p>&ldquo;So, today, is going to be very interactive,&rdquo; he said. &ldquo;It&rsquo;s a little like learning to swim, this improvisation.&nbsp; You can analyze it, you can talk about it, but its only when you jump in the water that you realize how it&rsquo;ll work.&nbsp; So we&rsquo;re going to throw you in the proverbial water.&rdquo;</p><p>Before tossing them in, Eninger reassures them with a fable about himself. Once upon a time, in the 1990s, he was a guy with an office job. &ldquo;I worked at an advertising agency&mdash;not as a creative person but as a database administrator&mdash;and was sneaking off at night to take improv classes.&rdquo;&nbsp;</p><p>And the classes, he says, transformed him. &ldquo;The more I studied improv here at Second City the better I got at my job by day, and began to manage people&mdash; not just some servers and machines&mdash; and started to do more and more creative work.&rdquo;</p><p>Eventually, he quit to do improv full time, &ldquo;and have not looked back since,&rdquo; he tells them. &ldquo;Well, maybe a couple of times, for the health insurance.&nbsp; But other than that&hellip;&rdquo;</p><p><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/Andy%20Eninger%20workshop%201.png" style="height: 216px; width: 350px; float: left;" title="Andy Eninger leads a training for Second City Communications. Participants learn how to use the principles of improvisation — including risk-taking — to be more effective in their work. (Courtesy Andy Eninger)" />Like anybody spinning a fable, Eninger is leaving out some important stuff. Actually, there were some lean times in there. Leaner than lean. When he left his office job in May, 2000, he stepped off a cliff and fell pretty hard.</p><p>He and a friend rented an office and hung out a shingle as improvisers for hire&mdash; doing custom shows and running trainings like the one he&rsquo;s doing today, but entirely on their own.</p><p>&ldquo;We had a few gigs on the line, so we had a few gigs coming up,&rdquo; he says. &ldquo;But there was this crushing reality that there was no real income. We didn&rsquo;t know where it was going to come from.&rdquo;</p><p>It got worse. Just as their enterprise was starting to pick up steam, 9/11 happened. An agency representing their company on the college circuit scammed them for thousands of dollars. He had three years of negative income, and racked up credit-card debt that took ten years to pay off.</p><p>&ldquo;We had a lot of pitfalls,&rdquo; he says. &ldquo;Things that, if I had known those things were coming up, I never would have taken that risk.&rdquo;</p><p>And yet: Today, he calls those pitfalls an investment. And risk-taking is a big part of what Andy is here to teach the librarians in the Friday improv workshop.</p><p>Any performance&mdash; especially improvising&mdash; is inherently full of risk: The risk that you&rsquo;ll fall on your face, look like a jerk.&nbsp;<br /><br />In everyday life and in business, we confront the same risk every time we raise our hand in a meeting, propose a new project, or initiate a new business deal.</p><p>Improv training focuses on getting people into the habit of taking those kinds of risks.</p><p>When he first started learning to improvise, it was a lesson Andy Eninger needed to learn as much as anyone.</p><p>&ldquo;I mean, I&rsquo;m the person who, in fifth grade, went to the bathroom in my pants because I was scared to ask to go in from recess to go to the bathroom,&rdquo; he says. &ldquo;I still have that operating, any time I have to raise my hand or speak out of turn. And improv is the thing that makes it possible.&rdquo;</p><p>What he learned from improv, he says, was &ldquo;to risk in the moment&mdash;to say the first thing that comes to mind. Because I was doing it in class, every night and all the time, I couldn&rsquo;t not-do it in my job.&rdquo;</p><p>And so, he became a much more valuable worker in that day job.</p><p>&ldquo;I always would see opportunities, or see systems that were not working,&rdquo; he says. &ldquo;Like, &lsquo;Oh, you&rsquo;re dealing with this ridiculous spreadsheet. It gave me the confidence to speak up and say, if you allow me to work on this, then I know I can make it better.&rdquo;</p><p>So, he did, and he got noticed. He got promoted. He survived layoffs. He even started to do some creative work.</p><p>&ldquo;But there was a moment when I thought, if I don&rsquo;t disrupt it now, I can see my life laid out in front of me,&rdquo; he says.</p><p>So he saved up some money, and took a bigger risk. He left that cushy day job. And we&rsquo;ve already heard about how tough that was at first.</p><p>But over time things turned around, thanks to Second City. Andy started doing corporate training workshops, got some gigs as a performer, and eventually became head of the writing program at Second City&rsquo;s Training Center. By 2008, he says his take-home pay finally matched the paycheck from his old corporate job. It felt pretty good.</p><p>Andy still makes time for the corporate workshops, which are a big moneymaker for Second City. They charge thousands of dollars per session, to clients including Pepsi, General Electric, and hundreds of others like the American Library Association.</p><p>So, how does it work?</p><p>WIth the librarians, Andy gets everyone into a big circle, and asks a volunteer, Mike, to come to the center. Then he has him strike a pose. It can be anything.</p><p>Mike makes a silly face and holds his arms up.</p><p>&ldquo;Perfect, now hold that for a moment,&rdquo; Andy tells Mike.</p><p>&ldquo;Now, this&rdquo;&mdash;Mike&mdash;&rdquo;is the first half of a statue,&rdquo; Andy tells the group. &ldquo;Somebody come out and show us the second half by adding another pose.&rdquo;</p><p>Someone does. &ldquo;Mike you can say thank you,&rdquo; Andy says. &ldquo;Your job is done, good work.&rdquo;</p><p>Now it&rsquo;s time for another volunteer. And another. The poses are goofy, random, and gone in an instant.<br /><br />&ldquo;It&rsquo;s perpetual motion,&rdquo; Andy tells them. &ldquo;Someone is always coming out to join.&rdquo;</p><p>Volunteers keep coming up, one after another, and Andy eggs them on.&nbsp; &ldquo;If you haven&rsquo;t been out, just urge yourself to go out, trust that gut instinct,&rdquo; he says.<br /><br />When it&rsquo;s done, Andy asks a question: &ldquo;If you did not go out, why did you hesitate to go out?&rdquo;</p><p>&ldquo;I didn&rsquo;t know what pose to do,&rdquo; a librarian answers.</p><p>&ldquo;Right,&rdquo; says Andy. &ldquo;Because how many poses would be wrong in this game?&rdquo;</p><p>The room fills with laughter&mdash;recognition and release.</p><p>&ldquo;Yeah,&rdquo; Andy says, &ldquo;it&rsquo;s a game in which really anything will be right.&rdquo;</p><p>Andy builds on the moment.&nbsp; He asks the group, &ldquo;What does that person in the center want?&rdquo;</p><p>Immediately the answer comes: To get out of there.</p><p>&ldquo;Yes, to get out of there!&rdquo; Andy says, channeling the player: &ldquo;&lsquo;OOOH. come in and save me!&rsquo;&nbsp; And we&rsquo;re all there thinking, &lsquo;Someone should go and help them out.&nbsp; Not us, but someone should go out there.&rsquo;&rdquo;</p><p>Andy tells the group that the impulse to help others is one of the things that lets improvisors take risk after risk.</p><p>&ldquo;We find out that that bravery comes not from any brilliance on our part,&rdquo; he says, &ldquo;but from: &lsquo;I need to get my idea out there to support that other person.&rsquo;&rdquo;</p><p>After the workshop, library administrator Sarah Dallas reflects.</p><p>&ldquo;I&rsquo;m kind of a shy person, and this was a real challenge for me to do something like this and I knew I had to be more out there,&rdquo; she says. &ldquo;And I was kind of going through this and getting through&hellip;&rdquo;</p><p>And then came the final exercise: Working in a small group the librarians created a whole scene&mdash; a fake ad for a fake product&mdash; out of nothing and performed it for the group.</p><p>&ldquo;When we got the final assignment, to perform in front of everybody, I just wanted the floor to open up and let me drop down,&rdquo; she says. &ldquo;But it didn&rsquo;t. And with the support of the group, I survived, and for me that&rsquo;s a victory.&rdquo;</p><p>She says she&rsquo;ll remember these moments when she&rsquo;s running meetings back home at her job..</p><p>Responses like these are exactly what Andy Eninger hopes for.</p><p>&ldquo;We don&rsquo;t make them pretend to be improv performers,&rdquo; he says. &ldquo;For us, it&rsquo;s all about what they&rsquo;re doing&nbsp; It&rsquo;s all about what their challenges are. We want them to have the joy that improv is for us, but we want them to be able to take it away, so they can use it that next Monday.&rdquo;</p><p>That is, he wants to give them just enough risk to help them re-think their routine.</p><p><em>Dan Weissmann is a reporter for <a href="http://www.marketplace.org/">Marketplace</a>. &nbsp;Follow him <a href="https://twitter.com/danweissmann">@danweissmann</a>.</em></p><p><em>&ldquo;At What Cost?&rdquo; is made possible in part by the John A. Wing Society, an initiative of the Illinois Humanities Council to improve dialogue about business and the common good.</em></p></p> Mon, 14 Oct 2013 10:33:00 -0500 http://www.wbez.org/news/improvising-improve-business-108914 Are some people hard-wired to take more risks than others? http://www.wbez.org/news/are-some-people-hard-wired-take-more-risks-others-108913 <p><p>From the time she was 16, people kept telling Jody Michael she should check out one of Chicago&rsquo;s famous financial exchanges.&nbsp; She&rsquo;d be a natural, they said, on the trading floor.</p><p>Michaels wasn&rsquo;t interested.</p><p>&ldquo;I kept saying, &lsquo;No!&nbsp; I don&rsquo;t want to be around numbers. No,&rsquo;&rdquo; she says. &ldquo;And then one day, a friend who was working at Reuters tricked me.&rdquo;</p><p>The friend invited Michael for a bite to eat...but took a detour.</p><p>&ldquo;Instead of going to lunch, we walked onto the trading floor,&rdquo; she recalls.</p><p>This was the famous &lsquo;pit&rsquo; at the Chicago Mercantile Exchange in the old days, before electronic trading. It was crowded with guys in colorful jackets &ndash; and they were all guys back then &ndash; shouting, waving their hands, literally jumping up and down to make trades. Some of them worth millions of dollars. Non-stop.</p><p>&ldquo;I walked on, I was like, OH MY GOD,&rdquo; Michael says. &ldquo;It was competitive, it was fun, it was exciting. And it&rsquo;s the antithesis, I found out later, of most people that walk on the floor. They walk on the floor, they&rsquo;re overwhelmed. They&rsquo;re like, &lsquo;Oh my God &ndash; what are people doing?&rsquo; And it was a very different experience for me.&nbsp; I really wanted to go and play.&rdquo;</p><p><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/BRAIN%20SCAN%20SOUNDCLOUD%20THUMB.png" style="float: left; height: 260px; width: 350px;" title="A snapshot of the human brain highlights the areas associated with rewards, fears, and decision-making. Area B, highlighted in yellow, shows the brain’s “reward center,” which can push us to take risks. (Photo courtesy of Camelia Kuhnen)" />And so she did, for more than a decade, first as a trader and then as a manager at the Mercantile Exchange. Jody Michael says she loved the rush &ndash; including the minute-by-minute risk-taking &ndash; but she acknowledges it&rsquo;s not for everyone.</p><p>So what makes people like Jody Michael different? Camelia Kuhnen at Northwestern&rsquo;s Kellogg School of Management has given the question some serious thought. A neuro-economist, she studies what&rsquo;s going on inside people&rsquo;s heads &ndash; literally &ndash; when they&rsquo;re making financial decisions.</p><p>&ldquo;We get to ask questions that have never been asked before. And you know what? We can even answer them sometimes,&rdquo; she says with a laugh. &ldquo;For example: Why do some people take a lot of risks and others don&rsquo;t? Or: Why are some people confident in their beliefs, and others aren&rsquo;t?&rdquo;</p><p>In some experiments, Kuhnen puts people inside fMRI machines, gives them investments to choose from, and sees which areas of the brain light up. She also looks at their genes, their personalities, and their credit reports.</p><p>Kuhnen describes Jody Michael&rsquo;s experience as an example of a phenomenon called &ldquo;traders&rsquo; intuition.&rdquo;</p><p>&ldquo;It&rsquo;s probably not gonna be just mathematics &ndash; knowing how to deal with numbers and probabilities &ndash; that&rsquo;s gonna make you a successful trader,&rdquo; she says. &ldquo;It&rsquo;s about understanding what everybody else in the market is doing. [Michael] probably was able to understand what all those people in the pit were all doing and talking about &ndash; yelling about, I should say.&rdquo;</p><p>In the midst of all that chaos, Jody Michael was able to &ldquo;read&rdquo; people, and the room as a whole. Researchers have found that this traders&rsquo; intuition is tied to what psychologists call &ldquo;theory of mind&rdquo;:&nbsp; The ability to form a mental picture of other people&rsquo;s thoughts, feelings, and intentions.</p><p>Michael agrees. &ldquo;It wasn&rsquo;t about numbers at all,&rdquo; she says. &ldquo;It was driven absolutely by feeling &ndash; ooh, it feels like I&rsquo;m at home, in the competitive environment and driven by the opportunity.&rdquo;&nbsp;</p><p><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/CBOT%20image.jpg" style="height: 220px; width: 300px; float: right;" title="The Chicago Mercantile Exchange. Former trader Jody Michael says unlike most people she felt right at home in the chaotic risk-taking chaos environment of the famous pit. (Wikipedia)" /></p><p>The beginning of Jody Michael&rsquo;s life on the trading floor provides a window into the psychology of traders. And as it happens, when she left the floor 15 years later it was to go back to school to study psychology. Now <a href="http://www.jodymichael.com/" target="_blank">she&rsquo;s a professional coach</a> to traders. She says she aims to help her clients understand themselves as well as they understand the markets.</p><p>&ldquo;The most important piece of trading is you,&rdquo; she says. &ldquo;As we go into trade, we are shaped by our perceptions, our attitudes, our beliefs, our values, how we think, the moods that we&#39;re in, all of that impacts what we see, what we don&#39;t see, what we take action on, what we don&rsquo;t take action on. That is the psychology of trading.&rdquo;</p><p>And her best example of the psychology in action is a client we&rsquo;ll call &ldquo;Steve.&rdquo; Steve isn&rsquo;t his real name because of client confidentiality, but his story opens up questions about the nature of risk taking. How much of it is hard wired in our brain, and how much of it is what we choose?</p><p>Steve is a hotshot trader &ndash; experienced enough to play the market by intuition.</p><p>&ldquo;He&rsquo;s a sensation-seeking, I-need-a-lot-of-variety kind of guy,&rdquo; says Michael.</p><p>But, when he first came to Michael&rsquo;s office, he wasn&rsquo;t making as much money as he wants.</p><p>Michael&rsquo;s work with Steve takes a few steps: First comes awareness. She helps Steve understand that although he thinks he&rsquo;s just doing one thing all day &ndash; trading &ndash; he&rsquo;s actually doing it in two completely different ways.&nbsp;</p><p>First are the setups: As Michael describes it, this is based on long years of experience. When certain conditions come up, bam! He buys this or sells that, and it&rsquo;s gonna make him a ton of money.</p><p>But they only appear every so often, and meanwhile, he&rsquo;s trapped watching the screens, waiting.</p><p>&ldquo;And he gets bored!&rdquo; Michael says. &ldquo;So in between those trades, when he&rsquo;s sitting around &ndash; and this is where he gets into trouble &ndash; he will just play, going in and out, all day long, to fulfill that need for that feeling: He&rsquo;s in it. He&rsquo;s in the game. He needs to be in the game.&rdquo;</p><p>Camelia Kuhnen&rsquo;s research shows that some people are just like this &ndash; they&rsquo;re born risk takers. She points to a gene called DRD4 that regulates dopamine levels in the brain&rsquo;s reward center.&nbsp;</p><p>&ldquo;Yeah, if you carry the long version of DRD4, you tend to take about 25 percent more risk in your portfolio than other people,&rdquo; she says.</p><p>Jody Michael works with Steve for months, and helps him become aware of the difference between the good trades and the other stuff. She has him practice, training himself to do the opposite of what his instincts tell him. If his brain says &lsquo;go,&rsquo; Steve learns to stop.</p><p>But then Steve starts to falter. He can&rsquo;t stay disciplined in controlling his trading habits.&nbsp;</p><p>&ldquo;What we figured out with Steve was that he had a competing commitment,&rdquo; says Michael. &ldquo;Steve has a strong need to have fun, and play.&rdquo;</p><p>In other words, he was making all these dumb trades because he loved to do it. Or, you could put it this way: He wasn&rsquo;t just yielding to a compulsion to take risks:&nbsp; He was indulging a desire to have fun &ndash; which for him involved taking risks.</p><p>Once he knows the difference between work and play, he gets to choose. And what Steve decides is: He wants to keep playing.</p><p>&ldquo;He acknowledged, &lsquo;You know, I don&rsquo;t care: I love this,&rsquo;&rdquo; says Michael. &ldquo;&lsquo;I just wanna do this.&rsquo;&rdquo;</p><p>So rather than change what he does, Steve changes his attitude. He learns to embrace it.</p><p>&ldquo;What&rsquo;s interesting is that Steve came to me to minimize the risk and to become a better trader,&rdquo; says Michael. &ldquo;And how he ended up leaving was: He was the same trader but at peace with it.</p><p>He makes less money than he might &ndash; but enough that he gets to keep playing. And enough that he can fly to Vegas eight times a year, with money to blow.&nbsp;</p><p>Jody Michael says other traders she&rsquo;s worked with would never make the choices that Steve does.</p><p>&ldquo;They&rsquo;re going to look at the dollar amount and say, &lsquo;Hey, percentage-wise, this is crazy,&rsquo;&rdquo; she says. &ldquo;But you get a guy like Steve, and he makes enough, and he says, &lsquo;I&rsquo;m driven by opportunity, but I also want to play.&rsquo; And he does.&rdquo;&nbsp;</p><p>So what does Camelia Kuhnen&rsquo;s science tell us about what makes Steve so unique?&nbsp; Well, not much. He probably carries the longer DRD4 gene, but genes only account for around 35 percent of behavior, she says. They&rsquo;re just hints, really, about the kinds of risks you might accept.</p><p>&ldquo;Just the pure genetic component, while it&rsquo;s important, is not the only thing that drives behavior,&rdquo; she says. &ldquo;Your own experience matters a lot. Where you were born and how you were brought up matters a lot.&rdquo;</p><p>And, Steve might say: How well you know yourself, and what you choose to do with that knowledge.</p><p><em>Dan Weissmann is a reporter for <a href="http://www.marketplace.org/">Marketplace</a>. &nbsp;Follow him <a href="https://twitter.com/danweissmann">@danweissmann</a>.</em></p><p><em>&ldquo;At What Cost?&rdquo; is made possible in part by the John A. Wing Society, an initiative of the Illinois Humanities Council to improve dialogue about business and the common good.</em></p></p> Mon, 14 Oct 2013 10:32:00 -0500 http://www.wbez.org/news/are-some-people-hard-wired-take-more-risks-others-108913 Risk-taker embraces failure to find success http://www.wbez.org/news/risk-taker-embraces-failure-find-success-108912 <p><p>Terry Howerton is giving me a tour of his latest business venture, which he recently moved to the Civic Opera Building downtown. TechNexus is a tech collaborative that helps launch startups.</p><p>&ldquo;What we&rsquo;re walking through right now, this space will be what we call grow suites. A grow suite is designed to have room for a two person or a four person company,&rdquo; he said.</p><p>The office walls can literally move to adjust to a start-up&#39;s needs as it grows.</p><p>Outside on the 15th floor, contractors built a rooftop deck with a bird&rsquo;s eye view of the Chicago River.</p><p>&ldquo;There&rsquo;s a barbecue and a bar area. And the idea is that most of the people who build companies at TechNexus, these are startups. These are entrepreneurs,&rdquo; he said. &ldquo;We&rsquo;re here 12, 15, 18 hours a day, and in some cases 24 hours a day and sleeping on the floor of the office,&rdquo; he said.</p><p><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/Failure%201.jpg" style="height: 263px; width: 350px; float: left;" title="Terry Howerton stands outside on the rooftop deck of TechNexus. He’s building out his tech incubator. (WBEZ/Susie An)" />Deciding where the bar should go on a new company&rsquo;s rooftop deck isn&rsquo;t a decision most would&rsquo;ve thought Howerton would be making at this point in his career. A few years ago, another high profile business of his took a nose dive.</p><p>But in Howerton&rsquo;s words, starting new businesses is simply part of his DNA -- even when they sometimes fail. He&rsquo;s always considered himself an entrepreneur, as far back as the second grade.</p><p>&ldquo;I realized the pencil machine outside of the principal&rsquo;s office that sold pencils two for a quarter, you could buy all the pencils out of the machine. It took the principal two weeks to restock the machine,&rdquo; he said. &ldquo;So if you cornered the market on pencils, you could sell them for a quarter apiece.&rdquo;</p><p>Howerton said he must&rsquo;ve started 20 to 30 companies over his lifetime. He dropped out of college his freshman year because he wanted to work on a business idea, instead of sitting bored in class.</p><p>In 2001, he moved to Chicago to launch a tech firm called Fast Root. It was a company that delivered software on the Internet. Things were going well for the business. So Howerton started launching other projects, like a tech incubator that would later become TechNexus.</p><p>But after awhile he found himself losing zeal for FastRoot. And maybe that was the tip of the iceberg.</p><p>&ldquo;We were very ambitious at FastRoot, and had planned on building several new data centers, had projects underway, very expensive projects we were spending money on,&rdquo; he recalled. &ldquo;When the market shifted in 2008, because I wasn&rsquo;t really focused completely on the business, I think we weren&rsquo;t agile enough to respond.&rdquo;</p><p>One of the other ventures he was juggling back then was a charter school that he helped build. It taught inner city kids about entrepreneurship and technology. Howerton said as FastRoot starting tanking, he found himself telling the students that failure was part of entrepreneurship. But here he was unable to accept it.</p><p>&ldquo;I think there&rsquo;s a thin line between entrepreneurs who think people telling them something is impossible is completely plausible,&rdquo; he said. &ldquo;The idea that I&rsquo;m going to fight that battle until I win that battle, which is something that&rsquo;s just ingrained in an entrepreneur. And the idea of being able to accept failure fast enough.&rdquo;</p><p>For something that could&rsquo;ve been over in 60 days, the FastRoot failure dragged out painfully for a year and a half. Howerton said he began doubting himself and had no energy to create new things.</p><p>&ldquo;I think a part of that time, as the Titanic was sinking, as the business was failing, and a part of that time was licking my wounds after that failure. And that&rsquo;s what failure does to an entrepreneur. It really distracts them from other opportunities for success,&rdquo; he said.</p><p>And then Howerton faced a kind of crossroads. He was offered a job at another company, a good position with a nice salary. He turned it down.</p><p>&ldquo;What finally helped me break out of the cycle was to realize that that wasn&rsquo;t me. It had never been me in 25 years of being an entrepreneur, and I didn&rsquo;t want it to be me for the next 25 years,&rdquo; he said.</p><p>Howerton doesn&#39;t remember this period fondly.</p><p>&ldquo;It was pretty visible, and lots of gossips and gadflies and bloggers like to write about it and poke fun about it, but it&rsquo;s made me stronger,&rdquo; he said.</p><p>Strong enough even to face his old failures. After he finishes the TechNexus build out, Howerton said he plans to give FastRoot another try.</p><p><em>&ldquo;At What Cost?&rdquo; is made possible in part by the John A. Wing Society, an initiative of the Illinois Humanities Council to improve dialogue about business and the common good.</em></p></p> Mon, 14 Oct 2013 10:31:00 -0500 http://www.wbez.org/news/risk-taker-embraces-failure-find-success-108912 Chicago retailer credits ignorance of risk for its success http://www.wbez.org/news/chicago-retailer-credits-ignorance-risk-its-success-108911 <p><p>Sometimes risk can be masked by a lack of experience and knowledge. But that doesn&#39;t mean someone can&#39;t find success. More than 10 years ago, Jon Cotay took a chance on a venture he knew nothing about. Today, it&rsquo;s paying off.</p><p>Cotay&rsquo;s a man with a lot of energy.&nbsp; If he&rsquo;s not managing 400 vendor accounts or keeping tabs on 270 employees, he&rsquo;s likely at a fashion event.</p><p>&ldquo;The funny part is all three of us are really not the most fashionable people out there. If we had to look back, we were just like what the heck were we thinking?&rdquo; he said.</p><p>Eleven years ago, he and two college friends founded Akira, a fashion retail company. Cotay said fashion still doesn&rsquo;t come naturally to him. His assistant had to tell him not to wear shorts and flip-flops to our interview. Instead, he wore a sharp blazer and jeans.</p><p><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/success%203.jpg" style="float: left; height: 234px; width: 350px;" title="Akira’s Block 37 store. The company has opened 17 stores since 2002. (Photo courtesy of Akira)" />In just over a decade, he and his two partners Erikka Wang and Eric Hsueh built Akira into 17 stores across the Chicago region with an online shop that sells internationally. And yet when they all attended the University of Illinois in Urbana Champaign not one of them studied fashion or business. Hsueh and Wang studied Management Information Systems. Cotay majored in nursing.</p><p>&ldquo;We actually bonded around food. All of us are Asians. Different people worked in different restaurants. The three of us would get together and barter food,&rdquo; Cotay said.</p><p>After graduation, all three worked in fields related to their majors. Cotay had multiple nursing jobs, including a full time shift at a hospital just to keep busy. Then, one day, Erikka Wang wasn&rsquo;t feeling satisfied with her job. She wanted something new. So she presented Eric Hsueh and Cotay with a crazy idea, a career in fashion retail.</p><p>&ldquo;We started laughing. We&rsquo;re like,&rsquo;really, the three of us would open something in retail.&rsquo; And we didn&rsquo;t even know what the scope of retail was. We didn&rsquo;t know about brands. We didn&rsquo;t know anything about distribution. We didn&rsquo;t know anything about how the retail market worked,&rdquo; he said. &ldquo;We just thought it was kind of like a cool idea to get started.&rdquo;</p><p>Cotay was 28-years-old at the time. After a few years of nursing experience, his parents expected him to go to med school, not run a business. But he decided to take a chance. He and his partners opened their first Akira store in Bucktown in 2002.</p><p>&ldquo;For the first three years, I didn&rsquo;t actually tell my parents I owned the business. My parents are conservative and everything like that, so I didn&rsquo;t want to put them on a lot of stress,&rdquo; he said.</p><p>Cotay never really officially told his parents he had started a business.</p><p>&ldquo;Over time, they just realized, &lsquo;what is Jon doing at this store. Why are you always there?&rsquo; Every time they asked me why are you always there a lot. I say, &lsquo;oh, I work there part time,&rsquo;&rdquo; he said.</p><p>Actually, he and his partners worked overtime. They noticed most stores in the area sold luxury goods and were only open from 11 to 5. They tried something different. They brought in more affordable options and kept the doors open until 9, sometimes later if they were just hanging out on a Friday night.</p><p><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/success%202.jpg" style="float: right; height: 233px; width: 350px;" title="From left to right, Eric Hsueh, Erikka Wang and Jon Cotay. The three college friends founded Akira 11 years ago. They were successful despite knowing little about fashion or business. (Photo courtesy of Akira)" />&ldquo;We didn&rsquo;t even think about the risk factor. We just had the mentality like &lsquo;well, we have to pay our bills.&rsquo; So we have to make sure whatever we can do, we just do it,&rdquo; he said.</p><p>Cotay said it was an immigrant work ethic that drove them. Before he was born, Cotay&rsquo;s grandparents emigrated from China to the Philippines. He watched them work hard to keep their own small business going. That stuck with him when he came to the U.S.</p><p>But his parents still wonder about his career in medicine.</p><p>&ldquo;I think even 7 years into the business they asked me if I would still consider going to med school. And I&rsquo;m like I don&rsquo;t think that&rsquo;s going to happen now. This is it. This is my baby right now,&rdquo; he said.</p><p>Cotay&rsquo;s parents might&rsquo;ve worried if they knew their son put his savings into opening a clothing store without having a business plan. This is the first year the company brought in business consultants. And Cotay said they all question how Akira got where it is today without a set strategy.</p><p>&ldquo;We were all in some way ignorant about it. We kind of like had more confidence in ourselves to get it done. But if we knew now how challenging it was, we would probably talk ourselves out of it,&rdquo; he said.</p><p>It all seems pretty risky in hindsight. But Cotay and his partners may have been too busy building a successful business to notice.</p><p><em>&ldquo;At What Cost?&rdquo; is made possible in part by the John A. Wing Society, an initiative of the Illinois Humanities Council to improve dialogue about business and the common good.</em></p></p> Mon, 14 Oct 2013 10:29:00 -0500 http://www.wbez.org/news/chicago-retailer-credits-ignorance-risk-its-success-108911 Chicago's future innovators look to the past http://www.wbez.org/news/chicagos-future-innovators-look-past-108910 <p><p>To get a glimpse of the future of innovation in Chicago, you have to visit one of the oldest buildings in the city. Up on the 12th floor of the Merchandise Mart an unusually high level of entrepreneurial energy is coming from a 50,000 sq. foot workspace called <a href="http://www.1871.com/">1871</a>.</p><p>In a large communal space 20 &amp; 30-somethings are sprawled on couches, glued to laptops, and of course slurping coffee. These digital dreamers are all here for one reason. They want to be the next Groupon or Grubhub...or if they&rsquo;re lucky, Google. This is what a tech incubator looks like.</p><p>&ldquo;It means a place of risk and a place to collaborate, a place to challenge, a place to compete, a place to win, and a place to put Chicago on the map,&rdquo; says Frank Muscarello, one of the first entrepreneurs to work at 1871.</p><p>Muscarello is the founder of <a href="https://www.markitx.com/">MarkITx,</a> an online marketplace for used IT equipment. A year and-a-half ago it was just an idea. Now it&rsquo;s one of the most promising startups in town.</p><p>&ldquo;This whole thing, this whole ecosystem at 1871 is all about newness and creativity, innovation and disruption,&rdquo; he said.</p><p>Economists say the biggest risk to the economy today might be companies not taking enough risks. Chicago already has a reputation for being more risk-averse than other parts of the country. But a new bunch of digital entrepreneurs at places like 1871 are starting to change that &mdash; with a conscious nod to the past.</p><p>The name 1871 refers to the year of the Great Fire. That disaster killed hundreds, left one-third of the city homeless and burned 18,000 businesses to the ground. Yet according to <a href="http://www.valpo.edu/history/faculty/carter.php" target="_blank">Heath Carter</a>, a history professor at Valparaiso University, it was also a turning point.</p><p>&ldquo;1871 brings catastrophe but it&rsquo;s also quickly seen by many in the city here as an opportunity,&rdquo; Carter said.</p><p>The city was already known for its boom and bust economy &mdash; so why not take a chance on rebuilding?</p><p><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/Frank%20Muscarello%20at%201871.jpg" style="height: 451px; width: 300px; float: right;" title="Entrepreneur Frank Muscarello at Chicago tech incubator 1871. (Photo courtesy GG Photo)" />&ldquo;Risk is at the heart in some ways of what drives capitalism, and I mean Chicago in the mid-to-late 19th century is just a center for that kind of activity,&rdquo; he said. &ldquo;And there&rsquo;s a reason why people are betting on this swampy marshy undesirable piece of land to become the next big thing. And in that sense Chicago is itself one huge gamble.&rdquo;</p><p>Long before the fire, a wild and woolly capitalism had already taken root in the city. Carter says to understand how that happened you have to start with the river. And so that&rsquo;s where I met up with him on a recent afternoon. As we walked along the river&rsquo;s edge near Wolf Point, Carter described what it would have looked like 170 years ago.</p><p>&ldquo;You&rsquo;re in the middle of what&rsquo;s going to become within a decade or two one of the biggest ports, most active ports in the whole country,&rdquo; he said. &ldquo;In 1850 you would&rsquo;ve had schooners and ships carrying their wares and cargo, taking lumber down to Pilsen, taking grain up to the elevators on the north branch.&rdquo;</p><p>In fact, the grain industry shows just how disruptive this new economy was. In a few short years, you went from sacks of wheat to giant grain elevators to an entirely new commodities exchange. Suddenly at the Chicago Board of Trade you could bet on the future price of grain and make a killing.</p><p>Taking a risk in those days was almost irresistible according to Rima Schultz, a Chicago historian who studied the mid-19th century version of startups.</p><p>&ldquo;So if you didn&rsquo;t take a risk, if you didn&#39;t borrow money. Stayed still, so to speak, didn&rsquo;t reach out to develop a new business...[you didn&rsquo;t really fit in],&rdquo; she said.</p><p>Schulz adds that there was also tremendous workforce mobility. Like today, hungry entrepreneurs jumped from one opportunity to the next.</p><p>&ldquo;I looked at maybe 400 businessmen that I traced through their credit reports. And 1/3 of them go bankrupt. I mean bankruptcy was relatively ordinary,&rdquo; she said.</p><p><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/Chicago-fire1.jpg" style="height: 200px; width: 300px; float: left;" title="An artist's rendering of the Great Chicago Fire. The digital bootstrappers at tech startup hub 1871 say they're inspired by the risk-taking innovation that followed. (Wikipedia)" />Entrepreneurs would often lose everything. But then they&rsquo;d dust themselves off and build something new. So it&rsquo;s no wonder that the city did much the same after the Great Fire.</p><p>&ldquo;There were lots of ideas, some things worked, some didn&rsquo;t but Chicago was a laboratory for all sorts of experiments,&rdquo; Carter says.</p><p>Steel kyscrapers rose upward, refrigerated trains shipped meat cross country, and by the 1893 World&rsquo;s Fair, Chicago was again seen as a center for innovation.</p><p>Which brings us back to the digital bootstrappers of today like Frank Muscarello. Not long ago Muscarello suffered a major setback when a previous business of his went under.</p><p>&ldquo;I had to sell all the cars, sell the house,&rdquo; he remembers. &ldquo;And I mean literally you go from having a high-paying great job from a business that&rsquo;s like your child that you built. And then all of a sudden she grows up and marries someone that doesn&rsquo;t like you.&rdquo;</p><p>Muscarello says bankruptcy was a bruising experience, but nothing to be ashamed of at 1871.</p><p>&ldquo;There&rsquo;s not this negative connotation around failure. Because it happens, you know? Unfortunately 99 percent of these companies that are here are going to lose and that&rsquo;s a risk you understand going into it,&rdquo; he said.</p><p>It&rsquo;s hard to pin down exactly how many of these companies have failed or will fail. But in the last 5 years roughly 1300 tech start-ups have launched in Chicago. Of those, just 6.6% have been acquired or gone public according to Adam Calica, product manager at <a href="http://www.builtinchicago.org/">Built in Chicago</a>. In other words, a lot of risk-taking has yet to pay off.</p><p>And that&rsquo;s perfectly fine with <a href="http://www.kellogg.northwestern.edu/faculty/directory/darragh_linda.aspx" target="_blank">Linda Darragh</a>, head of the Entrepreneurship program at Northwestern&rsquo;s Kellogg business school.</p><p>&ldquo;It drives me crazy when I still hear people in Chicago say that Chicago&rsquo;s risk-averse. People don&rsquo;t understand that that&rsquo;s changed,&rdquo; she said.</p><p>But <a href="http://www.chicagobooth.edu/faculty/directory/w/ira-s-weiss" target="_blank">Ira Weiss</a> an angel investor who teaches at the University of Chicago&rsquo;s Booth School of Business, thinks Chicago still has a ways to go. He points to the culture of rapid turnover at young tech startups.</p><p>&quot;In Silicon Valley it&rsquo;s very common to work at a company and then they hop around. So people will have a new job every couple of years, that&rsquo;s normal,&quot; Weiss said. &quot;But here [in Chicago] you&#39;d ask the question: &#39;Well, can that person hold down a job&#39;?&quot;</p><p>Darragh thinks as long as Chicago continues to encourage risk-taking that mindset will change. And she says the energy in the tech startup scene is no longer exclusively on the the coasts.</p><p>&ldquo;I was at 1871 just last week and I met a person who had been in Chicago and then went to the West Coast for funding, same thing as we always hear,&rdquo; Darragh said. &ldquo;Well, she was back in Chicago I was totally surprised to see her. And she said &#39;I&rsquo;m here because the best talent is in Chicago and I&rsquo;m hiring people here.&#39; And I said, &lsquo;why&rsquo;? And she said, &lsquo;basically the work ethic is very strong and they can build companies. They have all the skills, they&rsquo;ve got the network.&rsquo; It&rsquo;s here now.&rdquo;</p><p>Or maybe it&rsquo;s just come back.</p><p><em>Derek L. John is WBEZ&rsquo;s Community Bureaus Editor. Follow him at <a href="https://twitter.com/DerekLJohn">@DerekLJohn</a></em></p><p><em>&ldquo;At What Cost?&rdquo; is made possible in part by the John A. Wing Society, an initiative of the Illinois Humanities Council to improve dialogue about business and the common good.</em></p></p> Mon, 14 Oct 2013 10:25:00 -0500 http://www.wbez.org/news/chicagos-future-innovators-look-past-108910 Millennials, risk and the economy http://www.wbez.org/blogs/leah-pickett/2013-10/millennials-risk-and-economy-108886 <img typeof="foaf:Image" src="http://llnw.wbez.org/main-images/niala.PNG" alt="" /><p><p><em>Above is a Google hangout between fellow WBEZ blogger Britt Julious and Afternoon Shift host Niala Boodhoo, discussing how millenials are taking risks in today&#39;s economy.</em></p><p>Oh, those millenials. Generation Y, made up of people born between the late &#39;70s and early &#39;90s, is often called the&nbsp;<a href="http://www.nytimes.com/2011/11/13/opinion/sunday/the-entrepreneurial-generation.html?pagewanted=all&amp;_r=1&amp;" target="_blank">&quot;entrepreneur generation,&quot;</a>&nbsp;due in large part to the plucky startup models, risk-taking mentalities and personal branding strategies that have come to define success at work in the new millennium. Rapidly transitioning from one career to another also has emerged as a frequent practice for Gen Y, and <a href="http://finance.yahoo.com/blogs/daily-ticker/born-digital-millennials-change-workforce-much-more-115241544.html" target="_blank">&quot;sidepreneurism,&quot;</a> the increasingly popular trend of employees creating and running their own businesses while still engaged in a full-time job, is perhaps even more common.&nbsp;</p><div class="image-insert-image ">However, millennials of the Internet Age also have been dismissed by think piece writers, political pundits, and baby boomers ad nauseam. They have been labeled lazy, bratty, pretentious, entitled and self-absorbed. Framed in a stereotype, the millennial&#39;s fingers are perpetually glued to an electronic device, watching life go by through the glow of a smartphone screen.&nbsp;</div><div class="image-insert-image ">&nbsp;</div><p>I am 24, and clearly a millennial, but not a single one of the condescending &quot;kids these days&quot; stereotypes applies to me. I was raised to work hard, take responsibility for my actions, embrace change, and never burn bridges. I spend more time reading books then scrolling through filters on Instagram. I also have learned that failure&mdash;big, crushing, spectacular failure&mdash; is often a necessary pathway to success.&nbsp;</p><p>So, which scenario carries more risk for millenials in today&#39;s economy: starting a business from scratch or climbing the corporate ladder? Personally, I would relish the opportunity to work my way up at an organization that fulfills my needs as a young professional&mdash; especially since post-grad <a href="http://www.thefiscaltimes.com/Articles/2011/01/02/Permalancing-The-New-Disposable-Workforce" target="_blank">permalancing</a>, while popular among the twenty-something set,&nbsp;is not the most financially stable of pursuits. Health benefits are frustratingly difficult to come by, and nearly impossible to obtain as a freelancer. Any semblance of job security? Even less so.</p><p>Still, I find myself drawn to the romance and excitement of innovation. I am propelled by Chicago&#39;s recent crowning by Forbes as the new <a href="http://www.forbes.com/sites/johnhall/2013/08/30/why-chicago-is-a-new-hot-spot-for-entrepreneurs/" target="_blank">&quot;hot spot for entrepreneurs</a>,&quot; and inspired by the dream teams who came before us. I think of&nbsp;Steve Jobs and Steve Wozniak building the first Apple computers in Jobs&#39; Los Altos garage, ushering in a new wave of&nbsp;<a href="http://www.businessweek.com/innovate/content/jun2010/id20100610_525759.htm" target="_blank">startup culture</a>&nbsp;and a new generation of people&nbsp;working to&nbsp;elicit powerful, meaningful, and life-altering change from their own backyards, and on their own terms.</p><p>Perhaps millennials need to learn how to fall down in order to get back up again: to create, innovate, and <em>try </em>with boundless enthusiasm. After all, isn&#39;t putting ourselves out there&mdash;at least being able to say that we tried, that we didn&#39;t settle&mdash;better than remaining frozen in stifling, unfulfilling work environments for the rest of our lives, wondering, &quot;What if?&quot;</p><p><em>Leah Pickett writes about popular culture for WBEZ. You can find her on&nbsp;<a href="https://www.facebook.com/leahkristinepickett" target="_blank">Facebook</a>,&nbsp;<a href="https://twitter.com/leahkpickett" target="_blank">Twitter</a>&nbsp;and<a href="http://hermionehall.tumblr.com/" target="_blank">&nbsp;Tumblr</a>.</em></p></p> Thu, 10 Oct 2013 13:00:00 -0500 http://www.wbez.org/blogs/leah-pickett/2013-10/millennials-risk-and-economy-108886