WBEZ | startups http://www.wbez.org/tags/startups Latest from WBEZ Chicago Public Radio en City moves to regulate rideshare companies http://www.wbez.org/news/city-moves-regulate-rideshare-companies-109639 <img typeof="foaf:Image" src="http://llnw.wbez.org/main-images/Screen Shot 2014-02-05 at 10.02.40 AM.png" alt="" /><p><p>The days of Chicago&rsquo;s Wild West of ridesharing services may be numbered, if the city has its way. The Mayor&rsquo;s office introduced new rules at Wednesday&rsquo;s City Council meeting, aimed at bringing the technology companies into the regulatory fold. But the move is already angering some who say the city should use its existing regulations for taxicabs and livery vehicles, rather than create a new set of rules.</p><p>&ldquo;This is a new industry that&rsquo;s still in the early stages and we wanted to step in, create some requirements that provide for public safety and consumer protection, but do that without essentially regulating the industry out of existence,&rdquo; said Michael Negron, Chief of Policy to the Mayor.</p><p>The proposed ordinance creates a new category of commercial vehicle transportation, called &ldquo;Transportation Network Providers,&rdquo; meant for technology companies that connect people who need rides, to people who have cars. Currently, this would include companies like Lyft, Uber and Sidecar, which have operations in Chicago. Unlike taxi drivers, people offering rides with these services use their personal cars, which do not have to be registered with or inspected by the city. The drivers also do not have to undergo training or licensing as public chauffeurs.</p><p>&ldquo;Now that the industry&rsquo;s been up and running for a bit, we want to be able to step in and impose what we think are ultimately some common sense requirements,&rdquo; said Negron, &ldquo;that ensure that when people step into a rideshare vehicle they know that the driver has gotten a background check and the driver&rsquo;s been drug tested and that the vehicle has been inspected and that they&rsquo;re getting the fare disclosed to them.&rdquo;</p><p>The ordinance would require the companies to register with the city and pay an annual $25,000 licensing fee, as well as $25 per driver with their service. It would also subject the companies to the city&rsquo;s ground transportation tax &mdash; $3.50 per day, per vehicle, for each day that the vehicle is used in Chicago for ground transportation. Additionally, the vehicles would have to display signage or an emblem that identifies their ridesharing service, and would have to be inspected annually by the city.</p><p>But perhaps the most significant cost that the rules would require are general commercial liability insurance and commercial automobile liability insurance policies of $1 million per occurrence.</p><p>&ldquo;Uber&rsquo;s existing policy meets that requirement,&rdquo; said Andrew MacDonald, Regional Manager for Uber Midwest. &ldquo;The basic premise is our insurance policy, as designed with our carrier, does cover a driver on an Uber trip regardless of the personal insurance policy.&rdquo; The company, however, declined to share a copy of that policy with WBEZ.</p><p>Several drivers, some of whom asked not to be named because they still drive for&nbsp; UberX and Lyft, told WBEZ that they were offered little or no detailed information about the companies&rsquo; insurance policies when they went through their orientation sessions.</p><p>&ldquo;People asked about what to do if there were problems,&rdquo; one said, &ldquo;but the answer was always to call Lyft Support,&rdquo; a hotline that the service provides for its drivers. &ldquo;They verified my insurance,&rdquo; said another driver for UberX, &ldquo;but never explained anything about what would happen in the case of a very bad accident.&rdquo;</p><p>Lyft, too, claims to carry an insurance policy of $1 million per occurrence, but it is an &ldquo;excess policy&rdquo; that kicks in after the driver&rsquo;s personal insurance has been used. The proposed ordinance would no longer allow this.</p><p>&ldquo;For us, it&rsquo;s like we are completely on board with provisions that increase consumer safety,&rdquo; said MacDonald, referring to the idea of new regulations. &ldquo;But beyond safety issues, I think controls on pricing, overreach on information, limitations on where cars could operate &mdash; all of that stuff starts to be not about safety, but starts to be about protectionism, and doesn&rsquo;t benefit the consumer, and doesn&rsquo;t create jobs, so that&rsquo;s where I get really concerned,&rdquo; he said.</p><p>The ordinance proposes that drivers with the services may collect fares determined by distance or time, or that are predetermined, or that are suggested donations. It would no longer allow the companies to apply formulas that calculate fares as a combination of time and distance. It also does not address &ldquo;price-surging&rdquo; or &ldquo;prime time tipping&rdquo; &mdash; a practice where Uber and Lyft hikes their fares when demand is high.</p><p>&ldquo;This ordinance is simply enabling an illegal activity which is a cab-like activity to take place,&rdquo; said Pat Corrigan, owner of The Yellow Group LLC, which operates Yellow Cab in Chicago. &ldquo;So this is not something the cab industry can stand by and see.&rdquo;</p><p>Corrigan and others from Chicago&rsquo;s cab and livery industries say they are prepared to file a federal lawsuit against the City of Chicago to compel the city to regulate ridesharing services the same way as their industries.</p><p>&ldquo;The public transportation system, which is the taxi system as you know it, has all these rules and regulations,&rdquo; he continued, &ldquo;including it can&rsquo;t charge more than the meter. UberX, Sidecar and Lyft, can charge basically anything they want.&rdquo;</p><p>Corrigan noted that cab companies must offer worker&rsquo;s compensation, use vehicles that are less than four years old, accept forms of payment other than credit card, and service all neighborhoods of the city &mdash; requirements that are not part of the proposed rules for ridesharing companies.</p><p>The arrival of ridesharing companies has certainly complicated the city&rsquo;s position. Under Mayor Rahm Emanuel, the city has touted itself as technology-friendly, and appears to have dropped early objections to Uber&rsquo;s taxi operations in the city. But at the same time, Chicago brings in tens of millions of dollars each year in taxes and fees from taxis &mdash; an industry whose value rests largely on maintaining the value of the medallions.</p><p>&ldquo;It&rsquo;s certainly not good for the medallion system,&rdquo; added Corrigan, &ldquo;because you have another system that&rsquo;s competing &mdash; a private system of transportation &mdash; for some of the people in the city that can afford it, competing against the public system.&rdquo;</p><p>Taxicab medallion owners and lenders have been nervously watching the growth of ridesharing in the city, worried that it may undermine the value of their investments. Medallions, which the city issues in limited number to license taxis, are valued at roughly $350,000 apiece.</p><p><em>Odette Yousef is WBEZ&rsquo;s North Side Bureau reporter. Follow her <a href="https://twitter.com/oyousef">@oyousef</a> and <a href="https://twitter.com/WBEZoutloud">@WBEZoutloud</a>.</em></p></p> Wed, 05 Feb 2014 09:55:00 -0600 http://www.wbez.org/news/city-moves-regulate-rideshare-companies-109639 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 Venture: A business school shark tank for aspiring CEOs http://www.wbez.org/story/venture-business-school-shark-tank-aspiring-ceos-87736 <img typeof="foaf:Image" src="http://llnw.wbez.org/story/photo/2011-June/2011-06-13/Booth School U Chicago_Flickr_Ben Casawood.jpg" alt="" /><p><p>It’s graduation season – and lots of grads are hitting the job market. But some are choosing an opposite direction - they're hatching their own companies – hoping to become the next Mark Zuckerberg. At the University of Chicago Booth School of Business, a course on how to do exactly that is now one of the hottest things on campus.</p><p>Michael Toporek is trying to be kind. He's an investment manager helping judge an early round of the New Venture Challenge. That’s a competition and a class at the Booth School of Business. Teams of students present their ideas to investors, and the winners take home thousands of dollars to help run their companies.</p><p>Toporek is telling a team they're kind of lacking gumption. &nbsp;</p><p>MICHAEL TOPOREK: if you really think that those numbers are true, I would shake your hand, thank you, think you were intelligent and wish you the best of luck.<br> <br> Rafi Aviav is one of the students explaining their idea for investment strategy software. He tries to defend his team's financial projections but then commits a cardinal sin – he admits they lowballed the numbers.<br> <br> AVIAV: We're always encouraged to be ambitious and accurate, I think, but we really were quite conservative.<br> STEVE KAPLAN: You guys have to leave.<br> WAVERLY DEUTSCH: You're not allowed to use that word.<br> &nbsp;<br> It's early April, and the teams are still a bit rough around the edges. And the stakes are high – By the end of May, when the top 10 teams go to the finals, $75,000 in prize money hangs in the balance.<br> <br> Aviav originally came to Booth from Israel to study finance but contracted startup fever.<br> <br> AVIAV: I have a good friend, who's Uzi Shmilovici, who started PipeJump and was in last year's competition and just recruited $1 million from VCs, so to me, Chicago is just an amazing place and a real hotbed for entrepreneurship.<br> <br> Business plan competitions are nothing new.&nbsp; More than 50 universities have them, including top schools like Harvard and Wharton. But for a school like Booth that's been known for its focus on number-crunching and finance, the increasing popularity of entrepreneurship is dramatic.<br> <br> More than 65 companies have emerged from the New Venture Challenge in the past 15 years. They've raised about $150 million in venture capital. A third of that has come in the past year alone.<br> <br> Steve Kaplan is one of the professors who runs the course. He says it's not much like any other class.<br> <br> KAPLAN: I don't really teach anything.<br> <br> Instead he pushes the students to figure stuff out on their own – and not just on paper. The best companies in the class are already up and running, with students juggling tests and customers at the same time. He says the students are the ones in the driver's seat, but:<br> <br> KAPLAN: We give them premium gasoline so they can go faster than they would have gone if they weren't doing the class.<br> <br> That includes recruiting judges from Chicago's top venture capital firms. Lon Chow is a general partner with Apex Venture Partners, which manages a $140 million fund. He says the New Venture Challenge has opened his mind to investing in companies started by students.<br> <br> CHOW: The last thing you want to do is have a bunch of newly minted MBAs learn on your dime about starting businesses, and I think they've done a phenomenal job of just improving, attracting really talented students.<br> <br> And those students are going off and creating real companies.<br> <br> MATT MALONEY: These are all people who are getting restaurant menus and entering them into the web site, and then behind you is some phone sales.<br> <br> Matt Maloney is giving me a tour of his company – you may have heard of it – GrubHub, a web site for ordering takeout. He and co-founder Mike Evans won the New Venture Challenge in 2006. But Maloney says almost no one would have picked them as winners in the beginning.<br> <br> MALONEY: When we went in, we were just two young scrappy entrepreneurs thinking we had the greatest idea ever, so we got up for our first presentation and pretty much said, here it is, isn't it great? And they all kind of resoundingly said, 'What the hell are you talking about?'<br> <br> He says they needed to show how they could make money on each transaction. So they went back to the drawing board, retooled their presentation and won. Now they've raised more than $34 million in venture capital.<br> <br> The GrubHub guys are legends to current Booth students like Nik Abraham.<br> <br> NIK ABRAHAM: Yeah, you kick it off by saying we're Sibylus and then introduce everyone and then Ingram will start.<br> <br> It's a Sunday afternoon, and Abraham and four other students are holed up in a classroom rehearsing.<br> <br> MATT KOPKO: Alright, hey guys, I'm Matt, this is Ingram, this is Julian, Nik and Jason here and we're Sibylus. We're doing essentially digital coursepacks.<br> <br> Their company is called Sibylus – yes, they know it sounds like syphilis and they're trying to come up with another name. But they're more certain of the concept – circumventing the expensive collections of newspaper and journal articles called coursepacks that professors make them buy for almost every class. Their company searches databases and the internet to provide students with links to the articles for much less money. And they're already in business – they sold 200 coursepacks to fellow Booth students this semester. Abraham says the idea for the company arose from a universal gripe.<br> <br> ABRAHAM: Students sign up for classes, they go to the bookstore, they complain about waiting in line and paying all this money, they come back to the Winter Garden and have lunch with their friends and everyone will be complaining about it. So that's when I realized so many people are experiencing this pain, there's definitely something we can do about it.<br> <br> Since they launched in March, Abraham says running the business has eclipsed everything in their lives. His team is part of a trend toward entrepreneurship that accelerated as the economy worsened. According to the Kauffman Foundation, last year the percentage of people who started businesses was at its highest in 15 years.&nbsp; As for the New Venture Challenge, Abraham says they'd love to win, but what they really want is a successful company.<br> <br> ABRAHAM: It would not be a good outcome if we won the NVC and flopped.<br> Turns out, they cross the first hurdle and make it to the finals.<br> <br> There, they face some stiff competition.<br> <br> SWINGBYTE INTRO: Good afternoon, thank you for your time and for the opportunity to introduce you to Swingbyte, a revolutionary golf training device using your smartphone, tablet and computer,<br> LINEJUMP: We are LineJump – a mobile application that allows you to open and close a tab from your smartphone.<br> AGILE DIAGNOSIS: Good afternoon, we are Agile Diagnosis and we develop web and mobile applications that help doctors and nurses more accurately and efficiently diagnose their patients.<br> <br> After each presentation, judges mingle with students, swapping business cards and maybe sowing the seeds for potential investments. I chat with the folks behind Agile Diagnosis, the company that makes medical software. Jon Lee is studying to become a doctor and get his MBA, but he plans to take a leave of absence to work on the company. His parents are not happy.<br> <br> LEE: My mom was just saying I don't understand over and over in Korean.<br> GROSS: What was it in Korean?<br> LEE: Actually that part was in English, but it was in a Korean accent, so it was like Konglish. 'I don't understand. I don't understand.’<br> <br> But maybe this will help her come around – Agile Diagnosis won first place and took home $25,000. It's a little reassurance as her son rolls the dice on his dreams of building a company. And the Sibylus guys? They won second place. They admit first place would have been nice, but they're happy to get this stamp of approval as they set out to woo investors.</p></p> Mon, 13 Jun 2011 05:11:00 -0500 http://www.wbez.org/story/venture-business-school-shark-tank-aspiring-ceos-87736 Chicago's startup scene: The one that got away http://www.wbez.org/blog/city-room-blog/chicagos-startup-scene-one-got-away <img typeof="foaf:Image" src="http://llnw.wbez.org/apps-bump.png" alt="" /><p><p>You&rsquo;ve heard of <a href="http://www.groupon.com/chicago/">Groupon</a>. How about <a href="http://bu.mp/">Bump Technologies</a>? For Chicago, Bump is an example of the one that got away. <br /><br />David Lieb and his friend Jake Mintz hatched the company at the <a href="http://www.chicagobooth.edu/">University of Chicago Booth School of Business</a> when they discovered in that flurry of the first few weeks of school that they really, really hated manually typing all their new friends&rsquo; contact information into their phones. <br /><br />So, along with their friend Andy Huibers, they figured out a way to &ldquo;bump&rdquo; two phones together to transmit that contact info. And their new smartphone application was born on March 27th, 2009. Things moved fast from there - they won the school&rsquo;s <a href="http://research.chicagobooth.edu/nvc/index.aspx">New Venture Challenge</a> business plan competition and in the summer of 2009, just like Gold Rush era miners of yore, they packed up and headed to California. <br /><br />They didn&rsquo;t go with the intention of staying. After all, Lieb and Mintz still had another year of B-School ahead of them. But like lots of good tech companies, the train barreled down the tracks at breakneck speed. <br /><br />They took part in a summer business incubator program run by <a href="http://ycombinator.com/">Y Combinator</a>. By the end, they got a big, fat $3 million check from the venture-capital firm <a href="http://www.sequoiacap.com/">Sequoia Capital</a> and some Valley angel investors. <br /><br />But just because they got the money there didn&rsquo;t mean they had to stay. They could have come back to Chicago. But they didn&rsquo;t. They opened their headquarters in Mountain View, California, and now have 15 employees there and are &ldquo;aggressively hiring.&rdquo;<br /><br />Lieb says the main reason was because Huibers lived in California already. But there was another reason that speaks to Silicon Valley&rsquo;s dominance. <br /><br />&ldquo;We knew we needed to hire a bunch of people, and being here in the Valley is really where all that technical talent is,&rdquo; Lieb said in an interview. <br /><br />And even though they did talk with venture capitalists in Chicago, there aren&rsquo;t as many of them and they&rsquo;re more cautious, Lieb says. <br /><br />&ldquo;Here in the Valley, firms are okay with putting in $3 million to $5 million to $7 million in a Series A deal for a completely unproven company with some idea they want to build,&rdquo; he said. &ldquo;Whereas in Chicago, you have to convince people a bit more about what&rsquo;s your business model, how are you going to make money. Those things aren&rsquo;t as big a deal here in the Valley.&rdquo;<br /><br />These are the things that have perennially kept Chicago as an also-ran instead of a tech heavyweight. But big changes are afoot. <br /><br />All of a sudden, business incubator programs are popping up here. This year, <a href="http://www.exceleratelabs.com/">Excelerate Labs</a> launched in Chicago, mentoring 10 startups over the summer and providing them seed money in exchange for an equity stake.<br /><br />Mad-dash weekend-long incubator programs like <a href="http://chicago.startupweekend.org/">Startup Weekend</a>, <a href="http://chicago.theleanstartupmachine.com/">Lean Startup Machine</a> and <a href="http://www.socialdevcampchicago.com/">SocialDevCamp</a> have also arrived. They throw developers together with the hope of hatching viable business ideas by the end. And in September, 1,500 people attended the first-ever <a href="http://midventureslaunch.com/">midVentures Launch</a> conference, at which 35 startups presented their ideas to investors. <br /><br />&ldquo;We don&rsquo;t have a lot of places where startups can go to get information on raising funds and developing their technology,&rdquo; says Jon Pasky, senior vice president at MidVentures. <br /><br />But increasingly, there are more places like that. This summer, a space in the West Loop called the <a href="http://syncubator.com/">Syncubator</a> opened up. It provides desk space and advice to budding entrepreneurs.&nbsp; And its founder, Mike Rhodes, is launching a $5 million early-stage investment fund. <br /><br />Groupon, of course, though, is the big kahuna. Groupon founders and serial entrepreneurs Eric Lefkofsky and Brad Keywell started a $100 million investment fund called <a href="http://lightbank.com/">LightBank</a> earlier this year and have invested in eight startups so far. They&rsquo;ve become evangelists for Chicago as a rival to Silicon Valley. <br /><br />&ldquo;Eric and I are outspoken about the awesomeness of Chicago and of the ability to do great things right here and continue the heritage of our city, which is make no small plans,&rdquo; Keywell said in an interview. <br /><br />Lots of people are paying attention to this activity &ndash; including startup entrepreneurs who are weighing whether to stay here or tread down the well-worn path to California. Chiara Piccinotti cofounded her company, <a href="http://www.applyinthesky.com/">Apply in the Sky</a>, with a friend last year when they were both applying to business school. They created software that manages that process for you &ndash; keeping track of deadlines and application requirements. Piccinotti now goes to business school at the University of Chicago and is running her company at the same time. <br /><br />Their office is in San Francisco, where Piccinotti&rsquo;s cofounder, Emily Chiu, lives. So will they stay in California? Is there any chance they&rsquo;d move the company here? <br /><br />&ldquo;What we&rsquo;ve found so far is the resources at this point are much greater in the Valley, especially for a web venture of this sort,&rdquo; Piccinotti says. <br /><br />But she acknowledges the environment in Chicago is abuzz. <br /><br />&ldquo;Chicago&rsquo;s an exciting place to be in right now because it does feel like there&rsquo;s this excitement around Groupon,&rdquo; Piccinotti says. &ldquo;Things are changing. But to say that it&rsquo;s the same as the Valley now &ndash; it&rsquo;s a bit premature. When you move out to San Francisco, you see friends around you starting companies and you just feel it everywhere. You want to go out on your own and start something innovative. Here, it&rsquo;s great, but it doesn&rsquo;t sweep you like the Valley.&rdquo;<br /><br />&nbsp;</p></p> Wed, 15 Dec 2010 12:00:00 -0600 http://www.wbez.org/blog/city-room-blog/chicagos-startup-scene-one-got-away Groupon ignites Chicago startup boom http://www.wbez.org/story/andrew-mason/groupon-ignites-chicago-startup-boom <img typeof="foaf:Image" src="http://llnw.wbez.org/IMAG0315.jpg" alt="" /><p><p>Now that the dust has settled and it’s clear the online discount company Groupon has reportedly walked away from six billion bucks from Google, we wanted to find out what else is going on in Chicago’s tech scene.&nbsp; Turns out, the hog butcher for the world may in fact be moving toward a cyber future.<br> <br> Ashish Rangnekar unlocks a door in Groupon's sprawling headquarters in the old Montgomery Ward building.<br> <br> He’s leading me to the office of Watermelon Express, his test-prep software company.<br> <br> RANGNEKAR: And then we are here.<br> <br> In this building, Watermelon Express is like a tiny barnacle stuck to the side of the Groupon battleship.<br> <br> It’s an example of how Groupon is transforming the culture of Chicago, creating the right atmosphere for small companies like this one to get a start.<br> <br> RANGNEKAR: I would say the last nine months have been phenomenal. I would not want to be in any other city but Chicago right now.<br> <br> And here’s the lineage to Groupon.<br> <br> Eric Lefkofsky and Brad Keywell are serial entrepreneurs who bankrolled Groupon.<br> <br> They discovered Rangnekar at the University of Chicago business school and funded his company in July.<br> <br> It’s one of eight startups they’ve invested in this year out of a new $100 million dollar fund.<br> <br> Keywell says Chicago's tech scene is starting to get the ego it needs to rival Silicon Valley.<br> <br> KEYWELL: There are enough successes now in our community that young entrepreneurs can look at those successes and say to themselves I can absolutely do it here, I can do it here in a unique way that I probably couldn't do it on the West Coast, and time to go, let's do it.<br> <br> And that's a big change.<br> <br> This city has long trailed Silicon Valley, New York, DC, even Dallas-Fort Worth in tech jobs.<br> <br> And get a load of this – Netscape, PayPal, YouTube – those could have been Chicago companies.<br> <br> Their founders studied at the University of Illinois but then quickly left for Silicon Valley.<br> <br> Groupon founder Andrew Mason says Chicago lacks a kind of entrepreneurial savvy and he says that even applies to himself.<br> <br> MASON: It didn't even really occur to me that there were people out there who would give you money on the promise that maybe someday it would turn into more money. I just was lucky enough to work for Eric Lefkofsky, who heard about one of my ideas and said hey, stupid, why don't you drop out of school and we can turn this into a company together?<br> <br> There are lots of theories about why the city’s lacked that entrepreneurial spark… everything from an aversion to risk to a fear of failure.<br> <br> But now long-time observers like Steve Kaplan say Chicago is becoming more of a place to launch great business ideas.<br> <br> He's a professor of entrepreneurship at the University of Chicago.<br> <br> KAPLAN: I've had in my office a couple of East Coast venture capital firms saying we now view Chicago as a place to look for businesses – that didn't happen, that hasn't happened in my memory.<br> <br> Chicago investors are also getting in on the action.<br> <br> INVESTOR: I may have blanked out but did you say how much money you're looking for and what you're going to do with it?<br> BUSINESS OWNER: Yeah, we'll be looking for approximately $500,000.<br> <br> At this event called the Funding Feeding Frenzy, CEOs pitched their ideas to investors.<br> <br> Scenes like this have been taking place a lot this year in Chicago.<br> <br> As for what it would take for Chicago to become the next Silicon Valley, Andrew Mason of Groupon has this characteristically goofy take.<br> <br> Remember, he’s the kind of CEO who once hired a man to walk around the office in a tutu just for laughs.<br> <br> MASON: What’s made Silicon Valley Silicon Valley is the fact that there have been a lot of great companies that start there and then they get big and they get too big and they become a sucky place to work and then all those really smart people that learned so much go off to start their own things. So I think for Chicago to really develop a strong technology community, we need companies like Groupon to get really big and then start to suck and then for all our people to go off and do other things. So I'm actually against the idea of Chicago becoming a technology hub. I just want everybody to work for us and never leave.<br> <br> He’s mostly joking, but he has hired almost 900 people in Chicago this year.<br> <br> That alone isn’t enough to create another Silicon Valley, but with other new companies cropping up, it’s a good start.</p></p> Wed, 15 Dec 2010 06:01:00 -0600 http://www.wbez.org/story/andrew-mason/groupon-ignites-chicago-startup-boom