Pando Daily and the Chicago Startup Scene

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Pando Daily, a fantastic new site about technology, startups, and other tech-related news published a post today titled The Midwest Mentality.  In it, the author Trevor Gilbert, outlines some accurate, and some not so accurate, observations about the Chicago tech scene.  (note, he wrote a post that he'd be in Chicago, willing to meet with anyone that wanted to chat with him. I missed that post so shame on me a little.)

He writes about why a Twitter or Facebook would likely never be born here.  Citing, among other things, an unproven business model and being dependent on multiple rounds of financing. The whole article is well worth a read. Unfortunately though, the main point he makes around "the problem" with the Chicago startup scene, and the thing he bases his entire article on, is wrong.  Or rather, it's incomplete.  He says:

Understanding the Midwest Mentality is key to understanding the entire Chicago ecosystem. It affects how startups are created, who gets funded and who gets accepted into the ecosystem. It is the glue of the shoe, the plugs in the boat and the sandy foundation all wrapped up into one.

He goes on, to state his main point:  

Although I’m coming from a different perspective, it appears to me that after having looked at the ecosystem from an outsiders’ perspective, the entire concept can be boiled down to one term: pragmatic.

This single statement shows me that the author misunderstands the motivations of most Chicago tech entrepreneurs.  It's true, many of us are pragmatic.  But why we're pragmatic seems to be irrelevant to him.  Without using the exact words, he touches on the whole "Lifestyle Business" dig that people often make:

Sure, being pragmatic has its benefits. Work a 9 to 5 job and see steady, predictable growth over time. You get a salary, and you are possibly acquired. You spend time with your family and get to send your kids off to college. That’s fine, but its not revolutionary, which is something that the technology industry – regardless of geography – is based upon.

If you've read my blog for any amount of time, you know this kind of tone makes my blood boil.  See Every business is a lifestyle business for more on that. Here's the thing he's missing.  Chicago Entrepreneurs are independent.  

Surely, sometimes to a fault, but understanding that it's this independent streak that causes the pragmatism is fundamental to understanding Chicago entrepreneurs.

Having to answer to investors seems not all that much better than having to answer to an employer.  Building a business without a revenue stream means we don't have the ability to sustain ourselves, and are therefore not independent.  Not being able to live the life you want to live because you're busy trying to make something "go boom" seems absurd.

The other thing is that a lot of tech entrepreneurs here don't think of themselves as "startups".  We think our ourselves as small businesses.  Technology is the vehicle, not the destination.

I guess my fundamental criticism of the article is that it seems they didn't ask "why?" nearly enough.  They think they found the "why" - we\'re pragmatic! - and what our goals should be - GROWTH! - and are viewing everything from that perspective.

The biggest problem with the Chicago Startup scene is the same problem we have with everything else, whether it be sports, business, or architecture.  We have an inferiority complex.  Unfortunately this article is going to do nothing to help with that.  But the biggest mistake the Chicago tech community could make is to try and be like the valley.  

It's true that the next Twitter or Facebook might not be born in Chicago.  You know what else wouldn't be born in Chicago though?  "Color": I'm just saying.

Mr. Gilbert mentioned that he'd never been in Chicago before this trip.  And I appreciate that Sarah Lacy and Pando Daily genuinely seem curious about what\'s going on in Chicago.  But if they're sincerely interested in Chicago's startup scene, they need to keep coming back, they need to keep digging, and they need to ask 'Why?' a whole lot more.

If anyone could do it well they could, and the Chicago tech community would be better for it.