– How Chicago’s Startup Ecosystem Is Meeting the Covid-19 ChallengeEstimated Reading Time: just 4 min

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Chicago’s last mayor, Rahm Emanuel, was fond of suggesting that “You never want a serious crisis to go to waste.” Although Chicago, along with every other major urban city and the rest of the country, has and continues to suffer mightily thru this pandemic, the truth is that–just as Rahm would often also note–the Covid-19 crisis has presented and accelerated opportunities for the city to accomplish things which people here thought were virtually impossible. New levels of cooperation, collaboration and commitment from businesses, civic and religious groups, and organizations of all sizes have positioned the city to enter 2021 with a vitality and vision for a better future that no virus can dim or vanquish. 

In many ways, this exciting path forward started with and continues to depend on a strong and stable startup community. In the past three decades, startups have created 40 million jobs and these jobs were the only net new jobs created in the U.S. economy. Chicago’s startup scene today is stronger, broader, more diverse, and more productive than it has ever been. Nowhere has the transformative power of passionate and persistent business builders been demonstrated more clearly and convincingly than right here in the City of the Big Shoulders. Creative destruction and disruptive innovation are the heart of entrepreneurship. Carl Sandburg’s poem Chicago called out the critical iterative steps of:

     Building, breaking, rebuilding.

It’s every great entrepreneur’s credo. 

Startups create new companies, which generate new jobs and create the kind of novel solutions essential to saving lives and surviving the past year. Since 2012, Chicago-based startups have created more than 16,500 jobs and raised close to $2 billion in investor capital, according to ChicagoNEXT and World Business Chicago. When the virus hit in March, early-stage Chicago companies, such as Rheaply, partnered with the city and built tools and exchanges to help local nonprofits and businesses source PPE. Others, like InstaShield, shifted production lines to quickly create masks and shields. Still others, like Lisa, developed service offerings and teams to provide support and assistance to frontline caregivers. Chicago’s central technology hub, 1871, which I led for many years as CEO, combined its efforts with other newer incubators focused on medical and manufacturing solutions, including MATTER and mHUB, to help develop new solutions and to expand access to their content, mentors and other resources across the tech and startup community. 

The Covid-19 virus forcibly accelerated 1871’s plans to move from an emphasis on a single physical location to a wider focus on the 1871 learning experience which could be more broadly shared. Moving digitally beyond its long-time home at The Merchandise Mart in the central business district, 1871 is piloting the delivery of its content and on-demand instruction to hundreds of online learners in 15 different Chicago neighborhoods and expects its reach to eventually touch every neighborhood in the city. 

These kinds of broadened and shared resource and access strategies are going to be essential in every major urban city to address pressing social and educational needs and demands. Once the virus is under control, and we have vaccines, we’ll need to address the historic vacuums in our cities and apply the many virtual tools we’ve developed and depended on to weather the current storms in order to avoid future and more painful societal disruptions. Covid-19 has taught us that we are all inextricably connected and that no one is an insulated or isolated island. No city can succeed in the long term that excludes or ignores important parts of its community and every business needs to be part of the solution. 

Interestingly, more traditional and larger businesses (with enormous, fixed costs and other overhead) have been far more adversely affected by the virus than Chicago’s agile and resilient startups, which have adapted and successfully seized upon new business opportunities across the board. In fact, many of the city’s largest corporations are looking to startups for support, suggestions and new approaches and solutions. For example, Abbvie and Mayo Clinic are working closely with THYNG to develop augmented reality medical applications.

While retail, restaurants, entertainment venues and real estate have probably been the hardest hit industries, aggressive tech-enabled startups have grown at a rapid pace in increasingly critical areas, such as telemedicine (Livongo, for example), digital learning (eSpark Learning and others), and especially logistics (FourKites, for example), as we move from a “just in time” world to a more conservative “just in case” approach. Chicago startups, like Forager, are enabling and leading the migration of large and small companies as they focus far more today on redundancy and resilience, rather than simply inventory management and cost reduction. 

Chicago has risen before from catastrophes–mostly famously, the Chicago fire of 1871. Overcoming Covid-19 and its lengthy and painful aftermath will not be an easy journey or one which the city, state, or even a well-intentioned federal government might simply solve for us. Success will require the commitment, sacrifice and cooperation of each and every citizen in every city. Chicago’s strong startup ecosystem and our people’s passion, persistence and work ethic have positioned our city to help lead the charge forward.

Author: Howard Tullman
Date: 2020 12 01

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