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As entrepreneurs, we all know that Silicon Valley is the promised land of innovation that changes the B2C culture. The stature of the valley attracts the greatest innovators in the world; and as an incubator, this Californian hot spot promotes growth and feeds ideas that will one day create life-changing applications.
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Yet, perhaps the next wave of groundbreaking ideas will not come from the Silicon Valley model of creating consumer-centric apps, which often gain a billion users and have no revenue model, everything by moving towards valuable products that solve real problems.
Perhaps the next real opportunity for entrepreneurs lies in meeting the needs of other well-capitalized clients: corporations and mature businesses.
That’s why I predict that the next booming city of innovation will be Chicago. It is a city that has accepted the fact that it will never be a B2C superpower, even with Groupon on its list of mainstream game changers incubated.
Instead, this often neglected Midwestern city now draws its strength from its supply of highly saturated corporate headquarters, to focus on the day-to-day problems of companies that desperately need to be resolved. Chicago is going to be the next startup power for B2B innovation. Here’s how.
No Teamsters: Just Government and LikendisLikes Team Up
Historically, Chicago was not exactly known for its ethical policies. His government has been a source of controversy ever since, forever. But it is evolving and, by working together, the commercial and political spheres of Chicago are doing something good together. As a result, the city embraces the startup culture and entrepreneurship with unprecedented enthusiasm.
Two major illustrations of this symbiosis are 1871 and Matter, two of the country’s main incubators, both supported by the city and state governments. These epicentres of innovation are much more than a media opportunity; they connect great minds and break down barriers, so entrepreneurs and businesses think and work creatively, team up and thrive.
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“Companies are finding that the best way to bring real innovation to their businesses is to partner with startups that deal with specific areas,” said 1871 CEO Howard Tullman. “Our business partners work with 1871, not because it’s the right thing to do, but because they recognize that partnering with new, innovative companies gives them the best chance of staying ahead as their industries evolve. . “
It doesn’t matter (no pun intended) what your policy is, the results speak for themselves. And with hundreds of new businesses partnering with companies, building their own communities, and enjoying government support – these results are going in the right direction. “LikendisLikes no longer have a reason not to be successful in the Midwest,” said Steven Collens, CEO of Matter.
“Before, it was difficult to find capital, mentors and talent,” said Collens. “But that is not the case today. The Chicago startup community is validating technology, offering huge opportunities and helping to acquire customers and financing like never before. And for B2B and healthcare startups, it’s the promised land of giants like Abbott, Walgreens and other top companies [that are] looking for innovation. ”
The talent – and the value – of the Midwestern mentality
Silicon Valley has attracted some of the brightest minds and most astute entrepreneurs to adorn the planet: thinkers whose ideas have completely changed our culture and our way of life. As such, the bar is raised for talent who will thrive and be welcomed into a city of booming innovation already booming. On the corporate side, the hometown of Wall Street, New York, values extremes and opulence, and leaders who think big and live big in an incredibly crowded space.
Most Chicago entrepreneurs, on the other hand, are neither flashy nor dashing. They exist halfway between hooded and Rolex cultures. Typical backgrounds include a diploma from a large Midwestern university and counseling training – with a tendency to be hardworking, dedicated and disciplined. Now, incubate this potential in an environment like Chicago, and you have a recipe for success.
Young talents in today’s Midwest have been influenced by the culture of startups and have caught this contagious hunger. But their well-founded views and real-world experience support a more practical and problem-solving approach to entrepreneurship that appeals perfectly to the B2B market. They are ideally positioned to tackle obsolete industries with revolutionary enterprise products – intuitive solutions that make sense and have value.
“The Chicago innovation ecosystem is growing exponentially,” said Jeff Malehorn, President and CEO of World Business Chicago. “The combination of the 273 average digital startups launched here per year and our unrivaled talent pool propels Chicago [into being] one of the best cities for technology and entrepreneurship. “
A big city, but a small city: the perfect home
Chicago may be one of the largest cities in the country, but it has the vibe of a small city that was once the backbone of American entrepreneurship. Everyone feels a degree of separation, which makes it a paradise for networkers. This perfect storm of concentrated and successful entrepreneurs in a tight-knit community, with a friendly and helpful Midwestern mentality, makes Chicago a hotbed of innovative connections.
It also explains why the city government is moving into a new era of cooperative relationships with companies and entrepreneurs who have taken up residence in Chicago. This city may not be the first to value the relationships that fuel innovation or finance revolutionary technologies, but it is a powerful metropolis that sees how a dynamic and healthy corporate culture can enrich its population; and it’s starting to take advantage of it. Both sides bring a lot to the table, putting Chicago on everyone’s radar.
The “second city” roars
Chicago’s disparaging nickname “Second City” was sadly born of a statement by A.J. Liebling in a 1950s article at the height of Chicago’s rivalry with New York. Originally inspired by the boom in skyscrapers in the late 19th and early 20th centuries, the pseudonym has a new meaning in the city.
The designation of “second city” of Chicago is now adopted as the city takes its place behind another dominant metropolis; but this time it’s not New York, but Silicon Valley. A technology and start-up boom similar to that of the valley infected Chicago. But, as Troy Henikoff, CEO of Techstars says, “The thing with Chicago is that we don’t want to be Silicon Valley. You’re not going to see the next Facebook out of Chicago, but that’s fine. These are relationships in Chicago, so it’s the perfect place for B2B business, and the many Fortune 500 companies to develop there are proof.
“And the simple truth is that B2B businesses are booming here. Why fight this? It is moving Chicago faster than ever.”
Good money in Chicago
The Silicon Valley venture capital community is incredibly dynamic and provides entrepreneurs with the resources to build, iterate and grow. Chicago capital does not operate in idea-based investing: Chicago prefers to fund proven ideas and businesses that meet a particular market need.
Let’s make a comparison between the types of investors and the phases of the evolution of a startup: function, marketing and scalability. In this context, investors in the Midwest are definitely the latter. It comes down to the basics of business and finance, profit and loss, and the need to prove that an idea has an appropriate revenue model – before funding starts to flow. And it is only when this company remains solid that this capital will continue to flow in the next round.
Bill Pescatello, partner at Lightbank, told me, “Chicago being a B2B megapower makes perfect sense. It is full of people who absolutely define the entrepreneurial mentality. They know where their strengths lie and they will not pretend to be something that they are not. Chicago startups are solving specific problems and shaking up old methods that have been in desperate need of revision for a long time. “
We hear the term “smart money” all the time, but Chicago investors are connected to the community and provide not only capital, but something more precious: relationships and customers.
To understand this market, remember: Chicago is a big city, but also a small city. City leaders know who is who in each business and will do their homework to check on these sources if there is a real need in the market.
Once they see one, they’ll open all the right doors and bring entrepreneurs all the best customers. The reason is that the Chicago B2B market promotes the real-world business mentality: for B2B executives, paying customers are the best fuel to finance a successful business. It may not be easy to get capital in Chicago – but if and when you do, you will have the most powerful combination that capital and its assets can provide: namely, paying customers and dedicated investors.
Chicago’s new B2B orientation fosters a community of innovation and entrepreneurial-business relationships that don’t reflect the B2C model – and that’s great: in fact, I think it’s the next big thing.
So keep looking at Chicago, as it creates a booming city of B2B startups, encourages business innovation, and writes its own business model.
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