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It's actually been a good couple of months for Groupon, the once-great standard bearer for the city's tech scene, in that people have stopped talking about their fall from grace (where grace=good stock qutoes). Lest we forget, Groupon opened trading at $26 per share in November, dropping in August to $4.20 or so, where it's hovered ever since. Gone are the accolades, the subsidized and fancy housing, the new gubernatorial advice sessions. Yesterday my roommate showed me they were offering $25 off a firearms class, asking, "What the hell?"
Chicago wants to compete for lucrative tech jobs, a growth industry at a time when that's mostly associated with taking care of the elderly. After the promise of Groupon dissipated, it's not clear where those jobs will come from. Pinterest was founded by a University of Chicago grad, but it's based out of Palo Alto and doesn't necessarily have the staying power of a Twitter or Instagram. Grubhub is doing well and Threadless partnered with Gap a while back, but neither seems to be growing. A Forbes study earlier this year looked at the best cities in America for tech jobs. They were Seattle, D.C., San Diego, and Salt Lake, while Chicago wasn't in the top ten, eons from being the "high-tech hub" Mayor Emanuel's looking for.
Now there's 1871, the "start-up incubator" that gets lots of press, but it hasn't produced any winners just yet. It's profiled in this month's Chicago magazine, and the article does a much better job than I of pointing out the stakes in the tech game. Author David Lepeska makes it sound like a promising idea with a good community and a few hot prospects. Not to be overly dismissive of 1871, but there were good community and a few stars on the University of Chicago football team when I was there, but I doubt they'll be showing up on Monday Night Football any time soon.
This, from a 2011 Marketwatch story on Groupon's halo, feels like it gets at the heart of the matter: "'We will need to hire 300 sales people if we get going,' said Joe Matthews, CEO of Poggled. 'That is an area where Chicago is fantastic.'" Chicago just isn't where people go to find techies, and my bet is that they never will, and that's down to what Lepeska calls "the Midwest mentality: an alleged predilection among local tech entrepreneurs and investors to play it safe." Richard Florida is called in to promise that Chicago's history of innovation can overcome this nuts-and-bolts way of thinking.
Thriving tech scenes around the world come out of nerdy local cultures built around electronics companies, and the attempt to re-create that inorganically strikes me as very similar to Rust Belt economies inculcating artistic "vibrancy" to bring about prosperity, one of Florida's ideas that Thomas Frank has pointed out is completely backwards and kind of sad. But the city seems to be doubling down on fostering primordial-soup-style entrepreneurship with the recent creation of ChicagoNEXT, a Pritzker-led initiative that will connect venture capitalists with more incubators. But look at the jostling for space in your app store and you'll see that it's not about creating more firms, it's about putting enough momentum behind the right one. And even then, you might have another Groupon on your hands. Hey, even Google will be overtaken, and there should be some hope for Chicago in that. But only as much as any other city in the world can have. While the city's best hope for a tech revival is named for a 140-year-old fire, it probably won't be seen as having the right attitude.