Incubators, Innovators, and Instigators
Howard Tullman is a business futurist. He moves through Chicago’s commercial, educational, and technology corridors like an omniscient character from an unwritten Phillip K. Dick novel. Tullman has been a trial lawyer, fathered a dozen companies, manages two venture capital investment firms, and is the newly appointed CEO of 1871, Chicago’s (relatively) new technology incubator. 1871 consumes 50,000-sq.ft. of Chicago’s Merchandise Mart and was founded in May 2012 with backing from venture capitalist J.B. Pritzker and the state of Illinois.
Tullman has a vision for 1871 that isn’t clouded with dated thinking on what a technology incubator should be. He’s studied the space and is in the midst of tilling a hybrid victory garden that will be a fertile environment for startups with the right proportions of creativity, drive, business acumen, and guts. Let’s see what the 250 companies that call 1871 a business address can look forward to over the next few years.
Connected World: What is the difference between 1871 and a traditional incubator?
Tullman: Most incubators take an economic interest in the companies that they work with. They pick and vet their candidates like stocks because they’re essentially assembling a portfolio. They’ll provide shared space, mentoring, and education in the anticipation of growing bankable winners. 1871 is a nonprofit, originally developed to be more of a community hub for entrepreneurs. My 2.0 version is focused on developing self-sustaining businesses. That means on site exposure to capital resources, presentations to vertically aligned investors, and true advisors with sufficient time and interest to share their domain expertise. We’re adding enhanced connections and educational resources to the incredible amount of activity and energy here.
Connected World: Where would innovators be without incubators?
Tullman: They’d be lonely. Innovation can be a solitary business. Incubators provide camaraderie, emotional support, and encouragement. About 15% of our memberships are nighttime or weekend only and allow innovators with day jobs to pursue their dreams in some place besides the corner of a dining room table, the garage, or the basement.
Real innovation isn’t necessarily about creating human transports or phasers, it’s as simple as making an existing solution more efficient. If you can engineer a quantifiable percentage of efficiency into an in demand product or service, the business effect can be stunning. These kinds of innovations move things forward and make a difference. Elegant, streamlined processes will create more millionaires than flying cars and transparent metal.
Connected World: What did you learn from early incubators like Chicago’s famous divine interVentures and their Ziabatsu model?
Tullman: First and foremost, it’s not possible to be all things to all people. For example, many incubators would aggregate all types of companies and conduct demo days that were a hodgepodge of everything they were brewing in house. There was a strong current of assumptivegeneralism running through earlier efforts. For example, one mentor could be found advising a biotech firm one day and a software firm or food sciences firm the following day. This general approach doesn’t work because, apart from some business basics, startups really need direction from mentors who know a specific domain.
Our demo days will be more curated and will address vertical sectors. We’ll be expanding this system to other verticals and will begin to embrace things like gender (women’s businesses), education, financial services, and everywhere else that digital, marketing, and social technologies have coalesced to propel new businesses forward.
Connected World: Can you wrap any metrics around 1871?
Tullman: We conducted a survey in December 2013 of current 1871 members and alumni to estimate our economic impact on Chicago and Illinois. The study revealed that over 1,000 jobs were created by all 1871 member companies, more than 325 of which were created by 1871 alumni companies.
Almost $70 million of capital has been invested into all 1871 member companies, $32 million of which was invested into 1871 alumni companies.
1871 member companies have contributed over $31 million in revenue to Illinois’ economy, with more than $10 million generated by 1871 alumni companies alone. And we’re just getting started.
For more information on 1871, please visit http://www.1871.com and for more information on Howard Tullman, please visit his blog at tullman.blogspot.com
Steve Lundin for Connected World magazine.
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