October 9th, 2014

kCura leading by example – bringing the national tech community to Chicago

Let’s hear it for kCura! Starting this Monday, kCura will be hosting its annual user conference - Relativity Fest - in Chicago. If you don’t know kCura you should. A fast growing technology company in Chicago – employing 100s – the company has taken the eDiscovery software mark by storm. Clients include leading consulting and law firms.

They are a great example of the types of companies that Chicago is the best at building.

What’s even more interesting is that they are bringing their user base to Chicago They’ll have 1,100 folks coming in from across the world, learning, exchanging ideas, networking, listening to Big Bad Voodoo Daddy  and more.. Andrew Sieja, the CEO, will also be giving a huge keynote the morning of Monday, October 13 and we can expect some big announcements.

All this activity is great for Chicago and kCura is really leading by example about what it means to be a leader in tech in Chicago. It’s a great chance for all of us to get behind them and showcase what Chicago tech is all about to people from all over the country. So if you see people out an about on the streets this week carrying kCura or Relativity bags – be sure to welcome them. I know I will. 

August 8th, 2014

More Than Coupons: The Reality of Chicago Tech

The success of Groupon is a feather in Chicago’s cap, but it has also colored general perceptions about the makeup of Chicago’s technology community. The latest example comes from Siri co-founder Dag Kittlaus, who recently urged local technorati to think bigger than “coupons” and instead step up to the innovation plate with game-changing ideas like nanomanufacturing and driverless cars.

That call to action is spot on and one we’ve been discussing at the Illinois Technology Association for quite some time. But missing from that discussion is a recognition that innovation comes in many forms. Groupon famously figured out how to use collective buying to make online deals worthwhile for participating merchants while simultaneously giving companies – especially smaller businesses – a new way to drive sales. Other local ventures have their own claim to innovation fame.

Modern technical mobility came out of both the University of Illinois (Mosaic browser) and the cell phone that was created by Motorola. The basis of all electronic trading on the NYSE is technology that was built on Wacker by Archipelago Holdings. SPSS defined the predictive analytics market that presaged “Big Data.” Orbitz revolutionized the way we purchase plane tickets and travel. NAVTEQ was the leading force behind mapping technology in the world.

Looking at this list and other examples, it’s clear that most people remain unaware of Chicago’s technology achievements. That’s because, unlike Groupon, most of them are B2B plays. These companies may be stars in their respective sectors, but they aren’t selling the headline-grabbing app or gadget that everyone’s mother knows about. That means they’re virtually invisible to the public and even to many tech VIPs.

The reality is that every business community has to play to its strengths. In Chicago, those strengths involve legacy expertise in core areas like healthcare, travel and hospitality, manufacturing and financial services that have grown and flourished for more than a century. Many tech startups and growth companies that take root here grow directly out of that fertile soil.

In the healthcare arena, for example, we have more than 200 healthcare tech companies – including publicly traded businesses like Allscripts and Merge – partly because we have a large base of domain experts ranging from hospitals to drugstore chains whose insights can help shape the products and services needed to support today’s medical-related information technology needs. 

Likewise in financial services, online brokerage firms OptionsHouse and TradeMonster set up shop here because of the city’s status as a leading commodity trading center. (Symbolically as well as practically, OptionsHouse is headquartered in the historic Board of Trade Building.) In May, the companies announced a merger that will create the largest options technology company in the country.

These companies may not have given birth to jaw-dropping inventions like Google Glass, but their contributions to how we live, work and manage our everyday activities are incalculable. So are their growing contributions to the Chicago economy.

The other issue is that innovation is frequently evolutionary rather than revolutionary. Just as new pharmaceutical drugs grow out of basic research, so do even the most knockout new technologies ride on the shoulders of what has come before.

Siri, Dag Kittlaus’ big payday, could not have been developed without underlying speech recognition technology that had evolved over several decades. Driverless cars like those now in development at Google cannot happen without a combination of radar, lidar, GPS, computer vision and artificial intelligence. Personal robots designed to do household chores are emerging from industrial robotics, motion planning, natural language processing and more.

So let’s give Chicago’s technology entrepreneurs their due. They’re working in the trenches every day. They include hundreds of startups as well as more than 1,000 growth-stage technology companies with revenues from $2 to $250 million and an average 20% annual growth rate. Many are being built on the pillars of Chicago’s established industries. Many others are in completely different sectors ranging from electronic discovery (kCura) and data storage (Cleversafe) to logistics (Arrowstream) and advertising (Centro).

The work these companies are doing may well lead to the kind of “big idea” that Dag was talking about. Meanwhile, there’s ample room in the technology universe for innovations both large and small. Chicago is solidly in the game and is increasing its influence on a daily basis with a diverse technology scene that goes far beyond coupons and apps.  One never knows what fruit will sprout from the seeds that are planted here in Chicago, but I am sure they will grow to redwoods over the next decade. 

August 1st, 2014

Grab the Wheel Chicago

This morning I read the following piece by Joe Cahill of Crain’s on Truck Club’s acquisition:  http://fw.to/40giOHO.  He couldn’t have been more clear or right:  Chicago’s strength as a tech capital will be defined by deals like this one. Whether it’s Spothero and Parkwhiz in parking, Analyte Health in healthcare, GoHealth in insurance and even GroupOn in marketing and advertising – many of our successes are based on combining domain expertise with technical know-how.

We must face the facts:  The success of large consumer based products and services are not our strongest suit. 

Our challenge as a business community in reaching success?   Recognize earlier where pieces of business have the opportunity to integrate.

For example, what if Sears or Marshall Field’s bought Trunk Club? What if a large local financial institution bought Braintree? It would keep the center of gravity in Illinois.   Moreover, if the Crain’s Top 100 largest corporations actively engaged with local entrepreneurs to drive the next 100 years of their business,  Chicago’s economy would expand exponentially.  We’re seeing this kind of success at TechNexus in this area already. 

Chicago has the capacity and opportunity to become the GLOBAL center of digital transformation for a dozen industries.  Are we going to miss the boat or are we going to get behind and take the wheel? 

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Fred Hoch is the CEO of the Illinois Technology Association (ITA) and Founder of TechNexus, a venture collaborative. This blog contains his musings on technology with Chicago at the pivot.