

Illinois's so-called tech leaders have failed the state - brandnewlow
http://www.sachinagarwal.com/illinois-so-called-tech-leaders-have-failed-t

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tptacek
Venture funding is a poor proxy for tech entrepreneurship anywhere but in a
few VC hubs; we should just stipulate that the majority of those dollars are
going to Palo Alto and Waltham no matter what Pat Quinn does. But no matter
where you locate, most tech startups aren't going to get funded.

That said, Chicago does very little (if anything) to support tech startups.

There is a "Chicago style" of startup --- 37signals and Threadless being the
most visible examples --- with bootstrap backgrounds and ethics. There are
things that Chicago could be doing to foster those kinds of companies, which
don't require financier gatekeepers, grow organically, and are less
speculative and volatile than valley shoot-the-moon companies --- which work
well for San Jose only because there's always another shoot-the-moon company
to fall back to when your current one fails.

Illinois could:

* Provide tax and fee incentives to technology startups

* Adopt policies that encourage development of tech-friendly office space outside of the loop

* Make its own internal processes more accessible to tech entrepreneurs, in the same manner as Data.gov, to create opportunities for companies to add value. Chicago's own IT infrastructure is, for instance, a shambles.

* Look for opportunities to work with local companies to showcase products and create calling cards for selling into the _huge_ prospective client base in the Chicago economy.

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sachinag
Thomas, I disagree with your proxy statement, but we can do that over IM.
Also, why stipulate? We can look at the data to see if that's true (and I
will).

Again, I do believe the per-capita data is the correct metric, as that
accounts for differences in population. While no one would be surprised that
California gets the most money, the per-capita figures might be of interest.

I'd love it if you wouldn't mind copy/pasting your comment to the post (even
with the first graf). It is being passed around political circles in
Springfield, and it'd be good for them to see it. The post is only looking at
the data (which proves that the leadership has failed); it is deliberately
silent on "why" and "how to fix". I want others to suggest those things before
I take a swing.

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tptacek
If per-capita dollars was the right metric, the Greater Los Angeles combined
statistical area would pull VC investments down to Southern California, which
is more than twice as large as the valley.

Similarly, New York startup investments would dwarf Boston investments.

Money goes to San Francisco because of a feedback loop set in motion and
sustained by a network effect. Fighting it is like fighting the tides.
Illinois doesn't have the will or the wherewithal to compete with the valley
on the valley's terms, and shouldn't bother trying.

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johnohara
I'm not an Obama basher but there's no way he (or Sen. Durbin for that matter)
can talk about the new 'entrepreneurial spirit' in America that's leading us
out of the current economic malaise and then point to his home state.

No politician in Illinois has ever met a tax s/he didn't like -- and passed
into law. The state budget is a mess, underwater by 11.5B, the governor was
recently impeached for attempting to sell a vacant Senate seat, the City of
Chicago is selling off it's expressways and parking meters for immediate cash,
in Cook County we have some of the highest sales taxes in the nation, that
budget is underwater too and state pensions pay more money to retirees than
was paid to them during employment.

Now look at 37Signals -- they're a great company, in the city, hard-working,
focused, and making money. They're tough-minded business people and for me, an
inspiration to keep working hard on my idea.

But I have no illusions -- the risk in Chicago is _always_ entirely your own.

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lacker
The Illinois state budget might be a mess, but heck, California has been
issuing IOUs and is nearly bankrupt. I'm not sure if the state budget
necessarily has anything to do with startup-friendliness.

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andreyf
_which is just 1.99% of all deals in the States_

Considering there are 50 states, this seems about... average?

 _Illinois averaged just 20th amongst the 50 states, DC, and Puerto Rico in
startup dollars per capita for the 2001-2007 period_

I think that means there are 32 other states/DC/PR doing worse...

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tptacek
As he points out, some of those 50 states simply get no startup activity; if
you pre-qualify the states and exclude places like Wyoming, we're below the
median.

On the other hand, Maryland is a bad example; Maryland has artificial
incentives for VC dollars, because of fedgov contracts.

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smock
This is particularly embarrassing as the state has a very good flagship tech
school at the U of I (the most visible internet product coming from there
being paypal, which ended up being based in California).

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tptacek
Yeah, those "web browser" thingies being a close second there. ;)

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slyn
As well as LLVM being the new up-and-comer of the group.

