Pando Daily slaps Chicago in the face. Are we going to take it?

Matt Moog

An open letter to Sarah Lacy, the CEO of Pando Daily.

The team here at Built In Chicago has worked hard over the last year to tell the story of Chicago’s growing digital technology community.  We have been able to show that more than 30,000 people in Chicago are building world-class digital businesses.   We have told the world about the 128 new digital startups created in 2011 and the $1.4 billion in capital that was raised to fuel growth in every part of the ecosystem.  In fact, just last week the Wall Street Journal wrote a story about the recent growth of Chicago’s tech eco system. 

For these reasons it was with great disappointment that I read Trevor Gilbert’s latest blog post about his take on the “midwestern mentality”.  It was with greater disappointment when I saw that you quickly tweeted how his post was an example of why you sent your reporters on the road.  When you started Pando Daily I had hopes that you would have high standards.  Instead, so early in the development of your brand you sent your “entry level kid” (your words, not mine) to our great city and then praised his work that laid bare to even the most casual observer how little insight he seems to have gained during his fourteen days in our city. 

So if you are as you say  “unashamedly part of the startup community” and you “love it and are advocates for the best parts of it” and you will really “call out the worst parts of it”, I would encourage you to read on and tell me if Trevor really captured the essence of the digital startup community in Chicago.  Because I assume that when you say you love the startup community you are not just talking about Silicon Valley but about the larger national and international tech startup community.   I don’t think you want to send a message to Chicago, New York, Boston, Seattle, Austin, Los Angeles, Washington, DC London, Paris, Tokyo or any other growing tech community that the writers of Pando Daily think so little of them that they are willing throw around unsubstantiated insults about our entire community.

For example, do you agree with Trevor when he says that Chicago “is not a city built to house fast scaling products” despite Groupon being one of the fastest growing companies in the history of American business?  Do you stand behind his equally absurd assertion that “no “hot” startup could ever exist in Chicago”?  How do you explain Accel investing $30 million in Braintree and how did GrubHub raise $85 million from Benchmark and other leading venture capitalists?  How did MuSigma just raise $105 million from General Atlantic and Sequoia.  And all of this happened in the last 12 months.  

And when Trevor says it would be shocking to him if a “hot company” with “no revenue model” ever comes out of Chicago does he realize that Twitter actually recruited Dick Costolo, a two time Chicago entrepreneur to help them scale?  Did he know that Dag Kittlaus, the founder & CEO of Siri just moved back to Chicago?

And seriously, Sarah, as a new parent, how can you be ok with Trevor saying “ people here got married too soon” and that “means that the ecosystem can’t rely on the insane work hours of the independent, no responsibilities generation.” Because at the ripe old age of 19, Trevor believes that married people “need to go home at 7 or 8 to spend time with their kids and families”.  Seriously?  As a father of three writing this letter at 10:30pm on Sunday night, I would like to throttle Trevor for a) implying that parents don’t work their asses off juggling a startup and a family and then b) he makes spending time with your kids seem like it is a negative and spells certain doom for tech startups.   And by the way, when Trevor says he has “no recent census data at his finger tips” you might want to tell him he actually does and if he had done a single Google search he would have seen that he was flat wrong.  (the median age of first marriage is 29 in both California and Illinois)

When Trevor makes comments like these it really makes me wonder what he did in the two weeks he was here.  “Instead of working on a startup 24/7, employees take the weekend off and don’t work through the night. It doesn’t help in the creation of amazing technical feats, but it does allow people to have lives.” Seriously?  What is Trevor saying?  Technical breakthroughs are most likely to happen by single people? I wonder if I told him that good reporting is likely to be done by someone who is 29 rather than 19 if he would take offense? 

Trevor seems to feel we are missing the “radicalism” and “intensity” of the Valley.  So he sums it all up with this gem, “The steady life only gets you so far, but in the end, the pragmatism is both Chicago’s greatest asset and its greatest liability. Which really is the entire problem with the Midwest Mentality. Midwesterners have their priorities straight, but nothing generationally disruptive comes out of being conventional.”

Now remember, this “pragmatism” that Trevor says is our greatest liability he defines as figuring out a business model when starting a business.  Seriously Trevor?  Have you drunk the kool aid so completely that you think the reason Silicon Valley is a major tech center is because it is so radical and intense and doesn’t worry about business models?  Doesn’t it make you wonder why Sequoia suggests that a revenue model and pricing is a central part of a business plan?

Perhaps the real reasons for the success of any entrepreneurial ecosystem is the close cooperation of Universities, Venture Capitalists, Serial Entrepreneurs and the larger business and civic communities. We could debate cause and effect, but I am pretty sure that “not having a business model” is not high on the list of reasons that businesses of innovative ecosystems thrive.

Bottom line?  We get Silicon Valley is the big kid on the block.  We admire what you have done and are proud of your successes.  But don't have the hubris to think that other cities and regions can't be centers of innovation and entrepreneurism.  Because they are and frankly in a few years you might find the most unconventional and innovative things are happening outside your corner of the world. 

By the way, we are not the first region that Trevor saw fit to dismiss.

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Comments

Jeff Weber

Amen Matt. Let them think they are king of the castle. In the meantime we'll do what Midwesterners do best - continue to earn our spot. Eventually we'll get recognized, and at that point we might be #1. I like chasing the guy looking over his shoulder.

Brian Kung

Perhaps it's my age, but I agreed with most of what he said, if not the dismissive tone. Here's why pragmatism not a bad thing:

http://blogs.reuters.com/felix-salmon/2012/03/21/how-the-ipo-market-is-broken/ 

J. A.  Ginsburg

whoops...errata:  "in the post below" -- I originally posted these comments here,where that reference made sense!

J. A.  Ginsburg

1) It is always about the mix and the match. There is no point for Chicago to try to duplicate Silicon Valley, but rather take inspiration from the parts that apply. San Francisco is now reveling in developing a manufacturing culture (http://www.fastcompany.com/1825437/manufacturing-in-san-francisco) Well, Chicago has a much much deeper and broader manufacturing base than SV, Seattle, NY or Boston, probably put together. Mixed with tech, it could be a real signature strength. But these different realms really need to find ways to intersect more...

2) It is also about balance. Pragmatism has its charms. Every now and again,though, it is useful to step back from what's been built and ask, "What else could this be used for?" and simply to play, exploring the intrinsic possibilities of various technologies. When pragmatism becomes tunnel-vision, results are predictably limited and may completely miss the mark. But pragmatism also means a sensitivity for seeing where needs are. In the post below, I talk about some major opportunities for tech to help address resilience issues. Resilience is going to be the buzzword for the 2010s as the climate continues to shift and businesses worry about such mundane issues as logistics. This goes way beyond clean tech. My friend and former InSTEDD colleague, Robert Kirkpatrick, now heads up Global Pulse at the UN, which is doing some really interesting Big Data crunching to predict "slow crises" and improve humanitarian response. The World Bank has a competition for Climate Apps. New building materials using 3D printing techniques are entirely new tech dependent.

3) Although I celebrate regional differences and there are usually kernels of truth-in-labeling (e.g, "Midwest Mentality"), centers of innovation are developing everywhere. My friends at InSTEDD have spent the last few years developing innovation labs in developing countries. Their first, in Phnom Penh, Cambodia, started off with the first Barcamp ever in S.E. Asia. Three hundred people showed up. Last year, 3,000 people came to a Barcamp in Myanmar. The iLab is now completely Cambodian run and has developed software that has been used by NYC's public health department. Innovation can now come from every corner. My friends helped set the stage for a resilient network to develop. That's the alchemy—and why I am so excited about 1871. It's critical mass. Here is a q & a I did last year with Eduardo Jezierski, InSTEDD's CTO (formerly head of patterns and practices at Microsoft): iLabs: Community, Connection and a Culture of Innovation: a conversation with InSTEDD’s CTO Eduardo Jezierski

Antony vanZyl

Chicago is not Silicon Valley - a fact that has been made clear by many writers and local tech pundits. This is not a negative comment.

Chicago is Chicago and it has it's own strengths and weaknesses - what we here in the Midwest are all aware of is that Chicago is rising in terms of tech - but we are not Silicon Valley.

Instead of comparing the two, we need to insure that Chicago stands forth not in the shadow of any other place - but on it's own two feet. 

Chicago, especially the Chicago tech community as a whole needs to stop attempting to measure up and instead start selling itself. We continue to look west, east or even south for yardsticks to measure ourselves with. To hell with that - lets stand proud and exalt our accomplishments and begin a solid, formulated and bold campaign of insuring that Chicago is not judged by writers and pundits from extended compass points - but rather have our virtues (and shortcomings) highlighted from within.

This site is one step in creating that, but I will invite any tech company, any individual to contact me as we continue to develop a weekly television show about the tech industry with a strong focus right here in Chicago.

Antony van Zyl

Managing Director

eGEn.TV

Executive Producer

Tech Talk

Chris Conn

Matt - Thank you for taking the time to write this response. Any point Trevor may have been making that could be worthy of discussion is lost in gross generalizations.  By making the article about comparing Chicago to SV I think he completely misses several interesting and positive trends in Chicago. Trends that make Chicago the place I will likely happily live forever after spending 5 years in New York and 3 in California almost all in great internet businesses.  Things like:

  • the number of successful entrepreneurs who have had success in Chicago and are now investing time and money in startups
  • the approachability of mentors in chicago and their willingness to help
  • the number of people who did go west to SV or east to NYC and are now moving back and helping to build the eco-system here
  • How all of that is fusing together into a strengthening layer of support for new startups in the form of groups like Excelerate, Built in Chicago, LightBank, HPA, Firestarter.  And how that layer combined with the existing VC community, universities and more are making it more possible every day for a new startup to be successful.   

All of this together leads to the more interesting story of how fast we are changing, how these changes are helping us and where we will be after we keep this momentum up for the next 5 years.  I fully expect a few more of these articles as Chicago continues to grow our ecosystem and spread our wings.  I am thankful that we are developing the swagger to fight back and that we have the confidence to build our own unique startup ecosystem not a clone of someone else's.

I love Chicago and I look forward to building great businesses here.

Kathryn Born

I agree with 80% of Matt's letter. However, Chicago does have a propensity for quaint, technologically unsophisticated startups. You could make a case that Groupon brought zero new technology to the table. If you’ve got something where the value is the killer algorithm, a mathematical secret sauce, so to speak, our investor community - which has a lot of older folks who don’t’ even know how to jailbreak a Smartphone – won’t be interested.

Almost all of the greatest programming talent of the last 50 years has gravitated to Silicon Valley. Young programmers struck gold in the 80’s and 90’s and in turn because extremely technically sophisticated investors. They could invest based on code. I can think of maybe 5 investors in Chicago that could get through a code review.

So.. so what? More and more, our startups will grow up and invest, and the code will matter. And I know a few good startups that are moving away for that reason. My advice: let’s not be so sensitive, let’s just get some programmers involved in the VC community and let them help make decisions. I see some good names in the Firestarter fund.... we'll get there, it just takes time. 

Ellen Carnahan

The world is full of nay sayers.  Focus on who we are; why we are different; and why starting a business in Chicago is an advantage.  Guess what?  Business is about serving the customer's needs in a way that makes money for the shareholders and provides an excellent culture and working environment for the employees.  Call me stupid, but that "pragmatic" approach makes great sense. 

Jeff Carter

Thanks Matt, as I tweeted at you this morning, it makes me determined. I embrace my midwestern pragmatism.  Decided to write about it tomorrow at pointsandfigures.com.  You made some great points, and of course, I linked to your piece too!  

Mana Ionescu

Thanks for responding to this.

Anyone else think of math when reading something like this? All I can think of is how bad his math is (do they still teach "logic" as part of math classes?). Call me a "I grew up in Europe" Chicagoan, but I wouldn't invest a second or a dollar on someone with European airs, a swagger and bad math, unless it was a "made-in-Italy" shoe manufactured in Romania. 

Marcy Capron

@meagan yeah -- check my convo w sarah... I do definitely wish they'd used quotes. :/

Meagan Lopez

@Marcy - I guess that's my point - I wonder if he did actually ask anyone any specific questions, or just "hung out" with people...

Marcy Capron

@meagan lopez.... trevor did not interview me. he stayed with me for a bit and I intro'd him to some startup people/we all hung out and did dinners and whatnot but nah, I didn't personally lead to any of his conclusions I don't think?

Aleks Buterman

Matt - 

That was a very curious article... So curious that it elicited a very wordy response: 

http://www.builtinchicago.org/profiles/blogs/discipline-is-not-a-curse

Regards,

Aleks

Bob Geras

Matt,

Excellent rebuttal to this obviously biased 19 year old know-it-all, but it's likely that nothing you (nor anyone else) can say will make any difference. It's a classic case of "Don't confuse me with the facts, I've already made up my mind!".

Your question to Sarah: "I wonder if I told him that good reporting is likely to be done by someone who is 29 rather than 19 if he would take offense?"  makes the right point, but I'm sure will go right over their heads. After all, according to  that 19yr old Genius, you're just one of us Conventional Midwestern Pragmatists who could never come up with anything "generationally disruptive" so in their minds, nothing you (we) say is worth listening to.

Creativity and entrepreneurial thinking is a state of mind,....It happens right between the ears, NOT at any outside physical location. In that respect, anyone who has that entrepreneurial drive is ALWAYS "at work" no matter where he is nor what he is doing. Either you have it, or you don't. It has less to do with age or marital, parental status, and more to do with whether it's in your blood or not. If he was a true entrepreneur, he'd know that.....but obviously, since he doesn't get it... he is not one. That, more than anything else, explains his flawed and judgmental conclusions.

        Bob

    (Just your typical 74yr old Lifelong Midwestern Conventional Pragmatic Serial Entrepreneur and Incurable Deal Junkie, who, by the way, also has six children and 13 grandchildren.)

        

Joshua Hernandez

I would leave age out of this, mostly because everything else is sooooo ripe for the picking. But once you add age you give them a fallback and rightfully so. We can die for our country starting at 18, and because of that we can start companies at the same age ;).

Cate Conroy

Thanks for your response to this piece, Matt!

Natalia Rachelson

Matt,

Thank you so much for putting in words what we all have been thinking!!!  I was absolutely furious last night after reading this article.  Shame on PandoDaily.  First, Chicago wasn't worthy of a real reporter, they sent a toddler over.  Secondly, Sarah has been biased against Chicago for a while now.  While still at TechCrunch she wrote a big piece on why Groupon/Andew Mason will fail, and the reason is because they chose to start a company in Chicago vs. SV.  She is drumming up SV and that is all she cares about, SV and her investors pay her bills.  Most likely, none of Sarah's investors invested in Chicago; hence, what is the point of promoting any of Chicago companies. Agrhhhhh  

David Weinstein

Right on Matt!  Never let these guys believe their own BS!  We know we have a world class city for tech entrepreneurs.   Thankfully due to the momentum of the digital start up community over the last two years and the great community building of "Built in Chicago" the rest of the world will also come to see the wonderful tech assets of Chicago as the WSJ noted in their article last week! 

Greg Stevens

Well put Matt, Trevor should remember this piece of wisdom from Mark Twain "When I was a boy of 14, my father was so ignorant I could hardly stand to have the old man around. But when I got to be 21, I was astonished at how much the old man had learned in seven years." Just saying...

Brad Spirrison

 I didn't think it was possible for a Pando tree to jump a shark.

Marcy Capron

("I'm too busy..." as in my following suit that we're all making stuff. As we should be. Y'all get back to building, so that when you have a second to breathe we can talk about further fortifying this community!!!!!!!!)

Meagan Lopez

Brittany and Marcy - I'm curious what kind of questions Trevor asked you guys to come to the conclusion he did in this article.

Marcy Capron

I don't totally agree with everything being said.... probably mostly with Brittany on this one.... I stick to my comment on the article itself.

I see Chicago as a necessary complement to SV, see my twitter stream for convos w Sarah Lacy & Trevor on the matter. I hosted Trevor for a few days and I will agree, he's definitely a smart kid and he does have manners & all the makings to rack up experience eventually.

So I'll second the lovely Tim Jahn with I'm Marcy and I'm proudly building in Chicago. I'll write an exposé as to why when I get a second. I'm too busy launching a new subcompany. ;)

Matthew Hartman

An interesting back and forth about startups in Chicago. As someone who has worked for a "hot venture backed startup" on the east coast, this is why I moved to Chicago to start my company...http://www.builtinchicago.org/profiles/blogs/why-i-moved-to-chicago-to-start-my-company

Brittany Brittany

Great response Matt. I spent time with Trevor in Chicago and he's a smart, unexperienced, young journalist. I think the cost of his youth came through. He came in looking to find examples and explain the 'Midwestern Mentality' not to see what Chicago actually had to offer. I think his lack of experience shows through more than the lack of ambition in Chicago. Thanks for posting this. Speaking from NYC, LA and RDU experience, Chicago is doing all the right things.

Matthew Kemp

Reading the article and then the rebuttal I must say that I don't think Trevor has quite penetrated the start-up scene in Chicago.  I know plenty of Chicagoians that can tell you that pragmatism isn't a necessity in this city, and it's sad to see that he's misrepresenting the 'midwest mentality' because the midwest has spawned great companies and will continue to do so.

Meagan Lopez

Incredible response. Well-informed and a journalist who actually took some time to do some research before posting. Thank you for that. 

I think ridiculous journalism like what Trevor posted deserves a well-qualified response. We can't ignore it - Chicago deserves to have someone like you on its side. Looking forward to seeing how he/she can possibly respond to this post.

Ronnie Perchik

I invite Trevor to spend a week with my wife and I, both of who started our companies in 2008.  I doubt he would make it until Thursday............

Thanks Matt for being our voice. 

Jeff Judge

We've only got 6 hours to respond to this before the day is over, let's get to it.

Joshua Hernandez

nice read .. back to working smart so i can spend time with my family ;)

Bill Razzino

Nice job Matt! I am headed home early to play with the kids.  But keep up the good work! ;)

Erik Severinghaus

Almost forgot the classic Zuckerberg quote. I think you could replace "Boston" with "Chicago" quite easily.

 If I were starting now I would do things very differently. I didn’t know anything. In Silicon Valley, you get this feeling that you have to be out here. But it’s not the only place to be. If I were starting now, I would have stayed in Boston. [Silicon Valley] is a little short-term focused and that bothers me.

http://techcrunch.com/2011/10/30/facebooks-zuckerberg-if-i-were-starting-a-company-now-i-would-have-stayed-in-boston/

Tim Jahn

Steve Jobs' greatest regret was not spending enough time with his children.

I think Trevor's way off.  But I'll take that slap in the face and keep moving forward.

When it's all said and done, I know what I stand for and why I'm here.  And building the next Valley-hyped-social-photo-amazing-hyerlcoal-sharing-with-19-year-old-guys-named-Trevor app isn't why I'm here.

I'm Tim and I'm proudly building in Chicago.

Chris Courtney

Thanks Matt. The parent in me appreciates you stepping up to the plate. I'm guessing most of us put the kids to bed and then get straight back to work.

Speaking of back to work...

Bob Armour

If Sarah Lacy cares about Pando Daily's brand, she might want to up the quality quotient of her "journalists". Perhaps you'll be getting a call from her.... Your response was excellent.

Anne-Catherine Dargis

Matt, thanks for crafting such a great rebuttal on behalf of Chicago.  I'm still struggling to reconcile the problem with pragmatism; I'm just not sure why a clear path to revenue and work-life balance are detrimental to the health of our ecosystem...

Alex Griffiths

Nice work Matt. I'm with Alan - now its time to "Ignore the Bozos" and get back to it!

Bill Ready

Great response Matt!  Thanks for carrying the mantle for Chicago and all of us in the Chicago tech community!

John Roa

It's best to just ignore the valley's narcissism. It's laughable at best and scary at worst, but end of the day there is a reason we choose to build our companies in great cities like Chicago.

Erik Severinghaus

it essentially means that no “hot” startup could ever exist in Chicago. Aside from Groupon (again, more on that later), it will be incredibly shocking to myself, and to Chicagoans, if a company like Facebook or Twitter comes out of the area.

Just makes me think, "other than that, how was the play, Mrs. Lincoln?"

Great response, Matt. Saying that a "hot" startup couldn't exist in Chicago was asinine before Groupon and some of the other recent successes. Saying it now just reeks of trolling. 

Virginia Carlson

Matt - Perhaps another way to answer the "SV Challenge" is to champion Chicago successes as different from, and complementary to, SV.   We don't have to be SV, - it's a symbiotic relationship. Themes might include: 

1.  Chicago is a place where technology gets applied and creates real value.  The SV companies that Trevor Gilbert focuses on are all social media companies - with the possible exception of Google.  There are SV companies that are creating platforms and services that would have no revenue stream without "Midwestern values" to take them and make money.  We've got companies that are taking platforms and software built across the country and turning them into value streams (who's using all those Cloud Services for goshsakes? -e.g., Total Attorneys).

2.  Technology is not all about software and its not all about the internet.  It's about hard-wired products that create quality of life: medical devices, water technologies, CAD/CAM in manufacturing and architecture, enterprise solutions (Motorola).  This list continues....

Galen Mason

Great great response!

Scott McMillin

Nice response, Matt. I added a comment about my experience to Trevor's article.

Alan Warms

Matt -

My experience with these guys is ignore it. The story is pretty poorly written and so bad on the face of it (reasoning, etc.).  Let's not take the bait and just keep building great companies.  MY two cents: ignore

Al

Stella Fayman

Amen Matt! Great response...this reporter is guilty of seeking stereotypes and seeing them as success. Anything otherwise does not fit the paradigm and should be dismissed. Very Silicon Valley and very much against what I think PandoDaily wanted to do...

Andy Crestodina

He wrote that like it was a thesis, but with no data. Not impressed.

The hard-working, risk-taking, ass-kicking people of this city have nothing to prove to anyone.

Karthik Chandramouli

Recognize negative attention-seeking behavior for what it is, and treat the child accordingly. Go to your room Trevor, and come out when you stop hyperventilating. Child, please.

Josh Saunders

Great letter Matt.  Thanks for putting this together and standing up for all the great things happening here.

Mike Fisher

As a married parent who slept on the couch in the office last night (as I do twice a week), I agree completely Matt.  The fact that they have a 19 year old 'reporter' says a lot about Pando Daily.  Of course I remember how 'smart' I thought I was at that age, so we should go easy on the kid - but not Pando.

Nobody will really care about this article who matters though.  With great Midwest pragmatism, we'll just keep grinding away building products and services that customers actually care about.

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