Five Chicago CEOs, founders and executives generously gave us their thoughts on the future of Chicago tech. Overall they were quite optimistic on the future of Chicago tech, seeing the industry overcoming even its biggest challenges in 2015. Their thoughts range from venture capital flow to rising companies, and everything in between.
Predictions below from:
, CEO & founder of YCharts
, CEO & founder of Centro
, CEO of 1871
Will tech and startup growth in 2015 surpass 2014?
MM: The momentum will continue into 2015. On every metric: job growth, funding, M&A activity, and breakthrough success stories. The Chicago technology community is on fire.
SR: I don’t believe we’re going to see the same level of angel and VC funding we experienced in 2014. It feels to me as if the market is tightening. However, I feel M&A is going to surpass 2014. The perfect climate exists for a strong M&A market: high equity prices, strong corporate cash reserves and plenty of start-up companies finally at scale that can have a material impact on an acquirer.
HT: Growth will continue in terms of (a) the number of businesses getting funding and (b) the amount of available capital for early stage companies as well. M&A transactions will increase as more and more corporate venture arms increase their local activity and connections with local, young, innovative companies in their market sectors.
How do you think the startup community will be different in 2015?
SC: The startup community in Chicago continues to mature. Quite a few companies were started in the last 5 years and are now moving from startup to growth phases.
MM: With 2,500+ companies and 50,000+ tech workers, and 1.6 billion in funding over the past year, Chicago is a vibrant and growing community of passionate technologists, designers, marketers and entrepreneurs all making it happen. We now have more than 50 seed and early stage investors who help fund hundreds of new startups every year.
SR: In Chicago, I feel we’ve done a great job of breeding start-ups and now companies that need to find ways to start generating real revenue and hit hockey stick growth curves. So I believe the focus will shift from start-ups and incubators to supporting the successful companies that generate real and sustainable growth rates and revenue.
HT: A greater focus on “real” B to B businesses and less emphasis or support for pretend social businesses and services which aren’t sustainable or scalable business models.
How will Chicago continue to strengthen its tech community in 2015?
SC: The tech community will improve as more and more founders start and exit successfully. As this happens, we are likely to get a nice balance between capital and founding teams and may see more ambitious companies launched.
MM: With the GrubHub and Enova IPOs and the Fieldglass, Trunk Club and Apartments.com exits for a combined $2 billion it was a blockbuster year for the Chicago tech community. The pipeline of 10+ pre-IPOable companies is stronger than it has ever been: Centro, GoHealth, kCura, Cleversafe, Ifbyfone, AvantCredit, ContextMedia, Signal, Jellyvision, and VividSeats. And if all that was not fantastic enough Chicago has become home to major offices for Salesforce, LinkedIn, Yelp, Uber, Twitter and others. In 2015 and beyond, the Built In Chicago tech community will drive employment growth, economic opportunity and innovation for Chicago.
HT: 1871 will continue its expansion adding more space beyond MATTER and more resources for our member companies and the community as a whole. More educational resources, in particular, will be available to entrepreneurs and others at 1871 which will continue to distinguish and differentiate 1871 from desk rental spaces and glorified coffee shops.
BW: I think we'll only see Chicago's tech circle grow as we give back and strengthen it. It's on us — the growing companies in Chicago tech — to actively seek out organizations like Girl Develop It and Dev Boot Camp and do everything we can to foster growth and diversity. I think we're doing a good job of this now, but a goal for everyone in 2015 should be to give back a little more.
Are there any big problems that Chicago tech, or certain verticals within Chicago tech, needs to tackle?
SC: We need more successful companies in Chicago which will attract additional talent to start the next great companies.
SR: The biggest challenge Chicago tech should tackle is finding ways to drive large, scaled and sustainable revenue streams. And this is no easy task. If I were to make a recommendation to all tech entrepreneurs for 2015 it would be to start consuming books on selling and marketing.
HT: Education and health care.
Any other thoughts, observations, or reflections?
HT: Mayor Emanuel (and now Governor Rauner) have both made it clear that continued new business development and expansion (and the attraction/retention of new talent) – all driven by the kinds of energy and innovation that are unique to the digital tech and start-up communities - will be among the most important factors in the next few years in the continued improvement of the economies of our city and state.