Chicago Tech 101: A comprehensive guide to Chicago's tech scene

by Andreas Rekdal
August 25, 2016

If you're interested in getting involved in Chicago's tech scene, figuring out where to begin can be a tall task. Thankfully, Chicago's techies are a friendly bunch, and there are plenty of resources available. To help you find your bearings — and your place — in the city, we've compiled this guide with everything you need to know.

The background

The diversity of Chicago’s economy remains its chief strength as a startup hub. The city is home to a number of Fortune 500 companies in industries ranging from transportation and logistics to manufacturing, insurance, finance, retail, publishing and food processing. This established business community has proved a healthy customer base for an accompanying business-to-business (B2B) tech ecosystem of startups working to address the challenges they face.

As a result, many of Chicago’s biggest tech employers remain well-kept secrets among non-techies, with consumer-facing companies like Groupon, Morningstar and Trunk Club making for notable exceptions.

Compared with its peers on the coasts, Chicago companies and investors tend to place a bigger emphasis on business fundamentals and stretching resources further — a goal aided by the city’s relatively low cost of rent. Indeed, companies like ContextMedia have made names for themselves entirely without outside funding. As for the companies that do take outside funding, Chicago boasts the highest investor returns in the country, according to a recent study.

In short, an emphasis on hard work and business savvy over flashy moonshots is a point of pride for many members of the community.

But that doesn’t mean Chicago companies can’t raise money when they need it. In 2015, Chicago startups raised a whopping $1.7 billion, and it's now home to five privately held companies who have received fundings at valuations of a billion dollars or more: Mu Sigma, Avant, Uptake, ExteNet Systems and SMS Assist.


The history

If you look at a timeline of Chicago tech, you'll see a thriving tech ecosystem like Chicago's doesn’t come out of nowhere — in fact, Motorola, which remains one of the city's largest tech employers, was founded in the 1920s.

The late 1970s and early 1980s brought Chicago's first wave of digital tech companies, with the founding of companies like Morningstar, CCC Information Services and HERE (which was still Navteq at that point), all of which still employ hundreds.

The next wave took place in the late 1990s, which saw the launch of major tech players like Fieldglass, Cars.com and Pritzker Group Venture Capital. Since then, the sector has been growing exponentially, employing nearly 55,000 at the end of last year.


The biggest employers

Every year, we publish our Top 100 report, detailing the city’s biggest tech employers. Last year, Chicago was home to 89 digital technology companies with 100 employees or more, up from 77 in 2014. Groupon remains the city’s biggest tech employer with over 2,000 people on staff, while Morningstar, HERE, Coyote Logistics and Enova take up the following four spots — all over 1,000 strong in Chicago at the time of the report. 

The report also found that Chicago tech’s impact on the local economy has been steadily rising over the past few years. The sector employed more than 33,000 Chicagoans in 2012. In 2015, that number was more than 54,000.


The influencers

Like any tech ecosystem, Chicago has luminaries who help set the tone. Many of them, like Troy Henikoff and Howard Tullman, are early tech pioneers who draw on their experiences to help young companies — and the entire tech community — grow. Others, like Shradha Agarwal and Joe Mansueto, are investing and advising companies while keeping their feet firmly planted in the trenches.

To help you get a sense of who's who in the community, we curate a list of 50 Twitter accounts each year we think warrant a follow. It includes developers, CTOs, founders, marketers, VCs, reporters and other influencers. Obviously no such list can ever be exhaustive, but it should be a good jumping off point for expanding your network. And once you’ve followed all the people from this year’s list, you could check out last year's list too.

We also recommend checking out the Chicago Tribune's Blue Network and Crain's Tech 50.


The accelerators and incubators

Coming up with an idea for a company is one thing, but following through is quite another. If your idea requires reaching a critical mass of traction in a short period of time, you could probably profit from the counsel of someone who’s been in your shoes before.

That’s where incubator and accelerator programs come in. Led by veteran entrepreneurs, investors and leaders in the tech community, these programs can help a startup put the struggles it’s facing into perspective and develop a strategy for growing into a successful business.

Some of the city’s programs focus on specific industries or missions. Bunker Labs promotes entrepreneurship among military veterans, while Elmspring is an accelerator exclusively for real estate tech. Techstars Chicago, meanwhile, connects companies with some of the city’s high profile entrepreneurs, offering funding and a host of other benefits to boot.

Though they vary in size, age, mission and expertise, these programs all share one underlying mission: building our tech ecosystem into one of the most flourishing in the world.


The coworking spaces

Technology is far from immune to fast-fading fads, but sometimes an idea just sticks. That seems to be what happened with coworking. An extension of the open office plan philosophy, coworking spaces offer entrepreneurs an opportunity to casually network and collaborate with the founders of other companies, sharing resources, knowledge and connections. And Chicago has lots of them.


The community organizations and institutions

Since opening in 2012, 1871 has become an essential meeting point and resource center for Chicago's booming tech community. Located in the historic Merchandise Mart in the heart of River North, the Chicagoland Entrepreneurial Center's flagship project is currently in its third iteration, with a mind-boggling 115,000 square feet worth of conference rooms, offices and coworking space. Many of the city's tech organizations and incubators also call 1871 home.

Chicago is home to a plethora of organizations who boost the city’s rate of innovation in other ways, too. The city’s universities have played a major role in helping young inventors and researchers discover their entrepreneurial sides. The New Venture Challenge, which was hosted for the 20th time this year by the University of Chicago’s Polsky Center, helped launch cornerstone companies like Grubhub and Braintree into the world, and Northwestern’s track record of fostering entrepreneurship isn’t too shabby either.

ITA and Technori, on their end, help companies build networks and get the word out about their work. There’s also a number of organizations with more focused missions, like Smart Chicago, which promotes civic tech, as well as organizations like BLUE1647Women Tech Founders and Tech While Black, which aim to inspire new generations of entrepreneurs and make the tech community better reflect the city's population as a whole.


The events

Chicago has its fair share of industry events put on by companies, nonprofits, investors and accelerators, ranging from networking events to presentations and panel discussions. Every Monday, we publish a list of five events from our events calendar that we think the community should check out. We'd also recommend heading to sites like Meetup and Eventbrite for additional tech (and non-tech) events.

If you're looking for a place to meet other members of the community, our monthly Built In Brews events are a great place to start. Chicago also plays host to a number of bigger annual events like Techweek, the Chicago Innovation Awards and our very own Moxie Awards.


The coding schools and bootcamps

Learning how to code is still the best bet for those looking to break into tech. Home of The Starter League — one of the early pioneers of the coding bootcamp movement — Chicago offers a number of full-time coding education programs tailored to turn novices into developers in a matter of weeks.

These coding schools differ from each other in a number of ways. Some focus on web development, while others are all about iOS and Android. Some zero in on a particular language, while others focus on multiple languages and frameworks. And if you’re curious about techniques like test-driven development or pair programming, there are bootcamps that emphasize that, too.


The venture capitalists

Chicago has no shortage of leading venture capital firms. Founded in 1996, J.B. Pritzker's Pritzker Group Venture Capital remains one of the Midwest's biggest and most storied firms, with newer firms like Lightbank, Chicago Ventures Jumpstart Ventures and MATH Venture Partners following closely behind. Check out a more complete list of venture capital firms here


The dev shops

If your entrepreneurial spirit didn’t come paired with a technical mindset, you may need a dev shop to bring your idea to life. Luckily for you, Chicago has a ton of them. The city’s dev shops have differing specialties, and many of them boast quite impressive portfolios. 


The startups to watch

At the beginning of each year, we like to round up 50 of Chicago’s most promising young tech startups and keep an extra close eye on them for the year to come. The list for 2016 included companies like DRIVINOpternative and ShipBob, who went on to make waves with major funding rounds in the first half of the year.


The neighborhoods

Chicago tech is booming, with many companies outgrowing the lofts and co-working spaces for which River North has become so well known. And as they’ve gone in search for new, bigger offices, technology hubs have popped up around them, leaving their imprint on ever-wider swaths of the city. 

To get a better sense of where these tech hubs are located, we broke down over 150 funding rounds between September 2015 and August 2016 by zip code. These were the most highly funded neighborhoods:

 
 
If you're launching your startup in Chicago, why not take advice from someone who's been here for a while — 143 years to be exact. Phillips Brothers Insurance has been protecting small businesses in Chicago for over a century. To learn more about insurance coverage for your startup, contact [email protected] or visit their website
 
Images via Shutterstock and listed companies.
 
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