1. Chicago’s Role in the
International Tech Community
(aka “Railroads. Stockyards. Silicon?”)
2015.08.07 International Tech Breakfast @
Darius Vaskelis
@vaskelis

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@vaskelis
HI, I’M DARIUS
• Son of Lithuanian immigrants, lucky to
have had amazing global business clients
• Product of East Coast and Chicago
• Started career at IBM, later in corporate
IT, part of Inforte leadership team for IPO,
then Cognizant, and former CEO of
Safepole, patient care device startup
• Was CEO and co-founder of Sakonent
since 2009, a leading Gartner-recognized
CRM tech consultancy, which was
acquired by Tectonic in 2014; now
Tectonic’s SVP of CRM
• Visit Silicon Valley 6-10x/year, although
focused on the sales, marketing and
customer service tech scene

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@vaskelis
It all started in Silicon Valley
(isn’t the HBO show great?)

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@vaskelis
SILICON VALLEY
• Undisputed leading hub and startup ecosystem for high-tech innovation and development
• Accounts for one-third of all of the venture capital investment in the United States
• “The people who built Silicon Valley were engineers. They learned business, they learned a lot of different things,
but they had a real belief that humans, if they worked hard with other creative, smart people, could solve most of
humankind's problems. I believe that very much.” – Steve Jobs

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@vaskelis
HOW DID SILICON VALLEY EVOLVE?
• 1940s: Stanford University encourage
faculty and students to start businesses
• 1960s: Private R&D from companies like
Bell Labs and Xerox coupled with public
R&D like ARPANET
• 1960s: Immigration reform helped find
educated high-tech and production
workforce
• 1970s: Venture capital industry starts,
explodes after Apple IPO in 1980
• 1980s: Legal infrastructure to support the
rapid formation, funding, and expansion
of high-tech companies

6. 6
@vaskelis
WHAT MAKES SILICON VALLEY WORK?
• Unique culture: risk-taking, multi-
cultural, meritocratic,
entrepreneurial
• Well-trained engineers, business
people, marketers, researchers
• Vibrant venture capital
community and a highly available
stock market appetite for stock
flotations
• Failure is considered experience
• Legal and business climate allows
easy development and formation
of startups

7. 7
@vaskelis
Innovation Clusters
(the engines behind tech)

8. 8
@vaskelis
INTERNATIONAL INNOVATION CLUSTERS (MCKINSEY DIGITAL)
• Dynamic oceans: large and vibrant
ecosystems with continuous
creation and destruction of new
businesses
• Silicon Valley leads in size (number
of patents), momentum (growth of
patents) and diversity (number of
companies)
• Silent lakes: older, slower-growing
hubs with a narrow range of large
established companies
• Chicago has similar size as many
global centers, lower momentum,
but very high diversity in companies
Source: Juan Alcacer, Harvard Business School and New York University; McKinsey analysis

9. 9
@vaskelis
CHICAGO: FEWER PATENTS, MANY ESTABLISHMENTS
Source: Professor Michael E. Porter’s U.S. Cluster Mapping Project , Harvard Business School

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@vaskelis
Chicago as an Innovation Cluster
(and no, it’s not the next Silicon Valley)

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@vaskelis
HOW DID CHICAGO EVOLVE?
Sorry for the eye chart, but note this 2013 timeline’s focus on innovative
application of technologies rather than Silicon Valley-style new invention tech.

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@vaskelis
WHAT MAKES CHICAGO WORK AS AN INNOVATION CLUSTER?
• Allure of an affordable Midwestern big city draws employees
• Many companies that are leaders in applied technology
• Highly diversified and more stable economy
• Private equity more important and some venture capital, but many are
customer-funded and bootstrapped… with a focus on revenue and
profitability!
• Pockets of innovation and entrepreneurship, like services
• Supportive networks and less saturated community, smaller incubator
community
• Large market for established tech companies
• Local government support, although not always clear where it’s beneficial

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@vaskelis
Chicago Cases
(one is only partly Chicago)

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@vaskelis
CASE: SPRINGCM
SpringCM is a cloud platform that manages documents, contracts
and all related collateral.
Highly focused on application to solve sales/legal interactions.

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@vaskelis
CASE: MOBSS
Early stage company with Chicago and Los Angeles roots.
A mobile solutions company for access control readers
with a strong background in hardware design.

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@vaskelis
CASE: DEVBRIDGE
Consultancy that to accelerate product-to-
market through a metrics- driven agile
process, dedicated Product Teams, and a
blend of UX and Software Engineering.
Midwest services base with global delivery.

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@vaskelis
The Future for Tech in Chicago
(my perspective)

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@vaskelis
WHAT’S RIGHT AND WRONG – AND WHAT TO DO ABOUT IT
Things I Worry About
Chicago tends to be conservative
in business, so disruptive
innovation isn’t embraced overall,
and the diverse economy doesn’t
favor tech (e.g. “the cloud tax”)
and looks for silver bullets like
incubators.
Things I Like
Less focus on raising capital puts
more focus on economics, which
makes us better business people.
Also, not all failure is good failure,
we recognize stupid failures so
have better appreciation for risk.
Unsolicited Advice
Universities should encourage
entrepreneurshipby faculty. Don’t
require “made in Chicago” when
the real answer is more complex.
Recognize tech startups in
services and not just products,
which often act as midwest
incubators before going west.

19. Chicago’s Role in the
International Tech Community
(aka “Railroads. Stockyards. Silicon?”)
2015.08.07 International Tech Breakfast @
Darius Vaskelis
@vaskelis