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| | 06/30/2012
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| | Scoop
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| | [Actually 6/18/2012]: The May Report: 6/18/2012: This is just the kind of scandal I love since it wraps all my "buddies" in one ball of wax and then we can light a candle on it: So, the story is, told to me in confidence on penalty of death, that Children's Hospital paid $500,000 to a web development firm called Manifest Digital http://www.manifestdigital.com/ to completely re-vamp their website and it was supposed to be completed by the time Children's made the move to the new Lurie hospital over by Northwestern Hospital which was the weekend of June 9th and was quite an impressive logistical feat (my kidney doc, Eduardo Cremer, told me that the entire staff was required to be there and they were stationed in both hospitals as the children were transported one by one), but Manifest Digital headed by Jim Jacoby http://www.manifestdigital.com/blog/manifest-founder-jim-jacoby-explains-the-companys-core-truths/, I heard that did nothing, bupkis, nada, but they took the money nonetheless; now here's where it gets interesting: Guess who recommended using Manifest Digital? A little hint: He's on the board of Children's, he's a co-founder of Lightbank, www.lightbank.com, he's the man behind the curtain at www.groupon.com, he gave $60K to Rahm's inauguration fund, and he teaches at Chicago Booth. Yes, you guessed it. None other than Eric Lefkofsky. Now, this being a charitable publication with a democratic (small "d") philosophy of including everyone :-), we can't leave out 1871 and Code Academy. My info. is that one of the key people at Manifest Digital who screwed up and dropped the ball is Carolyn Chandler, http://tinyurl.com/7pwmncl, Secretary at Stage Left Theatre, User Experience Director at Manifest Digital and a web design instructor at Code Academy http://www.codecademy.com/#!/exercises/0, (and I think this is the correct site), http://www.luriechildrens.org/en-us/Pages/default.aspx after Children's gave the job to another web development firm, but I don't know the name of that firm (we can bet it wasn't Doejo or publicity king Phil Tadros would have sent an email by now); Kevin Willer, old buddy old pal, I live for days like this -- to channel Ava Gabor, "darling I love you" (1871, Eric, Code Academy, etc.) "but give me..." a juicy scandal any day; I have tons to write about the Catapult Open House from last Wednesday and the Red Meat Market launch last Thursday -- trust me, it's coming: Bid Med, www.bidmed.com, founded by Patrick J. Kelly, patrick@bidmed.com, has 5 desks at Catapult, pays $500/mo rent for the whole shebang; has raised $150K out of $200K for their 1st round of funding; they buy used equipment such as a 5 year old MRI machine that sells for $2MM new and it's worth $500K, and they sell to hospitals, medical centers, doctors' groups, etc.; one real hottie there is Jackie Dimora, a new acct. exec. who had been doing editing at NBC News; As long as I'm on a scoop roll, www.styleseek.com, at Catapult for 6 months, has 7 FT people, and has raised $1MM in seed funding from institutional VCs, angels, and family (so much for their planned media roll out); Craig Bradley told me at Catapult that Linda Darragh is going to take over running Wildcat Angels when she starts at NU, http://www.wildcatangels.com/, and he said that they recently held a meeting at which 3 companies presented; Tonya Sims of ScoutMeCoach http://scoutmecoach.com/ who was one of the 4 finalists at the Lean Startup Circle finals in December (tsims25@gmail.com) is working on a new mobile app (btw, John Pytel of www.GoSoapBox.com who won that contest and the $25K told me on May 2nd at the 1871 Grand Opening that he has held off on taking the money while he does a new incorporation); and speaking of corp. org. issues, Ryan Leavitt, president of www.catapultchicago.com told me they're applying for 501(c)(3) status, and it's pending; I just talked to Ryan as he was driving to Michigan (he went to U. of M.) and he told me that neither Catapult nor any sponsors like Blackman Kallick is taking any equity in the firms in the space; Jessica Lybeck, jess@dabble.co tells me that they (also erin@dabble.co) are redoing the business model of charging $20 per student and splitting the revenue with the instructors and it will be announced in about 60 days, they have 8 people now, and the most popular class so far has been Scotch tasting which drew 50 people (the average class size is 8-10); they've expanded to Milwaukee and Denver; Iain Shovlin, I watched the movie Money Never Sleeps, the sequel to Wall Street, http://www.imdb.com/title/tt1027718/, last night and there was a scene showing a gift of Johnny Walker Blue being given to some Chinese investors (I'm obviously not a Vance Packard style status seeker, but Iain, that Macallan 18 http://www.themacallan.com/home.aspx has gotten me quite a few nods of respect from folks who are status conscious); Founder and CEO, Jessica Nam Kim of www.BabbaCo.com, you should know that there is a solar firm with the same name as your firm in the movie; the best analogy in the movie was to something I was telling Bill Anthony about a week or so ago as it relates to entrepreneurs, and that was the biggest bubble of all time -- no, not the Dutch tulips http://en.wikipedia.org/wiki/Tulip_mania in the 17th century, but the Cambrian explosion, http://en.wikipedia.org/wiki/Cambrian_explosion, from 530 million years ago which is responsible for most of the species and life we know, and what got me going on this was that whole issue of the patterns of evolution and entrepreneurship, and it's not a nice even line of one firm after another, but rather advances in fits and starts, what Stephen Jay Gould called punctuated equilibrium, http://en.wikipedia.org/wiki/Punctuated_equilibrium; btw, Jason Kalish went to Google from that daily deal startup he was involved with, and a lot of those sites are going the way of the dinosaurs
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| | June 18, 2012
The May Report: 6/18/2012: This is just the kind of scandal I love since it wraps all my "buddies" in one ball of wax and then we can light a candle on it: So, the story is, told to me in confidence on penalty of death, that Children's Hospital paid $500,000 to a web development firm called Manifest Digital http://www.manifestdigital.com/ to completely re-vamp their website and it was supposed to be completed by the time Children's made the move to the new Lurie hospital over by Northwestern Hospital which was the weekend of June 9th and was quite an impressive logistical feat (my kidney doc, Eduardo Cremer, told me that the entire staff was required to be there and they were stationed in both hospitals as the children were transported one by one), but Manifest Digital headed by Jim Jacoby http://www.manifestdigital.com/blog/manifest-founder-jim-jacoby-explains-the-companys-core-truths/, I heard that did nothing, bupkis, nada, but they took the money nonetheless; now here's where it gets interesting: Guess who recommended using Manifest Digital? A little hint: He's on the board of Children's, he's a co-founder of Lightbank, www.lightbank.com, he's the man behind the curtain at www.groupon.com, he gave $60K to Rahm's inauguration fund, and he teaches at Chicago Booth. Yes, you guessed it. None other than Eric Lefkofsky. Now, this being a charitable publication with a democratic (small "d") philosophy of including everyone :-), we can't leave out 1871 and Code Academy. My info. is that one of the key people at Manifest Digital who screwed up and dropped the ball is Carolyn Chandler, http://tinyurl.com/7pwmncl, Secretary at Stage Left Theatre, User Experience Director at Manifest Digital and a web design instructor at Code Academy http://www.codecademy.com/#!/exercises/0, (and I think this is the correct site), http://www.luriechildrens.org/en-us/Pages/default.aspx after Children's gave the job to another web development firm, but I don't know the name of that firm (we can bet it wasn't Doejo or publicity king Phil Tadros would have sent an email by now); Kevin Willer, old buddy old pal, I live for days like this -- to channel Ava Gabor, "darling I love you" (1871, Eric, Code Academy, etc.) "but give me..." a juicy scandal any day; I have tons to write about the Catapult Open House from last Wednesday and the Red Meat Market launch last Thursday -- trust me, it's coming: Bid Med, www.bidmed.com, founded by Patrick J. Kelly, patrick@bidmed.com, has 5 desks at Catapult, pays $500/mo rent for the whole shebang; has raised $150K out of $200K for their 1st round of funding; they buy used equipment such as a 5 year old MRI machine that sells for $2MM new and it's worth $500K, and they sell to hospitals, medical centers, doctors' groups, etc.; one real hottie there is Jackie Dimora, a new acct. exec. who had been doing editing at NBC News; As long as I'm on a scoop roll, www.styleseek.com, at Catapult for 6 months, has 7 FT people, and has raised $1MM in seed funding from institutional VCs, angels, and family (so much for their planned media roll out); Craig Bradley told me at Catapult that Linda Darragh is going to take over running Wildcat Angels when she starts at NU, http://www.wildcatangels.com/, and he said that they recently held a meeting at which 3 companies presented; Tonya Sims of ScoutMeCoach http://scoutmecoach.com/ who was one of the 4 finalists at the Lean Startup Circle finals in December (tsims25@gmail.com) is working on a new mobile app (btw, John Pytel of www.GoSoapBox.com who won that contest and the $25K told me on May 2nd at the 1871 Grand Opening that he has held off on taking the money while he does a new incorporation); and speaking of corp. org. issues, Ryan Leavitt, president of www.catapultchicago.com told me they're applying for 501(c)(3) status, and it's pending; I just talked to Ryan as he was driving to Michigan (he went to U. of M.) and he told me that neither Catapult nor any sponsors like Blackman Kallick is taking any equity in the firms in the space; Jessica Lybeck, jess@dabble.co tells me that
they (also erin@dabble.co) are redoing the business model of charging $20 per student and splitting the revenue with the instructors and it will be announced in about 60 days, they have 8 people now, and the most popular class so far has been Scotch tasting which drew 50 people (the average class size is 8-10); they've expanded to Milwaukee and Denver; Iain Shovlin, I watched the movie Money Never Sleeps, the sequel to Wall Street, http://www.imdb.com/title/tt1027718/, last night and there was a scene showing a gift of Johnny Walker Blue being given to some Chinese investors (I'm obviously not a Vance Packard style status seeker, but Iain, that Macallan 18 http://www.themacallan.com/home.aspx has gotten me quite a few nods of respect from folks who are status conscious); Founder and CEO, Jessica Nam Kim of www.BabbaCo.com, you should know that there is a solar firm with the same name as your firm in the movie; the best analogy in the movie was to something I was telling Bill Anthony about a week or so ago as it relates to entrepreneurs, and that was the biggest bubble of all time -- no, not the Dutch tulips http://en.wikipedia.org/wiki/Tulip_mania in the 17th century, but the Cambrian explosion, http://en.wikipedia.org/wiki/Cambrian_explosion, from 530 million years ago which is responsible for most of the species and life we know, and what got me going on this was that whole issue of the patterns of evolution and entrepreneurship, and it's not a nice even line of one firm after another, but rather advances in fits and starts, what Stephen Jay Gould called punctuated equilibrium, http://en.wikipedia.org/wiki/Punctuated_equilibrium; btw, Jason Kalish went to Google from that daily deal startup he was involved with, and a lot of those sites are going the way of the dinosaurs
Editor and publisher: Ron May, ron@themayreport.com, ronaldmay@aol.com,www.themayreport.com, 773-525-3944.
If you missed an article, go here:
www.tmronline.com/A55951/tmrarticles.nsf/vwFullNewsletter
____________________________________
TABLE OF CONTENTS
The Scoop section:
-- Nancy Munro: MIT-EF meeting canceled for June 19th, and Nancy, canceled has one "l" not two, and shame, Nancy, you wrote "the event do to too many conflicting" but it should be due, not do
-- Tuesday, June 19: Code Academy Demo Day: Passion and Persistence, Spring 2012! Join us, June 19th at 1871
-- Tuesday, June 26: ACG Chicago: Finding New Opportunities in Chicago's Entrepreneurial Wave with James Dugan, CEO & Managing Partner, OCA Ventures
Michael Gruber, Partner, Cornerstone Angels
Troy Henikoff, CEO & Co-founder, Excelerate Labs
Karin O’Connor, Managing Director, Hyde Park Angels
Moderator: Dan Howell, Senior Managing Director, Mesirow Financial
but not Kevin Willer -- for once!
-- Melissa Harris: One of the nation's top venture capitalists talks Chicago: Harry Weller thinks city's startups can revolutionize online commerce
[Editor's note: May here. Hold onto your horses, Tarkus and Lisa B, and many others who have sent in cards and letters. I was not really planning to put this out today, but that scoop was too good to pass up.]
_______________________________
The Scoop section:
___________________
Nancy Munro: MIT-EF meeting canceled for June 19th, and Nancy, canceled has one "l" not two, and shame, Nancy, you wrote "the event do to too many conflicting" but it should be due, not do
Subject: RE: Nancy, please put me down for Tuesday evening. Also, I'm way behind on invoices.
Date: 6/18/2012 2:36:55 P.M. Central Daylight Time
From: nancy@knowledgeshift.net
To: RONALDMAY@aol.com
Ron:
We cancelled the event do to too many conflicting events that night.
From: RONALDMAY@aol.com [mailto:RONALDMAY@aol.com]
Sent: Monday, June 18, 2012 2:31 PM
To: nancy@knowledgeshift.net
Cc: ronaldmay@aol.com
Subject: Nancy, please put me down for Tuesday evening. Also, I'm way behind on invoices.
____________________________
Tuesday, June 19: Code Academy Demo Day: Passion and Persistence, Spring 2012! Join us, June 19th at 1871
Subject: Code Academy Demo Day: Passion and Persistence, Spring 2012! Join us, June 19th at 1871
Date: 6/18/2012 3:42:16 P.M. Central Daylight Time
From: tatvshow@yahoo.com
To: ron@themayreport.com
CC: RONALDMAY@aol.com
Code Academy Demo Day: Passion and Persistence, Spring 2012!
event description
80 students, 20 teams, 5 minutes each. Welcome to the new Code Academy Demo Day!
Spring 2012 Code Academy students will take the stage at 1871, June 19th. Together as a class, they focused their passion & persistence into small teams, came up with application ideas, and hustled through the quarter to make them real.
Each team is given 5 minutes on stage to showcase what they've built, why they built it, and what they've learned.
The price of admission will get you a seat, drinks & food.
Join us, June 19th at 1871.
Follow #caDemo or tweet us at @CodeAcademy.
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Bruce Eric Montgomery
Founder, Producer & Host
Technology Access Television
200 S. Wacker Drive, 15th Floor
Chicago, IL 60606-5865
(312) 725-8601
tatvshow@yahoo.com
www.TechAccessTV.com
www.twitter.com/TechAccessTV
www.facebook.com/TechAccessTV
www.YouTube.com/TechAccessTV
_______________________________
Tuesday, June 26: ACG Chicago: Finding New Opportunities in Chicago's Entrepreneurial Wave with James Dugan, CEO & Managing Partner, OCA Ventures
Michael Gruber, Partner, Cornerstone Angels
Troy Henikoff, CEO & Co-founder, Excelerate Labs
Karin O’Connor, Managing Director, Hyde Park Angels
Moderator: Dan Howell, Senior Managing Director, Mesirow Financial
but not Kevin Willer -- for once!
Finding New Opportunities in Chicago's Entrepreneurial Wave
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ACG Chicago Networking@acgchicago.com
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Tuesday, June 26 - 11:30 am - 1:15 pm
The Standard Club, Chicago
Register Today
Chicago's entrepreneurs are finding new capital in the rapidly developing angel networks, new talent and mentorship in the expanding incubator spaces, and many are now looking for next stage investment/exit expertise to join the gazelles in the middle market. Join us to meet key leaders in our entrepreneurial community and better understand where you fit into this new growth dynamic.
Click speaker names to view profile
James Dugan, CEO & Managing Partner, OCA Ventures
Michael Gruber, Partner, Cornerstone Angels
Troy Henikoff, CEO & Co-founder, Excelerate Labs
Karin O’Connor, Managing Director, Hyde Park Angels
Moderator: Dan Howell, Senior Managing Director, Mesirow Financial
Business Casual Attire is Suggested
ACG Member Registration Fee - $40.00
Public Registration Fee (Non-ACG Member) - $60.00
(These Rates Expire 6/21/2012)
________________________________
Melissa Harris: One of the nation's top venture capitalists talks Chicago: Harry Weller thinks city's startups can revolutionize online commerce
http://www.chicagotribune.com/business/ct-biz-0617-tech-overview-confidential-20120618,0,7083709.column
One of the nation's top venture capitalists talks Chicago
Harry Weller thinks city's startups can revolutionize online commerce
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Harry Weller, of New Enterprise Associates, Monday, June 11, 2012. (E. Jason Wambsgans/Chicago Tribune) (June 17, 2012)
Melissa Harris' Chicago Confidential
June 18, 2012
The most objective measurement available for the strength of Chicago's technology sector shows this city's performance leaves something to be desired. It ranked eighth in 2011, behind San Diego and about on par with Austin, Texas, a city with less than a third of Chicago's population.
Harry Weller's rankings look different.
"It's Silicon Valley, Chicago and then the rest of the East Coast," said Weller, who this year ranked 17th on Forbes' list of the world's best tech investors, and is a general partner with Silicon Valley-headquartered New Enterprise Associates. "That's a testament to Chicago's entrepreneurial environment right now. Me and Peter (Barris) are always here, and, I mean, he's the head of our firm."
Melissa Harris' Chicago Confidential
Bio | E-mail | Recent columns
Related
Chicago technology venture capital scorecard for 2011
Venture capital isn't dead, but it isn't thriving either
High schooler moonlights as app developer
It's impossible to imagine Chicago will ever knock California off its perch as the technology capital of the world, and it's a long way off from harnessing its elite universities the way Boston has with Massachusetts Institute of Technology (or Silicon Valley has with Stanford University). We'll also never have a financial sector as vast as Wall Street's.
But Weller said his firm is so keen on Chicago because the city's tech community has found a focus to rally around. And if you are thinking that focus is Groupon, well, it's a bit broader than that.
Weller said Chicago's entrepreneurs are concentrated on improving local commerce: figuring out how to help merchants, from the local bakery to a community bank, lure new customers and pay less for goods and services via the Internet.
That theme should come as no surprise. After all, Chicagoan Aaron Montgomery Ward invented the mail-order industry.
"There's a pragmatism to making sure a business model works that exists in this region that doesn't exist in others, so the string still stays tied to the kite," Weller said. "Whereas I think one of the big diseases in Silicon Valley and to some degree New York City, is that sometimes the business model part gets lost."
Entrepreneur Eric Lefkofsky's first successful startup — the one that enabled him to throw $1 million at Groupon's predecessor, The Point — illustrates Weller's argument. InnerWorkings helps midsize companies broker cheaper printing services and then takes a cut of the savings. It made a lot of money quickly, yet the team used FileMaker Pro, an off-the-shelf programming tool, to code the system.
No new technology was involved. That's the primary reason why David Kronfeld, the founder of Chicago-based JK&B Capital, has no active investments in local companies.
Kronfeld started JK&B in 1996 with money from billionaire George Soros and Charles Wang, the founder of Computer Associates. In total, Kronfeld has deployed $1.1 billion in venture capital through JK&B. Yet Kronfeld, in an interview in his Two Prudential Plaza office, could recall only one or two Chicago investments.
"We probably see most of the local deals, but we don't invest in them because they don't pass our screening criteria," he said. "Generally we look for revolutionary technologies that have an opportunity to create substantial markets, and those are few and far between here."
Kronfeld said the danger of demanding something "original" is that you pass on most startups not only in Chicago but the Midwest. The upside is that he believes investing in groundbreaking technologies — often objects one can touch — is more "predictable" and "sustainable" over the long term.
"The risk-reward for investing in (business) services and (mobile) apps is substantially higher because there's no real science on predicting how an application sitting on top of the Internet will do," he said. "If you look at social networks, there are thousands and thousands of them that have been funded; most of them fail. You have one Facebook. ... We avoid those kinds of deals, which appear to be more of a gamble."
Before starting JK&B, Kronfeld led venture investing at former Chicago-based telecom company Ameritech. As that sector struggled, JK&B began broadening its focus to include health care and nanotechnology. Again, Kronfeld looked elsewhere, striking up partnerships with Harvard Medical School and Hebrew University of Jerusalem.
Among his firm's investments are S.E.A. Medical Systems, a Santa Clara, Calif.,-based company developing medical devices that catch life-threatening IV drug errors, and Polatis, which creates "new solutions for modern fiber-based networks" and has its North American headquarters in Andover, Mass.
Assessing Chicago's progress as a burgeoning tech hub isn't so easy. But there's been one big change over time besides Groupon's breakthrough from local startup to global company: the development of a venture capital community.
On Pages 4 and 5, you will find the Tribune's 2012 tech scorecard, a look at a selection of the city's most prominent venture capital players.
Where the early days of Chicago's tech scene were dominated by big companies like Motorola and Navteq, the city has added three accelerators since 2010: Excelerate Labs, Healthbox and Impact Engine, each of which focuses on a particular sector. The FireStarter Fund, made up of investments from 45 people, launched this year, as did 1871 and Catapult, new flexible workspaces for small startups.
Other ways to measure Chicago's tech progress: Chicago has seen 14 public offerings and 15 sales of digital technology companies worth $100 million or more between 2000 and 2011, according to Built in Chicago.
But scenes come and go. It wasn't long ago, remembers Lefkofsky, the serial entrepreneur and Groupon chairman, that Chicago's tech scene "was pretty much dead."
"I was the guy rowing the boat, and for me, it was pretty much a decade of rowing nowhere," he recalled of the years after the tech bubble burst in 2000, taking out his company Starbelly.
There's no guarantee of what comes next. Over the past decade, the number of deals financed in Chicago and the amount of money invested has bumped along at a steady but unspectacular clip. What the numbers don't show is that Chicago's tech scene is creating an identity of its own, and that matters to some.
Weller says he often hears Chicago's tech scene described as "niche-y" for its focus on helping businesses market their products, whether it be manicures or printing services. Not only does he think that viewpoint is wrong, but he also doesn't put much weight in rankings showing Chicago's tech sector lagging behind other cities.
"It's not quantity; it's quality," he said. "It's going to become more and more obvious what's here over time. You're going to see a couple more Groupon-like examples, which will make it undeniable. But frankly, I'm not too upset other VCs haven't figured it out."
Melissa Harris can be reached at mmharris@tribune.com or 312-222-4582. Follow her on Facebook at facebook.com/chiconfidential or Twitter @chiconfidential.
Copyright © 2012, Chicago Tribune
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Comments:
Word Strangler at 8:08 AM June 17, 2012
Well QUINN the promises to unions for votes idiot strapped on a burden to all IL techs to pay more into the state ... that sent many right over the boarder to IN. Chicago, COOK, & IL know how to suck dry the host and drain it dead.
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nomoretears at 9:15 AM June 17, 2012
I have a small tech company that I registered in Michigan because of the difficulties of being a start-up company in the state of Illinois and Chicago. However MOST of my business will be done in Chicago. Basically taking my profit from here and reinvesting it in another state.
It's too bad that the region is not friendly to small businesses and chases much of the talent away.
I predict my business will grow about 500 percent over the first 2 years. When that goal is eventually met, I could have been a huge asset to the Chicago region but due to high start-up cost and corrupt regulations, my success will be rewarded in Ann Arbor, Michigan.
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Barry3 at 6:31 AM June 17, 2012
A story on Venture Capitalists helping create businesses and jobs - liberals take note.
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jimjay4375 at 9:32 AM June 17, 2012
Yeah, more people to tax.
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im_gumby at 9:41 AM June 17, 2012
You mean Vulture Capiitalists.
VCs need to learn to be less greedy.
Also there is a culural difference between Silicon Valley and the Midwest.
Looking at the starups being funded by groups like 1871, most are doomed to failure from the get go. Bad ideas, low barrier to entry, under funded.
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