Rosenthal: Keeping genius in Illinois

Tendency is for U. of I. tech grads to head West

There are 140 or so miles of highway between the heart of Chicago and the University of Illinois at Urbana-Champaign. It's not the most exciting stretch of road unless you look at it as an asphalt umbilical cord.

Coming to terms with the fact that its historic role as a global hub cannot ensure prosperity in a technology-infused future, Chicago must develop its tech sector. But the effort has been hindered for years by the tendency of genius cultivated at U. of I. and other area hothouses of potential to bypass northern Illinois in favor of Northern California.

So the city whose 20th-century rise was fortified by its 19th-century determination to reverse the Chicago River has its 21st-century hopes pinned to how effectively it can divert to Chicago the regional brainpower flowing away to Silicon Valley and other tech centers.

It will be an uphill struggle, and it's way too soon to break out cigars. Although signs are encouraging, it's difficult to get a firm read on vitals.

"There is a sense of optimism that I don't know how to describe," University of Illinois President Robert Easter said. "I'm not sure I can point my finger to why (that optimism) is there, but we have become involved in some of the things that the city is doing."

Recent years have brought a conscious effort to teach students — not just at the U. of I., but also the University of Chicago, the University of Illinois at Chicago, Illinois Institute of Technology, Northwestern University, Loyola, DePaul and other institutions — that Chicago is as ambitious as they are when it comes to digital startups.

Mayor Rahm Emanuel headed to Urbana last fall to make his Chicago-as-Startup-City pitch in person to engineering and computer science students. Accompanied by reps of the local tech scene, Emanuel urged would-be app entrepreneurs, mobile magnates and Internet impresarios not to come to Chicago merely to board a plane bound for Silicon Valley or Seattle.

Better to make one's name in Chicago — and help make Chicago's name in doing so, the mayor said.

"Everybody is trying very hard," said Avijit Ghosh, a University of Illinois business professor and senior adviser to Easter. "I think over time we'll learn how to do it much better and be much more coordinated, but I have witnessed a definite change in perspective."

Matt Moog, a leading light in Chicago's growing digital business community of more than 40,000, said some of Chicago's improved standing is rooted in the success of homegrown startups such as GrubHub and an increase in early-stage investment money coming into the market. Some is the result of initiatives such as 1871, the Merchandise Mart-based community of startups.

"We're definitely making progress in changing the general reputation and image and profile of Chicago as a place that you'd want to come to if you were an ambitious, young, aggressive engineer or entrepreneur choosing to start a tech business," said Moog, who's an active angel investor in addition to heading digital business incubator Wavetable Labs, consumer review site Viewpoints Inc. and BuiltInChicago.org, an online community of local digital entrepreneurs.

Chicago Deputy Mayor Steve Koch spoke to several hundred people connected with the city's digital startup sector, along with interested students, at BuiltInChicago's annual Moxie Awards on Thursday. "There's no question that success in building the tech sector in Chicago, success in building what you do, is critical" to what the city is "going to be for the rest of this century," he told them.

A Chicago startup launched every two days last year, according to Koch, representing an overall early-stage investment of around $400 million. "That's an amazing statement about people's willingness to invest in Chicago as a great home for the technology sector," Koch said. "Every job you add is an investment in the future of the city."

One of the many stories of missed opportunities for Chicago owing to brain drain involves Max Levchin, who attended high school in Chicago, graduated from the University of Illinois and then headed west from Urbana instead of north.

Chicago's tech scene in the late 1990s was in no shape to support Levchin's ambitions. He founded PayPal, and success begat more successes. Levchin went on to help fund the launch of Yelp, which was co-founded by U. of I. and PayPal alum Russel Simmons. Also, while working at PayPal, two other U. of I. grads — Steve Chen and Jawed Karim — met Chad Hurley, and the trio went on to create YouTube.

"The guys down (in Urbana) need to see Chicago as an exciting place to go … and not necessarily go straight to California," Dag Kittlaus, who co-founded the company that created Apple's Siri feature, once told me. "A steady stream" of great, newly minted engineers is critical to building an innovation ecosystem, he said.

One initiative, ThinkChicago, brings promising students to town from around the nation to experience the local tech and social scene. Participants pay their own way but get a free ticket to the Lollapalooza music fest in addition to the chance to attend career fairs and meet local leaders.

"Schools have definitely woken up to the importance and potential and benefit of encouraging their students to seriously consider Chicago as a place they should look either for internship or postgraduate job opportunities," Moog said.

The idea is not to supplant Silicon Valley, as if that were possible, but to carve out a niche in much the way, say, the Chicago Board Options Exchange has. CBOE created its own market by using advanced technology and proprietary products to seize opportunity and fill a void.

Second City made Chicago a magnet for sketch comedy, giving the tech types a model for creating gravitational pull.

"If there are not successful companies, it doesn't matter what the city does, the state does, the universities," Moog said.

Said Ghosh, "One large success can change the perception in a very significant way."

And that may be the only reliable way to make the road less traveled from school to Chicago more exciting, and stem the flow of traffic to the coasts.

philrosenthal@tribune.com

Twitter @phil_rosenthal

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