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Olson’s Observations

Technology. Innovation. Science. VC. Media. :: by Eric Olson

Archive for the ‘Chicago’ Category

Technology Transfer in the Midwest: Looking Up

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Crain’s Chicago Business published a great article about technology transfer in the Midwest a few weeks back entitled “Seeking a breakthrough“.  The article specifically focused on tech transfer in Illinois and mentioned that, to date, Illinois has not done a great job of tech transfer.

Having come to Chicago from one of the most vibrant tech transfer centers in the world, Boston, MA (second only to Silicon Valley imho), I have seen what a great tech transfer system looks like and what it can do for the local economy.  Compared to Mass and the Valley we haven’t been doing a great job of commercializing technology from university labs (and from government labs) here in Illinois.

We all know the stories that still break our hearts.  Mosaic/Netscape, PayPal, YouTube, etc.  All of these companies were founded by Illini and yet ended up on the west coast.  The numbers also back up our lack of tech transfer.  From the Crain’s piece:

Between 1996 and 2006, Illinois universities spun off 124 companies and made $180 million from startups and technology they licensed directly to existing companies, according to the Deerfield-based Assn. of University Technology Managers. In that same period, the Massachusetts Institute of Technology alone started 220 companies and made $344 million. Stanford University made $209 million between just 2002 and 2006.

Those numbers say it all but we can (and will) turn this around.

What can we do to turn this around? One of the first things we need to do is not so easy.  We need to build some high profile success stories here in Illinois.  I would argue that is already happening with FeedBurner (acquired by Google in 2007) and TicketsNow (acquired by Ticketmaster in 2008) along with a handful of other solid companies that have exited recently (disclosure: DFJ Portage was an investor in FeedBurner and TicketsNow).  That said, those companies did not come out of university labs.  However, the success stories should still show people both in and out of labs and investors that great companies can, and are, built right here.

As the Crain’s piece suggests, more high profile successes in the state will create more technology millionaires who will then help to mentor and seed the next generation and so on and so forth.  This is the same way Silicon Valley and Boston, MA were born and why the biggest thing we can do is build some very successful technology companies here in Illinois.

The infrastructure is also being put into place to make technology in Illinois a mainstay.  The University of Illinois at Urbana-Champaign has built a fantastic research park and incubator (which I frequently visit and which will house TECH cocktail Champaign this week) as has the Illinois Institute of Technology (again, another place I frequent).  Both of these places along with other facilities are helping to change the tide of tech transfer here in the state.

What about the money though?  We all know that investors like to be close to their companies, which is why many Illinois startups have to leave the state to get up and running.  So we also need more investors here in the state.  The good news is that we are starting to see a growth in the investor pool here in Illinois.  From the Crain’s piece:

U of I created an independent fund, Illinois Ventures LLC, based in Chicago, with the help of private donors in 2002. Its goal is to provide early-stage money and logistical help to university-based startups.

Illinois Ventures has invested $20 million so far in 15 companies, among them Tetravitae Bioscience Inc., an alternative fuel company in Chicago, and has attracted another $300 million in outside investments, much of it coming from venture-capital funds on the coasts.

Ron Kirschner, a retired physician with an MBA from DePaul University, started Heartland Angels in Skokie in 2004. The group has grown from six to 22 investors and has put more than $3 million into six early-stage Midwestern companies. Four of those grew out of universities, among them Abiant Inc., a Deerfield company based on research from the University of Chicago and New York University. The startup uses imaging to help drug manufacturers improve products by mapping how they affect the brain.

I would also add the the Chicagoland Chamber of Commerce created a fund a little while back called the Illinois Innovation Accelerator Fund (i2A for short) which is a $10mm vehicle dedicated to funding innovative technology companies here in Illinois.

Also, as most of you know, the firm I am an associate with, DFJ Portage Venture Partners, focuses only on the upper Midwest and has for quite some time.  We are able to bring the global resources of Draper Fisher Jurvetson (DFJ) into the region while remaining locally focused, something we think will really help the region grow and help entrepreneurs create world class companies right here in Illinois (and throughout the Midwest).  As you can imagine we are very bullish on the Midwest as a technology center and we are excited to be part of the growing technology community here.

Successful technology transfer efforts will be a big part of what ultimately makes Illinois a leader in technology and tech transfer efforts are certainly getting exponentially better each and every day here in Illinois (for example Northwestern did a $700mm deal last year to sell part of its royalty rights to Pfizer’s pain drug Lyrica - a drug based on Northwestern research).

We are just now hitting the big upswing in the “hockey stick” here in Illinois and across the Midwest.  We are well on our way to rivaling the coasts when it comes to technology but we’ll no doubt do it our own special way making the Midwest a unique and exciting place to start and build technology companies.

Further discussion on this topic: Chicago Tech Report: “Understanding why Marc Andreesen left Illinois” by Blagica Bottigliero

Extension 720 on WGN Radio: The Web 2.0 Show

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Just a quick note to inform all of you Olson’s Observations readers out there that I will be making some observations on WGN radio this Friday from 9pm - 11pm on Extension 720 hosted by Milt Rosenberg. Since I am unsure if a lot of you out there are listening to AM radio (and because a lot of you are located outside Chicago) I want to point out that you can listen live online as well.

This show has had a lot of prestigious guests over the years and Milt Rosenberg is known as one of the top interviewers around so I am very excited, honored and humbled to be asked to come on the show. I should note that this is a panel discussion though, not an interview, so I will be on with a few other top notch guests making the show that much more interesting.

This will be my first time on the air since I stopped doing a radio show with my friends back in high school on the local college radio station (95.1 FM WNRC baby!) and I am looking forward to it. I have always loved radio as a way to communicate and talking about what Web 2.0 has done in terms of revolutionizing communication via one of our oldest communication technologies will be a treat. Who knows, maybe we can even get Milt to start podcasting his shows!

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Editor’s note: I have bee lax in writing on this blog lately due to my new gig, TECH cocktail and my studying for the GMAT. That said, I plan to overhaul the site over the next couple months and start writing more frequently again so stay tuned and thanks for your support over the years.

Written by Eric Olson

July 8th, 2008 at 8:00 pm

Posted in Business, Chicago, Web, Web 2.0

Jim Cramer: Midwest is Hub of Innovation

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It is official. Jim Cramer of Mad Money and TheStreet.com loves the Midwest. Today on the roof of Soho House Jim talked about the Midwest, which he refers to as Cleveland Valley (man, I hope that name doesn’t stick), and about how some real solid innovation is happening here.

Cramer took a number of swipes at the internet and technology landscape today specifically calling out the me-too companies in the media space. Here is one quote that stuck out in my mind (via PaidContent.org):

Guitar Hero is “amazing… but when you look at the companies that are innovating, they’re in the Cleveland Valley, not the Silicon Valley.”

As pointed out by PaidContent.org when Cramer uses the term Cleveland Valley he is referring to the industrial firms here in the Midwest who are asking themselves: “What are the big problems of mankind and how can we solve them?”

So Cramer is not quite endorsing the Midwest as a high tech hub per see but I think he gets at the heart of what we’re all about out here and that is creating sustainable businesses and innovation by solving real problems. It is good to see more and more people looking to the Midwest for innovation. We’re at an inflection point in this region. No doubt about it.

Written by Eric Olson

June 9th, 2008 at 6:18 pm

Posted in Business, Chicago

iVentures10: Starting up in Illinois

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iVentures10As programs like Y Combinator and TechStars gained popularity I started to wonder why something along the lines of those programs didn’t exist here in Illinois. After all the modern web was pretty much born at the University of Illinois at Urbana-Champaign (mosaic/netscape, apache, etc.) and other notable web superstars like PayPal and YouTube have come from the minds of U of I grads. Well, I didn’t have to think about this idea for long…

Enter the iVentures10 program. iVentures10 is a program created by Illinois VENTURES initially as a “new kind of internship” for U of I computer science students. However, they recently announced a partnership with Mozilla along with their intention to take applications from around the world.

I think this is a fantastic thing for tech entrepreneurs based here in Illinois and a great way to get others that aren’t based here to spend a summer here in Illinois building their companies. Hopefully we can all show them such a good time they won’t want to leave! Keeping our tech talent here in the state is crucial to Illinois becoming the tech center it deserves to be and this program will clearly help with that effort.

You can learn more about the iVentures10 program on their site and if you think you want to submit an application make sure to get it together soon. The final day to submit applications is May 15th.

Side note: You can also learn more about the iVentures10 program at the next TECH cocktail mixer on May 29th. The team will be at the event along with some of the folks who have been accepted into the program.

Written by Eric Olson

May 1st, 2008 at 10:21 am

Posted in Business, Chicago, Technology, VC

Update: TECH cocktail Conference

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TECH cocktail ConferenceJust wanted to post a quick update on the TECH cocktail conference that is coming up on Thursday, May 29th. Frank and I recently finalized the schedule and posted it on the site. We really have a fantastic speaker line up if I do say so myself. We’re really psyched and appreciative that so many top notch folks were willing to give up time in their day to come and talk.

If you have been thinking about buying a ticket but haven’t yet here is your chance to get $25 off the already low introductory rate of $225. Just use the promotional code olsonsobservations when you register and you’ll be $25 richer (or I guess you could say $200 poorer but I really think the content we put together is worth much more than $200 - the glass is half full people!).

I look forward to seeing everyone at the conference. (Oh, and I really do have some more “real” posts coming up soon. I swear… Stay tuned!)

Side note: We even have “Attending” and “Speaking @” TECH cocktail Conference badges for your site. Snag one and add it to your site when you have a chance. Attending & Speaking

Written by Eric Olson

April 14th, 2008 at 10:39 am

Posted in Chicago, TECH cocktail

TECH cocktail takes home the 2008 ITA CityLIGHTS Award

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ITA CityLIGHTS AwardWow. Twelve hours later I still don’t really know what to say. For people who know me well they know that says something (yeah, I talk a lot).

Frank and and I were nominated for the Illinois I.T. Association CityLIGHTS award along with some truly incredible people last night (my friend Brad Spirrison and super angel Bob Geras among them) who all deserved the award as much if not more than we did. Winning this award is a huge honor and incredibly humbling. I can’t stress that enough. I was simply stunned we took it home.

As I said in my short speech last night TECH cocktail has really been a story of community. Frank and I look at ourselves as facilitators but the tech community here in Chicago is where the magic is and always was. We just brought it into the light.

Another key point to note is that the tech community here will grow much faster if we all work together. Every chance we get we help other events, startups and people because we need an ecosystem. Other organizations, the ITA being one of them, feel the same way and always try to help others. Bottom line: we need to work together. TECH cocktail certainly can’t do it alone (nor has it - we’ve had a lot of help in the last two years) and it will be much more powerful as part of a larger whole.

I am excited for the future of Illinois technology and for the Midwest overall. I think we’re heading into a new age where we can become the technology center we deserve to be. Do we want to be Silicon Valley? No, I don’t think we do. We want to solve real problems with solid technologies in order to create real revenues and long term sustainable value. This isn’t to say that Silicon Valley doesn’t do that as well but I do think that we tend to escape some of the irrational exuberance that is prevalent in the Valley and that should be looked at as a strength not a weakness.

Here’s to the future. Onward!

Written by Eric Olson

April 4th, 2008 at 10:16 am

My Visit to skinnyCorp (threadless.com)

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skinnyCorpHarper Reed, the CTO of skinnyCorp, was nice enough to invite Frank and I down for a visit to skinnyCorp HQ last week. I had been dying to check out their offices as I was sure they would be pretty unique (plus I like the guys and their products) but I had no idea of the wonders that were in store for us (it was Willy Wonka style except with t-shirts instead of candy).

skinnyCorp is definitely one of the most interesting companies in Chicago today. Their tag line is “skinnyCorp creates communities” and that they do.

The most famous of their communities is threadless. Threadless is a community based t-shirt site. Designers (and even non-designers) can submit t-shirt designs to the site which are then put up to a vote. Once the community votes the scores are tallied and the best shirts are produced for sale at the threadless site. The winning designers also get paid if their shirts are selected.

Being a t-shirt junky I was naturally drawn to threadless but the other skinnyCorp communities like ExtraTasty (cocktail recipes) and I Park Like An Idiot are also a lot of fun.

Needless to say the office visit was a blast and Frank and I are now entering into the ThreadLe Manss 48 Heures race in May. It is a 48 hour pinewood derby run off. What could be more fun than that? Have I told you how fun these guys are? If you can’t participate but want to watch the action you can do it live on May 16 and 17 via threadless.com.

For more skinnyCorp fun times and a tour of their facilities check out the segment from SomewhatFrank TV below.

Written by Eric Olson

March 4th, 2008 at 9:53 am

Posted in Chicago, Technology, Web