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$1.6B in funding and $7B in exits: Chicago tech just had its best year ever

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Re: $1.6B in funding and $7B in exits: Chicago tech just had its best year ever

#41

Post by kasey_junk »

encoderer wrote: post #37

My impression is that in Chicago -- and really everywhere outside the SF BA and NYC -- has much weaker comp for engineers. It makes sense, really. By far the majority of SE jobs in these places are in IT departments writing line of business software. These are Java and .Net shops usually and anecdotally it seems they pay from $60-90k. The companies where engineers are profit centers -- web startups and software compa…

Nearly every major study I've seen going back decades has Chicago having lower comp numbers for tech than SV. But usually its on the order of 3-10%. How that compares in cost of living adjusted terms I don't know.

The 60-90k number sounds absurd to me. Having worked in Chicago for quite some time, 60k is what a new graduate could have earned 10 or 12 years ago in the middle of the last bubble burst. 90k seems like a plausible starting point now for an entry level Java developer.

The last time I worked in a .NET shop, we would not have been able to hire any of our targeted developers for anywhere near those numbers and that was 5 or so years ago.

Re: $1.6B in funding and $7B in exits: Chicago tech just had its best year ever

#42

Post by mrkurt »

encoderer wrote: post #37

My impression is that in Chicago -- and really everywhere outside the SF BA and NYC -- has much weaker comp for engineers. It makes sense, really. By far the majority of SE jobs in these places are in IT departments writing line of business software. These are Java and .Net shops usually and anecdotally it seems they pay from $60-90k. The companies where engineers are profit centers -- web startups and software compa…

My standard of living in Chicago was much higher than in the sfbay, despite the salary being much lower. The cost of living in the Bay is outpacing salary packages for engineers, it's nutty.

Re: $1.6B in funding and $7B in exits: Chicago tech just had its best year ever

#43

Post by spuiszis »

rayiner wrote: post #21
the_vincedent wrote: post #18

As a Chicagoan and software engineer, here's my honest opinion of tech in Chicago: it's a sad, sorry place to be right now. I grew up in Chicago, went to college in Chicago and work in Chicago. It's been a roller coaster love-hate relationship for 30 years. There's two major reasons I say it's so sad and sorry: a total lack of experienced, aggressive VC here, and a massive deficit of university-business partnership.…

Trying to make Chicago a "tech hub" sounds about as practical as trying to make San Francisco a commodities/derivatives hub. What's the point? It's not as if tech is going to create jobs for all the struggling folks on the south side--indeed, tech is actively working to put those folks out of work.

Quite the contrary. CPS is making basic computer science a part of the K-12 curriculum, starting as earlier as Kindergarten[1]. It will take decades to see the actual results from this but its helping put the city on the right path.

[1]http://cps.edu/News/Press_releases/Pages/PR1_03_19_2014.aspx

Re: $1.6B in funding and $7B in exits: Chicago tech just had its best year ever

#44

Post by spamizbad »

Eh, three things really grind me gears about the tech scene in Chicago.

1) Lots of mediocre entrepreneurs that seem to have the same story:

  - Little to no hard skills.
  - Probably got an MBA from a good B-school
  - Did a stint at a consulting firm and is going to outsmart
    the competition with all the wisdom they gained at 
    Accenture, McKinsey, BCG, Bain, or some big IL firm.
  - Does NOT have a technical co-founder but is being advised
    by some guy with a similar pedigree that attended a coding 
    bootcamp/wrote a crappy iOS app/got a CS degree... 
    but has written
I know these people exist everywhere today but there's an unusually large number concentrated in Chicago. Must be something in the water?

2) Developer compensation is roughly 10% lower (when adjusted for CoL) than it should be. And in terms of equity compensation Chicago isn't even in the same league as SV today. Getting >0.25% as the initial engineering hire is extremely rare here - even at companies that lack a technical co-founder.

This causes younger talent to get sucked to the coasts.

3) Many of the startups do not actively cultivate a technology or engineering culture. I think this largely stems from Point #1 - you really do need a tech co-founder to drive that side of the company.

Re: $1.6B in funding and $7B in exits: Chicago tech just had its best year ever

#45

Post by desireco42 »

spamizbad wrote: post #44

Eh, three things really grind me gears about the tech scene in Chicago. 1) Lots of mediocre entrepreneurs that seem to have the same story: - Little to no hard skills. - Probably got an MBA from a good B-school - Did a stint at a consulting firm and is going to outsmart the competition with all the wisdom they gained at Accenture, McKinsey, BCG, Bain, or some big IL firm. - Does NOT have a technical co-founder but is…

+1 on everything what you just said. Totally true.

Re: $1.6B in funding and $7B in exits: Chicago tech just had its best year ever

#46

Post by dannykingme »

spamizbad wrote: post #44

Eh, three things really grind me gears about the tech scene in Chicago. 1) Lots of mediocre entrepreneurs that seem to have the same story: - Little to no hard skills. - Probably got an MBA from a good B-school - Did a stint at a consulting firm and is going to outsmart the competition with all the wisdom they gained at Accenture, McKinsey, BCG, Bain, or some big IL firm. - Does NOT have a technical co-founder but is…

I used to recite a similar list when someone would ask why I left. It's actually eerie how similar they are.

Re: $1.6B in funding and $7B in exits: Chicago tech just had its best year ever

#47

Post by joezydeco »

spamizbad wrote: post #44

Eh, three things really grind me gears about the tech scene in Chicago. 1) Lots of mediocre entrepreneurs that seem to have the same story: - Little to no hard skills. - Probably got an MBA from a good B-school - Did a stint at a consulting firm and is going to outsmart the competition with all the wisdom they gained at Accenture, McKinsey, BCG, Bain, or some big IL firm. - Does NOT have a technical co-founder but is…

Must be something in the water?

It's a flood of NWU/Kellogg and UC/Booth MBA grads that continually stream into the market and slosh around the consulting firms before filling up the lobby at 1871 trying to catch the eye of a Pritzker.

I left a Chicago-area startup that ticked off about 90% of your boxes above. It was a nightmare. The company is still going and the CEO is still busy running around talking about being a startup CEO instead of shipping the damned product.

Re: $1.6B in funding and $7B in exits: Chicago tech just had its best year ever

#48

Post by deet »

spamizbad wrote: post #44

Eh, three things really grind me gears about the tech scene in Chicago. 1) Lots of mediocre entrepreneurs that seem to have the same story: - Little to no hard skills. - Probably got an MBA from a good B-school - Did a stint at a consulting firm and is going to outsmart the competition with all the wisdom they gained at Accenture, McKinsey, BCG, Bain, or some big IL firm. - Does NOT have a technical co-founder but is…

I'll offer a hypothesis to explain #1:

It's because Chicago's culture is excessively risk averse. There seems to be a tendency to seek permission or acceptance from peers and others before taking a risk (either in business, fashion, life, whatever).

This is actually great for bootstrapping, because it keeps you in touch with the real world and immediate customer demand.

But it leads to fewer qualified, technical people there with no history of 'business' thinking that striking off on their own and starting a company is a good idea.

The people who do start companies there are often the ones who have gone through some kind of training program (MBA, work experience, etc.) that in their minds has qualified them to start a company.

So I propose that it's not that the MBA types are overrepresented, it's that technical folks and others are underrepresented, because they're tending to not start companies.

Disclaimer: totally conjecture, based on living in Chicago for eight years, but being from California and now living in NYC. In moving from Chicago to NYC the most striking difference (for me), other than the diversity, was the spirit that no one cares about you or what you do, so you might as well do whatever you want or think you can. For some that means starting companies.

Re: $1.6B in funding and $7B in exits: Chicago tech just had its best year ever

#50

Post by pcarolan »

spamizbad wrote: post #44

Eh, three things really grind me gears about the tech scene in Chicago. 1) Lots of mediocre entrepreneurs that seem to have the same story: - Little to no hard skills. - Probably got an MBA from a good B-school - Did a stint at a consulting firm and is going to outsmart the competition with all the wisdom they gained at Accenture, McKinsey, BCG, Bain, or some big IL firm. - Does NOT have a technical co-founder but is…

Point 1 is true here, and out west too. I think MBA's are just better at raising money. Also, entrepreneurship is now getting built into every MBA program out there, so get ready for more of that.

The equity thing needs to be addressed badly, my theory is that it's the result of our manufacturing past. We still have those manager/worker cultural remnants. I talked to one woman who said she "couldn't wait to turn 30 so people would take her seriously." We probably have some of the best engineers in the world here, but most of them aren't in startups, they're building corporate IT or middleware. You're not seeing a ton of new spinoffs from Groupon because the equity was so concentrated pre-ipo. Until we get a virtuous feedback loop of young guns spinning out of companies WITH some cash, it's probably not going to change. The VC community here is risk averse and typically only buys revenue.

I disagree with point #3. Rails, Django, 8th light, Groupon, etc... have done more for craftsman culture than anywhere else I can think of. The midwest work ethic and quality standards have a lot to do with that.

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