Innovation Ideas

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Over the last 15 years, the hyperlink has proven to be an incredibly disruptive tool.

On a website like Ancestry.com, a link on an online family tree can help an extended family member rediscover his/her genealogy and identity.  A link via a tweet on Twitter to a photo documenting political unrest in Libya or the Middle East can now create instant international reaction.  On AngelList, a link to a hot, new startup company can create an avalanche of investor and media buzz overnight.

The speed at which the interconnectedness of information has accelerated depends on one small device: the hyperlink. Increased connectivity works in person, too. TechWeek’s mission is to connect as many people, places and things within the span of one week.  We approach digital connectivity (social network links, media links, project management links, etc.) as a clear one-week mission statement.  We aim to give tech startups that foster connectivity instant access to an audience of TechWeek attendees in the pursuit of discovering and distributing “best practices” for an international ecosystem of connectivity. The philosophy of connectivity is larger than any one startup company and any one city.  TechWeek invites the world to join in that mission.

Just as StartupWeekend creates a micro-incubator of startups over a 3-day period, TechWeek will transform Chicago into an incubator of ideas, opportunities, partnerships and creative expression by enabling a critical mass of digital connectivity on dozens of online platforms.

Here are a few tools you can use to connect before, during and after TechWeek:

• Plancast is a social network where you can find TechWeek events, subscribe to your friends’ event feeds and publish your plans to your subscribers.

• Facebook enables TechWeek participants to communicate with the TechWeek team and receive updates by ‘liking’ the TechWeek page.

• Quora enables you to post and answer questions about TechWeek within a larger community of experts.

• Twitter tracks all TechWeek conversations that mention @thetechweek or the #techwk hashtag.

• SCHED* conference scheduling software will help you plan TechWeek Conference sessions and see which panels, talks and workshops your friends are attending.

• Linkedin lets you connect your digital resume and professional network to a larger TechWeek community of business leaders.

• Foursquare enables you to check into the venue where you are, see who else is there and visualize where all other TechWeek attendees are right now.

• Built In Chicago connects, educates and promotes the growing digital community in Chicago.

• DoubleDutch gives TechWeek attendees the ability to find speakers and check into sessions and events during TechWeek, all while holding mobile conversations with other attendees.

Big Question: Is Chicago witnessing the emergence of a new innovation ecosystem?

In less than 2 years, the Chicago technology and innovation ecosystem has seen an escalation of successful startup fundraising, growth and acquisitions.  Chicago’s business and technology leaders now discuss how this represents a “new ecosystem” of tech in the city.  I’ve had the benefit of participating in several conversations around this groundswell of activity in Chicago’s tech community ecosystem, support structures, incubators, networks and general ‘connectivity’ of Chicago startups, technology, and innovation. From our perception, the Chicago innovation ecosystem appeared- grew- and became aware of its impact on a global stage.

Question 1: Does the growth of Chicago innovation create a new ecosystem?

A counter-question would be: does the Chicago ecosystem of universities, corporations, civic leaders enable a new type of innovation? Chicago has, for decades, proved unique as a multi-dimensional capital of art, education, finance, corporate management, media, and entertainment. Chicago has one of the most diverse yet sustainable ecosystems of any major city.

Question 2: Does innovation produce ecosystems, or do ecosystems produce innovation?

In silicon valley you have proximity and connectivity of tech companies to other tech companies. The Oracle’s and Twilio’s are silicon valley tech companies that sell to other tech people. The silicon valley ecosystem is one-dimensional tech. You are surrounded by tech; and that becomes your only ecosystem. In other words, the innovation produced by silicon valley emerges from an incomplete ecosystem.

Idea 1: The proximity and complexity of an ecosystem directly influences the type of innovation created and distributed.

Chicago is an online options trading hub because of an existing ecosystem around finance. Chicago is an e-commerce hub because of of its history as a capital of traditional commerce. Chicago is an enterprise infrastructure hub because of the 31 Fortune 500s in our backyard. Technologies like thinkorswim, Groupon, GrubHub and Redbox appear in Chicago–and in no other city–because of our existing sustainable diverse ecosystem.

Idea 2: We are not witnessing a “new innovation ecosystem” in Chicago.  Instead, the world is looking at Chicago as a hub of diverse ‘exogenous’ technologies because of its existing innovation ecosystem.

In theory, the Chicago innovation ecosystem is not new and is not immature. On the contrary, it is because the Chicago innovation ecosystem is established, sustainable, and unique in its diversity that Chicago is able to produce its own exogenous type of innovation. It just so happens that in the past 2 years, the world is recognizing the importance of Chicago-style innovation.

Some geographies such as Silicon Valley foster ‘endogenous’ innovation: using technology to innovate on top of existing technologies wherein technology itself is the ecosystem. Chicago is unique because of our ‘exogenous’ innovation: the points from which innovation emerges, is distributed and then impacts form an externally diverse ecosystem of universities, law firms, banks, Fortune 500s and community organizations.

Idea 3: Chicago is aware of itself as an ecosystem because the Chicago city-as-ecosystem is now recognized by the world as an ecosystem-as-incubator.

Most cities do not recognize themselves as innovation ecosystems because most cities do not produce innovation, due to the interconnected diversity of their ecosystems. That is why the world recognizes Chicago as a new type of innovation hub (external ‘exogenous’ diverse innovation) and most other major cities do not have that innovation identity.

Conclusion: It is not true to assume that a new Chicago innovation ecosystem has just emerged. On the contrary, the world is now recognizing Chicago as a producer of innovation because of an established, sustainable, diverse city-as-incubator ecosystem. Our national recognition itself has created the identity of an ecosystem, though that ecosystem has been embedded in the fabric of Chicago for decades.

A new entrepreneur-focused web series “Trep Life” launched last month, the brainchild of Scotty Cadenhead and Malachi Leopold. Read the interview here.

Showcasing what it takes to be an entrepreneur through real-life stories of startup success, “Trep Life” gives viewers a unique, 360-degree view of what being an entrepreneur really takes.

Transaction Cost Economics defines the ‘firm’ or corporation as an entity whose purpose (aside from maximizing profits and increasing shareholder value) is to lower the cost of a transaction in an economic system. In other words, of the cost of a transaction were sufficiently low (a transaction being any exchange of capital, goods, services, knowledge, assets, property, etc between multiple people or groups) then individual workers (freelancers) would be able to conduct complex business with the same efficiency as a large corporation. That means it would take as much time and resources for 2 separate small businesses to enter into a contract to exchange capital for services, as it would a manager to assign work to his employee.

Yet it is obvious that corporations reduce the transaction costs of exchanges, management, and economic processes. Why else would every entrepreneur need a lawyer, yet every employee in a company uses the same company lawyer? But my interest in the transaction cost of entrepreneurship is not in reference to the transaction of management, delegation, or exchanges in products or services. Rather, my interest is in the transaction cost of Deal-Flow.

Someone should conduct research on the amount of time and resources spent by an entrepreneur preparing, planning for, seeking, negotiating, securing, and maintaining either investment, strategic partnerships, acquisition, or equity-based deal-making. Some startups ignore ‘deal-flow’ and focus on the basics such as organic sales. Yet some companies do nothing except push their own deal flow. Many startup lawyers tell me new tech ventures might spend 20% of their revenues on the legal and administrative costs whose purpose is little more than to secure more funding. In other words, the transaction cost of finding, negotiating, and securing either funding or equity-based deal flow is not efficient. Mostly because its a buyer’s market and the startups need to jump quite high to get noticed.

Therefore my interest is in reducing the transaction cost of entrepreneurial deal flow. In other words, both eliminate the guesswork or ‘information assymmetry’ from startups who do not know when or where to get funding or partners, as well as the ‘game theory’ information assymmetry of multiple investors or partners conducting multiple independent reviews and negotiations. Within a corporation the transaction cost of an acquisition is the salary to the analyst and then the VP in charge of presenting the acquisition to decision-makers. In Entrepreneurship, there is no well-defined process.

I have some ideas in mind.