Groupon co-founder: Chicago needs more ‘ego’
Chicago is not the first city that comes to mind when asked about the best places to launch a tech startup. In fact, it’s probably not in the top five.
But Eric Lefkofsky hopes to rearrange those mental rankings, and is being aided by the success of hometown heroes Groupon (which he seeded and co-founded, alongside partner Brad Keywell). He currently serves as managing director of LightBank, an early-stage investment firm that has done eight deals since being founded this past February.
I spent some time on the phone today with Lefkofsky, to better understand his mission:
Fortune.com: How important is Groupon to Chicago’s entrepreneurial ecosystem?
Lefkofsky: It’s extremely important because Chicago hasn’t yet produced a really well-known tech startup. Groupon is now part of that elite group of five or so companies – like Facebook and Twitter and LinkedIn and others – that shows unlimited promise. It’s getting a lot of industry notoriety. Not only is that generally important in the tech world, but it helps make other Chicago entrepreneurs more confident about their prospects here.
As it relates to us and Lightbank, it’s logical that the next founder down the road will consider us because of our track record with Groupon and other successful companies.
I’m based in Boston, where we’re always talking about the dearth of cornerstone tech companies whose employees then go on to found other companies. Is Groupon mature enough to be that type of cornerstone for Chicago?
I actually think we’re that here. If you think about the genealogy, we’ve been doing it for almost 10 years. One of the guys at InnterWorkings had an idea which became Groupon. Now we’re seeing the benefits of that.
Will Groupon continue the chain? Yeah, of course. It’s just the law of numbers: When you have thousands of smart people working on something, some of them will eventually start working on something else.
Does Chicago have enough early-stage tech capital outside of LightBank?
There’s a lot of dollars here, but the money isn’t as fluid or willing to take risks as it is in Silicon Valley. But, at the end of the day, it’s fluid enough. If you have a great idea in Chicago, you don’t have to leave. That’s not true everywhere, but it’s true here.
If you were king of Chicago, or maybe of Illinois, what would you do to improve the local startup scene?
I don’t think there are any silver bullets. It’s a bit like the arts. Mayor Daley has done a phenomenal job of promoting the arts over the past quarter-century, and it probably takes that long to do that type of promotion for anything.
But probably the number one thing missing in Chicago today is an ego. Of all the things lacking, Chicago has to believe in itself, and get rid of its second-city mentality. It has to believe it has the most innovative business models in IT, biotech, all of it. That we can complete with the most innovative business communities in the world.
You don’t get there overnight, but to begin we need our media and government institutions to become much more willing to take risk. It means the city pumping more money into venture, new infrastructure, office space, loaning money to business, giving tax incentives for job creation – all of it.