Chicago is rapidly becoming a hub for tech talent as the city experiences record-setting business growth this year. Local tech companies raised $3.8 billion in the first half of 2021, surpassing last year’s total, and 11 Chicago startups have reached the highly sought-after unicorn status—an industry term for companies valued at more than $1 billion. Recently, Fast Company featured Chicago’s efforts to build a start-up ecosystem and how Chicago is working to be the next unicorn machine. Even with this positive momentum, Chicago has more work to do.
Crain’s also featured the efforts and results of “Come Back To Move Forward”, an integrated campaign developed by 50,000feet in partnership with World Business Chicago and P33 to attract tech talent from major markets. With a goal of recruiting and retaining 10,000 tech professionals within two years, the campaign to date has reached more than 1.2 million tech professionals, resulting in more than 400 tech professionals reaching out to learn more about Chicago.
Read the full Crain’s article below.
How are we doing wooing techies?
An ad campaign by Penny Pritzker's P33 and World Business Chicago touts the city. Is it working?
Earlier this year, Benjamin Kinga was looking to move out of Nashville, Tenn., to pursue a career in a robust tech hub.
He got a remote software engineering job at New York-based software startup Pandium. Because of the position’s geographic flexibility, Kinga explored alternatives to New York rent.
“My job is in New York, and it makes sense for me to live in New York, but the rent is very high and while I’m paid well, I’m not paid that well,” said Kinga, 24.
After looking at places like Washington, D.C., and Austin, Texas, Kinga found himself moving to Chicago this summer after coming into contact with P33, a local tech organization that Penny Pritzker and serial entrepreneur Chris Gladwin launched in 2018 to boost Chicago’s reputation as a tech hub.
“The reason why I reached out to P33 was because I wanted to get connected to the tech community,” Kinga said.
Since May, P33 has been running ads, from Facebook to billboards in San Francisco, aimed at persuading workers in big tech hubs to come to Chicago. The ad campaign, called “Come Back to Move Forward,” is targeting tech workers across the country with Chicago connections—like those who grew up or went to college in the area—as well as those interested in Chicago’s tech scene in general.
P33 set out to target 100,000 tech workers in San Francisco, New York, Seattle, Los Angeles, Boston, Atlanta, Denver, Dallas, Austin and Washington, D.C. To date, it has reached more than 1.2 million tech professionals with its ads. Nearly 400 have made contact with the organization, expressing interest in moving to Chicago for a tech career, and about 50 have told P33 they are making plans to move, according to P33 and Rise Interactive data provided to Crain’s.
P33 declined to disclose the budget for its ad campaign but said it was a “small pilot in terms of media spend” and that it was funded by P33 and World Business Chicago, the city’s economic development arm.
“This effort is about driving awareness of Chicago’s amazing tech momentum,” said Penny Pritzker, who was commerce secretary under President Barack Obama and now runs her own investment firm, PSP Partners. “Chicago has been punching below its weight in terms of the recognition of the tech potential, as well as the reality of what’s going on in Chicago in the technology world.”
Over the past several years, data points to evidence that Chicago’s tech scene is growing, with 2021 shaping up to be a defining year for local startups. PitchBook and National Venture Capital Association figures show that local companies have been raising record amounts of venture capital this year, which allows startup staffs and valuations to grow.
In the first half of 2021, local tech companies raised $3.8 billion; that already eclipses last year’s total, which was the highest since 2014. Data from WBC also shows that 11 Chicago startup companies have reached “unicorn” status in 2021, an industry term for companies valued at over $1 billion.
Kathryn Finney, an entrepreneur and investor known for launching Digitalundivided and #ProjectDiane, and her husband, Tobias Wright, a software engineer at Microsoft, moved to Chicago this year from Atlanta, though not because of P33 ads. Besides having family in the area, they each saw opportunity in Chicago as the local tech industry has grown.
“One of the hesitations for Chicago for us for a long time was there wasn’t a lot of tech here,” Finney said. “Having a husband who is an engineer and me being in the startup world, there wasn’t a lot going on and that limited our ability to move here.”
Historically, about half of the computer science and engineering students at the University of Illinois at Urbana-Champaign, a top-ranked computer engineering school, have left the state after graduating, according to school data.
“It’s never been a problem to recruit (students). The problem is to keep them here after they graduate,” said Rashid Bashir, the dean of the Grainger College of Engineering at UIUC. “That clearly has to do with the jobs that are available.”
As a smaller tech economy, Chicago has fewer software and engineering positions, especially at high-profile firms like Facebook, LinkedIn or Google. WBC has worked to get nearly 90 companies to move their headquarters to or open offices in Chicago in 2021 by touting the region’s talent coming from Big 10 universities and the lower cost of living compared with the coasts, says WBC CEO Michael Fassnacht.
Tegus, a business intelligence company that moved to Chicago from San Francisco three years ago, just signed a lease for a new office in the Loop and said it is hiring 100 people this year.
“There’s so much opportunity in Chicago to start your company, to join a startup or to join an established company,” he said.
Regardless of how many advertising campaigns or tech-forward initiatives Chicago tech leaders launch, the city and its tech ecosystem still have issues that could deter would-be migrants. While there’s evidence that the local tech sector is growing, it still lags behind other tech and startup meccas, like Silicon Valley, New York and Boston.
On a 2020 global ranking of startup hubs by Startup Genome, Chicago comes in No. 14, behind Silicon Valley (No. 1), New York (No. 2), Boston (No. 5), Los Angeles (No. 6), Seattle (No. 9) and Washington, D.C. (No. 11).
Additionally, Chicago also can’t shake its reputation for violence. Kinga said he was initially worried about crime when he moved to the city in June.
“When I was figuring out what neighborhood I wanted to live in, one of the top things on my mind was: What’s the crime rate here?” Kinga said.
During a recent trip P33 took to San Francisco to recruit tech talent, Chicago representatives were asked about how pervasive violence is in the city. But leaders try to ease anxieties by pointing out that nearly every big city in the U.S. is dealing with crime.
“In general, all cities are facing an issue right now of increased crime,” Pritzker said. “People are aware of that as a city challenge, but they’re seeing it in San Francisco and New York and other major cities. It’s really not about us particularly.”
Besides a smaller tech industry and crime concerns, Chicago’s cold, long winters and complicated politics hold it back, too.
Even still, P33 said it is making progress with its efforts to bring more tech workers to Chicago. Success to them looks like recruiting and retaining 10,000 diverse tech professionals over the next two years, especially those with Chicago roots.
“This is our ‘Project Sea Turtle,’ ” Fassnacht said. “Sea turtles, ultimately, always come home. And that’s what we’re trying to do with this campaign.”