comScore and 1871 Announce Partnership to Help Accelerate Chicago Area Startups
As a veteran of the Chicago tech entrepreneurship scene, I am delighted to announce today a new comScore initiative aimed at helping accelerate the growth of Chicago startup companies. comScore is partnering with 1871, a 50,000-square-foot collaborative space in the Merchandise Mart managed by the Chicago Entrepreneurial Center, to bring access to digital intelligence to the more than 100 start-ups that will be housed at this location.
The 1871 space will gather entrepreneurs together, creating a community of mentors, partners, peers, developers and investors to spark innovation and grow successful companies. comScore will assist in helping these companies grow by providing complimentary access to our flagship web and mobile measurement services while they initially build their businesses. comScore’s analytics and data will provide key insights that entrepreneurs need to measure their companies’ in-market performance, better understand the digital landscape, design more effective digital marketing strategies, and help illustrate their companies’ value to potential advertisers and investors.
Chicago’s Recent Emergence as Tech Hotbed
In recent years, the Chicago area has become a hotbed of entrepreneurial activity, with numerous digital startups bursting onto the scene. A recent WSJ article entitled “A Start-Up Ecosystem Forms in Chicago” highlighted the increase in funding activity and collaborative environments that are helping get Chicago start-ups to the next level.
While Groupon might be the most recognizable name coming out of this city, there are many others blazing their own trails. Data shown on the Built in Chicago website reveals that 128 digital startups launched in Chicago in 2011 alone, 56% more than in 2010. These companies share a common characteristic in that they each leverage the Internet’s vast capabilities.
The appeal of Chicago startups has not been lost on the VC and Private Equity investment communities. In 2011, 77 Chicago companies raised a total of $1.45 billion, a staggering 431% higher than the total amount raised in 2010. And, while Groupon alone accounted for $972 million of the $1.45 billion total in 2011, even if we exclude Groupon, the other companies raised 76% more capital in 2011 than was raised by all companies in 2010. Besides Groupon, 11 companies each raised at least $10 million: Analyte Health, Savo, SMS Assist, Trunkclub, Braintree, SitterCity, Tastytrade, Coupon Cabin, Grubhub and Mu Sigma.
Also in 2011, 16 exit events (mergers, acquisitions or IPO’s) occurred involving Chicago digital companies, generating more than $2 billion of market value. From all the data that Built in Chicago has published, it’s clear that we have a vibrant and very valuable digital ecosystem in place in Chicago today.
Chicago’s Rich Startup History Rooted in Technological Breakthroughs
Interestingly, Chicago has been, for many years, associated with startup companies that exploited technological breakthroughs other than the Internet. I know this to be true because my career has been inextricably linked with Chicago and new technology. In the late 1970s, I managed the Chicago office for Market Science Associates (MSA), a Pittsburgh-based database analytics company. It was a time when UPC point-of-sale scanners were first being introduced into supermarkets, promising rich new data on consumer buying behavior. In conjunction with a West Coast company named TRIM (whose CEO went on to later start Catalina Marketing, the well known in-store couponing company), MSA built the country’s first market research panel of households who agreed to present ID cards when they checked out of their local supermarkets. The cashier simply entered their ID number into the checkout register and, voila, we obtained a continuous electronic measure of the SKU-level buying patterns of thousands of households. Contrast that with the previous manual methodology where households were asked to record the details of their purchases in written diaries!
A few years later, in 1980, I joined a young Chicago startup named Information Resources (IRI) which had not only built scanner household panels in two small cities but had also invented a “black box” which was attached to the TV sets of cooperating households, thereby allowing IRI to change -- as part of normal programming -- the TV advertising that the households were receiving. This was targetable TV by any other name – 32 years ago! IRI still uses the technology today to precisely measure the impact of TV advertising on consumer sales by comparing the UPC scanner purchases of panel households who received one TV advertising strategy (it could be ad weight, frequency or creative – or a combination of all three) with the buying behavior of households exposed to another ad strategy.
In 1985, IRI acquired a company named Management Decision Systems (MDS) founded by three professors from MIT and Wharton. MDS had developed the first relational, multi-dimensional, decision support software. We used it at IRI to analyze the massive databases that in-store scanners were by then generating across the country, while also selling the technology as a standalone software product. By 1996, IRI had grown to be the largest U.S. market research company, as designated by Advertising Age magazine.
Over the past twenty years, my involvement with new Chicago-based technology companies has also included board representation. From 1991 until 1999, I served on the board of Platinum Technology, Inc., a Chicago provider of mainframe tools and applications, during which time the company grew from $80 million to more than $1 Billion in annual revenues and established itself as a global leader in the software services industry. In 1999, Platinum Technology was acquired by Computer Associates in an all-cash transaction valued at $4.0 Billion -- at the time the largest-ever acquisition in the software industry. I was also a board member at U.S. Robotics, which leveraged proprietary manufacturing technology and the emergence of the Internet, to become the largest U.S. supplier of modems. In 1997, U.S. Robotics was acquired by 3Com in a transaction valued at $8 Billion. With the Internet boom, from 1990 to 2000, I served on the board of yesMail.com, a leading Chicago supplier of permission-based e-mail services. In March 2000, yesMail.com was acquired by CMGI for approximately $700 million. Today, I’m also a board member for Chicago-based InXpo, the country’s leading supplier of technology for conducting virtual events.
Let’s Help the Next Wave of Chicago Innovators
As a result of both my operational and board experience, I’ve been extensively involved with technological breakthroughs and the Chicago-based startup companies that have successfully exploited them. But, while I revel in the excitement of the many new opportunities in front of this next generation of entrepreneurs, I also know they will have their fair share of challenges in attempting to grow a new technology company from the ground up. It is important that the greater Chicago tech community lend a hand to help these brave young entrepreneurs succeed.
It has been especially gratifying to watch the Chicago digital tech community develop over the years and its emergence over the past several months, in particular, has been electrifying. Chicago has always been a great city for business and innovation, and comScore looks forward to helping the next wave of successful tech startups get off the ground and spread their wings.