>It's because Chicago's culture is excessively risk averse.
Again this seems like selection bias at play. Chicago's history is actually built on the back of excessive risk taking, not risk aversion. Its a cultural touchstone that is built into the cities image.
And if you look at areas outside of the web, there have been huge payouts for risk taking very recently (trading is the most obvious one).
I suspect that what people are saying is "Chicago doesn't do as good a job of building SV style startups as SV. The kind that is based on a constant flood of inexperienced dev talent, high turn over, and equity based compensation. Due to this there are very few blockbuster technology firms and relatively fewer people with that kind of experience to lean on when trying to emulate the SV model."
I think that is probably a fair assessment, but I also think that it is generally a bad idea to try to emulate the SV model, when for the price of a cross country voyage, you could be in SV.
SV has similar problems in the reverse direction. Talk to bootstrapped founders there some time. They walk around feeling like they have 3 heads. And don't get me started about the misconceptions of the way capital markets work. Having been pitched a couple of SV startups that were going to disrupt commodities trading, I can assure you misconceptions about how "business" works go both ways.
Again this seems like selection bias at play. Chicago's history is actually built on the back of excessive risk taking, not risk aversion. Its a cultural touchstone that is built into the cities image.
And if you look at areas outside of the web, there have been huge payouts for risk taking very recently (trading is the most obvious one).
I suspect that what people are saying is "Chicago doesn't do as good a job of building SV style startups as SV. The kind that is based on a constant flood of inexperienced dev talent, high turn over, and equity based compensation. Due to this there are very few blockbuster technology firms and relatively fewer people with that kind of experience to lean on when trying to emulate the SV model."
I think that is probably a fair assessment, but I also think that it is generally a bad idea to try to emulate the SV model, when for the price of a cross country voyage, you could be in SV.
SV has similar problems in the reverse direction. Talk to bootstrapped founders there some time. They walk around feeling like they have 3 heads. And don't get me started about the misconceptions of the way capital markets work. Having been pitched a couple of SV startups that were going to disrupt commodities trading, I can assure you misconceptions about how "business" works go both ways.