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1871 has a new boss, and he's ready to crack the whip on Chicago's startups

By Matt Present

Staff Reporter

When the board of the Chicagoland Entrepreneurial Center tapped serial entrepreneur Howard Tullman to run tech incubator 1871, the dynamic surrounding the tech incubator changed immediately.

Tullman brings decades of experience and a litany of proven business successes, but his greatest benefit may be his irreverence. He’s made plenty of money — two of his companies sold for nine figures — and at 68, he is “not looking for my next job or a big score.”

If Tullman has his way, the tech incubator will transform from a feel-good community hub into a rigorous boot camp that’s hard to get into and harder to get out of. We talked with the new CEO about his efforts to ensure graduation from 1871 is a strong credential in the tech community.

The party line on 1871 has been pretty rosy. You come in and you’re not pulling any punches. Have you gotten any pressure from the powers that be to rein your criticism in?

They knew what they hired. I’m not sugarcoating anything here. I don’t work for Rahm, I don’t work for the governor. There’s nothing without warts, there’s nothing that can’t be better. My entire life is about iteration, so I just want to keep raising the bar.

There’s going to be stuff that’s going to be hard and different and changed, but we’re going to tell it like it is because in today’s world, if you’re not transparent, someone will do you the favor of ratting you out anyway.

What kind of things will be ‘hard and different and changed’?

The largest single issue has been who’s doing the selection for people coming in and who’s doing the evaluation, if it’s even occurred. I’m not sure to date that anybody’s been asked to leave or move on.

I don’t think that can be done on a random basis. I think that the current thought is that we’ll find people who have domain expertise and maybe every 90 days or six months, we’ll have a group of the [1871] companies that are in an area meet with evaluators in that area. I don’t want some guy from Abbott Laboratories evaluating a doughnut business.

What kind of reactions have you received to taking that harder line?

One of my favorite expressions is everybody wants to change the world, they just don’t want to change themselves. I’ve had at least 20 different emails saying, ‘So glad you’re going to throw these guys out,’ whoever these theoretical dirtbags and posers are. And if you wait long enough, everyone in the joint will send you the same email. So I’m sure there’s a feeling that everyone has their own favorite candidate for who shouldn’t be there, this guy is too loud, this guy’s not serious. There’s no magic to this. To a certain extent, as you improve the culture and make it a little more serious place, I’m not sure we’ll have to be pushing people out, they’ll just find it’s not an environment that makes sense for them after a certain period of time, or the money will run out.

1871 is a big place. Would you rather see a full joint or some empty desks but everyone there has a shoulder against the wheel?

I’d rather have 50 successful companies than 250. If you have a highly selective, challenging and difficult place to get into, you have a much higher likelihood that the companies coming out of it are going to be successful. It’s not a student union and it’s not an entertainment center. It’s great that there’s a lot of community — I’m trying to figure out how to phrase the idea that community is not an umbrella for every kind of activity, it’s community in a way that’s additive and helpful to the core mission, which is building successful businesses — not to be the JCC.

What’s the downside to having 250 companies if among them are those 50 serious successful companies you’re talking about?

Noise and distraction is very challenging. There’s a sense that, if you talk to [former Obama campaign CTO] Harper Reed or [MarkITx CTO] Ben Blair, who are more hard-core engineer/programmer types, they would tell you that their vision of a work environment is a bunch of people who are head-down, ear-pods-in working. We need to try to get those people back. Their perception, right now, is that 1871 is not a serious place, and that’s horrible. If there are just too many people wandering around the place, you get a different feeling. I’d be more than happy to have 250 serious companies.

What’s your ideal acceptance rate?

Maybe one out of 10. It’s not that we want to turn down anyone who’s viable.

I don’t see a huge number of the existing people at 1871 being there well into the evening. It empties out. I don’t know what the deal is other than the fact that I do a lot of speaking about wiki work, the idea that you can work anywhere. It’s perfectly fine to say that model is you spend your day there, eat dinner, work more from home. [But] I hope people don’t think you build a successful business 35 hours a week. I just don’t think that works.

I go into 1871, and in no way does it reflect the diversity of the city. It’s mostly a lot of young white guys who dress pretty well.

Incubators that have grown up, like the one in Pilsen, I don’t think we want to say to their people, leave Pilsen and come downtown. What I want to figure out how to do is to let them have access and reciprocity. That’s what I’m interested in. If they have a meeting downtown and they want a space and they don’t think 40 people will come out to Pilsen or Englewood or wherever I want to help them have a presence here. But the truth is, if there they’re working in a former church and there’s five little businesses, you want them there because you want them to connect and enable those communities. So the way I’d like to initially work with them is to welcome them, invite them down for these educational events or things, without saying, the only cool place to be is downtown and we need four token black guys and five Hispanics and three more women or whatever.