As the bogus unicorns start to crumble into unicorpses, our more modest and meaningful metrics-- focused on building viable, cash-positive businesses and creating real job growth instead of voodoo valuations and media hype-- are starting to look positively prescient. Relative capital constraints (or at least capital that resists attaching to the latest shiny startup story like metal shavings on a magnet) make for stable businesses. I'm talking about businesses run by reasonable operators who understand that the race isn't always simply to size. That's going to be a hard lesson from some startups once the money spigot shuts off. When reality bites, it will favor companies who know that it's at least as important to get to sustainability, which means that you're burning less cash than you're bringing in from contracts and customers, as opposed to new investors.
In Chicago, we've got a growing stable of solid businesses providing real products and services and real benefits to millions of users across the country and the world. At the same time, they're creating concrete enterprise value for their backers and investors as well, value that isn't likely to dry up and blow away when the first headwinds and competitors arise. These aren't businesses that aspire to be the first on the block--the so-called first-mover advantage is overrated. (See http://First Mover Advantage: Maybe, But Be Smart About It) They're aiming to be the best in the business. "Does it better" always beats "did it first". And we're seeing similar growth and prospects in other cities throughout the Midwest as the "rise of the rest" continues unabated while the fantasy stories on both coasts continue to crumble. You can only win a race with your mouth (and your media) until you have to take your next breath. And that's very, very tough to do if your business is under water and a long way from shore.
A while ago I wrote about one of our EDtech companies at 1871, ThinkCERCA, rolling out new programs to schools to help students learn to think about, and actively engage, in their learning instead of passively sitting back as the traditional wisdom from the "sage on the stage" washed over and then right past them. Today they're leaning into this new tech-enabled world where they take control and responsibility for constructing arguments and building the foundations for their own education. Tell me-- I might listen. Show me-- I might learn. But let me do it myself and I own it for life. Watching the kids using ThinkCERCA's tools to build their arguments step by step, starting with their Claim, then gathering the Evidence for it; then explaining their Reasoning; next, addressing the Counter Arguments; and doing it all in language appropriate to their Audiences is an amazing experience. You can just feel the difference. They're taking charge and ownership, and it shows in their posture and in their faces.
But the proof is always in the pudding and that's the best news of all. The measured and validated results are starting to come in from across the country for a number of 1871 businesses, such as Options Away, Learnmetrics and Rippleshot, and the momentum and traction are continuing to build. As for ThinkCERCA, the sheer multi-year jumps in capabilities and other material growth in reading and other skills, especially in schools that started as underperforming at grade level, is encouraging enough. But the system is also working consistently in diverse environments for learners at every level, at scale. And, of course, with the economies of scale and some prudent restraint on willy-nilly expansion, comes profitability for the businesses right along with concrete results for all of the users. This means that differentiated learning in the classroom can be ongoing without consuming enormous (and scarce) amounts of teacher time and resources that had been spent in the past attempting to locate and provide useful materials for each student.
The technologies alone wouldn't have succeeded without substantial preparation and without creating a cradle of culture that also supported the change initiatives. But, once in place, it became clear almost immediately that there was no turning back and that these systems were game changers for everyone involved--students, teachers and parents as well. And of course, success breeds support, adoption, and further successes as well. This is how and what it means to build a real business-- Chicago-style. Real people. Real progress. Proven results.
And frankly, it's way more important to be improving the education of the next several generations of kids than it is to be building the 14th take-out delivery service or the next nichy social network that only a nerd could love. Building a business that makes an impact and a difference is just a better way to spend your time. Technology isn't an end in itself-- it's a tool that benefits us all but, more importantly, it permits us to build products and services that will improve the lives of others for decades to come.