Building a startup ecosystem by leaning into a city’s legacy

p 1 chicago built a startup ecosystem by leaning into its legacy and your city can too

I didn’t find yourself in Chicago on function. I grew up on the East Coast and lived in New York for a few years. When my spouse graduated from legislation faculty, we had been able to attempt one thing new. We picked Chicago after dwelling right here for a summer time due to the price of dwelling relative to the unbelievable alternatives to dwell, work, and play.

As soon as we picked Chicago, nevertheless, I had to determine what I used to be going to do for work, and I undoubtedly didn’t know at that time that I’d be founding a food-tech enterprise. In hindsight, being in Chicago has been one of many key substances to the success of my firm, Farmer’s Fridge—and that’s not a coincidence.

Chicago is the house of a variety of profitable food-tech startups, together with disruptors like Grubhub, which accelerated on-line meals ordering, meal package pioneer Residence Chef, protein snack RXBar (now a part of Kellogg’s), and rising gamers like Tovala and Nature’s Fynd.

Being surrounded by so many food-tech startups makes it clear that I ended up in precisely the proper place. Town’s startup ecosystem has embraced Chicago’s roots as a meals middle—and I’ll clarify how and why that’s been a boon for our firm and others—and provides a nice roadmap for founders and financial improvement officers in different communities in search of to leverage their conventional strengths to encourage innovation and win in new, technology-enabled industries.

Manufacturing and Distribution Epicenter

Whereas many People may consider California’s avocado farms or New York Metropolis’s eating places, Chicago, situated in the course of the most important food-growing area and within the geographic middle of the nation, is on the coronary heart of this nation’s meals manufacturing and distribution. Chicago has lengthy been a national transportation hub, and that’s nonetheless the case at present: Six of the nation’s largest railroad freight carriers function terminals right here, and it’s the third-largest intermodal system on the earth. We can reach 30% of North American customers with a one-day drive.

In brief, Chicago was well-situated from the begin to delivery and home most of the largest client packaged items corporations. It’s home to 1,500 meals manufacturing corporations, and practically 400 meals corporations have a presence right here, together with Kraft Heinz, Oscar Mayer, MillerCoors, and Conagra. And let’s not neglect to say that the most important restaurant chain on the earth, McDonald’s, scaled from its headquarters within the Windy Metropolis as nicely.

The truth that large meals has flourished in Chicago isn’t precisely information. The place it actually will get fascinating is once we have a look at the rising era of food-tech corporations that has blossomed right here. Why hasn’t one other metropolis or area been in a position to shake Chicago’s crown? There have actually been makes an attempt. Silicon Valley has their fair proportion of meals corporations, and locations like Boulder, Colorado have been pivotal to innovation within the pure meals trade. However nowhere else has the focus of corporations that now we have right here. What Chicago has going for it’s greater than pure geographic benefit.

Much less Costly

Meals is a bodily, tangible factor, and launching a firm with a bodily product is inherently extra price prohibitive and logistically difficult than launching a providers enterprise. It requires manufacturing area, labor, and entry to uncooked supplies. In 2013 in Chicago (once I began Farmer’s Fridge), the price of renting a desk to work in a shared industrial kitchen was $15 per hour. The same area to organize meals in New York ran for $100 per hour. Decrease startup prices are undoubtedly a purpose why so many food-tech corporations have planted roots right here.

Along with being cheaper, beginning up right here can be simpler. The infrastructure is available, and infrequently centrally situated. Chicago has the largest industrial real estate market in the U.S., with greater than 1.2 billion sq. ft of processing and manufacturing area obtainable. That’s 50% extra industrial area than Los Angeles has, and greater than Dallas and Atlanta have mixed. As a result of so many giant meals corporations are in Chicago, there’s additionally an ease to scouting these areas, partaking suppliers, and securing logistics companions. For our first manufacturing facility, we had been in a position to lease area proper within the West Loop beforehand used by meal package and residential supply enterprise Residence Chef, lower than half a mile from the Google headquarters and a brand-new Nobu lodge. After we outgrew that area, we adopted in Residence Chef’s footsteps once more and moved into the subsequent tier of facility they’d just lately outgrown.

Prime-Tier Expertise

Simply as vital as the present infrastructure is the institutional data. Chicago has supplied the assist system essential to develop Farmer’s Fridge. This metropolis has each the infrastructure and, crucially, the expertise base wanted to succeed because the meals system is as soon as once more revolutionized in America. The rise of tech and the digitization of our lives permits for a full transformation in how we work together with what we eat (suppose ordering your meal from an app, a software-enabled good oven, or a digitized merchandising machine, to not point out the advances in expertise enabled on the manufacturing entrance). If you overlay expertise on high of the stable industrial and logistical base already current in Chicago, it’s clear one thing particular is forming right here.

To that finish, it’s not laborious right here to rent workforce members who’ve labored in meals, manufacturing or logistics to assist develop your group. Chicago has the highest concentration of meals scientists and food-manufacturing staff of any giant American metropolis. I employed a director of high quality and meals security with a background at Kraft Heinz, and a director of operations who got here from Imperfect Meals. If you start to scale, Chicago is a giant sufficient metropolis to assist a roster of tech expertise. In reality, as a hub for high engineering packages, the midwest is producing an more and more giant share of the nation’s tech workforce. The College of Michigan, College of Illinois, and Purdue College are ranked among the many finest within the nation. Michigan is the state with the highest number of engineers per capita, and seven% of Illinois’s workforce is in tech, which is the same as roughly 440,000 jobs. After all, with so many large meals corporations headquartered right here, Chicago can be dwelling to proficient professionals from each different stroll of life. My Chicago-based management workforce has backgrounds throughout Garrett Popcorn, Groupon, Trunk Membership, and Feeding America.

Chicago as a Meals Metropolis

Chicago’s historical past as a meals metropolis signifies that I’ve discovered my fellow Chicagoans to have subtle style buds and curious palates. We even have an unyielding need for high quality and worth, coupled with a devotion to no-nonsense Midwestern costs. Put merely, our historical past as a meals metropolis signifies that we’re accustomed to one of the best, and Chicago’s top-tier restaurant scene has influenced our menu choices through the years. We’ve collaborated with cooks like Stephanie Izard, Brian Jupiter, and Paul Kahan right here in our dwelling metropolis, and had the possibility to supply wonderful substances. We used bread for sandwiches from James Beard awarded baker Greg Wade of Publican High quality Bread for a variety of years, and nonetheless use tortilla chips from Rick Bayless’s Frontera Meals in our snack gadgets. I do know I gained’t accept meals that isn’t wonderful, and neither will a lot of my mates and neighbors.

If you’re planning on doing one thing within the meals trade that’s large, revolutionary, and leverages new expertise, I strongly recommend you be part of us within the Midwest and make Chicago your headquarters. In case you’re a founder, take a web page from the Metropolis of Large Shoulders by discovering startup alternatives that embrace and capitalize in your hometown’s roots.


Luke Saunders is founder and CEO of Farmer’s Fridge, a recent meals distribution firm with nationwide supply and a community of greater than 400 good fridges stocked with recent meals and snacks.