January 13, 2014
Why we're watching: 1871 is the city's most prominent co-working space for technology entrepreneurs. Its mission is to offer services ¿ affordable rent, access to industry leaders and potential funders ¿ that accelerate the growth of businesses.
Ultimately, these companies are supposed to outgrow the co-working space and graduate. And in 1871's first 19 months, 26 companies have graduated and about 240 remain.
Tullman, 1871's new chief executive, declared late last year that its graduation rate was not good enough, and that it would be "up or out" for the companies at the Merchandise Mart-based site.
"We're not just a hobby," Tullman said in November. "We're not a place for people to go to feel good about attempting to be an entrepreneur. We're about people committed to building businesses."
It will be fascinating to watch how Tullman goes about weeding and sharpening the operations of 1871 and its resident businesses.
"There are over 900 business incubators nationwide, and the typical life span of a company in a business incubator is two years," said Brian Langham, an audit partner at Plante Moran who specializes in advising startups. "So you look at 1871, it's clearly approaching that 2-year life cycle. So Howard has ¿ to address how to get these companies out of the incubation stage, which isn't supposed to happen in perpetuity."
Tullman officially started in his post Monday. The next day, he announced the hiring of a chief operating officer, Tom Alexander, a communications aide to Mayor Rahm Emanuel. Before that, Tullman traveled to Israel, where he visited other incubators to lay the groundwork "for some kind of exchange" program for entrepreneurs, he said.
"They have similar issues," Tullman said of a young incubator he visited in Tel Aviv. "They have a rule about how long a company can stay and how much of a commitment they have to make. And there's a lot of sentiment that if I don't sort of control the population in a different way, it will affect the outcome and energy of the place."
Tullman doesn't yet have an office in 1871, and he needs to hire financial and information technology staff. This wasn't done before, Tullman said, because 1871's founders were "so unsure whether it was going to even be viable" that they launched with the leanest staff possible.
Viability is now assured. What remains to be seen is how Tullman maneuvers 1871 through its adolescence.