The second day of the Chicago Venture Summit featured big names in Chicago and national tech, including Don Thompson, the former CEO of McDonald’s and the founder of startup incubator Cleveland Avenue, and Ben Horowitz, co-founder of venture capital firm Andreessen Horowitz in Silicon Valley.
Summit attendees, which included investors, startup founders and civic leaders, gathered at Google’s headquarters in the West Loop on Thursday for the event, which included other notable figures, such as Mayor Rahm Emanuel, Uptake Founder and CEO Brad Keywell and Outcome Health Co-Founder and President Shradha Agarwal.
Both Thompson and Horowitz shared their insights during a keynote address about what they look for in a startup, how they attract and cultivate diverse talent, and their best practices for becoming better leaders.
Over the years, startup investing has changed due to the rise of seed investing and accelerator programs, Horowitz said. Now when he’s looking for a startup to invest in, he looks for “good ideas that look like bad ideas.”
“If it’s a good idea that looks like a good idea, it’s not really a great idea for an entrepreneur to pursue,” Horowitz said. “If it looks like a good idea, it’s not innovative enough because other people can see it.”
Airbnb, the online marketplace and hospitality service that Andresseen Horowitz invested in, seemed like a bad idea at first, Horowitz said.
“Nothing looked like a worse idea than that,” he said. “Here’s the idea: I’m going to blow up an air mattress, stick it in an apartment and rent it out to strangers.”
But now Airbnb has shaken up the hotel industry, with profits expected to top $3 billion by 2020.
Thompson echoed Horowitz, adding that he looks for startup ideas that are “going to blow up an industry.”
“If you have something that totally blows up the existing system, this is a fun deal,” Thompson said. “When the entrepreneurs are passionate, energetic and they have this phenomenal vibrancy about what it is they’re doing…that’s where we can leverage Cleveland Avenue, because we’ve got resources and connections to a lot of people.”
Mayor Emanuel, who has proven to be a useful civic ally to Chicago’s tech community, touted the city’s startup ecosystem, saying it’s a leading space for the number of women that work in tech and that the surrounding universities help produce top talent for hiring companies.
“In 2016, Chicago was the No. 1 city for return on venture capital,” Emanuel said. “Making money and doing it in a way that’s consistent with your values can be accomplished.”
When it comes to Horowitz’s values in hiring tech talent, he’s focused on getting a diverse pool of employees that expands beyond skin color.
“If you look at my African American entrepreneur portfolio, it outperforms every portfolio in Silicon Valley because I know the best people,” he said. “But it has nothing to do with diversity—it’s making me money. The key is to be able to see who people are.”
The Chicago Venture Summit, now running for its third year, was launched with the help of J.B. Pritzker. He’s also scheduled to speak Thursday afternoon.
Thompson said he values events like the Summit that bring entrepreneurs and investors together. But ultimately, being successful in the startup realm requires a good idea and smart people, he said.
“When those things happen, that’s when it’s not a transaction, it’s a movement,” Thompson said. “And disruptive movements will win.”