Chicago Mafias
The subject of “mafias” has come up frequently in tech/startup circles of late all over Chicago. This time of course not PayPal but Groupon. I am hopeful about the idea that this city will get an influx of young, savvy, and motivated “hustle” money into the hands of the top and middle management at Groupon and we’ll all be better off. Even if only a fraction of that $6B gets into the hands of the twenty- and thirty- somethings running the show there it will be enough to shake up the tech and startup scene here in a very good way. Hopefully companies won’t be running for the coasts as they have in times past.
Provided our newly minted million- and billionaires don’t head for warmer climes themselves. Or sit on their cash.
One question I’ve been fielding frequently is “why is there no Orbitz mafia”. After all, as a 3 year old company it IPOd at a value of $1B (seemed big at the time) and was acquired by Cendant one year later for a cool $1.25B (seemed big at the time.)
It is a valid question and one worth answering. As my friend Dave Goodman says, and I agree wholeheartedly, there were no founders at Orbitz. Anyone you meet, and I know there are people out there doing it, who calls themselves a “founder” at Orbitz is either 1) using very misleading shorthand 2) a pretender or 3) a liar. The airlines founded Orbitz. They hatched the plan, they funded the project, and they were the primary beneficiaries of the IPO and acquisition. There was no influx of big money into the hands of middle managers and in-the-trenches people to fund a new round of investment and self-funded startups. No big money in many hands, no mafia. Simple.
I should point out that some of the folks there did well. Some did very well. But it wasn’t “mafia” well in “mafia” numbers. It wasn’t “I now have money to throw around and help people” well. I’m not complaining, and I don’t know anyone who does.
Don’t get me wrong: the people were critical. I hope we have all figured out that there is no manifest destiny. There is no billion (or six billion) dollar idea — there are billion (and six billion) dollar executions. And the talent that built Orbitz and executed that plan are top notch. Many of them are still my go-to people for hiring and I’d take them into battle with me under any circumstances. A few of them I’d even follow into battle, and for those who don’t know me that is praise not given lightly.
We’ve seen the first generation of post-Orbitz startups: Alex Zohghlin, Roger Liew, Michael Wight, and others at G2 Switchworks. Jeff Liesendahl, Mike Long, and others at Accertify. Jeff Judge and his ever-growing team at Signal (www.signalhq.com). Mike Sands, Andrew Violette, and others at BrightTag. Dave Shemenski at Media Chaperone. Blagica Bottigliero and CondoPerks (and Gal’s Guide). Jeff Eckerling, Brad Jaehn, and Greg Ball at BonVoyou. There are countless more working industriously at numerous companies large and small all around Chicago, continuing to build on their hard-won experience at Orbitz.
I know I am leaving folks out and to them I apologize.
You’ve seen more startups founded by the Oribtz folks than you have seen invested in by them. We got great experience and great knowledge out of Orbitz, but not deep pockets. And sadly, people don’t scale as well as money. Money scales very well.
I am hopeful to hear more from these folks as several of them have exited already (Accertify, BonVoyou, and G2) and I think more will, hopefully soon.
And I am hopeful that we will see lots of cash make its way into a lot of hands at Groupon and we’ll see a new class of investor here in town.
Stay tuned….I know I will.
