Hispanic incubator flips script on tech entrepreneurship

By Kara Voght

Aspiring entrepreneur Jose Mendoza, 35, from Gurnee, Illinois, had only visited the Chicago tech hub 1871 on one other occasion before attending Wednesday night’s Hispanic Technology Showcase. At the end of the presentation, standing among the crowd packed into 1871’s Merchandise Mart auditorium, he said the pitches he’d heard surprised him.

“I didn’t even know there were so many tech people out there, especially Hispanics,” Mendoza said. “It’s inspiring to me because it lets me know [that] retail, construction are not all we have.”

Mendoza’s reaction is what Illinois Hispanic Chamber of Commerce president and CEO Omar Duque had imagined when he first hatched the idea for the joint 1871 and IHCC Hispanic Tech Incubator, whose inaugural members shared their businesses with over 500 attendees that evening.

“This is an opportunity for us to show the larger Chicago community, and the larger tech community, that we’re here, that we’re doing this, we’re serious, there’s value in this space, and we want to continue to attract Latino entrepreneurs to be part of this program,” Duque said.

Wednesday’s event not only offered a capstone for 10 Latino-founded startups that had spent the last three months growing their businesses at 1871, it marked a milestone in IHCC’s year-long effort to better connect its community with Chicago’s burgeoning tech scene. Duque said the IHCC, often associated with the brick-and-mortar businesses it has traditionally supported, needed to do more to serve Illinois’ young up-and-coming professionals who operate in the new economy.

“What will we look like in ten years if we’re not servicing this next generation of entrepreneurs?” Duque said. “That was a real existential question for us.”

To Duque, servicing that generation had two components. First, it required improving access to capital that has long eluded the Hispanic business community. According to a 2013 IHCC and DePaul University study, Hispanics compose 17 percent of Illinois’ population, but own only 5 percent of the state’s businesses, even though, according to a 2015 Univision and JPMorgan Chase report, Hispanic entrepreneurs start new businesses at a rate 15 times greater than the national average.

While Illinois businesses earn, on average, over $1.3 million a year, Hispanic-owned businesses maintain an average income just under $200,000. Contrasting the earning potential of family-owned-and-operated businesses typical of the Hispanic community with those of modern day tech tycoons, Duque said the tech incubator could be one method of attracting investors to the Hispanic business community.

“Imagine the economic growth when a group that’s one of the fastest in terms of economic development and propagation actually has funding,” said Mark Vargas, 35, an incubator member and co-founder of medical licensure platform Licentiam. “It’s going to transform communities and cities.”

Entrepreneur Mark Vargas pitches his company, Licentiam, to a crowd at the IHCCx1871 Hispanic Technology Showcase. (Kara Voght/MEDILL)

In addition to capital, Duque said he also wanted to improve access to tech and entrepreneurship resources for a community that isn’t well-connected to them. According to a 2014 Equal Employment Opportunity Commission report, the high tech industry sees a lower share of Hispanic employees, 8 percent, as compared to the private sector as a whole, 13.9 percent.

“I don’t think anybody knows how to tap into all of the resources of 1871 better than Manny, and you see it in the cohort and their ability to really connect, whether it’s to mentors or other companies with entrepreneurs, or even folks in the capital community,” Duque said.

Access to those resources incited interest in some of the incubator’s inaugural members. Ramon Rodriguez, 40, the founder of business partnership matching site collaborate.biz, said knowing he’d be working in a well-supported space encouraged him to leave the comfort of a corporate job for the startup scene.

“I was tinkering with the idea of doing entrepreneurship,” Rodriguez said, “but it was difficult to form the team, the connections, because a lot of things have to come into place for you to go ahead and take that leap.”

For Pablo Mitre, 24, founder of tutoring booking app Tandlr, having a home within the cohort made those resources more approachable.

“At 1871, it’s an awesome space but everybody works on their own projects, and they’re scattered,” Mitre said. “The community that has been built in through the incubator is really incredible.”

IHCCx1871 incubator members Kristen Sonday, left, and Ramon Rodriguez work on their businesses in 1871’s workspace. (Kara Voght/MEDILL)

That balance of broad access and intimate community offers a strong model of inclusivity for an industry plagued with diversity concerns. Seasoned entrepreneur Kristen Sonday, 29, co-founder of Paladin, a platform that connects lawyers with pro-bono work, said the partnership between mainstream tech giants, like 1871, and organizations that represent minority communities, like the IHCC, offers a means of developing opportunity pipelines necessary to sustain minority entrepreneurship.

“I think previously we’ve been a little bit siloed from the community and being pulled into these supportive networks is so essential to success and having access,” Sonday said. “This has actually been a pretty big thing for me.”

Being pulled into those supportive networks didn’t just benefit the incubator members. 1871 COO Tom Alexander said IHCC and the cohort have become an essential part of the fabric of 1871’s tech community.

“It’s fun to hear new points of view, it’s exciting to make the sort of advancements that come from those types of interactions,” Alexander said. “It feels great to go out in our space and it looks like the United Nations, or the city of Chicago.”

Early outcomes suggest Duque’s ambitions have been realized. Sonday is about to introduce Paladin to the Chicago pro bono market after a successful New York launch. Rodriguez said he’s had conversations with potential business partners. Vargas has already raised $75,000 for Licentiam. And Duque has been invited to talk about the incubator at a national Hispanic Chamber of Commerce conference later this year.

While Duque’s hopeful other cities adopt this model to support budding Hispanic entrepreneurs, he thinks Chicago’s early efforts will make the city a leader for minorities in tech.

“People are going to wake up one day, and Chicago is just going to be a rock star in this space,” Duque said. “I think we’re going to surprise a lot of people.”

Photo at top: Members of IHCC and 1871’s first-ever Hispanic tech incubator look on as IHCC President and CEO Omar Duque addresses the audience at the Hispanic Technology Showcase at 1871. (Kara Voght/MEDILL)