Growing up in Chicago, you quickly learn that there are insiders and outsiders. You always tried to be an insider, but unless you knew the right people, said the right things and more importantly, just did the right things without saying anything you would never be an insider. You might not also want to pay that personal cost it took to be an insider.
This is how the Chicago Democratic Machine and Illinois Combine really work. People don’t need to say anything. No notes. Carefully scripted and planned. Everyone does what’s expected. The votes are known before the ballots are dry at the printer’s office. No mover and shaker ever go to jail, just the minions or pawns.
I have a friend that used to build tall buildings. He wasn’t from Chicago. He built a couple of buildings in Chicago. He hired people he knew that knew the system. Every project he built had the correct amount of flexibility built into the budget. No project he ever built was ever over budget and things went as smoothly as they could. What was the key to his success besides his own business acumen?
I saw my father deal with it. The school board in the district he was an administrator bought a bunch of land. They marked it up and voted to have the college buy that same land to develop. These school board guys were amazing real estate investors. Imagine their luck.
It’s one of the reasons I was attracted to entrepreneurship. You learn to expect the unexpected. There are no clear lines and progress isn’t linear or predictable. Take a bunch of calculated risks and get a return. No need to worry about the man unless you were attacking a regulated business.
Open networks matter for entrepreneurship. It’s not who you know, but “can you do it”? One of the hallmarks of NYC and Silicon Valley was that they had the latter attitude embedded in their culture. But it feels like that has changed. Miami had more tech hiring and seems to be up and coming.
In Chicago, when you see a party that has absolute political power have infighting, reporters will try and create drama. Breathless gossip will be reported on. But, the reality is there is no drama. It’s just a fight over who will get what and how many or which taxpayers they will screw to get it. There is a smoke-filled backroom moving the chess pieces around on the board. It’s why guys like Danny Davis, who wants to come back to Chicago and “serve the public” in a local office, will never get to do it. Chuy Garcia was dispatched to Washington. The Machine needed him out of town. He saved face and gets to whet his beak. No room on the chessboard in the city right now.
Of course, if they make enough noise and do the right things, they will be rewarded somehow. It will be a corporate board seat or some other insider deal. Do you really think Rahm Emanuel was some sort of investment banking genius when he left the Clinton administration to broker M+A deals? Look for him to broker deals between the US and Japan in his next career.
That’s why when people like either Mayor Daleys were rumored to seek a higher office, you knew it was bullshit or some sort of smokescreen. The Daleys and people like them never wanted to leave. They needed to be close to keep an eye on things and cut deals. Maybe even for their spouses.
In entrepreneurship, just doing the right things and knowing the right people aren’t enough. You actually have to provide value for customers. Otherwise, you are gone.
When you meet a Chicago person, it’s likely they have a “guy” or a lot of “guys”. Jeweler, watch guy, accountant, cigar guy, hat guy, police guy, lawyer guy, insurance guy, car guy, bookie, ticket guy, clothing guy, butcher, Maitre D, or some sort of purveyor. Everyone knows everyone. Even in board rooms or among executives, you’d see business pushed to a certain person(s) over and over again. You know, “just because”. It’s the largest small town in America. I am using the colloquial “guy”, this could be a “gal” too. It’s not just beef and hot dog stands.
I had guys in Chicago and I miss them. They took care of me, and I tried to take care of them. I always saw myself as a builder. I deeply enjoy the early part of the process.
When I traded, certainly there were insiders and outsiders. But, you could break in and bust up cabals just by being quick, good, and taking some risk. Eventually, you might even be accepted. Once you broke in and people knew they could trust you, traders were introducing you to their guys and you were introducing them to yours. Because of the nature of floor trading, even people that were insiders didn’t always have a bed of roses and a road paved with gold. Nothing was guaranteed on the floor. Even the most despicable bagmen got run over sometimes.
That’s why it’s really offensive when I hear people tell me I was able to do what I did because of this or that. Or, perhaps, I just got lucky. Or, maybe someone just gave me the wink and nod. Of course, we made tons of money every single year and each year just made more of it, right?
Traders that were on the floor would laugh at anyone that said that to them. We would have had them for breakfast and dispatched them from our systems by lunch.
Some traders I knew went into scalable entrepreneurial companies as both founders and early employees of those companies. Many others left the floor and went into occupations like wealth management, real estate, or selling insurance. Believe me when I tell you, you are fortunate if you have an old floor trader representing you. They are honest as the day is long and tenacious.
One of the things that really attracted me to scalable startup entrepreneurship is great entrepreneurs didn’t need a guy. They didn’t need to be anointed by anyone. They answered to no one. If they were good enough, VCs beat a path to their door. Mom and Pop businesses did need guys. There was always someone to pay off in some way to make things go smoothly. Mom and Pop needed to keep a fresh box of envelopes on the counter.
Entrepreneurship was really really different.
Have a great idea, start a business. If you could execute on it, you rose above all the bullshit and the scrum at the Machine level. That’s why it always cracked me up to see Illinois politicians from both parties try to ingratiate themselves to the startup community. They weren’t there when it was hard. They weren’t there when there was a lot of personal risks and financial risk. Failure in Chicago is a no-no. But, the pols were willing to take the spotlight and smile for cameras and a willing press was more than willing to give it to them. of course, when the startup entrepreneurs’ business became successful, they all showed up with their hands out, wanting to introduce the startup to “their guys”.
I never saw a politician do any good for any entrepreneur that needed it. Their “guys” weren’t helpful. They only want to “spread the wealth around”. Great entrepreneurs don’t need “guys”. Politicians never follow the “give before you get” ethos of entrepreneurship. Brad Feld spells it out nicely here.
Raw, brazen, unbridled, entrepreneurship is great for America. We need more entrepreneurs because they don’t have to answer to the man. They are individualistic. They value their employees and families. They value freedom and liberty. They are builders and yes, they did build that.
💯 and with the ""New Deals" Obama Trickle Down Chicago Style Economics" the Democratic party is trying to destroy that. It is so sad to see the direction our country is spiraling in the past 9 months.