Features

Chicago Inno Feature: How Catapult Turns the '90% of Startups Fail' Stat Upside Down

Every entrepreneur knows the statistic. Somewhere around 90% of startups are going to fail, and even the best ideas with the best execution can succumb to the risky nature of starting a new business.

But at Chicago incubator and co-working space Catapult, the numbers look a little different. In fact, since the space launched five years ago, 90% of the startups that’ve come through its doors have been acquired or are still active today.

Catapult isn’t as big and flashy as some of the competing co-working spaces around town—it’s just 10,000 square feet—but it boasts an enviable startup hit rate that you’d be hard pressed to find at any other space in Chicago.

Its member companies have included some of the hottest startups Chicago’s seen in the last half decade, including Shiftgig, Opternative, Bucketfeet, Rippleshot and Jiobit, along with Shark Tank standouts Packback and Rent Like a Champion.

Since it launched in 2012, Catapult members have raised $150 million in venture funding, hosting 43 companies that have employed 800 people. Five of Catapult’s members have been acquired, including Plantlink (acquired by Scotts Miracle-Gro), TempoIQ (acquired by Avant) and Tastebud (acquired by Raise). Among the few failures Catapult has seen is wearable tech startup Rithmio, which raised $3.6 million and shut down at the end of 2016.

So, what sets Catapult apart? Not just any startup can come in and rent desk space. Companies interested in joining Catapult must pitch their businesses to Catapult’s members, who then decide whether or not to admit the company into the space. Startups have to be beyond the idea stage, have proven business traction, product-market fit, around 10 or less employees, and generate revenue, Catapult General Manager Caitlin McAllister said.

Not every startup gets in (Catapult turned down two companies last month), and it’s a model that helps the small co-working space punch above its weight, she said.

“We’re small, but mighty,” McAllister said. “We’re looking for the best of the best. That’s why we have such a good success rate.”

Catapult, which is industry agnostic and doesn’t take equity in startups, also fosters a spirit of collaboration between its member companies and the alumni network of startups that have since moved out, McAllister said.

“People come to Catapult because they want to learn from others and receive help from others,” she said. “Businesses here are at the same stage and see the same problems that come with scale. It’s a help-me-help-you environment.”

And Catapult’s newest members have the potential to keep the co-working space’s batting average high: Fly.io, an Application Delivery Network that makes a company’s apps run faster, is co-founded by Kurt Mackey, who previously founded Y Combinator-backed Compose, which sold to IBM in 2015; Rhabit, founded by two former NCAA tennis players, gives aspiring athletes access to top tennis coaches and professionals through instructional videos and online lessons; and Pay Your Selfie lets users get paid for, you guessed it, taking selfies while providing custom data to brands. Its clients include Crest toothpaste and Goose Island beer.

Catapult has also gone through a space renovation and a website overhaul to give its members even more resources to build their businesses, McAllister said.

“Companies that have graduated five years ago are still coming back for founder forums and events,” she said. “The model continues to work.”

Reasons to Celebrate: The Success of a Hypothesis

Reasons to Celebrate: The Success of a Hypothesis

It’s no secret that entrepreneurs who work together, thrive together — just ask one of Catapult Chicago's 5 founders: LearnCore's Ryan Leavitt and Vishal Shah, MentorMob's Kris Chinosorn, and Foley & Lardner LLP attorneys Chris Cain and Galen Mason. As March 2015 marks the third anniversary of Catapult’s induction into the Chicago tech scene, it’s a satisfying reminder that what was once just a hypothesis to create a community for the next wave of prominent tech startups, quite simply, worked.

Asking the Right Questions: The Thomas Chiang Interview

Asking the Right Questions: The Thomas Chiang Interview

Executive in Residence, Thomas Chiang, wants you to be strategic. Strategic in asking the right questions. Strategic in solving the right problems. “The most successful start-ups are those that value objectivity and that solve meaningful real-world problems, especially when it involves extending beyond their comfort zone and domain expertise.” It’s frank advice like this that makes Chiang an invaluable resource within the Catapult community.

Occasion Company Profile

Occasion Company Profile

Next up for the Catapult Company Profile series is Occasion, a resident company that joined Catapult in September 2014. With their international founding team and distinct mission, Occasion is thriving in the booking industry. Occasion helps merchants easily accept bookings and appointments online, from their own website – not a 3rd party page. Customers can easily and quickly complete their booking in one step from smartphones, tablets or computers, using a seamless and intuitive interface. Businesses and their customers benefit, thanks to Occasion. 

BondingPoint Company Profile

BondingPoint Company Profile

John Calzaretta is an experienced and enthusiastic leader with a proven track record for business acumen. He's held senior leadership positions at several companies, including InnerWorkings, NSource, and AT&T. Calz, as he is known to most people, is CEO of BondingPoint, and we are very lucky to have him and his team at Catapult. BondingPoint is a custom branded, fully managed, engagement solution. The BondingPoint solution provides new ways to incentivize and reward your target audience for advocating your brand. Whether it’s by spreading the word through social media, attending an event, or reaching an achievement, members are rewarded for taking action.

Learnerator Company Profile

Learnerator Company Profile

Luke Liu started Learnerator from his dorm room at Northwestern University in 2011, but it took a few years of trial and error (and day jobs) "to find our direction and focus." The perseverance and hard work paid off - in January 2014, Liu and cofounder Will Yang officially launched their test prep platform. They raised $300K in seed funding in June and moved into Catapult. Since that time, the still-young startup has been a full time effort for the two cofounders. (Also, check out an interview with Liu on Bootstrapping in America from July.)

MentorMob Company Profile

MentorMob Company Profile

The MentorMob team spent the summer of 2013 in New York City as part of the Kaplan EdTech Techstars Accelerator. The intensive 3 month program was pivotal for MentorMob in turning their idea into a business. Co-founders Vince Leung and Kris Chinosorn, and their close-knit group of "mobsters", returned to Chicago (and to Catapult) to get to work making their passion become a reality. The goal of MentorMob is to create a community of lifelong learners through its crowdsourced lifestyle learning site.

VLinks Media Company Profile

VLinks Media Company Profile

In 2010, Ethan Linkner and Vishal Shah were 4 years out of college when they realized they wanted to start their own business and be their own boss. The high school and college friends (#GoBlue!) identified a lack of innovation in the educational space and decided to fill the void. In true startup fashion, within weeks Ethan and Vishal quit their jobs, Ethan moved to San Francisco, and VLinks Media was born.

The Black Sheep Company Profile

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     For the next few months, Catapult will be interviewing residents to get an inside look as to what a typical day at Catapult is like. One of our newest members, Atish Doshi of The Black Sheep, sat down with us and told us a little bit about himself as well as his company.

     The Black Sheep is a collegiate media company that allows local and national brands a one-stop shop to reach the collegiate demographic through an in-house, integrated multi-channel approach. Atish Doshi started The Black Sheep, while he was in college at the University of Illinois and soon after moved to Chicago to take advantage of the resources the city has to offer. Doshi fell in love with the vibe of the city and believes it’s a great place for entrepreneurs because it nurtures growth and houses resources and places like Catapult that help businesses develop as individuals and as companies.

Compared to other college magazines, The Black Sheep puts an emphasis on making the content relevant for students based on where they go to school. By having the content written by students at each particular school both online and in print, The Black Sheep is able to relate to college students and provide them with valuable information in a witty, accessible way. With a wide variety of topics to choose from, including “Top 10: Ways Netflix Can Help You Study” and Daily Bar Specials tailored to each university, college students stay up to date on campus happenings and take a break from the stress of academic life. The Black Sheep’s ideal customer is any business or brand trying to reach college students—in particular, businesses targeting the more social and outgoing student.

The silliness Atish Doshi describes is definitely a key component to The Black Sheep’s work environment. With juvenile and humorous content, there is a degree of seriousness in a funny culture. Being productive and providing great editorial feedback to writers when they know the content is meant to be funny and entertaining makes The Black Sheep one of a kind. Their unique office environment is especially palpable when considering the team’s activities. To bond, The Black Sheep team does taste tests and experiments with products sent by clients, such as a Taco Bell taste test they did last month. Not only are the taste tests exciting, they also provide editorial and business opportunities for the magazine. The team is hoping to get a Bocce Ball event going, too. It seems as though The Black Sheep has struck quite the balance.

Since beginning The Black Sheep, Doshi has gained significant insight into life as an entrepreneur. The worst advice he’s received? “If you want things done right, you always have to do it yourself.” Doshi notes that you gain a lot of value by trusting people and letting them take on responsibilities. Once you establish that trust, you allow them to grow as a person and help your business grow as well. Along the same lines, Doshi notes that trust management is the most important skill needed to be a successful entrepreneur. Between the everyday craziness, highs and lows, and attempting to balance your personal life and your professional life, trust management seems to be the only thing keeping entrepreneurs sane and motivated.

Ultimately, Doshi would like The Black Sheep to become “the one-stop-shop for students to get everything they need for their social collegiate life.” We definitely think The Black Sheep is headed in the right direction and we can’t wait to see what’s ahead for Atish Doshi and his team.