Does Chicago have the tech manpower to satisfy Google’s huge appetite?

A year ago, Tony Rizzo was working for Uber Freight, enjoying a Silicon Valley salary plus perks like free meals, phenomenal healthcare and, of course, Uber credits.

Then last October, the suburban LaGrange resident accepted a business development position at Isometric Technologies, an early-stage transportation technology startup based in Northern California, but with an all-remote team that includes several Chicagoans.

The benefits weren’t on par with those offered by Uber Freight, but what Isometric Technologies offered Rizzo was a stake in a company that still has only about 20 employees.

“I’m still young and I take calculated risks,” says Rizzo, 31. “The capital was an incentive: if the business does well, I hope it will allow me to do more. »

That’s typical Silicon Valley logic, and it’s about to be tested in Chicago. In July, tech giant Google announced plans to purchase and renovate the cavernous James R. Thompson Center in the Loop, which it will then use to significantly expand its local workforce of 1,800 employees, probably creating several thousand jobs along the way.

This makes it a good time to be a talented technician. But if you’re working in human resources at a Chicago startup that’s aiming to grow, it’s daunting.

“Google has some things that are going to make it very difficult for some local businesses: they have stocks that are worth a lot of money and they have bushels of money,” said Troy Henikoff, Chicago’s chief executive. technology investor MATH Venture Partners and longtime startup mentor.

Google’s land grab — and impending employee grab — are both a boon and a potential beast for a local tech scene that has blossomed over the past two decades, spawning high-flying startups like as Grubhub, Groupon, Relativity, and SpotHero, plus an array of venture capital funds, incubators, and accelerators. So far in 2022, more employers are trying to hire software workers than any other job category outside of nursing, according to the Computing Technology Industry Association.

Google’s planned expansion will help attract more tech talent to the region, insiders say, which is good for the tech industry as a whole. But it’s also a critical time for companies that want to retain their employees: is there enough tech talent here to feed this larger and growing ecosystem while satisfying Google’s appetite?

People walk past the James R. Thompson Center in July.

File Anthony Vazquez/Sun-Times

A magnet for young coders in the Midwest

Google came to Chicago in 2000, establishing a small sales outpost just as city leaders were beginning to dream of Chicago’s potential to become a national technology hub.

At the time, the main reason for betting on Chicago’s promise was the emergence of the “PayPal Mafia”, a handful of University of Illinois graduates who left for Silicon Valley and quickly became tycoons. It was the group that got away, but the idea was that serious talent was coming to fruition here. If Chicago could cobble together enough tech infrastructure, perhaps the next batch of software stars might choose to stay.

The basis of that thesis still stands: The University of Illinois at Urbana-Champaign offers the fifth-largest computer science graduate program in the nation, according to US News & World Report. Other nearby universities such as Purdue, Northwestern, and the University of Chicago also rank in the top 30, while the University of Illinois at Chicago and Illinois Institute of Technology rank in the top 100.

Google’s expansion announcement underscored the appeal of downtown. Chicago site manager Karen Sauder wrote an enthusiastic blog post proclaiming, “We’ll be entering the ground floor of a larger loop revitalization” shortly after the announcement in July – the company is likely betting that the revitalization will be compelling for the region. concentration of IT talent. The company, which is headquartered in Mountain View, Calif., did not respond to a request for comment.

This same dynamic is also good news for local tech leaders.

Google’s expansion “is huge for the tech community, period. It’s great because it makes this graduate student say, even more than before, “Chicago is a great option to become a technologist,” said Kevin Willer, a partner at venture capital firm Chicago Ventures, which backed several local businesses such as Cameo and Tock.

Willer is a longtime tech cheerleader and former Google insider. He helped launch Google’s Chicago office in 2000 and worked there until 2012, when he became the founding CEO of 1871, an incubator and coworking space in the Merchandise Mart.

“In the short term, yes, you’re going to see wage pressures on some of the startups that won’t necessarily be able to compete with the big tech companies,” Willer said. “But what you see in the valley is people working for these big companies, they’re developing professional networks and skills, and then they move on to something like a venture capital-backed startup where there’s more growth opportunities. So people will join Google and then eventually migrate to other companies in the region. »

About 41,000 software developers are employed in the Chicago area, according to CompTIA, and Chicago ranks fourth among U.S. metropolitan areas with nearly 11,000 tech job openings in August, according to the Monthly Business Report. CompTIA technology jobs. New York, Washington, DC and Dallas were the top three. Right now, long before the renovation of the Thompson Center, Google lists 338 jobs available here.

The interior of the James R. Thompson Center in the Loop, Wednesday, July 27, 2022. The James R. Thompson Center has been sold to Google for $105 million.

The atrium of the James R. Thompson Center.

File Anthony Vazquez/Sun-Times

boss mode

What the framework of Chicago’s top university computer science programs cannot provide from the outset is a cohort of senior tech executives. It’s an acute need for growth-stage tech companies here, and it’s why CEOs like Jellyvision’s Amanda Lannert are happy to put up with some short-term salary pressure in the battle for software developers.

Following Google’s expansion, Chicago is likely to see an influx of the type of seasoned tech executives often called upon to help successful startups navigate the next phase of growth. “That’s where traditionally we had to go to the coasts to try to convince people to come here,” Lannert said. “Chicago is always an area where the tide lifts all boats, and where anyone’s exit or exit [investment] creates value for everyone because it gets people to see it as an ecosystem where you can earn.

Another benefit is Google’s focus on getting employees back to the office. Many tech companies such as Tony Rizzo’s Isometric Technologies have embraced an all-remote work model, but Google wants its employees to spend time in the office, which means those hired as part of Google’s expansion to Chicago will have to live here.

So while Lannert laments that Jellyvision’s “ability to woo top talent will continue to get more expensive” as a result of Google’s expansion, she says bring it on.

“I really believe we can absorb this, we can handle it. It’s a really big city with a sleepy reputation, but Google wouldn’t come here if they didn’t have the data that proves we can play,” Lannert said.

Steve Hendershot is a freelance writer for WBEZ.

Michael A. Bynum