IVCA Feature: Betsy Ziegler, CEO of 1871, on the Current Progress

IVCA Feature: Betsy Ziegler, CEO of 1871, on the Current Progress

September 16, 2020

Like everyone, the “1871” entrepreneur incubator, residing in the Merchandise Mart, was affected by the pandemic. As adjustments were made, the senior staff was on hand to make sure the operations kept progressing and delivering for their in-house business development. This included the CEO of 1871, Betsy Ziegler.
 
Ms. Ziegler was named CEO in February of 2018, from her previous role as Chief Innovation Officer at Northwestern University’s Kellogg School of Management. Ms. Ziegler has continued an evolution to diversity at 1871, including a staff that reflects the progress of both business and America. As the pandemic wears on, Ms. Ziegler provided perspective on 1871 to the IVCA in the following interview.
 
IVCA: Before we get into an update on 1871, at what point as the quarantine came up did you make the decision to close the offices, and what was the behind the process for making that transition as smooth as possible?
 
Betsy Ziegler: On March 6th, we hosted International Women’s Day, with about a thousand people in our space. At that point, there wasn’t a focus on social distancing and masks, but we were distributing hand sanitizer and asked for greetings without handshakes. The night of March 12th, I talked to my board chairman and expressed that I felt that the situation was going in a different direction. The next day at 9am I assembled my leadership team, and we spent the next two hours planning out how to get everyone home by noon, and to stay home until we found out anything different. It moved really fast.

At that point, we did still have people in the space, so we worked out a calendar schedule for the next month that had two people a day – all volunteers – to manage the space during the final move towards going home. After two weeks that transition was complete.

IVCA: So what is the current status of 1871, as far as the offices, entrepreneurs and approach to how you are reformulating?
 
Ziegler: At the same time we moved to home on March 13th, we went virtual for our entrepreneurs, growth stage companies, corporate partners, etc. It has remained virtual to that point, and it’s working out well. We did reopen on June 17th, but with a third of my team. The vast majority of our members and tenants are engaging virtually.
 
What is interesting is that for the last year-and-a-half, pre-COVID, we had been trying to shift to ‘1871: The Experience,’ regardless of how it is consumed. COVID has accelerated the process, and in that sense we’re still in midst of reformulating. Right now, I feel great about the support we’ve given our members, but the long-term effects of COVID have yet to be known.
 
IVCA: When we see the diversity of your team at 1871, we see an essential people mix of how America looks now. What is the advantage to diverse voices in the entrepreneurial space, and how does 1871 lead by example?
 
Ziegler: We still have a ways to go. But every metric that we can look at, as far as the performance levels of diverse teams, is significantly higher than non-diverse teams. Diverse leadership teams drive 19% higher revenue, 42% increase in Return on Sales, 53% increase in Return on Equity, and a 66% increase in Return on Invested Capital.
 
I think 1871 does well with women, with 30% of our founders being female, and our goal is 35%; 19% of our founders are black, and our goal is 30%; 10% is LatinX, on the road to 20%. We’re moving in the right direction, with room to grow on the entrepreneurial side, my immediate team and the board.
 
We believe that entrepreneurial talent and aspiration is evenly distributed but opportunity and access are not. As a result we are rolling out some initiatives in the under-resourced neighborhoods of Chicago, with a focus on the South and West sides. We will be announcing these initiatives in mid October in partnership with organizations based in the neighborhoods.
 
IVCA: What advice would you give to entrepreneurs as we sit right now, trying to understand what the ‘new normal’ is? And how does that relate to 1871, in the realm of your ‘new normal’?
 
Ziegler: I actually think that the world hasn’t changed that much if you’re an entrepreneur. In this environment, with unprecedented crisis after crisis being layered on top of each other, it is exactly the right time for the entrepreneurial spirit. This is the moment, because in the last 30 years there has been 40 million net new jobs created in the U.S. that are 100% due to start ups. Start ups and small businesses are the key to the economic recovery, in terms of job creation. And people who have an entrepreneurial mindset, and are willing to do the work, there is no better time.
 
Having said that, of course, this is really challenging with our health, social justice, climate and mental health crises. But again, when we look back ten years from now at the companies created out of 2020, they will be the defining companies of our age. Not only that, checks are still being written and people are still being funded.
 
As far as 1871 is concerned, our business model continues to adapt to the changing macro context. We are leveraging all of our entrepreneurial energy to do what our members do each day.
 
IVCA: Finally, What can the IVCA membership do to keep supporting 1871, and to keep it viable for Chicago’s vital entrepreneurial community?
 
Ziegler: Well, Maura O’Hara sits on the board and the Executive Committee, which is really important to me as a link to the IVCA. The membership of the IVCA is of course extremely vital to our community, especially in figuring out ways for us to connect, which is always welcome for both sides. If there is any education opportunities that the IVCA members could do for our founders, that would be phenomenal. I’m always open for ways to be creative, where we can show up together.
 
For more information about 1871, click here.