“I looked at […] 400 businessmen that I traced through their credit reports. And one-third of them go bankrupt. I mean bankruptcy was relatively ordinary.”
That’s a quote of Chicago historian Rima Schultz, taken by Derek John for Chicago Public Media. Schultz is talking about the startup economy of 1850s Chicago, where risk was part of the lifestyle, and bankruptcy was an acceptable part of that risk.
Schultz is saying that with no risk comes no reward, but that even if you do lose, bankruptcy isn’t the end of the world. Indeed, as John writes: “Entrepreneurs would often lose everything. But then they’d dust themselves off and build something new.”
John’s piece focuses on the tech startup hub “1871,” located in the 50,000 sq. ft. Merchandise Mart, named after the year of the Great Chicago Fire. According to the 1871 organization’s website, “The story of the Great Chicago Fire of 1871 isn’t really about the fire. It’s about what happened next: A remarkable moment when the most brilliant engineers, architects and inventors came together to build a new city.”
In many respects, even if your Great Chicago Fire comes in the form of Chapter 11 bankruptcy, those who came before you and those who will come after will build again.
John quotes one entrepreneur who earlier suffered bankruptcy with a previous business (and has since started another one): “There’s not this negative connotation around failure [at 1871]. Because it happens, you know? Unfortunately 99 percent of these companies that are here are going to lose and that’s a risk you understand going into it.”