Verbatim recording by Bill Blaire and Jim Kren.  Transcribed and formatted by Janet Case.

          “You know I ain’t got time to waste reading no more.”  Bill Blaire’s tall beefy frame towers over Jim Kren’s desk at the Chicago Venture Magazine offices and his huge fists are clenched.  “Then I gets blindsided,” he says, “big-time.  Pierce O’Shet reads that article to the boys—out loud, real loud, hamming it up—and they laugh me outa the bar.”  He pauses.  “So what you findin’ so funny, smart guy?”
          Jim’s eyes are closed and he’s quietly chuckling.  Finally he wipes the tears away with a sleeve and chokes out a few words. “Slow down Bill.”  He clears his throat. “You’re almost entirely incoherent when you get excited.”
          “Shuttup you scrawny SOB.  Doncha use them thee dollar words on me.”
          “Jim smiles.  “You’re not stuttering yet.  That makes you upset, not angry.  Your feelings are hurt.  Is that why you’re here?  For a shoulder to cry on?”
          Shut yer face.  Yer makin’ me out some kinda soft-headed idjut.” 
          “Nobody called you soft-headed.”
          “Funny guy.  From now on, clean up my talk when ya print it ‘steada havin’ yer seckertary copy exactly what I sez the way I sez it, you lazy good for nothing’— 
          “Impossible.  This series is called Verbatim, and that’s what it is—Verbatim.” 
          “I told you—quit with the three dollar words.”
          Jim sighs.  “Stop the big act, will you Bill?  You can’t fool me.  Your vocabulary isn’t any weaker than your biceps.  But whenever you get over-excited, you talk like you never saw third grade.  So if you want clean copy, bring down your blood pressure and clean up your mouth.  If it takes a couple drinks, okay.  I can’t make your report sound pretty just to salve your ego.  John would fire me the first time I tried it.  I’m supposed to print what you say.”
          “Here—take yer stinkin’ MP3 player and shove it—you know where. 
          Bill takes the recorder and examines it.  “Just for my personal interest, let’s get more specific.  Where exactly would you suggest I shove this thing, Bill?
          Bill glares at him, then showes a set of yellow teeth.  “I got somthin’ you oughta hear about.  After Pierce mocks me to the boys, Rocco follows me outa the bar and lays out a sweet deal.  Says he’ll make this whole problem go away—permanent like.  And he gives me a good price.”   
          “Bill, are you threatening me? 
          A pause.  Still standing, Bill lowers a massive fist and looks at it as if surprised he’s raised it in anger.  “Well, yeah.”  He squints at Jim.  “Cancha tell?”
          I’m disappointed to hear you take that tone.  That Pierce O’Shet mob is a bunch of losers and Rocco Spumoni is an outright hoodlum.  It’s a violation of your parole, hanging around known felons.  You’re not in the unions any more.   I hook you up with a high-grade crowd and what do you do?   You embarrass me.  You’re with a top-flight company here.  Don’t mix with the mobs.  Hell, if you want to intimidate people, you don’t need any help—your physical presence is enough to scare most anybody.  That’s what made you such a good boilermaker superintendent.  That’s what made you such a good union contractor where others failed and still fail.” 
          Jim picks up the MP3 player and turns it over in his hands.  “Hey—this thing’s still on.  I think I’ll—”

[End Recording]

[Next recording]

          Bill squints down at Jim.  “What da hell did ya do to that thing?”
          “Put in a fresh flash card.”  Jim pats his shirt pocket.  “I’ll just keep the old one for a while and make some copies.  What do you suppose will happen if the DA hears it?  Could mean a cozy new home for you, pal—in an orange suit.  I don’t think I’ll be hearing from Rocco and the gang any time soon, either.  When I print this, maybe they’ll come after you instead.  Hey Bill—Bill, you’re turning purple—don’t bust a blood vessel.  Here.”  Jim pulls a bottle of single malt from his desk, pours three fingers and slides the glass across.  “Park yourself.”
          Bill drops into a big soft chair and swills the whiskey in one gulp then licks his lips.  “You just make me mad is all.”
         “You’re still not stuttering, so I think I’m safe.  But you lay one of those sausage-sized fingers on me and you’ll regret it.  Listen.  You have no idea why you’re so valuable.  Let me spell it out for you.  You’re big, right?  Real big.  A scary retired boilermaker out of the bowels of Local 1.  Now you traded in your coveralls and always wear the same cheap blue sport jacket.  Looks like it’s going on five years without dry-cleaning.  You shoot your mouth off and never hold anything back.  But even so, you’re not banned from any meetings like that guy Rong Mayhem, and you’re actually a lot worse than he is.” 
          “That don’t sound nice, Jimbo.”
          “I’m not done yet.  That means you found a place with these people.  They respect you just the way you are.  And nobody can intimidate you.  Your slant on these new ventures is completely unbiased.  You never get swayed by the crowd.  You’re intelligent—maybe cunning is a better word—but you hide it and hide it well, so people tell you things they might hold back from the others.  You know business.  Since you gave up the tools, you made a success as a contractor then sold out for big money so now you’re on the loose as a qualified investor.  That gets you invited to all the best events.  Besides all that you’ve got an instinct for picking winners.  You’re a natural, Bill.  You’re in your niche.  I can’t afford to lose you.”
          Jim slides the MP3 player across the desk.  “Here, take your recorder.  It’s all ready to go.  Get out there and give me your best, just like you always do.  Stop some place and get your head together so you can speak more like a gentleman.  But stay away from that Pierce O’Shet bar.
          He tosses a set of keys and Bill snags them with a big mitt.  “Use the Mercedes.  Pick up John on the way out.”
          “You want I should pick up Mr. Jonelis?  What’s he need me for?  It’s his school.  I never got no MBA.”
          “Multiple events, Bill.  Last time I checked John can cover only one at a time.  And don’t give him any lip.  He gave you this chance because he saw something of value in you.  Don’t screw that up.  You’ve got three assignments—reporter, chauffeur, bodyguard.”
          Bill tilted the glass again to capture the last drop of single malt then slammed it down on the desk.  “Okay Jim, I tries it one more time.”

[End recording]

Comment on this article–name and email optional.

Find Chicago Venture Magazine at
www.ChicagoVentureMagazine.com Comments and re-posts are welcomed and encouraged. This is not investment advice – do your own due diligence. I cannot guarantee accuracy but I give you my best.

Copyright © 2012 John Jonelis – All Rights Reserved.

An open letter to my trading buddies about the white paper –  AI for the Individual Trader

by Loop Lonagan

I just heard stats that nowadays, 70% of the action in the financial markets is these high-frequency trading outfits. These high-freak syndicates enjoy the right of first look before they trade. You got it—they SEE YOUR ORDERS and FRONT-RUN YOUR TRADES. It oughta be against the law.  No, I ain’t talkin’ about them Occupy Wallstreet hoodlums.  This is big money. 

Why’s it allowed? Hey, 70% of the volume adds up to a lotta money for the exchanges. That clear enough for ya?

Just to clue you in—used to be only the Market Specialists got those kinda rights. And for a good reason.

• They gotta maintain orderly markets.  BIG RESPONSIBILITY.
• They gotta participate whether they like it or not.  BIG RISK.

But these high-freak syndicates ain’t got no duties. No allegiance to the public. No nothin’.   They’re speculators, plain and simple—in if for themselves and the rest ‘o the world can go take a flyin’ leap. They wait till the time is right, run their bombing raids, then disappear over the next hill.  At 70% of the volume, that explains a lot about what’s been goin’ on in the markets.

Hey, I ain’t got no beef with speculators. I’m a speculator. But givin’ one group special rights and privileges is against the spirit and the ideals that made the good old USA a country of opportunity for the common man. A few years ago we had, maybe 7,500 floor traders working in Chicago. Today? About 2,500 and dwindling. I know. I was one of them guys. Now I’m out. And the people trading on their own computers? Think they don’t get hurt? Think again.  But I ain’t takin’ it layin’ down.  I joined da revolution. 

The thing about these high-freak guys is they trade like hit men. Don’t leave nothin’ to chance.  They cram their operations real close to the exchanges so the wires from their computers to the trades are real short. They pay $100K and more a month for super-fast internet access—and they can afford it. You ready to plunk down that kinda cash? I didn’t think so. The high-freaks trade in and out in milliseconds using super-powerful computer programs.

How does the common man compete against that?  Sure, some folks got enough capital and the right connections and they buy-in to these outfits. If you can’t beat ‘em, join ‘em, right? But what about the masses?  Markets is supposed t’ be fair.

Turns there’s stuff we can do about it.  Lemme lay out a few ideas and you can give it some thought:

1.) SLOW DOWN - Whatever you do might just work a whole lot better on a higher time frame.  If you’re a scalper, try holding for at least a few hours.  If you’re a day trader, try swing trading.  If a swing trader, think about long term holds. If you’re already long-term, think about the new crowdsourced venture capital funds or maybe even distressed real estate.

2.) LOOSEN UP - Ya can’t use them tight stops no more.   These high-freaks see them orders and scoop up volume whenever they want by spiking price for just an instant. Yeah that’s right—runnin’ your stops ain’t hooey no more. It really happens. Nobody likes gettin’ kicked outa a trade just before the thing takes off to the moon. But anybody with any brains knows ya can’t make a living long-term without protectin’ yerself with stop loss orders, so my advice is just back off a bit.  And while you’re at it, how ‘bout some good old-time diversification? How ‘bout putting on a hedge? Ya gotta protect yerself. I know—you heard it before. But now we got no choice.

3.) BEAT ‘EM AT THEIR OWN GAME – Here’s where it gets good.  Do all of the above but do it smart.  Nowadays you gotta get way more high tech. Big time. You gotta adapt and keep adapting, again and again. The faster your trading style, the sooner ya gotta switch systems.  That means you need automation, ’cause nobody’s got enough hours in a day to do all this stuff alone.  Some guys run new simulations every night.  This market’s not efficient and random like the professors say but the easy money keeps moving around.  You gotta find where it’s goin’ on and get there first and grab it up. And I’m finding out it’s not so hard to do with the right tools. Sure I try new ideas – all the time. Yeah, I test ‘em. But if you wanna stay ahead, ya gotta teach your computer to figure out when there’s money layin’ on the floor. That’s right—get that electronic gizmo working for you for a change. Just don’t go head-to-head with the high-freak syndicates – you’ll get stomped.  Run right around them guys.  Go high tech.  Join da revolution.

So I read a white paper “AI FOR THE INDIVIDUAL TRADER.” That’s where I get most o’ these ideas.  It lays it all out plain and simple and it doesn’t cost me nothin’ to read.  And it ain’t selling nothin’ neither.  So I’m sending it to ya.  Yeah, I been givin it a go.  So far so good.

So what’s with da Bears hat?  Sure I like da Bears but that ain’t the point.  The white paper tells a story about “The Parable of the Hats.”  But most of all, it talks about AI—that’s Artificial Intelligence—yeah I can say the word and now I can use it. Neural Nets vs. Rule-Based Trading.  Genetic algorithms. Simulations. Walk-Forward Analysis, Auto-trading. Hey, I can understand this stuff so I think most of you won’t have no problem with it. And it’s written up by a guy I know and trust.  Give it a read and make up yer own mind.

Read white paper – AI FOR THE INDIVIDUAL TRADER (pdf)

Good trading, youse guys.
Loop Lonagan *

* [Verbatim transcript of an MP3 file dictated by Loop Lonagan]

Comment on this article–name and email optional.

Find Chicago Venture Magazine at
www.ChicagoVentureMagazine.com Comments and re-posts are welcomed and encouraged. This is not investment advice – do your own due diligence. I cannot guarantee accuracy but I give you my best.

© 2012 John Jonelis – All Rights Reserved.

Walter Mitty is the character from James Thurber’s famous short story. He slips into fantastic daydreams and loses contact with those around him. Danny Kaye re-interpreted the role for a terrific movie. I use the term “Walter Mitty” to describe a speaker that slips into his technical world and fails to connect with his audience. Some people say “geek” or “nerd.” I prefer “Mitty.”

I get off the train, grab a cab, and soon I’m at Kellogg for another session at Esther Choy’s Leadership Story Lab. Why am I here? Yes, I’m a writer, but I’m here to learn to TELL stories. That’s not the same process as writing and it’s not the same as giving a lecture.

Why is learning to tell a story so important? Story is a powerful business tool. Few know how to use it. It differentiates you from all the other equally qualified people.

It’s taken all my free time and the train ride downtown to hack my narrative down to five minutes. Now the sequence seems entirely unfamiliar to me and there’s no time to memorize, no time to rehearse. I figure I’ll rely on my notes. I’ll be all right. No problem. Amazing how one deludes oneself. I have no clue that I am about to fall into the trap around which I steer my clients.

Esther starts the workshop by telling her own story. She tells it as a story. She’s poised, confident, but not at all arrogant. It’s a joy to hear her speak. And it’s fascinating. This is a gal that knows her business.

Then she surprises us. By way of contrast, she begins again, this time listing her background and accomplishments the way people usually do—chronologically. And it’s an impressive list.

Which of the two introductions is more effective?

The story–no contest. I’ll remember the specifics told in the story.

Throughout the session, she gives pointers on storytelling:

You don’t have to be a superhero to tell a rousing story.
The way you tell is more important than what you tell.
You need some tools.
You need a process
You need to practice

You need plot, characters, conflict and resolution, just as you do in writing. But of all the lessons I learn tonight, the one that sticks out is this: “The hardest thing in telling a story is knowing what to leave out.”

Now I’m hearing four speakers—all fellow Kellogg grads. Some of them perform brilliantly. I’m last. I’m confident. I have no idea that I’m about to fall into the role of Mitty.

Where is the podium? Where will I put my notes? I lay them before me on a low table. Yes, I can just make out the print. I don’t yet realize it’s happening, but instead of the all-important eye contact, the audience is getting a glare off the top of my head. The notes are actually slowing me down.

Esther walks up to me.

She purposely seizes my notes—one sheet at a time.

She walks off with them.

What do I do now? I object. “I can do it without notes if you like, but not in five minutes.”

Her response? “You know your story.”

Tough love.

It takes me a few moments, but without my notes I ad lib. I make eye contact. I gesture with my hands, and generally become more animated. It’s probably too late to salvage this disaster but everything is going so much better.

Now Esther is standing beside me—close beside me. I glance at her. “Am I out of time?”

She smiles with compassion. “Yes,” she says quietly. I quickly skip to the takeaway points of my story and wrap it up.

Esther Choy

Now for the comments from the audience. Turns out, I lost them right at the start. I won them back after Esther intervened. As I had assumed, I wandered and didn’t finish the story but just as Esther said, delivery was more important than content.

This will not go into my memory banks as a delightful experience. It’s another lesson learned the hard way—the way I usually learn my lessons—with pain and humiliation. But Esther points out the word LAB in Leadership Story Lab. It’s a controlled and safe environment where you can experiment—where you are allowed to fail. And fail I did. And I’m thankful. I’m thankful for the opportunity to fail here rather than in the cold world of business.

Learn. Practice. Practice again.

Find Leadership Story Lab at http://leadershipstorylab.com/

Comment on this article–name and email optional.

Find Chicago Venture Magazine at
www.ChicagoVentureMagazine.com Comments and re-posts are welcomed and encouraged. This is not investment advice – do your own due diligence. I cannot guarantee accuracy but I give you my best.

© 2012 John Jonelis – All Rights Reserved.

Once we’re engaged in analyzing Columbus, modern parallels become obvious. We begin to apply his problems to our own and in the process find objectivity and freedom of thought—two rare experiences for most business people. We stretch the frame of the story and climb inside. Hey, this is exciting stuff. It’s a 4-step process.

FRAME STRETCHING:
1 – WHAT IS?
2 – WHAT IF?
3 – WHAT WOWS?
4 – WHAT WORKS?

I’ve seen Rachel explain the FRAME STRETCHING process at a mastermind group. We’ve talked it out together a couple times over coffee. But none of that prepared me for the power of the real thing—the amazing free flow of ideas generated by her methods. She’s using Story in an entirely new way. Rachel synthesizes some of the best ideas written on the subject into her own unique method.

We analyze the story of Columbus and get involved in the guy. His management style? Draconian. His competency as a ship’s captain? Nothing to brag about. His ability to assess reality? Shaky at best. He believes America is India. His sales skills? Clearly lacking. He seems an odd one to get this venture started. Can we identify with him? The answer turns out to be YES.

Just like entrepreneurs of today, Columbus goes on a road show. He gets turned down by one funding source after another. Queen Isabella of Spain finally gives him the nod but then he waits at her court for years till Spain beats back the Moors and feels ready to throw money at a new venture. And they’re looking for riches. Does that sound familiar to you?

But Columbus is a visionary. He’s unconventional. Passionate. A risk-taker. A disrupter. He’s already stared down his Black Swans and to his way of thinking, the unknown/unknowns are already known/knowns. He’s wrong on many counts. For example, he believes the globe is a lot smaller than it is. But that error works in his favor. It cancels his fear. He believes. His enthusiasm is infectious. He’s ready to bet his life on this venture.

In my mind’s eye, I picture of his three frail craft tossed like toys amid huge waves in a storm at night. Howling wind. White caps. A desperate struggle. This is way beyond mere entrepreneurship. This is adventure. And if he’s right, it means huge rewards. As it turns out, Columbus is proven wrong on several major points but nevertheless he’s wildly successful. Don’t forget the 80/20 rule. Perfection is an illusion.

I’m surprised by the new technology of the day as explained by various members of this group of luminaries—among them John Kennedy of Combat Brain Training, Christopher Rollyson who I last met at MIT, Rebecca Sexton, a design strategist, David Friedman of Collaborating Minds, Ken Novak from Sagence, and others—not a lightweight crowd. I teleconference with Terry Flanagan of SMART Decision Services to find out what went on at the earlier session. Terry is an encyclopedia of business knowledge and one of my key strategic partners. Turns out, his breakfast session contributed to Rachel’s preparation for our lunch meeting.

But I promised to tell about Columbus’ technology. Turns out, contrary to conventional wisdom, he knows the world isn’t flat. All educated people of his day know that. The Greeks discover it long before. Even the Church knows about it. Washington Irving gives a false impression in his history and it sticks with us to this day. Columbus is still living in the Middle Ages. Superstition is the norm so the common sailor believes in the flat earth and the leviathan but the elite does not.

More technology: The galleon is a relatively new vessel. The sextant? Only recently invented. Now a navigator can measure both latitude and longitude instead of relying on dead reckoning. In case you didn’t know, navigation remains a rare skill for hundreds of years. Without a navigator, a ship is lost at sea. Mutiny is common, but killing the navigator is folly.

Just to put the timing in perspective, Columbus’ venture is the driver for the coming Age of Exploration and he eventually becomes the governor of Hispaniola. Magellan and others come later. The Mercantile age won’t get big for another 200 years.

Is Columbus the first to try? Who knows? How many ships try and fail? History is written by the winners. Yes, the Vikings make the voyage but their exploits end in retreat and are not part of the knowledge base of the time. Columbus is the first European to do it.

LET’S GET PRACTICAL. Businesspeople tend to be impatient, results-oriented individuals. Like so many intelligent people, they skip the intermediate steps when seeking solutions. The common model is simple:

1 – WHAT IS? Discover and analyze the problem.
4 – WHAT WORKS? Solve it.

NOTE:  You just skipped steps 2 and 3.

This approach may put out fires but doesn’t build a legacy of solution methodology. Steps 2 and 3 are missing. And for a good reason. As you will see, #2 and #3 are very abstract.

WATCHOUT MODE—Let’s say you’re sitting in company meeting and feel the clock ticking. You’re too busy for this. You don’t like where this discussion is headed. It looks disruptive—a big change in the way things get done around here.  It means you’ve been wrong about a lot of things. Do you feel comfortable with that?  Of course not.  You see all sorts of risks. It doesn’t feel safe.  How are you gonna get the old creative juices flowing in that situation?

In business we deal with entrenched knowledge. That knowledge may or may not be based in fact but sticking to it feels safe. To break people out of that trap it’s necessary to change the way they view a problem. People fear that.

Nobody wants to change the way they think. We’re all wrapped up in our beliefs—our bias—whether valid or not. We may believe many things that are untrue because of conventional wisdom. We fear new modes of thinking. That scares adults who fought in armed combat. It may not occur to them that the status quo is the most dangerous choice.

HOW DO YOU BREAK THEM OUT? Rachel gets them involved in a story. As it turns out, a rational person will permit him or herself to indulge in deeply creative and abstract dialogue about a disconnected character. In doing so, the parallels to their own circumstances eventually become obvious. We change our perceptions. An entirely new solution may germinate and sprout. Today, Rachel steps us through some FRAME STRETCHING exercises to do just that.

Columbus chooses to fight the status quo. In his day, navigation means hugging the coast. The trip to the mysterious Orient is long. Round trip—about 2 years. He ends up crossing the Atlantic in 32 days. Thirty two days! That’s huge! Can you picture the effect that has on commerce? So what if he doesn’t land in India as he assumes. He opens the gate to exploration and trade with a new world.

LET’S TALK SPECIFICS: Hey, I’m as results-driven as the next guy. I understand the resistance people feel toward abstract thinking. See if you can empathize as well.

THE HARDEST STORY TO TELL IS YOUR OWN. I’m constantly saying that. But instead asking us to waste time on our own stories, Rachel gets us involved in somebody else’s story—a heroic character—one with flaws who beats the odds and wins. We love to identify with such characters.

EXERCISE MORE THAN ONE MUSCLE. Most people keep doing what they do best simply because they’re good at it. But we all need to vary our exercise routine. That’s where FRAME STRETCHING comes in. The process involves asking four key questions while analyzing a well-known story:

1 – WHAT IS? This is assessment. It can be uncomfortable but it’s familiar. One failed to do this—another failed to do that. Assessment is more honest discipline than creativity. Competent executives are expert at it.

2 – WHAT IF? This is an analysis phase. It’s classic ideation. It uncovers bias and flaws in the status quo. It turns the Black Swans into Known/Unknowns so they can be addressed. This is extremely uncomfortable on many levels.

3 – WHAT WOWS? This is the analysis that creates the breakout. Now we’re creating Known/Knowns. It only comes after ideation has been allowed to work.

4 – WHAT WORKS? This is the practical phase. It involves action—something people are comfortable doing. But let’s carry it beyond mere market tests and implementation. Rapid prototyping is an example of the creative use of “What Works?”

Columbus knew the 2-year trip was impractical and perilous. He sought a new approach. That’s the “WHAT IS?” He’d been attacked by pirates on the usual route so he had good reason to indulge in the “WHAT IF?” He believed in his idea. People join you when they catch your enthusiasm because you believe. In other words, confidence is more important that competence. A leader doesn’t have to be right to get something going—just certain. Sometimes ideas become so outrageous that they’re irresistible. That’s the “WHAT WOWS?” His skill set, his crew (team), his ships and sextant (technology) and his plan make up the “WHAT WORKS?” Executives are comfortable carrying out a plan. The key is to develop the right one. That’s why the two intermediate steps are so important.

The intermediate disciplines of “WHAT IF?” and “WHAT WOWS?” require an experienced facilitator—an impartial outsider. That saves time, avoids personal disputes, and makes a good outcome more likely. Remember: YOUR OWN STORY IS THE HARDEST TO TELL. Telling your own story is the sure path to mediocrity.

The core ideas Rachel has collected come from some significant authors and she gives credit where it’s due. On the train home, I fire up my Kindle and buy two of the books she cites. I might yet get several others. This is good stuff. Thank you Rachel for inviting me to experience the power of your method.

Rachel Kaberon is the founder of the consultancy known as E3 where she acts in the role of Catalyst to engage, energize and enable performance.

Find her at www.framestretching.com

Comment on this article. Name and email are optional.

Find Chicago Venture Magazine at
www.ChicagoVentureMagazine.com Comments and re-posts are welcomed and encouraged. This is not investment advice – do your own due diligence. I cannot guarantee accuracy but I give you my best.

© 2012 John Jonelis – All Rights Reserved.

VERBATIM – Uncut transcript of a taped interview with storied business consultant, J. P. Pierogiczikowski—affectionately known as Joe Perogi—as told to John Jonelis

Tonight I stop at a downtown Chicago drinking establishment and run into Joe Perogi. There are several good events going on the same time.  Maybe I’ll get lucky and find out about one I missed. Joe may come off as rough around the edges but don’t let that fool you. He’s a really bright guy. He’s coached plenty of startups to success. I respect his opinion.

I set my recorder on the bar. “So, Joe,” I say. “You pick up anything at BNC tonight?”

Joe takes a long draw on his glass of stout and smacks his lips. “Yeah, a number of things.

•  ”Old houses don’t need to waste so much energy no more.
•  ”Foot traffic is gonna be high tech.
•  ”Car dents aren’t gonna be a problem.”

He goes on: “These are high-tech solutions to everyday stuff. There’s this interesting company.” He shows me their card then slips it back in his pocket.

I quickly scribble the contact info on a pad.

MyHomeEQ – Christopher Coleman – www.MyHomeEQ.com

“They wanna make old single family homes energy efficient. ‘Course you know, the biggest share of carbon emissions comes from older homes, right?”

That’s news to me, so I just sip my scotch and let him make his point. And he does.

“So you got all these old houses—fifty million of ‘em,” he says.

Fifty million? I take in my breath and straight scotch goes down my windpipe. I bend over coughing.

Joe pounds me on the back till I clear my throat. “You okay?”  When I nod and wheeze out my thanks, he goes on: “Anyway, these guys give you what they call an EQ score.”

I clear my burning throat and wipe my eyes. “EQ—Energy quotient?”

“Yeah it’s like MPG for a house. Here’s where it gets good. The multiple listing service is gonna want that score so they can post it along with the price. And who’s gonna buy a house with a lousy EQ? So you gotta fix it. Maybe you don’t know what needs doing or who does that kinda work. Maybe contractors don’t follow up. Maybe you wonder if you can re-capture the cost. So waddaya gonna do?”

“Probably the wrong thing.” I take a gulp of water and it goes down good. “And maybe hire the wrong people.”

“Right—and spend too much. These guys solve all that. You get on their website. Enter your address. That’s it. They got access to a lotta data. The specs on your home. Your history of energy use. What projects cost.  Which ones give the biggest bang for the buck. You get a list of ready, willing and able BPA and LEAD certified contractors to choose from—all free and confidential—and the company sets up an appointment for you. And the guy that shows up already knows what needs doing.”

“How do you monetize that?”

“Don’t play dumb with me. They handle all the logistics. Take a percentage off the contractors. Take a percentage off the material providers. The thing I like is they even make money off their advertising ‘cause the MLS pays ‘em for the EQ score.”

I finally get it and smile. Joe goes on. “Hey, they won a $400K competition for this idea, right here in Chicago.

“Who else was there tonight?”

Joe massages his brow with a finger as if trying to recall. “Gimme a minute—it’ll come to me, but the thirst—the thirst—”

I signal the bartender to refill his Guinness. When a tall glass of black beer shows up, Joe grins and downs three fingers worth then sighs with obvious satisfaction. “There is one interesting little outfit.” He plunks down a business card in front of me and I look at a thin sheet of paper made from a reused road atlas.

Green Guestbook – Ellie Carleson – www.greenguestbook.com

“This one’s really early stage—just two people right now: the gal and her developer. Still needs a management team. But it’s a proven model. She’s already doing it for museums and it works for them. Now she’s pivoting from not-for-profit to direct marketing.” He takes another draw on his stout and I wonder how a startup that small can catch his attention.  Joe charges really high fees.

“It’s a digital guestbook for any arena with lotsa foot traffic. Customized. Uses touch screen technology insteada paper.  It gets your email addresses  Does surveys. Collects demographics.   All the stuff you wish you could do when you run an event. Some systems give you a list of who’s there but this one’ll let you send a message to the ones wearing pink neckties. 

Thing I like best about this outfit is the gal running it. Felt confident about her right away. Lotsa smarts. Lotsa energy. Good sensa humor. People usually give phony emails and she calls ‘em “sacrificial lambs”—that was rich. Her system offers incentives so people cough up their REAL email. Central database. Good privacy protocol. Pilot projects in restaurants, wineries, park districts, trade shows. This one won an award too and got 92% of the votes.

“She needs a lotta help. And John, keep out on this one. You been takin’ too many jobs away. If you wanna invest, okay. If you want a spot on the management team, glad to have ya. I’ll be sure to call you when it comes time to get the writing done. But I’m coaching this one if I can land it. Like I say, I believe in Ellie.”

I go along with that because Joe is passionate about the company. But Loop Lonagan would be better still because he’s not so expensive.  I’m not sure he’s available–have to ask.  I signal the bartender to fill Joe’s glass and he continues his account.

“There was one more outfit but I don’t think the guy needs much help—just capital so he can scale.” Joe shows me the card.

Dent Recon – Brendon R. Halcott – www.dentrecon.com

“This guy’s really got his act together. University of Chicago. Harvard Business School. Former investment banker. Company’s already profitable locally and looking at a new contract with a major company. He needs to scale and do it fast.

“Okay, I’m impressed. So what does he do?”

“It’s like Pea Pod for dent repair on your car.”

“You’re joking.”

“No it’s for real. Say you lost an argument with a taxi.  It takes a lotta time and hassle fixing a fender-bender. Running around for estimates.  Driving a rental car.  Now lets say you pull into the parking garage and they can fix your car while your at your office. Or maybe you want it fixed at your home. This guy inflates a special painting booth and works anywhere. Car’s ready when you are. No hassle. Oh yeah, these guys do the paint too, not just the dent.

“Anytime you needed their help, just get on the Internet. Smartphone works for that. Put in your VIN number and some info. Instant quote. Oh, that’s right—you’re too cheap to own a smartphone so you gotta find a hotspot for that laptop you lug around.” He grins.

“I like my laptop. I like my Trakfone.

“Okay, okay—don’t work up a sweat. Point is, you get an automatic estimate instantly.  Complete the transaction right then.  And that’s just the retail side. They white label this thing for any company. Car dealerships, car washes, parking garages, anything. Their people are trained. Neat. Professional. I expect to see this one launch soon.”

My antique Palm Pilot lets out an alarm. Time to head for the train. I drop some bills on the bar, say my goodbyes and hoof it to the station.

Find BNC – Business Network Chicago at: http://www.bnchicago.com/Groups.php?group=8

Find Chicago Venture Magazine at
www.ChicagoVentureMagazine.com Comments and re-posts are welcomed and encouraged. This is not investment advice – do your own due diligence. I cannot guarantee accuracy but I give you my best.

© 2012 John Jonelis – All Rights Reserved.

An acquaintance showed me this letter.  How would you advise him going forward?

Dear Friend

My neighbor Dave has a wonderful new product and needs more funding to move it forward. I already put money in it and don’t want to lose any of that. Can you give me some advice?

Tonight, he’s over here venting at the top of his lungs about some meeting. Drinking up half my single malt. Some guy had the gall to say that Dave doesn’t get his story across to the investor. Says he needs to make it clear to a reasonably intelligent 12-year-old. That’s ridiculous. Another one told him to write a real business plan. Can you believe that?

Everything Dave owns is tied up in this thing—it’s his whole life. Nobody knows that product better than him. His old company sold him the rights. Then he got a patent—that cost him plenty. But after he builds a prototype and proves the concept, investors will scramble to jump aboard. He only needs another $250K to do that. He practiced his presentation on me and he had so many good ideas and complex slides, it took three hours to explain it all and left my head spinning. I don’t pretend to understand it—I’m not an engineer or an accountant.

So, he hits all the meetings at the local universities. Nothing happens. He makes a formal presentation at a venture capital group and nobody calls him back. Next, he gives his pitch at a big all-day event and they basically say, “Get lost.” Then he tries a couple angel groups and they show no interest whatsoever. All this takes a lot of time. So he goes to New York and Boston for a month. Comes back empty. Now he’s planning presentations in Silicon Valley. Says California’s where all the tech money’s at. Dave believes he’ll eventually find an investor if he keeps throwing his shoulder at the door.

Problem is, he’s running out of doors. With no revenue and only three technicians left on staff, he’s still burning money. I don’t know what he’ll do if he loses these guys.  It seems so unfair. Dave keeps costs down. Handles everything himself, right down to the legal work. Even plans his own presentations. What’s wrong? Some guy offered him coaching but he doesn’t need that, does he? Sometimes I wonder. If he got professional help from the start, is it possible he’d be up and running by now? I don’t dare tell him that. What do you think?

Please keep this confidential.

Yours Truly,
Hal

This is a fictional account drawn from a composite of personal observation, experience and imagination.  Any similarities to actual individuals living or dead or to a particular sci-fi movie are purely coincidental.

Find Chicago Venture Magazine at
www.ChicagoVentureMagazine.com Comments and re-posts are welcomed and encouraged. This is not investment advice – do your own due diligence. I cannot guarantee accuracy but I give you my best.

© 2012 John Jonelis – All Rights Reserved.

I’m at Northwestern, surrounded by fellow Kellogg grads and feel privileged to be here.  One never stops learning, and Kellogg never stops offering opportunities to do just that.  I’m a storywriter, not a storyteller so this workshop shows promise.

In preparation for the class, we all view a video.  You can link to it on my previous post.  My article before that specifically addresses the same topic.  I watch the video twice and take notes.  Amazing the way two wildly differing speakers like Sinek and Gingrich can come to identical conclusions about a specific topic:  “Why do people succeed at what they do?”  Both speakers use the Wright Brothers as an example.  I find these talks inspiring and this evening I will again meet an inspirational speaker–this time a humble one.

Esther Choy

Quietly, almost shyly, Esther Choy points out you don’t have to be a superhero to tell a great story.  She talks about mining, refining, and telling.  Tonight, she explains that “mining” is all about getting at the “why” and converting it to key words.  The key words become metaphors.  She says that on average, we use metaphor every 25 words without even knowing it.  She gently takes us through a practical example, lists a few sample questions, then splits us into pairs. 

And it works!  All fifty of us immediately tell or facilitate a story—I mean everybody.  We switch places and the result is just as startling.  This is powerful stuff!

She introduces us to another exercise.  This time she wants us to talk about something we are passionate about, so she directs us to our hobbies.  And sure enough, nobody has any problem talking at length about that.  She actually needs to keep us to a time limit. 

My hobby is fishing.  After telling a fish story, we identify five keywords: Challenge, Environment, Patience, Collaboration, and Satisfaction. 

Now she’s issuing a challenge:  Tell a story about a business experience.  She instructs us to use the keywords just generated from our hobby.  And like before, everybody is suddenly able to tell stories! 

My story is about entrepreneurship.  I’ll break it down into the five keywords we identified from my hobby.

CHALLENGE

Early in my career, my company found itself in need of a radical new product.  The president called together the entire engineering staff, described the result he needed, and asked for an all-out effort to develop the new technology.  He asked us to push the limits in unimaginable ways. 

I found out later that not one of the engineers took up the challenge.  Nobody.  Zip.  At the time I didn’t know why. 

The president personally showed up at my office door one day and talked to me about it.  “John,” he said, “I want you to do this.” 

Now, I have not yet explained my position.  My training was as an artist.  I was a wet-behind-the-ears kid who joined the company sales force.  I made a lousy salesman.  My presence at the meeting was purely as an observer.   So I argued my lack of credentials. 

But he then said a curious thing:  “If you don’t do it, John, nobody will.”  That inspired me to try.  So I baited my hook and cast my line in the water. 

ENVIRONMENT

Fishing takes place in a creative environment, usually with no competition or hurry.  It’s enjoyable, even if you get no bites.  It’s okay to be non-productive.  It represents both freedom and peace.  It turns out that R&D can be a lot like fishing.  Because everybody else refused to try, I had in my hands a project with no real competition but myself.  I was not only allowed but expected to let my mind run free and that was pure joy.  Like fishing, I could try the various lures in the tackle box and if those didn’t work, make my own.  Even my budget had an open end.

As it turned out, all the creative principles I learned in art school translated directly to research and development.  And the technology hurdle?  I crawled around inside these units and learned all about them.  Back at my office, I doodled on scratch paper.  One dumb idea after another.  That led to a concept, design drawings, and finally a prototype.

PATIENCE

In fishing, you either keep trying till your idea works or keep trying new ideas till you find one that works.  It’s trial and error.  So it is with R&D.  I spent weeks struggling to come up with a viable concept.  The hurdles turned out to be significant.

This device needed to be cheap to manufacture and easy to install.  What else is new?  But it needed strength and accuracy to do its job well.  It had to withstand a highly corrosive environment, a constant 400 degrees, and frequent fires.  It had to do all that in close proximity to a 40,000-volt electrical source and yet not draw an arc.

This particular application needed to be perfect.  If the first installation failed, the company could get wiped out.  It was a bet-the-farm project, but that was a big secret.  Nobody but the owners and me knew the risks involved.

Every time I thought I had something that showed promise, I looked for alternatives.  Lots of alternatives.  Meanwhile, the sales department was already busy selling my product—even though it was little more than a glimmer in my mind. 

But I finally drew up the plans for the first prototype.  We hired a shop to assemble it.  I flew it and two tradesmen to a jobsite in the company plane.  We installed the thing ourselves. 

It worked.

But it became immediately obvious to me that my thinking had been two-dimensional.  Certain weaknesses remained and a far better solution waited.  That night at the restaurant, I sketched the new plan on a paper napkin.  That’s right—just like all those stories you hear.  And I got the usual response from those two experienced tradesmen.  “No, that won’t work.”  I was brought up knowing that opportunity lurks wherever you hear those words.  To me, it was like a red flag to a bull. 

I remember flying back in IFR conditions in my single-engine plane.  I couldn’t see the ground, but I could see the new design as clear as if it already existed.  When I reached the office, I committed it to an assembly drawing and had it built.  I drew up plans for a miniature unit so I could install prototypes right on the premises.  The prototypes required tweaking.  A lot of tweaking.  I learned to use tools I’d never used before. 

Meanwhile, the president approached me and ordered me to release the design to sales.  Now, you’ll recall that I stated that if it wasn’t perfect, the very first installation would certainly bankrupt the company.  I turned him down flat.  Where did I get the power to do that to the president of the company?  Knowledge is power.  I kept at it and refused to release it until I knew it was right.  As it turned out, that took two more months.  A fisherman must have patience.

COLLABORATION

When I’m fishing, I don’t want to run the boat.  I just want to cast.  I prefer to fish with somebody who knows the lake.  I get so wrapped up in my fishing that I don’t even know where on the lake I am at any given time.  If I had to find the way home, I’d be lost.

I built a great team out men from the trades.  Boilermakers.  Pipefitters.  A kid in the back room that I could see needed to move on to bigger things.  These guys didn’t believe in the dingus we worked so hard on.  They worked for me because they believed that I believed.  And because they believed me, they were willing to do anything I asked.  We brainstormed.  We bent metal together.  We shared beers.  We failed and cursed and tried again.  I never received an ounce of discouragement from this group of brilliant guys till the first prototype worked.  They were so eager to launch it, and yes, they were the ones who resisted the big change at the end—the sketch on the table napkin.

You never know where the big fish are hiding.  When I released the final design and companies started buying it, we faced serious struggles in quality control and cost containment.  A purchasing agent—a guy not even on my team—came to me with the solution.  He discovered a vendor in the slums of Chicago that could make the thing to the tolerances I needed.  They could do it consistently.  They could do it for 1/4 the price of our other suppliers.  That guy transformed a technical success into a financial success.  

SATISFACTION

Fishing can mean a trophy or meat on table.  Either represents the satisfaction of a primal urge. 

When this project started, I had no expectation whatsoever of successfully launching the boat.  Certainly not landing a trophy fish.  But because a leader inspired me, I tried.

And as a result, I wound up in charge of that engineering department and won seven patents in my own name.  That one product and its subsequent variations became the flagship of our company—a company that I bought into at the bottom.  And for four years we grew exponentially, orchestrated a successful exit, and ultimately became part of GE. 

So I did indeed put meat on my family table.  As the saying goes, “If you don’t get your line wet…”

It’s since been pointed out that my story talks about three distinct groups of people: 

• As a new minority shareholder, I had as much to win or lose as the president and other owners.  My house–everything I owned vs. a chance to grow a company.  High stakes, high reward, total freedom of movement and a chance to create something new.  None of the employees had a glimmer of the risk involved–only the owners.  If the employees knew that, they would have found steady work elsewhere.
• The team I cobbled together caught my vision.  They risked nothing but they believed in why we were doing it.  They bought in heart and soul and participated without any other expectation. 
• The engineers that refused to pick up the challenge feared personal failure, looking bad to their peers, damaging their careers–nothing more.  There was little upside for them.  Perhaps a small raise? 

MY TAKEAWAY – People seldom create on a paycheck. It requires taking on risk, an entrepreneurial mindset and self sacrifice.  People need much deeper reasons to do that.  They need to believe in what they are doing.  They need to catch the vision.

MEANWHILE, BACK TO THE MEETING – I look at my story partner in surprise.  Did that narrative just pop out of me?  Thank you Esther Choy.  May you continue to rack up success after success with your Leadership Story Labs.  Thank you for codifying the elements of storytelling and making the process seem so easy.

Find Esther Choy at www.LeadershipStoryLab.com

Find Chicago Venture Magazine at
www.ChicagoVentureMagazine.com Comments and re-posts are welcomed and encouraged. This is not investment advice – do your own due diligence. I cannot guarantee accuracy but I give you my best.

© 2012 John Jonelis – All Rights Reserved.

Newt explains entrepreneurship using story – John Jonelis

VERBATIM – Chicago Venture Magazine doesn’t cover political events but when a serious presidential candidate talks about entrepreneurship, that’s an opportunity.  This article will focus on that part of the talk–not the political side.  After that, I have appended a riveting TED video by Simon Sinek, who makes the same point from another perspective.

Newt treats us to an illuminating and inspiring story.  That’s right, a story.  It’s clearly given off-the-cuff by a man who knows his subject—something I don’t expect from a politician.

We meet at a little airport around the corner from my office.  We crowd together in a beautiful hangar with modern and vintage airplanes.  I stand, surrounded by press photographers. 

The secret service accosts me twice (I must look suspicious) but I seem to get along with these guys and they don’t throw me out on my ear. 

I’ve transcribed Newt’s story as I heard it, in his quiet, plain-spoken language. 

 
Speaker Gingrich:

He addresses a crowd packed into an enormous airplane hangar.  “You know, this is a great example of American ingenuity and inventiveness, you can imagine on a campaign like this we land a lot, which also means we take off a lot—I always say the Wright Brothers succeeded again.  If you look back here at these wonderful planes,” he turns to indicate a vintage Stearman and Piper Cub, “they represent the evolution of American invention.  

Vintage Stearman and Piper Cub – John Jonelis

I can see he’s got the crowd’s attention.  He goes on:  “The Wright Brothers were two bicycle mechanics in Dayton Ohio who set out to discover how to fly.  Now, being bicycle mechanics back then was a relatively high-end job.  But they spent time.  They studied birds.  They built their own wind tunnel.  And they spent years.  And they knew something really important that bureaucrats don’t seem to get.  THEY DIDN’T KNOW HOW TO FLY—SO EVERYTHING THEY WERE DOING WAS AN EXPERIMENT. 

“One thing the US Government did to help them:  When they wrote the weather service they said, where is the best place in the United States to get an updraft—so you have a continuous wind coming up?  Because that makes it easier for the airplane to get lift.  Turns out to be Kitty Hawk, North Carolina, which around 1900 is a really empty, barren place. 

“And so to get there from Dayton they have to take a train.  So every summer they load the train with extra wood.  Now, the reason they’re taking extra wood is THEY KNOW THEY DON’T KNOW HOW TO FLY. 

“They go down.  They get up in the morning.  They live very inexpensively.  They have no government grants.  They haven’t applied for anything.  This is all on their own money.  And so they live very frugally in a little shack.  They get up in the morning, fix coffee.  They go out and they crash.  And they stop and try to figure out what went wrong.  They fix the plane and they try again.  And they crash. 

Newt tells the story of the Wright Brothers while in an aircraft hangar – John Jonelis

“Callista and I were very fortunate.  We were at Orville Wright’s home a couple weeks ago.  The curator said to us: The best estimate is that they had 500 experiments that failed.  And you can imagine the congressional hearings…” 

The crowd breaks into laughter. 

“…because frankly, the modern political governmental system—and I’m going to use a very strong word—is just plain stupid.” 

A man in the crowd blurts out: ‘That’s right.’  And face it—everybody knows it’s true.  But Newt takes a lot of heat for comments like that.  It’s not PC.  It’s the reason so many hate him.  And it’s the reason many find him so appealing at a personal level.  I recall Tom Clancy’s portrayal of his hero Jack Ryan when he ascends to the White House.  In that novel, his advisors cringe when he speaks because he doesn’t follow the teleprompter and the things he says seem politically wrong.  Then Clancy reveals the reaction of political leaders around the world.  For example, the Indian Prime Minister thinks he shows weakness but the Japanese say, ‘He is Samurai.’

The Press – John Jonelis

Newt goes on:  “And I’ve been trying to figure out for the last several months how to get this across clearly to the American people.  You need visionaries.  Without vision, the people perish.  You need somebody who understands that you get to these aircraft by starting.  And you start somewhere with something that doesn’t look very big and isn’t very effective.

“The Wright Brothers keep trying and on December 17th, 1903 they crash four times.  The fifth time, they fly for 53 seconds.  The first powered flight in human history.  Two Americans from Ohio in North Carolina. 

“By the way, the first flight was shorter than the wingspan of a Boing 747 and slow enough that the one brother ran along next to the wing of the plane to make sure it didn’t flip over and kill his brother.” 

That draws a lot of mirth from the audience.

Newt raises his voice.  “Now here’s what makes this a miracle.  Because they’ve now discovered the principle, by 1907 they fly around the island of Manhattan and one and one-half million people see an airplane for the first time.  Three and a half years—that’s how fast they changed—BECAUSE THEY’D BROKEN THROUGH.”

He taps the podium with a finger.  “Here’s what makes it a fascinating story: The Wright Brothers knew that they had to build a very light engine because they had to build a very light plane.  And so they actually invented an engine.  They had a number of patents.  And these were very smart people working very hard.  This is their hobby—this is not how they’re earning a living. 

“By the way, the estimate by the curator at Orville Wright’s house is that their total spending was $500.  Now, that’s back when money was a lot more valuable than it is today, so let’s say they spent a half a million—but in them-year-dollars they spent $500.

Crowded Hangar – John Jonelis

“The Smithsonian—the greatest scientific center in the United States at that time—gave a $50,000 grant.  The Smithsonian had really smart scientists who didn’t know the number-one thing that the Wright Brothers knew.  THE WRIGHT BROTHERS KNEW THEY DIDN’T KNOW HOW TO FLY.  THE SMITHSONIAN THOUGHT THEY DID. 

“And so the Smithsonian went out to Germans for metallurgy and built a really powerful engine.  Now the problem with a very powerful engine is that it’s heavy.  And that means that you have to have a real heavy airplane.  And they didn’t want to go all the way to Kitty Hawk.  They were in Washington DC.  It was very inconvenient to go to Kitty Hawk.  So they tried to find a new innovative way to get wind speed.  And they invented something we still use—the catapult.  Exactly like the nuclear powered aircraft carrier. 

“Now there’s a problem because if you’re gonna have a catapult on a boat, you’re gonna launch over water.  So they decided they’d launch over the Potomac. 

“Now there’s a double problem:  If you land in water, the impact of the water will break the plane up.  Furthermore, the current of the river will break the plane up.  And when it gets to the bottom and you try to lift it, the process of lifting it will break the plane up.  So you won’t be able to figure out what didn’t work because by the time you get the plane back, nothing will work. 

“But they’re very confident because they’re very smart and they have a $50,000 grant and they’ve got lots of degrees.  So they go out and actually invite the press to their very first effort.  Now remember, the Wright Brothers have failed 499 times, but the Smithsonian is so cocky, they’re convinced they’re gonna fly the first time.  And exactly what most of you—I can tell by the look on your faces, you know what’s coming, right?  They get up in the morning; the sun burns the mist off the river.  They get the engine started.  They launch the catapult.  The plane goes straight down the length of the boat and straight into the river.”

The crowd erupts. 

“Now they’ve invited the press so you can imagine the press coverage: 

“SMITHSONIAN FAILS AT EFFORT TO FLY. 

“PEOPLE CAN’T FLY. 

“WHY ARE THEY WASTING THE TAXPAYER’S MONEY?” 

Newt gets quiet again.  “A little bit later, the Wright Brothers fly for the first time.  It’s covered by one Associated Press reporter in a real small story.  The Smithsonian is so angry that these guys who don’t have any degrees—they don’t have any government grants—they don’t get any money from the Congress—and they’ve invented flying?  Their relationship is so chilly that the Wright Brothers will not give them the original plane for 37 years.” 

The audience busts out in laughter and Newt is grinning.  “It’s now at the Air and Space Museum in Washington.” 

He pauses.

Newt tells a story  - John Jonelis

“Here’s why I’m telling you this story,” he gestures around the hangar, “because these planes just inspired it.  I want to get back to this innovation point ’cause this is what nobody in Washington and nobody in the elite media seems to get.  The great need in America is for a visionary political leader who understands science and technology applied with conservative principles of constitutional government.  Liberating the American people to discover and invent the future allows us to become more prosperous, more productive, more successful, and safer than any possible bureaucratic system!  And that’s just a fact!” 

The crowd bursts into deafening applause. 

“…the Wright Brothers, Thomas Edison, Henry Ford—these people invented the modern world without bureaucracy!” 

Newt waits for the crowd to calm down. 

“In that setting, let me tell you about innovation in energy.  Over the last decade, new systems have been developed that enable us to get oil and gas out of rock we couldn’t get oil and gas out of.  Now, with natural gas, if you asked in 2000, they’d have said we have a 7-year supply and we’re gonna have to import liquefied natural gas from the Middle East.  With the new breakthroughs and new innovation, we now have a 125 year supply, and we’re about to start exporting liquefied natural gas to China. …natural gas will add 600,000 jobs in the next decade. 

“Now it turns out that the same capabilities apply to oil in North Dakota, where it’s on private land…has led to the following development:  Fifteen years ago, we thought we had 150 million barrels of recoverable oil in North Dakota.  Up until the middle of last week, I said we now had discovered something like 4 billion barrels of recoverable oil.  Now we believe we have something on the order of 24 billion barrels of recoverable oil. 

“Here’s the real kicker.  They believe that with two more generations of technology, there are 500 billion barrels of oil.  They’re very deep, so we don’t currently have the technology to get ‘em. 

“I’m describing North Dakota.”

He pauses again and I think about the magnitude of those numbers—in a single state. 

Newt raises his voice.  “They talk about releasing the Strategic Petroleum Reserve and this is nonsense.  We have two strategic petroleum reserves in the Unites States.  One is the ingenuity of the American people and the other is called Alaska!”  The crowd breaks into applause. 

After the pandemonium subsides, he shifts gears. 

“By the way, in North Dakota—for those of you who care about the economy—their current unemployment rate is 3.5%.” 

His speech continues to build on that story and highlight specific political objectives.  That’s a subject for a different journal than this one.  You can find that in any newspaper–they stress politics and only politics.  My goal here is to bring out the broader insights about entrepreneurship. 

After he concludes his remarks, Newt and his wife, Callista greet the visitors.  They each pose with me for a personal photo.  Nice.  I hang around and talk politics with friends. 

Associated Press photographer - John Jonelis

A reporter from the Northwest Herald interviews me at length and I give him everything I can.  A sweet schoolteacher proudly tells the reporter that she taught my son and I feel mellow and happy.  That March 16th newspaper article sticks to the political side of the speech and uses only a few of my comments.  You can find it at http://www.nwherald.com/2012/03/15/gingrich-talks-gas-prices-jobs-at-lith-rally/ar6mc4u/?page=1 

And I’m struck by the bold frankness of this candidate.  Not your typical politician.  I can see why he makes so many people angry.  He’s highly intelligent.  He says what he believes—bold and clear.  And whatever your political leanings, whether you like him or not—admit it—you admire that in a man. 

In his simple story he’s made everybody in this airplane hangar understand what really makes entrepreneurship and this country work.  I know a lot of venture capitalists and I respect what they do, but who is that other candidate that trumpets speculation as if it were macroeconomic wisdom?  Today’s story brings out deeper, more fundamental truths than that.  I’m left with a very specific and uplifting view of what is possible—within our reach if we can muster the will to grab it.  And I heard all that in an aircraft hangar, in the suburbs of Chicago, the new, growing center for thought leadership.

And I find this job has it’s perks.

Newt and Callista Gingrich with John Jonelis

HERE’S A DIFFERENT PERSPECTIVE:

TED – SIMON SINEC ON THE WRIGHT BROTHERS, DR MARTIN LUTHER KING, AND APPLE

Comments on the Gingrich article started to get shrill until one turned me onto this:  I’ve appended a TED video of thought leader Simon Sinek that makes exactly the same point about the Wright Brother’s  but comes at it from an entirely different persepective.  In this video, he makes the same concepts stick with Dr. Martin Luther King and Apple Computer.  The video is absolutely riveting.   Kick back and enjoy!

Simon Sinek is the author of “Start With Why: How Great Leaders Inspire Everyone to Take Action,”  He writes for The New York Times, The Wall Street Journal, The Washington Post, Business Week and others.  He joined the Rand Corporation in 2010.

View TED video–Simon Sinek – How Great Leaders Inspire Action

Comments please

Find Chicago Venture Magazine at
www.ChicagoVentureMagazine.com Comments and re-posts are welcomed and encouraged. This is not investment advice – do your own due diligence. I cannot guarantee accuracy but I give you my best.

© 2012 John Jonelis – All Rights Reserved.

Ron May is screaming. “This kid puts the whole tech community to shame! His presentation is better than 90% of the professionals!” Bill Blaire mutters a response as if talking to himself. “Why don’t them guys make that loudmouth pipe down?” Thinking back, I recall Ron May getting silenced—even banned, but his harsh voice sometimes broadcasts the raw truth and I find that valuable.

In a roomful of investors and professionals, I sit between Bill and a six-foot-six giant of a man, Dr. Alexander Harbinger, three-time Ph.D. Alex looks around me to address Bill in his faintly German accent. “It is my heartfelt belief that the man is correct in his assertion,” he says. Bill responds with a scowl and crosses his arms. I nod and give a thumbs-up—I agree with every word Ron just blurted out.

The next speaker begins his pitch and Alex lets out a whispered, “Yes.” I feel the enthusiasm in the room. He leans close to my ear. “Think of it, John: These are high school children. One is only an 8th grader. And at a time that the public schools struggle to teach reading and simple arithmetic. We are seeing hope for the future of our country.”

I meet his eyes. I see the passion there. I’m getting treated to the six best startup pitches of the year. We’re at POWER PITCH, the capstone event of a partnership between IMSA and the MIT Enterprise Forum right here in Chicago. It’s the 25th anniversary of IMSA—the Illinois Mathematics and Science Academy—the high school with some of the smartest kids in the world. They’re proving it tonight—showcasing their new entrepreneurial program called TALENT.

“Nice digs.” It’s Bill Blaire, patching things up with Harbinger. I lean back in my leather chair and take in the enormous room, the multiple screens—the IBM Innovation Center is a beautiful facility. “TALENT,” Bill says, “Acronym, anagram–whatever. Must stand for somthin’ but I duno what. Teens Always Learn…Ten Advanced Lunatics… That can’t be it.” Then he taps the back of my head. “One thing’s sure—these kids know their stuff—anybody can see that.”

Alex responds for me: “These young people are more than just poised. They are professional and their fledgling ventures deserve serious attention.”

So, Bill challenges him. “You ready to plunk down a quarter mil in a company started by a 17-year old kid?” As the next speaker steps to the front, Alex surprises me. “Yes,” he says.

“What about that 12-year old?”

“Of course.”

Alex is right. These kids are for real. They aren’t geeks and they aren’t loners. Each of them comes with a team. Tonight we’re only seeing technology ventures. In the back of the room sit a group of students with non-tech companies. Smiling. Polite. Quiet. What kind of ideas did they cook up? I wish there was time to hear them all.

At break, a guy I don’t know pulls me aside, bursting with the need to let off some steam. He praises the kids up and down then finishes with, “Don’t you realize these entrepreneurs aren’t even legal age?”

I return to the room and Harbinger is asking Blaire what he thinks about one of the contestants. Alex sees real potential. And sure enough, at the end of the evening that one takes first place and the lion’s share of a fat cash prize.

Back at my seat, Alex points out an older gent in front. “That is Dr. Moises Goldman. He created this partnership between the MIT Enterprise Forum of Chicago and IMSA.” I know Moises. I like him—everybody does. We’re all glad he’s still making an impact on the entrepreneurial spirit of this city. Moises introduces Carl Heine, lead innovation architect of TALENT and I become conscious of an unusual number of Ph.D. level academics in the room.

I think back to the icebreaker before the session. We grab some food and after Bill complains about the lack of beer, he says, “Lookit all these kids in the crowd. Notice something strange?”

It takes me a moment to process that. Finally, “They’re all dressed like business people. Real clean cut. Unusual for high school kids.”

Bill glares at me as if I’m dead from the neck up. “Naw, it’s way bigger than that. Look—none of ‘em is usin’ a smart phone. The only guy doin’ that is the old man over there in the corner.”

I have to smile. Can you beat that?

The judges make up quite a group—not the usual panel of pitch coaches and angels investors:

• Bob Geras—CEO of LaSalle
• Kevin Willer—CEO of CEC
• Nik Rokop—Executive Director of Knaap Entrepreneurial Center
• Dr. Lance Pressl—President of the Chicagoland Chamber of Commerce Foundation
• Jose deFrancisco—Director of Marketing for Cloud Computing at Lucent.

At the end, they present the winners with checks—great big checks.

“Hey, lookit the size of that thing.” Bill laughs but Alex is clearly annoyed with him. “Are you referring to its physical dimensions or the dollar denomination, Mr. Blaire?”

“Both. Big as a tabletop. Numbers ain’t shabby neither. A kid can do a lot with that kinda dough.”

I need to catch a train and quickly look over my notes on the six ventures.

ATONA 

Lydia Auch and Kenso Esquivel – IMSA – 1st Place Winners.

These kids give a peek at the future of music-reading technology and put on a good show too. Kenso tries to turn pages of sheet music while playing a violin. Impossible. His music falls in a heap on the floor. That gets a big reaction from the crowd. Lydia takes over the presentation with this quote, “There has been almost no innovation in music technology since the 15th century.”

Good start.

Their offering is an electronic music reader with double touch screens, each large enough to see an entire sheet of music with e-ink technology—much like an oversized Kindle, not those tiny backlit tablet screens. You can see your music in any light and the device consumes almost no juice. A musician can store an entire library of music in one location and carry it everywhere—and it turns pages automatically with the music. Other features include a tuner, a sound recorder, a metronome, and a USB interface. A musician can scan hard-copy sheet music or download it on the cheap. Hey, I want one of these things.

They acquitted themselves like professional speakers with super-cool visuals, a clever marketing plan, and well-justified numbers. I won’t go into those details—all six contestants did a fine job. The technical side of their presentations wowed us as much as the smooth delivery and slick graphics.

TOSIgram

Andrew Chen – Nequa Valley High School – 2nd Place Winner.

This kid proved that TALENT is open to students outside IMSA. He started with a clear statement. “The way we deal with privacy is broken.” He went on to point out that everybody needs to decide on privacy boundaries. But who wants to read a 9-page document? Who wants to draft one? TOSI stands for “Terms of Service Made Easy.”

A Carnegie-Mellon study shows that reading privacy policies use up an average of 25 days a year per person and soon they’ll be required for the thousands of mobile apps. Every storefront needs one and the list is growing. TOSIgram has created an online step-by-step process to create these documents. It bypasses the lawyers. It provides a summary-driven interface that lets the user quickly drill down to the clauses that matter.

The Living TEG

Shivansh Padhy – Granger Middle School – 3rd Place Winner.

That’s right—he’s in 8th grade, maybe 13 or 14 years old. He poses this idea: “Imagine a world where YOU are the source of power for all your energy needs.” He’s discovered a practical way to use excess human body heat to re-charge electronic devices. This is both extreme green and extremely useful. No more batteries or electrical outlets.

Turns out the human body produces 116 watts of heat every hour. A smart phone only needs five. Body heat can run a cell phone continuously and energy can be stored for higher output devices. His first target is cell phones, then medical electronics, then radios and flashlights. He has a working prototype. If he’s in 8th grade now, what will he do when he gets to IMSA? When he gets to MIT?

TiqFolio

Kevin Wang – IMSA

This one wins my prize for the best speaker. He’s the super-glib one that caused Ron May to blurt out his praise at the start of the meeting. TiqFolio is a unique online storefront concept for selling digital products—a gap in the market. He’s applying a proven business model to a new segment.

Sofi

Shawn Jain – IMSA

“Put your portfolio online.” People love to talk about their stocks on the Internet. They love to socialize on the Internet. Why not combine those two? The result is an investor community. People helping each other succeed.

QuickLine

Jennifer Ren, Mitch Bieniek, and Konrad Wrobel – IMSA

Imagine creating your own bus route—one that fits your needs. These kids have a network to dynamically optimize bus routes and make them more efficient. They gather input from the end user then use a computer algorithm to re-route and size the transportation. A working prototype is already in place in the form of an Android app.

What’s next?

This summer, TALENT is putting on a 2-week micro incubator to bring in partners and make student’s ideas a reality. I’d like to see them find the right consultants and the right investors—the kind that’ll really help these kids.

For Information on the summer TALENT incubator, contact Dr. Carl Heine at heine@imsa.edu

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www.ChicagoVentureMagazine.com Comments and re-posts are welcomed and encouraged. This is not investment advice – do your own due diligence. I cannot guarantee accuracy but I give you my best.

© 2012 John Jonelis – All Rights Reserved.