Category Archives: Innovation and Culture

POWER PITCH

by John Jonelis

What happens when you give kids—kids gifted in math and science—a real chance to bust out with their God given talents and excel?

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  • What if you trust them to lay their greasy little hands on equipment normally available only at elite universities?
  • What if you allow them to direct their own time?
  • What if you challenge them to construct their own goals and learn by themselves how to accomplish them?
  • What if you dare them to build real startup businesses at such a tender age?
  • And what if you throw them into a competition against a panel of critical judges from the real private equity world?

What happens? Good things! Good things happen! They happen here at IMSA – the Illinois Mathematics and Science Academy. I’ll give you an intimate peek at the inner works of this educational powerhouse so you can see for yourself what makes this one of the biggest success stories in the country.

Showcase – Chandra Gangavarapu

This is a high school with a serious entrepreneurship program. Many of the ideas, business models, and pitches produced here outshine what we’re accustomed to in the business world. Mere students, you say? Some of their companies have gained funding and gone to market. And many of these same students intern at real-world startups throughout Chicago.

According to Britta McKenna, Chief Innovation Officer at IN2, “Kids love to have real-world problems to actually work at. This space provides that opportunity.”

Today’s event is the grueling POWER PITCH. Each team presents its company twice before separate panels of judges—the finalists pitch three times.

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What Do the Judges Say?

The judges are all smiles as they feed at the idea bar after the first round. Competitors get whittled down by secret ballot. I corner John Lump. He’s a colleague at Heartland Angels and a professor at DePaul where I’ve lectured at his invitation on risk profiles in private equity. See IN YOUR FACE RISK.

This a practical guy who’s knee-deep in the real world of business as VP of Federal Home Loan Bank of Chicago. I can count on him for an honest opinion. Here it is verbatim:

John Lump — Judge

“I love being a judge here. Second year I’ve been doing it. And it’s exciting and a lot of fun. The enthusiasm and energy of the kids is just fantastic.”

Swelly – Tyler Stock

“I saw several interesting businesses.

  • Swelly is a temporary insurance company.
  • Blabl is a company to help students with speech disabilities.
  • Rethink Numeracy is one that helps students with Downs Syndrome learn math—a more visual approach.

Some really cool ideas here.”

Blabl – Ayan Agarwal

“Obviously these entrepreneurs are quite young. There are some still in Jr. High. You’re talking kids that are 10, 12, 13 years old and already starting businesses! At Heartland Angels, we see entrepreneurs in their 20s up to their 50s and 60s. So these kids need much more mentoring. But I think you’re going to see some business opportunities here.”

Rethink Numeracy – Akshaya Raghavan

I touch base with Moises Goldman. As I’ve said before, he’s an old hand at private equity in Chicago and a VIP here at IMSA. I’ve known him a long time, and trust what he says. He’s a guy that projects humility, but receives deference and respect.

Moises Goldman – Judge

Today Moises is bursting with exuberance and he speaks with more passion than I’ve ever seen. What he says is as intuitive and emotional as it is insightful.

“Two of these kids blew me away. The company is called Fast Exit. One brother is 12 and the other is 15. Twelve and fifteen! I looked at the father and just jokingly said to him, what is it that you do? These kids are very, bright. Very, very bright—both of them.

[Moises is talking about the Orr brothers, Joshua and Maxwell. The older brother is in 8th grade at Avery Coonley. They are each pitching their own companies today.]

“What blew me away was that they’re two brothers, so I look at the father and I just wonder, what are his challenges as a dad with these two amazing kids? Because the social environment that they have—it must be an alternative universe to the one that I’m used to—that I grew up in.”

Jim Gerry with Joshua Orr of Fast Exit

[I suggest to Moises that their home life must be very nurturing.]

“Yes, somehow. But I’m amazed. That really blew me away—that blew me away. Last year, the older boy had a drone project that was a game you could adapt to Dave and Busters in that kind of environment.”

[I recall that drone project and ask if they’re both planning to attend IMSA.]

“The 12-year old—I don’t know. The 15-year old is applying for the coming year.”

OneNote Quiz – Maxwell Orr

Today there are 17 judges at Power Pitch – Patrick Bresnahan, Dane Christianson, Moises Goldman, Joe Jordan, Sanza Kazadi, Christine Krause, Maria Kuhn, John Lump, Josh Metnick, Nancy Munro, Kelly Page, Jacob Plumber, Lance Pressl, Julia Sanberger, Chris Stiegal, Tom Voigt, Joe Zlotniki. I agreed to be an alternate and fortunately don’t get that tap on the shoulder. I want to see the whole event.

Shop Cheetah – Catelyn Rounds, Julian Kroschke

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Entrepreneurship

IMSA’s entrepreneurship program is called TALENT—Total Applied Learning for Entrepreneurship—led by Dr. Carl Heine, Britta McKenna, and Jim Gerry. Jim is technically retired from the program but still volunteers his time. This is too much fun to stay away.

Heat2Heal – Sushil and Pranav Upadhyayula

At this place, students get real-life experience and opportunities to solve real-world problems and bring ideas to market. The goal is to instill the thinking patterns and mindset of an entrepreneur:

  • Develop a product
  • Form a team
  • Communicate ideas
  • Formulate a business plan
  • Protect intellectual property
  • Work your network
  • Raise funding
  • Start the business

Really? These are high school kids—some even younger. In a world of schools dominated by gangs, drugs, and fear, who would think them capable of such positive desires and accomplishments? Then I come across one of the quotes on the wall:

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IMSA Fast Facts

  • Teaching philosophy – The Socratic approach. Self-directed learning and problem-based learning.
  • 99.8% of IMSA students attend college.
  • 70.1% pursue majors in science or math.
  • 47% of faculty is PhD.
  • Alumni hail from every district in Illinois.
  • This is the school’s 30th year.

The IN2 Entrepreneurship Center at IMSA

I snag Dr Carl Heine, as he moves between presentations. He’s director of IMSA TALENT, their entrepreneurship program. I ask him if IMSA still has a presence at 1871, the huge incubator in downtown Chicago, or if all the activity is at the new IN2 facility.

Dr. Carl Heine, Director of IMSA TALENT

“IMSA is still a member of 1871. We take our students on Wednesdays to intern at companies. They’re embedded in startup teams. We can’t teach a class that’s better than that.”

“We do it every Wednesday. 1871 is just one location. We have students at the James Jordan Foundation downtown. Three of them are interning there right now, working on summer curriculum. There are students at a variety of other spots, too.”

[“This year’s Power Pitch is better than I’ve ever seen.”]

“POWER PITCH is an event that makes people feel good about the future. I hope you feel that way as a result of your involvement.

“The top three high school teams are advancing to the Next Launch regional competition in Indianapolis on May 17. If you would like to continue to work with your favorite team as a thought partner, a mentor or more, the purpose of IN2 and TALENT is to make that happen.”

Yoda

[I decide that Carl is the Yoda of IN2. I ask him, “What other events are coming up?”]

“This has been an academy for 30 years now, so we’d like to have a celebration. We’ve put it on March 30th this year, so there’s a 30 and a 30. As part of that, we’re doing the ribbon cutting for the IN2 space, and the new science labs that are part of a capital campaign that just wrapped up as well. And we’re celebrating the accomplishments of the institution over the last 30 years.”

This is just brilliant!

IMSA trains students not to fear any subject. I noticed THEORY OF ANALYSIS on the course syllabus. Normally, that’s offered only at the university level and it’s a course that’s hated and avoided by math majors nationwide. Never be intimidated by difficult subjects.

Award Ceremony

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17 Student Teams

IMSA’s President, Jose׳ M Torres, and the Stephanie Pace Marshall Endowment present the awards.

The top three high school teams—Blabl, Heat2Heal and Flameless—advance to the Next Launch Regional Competition in Indianapolis on May 17. The two winning middle school teams are Fast Exit and Shop Cheetah.

Blabl– Ayan Agarwal

 

Social Good Category Finalists & Winners

  • BlablAyan Agarwal – A mobile application that engages speech impaired children in conversation with an avatar – $1000 prize, Top 3 HS team
  • Heat2HealSushil Upadhyayula, Pranav Upadhyayula – A hands-free, self-powered Arthritis Wrap that converts body heat into electricity to provide targeted massaging & heat therapy for stiff joints – $500, Top 3 HS team
  • Rethink NumeracyAkshaya Raghavan – Teaching numeracy to children with Down Syndrome, leveraging their learning strengths.
  • Double-CheckRishi Modi – A protective biometric alternative to prevent ID theft.

Heat2Heal– Sushil Upadhyayula & Pranav Upadhyayula

Social entrepreneurs create self-sustaining businesses that promote social good. The STEM category is for-profit tech companies.

Fast Exit – Joshua Orr

STEM Category Finalists & Winners

  • FastExitJoshua Orr – A life-saving solution for managing exit signs – $1,000 prize, middle school team.
  • Shop CheetahCatelyn Rounds, Julian KroschkeA groundbreaking store navigation system that saves times and routes customers through the store$500 prize, middle school team.
  • FlamelessSivam Bhatt, Nikhil Madugula – Extinguishing cooking fires automatically with sound waves – Top 3 HS team.
  • SwellyAneesh Kudaravalli, Tyler Stock – A mobile app that allows users to get flexible insurance on personal items in an instant.

Shop Cheetah – Catelyn Rounds & Julian Kroschke

 

Other Competing Teams

  • AlertAshritha Karuturi, Priya Kumar – An app that efficiently connects homeowners to rescue workers, saving time and lives.
  • Be BettahZoe Mitchell – The food search engine and cookbook series that allows for bettah nutrition without changing your lifestyle.
  • Electrofood Alex Orlov – A microbial fuel cell that converts food waste to electricity.
  • OneNote QuizMax Orr – The personalized quiz generator.

Flameless – Sivam Bhatt & Nikhil Madugula

  • SafeSeatElliott Cleven – An app to alert parents if their child is left in a car unattended.
  • ShowcaseChandra Gangavarapu – A web app for musicians and dancers to gain recognition for their art.
  • Social BreadVainius Normantas – Using social media advertisements to raise funding and awareness for communities in need.
  • StrobeJayant Kumar, Zaid Kazmi – LED light strip supplements for fire and carbon monoxide alarms to assist the hearing impaired.
  • Verifact!Shreya Pattisapu – An effective and efficient way to couter fake news.

 

Read Part 1 – THE NAME IS IN2

Hope you enjoyed Part 2 – POWER PITCH

Coming soon – INQUIRY & INNOVATION

 

 

IN2 Contact Info

Address – 1500 Sullivan Rd. Aurora, IL 60506

Website – https://www.imsa.edu/

Carl Heine – heine@imsa.edu

Britta McKenna – bmckenna@imsa.edu

Tami Armstrong – tarmstrong@imsa.edu

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Photography by John Jonelis

Chicago Venture Magazine is a publication of Nathaniel Press www.ChicagoVentureMagazine.com Comments and re-posts in full or in part are welcomed and encouraged if accompanied by attribution and a web link. This is not investment advice. We do not guarantee accuracy. It’s not our fault if you lose money.
.Copyright © 2017 John Jonelis – All Rights Reserved
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Filed under 1871, angel, angel investor, Chicago Startup, Chicago Ventures, Education, Entrepreneur, Entrepreneurship, Events, IMSA, Innovation, Innovation and Culture, Invention, investor, MIT, MIT Enterprise Forum, MIT Enterprise Forum Chicago, MITEF, MITEF Chicago, Social Entrepreneur, Startup, startup company, vc, venture capital

THE NAME IS IN2

by John Jonelis

What happens when you give kids—highly gifted in math and science—a state-of-the-art facility entirely dedicated to entrepreneurship? This could be the best-designed business incubator on the planet and the students are going to create real businesses here. Hey—this is too much fun! It sure doesn’t look like high school to me! Where did they put the usual long halls walled by the usual rows of lockers? Where are the standardized rigid rectangular classrooms?

This is IN2, the new entrepreneurship center at IMSA—the Illinois Mathematics and Science Academy—the Statewide high school for the best and the brightest. It’s located near Chicago and students live on campus, as if attending a university four years too soon.

IMSA will host a big party and ribbon cutting for the new IN2 innovation space on the 30th of the month—that’s the 30th anniversary of the school’s founding. I had the unique opportunity to preview this amazing facility. Here’s a sneak peek:

IN2 at IMSA (Note the unique tables and ping pong net)

Britta McKenna is the Chief Innovation Officer here, and led the team that put this together. As I fumble to get my recorder going, I ask her how they pulled it off. Without any hesitation, she pours out an amazing story—so here it is, verbatim:

[First of all, I asked about the name—IN2. What does it mean?]

“Innovation and Inquiry. When people were in focus groups and asked about IMSA, those were the two words that came up over and over. So the company we worked with used Inquiry & Innovation as IN-IN. That’s why it’s called IN2. So you can say, ‘What are you IN2?’ It can be playful.”

Britta McKenna, Chief Innovation Officer

“The story actually goes back 10 years. It was decided an innovation hub would be built—a physical space and a virtual space.

“Three and a half years ago, we got a gift of one million dollars from Steve Chen to build the innovation center, so then the work really began.”

[Chen is an IMSA alum and co-founder of YouTube and AVOS. I asked Britta how they came up with such a wonderful design]

“I got tapped, as chief innovation officer, to figure out what this would be, what it would look like, how it would operate, how it would be funded. It would have to be a private revenue stream to support this.”

[ALERT—All you budget hawks. She’s talking private funding—and she’s got the corporate connections and alumni to do it.]

Maker Space

“So I brought along students to Silicon Valley—15 of them. We went through Chicago to spaces like Northwestern, IIT, University of Chicago, Fermilab, Argon, 1871, Private Industry Chicago, Next Door, and we also went out to Boston to visit MIT Media Lab, and other spaces out there, including artist colonies to be inspired to by what people were doing coast-to-coast in innovation spaces.”

Multi-use conference rooms

“That was a 2-year research project and included the students all the way. They worked in three teams—Developing Technology, Programming, and Facilities. They helped co-design the space, because they are the users, and too many times, we design things in a box outside of the users. So we implemented a user-designed thinking approach.”

Lab space

“We went to Facebook, Google, Dropbox, AVOS, which is Steve Chen’s newest startup, WeWork, which is a co-working space, and Stanford’s StartX, so we literally have done our due diligence.

“And I asked, ‘What space gets used the most? What’s your favorite thing? And what did you do wrong?’

“It doesn’t mean that those things will all work here, but it’s likely that we might have success if somebody else already has. So we synthesized all of that and I became what is known as the ‘hashtag’ Super-User. And the Super-User is the one that funnels all of this information to the architects, because now it actually has to be designed.”

Idea space

“We went to the community. We came together—58 of us—anyone from a Chicago Public School teacher to a city administrator with City of St. Charles. We got public, private, parents, past parents, teachers—everybody came together and literally built models of this space. We went through the design process with architects, we used Cordogan Clark in Aurora, and we built this—it took about a year to build from the time we broke ground and now we’re opening up.”

Sharing space

“So all the spaces here are influenced either by student ideas or places coast-to-coast that we visited. And so we’d probably say that we’re the first secondary school innovation center in Illinois, and dare we say the United States because we haven’t been able to find something like this. First-to-market is great for Illinois, great for Aurora, and puts IMSA on the map. We invite people to come in and see what we’ve built here.”

Collaboration space

“This is really meant as a convening space. Innovation doesn’t happen unless there are people here. We learned from going coast-to-coast that you can have the coolest space ever, but if there’s nobody there, there’s no innovation happening. There’s nothing happening. It’s all about connecting people.”

Coffee Bar

“One of the biggest places we found is around food. So we have a built-in cafe around the corner because you want to meet somebody for a cup of coffee. You just want to have a casual conversation. You want to have a back-of-the-napkin sketch, that can happen there or it can happen in our idea bar.

“We have Idea Baristas that we’re training. They actually wear aprons, and will help people advance their ideas here. They’re all volunteers.”

Idea Baristas.

We’ve got a mentoring office like 1871. We hope by the fall to have regular office hours. So I am a non-profit mentor. On Tuesdays from 4-6:00, I volunteer my time to mentor non-profits in the community. I can go to them. They can come to us.”

Mentoring Office

“Mike McCool, who’s an alum and a software engineer, wanted to donate and I said, ‘How ‘bout we get the McCool View?’ So he funded the beautiful windows that we have.”

The McCool View

“Our reach—about advancing the human condition—can, I think, really be actualized through this space. Not that we weren’t doing it—it just gives us that new front door. The space is just literally right by the front door.”

A huge competition between student startup companies— POWER PITCH—is going on here today. I’ll give you an inside look at that in the second article in this series.

Moises Goldman – Judge at POWER PITCH

I run into an old friend, Moises Goldman—angel investor, a big driver at MIT, and an important contributor at IMSA. Today he’s one of 17 judges at POWER PITCH. I ask him what he thinks of the new facility. Moises responds in his gentle, deliberate, and old-world manner, condensing his thoughts into a few words:

“I think it’s always been the desire to be in a type of space that recognized talented students. This is our recognition of these students. That makes a difference to me.”

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Notable IMSA Alums

The school’s alumni reflect its excellence. Browse through a few:

Steve Chen – Co-founder/Chief Technology Officer of YouTube and AVOS. Early engineer at PayPal.

https://en.wikipedia.org/wiki/Steve_Chen

Steve Crutchfield – Chicago Trading Company. CBOE Advisory Board, Head of Options, ETPs, Bonds at NYSE Euronext.  2012 Crain’s Forty Under 40.

http://marketswiki.com/wiki/Steven_Crutchfield

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Dr. Julia Comerford – Astronomer. Discovered several supermassive black hole pairs—occurring in the merger of galaxies.

http://www.sci-news.com/astronomy/pair-black-holes-distant-galaxy-03546.html

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Dr. Scott Gaudi – Astronomer, discovered over a dozen new planets and a new solar system.

https://www.imsa.edu/news/releases/2012/08/06/president-obama-honors-dr-b-scott-gaudi-91-highest-honor-early-career-scien

http://www.astronomy.ohio-state.edu/~gaudi/

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Nathan Gettings – Co-founder of Palantir. Founder of robotics company Robotex.

https://en.wikipedia.org/wiki/Palantir_Technologies

Also – http://www.robotex.com/

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Ramez Naam – Software developer and international bestselling author. Developer at Microsoft Outlook and Internet Explorer projects.

https://www.amazon.com/Ramez-Naam/e/B001IOH84S/ref=sr_tc_2_0?qid=1489516515&sr=8-2-ent

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Mike McCool – Software Engineer at Google, Robot Invader, Aechelon Technology, Netscape, and many others.

https://play.google.com/store/apps/details?id=com.robotinvader.fooding&hl=en

Rob McCool – Software developer and author. Developed the original NCSA Web server, later known as the Apache HTTP Server. Part of original NCSA Mosaic team with his twin brother Mike.

https://en.wikipedia.org/wiki/Robert_McCool

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Tim Meyer, PhD – Chief Operating Officer, Fermilab

http://www.fnal.gov/pub/about/timothy-meyer.html

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Yu Pan – Co-creator of PayPal and the first employee at You Tube. Co-founder of kid’s kraft company Kiwi Crate.

https://en.wikipedia.org/wiki/Yu_Pan

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Dwan Prude – Financial Analyst, Boeing Company. Motivational speaker.

https://www.imsa.edu/news/releases/2012/08/20/dwan-prude-97-gives-passionate-and-motivational-2012-convocation-address

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Russel Simmons – Co-founder of Yelp. Early developer at PayPal.

https://en.wikipedia.org/wiki/Russel_Simmons

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Clara Shih – Bestselling author, THE FACEBOOK ERA. Founder of Hearsay systems. In 2010, she was named one of most influential women in tech.

https://en.wikipedia.org/wiki/Clara_Shih

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Kevin Wang – Founder of TL;DR Legal. Theil Foundation fellowship recipient.

https://www.imsa.edu/academics/talent/kevin-wang-new-thiel-fellow

Also – http://www.geekwire.com/2012/kevin-wang/

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Sam Yagan – American internet entrepreneur. Co-founder of SparkNotes and OkCupid. CEO Match.com. Named in Time Magazine’s 100 most influential people in the world list.

https://en.wikipedia.org/wiki/Sam_Yagan

 

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Hope you enjoyed Part 1 – THE NAME IS IN2

Go to Part 2 – POWER PITCH

Coming Soon – INQUIRY & INNOVATION

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IN2 Contact Info

Address – 1500 Sullivan Rd. Aurora, IL 60506

Website – https://www.imsa.edu/

Carl Heine – heine@imsa.edu

Britta McKenna – bmckenna@imsa.edu

Tami Armstrong – tarmstrong@imsa.edu

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Chicago Venture Magazine is a publication of Nathaniel Press www.ChicagoVentureMagazine.com Comments and re-posts in full or in part are welcomed and encouraged if accompanied by attribution and a web link. This is not investment advice. We do not guarantee accuracy. It’s not our fault if you lose money.
.Copyright © 2017 John Jonelis – All Rights Reserved
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Filed under Chicago Startup, Chicago Ventures, Education, Entrepreneur, Entrepreneurship, IMSA, Innovation, Innovation and Culture, Invention, new companies, Public Schools, Social Entrepreneur, Startup, startup company

HOW BAD IS IT

bobs-bad-poetry-swtby Loop Lonagan

Lotsa people keep tellin’ me good things about Bob’s Bad Poetry so I’m checkin’ it out. Yeah, yeah, I know what yer thinkin’. But there’s no law against an angel investor goin’ in fer high culture. That’s right, I like literature ‘n’ modern art too—’specially the abstract stuff. You got some problem with that, bud? Hey, me fodder and me mudder’s both Irish ‘n’ both poets, so’s I got it in da genes. Maybe you already figured that out from da way I talk.

And hey—dis ain’t just any poetry—it’s high tech—performed exclusively on da internet. Maybe it’s a startup company! Y’know how I like t’ invest in them. So I ask ya—lookin’ at da macro picture—with this lousy economy, dis goofy election, crime ‘n’ all—can it be that hard times once again spawn a renaissance o’ creative juices? Will demand fer artistic expression skyrocket like it done in da 60’s? Doncha wish you invested in Mick Jagger or Paul McCartney back then? Could it be that bad poetry is da next growth industry? Sounds like a winner t’ me! But how d’ya make a thing like that fly?

I sneak onto You Tube while da boss ain’t lookin’. He’s over dare, behind his big fat beat-up WWII air force desk tyin’ flies. Yeah, flies! Fer fishin’! Guy’s got da worst case o’ writer’s block I ever seen. He won’t notice me takin’ in a little culture. Don’t seem to notice nothin’ nowadays—unless it’s new fishing gear or maybe a Cubs game. Yeah, he put in a big-screen TV and DVR here at our corporate offices in the backroom of Ludditis Shots & Beer—just so he don’t miss a single inning.

ludditis-shots-and-beer-500

Our Corporate Offices

Whoa—look at dis site! This is fer real! Bob’s pumpin’ out a new poem every single day. Weekends too! I watch five of ‘em and find myself feelin’ real, real good—kinda grinnin’ to myself like I just downed a big mug o’ prime porter and lickin’ my lips. But beer costs money and dis poetry site is entirely free! Don’t cost me a single dollar! And only five minutes goes by! Yeah, deeze poems is all short—real short—just da way I like ‘em! So I subscribe, just to make sure I don’t miss any.

bobs-bad-poetry

Bob Badpoet

Can high culture be good fer a guy and this much fun too? Bob’s Bad Poetry. Looks to me like a creative genius maybe figured a way t’ use dis high tech world t’ make money—in an industry where nobody made money before! And if he’s revenue positive, dat’s what I call da businessman of today! If he’s selling shares, I’m in!

And if you don’t believe me, see fer yerself. Click here: BOB’S BAD POETRY

 

Please listen to poetry responsibly.

Graphic by Jennifer Otsuka

Chicago Venture Magazine is a publication of Nathaniel Press www.ChicagoVentureMagazine.com Comments and re-posts in full or in part are welcomed and encouraged if accompanied by attribution and a web link. This is not investment advice. We do not guarantee accuracy. It’s not our fault if you lose money.

.Copyright © 2016 John Jonelis – All Rights Reserved

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Filed under angel, angel capital, angel investor, big money, Economics, Education, Entrepreneur, Entrepreneurship, Innovation, Innovation and Culture, Internet, Internet Marketing, investor, loop lonagan, Mobile, Mobile Marketing, new companies, Social Entrepreneur, Social Media, vc, venture capital, wireless internet

IMAGINED HORRIBLES

Investor from MS OfficeSourcing Strategic Investors, Part II

by Laurence Hayward

Make a wish—that the corporate venture investment world continues to grow.  Strategic investors are an increasingly vital source of capital for many entrepreneurs.  Who else will put up the cash?  Ask yourself,  “How many financial venture capitalists are investing in material science these days? Or cleantech?  Or hardware?” Not many, right?  So let’s discuss finding corporate investors that understand an entrepreneur’s needs for flexibility and ubiquity.

In a strategic investment in emerging technology, the corporation, or strategic, typically seeks to gain an operational advantage in the form of:

  • Access to new markets
  • Access to a large customer
  • Access to a dedicated supplier
  • Other benefits in addition to capital.

Sounds like a match made in heaven, right?

Well, it’s complicated.

Those additional desires often make their way into multiple forms of agreement. But separate from the agreements, there is the relationship.  And any good relationship requires ongoing trust and mutual benefit.

Flexible from MS Office

Flexibility

A critical need for an entrepreneur is flexibility, whether that means changing strategies, business models, or product mix. If there are no agreements beyond the investment itself, then what is expected from the relationship may be vague.  But let’s face it—there are expectations nonetheless.

So, as both parties seek advantages beyond capital, it’s important to match the method with the way the entrepreneur plans to run the company. Is there a common vision of where you want to go and how to get there?  The latter is notoriously mutable.

If the entrepreneur changes business models, is there reason for both parties to continue working together?

  • What about a change in product mix?
  • What if the strategic is a supplier and the entrepreneur needs to use other suppliers?
  • What if the strategic is a customer and the entrepreneur wants to sell to their competitors?
  • What if the strategic is a distributor and the entrepreneur needs channels that it doesn’t cover?
  • What if the strategic is a potential acquirer and the entrepreneur wants to lock in the highest possible bid at the sale of the company?
  • What if the strategic is pursuing certain lines of business that the entrepreneur sees as competitive?

How do you keep the relationship intact? The two parties want to assume the best going into a relationship, but a frank conversation around each of these issues may go a long way in managing expectations.

Negotiation from MS OFFICE

Many strategics need flexibility as well. Corporate objectives and personnel shift more quickly today than ever before.  How will changes in management or corporate objectives impact the relationship?

Strategic investors that have been in venture investing for some time understand an entrepreneur’s need for flexibility. Others may understand it conceptually, but still need to put the interests of their organization first.  Finding a comfort zone among potentially conflicting goals is an important part of the discussion. What are your expectations for this relationship?  And what if you need to make some changes later in the relationship?

Early in my career, while negotiating a strategic investment, I remember someone using the phrase the imagined horribles. It had to do with attempts to document away bad things that could happen.

Once that phrase came out, we all realized we were expending way too much energy negotiating things that probably wouldn’t happen. Imagined horribles are still necessary to avoid serious problems, but it might not be in the interest of either party to document every aspect of the relationship.  The relationship, like the business, will change and adapt. Allow it do so. Focus on the most critical needs of each party.  If there is reason to continue working together, the parties will do so. If there isn’t, an agreement may bind, but will it benefit?  Or does it prevent the deal from getting done in the first place?

Capture the Moon from MS Office

Ubiquity

Seeking ubiquity in one’s product requires vision, guts and more than a bit of confidence. A desire to achieve it is a trait common among great entrepreneurs.

So, in taking on corporate investment, a key assessment for any entrepreneur is whether the investor will augment or restrict the achievement of ubiquity. Will the strategic help the entrepreneur reach new markets and customers?  Or will the strategic ask for exclusivities and restrictions on what the entrepreneur can do?

For example, strategic investors may want exclusive rights to a product or technology, providing an advantage in the market versus the competition. This doesn’t seem like an unreasonable demand in exchange for capital and distribution. It’s a tradeoff.  But many entrepreneurs recoil at the suggestion of any kind of exclusivity because it inherently conflicts with the ubiquity they seek.

Fortunately, in this era, many corporate investors don’t require entrepreneurs to make this choice even when it would seem in their best interest to do so. Why? Because gaining access to the very best entrepreneurs and technologies requires terms acceptable to not only the entrepreneurs but also to the other investors.  And for many important technologies, a syndicate of investors is required.

Besides, there are several ways to win.

  • If the strategic wants to own a technology or product outright, they are in the best position to understand its value and acquire or license the technology.
  • Even without exclusivity, a strategic typically gains a first mover advantage if they are working with an entrepreneur to commercialize a new technology.
  • Many intangibles come from working with entrepreneurs and a culture of innovation.
  • And, like all the other investors, the strategic has the benefit of their equity value if the product succeeds.

In sum, a strategic can win in many ways if the technology becomes widely available, even to direct competitors.

Regardless of these factors, some entrepreneurs will still be concerned about a strategic limiting the option to sell product to anyone. The concern may be the mere perception of a link to just one customer.  For that there is an answer:  Consider strategics on the supply side rather than the buy side. A strategic that supplies raw materials to an entrepreneurial venture also wants that venture’s product to become ubiquitous. The tradeoff may come in the form of exclusive rights to supply or to match other suppliers.  Redundancy in the supply chain is critical for most businesses that intend to scale.  But that’s another point for negotiation.

Agreement from MS OFFICE

Ironing It Out

So, here is the challenge: Find common ground amidst mixed motivations.

  • The entrepreneur seeks to protect his needs for flexibility and ubiquity.
  • The strategic seeks to serve the strategic objectives of his corporation.
  • They both seek to generate a return on investment (ROI).

Focusing on that common objective is something that tends to align all the key stakeholders. It can help parties move beyond provisions that would otherwise impede flexibility or ubiquity.

GO TO PART I

 

Larry Hayward Photo

Venture Lab Logo

Laurence Hayward | lkh2@theventurelab.com | VentureLab | 2100 Sanders Road | Northbrook, IL 60062

This article is abridged from TheVentureLab.  Copyright 2015. The VentureLab

Image Credits – Parker Brothers via MS Office, Laurence Hayward

Subscribe to Larry’s articles at http://theventurelab.blogspot.com/

Chicago Venture Magazine is a publication of Nathaniel Press www.ChicagoVentureMagazine.com Comments and re-posts in full or in part are welcomed and encouraged if accompanied by attribution and a web link. This is not investment advice. We do not guarantee accuracy. It’s not our fault if you lose money.

.Copyright © 2016 John Jonelis – All Rights Reserved

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5 STARTUPS WE LOVED FROM TECHWEEK

Chicago’s Launch Competition

techweek-logo T

 

by Jeff Segal

Why does a B2B digital marketing agency that works with some of the biggest and best-known companies in America send a team to a startup competition?

Because marketing and startups actually have a lot in common.

  • Marketing is about problem solving, and startups are founded to solve problems.
  • Marketing is about storytelling, and every startup has a story.
  • Finally, a great marketing campaign and a successful startup both make people say, Wow, I wish I’d thought of that!

Out of the dozens of startups entered in last week’s Techweek Launch competition, here are five that made me and my coworkers say, “Wow!”

Techweek

 

CAST21

Technology has revolutionized nearly every aspect of healthcare in the last 20 years. But if you break your arm, your cast will look and feel just like one from 50 years ago.

Cast 21 wants to change that. Their lattice design—stiff on the inside, soft on the outside—lets patients shower and even swim, and lets doctors dress and treat the affected skin underneath. No more itching, no more smell.

Cast21

CEO Ashley S. Moy explains, “Our co-founder [and bio-mechanical engineer] Jason Troutner wore casts for nearly three years of his life. He was passionate about solving the complications that accompanied the casts, and his energy was contagious. We knew there was no other option but to change the way people heal broken bones.”

 

COMMON CENTS

If you know a college student or recent grad, you’ve probably heard about the increasing burden students loans are putting on the youngest members of our workforce.

Some recent University of Chicago graduates have designed a platform that makes paying off loans a little easier. Common Cents connects mobile spending apps like Venmo to a student’s loan accounts, so spare change from everyday purchases goes directly toward paying those loans down.

Common Cents

How much difference can a few cents here and there make? Co-founder Madeleine Barr says an average student who puts just $1.33 per day toward loan repayment can save more than $3,000 before finishing school, and more than $20,000 over the lifetime of a loan.

She adds, “As recent graduates with student debt, we are building the app we wish existed for us.”

 

FIND YOUR DITTO

Find your Ditto CEO Brianna Wolin has lived with multiple chronic illnesses since she was four years old. And she spent four stressful years at college without meeting a single other person living with the same conditions.

Her solution: build a mobile platform that allows people to make local, on-demand connections with others living with the same chronic illness. These connections can help relieve the isolation and depression that so often accompany chronic conditions like Crohn’s disease, celiac disease, diabetes, cancer and eating disorders.

Find Your Ditto

 

The result: Within five days of Brianna starting the Find Your Ditto pilot at the University of Michigan, another female student with exactly her same conditions had signed up.

 

FLIPWORD

If you read lots of online content, Flipword can help you learn a new language without special classes or software.

Like many startups, the idea for Flipword came from a real-life problem. CEO Thomas Reese was trying to teach himself Mandarin, but didn’t have time to study. One day while browsing the web, it hit him that he could learn Mandarin at the same time.

Flipword

The concept is mind-bogglingly simple. Read whatever online content you like, and Flipword replaces a few words per page with words from the language you want to learn, along with definitions and pronunciations. Maravilloso!

 

HERE 2

Jelani Floyd, CEO of Here2, explains how this “pop-up social broadcasting” app came to be:

“My brother and I attended a Bulls game at the United Center. We noticed so many people around us taking photos and videos and we wondered, where was all this content going? We searched hashtags on Facebook, Instagram and Twitter, but we could not find any content relevant to that game.

“We posted a photo to Facebook, and one of our friends—whom we had no idea who was also at the game—commented on our pic and said ‘I’M HERE TOO!!’”

Here 2

Here2 locates users geographically, so they can connect with each other in real time without having to guess hashtags or channels. And users who can’t make an event can still get authentic insight from the crowd’s perspective—the next best thing to being “here too!”

 

Links to the Five Companies

Cast21

Common Cents

Find Your Ditto

Flipword

Here2

Jeff Segal

Jeff Segal writes blogs and social content for digital B2B marketing agency StudioNorth, while crusading tirelessly against the words provide, quality, strive and utilize. This post originally appeared at Inside the Studio, the StudioNorth blog.

Check out Stories We’ve Told and Techweek Launch Competition

Graphics courtesy Jeff Segal


Chicago Venture Magazine is a publication of Nathaniel Press www.ChicagoVentureMagazine.com Comments and re-posts in full or in part are welcomed and encouraged if accompanied by attribution and a web link. This is not investment advice. We do not guarantee accuracy. It’s not our fault if you lose money.

.Copyright © 2016 John Jonelis – All Rights Reserved

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LIAR

Liar THow Far Will You Go to be Loved?

by Howard Tullman

You’re ambitious, motivated, and totally committed to your company. But are you strong enough to always tell the truth?
I’m afraid we’re developing another generation gap, and this one isn’t merely cosmetic – “Can’t stand those tattoos!” – or aural –

“Can’t stand that music!” – or even economic – “Why ‘own’ anything?”

dragon tatoo

No, this one is far more critical. I can deal with the questionable choices that many young people make today because I’m relatively sure we all made similar – or much worse, but probably less permanent – choices in our youth. Yet, amazingly, we’re still here, standing tall and offering the benefit of our wisdom, such as it is.

The gap I’m talking about threatens to undermine something so basic to the conduct of business, and especially to early-stage angel investing, that until recently there was no gap at all. Until now, everyone accepted that trust and sincerity are absolutely fundamental to success.

Trust

I recently heard Alan Matthew, a long-time successful options and commodities trader, express it forcefully in a talk he gave to several hundred entrepreneurs. He said that in every deal he does, and in every transaction, “My word is my bond.” And it’s just that simple, especially in the trading pits in Chicago, where the entire ecosystem depends on trust and the ability of everyone to rely on the commitments and honesty of the other players.

But too many of today’s young entrepreneurs live in a different conceptual world, one driven by situational ethics. And it sucks.

Telling people half the story, or telling them what they want to hear instead of what they need to hear, isn’t a funding solution—it’s an invitation to a coming slaughter. And it’s usually the entrepreneur and the management team who will ultimately get killed. So it makes sense to share all the news all the time, if for no other reason than to save a lot of grief down the line.

Half Truth

The truth never hurts unless it ought to, and sometimes it’s a powerful wake-up call for all concerned. There’s never a really good or special time to decide to tell the truth. The time is all the time.

But, if you haven’t been in the position of having to make the right choice regardless of how hard or discouraging it may be, or how it may impact your financing or prospects, and if there’s no one more experienced around to guide you because you’re running full-speed ahead and you’re making it up as you go, it’s far too easy to take a quick slide down that slippery ethical slope. But once you lose someone’s confidence—once they come to believe that you don’t share and abide by their fundamental values—you will never fully regain their trust and support.

An old friend of mine used to say, by way of excusing virtually anything disgusting he managed to do, that exceptional people deserve special concessions. I’m afraid his disease may be spreading. We have an entire generation of kids who were force-fed (at least since second grade) on the notion that they’re amazing, exceptional, and unique. So it’s just a short step for them to conclude that the ordinary rules don’t apply to them, that morals are just for the little people and they’re way above that mundane conformity—and far too smart for it as well.

You're a Star

As I often kiddingly say when I’m talking about building your company’s culture and instilling critical values in your people and your business: “These are my principles. If you don’t like them, I have others.” But that’s always intended as a joke, because in the real world we don’t get to pick and choose when to honor our promises and commitments. We say what we’ll do and then we do what we said we’d do. It couldn’t be more straightforward. You don’t get to be truthful some of the time or at some later time when it’s better or more convenient. The truth doesn’t vary based on circumstances.

We aren’t always talking about intentional dishonesty or immorality; in some cases, I think it’s just a lack of experience and education combined with way too much enthusiasm. Entrepreneurs can talk themselves into anything. (I call this this syndrome: “That hooker really liked me!”) And, once they do, they want to sell it to the world. But whenever you find you’re shading the truth or forgetting some ugly facts in order to talk your team or an investor (or maybe even yourself) into something, you probably need to back off.

Liar

It’s great to be highly motivated, but it’s not even a little cool if no one trusts your motives. It takes time and hard work to build any kind of relationship, but just an instant and a hint of suspicion to destroy it. I know how hard it is to say things that no one wants to hear, but that’s part of the leader’s job. It’s not delegable and it’s not optional.

It takes a great deal of experience and a whole bunch of broken dreams and busted relationships to appreciate that to be trusted is a much greater compliment than to be loved. Entrepreneurs, without a doubt, need and want to be loved more than anything. It’s part of the sickness that drives us. But, at the end of the day, trust is the only thing that you can really take to the bank.

Howard Tullman Double Gulp T

Howard Tullman is the father of Chicago’s 1871 incubator.

Read his bio on Wikipedia: https://en.wikipedia.org/wiki/Howard_A._Tullman

Check out his websites at http://tullman.com/

and http://tullman.blogspot.com/

Write him at 1871@Tullman

Or just type his name into your favorite search engine.

This article appeared in INC.

http://www.inc.com/author/howard-tullman

Image credits – MS Office

Chicago Venture Magazine is a publication of Nathaniel Press www.ChicagoVentureMagazine.com Comments and re-posts in full or in part are welcomed and encouraged if accompanied by attribution and a web link. This is not investment advice. We do not guarantee accuracy. It’s not our fault if you lose money.

.Copyright © 2016 John Jonelis – All Rights Reserved

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CANCER STOPPER

Cancer Treatment from MS Office TEssential Biotechnology –

New Treatment for Hard to Treat Cancer

Jayson Kurfis

A protein, CRR9, serves as a nexus for tumor cell survival. It’s located on the cell surface, making it an accessible drug target. By developing antibodies to the CRR9 protein, Essential Biotechnology has devised a method to kill therapy-resistant tumors. Continue reading

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