Category Archives: University of Chicago

ARISE 2.0

DSC_5954by Loop Lonagan

Whadaya think happens when 15,000 people get behind the entrepreneurs in their own neighborhood?  Good things—that’s what happens!  Energy.  Enthusiasm.  Stuff gets done!  Lemme tell you about it:

This is Loop Lonagan reporting and tonight I’m watchin’ a guy pitch his new venture like a Gospel Preacher workin’ up a frenzy on da pulpit!  I hear his bold words.  This guy believes in hisself—and why not—he’s growing a thriving business!  This is the Arise 2.0 accelerator and it’ll change our city fer the good.

(Hey, this thing gets my Irish up.  So ‘scuse me if I don’t sound smooth.)

Arise 2.0 gives Chicago a whole new slant on business.  They ain’t here to make a few people rich.  No, they build up local business so they can build up da local community.  Business is just a means to an end.  The goal is healthy neighborhoods, jobs, prosperity all around.  That’s the real end game here

DSC_6011

Arise already put together all the stuff of success plus a big kicker:  They got Investment—half a million in seed money.  They got the University o’ Chicago.  They got Tony Wilkins from Hyde Park Angels.  They got 1871—a great space to birth an accelerator.  They got a Ten-Year Action Plan that’ll pump out four new companies every year.  Yeah, they got all o’ that.  The kicker is da power of 15,000 people from the Salem Baptist Church because Rev. James T. Meeks figured out this great way to help his community.

You wanna bet against them odds?  I’m here to take yer money if yer patsy enough to try.  We’re talkin’ Free Enterprise nurtured by Da Church.  There’s a whole lotta motivation and commitment here.  This model could spread across the map!

 

Mentorship

Tony Wilkins runs the Arise 2.0 Accelerator.  I know Tony.  He’s smart.  I figure him for the brains o’ the operation.  Tonight he gives us a story about how to drive success.  Lemme say this slow so I get it right.  Here it is in his own words:     

DSC_5913I’m on my 537th business flight.  Southwest Airlines.  Isle seat.  A gentleman comes in last and squeezes into window seat beside me.  He looks jittery and nervous.  I ask him, “Are you okay?”

“Sorry sir.  This is my first time on a plane, I’m a little nervous.”

“It’s okay,” I say.  “It’s fine, don’t worry about it.”

The plane goes up.  But half way through the flight, he’s having problems.  He’s sweating.  He’s fidgeting.  I say, “Hey, the hard part’s over.  We’re in good shape.  The pilot wants to land just as much as we do.” 

“I understand, but I had something to eat last night and I have to apologize to you in advance, ‘cause this is not gonna work out well.”

DSC_5914So in my best mentorship mode I say, “You know…there’s a bathroom on the plane.” 

“PRAISE THE LORD!  WHICH WAY IS IT?”

 So mentorship worked out for him.  And it worked out for me.

If people knew better, they’d do better—like my travel companion on Southwest.  Everybody’s had somebody in their life who’s made a comment, performed an action, did something that made them say, “I can do that!”  So just presenting them with that information is often the most powerful thing in the world.

And they’ll become mentors to successive companies.

DSC_5915Accelerators across the country do the exact same thing.  We bring in mentors who, because they once had mentors, come and say, “I’ll spend an hour and a half.  I’ll spend an evening.  I’ll sit and talk to these companies.”  And many stick with them. It gives folks a higher perspective. 

Tony also passes on the knowledge to run a business:  How to hire and fire.  Marketing.  Funding.  Legal.  Operations.  Pitch practice.   “But,” he says, “the most important thing is mentors because that means contacts and business relationships and exposure to risk capital so these businesses can expand, become sustainable and scale.  If you remove barriers to mentorship and capital, good things happen.  We don’t know exactly what’s gonna happen—we’re just gonna have good things happen.” .

 

Church Business

I figure all o’ youse is wondering about the same thing.  The Church and business working together?  DSC_6147“Absolutely!” says Jamell Meeks, the pastor’s wife who oversees this bold initiative.  “The Bible says where your treasure is your heart will be.   So you can know a person’s heart by where they put their treasure.”  I gotta read that book fer myself.  Father Lonagan always said to leave it to da professionals, but I dunno.  Maybe I sound ignorant once in a while.  But I hate to actually be ignorant.

DSC_6133David Storch from AAR CORP is backing Arise with piles o’ da green stuff.  “It’s the entrepreneurs that make things happen,” he says. “They’re the lifeblood of the community.  Politicians talk about buzzwords like education.  But it’s really hard to talk about that when you don’t have food on the table or a roof over your head. But if you touch more people, you will build more successful businesses, which will create jobs, stimulate the economy, allow for education, which creates equality, creates opportunity, which we desperately need as a city, as a nation.

Steve Rogers from da Harvard School o’ Business once said, “The transformation of a community really begins with people within the community becoming great entrepreneurs.”

After that great quote, Pastor Miles Dennis of Second Baptist says, DSC_5995“We’ve almost forgotten—forgotten that entrepreneurship is the great transforming agent to turn around our communities.  They will change lives and yes, they will employ many people.  They will help others to become entrepreneurs.  The entrepreneurial spirit is alive!” .

 

Da Companies

Da competition fer each spot is super fierce.  A thousand companies wanted in but they whittled it down to these four.  These is Chicago-style companies—small outfits with allota upside and da gumption to grow.  Lemme tell you a little about ‘em:

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DSC_5939THE FROCK SHOP—Chicago’s Designer Rental Service

Jennifer Burrell Jen@frockshopchicago.com

Visit their website [click here]

How come us guys can rent tuxedos but da women gotta buy them fancy dresses?  And after a gal spreads her photo all over Facebook, she won’t wear that dress again.  But there’s something about da confidence beautiful designer dresses give women. Gals used to buy an outfit, hide da tag then return it after an event.  But nowadays the department stores is wise.  So Frock Shop’s got the rental business figured out and they’re thriving.  They’re gonna use online sales to scale fast.  Jennifer says, “Visit the Frock Shop where you can borrow the dress and keep the memory.” .

 

DSC_5983RS INDEPENDENT HOME HEALTH CARE

Ted & Reena Williams rena.williams@rsihhc.com

Visit their website [click here]

89% of seniors prefer to stay home and age gracefully.  30% need some kinda help.  This company goes into the home, cooks meals, gives meds, does laundry and housekeeping, takes ‘em to the doctor, and acts as companions—a whole lot more service than the usual rent-a-nurse.  And that means you can spend quality time with yer parents during those last years. They already got a contract with the veteran’s administration and they partnered with the Cancer Foundation.  This one’s creating jobs. .

 

DSC_6008

MA’S BEST

Brian Smith  brianearl2001@yahoo.com

This is a traditional baking operation, but when this guy describes eating his dinner rolls, it makes yer mouth water.  They already sell at 18 Chicago outlets.  Competitive advantages:  Better product.  No middleman.  Direct from oven to the store. Their direct competitors each do $137M a year and Ma’s Best outsells them 2:1 wherever they get shelf space.  Industry as a whole is $115B.  As Brian puts it, “That’s a lot of bread.” .

 

 

DSC_6084bSWISH DREAMS

Kenya Mercer  kdrew@swishdreams.org

Visit their website [click here]

Kids do lousy in school ‘cause they’re bored.  Kenya says, “Let’s give our kids the core academic values and let them have fun doing what they love—all at the same time.”  So they teach literacy, leadership, and physical fitness as one program.  And they get double-digit gains in literacy, fitness, and leadership on da assessment tests.  This one plans to expand nationwide. .

 

 

Salem Baptist Church LogoSALEM BAPTIST CHURCH

Pastor James T Meeks  info@sbcoc.org

……………………………………………..Visit their website [click here]

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DSC_5921ARISE 2.0

Tony Wilkins  tonywilkins76@gmail.com

Visit their website [click here]

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The accelerator strategy has three distinct components:

  • Remove barriers to mentorship.
  • Give broader perspective, contacts, and knowledge.
  • Structure risk capital to expand.

Check ‘em out.  Maybe be a mentor.  Maybe an investor.  But don’t sit on yer hands—da future’ll pass you by. .

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Loop Lonagan’s articles are verbatim as told to John Jonelis

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 © 2014 John Jonelis – All Rights Reserved . .

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Filed under 1871, angel, angel capital, angel investor, big money, chicago, Chicago Ventures, Education, Entrepreneur, Entrepreneurship, Entrepreneurship and Politics, Hyde Park Angels, philanthropist, philanthropy, The City, University of Chicago, vc, venture capital

CLEANTECH COMPETITION

Impact Engine—Part 7

VERBATIM by Loop Lonagan – Investor and man about town,

as told to John Jonelis

Claire Tramm - Effortless Energy TLoop Lonagan here with a real simple story. I’m at the CHICAGO CLEANTECH COMPETITION watchin’ ten green companies go head-to-head for the chance to move on to the international GCCA contest.

Hey, dis old world needs a good scrubbin’, doncha think? I’m here, trying to use my natural greed on somethin’ constructive fer a change. I glance around and see a company I know has da potential. We’re gonna hear some good stuff.

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Effortless Energy Logo

Claire Tramm CEO

Lemme ask you a question:

Elec MeterIf you could make your house energy efficient with no effort and get paid to do it, would you?

Effortless Energy is planning to make that happen. Here’s their offer:

  • Their experts figure out what your house needs. Then they find the contractors and do the work. You just sit back ‘n’ sip yer beer.
  • They pay for everything. They add insulation, plug air leaks—all the stuff that makes yer house comfortable and cheaper to live in. Effortless Energy 35 percent
  • Then they split the energy savings with you.
  • You get a nicer house, more money in your pocket every month, and you don’t plunk down any up-front money at all—nada.

With an offer like that, who wants to rob their bank account or take out a loan? Who Claire Tramm - Effortless Energy 2wants to wait years fer da payback? Who wants to go through the hassle o’ hiring alotta contractors? This makes me smile, ‘cause now I ain’t gotta do them things no more.

And yer helpin’ the environment by doin’ it! Inefficient houses is a big part o’ da carbon footprint and there’s 120 million in the USA. Hey, that’s a $230 Billion opportunity fer Effortless Energy! This one looks like a winner to me!

Effortless Energy Home GraphicI hear talk and read stuff—all kindsa complicated explanations about what they do, but it’s really a no-brainer. I got an old house. I want to work with these people. Don’t you?

Have a look-see at their video:

So’s I listen to nine other presentations. Some sound pretty terrific. Others don’t look like real companies. Now the distinguished judges is leavin’ to select the winners. Will they pick the best ones? Don’t make me laugh.

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Strange Goings On

The judges is leavin’ to vote on the winners and the audience just moved to the feeding trough. So I’m just sittin’ there when one judge—this delicate oriental lady—hangs back and asks Rong Mayhem to give back her business card. To me that shows good judgement.

But Rong holds it outa reach and asks, “Why do you put PhD at the end of your name?” Sheesh! I mean, why do you suppose? After summore o’ that kinda behavior, she stamps her foot and insists.

His response? “I’m gonna have to put you in my doghouse. That’s for people who give me trouble.” Actually, he used a different word than doghouse, but I can’t say that here.

So I finally speak up: “Rong, she hasta go do the judging. You wanna keep us here all night?” So he hands it over and things get back to normal for a while. Sometimes strange things happen at these events. It don’t bother me none and it’s kinda fun to watch.

When da judges finally file back in, they pick some pretty good companies, but my favorite ain’t one of ‘em. But who can tell what’ll happen when these ventures hit the real world? Here’s all of ‘em and da skinny on what they do:

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Da Competitors

Software to drive energy efficiency in industrial buildings with alerts.

Wind generator using a venturi to increase safety and efficiency.

Synthetic diesel and jet fuel from garbage.

More efficient hot water solar panel using a mirror.

  • Greenlight5th Place

Smart Meter for consumer electricity savings.

Make your house energy-efficient for free and get paid for it.

Pelletized torrefied wood to replace coal in power plants.

  • Kriisa Research

Reliable and stable portable energy fer developing countries.

  • Chicago Nat Gas Tanks

Custom low-pressure tanks to carry nat-gas using NuMat MOF technology.

  • Community Retrofits (participated via Skype)

Just like Effortless Energy, but for entire community associations.

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Da Judges

From readin’ the stuff on these judges, I get the impression they ain’t the kinda tree-huggin’ folk I expected:

  • Ben BrownClean Energy TrustExpert on energy systems. Commercializes renewable energy with alotta hands-on experience.
  • K. Quentin Burchill Jr.—Angott Search GroupTrack record fer matching energy companies with the right investment firms. Another hands-on guy.
  • Barbara A Fatina, CPA, MBA—Argonne National LaboratoryDeputy CFO at Argonne and big business. Energy operations experience. She builds businesses and teams.
  • Jared Gonsky—LanzaTechGroups businesses on a global scale. Experience in ethanol, VC work, marketing and supply chain in big business.
  • Diana Y Hu, PhDMolecular physicist and Biophysicist. University of Chicago MBA. Education of foreign-born professionals and clean energy.
  • Philip M Martin—United AirlinesFinance, development, operations, process—especially in transportation. University of Chicago MBA, which counts fer a lot with me.
  • Mark Menarik—UltraCarbonSerial entrepreneur in tech, alternative energy and nano materials. Focuses on cleantech scale-ups.
  • Travis Narum—Acciona EnergyWind and solar energy expert. West Point grad, and that ain’t nothin’ to sneeze at.
  • Anthony F Toussaint PhD, MBA—DSM Functional MaterialsChemical industries expert. R&D in fiber optics. PhD Chemical Engineering, University of London. Kellogg MBA, which gets top marks from me.
  • Klaus Voss—BW IndiaLong-time entrepreneur in environmental energy and biotechnology. Commercialized bio-wastewater tech for Mexico, India, and the ASEAN community. Another hands-on guy.

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Da Organizations

Dis thing is put on by some good folks:

One of over 50 global clusters responsible for nominating companies eachChicago Clean Energy Alliance logo year for the Global Cleantech Cluster Association’s Later Stage Awards competition.

They connect cleantech companies globally to create value chains. They seek GCCAcompanies that are scalable, equity investible, and willing to take risks. Their ten 2011 winners raised $462 Million.

Northwestern University – Kellogg School of Management accelerator located Impact Enginewithin the 1871 incubator. Linda Darragh’s baby.  Focus on social entrepreneurship.

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Photos and Video courtesy of Impact Engine, Effortless Energy, Chicago Clean Energy Alliance, and GCCA.

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GO BACK TO PART 1

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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 © 2013 John Jonelis – All Rights Reserved

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WHAT’S GOOD?

Impact Engine – Part 1

VERBATIM by Loop Lonagan – Investor and man about town,

as told to John Jonelis

Impact Engine

Loop Lonagan here.  Dis is somethin’ can change da world.  It’s called IMPACT ENGINE ‘n’ it’s dare first investor showcase. 

Already met one o’ da founders, Linda Darragh and she made a big-time impression on me.  I saw dis gal charge-up a roomfulla sleepy thought leaders with da energy of an oxyacetylene torch.  Ideas and plans fly off her like da Fourth o’ July.  She’s the reason I’m here. 

So I tear myself away from da great Funding Feeding Frenzy after way too much to eat ‘n’ a whole lot too much to drink.  I stagger outa my cab into da Chase Auditorium to hear IMPACT ENGINE rev it’s cylinders. 

(NOTE TO JOHN—I made merry after lunch at FFF.  Words ain’t comin’ out da way dey should.  Better clean up my copy for me.  I’m gonna make a big effort to straighten myself out here.  I see coffee at da other end o’ da lobby and I’m headin’ that way now.)

(NOTE TO LOOP—Your points come across nice and clear.  I’ll continue to print it exactly the way you dictate it.)

 

What They Do

I got a hot cup o’ coffee in my mitt so lemme start feedin’ ya the goods:  IMPACT ENGINE helps fer-profit startup companies make money by doin’ good things fer folks. I said FOR profit.  I’m all fer dat.  Dis is what you call Social Entrepreneurship

(Sound of slurping coffee.)

Hey—if yer gonna earn a livin’, why not do it in a way dat helps some other poor slob insteada just yerself?  Whaddaya think yer put on dis green earth for anyhow? 

And if yer gonna help somebody, why not do it as a business ‘steada holdin’ out yer hand like some leach?  Business is way better den charity ‘cause it supports itself.  Teach a man to fish and so on.  Dis is da future.  Dis’ll change da world. 

And demand!  Hey—dare’s no shortage o’ people dat need help!  And no end to it!  Like I always say, I got it on good authority dat the poor will always be among us. 

(I just poured a second cup.  Real strong stuff.)Impact Engine logo

I still got them slashed knees from fallin’ in a pothole this morning.  And it still don’t look stylish.  Hey, dis ain’t no pair o’ bluejeans—it’s a $2,000 suit.  So’s I look like a bum, but nobody’s gonna say nothin’ ‘cause I’m actually ready to write out a check.  Day call it Impact Investing.  I wanna make an impact.

(I slugged down three cups o’ this black stuff ‘n’ my eyes is buggin’ out.  Must be espresso or somethin’.  Anyhow, maybe the rest o’ this report’ll sound more coherent.  But you know me.  I studied on Wall Street and the Back Street.  I ain’t no English teacher.)

(NOTE TO LOOP—You don’t fool anybody with that school-of-hard-knocks routine.  The University of Chicago doesn’t hand out Masters of Finance degrees in back alleys.)

 

How They Do It

IMPACT ENGINE is a super-duper incubator that helps entrepreneurs launch ‘n’ win. 

  • They immerse ‘em all in a 12-week intensive program o’ workshops at the 1871 collaborative workspace. 
  • They hook ‘em up with a huge network o’ mentors, thought leaders, ‘n’ investors. 
  • They give ‘em brand exposure. 
  • They send ‘em out with a $20K kick in the pants.  Seed capital.   

 (Hey, that rolled off o’ the tongue pretty good.  Maybe espresso is better than beer.  But don’t tell the guys I said that.) 

 

The Weed

Linda Darragh

Linda Darragh

First time I met Linda Darragh was at the Levy Entrepreneur Mastermind Group.  A buncha sharp folks.  Linda’s a gal from da University o’ Chicago Booth who’s workin’ at Northwestern’s Kellogg School o’ Management.   That puts her in a real peculiar kinda position.  And she ain’t lettin’ it go to waste, neither!

Turns out Linda usta have about ten titles.  Couldn’t fit ‘em on a business card, so she dumped it all in one bucket.  Now she’s the Executive Director of The Kellogg Entrepreneurship Initiative.  Hey, one title fits better than ten. And it’s a helluvalot easier to say.  Turns out the startup community’s heart is poundin’ real strong here in Chicago.  But all the programs to juice these folks is fragmented all over the place.  Should we glue ‘em all together? 

I SAY NO!  Insteada tryin’ to control all them different silos, Linda Darragh is coordinatin’ ’em. 

BIG DIFFERENCE!  After all—each one o’ them groups is independent and all of ‘em got somethin’ special to offer. 

So I tell her she’s a black widow spider spinnin’ a big web.  But turns out she pictures herself as a “weed.”  I don’t get it, but if that’s the way she wants it, it’s okay by me.

So what exactly is this weed doin’?  Hey—what ain’t she doin’?  At Northwestern, she’s settin’ up the whole entrepreneurship curriculum—across the entire university.  Already replaced all them courses with stuff that’s more up to date.  AND online learning.  AND other stuff beyond the classroom. 

She says no more screwy mobile apps that already been done and ain’t goin’ nowhere.  AND no more static business plans.  Instead, a lean canvas.  She insists that every business starts with hypothesis testing and only then fleshes out a business model.  I like it!

She ain’t stuck to just one university neither.  She’s cooperatin’ with the University o’ Chicago, IIT, DePaul, Loyola, and others.  AND she’s reachin’ out to corporations too.  AND a she’s got a big presence at 1871.  AND she’s leveraging Kellogg’s worldwide alumni network along with ones from other schools.  She’s buildin’ one powerful, cohesive drivetrain.  I really like that!

I told ya this gal is a torch.

IMPACT ENGINE is one o’ her biggest projects, co-founded with Jamie Jones.  Now Chuck Templeton’s in it up to his neck.  These people all deserve alotta credit fer startin’ this highly unique incubator.

(Fifth cup and I feel great.  Headin’ into the auditorium.)

 

Take a SWAG

Usta take years to make a good business.  Now two kids in a dorm create somethin’ that goes national in no time.  Web-based companies can test fast and fail fast.  You can find out if it’s a go in 6 months!  This is a big deal.  You do all the testing before you sink in the big money. 

That means classical marketing is dead.  That’s what I said—dead meat—road kill.  It’s dead ‘cause now you can test yer product in the real world faster ‘n’ cheaper than doin’ a formal marketing study.  Look out Dr. Kotler—time to write another book.

Dr. Philip Kotler

Dr. Philip Kotler

Here’s the way it usta be:  You do one o’ them in-depth marketing studies.  That takes lotsa time and money and produces zero profit.  Then by the time the Execs decide what to do, the trend already shifted nine times.  That don’t work no more.  Better to test in the real world, fail fast, then make yer adjustments and give it another shot.

Another new thing is Big Data.  It’s a huge driver in the new way o’ doin’ things.  It makes it possible to pick up on trends using simple web searches.  Big Data also brings up lotsa big challenges.  Maybe you got all the data in the world but how d’you visualize it?  You gotta figure out the right questions to ask. 

That all sounds like cross-disciplinary stuff, right?  So IMPACT ENGINE is lookin’ for the right kinda people and helpin’ ‘em use all these new tools.

Yer head spinnin’ yet?  Lemme lay it out in four simple steps.

 

Da Final Four

Here’s the short list on what Linda Darragh says you need to do:

  1. PEST ANALYSIS—(Politics, Economics, Social, Tech).  You gotta identify the trends.  Big Corps gotta innovate here and summa them is doin’ it.  But it’s a whole lot easier fer a startup—that is, if you don’t trip over yer fat ego.
  2. DA CUSTOMER IS KING—What does yer customer need now?  Keep talking to ‘em and keep adjusting to ‘em. Find out if customers is leavin’ and where they’s goin’.  More than ever before, it’s all about the customer. 
  3. TRACK YER COMPETITORS—What are them bums doin’ now?  Are they gonna take you out?  You gotta figure out the changing value chain and how it’ll affect you.  It’s real easy to believe things is goin’ good—then wham—you get blindsided.
  4. TECH IS DA ICING—Fer early-stage funding, the Chicago success model is tech-enabled manufacturing—not pure tech.  Lotsa opportunities ‘cause ever’body needs tech these days.

One more thing:  Impact investing’s got a whole different timeline.  Angels and VCs usually cash out in 5-7yrs.  Impact Investing might take 10-15 years.  Yeah, it’s a bigger horizon but we gotta put aside legacy thinking. 

My batteries is runnin’ down again.  I’ll get back to you later and show you what summa these new social entrepreneurship companies look like.  Fer now, check out this great video about IMPACT ENGINE:

 

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CONTINUE TO PART 2

Go back to Shark Tank Meets the Apprentice

 

Da Contacts

IMPACT ENGINE – www.TheImpactEngine.com

Ask a question:  www.TheImpactEngine.com/Contact

Impact Engine.

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 © 2013 John Jonelis – All Rights Reserved

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15 Comments

Filed under 1871, angel, angel capital, angel investor, App, big money, Chicago Venture Magazine, Chicago Ventures, Data, Entrepreneur, Entrepreneurship, FFF, Funding Feeding Frenzy, Impact Engine, Impact Investing, Innovation, Innovation and Culture, Invention, investor, Kellogg, Marketing, Mobile, Mobile App, Mobile Marketing, new companies, Northwestern, Social Entrepreneur, Think Tank, University of Chicago, vc, venture capital

THE POLITICS OF INVESTING

The Chicago Innovation Awards – Part 4

John Jonelis

Time Share Gulfstream JetI’m at 40,000 feet on Loren Bukkett’s Gulfstream G450 trying to squeeze out his views on two accolades at the Chicago Innovation Awards—the ones they gave to Governor Pat Quinn and Mayor Rahm Emanuel. So far Loren is holding out on me.

I splash the last of the Hennessy into our snifters when this doggerel runs through my head: Loren pontificates that prizes to politicians will puncture their perfect performance and I ponder what precisely he proposes.

The plane bucks in turbulence and I almost fall out of my seat. The altitude and liquor sure are working on me—as you probably noticed.  Even in a pressurized jet, you’re effectively at 8000 feet or more and liquor packs a terrific wallop. I hope it loosens up Loren before it claims me entirely. My strategy is to get him jawboning on one thing and then slide into the main issue.

Gulfstream G450

Gulfstream G450

I take a deep breath of thin, dry air and get Loren’s attention.  “Let’s talk about the keynote speaker, Andrew Mason.  He won a Chicago Innovation Award back in 2009.  Groupon had only 100 employees at that time and now it’s got 12,000 people all over the world and 1.6 billion in revenue.  Not bad for a music major from Northwestern.”

The plane yaws and I continue: “Groupon was an amazing pick for the Chicago Innovation Awards.  That year, the company was still in its infancy.” I might have added, in all this turbulence I feel like a baby rocking in a cradle.

Loren sizes me up before answering in his acerbic tone. “Most of what Andrew said was just a short version of the same talk I heard him give several times.”

“Really?  I only heard it once before.”

Loren pauses a long moment. “One part of it is new to me—his admission that in 2009 he campaigned to beat Abbott Labs for the People’s Choice Award. He used false negative attack ads and now he’s bragging about it! Maybe he’s joking—I hope so. I’m just glad it didn’t work.”

“It earned him a big laugh from the audience.”

“Well, I don’t think it’s funny.”

“Don’t you like anything about Groupon?”

Again, he takes his time responding. “I like it that his customer service comes out of the Chicago Improv. That’s highly creative.” He pauses again. “He sometimes just throws tidbits like that out there without explaining the significance.  To me, this one is striking. If that kind of thinking is systemic—and I believe it is—then the company should succeed.” He goes silent then blurts out: “And naturally I like the acceleration in growth.”

I’ve been keeping an eye on Aussy. She’s still taking notes but I notice her quick worried glances at her husband.  He’s taking longer and longer to join his ideas together and I sense that it’s time to drill down to the core:

“Loren, what did you mean when you told me the Chicago Innovation Awards just ruined their perfect record?”

He knits his formidible brows.  “I warn you, John. Don’t go there.”

“Is it that you don’t think political awards are appropriate?”

Loren tightens his lips and finally responds. “Actually, on one level, I agree with it. I like to see local government throw its weight behind entrepreneurs as much as possible. Bringing in the governor and the mayor to this event draws a bigger crowd and that’s positive too. But Rahm’s been popping up at these things a lot, I have to ask myself why. If he’s really contributing something, that’s fine. But if he’s just riding the backs of these hard working young people for political gain, I don’t like it.”

Mayor Rahm Emanuel at the Chicago Innovation Awards

Mayor Rahm Emanuel at the Chicago Innovation Awards – jaj

He swallows his Hennessy and sets the empty glass down hard. “How can they can give the 2012 Visionary Award to a mayor?  They should’ve used the politicians as keynote speakers and left it at that!”

“Maybe they won’t count those awards in the stats.”

“That would render the whole event meaningless!”

“You mean like giving the Nobel Peace Prize to Yasser Arafat?”

He jerks his head to the side as if he’s been jolted, then turns back and glares at me. “I choose to take that as hyperbole.  But yes, that’s it precisely.”

“But you still endorse these guys?”

He passes a hand over his unkempt brow. “I like Emanuel’s sentiment when he says investors create all the jobs. And when he says that government only helps create the atmosphere for success, I agree with him. He may be the only progressive politician I ever heard rub those two ideas together. But entrepreneurship in this town is driven by the whip of massive unemployment. At the same time, the banks won’t lend. I scarcely call that an atmosphere for success.”

He draws in a sharp breath of rarified air. “I know, I know–I told you these cruel circumstances are forcing the creative renaissance that we see. It’s true. They are. But that’s not any way to sustain growth. So many of these fervent young entrepreneurs will start out with initial success only to have their hopes dashed.”

I’m amazed at Loren’s intellectual capacity. And he holds his liquor a lot better than I do even though he rarely drinks. I have to admit it, even when he’s sloshed he’s the sharpest knife in the drawer.  So I try a dig: “People like it when Rahm says he’ll lengthen the bike path. You can’t deny that thunder of applause.”

Loren thumps the table with an angry fist. “A bike path! Pshaw! Civic projects! He’s mayor—that’s all he is. Don’t expect more than that.”

“He lengthened the school day so kids don’t have to pick between math and music.”

Loren stops and smiles. “That I like!”  He waves a finger at me slowly.  “That takes backbone!”

“Tell me about the governor.”

Governor Pat Quinn at the Chicago Innovation Awards

Governor Pat Quinn at the Chicago Innovation Awards – jaj

He snorts. “He’s a party guy. What did Quinn ever do to merit—what do they call it? The Distinguished Innovator Award. Did he invent anything? No—he raised taxes because the state is going bankrupt. While he drives business out, he talks about the state investing in companies. On whose dime? That’s not free enterprise. That’s messing in my backyard.”

“Do you withdraw your support?”

He winces. “A governor should lean on the banks to free up capital. I’d applaud an effort like that. But he talks about education reform, high speed rail, clean water—the usual high-ticket malarkey. You want to know what really happened tonight? They propped those two guys up front like carved idols and bowed down in homage! It’s the golden calf all over again!”

“Loren, it’s a political season and this is still Chicago. These guys are trying to get in front of any crowd they can.”

“This is a distinguished event! There’s no reason to encourage that kind of behavior!” He shakes his head. “The old political machine grinds on and on, year after year–I can’t get involved in that!” Then he yawns and says something unintelligible. “I’m tired.  Interview over.”  He closes his eyes.

I figure he just got something off his chest—he relieved the pressure—and now the liquor and altitude can take over.

Just when I think he’s asleep he speaks softly, eyes still closed: “John, did you ever see the Great McGinty?  The motion picture…Preston Sturges…written and directed…brilliant…such a long time ago…it still tells the whole story…nothing has changed…”

See it on Amazon

Again I think he’s asleep when he mumbles, “Next time you want to interview me, pick a different topic.”

I give him a salute as he drifts off to sleep.

Aussy tucks a blanket around him and then turns to me with an accusing look. “I hope you’re satisfied,” she says.

Those are the first words I hear from her the whole flight and it’s all scorn. Then she tosses a blanket in my face. As I make myself comfortable, I get a nasty feeling that she’ll arrange a slow plane with lots of layovers for my return trip.

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Go back to Part 1

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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.

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Copyright © 2012 John Jonelis – All Rights Reserved

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Filed under 1871, Chicago Innovation Awards, Chicago Venture Magazine, Chicago Ventures, Conflict, Entrepreneur, Entrepreneurship, Entrepreneurship and Politics, Events, Innovation, Innovation and Culture, Internet, Invention, Northwestern, University of Chicago

WORTHY OF AWARDS

The Chicago Innovation Awards – Part 3

John Jonelis

Time Share Gulfstream JetI’ve jumped aboard a Gulfstream G450 to interview the legendary Loren Bukkett. I want his take on the Chicago Innovation Awards. He finally puts away his phone and turns to me. “Okay, let’s talk,” he says.

I take that to mean he’s already finalized all the deals that peaked his interest. Nice to have a large staff to handle the details. But here in the jet cabin, it’s just Loren, his wife Aussy, and me.

Aussy is doing some form of shorthand on a tablet computer. That woman hasn’t spoken since I climbed in the plane. Maybe Loren asked his wife to keep it buttoned. Maybe he wants to control what information gets out. At this point, I’m afraid to ask her a direct question. I even wonder if this is their secret strategy to keep outsiders off balance. If so, it’s working.

They give out so many honors at the Chicago Innovation Awards tonight that I can’t keep it all straight. So much glitz and pizzazz. Jumbo screen. Music. Entertainment. Applause. Streaming internet content. I appreciate the way they present a standardized set of videos to highlight the mission of each winner. A professional job and it moves things along nicely. With sponsors like Disney, Comcast, and Wrigley, they can afford to do it right.

Chicago Innovation Awards

Chicago Innovation Awards – jaj

I pull out my notes. “Let’s do the ‘Up-and-Comer’ category first.” I proceed to read off the list but Loren waves me to a halt.

“We’ll do it my way,” he says. And he goes on to tell me about every company that won an award at that event. He does it in depth. No notes. No prompts. At his age, that kind of memory astounds me.

“Now John, keep in mind that for twelve years, every company with an award from this group is a success. And there are a lot of them. That’s impressive and gives an old investor like me a feeling of confidence. Of course my people check out these companies in depth, but you can’t help but come away with some degree of certainty—a belief deep down that every one of them will find a way to make it.”

“You said they’ll break that perfect record this year.”

“That’s the awards to those two politicos, not the companies. No as I see it, what we have here is a large pool of opportunity. I already set some wheels in motion. Don’t ask me which ones.” He clasps his hands behind his neck and leans back. “When you get to be my age, you either turn into a curmudgeon or you win back some of that idealism you enjoyed as a youth. These days, a big part of my strategy includes companies that are doing-well-by-doing-good. I saw a few tonight. One of them is BriteSeed.

I nod. “I saw them pitch earlier in the year—at BNC I think. They made a big impression on me.” I splash three fingers of his excellent Hennessy into each of our snifters. Maybe the combination of spirits and altitude will keep him loose.

“It’s a hot sector,” he says. “Their SafeSnipstm technology could be life-saving. Imagine it on a large scale. No more surgical accidents. Billions of dollars saved.” He leans toward me and lowers his voice. “Keep your eye on Northwestern Global Health and their rapid HIV diagnosis. And Recall-Connect built an automated system to match defective medical implants with patients. No more wading through reams of paper files. Medline came out with an anti-viral face mask. Preventing disease is real attractive to me, but this one’s a family company, so…”

“No need for investors?”

“We’ll wait and see. My only concern with Feeding America is scalability. But they won the Social Innovator Award so people need to take that group seriously—very seriously. Any way we can fight hunger, we oughta do it.” He gingerly takes a tiny sip of his cognac as if he’s already had enough to drink. “I’m interested in the People’s Choice Awards winner,” he says. A little company, New Futura, wants to help Latinos achieve the American dream. Naturally I’m attracted to those kinda offerings. Then there’s Moneythink helping high school kids with their careers. That’s about it for the do-gooders.”

“What about Belly?”

He pauses a moment, pats his stomach, then grins. “That’s another hot sector. That company is off and running in 10 markets with half a million customers already. I’m sure they’ll do well. But I’m not in the mobile app or social media space.”

“Doesn’t that limit your exposure to startups?”

“That it does, John. That it does.” He takes another tiny sip of cognac. “Anymore,” he says, in his Midwestern idiom, “Anymore there’s so much money chasing mobile. So many new startups and only a few will pay off. The good ones get bid-up. Way too high for my liking. New York, Boston—all those great centers for venture capital are in love with mobile and social media. Maybe it’s good for Silicon Valley but it doesn’t fit my strategy. That’s why I come to Chicago. Of course I make exceptions.”

“Do you see a bubble?”

“Well, you always need to keep that in mind. For me it’s more a problem of value.”

Anybody that follows Loren Bukkett knows that deep value is his favorite strategy. Then he shifts gears. “Do you know anything about NuMat Technologies?

That catches me off-guard and I fumble over my words. “Some. I saw them present at another Chicago event–can’t recall where. Seemed like a winner to me but with so many great offerings, the judges at that event looked elsewhere. Do you think the technology is practical? Can they actually store and transport natural gas in bulk the way they suggest?”

“Keep your eye on them,” he says. And suddenly I wish my investment portfolio could stretch that far.

“And Coyote helps trucking avoid dead runs by sharing between companies. That’s the same thinking that put you and me on this beautiful jet. I like that business model.”

He takes more from his snifter and my hopes of getting him to comment on the awards to the governor and mayor are one step closer to reality. “1871,” he says. “That is without a doubt the most significant incubator I’ve come across. They made up their minds to do it right. 50,000 square feet with an option to double. Three universities keep offices there. Venture capitalists too. A successful startup from Northwestern keeps two big rooms to teach folks to code in new languages. Lots and lots of aspiring companies—and you gotta pass their standards to get in! This is one of the new hybrids—part incubator, part accelerator. Most of their companies are outside my investment horizons but every one of them is highly interesting. It must be a great resource for you.”

“Sure, I’ve been there a number of times. They run a lot of events and always invite the community. If they expand, I may take an office there. What’s your opinion on Options City?”

Loren lifts his feet back to the tabletop. “That one hopes to cure a sore point of mine. They want to help the little guy fight back against high frequency trading syndicates. We’re talking trading in-and-out in nanoseconds. Nowadays these guys own 70% or more of the volume on most of the exchanges. And naturally, the exchanges reciprocate by giving them the same privileges as market makers. But they don’t carry any responsibility like market makers. Or risk. They don’t make orderly markets. No, they hit and run. They’re speculators. Why should they get the first look at all the trades?  It’s all driven by greed on the part of the exchanges. I think it should be illegal.”

I’m leaning forward and nodding vigorously. “It’s the High Freaks that changed my approach to trading. I had to slow my timing way down and widen my stops—take on more risk.”

“Well alotta people are going broke because of it. These operations spend upwards of $100,000 a month for the fastest hookup and shortest wire to the exchanges and then run everything by computer algorithm. This new company wants to level the playing field.”

“Can they do it?”

“The jury is still out.”

Loren talks another twenty minutes to cover it all. Food Genius, mentormob, and mobcart, all leverage the Internet to aggregate information and communication. Cummins Allison of all people is selling a document scanner for banks. Borealis makes a light that takes 90% less energy and lasts 30 years.

That leaves Bright Tag, Catamaran, Littelfuse, and SMS Assist.  An impressive event in execution, scope, and promise.  It amazes me that so many fine businesses are right here in Chicago.  All they need to succeed is a boost in the economy. 

We clink glasses. “So Loren, I still want to talk in-depth about the awards to the governor and mayor.”

He flashes me a dirty look.

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Continue to Part 4

Go back to Part 1

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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.
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Copyright © 2012 John Jonelis – All Rights Reserved

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Filed under 1871, BNC Venture Capital, Characters, Chicago Innovation Awards, Chicago Venture Magazine, Chicago Ventures, Conflict, Entrepreneur, Entrepreneurship, Entrepreneurship and Politics, Events, Innovation, Innovation and Culture, Internet, Internet Marketing, Invention, Kellogg, Marketing, MIT Enterprise Forum, MITEF, Mobile App, Mobile Marketing, MobiM, Northwestern, Software, University of Chicago

THE STORY BEHIND BIG DATA

John Jonelis

Big DataThere’s a lot of buzz about Big Data these days. By Big Data, we’re talking Big Mountains of Data. The manipulation of this resource will change the world and do it soon. I hear plenty of lofty goals for the benefit of mankind but destructive ends also seem likely. So what can we expect? I’m here to pass along the short version in plain language.

Tonight we’re treated to speakers from Oracle, CABI, and Narrative Science – a business that grew out of the artificial intelligence labs at the University of Chicago and Northwestern.

Pound for pound, Chicago’s MIT Enterprise Forum is always dense with PhDs and Thought Leaders. I spot a VC in a room dominated by businessmen, academics and MIT alumni. Josh London from Wellter moderates this high-powered session.

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Distilled Data

Louis Nagode – Oracle

Louis A Nagode

Louis A Nagode … jaj

Louis Nagode is a self-proclaimed geek, but he’s world-renowned, with 30 years of business intelligence under his belt. When he talks Big Data, he’s thinking an aggregate of an enormous bulk of worldwide information—ultimately all the knowledge in the world. He says we’re creating data at a phenomenal rate. In the next 2 years we’ll create more data than ever existed before. The key to using it, according to Nagode, is distilling it down to useful information. He breaks it down into four “Vs”:

  • Volume—(How do you process it all?)
  • Velocity—(How fast does it change?)
  • Variety—(How do you make use of it?)
  • Value—(How do you make sense of it?)

The big question is this: Can we use Big Data to reduce workload for people, manufacturing, and other altruistic purposes? The next two speakers give concrete answers to that.

Nagode talks about alternatives to databases—alternatives like HDFS, the distribution of data across multiple computers around the globe. That’s data that can be harnessed.

Oracle Logo

To sift out what we need to know he uses a map-reduce pipeline. Look it up if you want, but it boils down to this: You no longer need a structured query language like SQL. Bottom line, it’s getting a lot easier to use data. Let’s move on and see just how easy this gets:

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From Data to Story

Kristian Hammond – Narrative Science

Kristian Hammond - JAJ

Kristian Hammond … jaj

Hammond built the artificial intelligence lab at both the University of Chicago and Northwestern. Now he’s built a Chicago company that takes numbers and symbols and communicates the hidden insights in a more human form. Let me put it more directly: He transforms Big Data into words and narrative. In other words, STORY!

Numbers require expert analysis. Graphs help visualize numbers but we’re still looking at only an 8% penetration. Stories, on the other hand, are highly accessible. They communicate beyond data and tell you things you can’t see. After all, narrative is the way we’ve communicated as long as we’ve been human.

His system produces a short narrative that tells your company the pertinent facts, then gives a summary—A SUMMARY OF WHAT YOU CAN DO THIS WEEK TO MAKE YOUR COMPANY BETTER. We’re not talking about overseas labor knocking this stuff out—no, machines are doing it using artificial intelligence!

Narrative Science Logo

Hammond gives an example of a food chain using corporate analytics. The data says that sales of Reuben sandwiches are down. The STORY gives the company easy-to-understand and actionable recommendations, something like this: “Reuben Sandwiches are this week’s weakest menu item with average sales of 136.7 units. Bringing sales up to norm means $7.2MM in added revenue overall. This requires only 6 more sales per store per day.” Now that’s useful information that people can understand and act on.

According to Hammond, people have forgotten the business reasons for data. By telling them the business side in Story, the data becomes immediately useful. As he puts it, “Story is the last mile in Big Data.”

What about education? His system give feedback on an exam with advice on how to improve a student’s performance: “In physics, you need to focus on the Theory of Relativity. Look back to Chapters 5 and 6 of the text.”

How about a sector report for stock analysis? Or a seasonality report for commodity analysis? Why not pull down the Twitter data of all the speakers at a conference and give it out as written analysis? What about a data-driven narrative for media? Turns out that’s a natural. Hey, this could put me out of business!

So how does it work? They analyze nuance and word choice 200 ways plus adjectives and adverbs. They match the client’s written “voice.” They can generate different styles using the same machine. According to Hammond, “Any data, any story, we can do it.”

Now let’s look into using Big Data on a grand scale:

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Use it for Good

Roland Dietz – CABI, IERG, Focused Connections Partners

Roland Dietz - JAJ

Roland Dietz … jaj

Dietz showed us Big Data in use on the world stage. His organization predicts infestations in plant or animal populations worldwide.

They can show a farmer what might happen to his crop. To do that, they combine data from around the world on climate, soil composition, movement of materials, markets, and many other sources. This model is open source. The data is freely given and freely distributed.

The profit is in what they do with Big Data. As he put it, “We start with tons of information, then identify its significance. That becomes our competitive edge.”

CABI Logo

For example, let’s say you track the movement of a pest that destroys coffee plantations. You know the various soils, plant densities, climates, population centers, and topography worldwide. With this, you can predict where the plague will spread.

Some governments don’t want to join CABI, but the group has done good work, even in Korea and Pakistan. When countries see that the organization isn’t political, they accept them. Some are restrictive about what they share because they don’t understand the consequences. But when they find out some of the unexpected benefits of Big Data, they open up.

Big Data at Emmi Solutions - JAJ

Big Data at Emmi Solutions … jaj

Takeaways

  • Constant Change—The ecosystem is non-linear and always in flux. Using Big Data means doing analysis in real time.
  • Analysis—Data without an expert is useless. But just like any science, you come up with a theory based on the data. Then you test it. The scientific method is very much alive and well.
  • Opportunities—The biggest opportunities identified so far are in healthcare, world agriculture, education, and evidence-based decision making in business.
  • Privacy—This is a huge question that needs to be answered. More and more, people accept constantly observation. But how is the data used? If, for instance, a telecom company has significant insight into YOU, do they keep it proprietary? Can an organization publish information on coffee production in Senegal without permission? I suggested that I’d love to get my hands on coffee pest data to gain an edge trading commodity futures.
  • Ethics—Turns out, these speakers aren’t the ones to address this issue.  “It’s above my pay grade,” said one. But might not Big Data be used for evil purposes? A member of the audience suggested the specter of ethnic cleansing. Like nuclear power, the possibilities for both altruistic and destructive goals seem endless.

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Contacts

Louis A Nagode—

Oraclehttp://www.oracle.com/us/solutions/index.html

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Kristian Hammond—

Narrative Sciencehttp://www.narrativescience.com/

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Roland Dietz—

Focused Connections Partners http://focusedconnectionspartners.com/

CABIhttp://www.cabi.org/ – a not-for-profit international organization that improves lives by solving problems in agriculture and the environment.

IERGhttp://www.iergonline.org/ – (International Executive Resource Group) – A not for profit organization of senior business executives from around the world.

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Josh London—

Wellterhttp://www.wellter.com/ – Enables employees to comparison-shop for healthcare providers.

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The Venue—

Emmi Solutionshttp://www.emmisolutions.com/ – builds patient empowerment solutions for health organizations that measurably impact outcomes. Their offices are a terrific venue for this event. By the way, they’re still looking for talent. Check out this link: www.EmmiSolutions.com/Careers Looks like a great place to work.

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MIT Enterprise Forum, Chicagohttp://www.mitefchicago.org/

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GO BACK TO PART 1 – WHO’S RUNNING THE ASYLUM

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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

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