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7 TIPS FROM A WINNER

Funding Feeding Frenzy – Part 5

VERBATIM by Loop Lonagan – Investor and man about town,

as told to John Jonelis

FFF LogoLoop Lonagan here. I’m gonna go full circle at dis Funding Feeding Frenzy.

No, I ain’t drunk—well maybe I am by now—but what I mean is, I’m goin’ back to the start o’ this event. After all that stuff I already talked about, I’m finally gettin’ ‘round to the first speaker at the FFF—Palette App—the company that won last time.

Like I said, I seen the pitch before. I also seen them at BNC Venture Capital and later at their corporate offices. Research. A guy’s gotta check stuff out fer himself.  Anyhow, here I am at the FFF in the Chopin Theater to hear what he has to say.  And as it turns out, I’m very glad I to be here.

Chopin Theater Lobby

Lobby – courtesy Chopin Theater

The speaker is Jerry Freeman, founder of Palette App, and the guy’s real smart. He’s doin’ his pitch fer us as a demo—to break the ice before all the poor slobs face the judges.

So I’m sittin’ here next to Jay Kinzie, a colleague o’ mine from Mastermind Advisory Board in this cushy seat in the Chopin Theater. Rong Mayhem ain’t gonna wheel up behind me and start yellin’ like he did at that car barn they held this thing at last time. And the noisy crowd is banished to the trough downstairs.

Feeding Trough

Feeding Trough

That means I’m free. Free to concentrate on findin’ the companies I wanna follow up on. But first comes Jerry Freeman. He starts by giving his own pitch. I know it by heart so I’ll paraphrase:

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Da Pitch

Palette App logoPalette App helps architects and designers do their job better, faster, cheaper. (Jerry doesn’t actually say better, faster, cheaper, but that’s what it amounts to.)

They take away them old-fashioned sample binders that designers and architects been blowin’ their money on for 150 years. They hand ‘em this beautiful digital palette. It’s easier to put together, better organized and more efficient to use. You can make changes fer free! That’s a big deal in this industry.

Palette App

Palette App

It saves a designer about 30 business days a year. That’s alotta man hours. And that kinda time’s worth a few bucks. The digital palette’s better for the client too. That’s why I been excited ‘bout this company right from the first.

Palette

Palette

The software usta be just on iPad ‘cause that’s what designers and them kinda people use. But now it’s on Android too. There’s a version for architectural design schools, which turns out to be a big deal. You can read all about it at https://chicagoventuremagazine.com/2012/07/16/150-years-of-waste-meets-technology/

The company is up-and-running and generating revenue. They already got 35,000 products loaded in their system. They got multiple profit centers. They make money whenever a designer orders a sample. And they make money through subscriptions.

Far as capital goes, they already raised $700K and the first round is gonna close pretty quick. 70% of that came from the last FFF. You can read about that at https://chicagoventuremagazine.com/2012/11/23/shark-tank-meets-the-apprentice/

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Da Interview

So after his sample pitch which I kinda butchered—but hey—how ya gonna spoil something as good as that? Anyhow, Jerry sits down with David Culver and does an interview about what it’s like to run a startup. This is good stuff and I learn something.

Jerry Freeman and David Culver

Jerry Freeman interviewed by David Culver

Raising Money

This seems to be the biggest question on ever’body’s minds. Jerry says, keep pitching at every event you can ‘cause it’s the best way to get connections to lotsa investors. Raising money is a full time job. As CEO, raising capital turns out to be his #1 job.

Then there’s cold calling. You start by pitching on the phone to some junior-level gatekeeper. Then to the next one up, then the next. Then maybe you gets a face-to-face with a decision-maker, fly way out somewheres and run up the old expense account.

All that takes months. Then maybe you get a commitment. Whoa—the money ain’t in the bank yet, fella. Gotta go thru due diligence. Paperwork. It takes six months to get the check, if it comes at all. People drop out. Meanwhile, how you gonna pay yer staff? So you gotta watch yer cash flow real close.

So he says to keep entertaining small investors till the big checks come through—just to pay the bills. The little guys come through quicker.

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Crowd Funding

Glenn Gottfried

Glenn Gottfried

Let’s talk about the new self-directed IRA. Lotsa baby boomers got millions stashed in their IRAs. All those add up fast. There’s five trillion in investment dollars hidden away in these accounts. That’s right—I said five TRILLION dollars—almost a third as big as the national debt! It dwarfs private capital. Blows it away! And deals like that close in thirty days—not six months like with VCs and Angels.

This is a form o’ crowd funding. Usta be only charities raised money that way. Now there’s brand-new laws that open it up to investors. So far it’s only for accredited types—people with a million bucks plus. That’s gonna change but the government is draggin’ its toes—nothin’ new about that.

So fer now, friends ‘n’ family ‘n’ Kick Starter is still the best way for small cash, then

Loren Minkus with Jay Kinzie

Loren Minkus with Jay Kinzie

millionairs with self-directed IRAs. Pretty soon we might see the dam burst on crowdfunding and money’ll flow all over the place.

Jerry gives 7 more tips on how to run a startup:

7 Tips

  1. “The shorter your pitch, the better,” says Jerry. If you think yer gonna get through it in eight minutes, cut it back ‘cause it’ll always take longer. “Practice 21 times,” he says, “so you’re not nervous.”
  2. “Simplify. If you’ve got twenty ideas, narrow it down to three,” he says. When Steve Jobs came back to Apple, he cut down their product line to about five. Now they’re huge.
  3. “Challenge is important.” He asks himself why he ain’t tripling his users every month. You gotta find creative ways to reach that target.
  4. “The dot bomb era is over.” Start raising revenue ASAP. That helps attract investors way better than flashing yer goofy projections on PowerPoint. “When you can say, We already started generating revenue, it puts you in a different pile from the rest.”
  5. “Crank up sales fast because sales sell. Get to risk mitigation ASAP.” That’s important ‘cause investors is more risk-averse than dey ever was before. And the banks ain’t lending. Actual sales sounds a lot less risky.
  6. “Keep your people motivated.” Use every success to get your people rejuvenated. Tell ‘em stories from the road. Celebrate small successes.
  7. An entrepreneur is somebody who goes from failure to failure to failure without getting discouraged.” It’s good to come from a sales background so yer already used to rejection. “If you’re a wallflower, get over it,” he says. Then David Culver follows that with, “The fortune is in the follow-up.”
Chopin Theater

Stage – courtesy Chopin Theater

Gotta Go

I gotta catch a cab to another meeting, so after plenty o’ good food ‘n’ drink, I say g’bye to the FFF kinda early. Two guys tag along to share the ride. One’s an investment banker, the other a VC.

And wouldn’t you know it—I trip on another pothole, right there on the sidewalk. Now my suit’s slashed in both knees. Neither o’ these guys helps me up like the bums did.

And when I drop ‘em off, neither offers to share the cab fare.

Happy New Year to all o’ youse out there.  Cheers from da merry land of Shark Tank Meets the Apprentice.  

NOTE TO JOHN – I seen your articles on a buncha sites.  One o’ dem usta be a real good tech jounal run by the Huffington Post.  It went through a buncha changes.  Now it’s runnin’ third-rate soft porn right along with da articles.  Don’t know what’s with that but thought you’d wanna know.

NOTE TO LOOP – Thanks for the heads-up.  I’ll check it out and maybe put a stop to it.

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Continue to WHAT’S GOOD?

Go back to Part 1

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Da Contacts

Palette App – www.paletteapp.com

Funding Feeding Frenzy – www.facebook.com/FundingFeedingFrenzy

The Chopin Theater – www.chopintheatre.com/event.php?id=2275&pageId=soon

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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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THE AMAZING MobiU

Mobile University Part 1

John Jonelis

MobiUHow do Social Networks, the Mobile Internet, and Mobile Apps get put to profitable use by Big Corporate Marketing?   I’m at MobiU to find out.  And the big companies are here to tell us about it – Anheuser-Busch, ESPN, United Airlines, Encyclopaedia Brittanica, Walgreens, Blue Cross Blue Shield, Pepsico, Best Buy, Deloitte Consulting, Kimberly-Clark, and many others.  This is the annual Mobile University Conference with speakers on multiple stages at the same time.  Heartland Mobile Council puts on this event at the Microsoft Innovation Center in Chicago.

The Tektite Group’s Jean Pickering runs the volunteers here and she puts the arm on me.  So, how am I gonna cover thisTektite Group event?  I already scheduled the article in Chicago Venture Magazine. 

Then something happens that seems like providence.  I run into Donatis Ludditis.  Good old Don!  Always ready to lend a guy a helping hand!  And a good head on his shoulders, too.  Robust–that’s what I’d call him.  White hair—kinda like Einstein.  Age doesn’t seem to phase him. 

“Don!” I shout, “Don, I need your help!”

He scowls, suddenly guarded. “What you want I should do?” he asks in his mix of Baltic and Chicago dialects.  “I too old for that no more.  I legit. Lawyer say I legit.”

“Just gimme your personal impressions on the talks.  And take some photos—here’s my camera.  Meet me at the old place afterwards.  I’m buyin’.”

“No break nobody’s legs?”  He grins.  “Okay!”  He says it with enthusiasm and grins some more.  “You buy I talk!”  But he hands back my camera.  “I no work dis kinda contraption.”

Smartphones - Photo by Gilly Berlin

SMARTPHONES – Photo by Gilly Berlin

I shrug and pocket my camera.  We shake hands and go our separate ways.  I should’ve known he’d refuse to use a digital camera.  Explaining technology to Ludditis is like talking to a caveman.  This is the guy that labeled the VCR the work of the devil.  I happen to know he never owned a computer in his life.  So what’s he doing here?  But here he is—here in this world of Social Networks and Mobile Internet Marketing—some of the most confounding stuff happening outside of particle physics.  Now, while Jean keeps me busy, I’m counting on Ludditis to give me the man-on-the-street slant on mobile tech.   And I’m worried.  Can he do it?

The Lithuanian Cathedral

The Lithuanian Cathedral

Ludditis is one of the few left from the old days when Lithuanian was the primary language in Chicago’s Marquette Park neighborhood.  He knew my relatives Father Stanley, Father Johnny, Sister Clarita.  He actually attended the old Lithuanian Cathedral.  He’s up there in years but you’re not gonna mess with this guy.  He’s stocky with huge biceps that he uses to crack walnuts.  And even at his age, he still looks plenty dangerous.

At the Diner

The day goes by in a blur and it’s 10pm when I walk into Ludditis’ favorite diner in the old neighborhood.  I find him at table, slowly pouring beer in a glass intended for milk or juice.  That’s the only kind of glass you get in this place. 

The Lithuanian Plaza - Chicago

The Lithuanian Plaza – Chicago

Three empty bottles already stand on the table—labels I can’t read but recognize as Lithuanian.  “I want potato pancakes,” I say as I take a chair.”

“Already order.  You buy dem, we eat dem.” 

I wonder what Donatis Ludditis can possibly know about Big Corporate Mobile Marketing.  I want to understand how they do it and what it means to Startups.  Thirty years back, when Don gave up the noble profession of bouncer (some say enforcer) he bought a tavern of his own, under the ‘L’ tracks.  Paid cash.  Calls it ‘Luddites Shots ‘n Beer.’  Why didn’t we meet there?

The waitress materializes from nowhere lugging two heavy plates.  Ludditis says something to her in Lugan and she comes back with a beer for each of us.  In his robust way he offers cheers.  “Sveikas!” he says as a toast and we clink bottles.  He still talks like an immigrant and he’s not gonna change, even if he makes it past a hundred. 

The beer goes down good.  The thing I like about potato pancakes at this place is they crunch when you chew and now I remember with all my senses why this little diner is the place to be.  “So Don,” I say. “How’d you get mixed up in a Mobile Internet conference?  I’d expect you to curse it as some kinda sin.”

MOBILE DEVICES – Heartland Mobile Council

The Convert

“No, no, is wonderful—so small—carry in trousers.”  He produces a huge Samsung Galaxy in one hand and an iPhone in the other. 

I drop my jaw.  Then, as Ludditis goes on, I take the opportunity to shovel in more potato pancakes and sour cream

“Fit in pocket, see.”  And he slips them away like a gunslinger holstering two six shooters. “They say it soon be part of clothes.”  He talks between bites of food.  “Maybe even put in body—in bloodstream!  No lug around heavy bag.  Is beautiful thing!” 

“It’s technology, Don.”

He shrugs.  “Friends all use it.”

“But you hate technology.”

“Is progress.  Cannot fight such things.  Besides—” He turns over a hand. “Is so easy to talk to a person.  And not stuck at desk.  I hate desk.”

Without warning, he pulls out the iPhone and goes silent.  He bows over the thing and then utters a healthy laugh.  “Is Mary—you know Mary, my great granddaughter,” he says after typing something with his big thumbs.  “She finally get that bum to marry her.  She want I tell her best place for wedding.  Monastero’s is place to go.  Best food.  Best service.  Best price.  So I text her.” 

He texts too?  I shake my head.  “Don, that’s a Sicilian place.”

“So what?”  All kind of people make up city.  Even old neighborhood not same no more.  Not so many speak the language.  New generations take place of old.  People move around.  He points the huge Galaxy phone at me and I see an image of a beautiful ballroom dominated with huge candelabra that look like bouquets of flowers.  “Nice place, you agree?”

In nod and he smiles.  Then he empties the remaining beer from his juice glass in one gulp.  “Look.”  He runs through a series of pictures taken at the MobiU event that day. Nice photography–I have to admit it.  Did he really take those with a phone? 

“What your email address?” he says.  “I send pictures to you.”

I stutter and then tell it to him.

Engaging Your Audience

ENGAGE YOUR AUDIENCE – Heartland Mobile Council

Now he gets out the other phone.  “Manager give two beer if we Like dis place.  You like dis place, Yon?  If you do, I press dis icon.  I no say–you say only.” 

“Yeah, I like it.  Plenty.  Call me John.”

He touches the screen and then thumbs the virtual keyboard and more beers arrive almost immediately.    

“Don, let’s get down to business.  What can you tell me about the conference?  Start from the beginning.”

HUGH JEDWILL – by Ludditis

“Well, that gonna be Hugh Jedwill.  He good boy.  Heartland Mobile Council – it his outfit.  No profit – not never.”

“Non-profit?”

“That what I just say.   Hey, you take notes Yanulis!  I say these things one time only!”  

I pull out an MP3 recorder and switch it on while he forks another glob of potato pancakes. “Their mission, Hugh call it—Change industry.  Do things the right way—not like dot com bomb.”

Not the Dot Com Bomb

“’Scuse me a sec, Don, but whadaya know about big business?”

Ludditis seems genuinely hurt.  “What—you think I no buy stocks?  No do research?  Am I crazy old man and let money rot in bank?”  He strokes the Galaxy and shows me the charts of a couple big tech companies. 

“Sorry.”

“Is okay.”  He brightens and I know the anger is instantly gone.  “Chicago—” Ludditis thumps the table with a meaty Heartland Mobile Council Logoforefinger.  “Chicago is best place to put on dis—dis MobiU.  People come from all over country.  It hub for airlines.  Railroad all pass through here.  Interstate squeeze through.  Dat mean trucks.  Is commodity capital of world.  Chokepoint for Internet.  Lotsa huge consumer brands in town.” 

“Okay, I get it.  Just like the ancient camel route that built Petra in the wilderness.”

He ignores that and goes on. 

No Force Feeding

“After Hugh, I hear Steve Surman from Anheuser-Busch.  He tell us, Do not be needle in haystack.  Dis is big company make Budweiser and he say that.  Old ideas, they no work, he say.  Used to be, ‘Buy me, I’mwhatever’—you fill in blank.  Everything brand-focused.  Nothing for people to say or do.  That is old way.  No good.”

I stare at him, amazed.  There’s really something here—something powerful enough to bring Donatis Ludditis out of a lifelong anti-technology shell.  And I marvel at his sturdy intellect.  I start taking notes like he told me to do. 

“Mobile,” he goes on, “It is big change in way people use tecnostuff.  Everybody want a say.  A say in what they buy.  Brands yusta ram message down your throat.  No more.”  Don squeezes his eyes closed.  “I memorize quote for you:  Surman say, ‘Intense expectation of engagement.’  That is it—exact words.  World not dis way—not for many, many years—such long time you do not even remember!”  He sits back and beams.  “So today, Mobile Contraptions bring back past.  Now we have job for brand and also job for buyer—just like old days when we haggle at market.  Dis I like.” 

I’m in awe.  Ludditis is telling me the same thing Google’s brain trust predicted.  They call it
The Zero Moment of Truth.

Now Ludditis is fooling around with one of his phones again.  “Good movie tonight.  You like movies, Yon?”

“Sure, what’s playing?”

He works his thumbs and then pockets the phone.  “Hugo.  I get bargain.” 

That raises a laugh from me.  “So that’s how you finally fall in love with technology?  The cheapskate in you is overcoming the barriers?”

Ludditis flashes a stern look.  “Smart guy.”  He holds his stare and I shut my trap.  “Is completely different, this Mobile Internet.  No need office.  No need computer.  No file cabinets.  No paper.  Store it all on cloud.  No lug briefcase like some bean counter.  Do anything anywhere.  No lose track of family.  It make me happy.” 

No Sex

“Yon, I think you not see how this make huge change–change in way companies do business,” he says. “This force new kinda advertising on Madison Avenue sharks.  Surman say old crutches no work on Mobile.  Yusta be sex, sex, sex!  Sex sell soap.  Sex sell beer.  Now people with these gizmos say sex get in way.”

“You mean to say sex is a distraction for Mobile users?”

“You no listen?  Here.  The app—she must be practical.  She must function.  And direct—easy to use.  Not just sex.”  He straightens in his chair.  “Dis I like also.”

So the old crutches don’t work in Mobile advertising?  I ponder whether that’s really true but Ludditis moves on and doesn’t give me time to consider it. 

Gatorade and Pandora

GATORADE and PANDORA – by Ludditis

Let me give you the short version of what Don tells me:  He sees Kim Luegers from Gatorade together with Sarah Bild from Pandora Radio.  Pandora’s got a teenage audience.  80% of these kids own smartphones and use the mobile Internet.  75% of their radio gets heard on mobile devices.  These kids pay attention to Mobile Ads.  80% tell friends about what they buy on social media.  They crave it.  And pretty soon they’re gonna be adults. 

We clink bottles again in a toast and I decide to test Ludditis.  “Can you define social media?”

The table immediately sags in the middle from the impact of his fist.  “Shuttup ‘n’ listen, Yonulis.  You think I make this stuff up?”

I show him both palms.  He continues more calmly.  “Turns out,” he says, “Gatorade choose special types to match music on Pandora.  They got active audience.  Kids like brand.  Gatorade does not tell them what to do—no, they listen to customer and talk to them.

They listen.  Of course—that’s the key to it all.  It’s no longer a one-way feed. 

Microsoft Innovation Center

I push away my plate and stretch my legs.  My gut is full and I’m feeling a little sloppy from all the beer.  I wave for the bill.  On the way out the door, Ludditis says, “Yon, you still want see movie?”  He sounds kinda eager, so what the heck.

“Yeah sure,” I say as we walk the dark empty street. 

Ludditis grins.  “I give you rest of the story after de show.”

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GO TO – FAIL FAST
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Contacts

Heartland Mobile Council:

Online: http://heartlandmobilecouncil.org/

Twitter: #mobiu2012

Facebook: HeartlandMobileCouncil

The Tektite Grouphttp://tektitegroup.wordpress.com/

Photographs and comments used by permission of Hugh Jedwill and Heartland Mobile Council.

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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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Filed under Chicago Venture Magazine, Conflict, Heartland Mobile Council, Innovation, Innovation and Culture, Invention, Mobile, Mobile App, Mobile Marketing, MobiM, mobiU, Social Media, Tektite