Tag Archives: New ideas

WHAT MAKES IT GOOD

Techweek Part 4 –

Two Points T

by storied business consultant, Joe Perogi,

as told to John Jonelis –

Been hearin’ complaints ‘n’ controversy about Techweek this year. People gripe so you figure there’s gotta be a good reason, right? Yeah, I hear you. Yer sayin’, where there’s smoke there’s fire. But all them critics completely miss THE HIDDEN ROOM that you and me stumple upon—the hidden room that makes this thing truly amazing. Now the dust is settled, lemme take you on a tour o’ what I seen.

First, permit me t’ introduce myself. Name’s J. P. Pierogiczikowski, but you can call me Joe Perogi. Everybody else does. They say I have way too much fun. Maybe they’re right. Confidentially, there’s alotta money in it, too.

Da Speakers

We meet at the office in the backroom o’ Ludditis Shots & Beer.

Ludditis Shots and Beer 3

It’s just a good stretch o’ the legs from here to the Chicago Merchandise Mart and we get there in fifteen minutes easy. This event takes up a whole floor and gets a special elevator.

On this tour, you and me start in a room packed with chairs and people eager to hear Sal Khan of Khan Academy—one o’ da featured speakers. I wanna hear this guy. His company solves problems in education. Uses technology to help the kids learn ‘n’ helps the teachers make better use o’ their time. That’s huge. I’m figure this is gonna be good.

Khan Academy’s gonna partner with big business—a move that’ll give ‘em a longer reach. None of us know about that at the time—all we wanna do is hear the guy talk.

Look at that outrageously pretty lady on stage. Now she’s tellin’ us how great the speaker is. Now she points out the big screen. Hey, Sal Khan ain’t even here. You’re here. I’m here. We paid to be here. All these other people are here, too. But no Sal. He’s on Skype. So I’m a little bit offended, but whaddaya gonna do? They call it Techweek, so I figure we’ll give it our best shot.

All the computers crash at Sal’s office out in California or wherever he really is. But Sal’s no quitter. He carries on—with his smartphone. Ever notice how people believe them smartphones can do anything? Maybe it’s ‘cause they call ‘em smart when they’re really just pocket-size computers waitin’ to go wrong.

THE MERCHANDISE MARTWe look at the big screen and see this faded picture of Sal Kahn. You can tell he’s holdin’ the phone too close to his face. That’s why he looks kinda distorted. And he’s got a lousy connection—maybe one bar, tops. Truth be told, none of us can get our phones working here in the Chicago Merchandise Mart. Too much concrete. But apparently the organizers think smart phones is a smart move. So we sit through snips and swipes o’ Sal’s voice, cutting in and out. Nobody knows what the hell he’s saying. It creates a feeling of suspense, doncha think? I mean, the way that distorted face skips and jerks across the faded auditorium screen.

Why don’t anybody get up and walk out? Easy. It’s that gorgeous gal on stage—she’s really somethin’. Class. Intelligent-looking. Businesslike. She apologizes. Now she’s promising they’s gonna fix the problem. Now she’s watching that big screen with such intense interest—like she can understand what he’s sayin’ and she’s hangin’ on every word. She creates in us what they call a sense of suspended belief. (I read that somewhere.) And it keeps everybody in their seats.

Sal keeps cutting in and out till his battery dies and that means, lecture over. It teaches me a lesson: It’s usually more about marketing than technology. But you don’t know that till the technology breaks down.

Did I mention that the Blackhawk’s rally is going on downtown today?Blackhawk logo You don’t wanna go? Hey—they won the Stanley Cup. It’s a big deal. Okay then, let’s crash a few more presentations.

So we take in summore lectures. Seems like every speaker talks in some important-sounding corporate lingo. It’s all meaningful stuff, right? Maybe it’s what they call high-elf—I dunno. I’m wishin’ I can be with the Blackhawk fans. So you and me ditch the lectures and hit the booths.

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Da Booths

There’s rows ‘n’ rows o’ these little islands o’ commerce packed side-by-side, with all sortsa people plugging up the floor and it all seems to go on forever. Pretty soon I get turned around and confused and everything’s a blur. Don’t it hit you that way, too? This place is so big, a guy can get lost in here real fast.

Look around. Everywhere it’s corporations hawking their wares. (There’s that word Hawk again.) Notice how most people just mill past the booths. Except fer that one—the one serving free booze. We stop there for a while. Pretty good, huh?

FREE BOOZE

So I learn a second lesson, but it don’t hit me till later: Big corporations waste lots of money. But they help an event pay the bills.

Then, just when I’m about to give up and say goodbye, we find the hidden room.

startup city logo

Da Hidden Room

See that wall with the huge Startup City logo painted on it? Looks like a dead end, don’t it? We walk up and take a closer look at the artwork. There’s a small door on our right. We go through there and WHAM! It’s a whole ‘nother room packed with booths ‘n’ people ‘n’ lotsa noise. These is all startup companies. Seventy of ‘em. Ambitious entrepreneurs, brilliant inventors and gutsy financiers ready to take a risk on a new idea. This is where the action is. So let’s do the rounds. Hey, I know summa these people! I like this place!

And whaddaya know—they got a competition goin’. The judges go from booth to booth and try to pick out the five best startups. Which o’ these folks is the judges? I can’t tell. It’s kinda like a benched dog show.

Now we find out the winners are gonna get announced at a special event with the mayor. Our tickets ain’t good enough to get in—those tickets musta cost thousands! No problemo. We crash it.

We’re in and now the mayor’s up there giving a speech:

“…I think the city of Chicago will become the mecca of the Midwest in startup cities,” he says. IMG_9067“The city of Chicago is building the digital economy as the fifth pillar…” I gotta ask you: Where’d he get all that mecca and fifth pillar stuff? I mean I like the guy but them terms don’t feel right coming outa him. Maybe if he wore a keffiyeh or a turban er somethin’. Naw, that ain’t never gonna happen.

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Da Shortlist

Then they announce the winners. But I’m an investor and I got my own short list. Lemme tell you about ‘em:

cervia diagnostic logoCervia Diagnostic Innovations is gonna wipe out cervical cancer by replacing the age-old pap smear with a better test. They got all the research and their team’s fulla PhDs and Nobel Prize winners.

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PaletteApp logoPaletteApp is bringing architects and interior designers outa da closets and into the digital world and saving companies a whole lot of money.

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youtopia logoYoutopia is gettin’ high school kids emotionally involved in those service projects they gotta do and documenting the results fer the colleges they wanna get into. You got a high school kid? Then you know that’s something worthwhile.

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faspark logoFaspark is helpin’ us all find street parking for our jalopies. It’s based on data analytics and probability of success and reduces time cruising the streets by 70%. Shows up as a map on your phone. They’re setting up in Chicago and Munich at the same time.

UPDATE – Faspark now gives you parking garage information in addition to the street parking.  Check out this article in Crain’s Chicago Business.  

None o’ them great companies made the finals ‘n’ that makes me scratch my head. And now they announce the winner:

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Da Official Finalists

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wedeliver logoWeDeliverFirst Place. I gotta say, this one’s on my short list now I get to know ‘em, and there’s an article about them in this magazine. But this is my first look at ‘em. You ever see these guys before? Great business model. Terrific CEO. Tech enabled same-day local delivery for brick and mortar businesses. These guys is gonna level the playing field with Amazon and create a buncha jobs right here in Chicago—and that’s just fer starters.

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Crowdfynd LogoCrowdFynd is a lost-n-found service that uses crowdsourcing to find yer stuff.

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Furywing LogoFurywing is is a gambling play. I don’t like online gambling, but it ain’t my place to judge.

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24Fundraiser logo24Fundraiser is a one-stop solution fer online auctions.

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neststepio logoNextStep.io helps you get yer daily workout by usin’ yer daily routine. I like that idea a lot. Gotta find out more about this one.

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trinet logoThe whole Startup City production is sponsored by TriNet. I talked to them folks at length and came away impressed.

Then I get a big surprise on the way home:

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Da Hawks

I ride the water taxi to the train and it turns out I don’t miss the Blackhawks celebration after all. The train’s loaded with drunken smiling people singin’ songs, makin’ a whole lotta noise, and generally havin’ a great time. Now it’s my turn, so I belt out The Wreck of the Edmund Fitzgerald.

IMG_9086-001

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Back to Part 3 – BNC TUESDAY NIGHT SMACKDOWN

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Photos courtesy Techweek, The Chicago Blackhawks, John Jonelis.  Logos courtesy companies.

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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9 Comments

Filed under angel, angel capital, angel investor, App, big money, Characters, chicago, Chicago Ventures, city, Donatas Ludditis, Education, Entrepreneur, Entrepreneurship, Entrepreneurship and Politics, Events, Innovation, Internet, Internet Marketing, Invention, investor, Mobile, Mobile App, Mobile Marketing, new companies, Nobel Prize, pitch, Software, Techweek, the chicago machine, The City, the machine, vc, venture capital

FASCINATION OF A THOUGHT LEADER

rocket-fuel-labs-launches 2Michael Pollack of Rocket Fuel Labs

Verbatim – John Jonelis

I always enjoy the scenic water taxi ride to the Chicago Merchandise Mart where the huge high-tech incubator known as 1871 lives and breathes like a sleeping dragon in a cave full of gold.

Michael Pollack, CEO of Rocket Fuel Labs is waiting for me. His firm provides the technology to launch new companies.

Turns out, I’m in for a treat—a conversation with a genuine thought leader. Mike is a highly intelligent man exploding with enthusiasm. I get the preliminaries out of the way, then sit back and simply say:

“Tell me about Rocket Fuel Labs.”

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Rocket Fuel Labs logo - Large

Mike – Let me take a step back and give you some background on myself and Lance Ennen, then how Rocket Fuel came together.

In my career, I’ve lived at the intersection of sales and technology. I started my first business when I was 12 or 13—I was building and selling computers. I used my mom’s credit card and bought a tremendous amount of individual pieces of hardware. This is in the early 90’s, at a time when a desktop computer is about $4,000 to $5,000.

Michael Pollack LinkedIn2

Michael Pollack

Note – Not only does Pollack organize his thoughts, they burst forth at a phenomenal rate of speed.

John I personally bought a computer for $5,000 about that time. And it seemed real pricey a year later.

Mike – Okay, so there you go. My competition, Gateway, was charging $5,000. I, as the kid down the street, was charging about $4,500. I was making great money on that. The margins were phenomenal. I was 12 years old and that was more money than I knew existed in the world, right? That was such a tremendous sum.

And I learned a fascinating lesson in my life and my career as well. I was buying all this equipment and keeping it in my room. Stacks of motherboards, processors, video cards, cases, and all the pieces. I’d say, hey, you want a new computer? I’ll build it for you and be your free tech support. It was great. It was a very good business.

But it was right around that summer when Dell said, “We’re gonna do a back-to-school special and cut the price down from $5,000 to $3,000.” My margins went completely upside down and I learned a very important lesson about managing your inventory properly. I had all this stuff that was bought at the wrong price. My prices couldn’t sustain a market, and that was the first lesson I learned about keeping as lean as possible. All those profits I made on the first five or six computers I lost on the following nine or ten. At that point I said, “Wow, this is a tough business. Michael Dell is killing me.” As a twelve-year-old, I just couldn’t compete with what he was doing in Texas and so it was an important lesson.

From there I did programming for a bit. As a kid I took things apart. Vacuum cleaners, VCRs, anything I could find. I had great parents. They gave me a tremendous amount of opportunity and I probably took advantage of it a little too much when I was younger. Maturity is recognizing your mistakes and operating within those bounds.

John – Just like Richard Feynman. As a kid, he made a business of taking apart radios and fixing them. I used to read his books to my son as bedtime stories.

MikeRichard Feynman is a personal hero! I think he’s an absolutely fascinating man. An important physicist of enormous stature. His books, Surely You’re Joking Mr. Feynman and What Do You Care What Other People Think both make for great reading.

Note – It seems that Pollack is not only brilliant, but well-read.

Surely You're Joking Mr. Feynman

See it on Amazon

Mike – I started a number of businesses and my personality pulled me in the direction of sales but I could also understand technology. As a kid, I did everything from sell Cutco knives door-to-door to being a PC tech at Best Buy.

But my career moved into an interesting avenue. A very good family friend started a freight brokerage. If you know people that work at C. H. Robinson or Echo Global Logistics—these companies that manage the trucks that you see on the road—it’s a really big business, and it’s a business that most people don’t think about.

Consider this room. Everything gets here by truck, right? In America, the domestic trucking industry is $300 Billion.

$60 Billion—with a “B”—of that goes to domestic truckload brokers. To walk you through that world, there are about 3-4 Million full truckload shippers. These are the manufacturers who put stuff inside of trucks. Take the company that manufactures this couch, for instance.

On the other end of the equation, there’s a hundred thousand trucking companies. Ninety six percent of those companies operate 10 or less trucks. A lot of mom-and-pop outfits. There’s those big orange trucks you see on the road from Schneider or J. B. Hunt or Werner or Swift, but those big companies are actually in the minority. Only about a hundred of them.

In the middle, there’s fourteen and a half thousand brokers. Those brokers consume that $60B and effectively, those brokers are like glorified travel agents.

John – They’re routing all the trucks. Are they making all the money?

Mike – Not all of it, but a lot of it. Very little overhead. They’re doing this mostly over phones. It’s an old-fashioned travel agency model.

I started as a salesman and realized our tracking software just wasn’t very good. You need to make sure you assign the right truck and get the best price. Then when the truck is actually moving, make sure it gets from Point A to Point B. If the truck encounters an issue, it needs some way to facilitate that.

So we designed a software platform called Autobahn, which was a freight brokerage trading system. The name invoked something sexy, like a Mercedes Benz cruising down the highway at high speed when in reality we’re moving trucks around the country.

John – Did you know that the German Autobahn helped us win WWII?

Mike – Yes, it’s interesting. When you read Eisenhower’s memoirs, one of the things he’s most proud of is the Eisenhower interstate highway system, which is a direct replica—a rip-off—of what he saw in the Autobahn.

NoteOnce again, I’m taken aback by Pollack’s intellect and enthusiasm. 

JohnHe did that?

Mike – That’s correct. He saw the Autobahn and said, “Wow, the ease in which we could move through the country—the effectiveness of their mass transit system was so eye-opening…One of my first initiatives when I come back to America will be the Interstate Highway System.”

I worked on logistics for a long time and know a couple facts about the highway system that will blow your mind.

1.) The reason bridge heights are set at thirteen and a half feet, is that at the time, in the 50’s, the United States had nuclear mobile-launched missiles. That was the height at which they had to be to get under the bridge and that’s where bridge heights come from to this day in America.

2.) The other thing that was mandated was for every ten-mile stretch of highway, there had to be a one-mile strip of straight highway so in the event that airfields all got destroyed by nuclear war, we could land airplanes on the highway.

Pretty clever, actually, how they did it. It’s a really well thought out bit of technology. It’s a fascinatingly cutting-edge technology for the 50’s. It’s infrastructure. Like a platform. Like we do software now.

Think about that. What I find fascinating about logistics in particular is that good infrastructure is, effectively, a platform. And you can build on it. If you think about the highway system in this country, it provided the platform on which McDonalds could provide roadside dining. Hilton and Marriot could build massive hotel chains.

When I think about that infrastructure, I think about our business; I think about Rocket Fuel Labs.  It’s about providing technology infrastructure to allow businesses to build on. That’s where I get really excited about what we’re doing here.

rocket-fuel-labs-launches

Note – I don’t know how you readers feel about it, but I find this conversation fascinating and don’t want to shred a single paragraph. I’ll pick up where we left off in a future article. Verbatim.

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Contacts

Rocket Fuel Labs

  • Specialties – Startups
  • Industry – Computer Software
  • Type – Privately Held
  • Company Size – 1-10 employees
  • Founded 2013
  • Expertise – Web Development & Deployment, UI/UX, Online Marketing, Product architecture, E-Commerce.
  • Headquarters – 222 W Merchandise Mart Plaza #1212 Chicago, IL 60654 United States
  • Website – RocketFuelLabs.com
  • Email – Info@RocketFuelLabs.com
  • Phone – 855-4FR-LABS
  • Fax – 312-620-9655

Photos courtesy Rocket Fuel Labs, NASA, LinkedIn, Amazon.com

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GO TO PART 2

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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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13 Comments

Filed under 1871, angel, angel capital, angel investor, big money, Chicago Ventures, Consulting, Entrepreneur, Entrepreneurship, Innovation, Innovation and Culture, Internet, Internet Marketing, Invention, investor, jobs, Marketing, new companies, Software, vc, venture capital

STARTING COMPANIES WITH STYLE

The Story of Ray Markman – Part 3

by John Jonelis

Ray MarkmanFriday 2:00 pm

A boxing match! I promise myself to be there to see Loop Lonagan and Alexander Harbinger PhD settle their differences in a modern-day duel. I know Loop as a tough street fighter but he gives away a tremendous advantage in reach to the tall German and at the Union League Club, the Marquess of Queensberry Rules are enforced—way out of character for Lonagan. No gouging, no rabbit punches, no kicks to the groin. And unlike here in my office, nobody can pull a gun and start blazing away.

Now I need these two to set their differences aside and give me their reports on Ray Markman. Under the circumstances, that’s asking a lot. The atmosphere is way too tense. So I pull a bottle of single malt out of my drawer, produce three heavy tumblers and pour till they’re all half full.

Actress, Lee Remick

Lonagan and Harbinger are still glaring at one another until the scotch gets their attention. Loop takes a seat and downs his in one gulp then pours another. Harbinger and I sip at ours.

As Lonagan’s color slowly returns to normal, he goes on as if nothing happened: “Like I was sayin’—bottom line, Ray always has two lives happenin’ in parallel. During the day it’s his corporate career, but nights ‘n’ weekends he’s starting companies. So he hedges his risk but pays da price of super-long hours. He puts together a team o’ five investors. Dey start a life insurance company, a real estate company, a bank, a wealth management company. Lotsa others. Some of ‘em big-time. He’s part of a group startin’ a venture capital fund as we speak. Now here’s my point. A guy don’t do that unless he gets a thrill—a real blast outa what he does!”

Harbinger sips his drink—aloof and silent.

Lonagan goes on: “Lemme tell you ‘bout da life insurance company first. Names it Mayflower to give it a feeling of history. And that works real good—people think it’s an old, established firm. Here’s da point I wanna make: He brings in a charismatic leader who lines up all the major agents. Ray’s always forming teams! Yer gonna see a lot o’ that with him. It’s what you might call his modus operandi.

“Anyhow, business just pours in with dis insurance company. Dey take it public! Then private again! Then dey sell out! Then buy it back! Then, when things go bad, just when dey think dare broke, somebody comes along and buys it!”

Lonagan leans back in his chair. “Ya gotta understand. Ray’s one o’ them guys dat loves da game—any game. He knows where money wants to go. He feels it—it’s a natural talent. He can make it flow and channel it. And he does it with style!   And if yer smart, ya hitch a ride with ‘im! I used to do that all da time on da trading floor—hitch a ride with a winner.”

I hold a finger to my lips and think about what I’m hearing so far. It calls to mind a favorite old movie—James Garner and Lee Remick in, THE WHEELER DEALERS.

Lonagan’s ears are red and I see he’s not done. “Ever see da show MAD MEN?” he asks. (I haven’t, but I stay quiet as he goes on.) “I think dat’s what it’s like for Ray.”

Harbinger sets his empty tumbler on the desk. “I do not believe an insurance company qualifies for what is referred to as risk capital.” After downing the scotch, he seems calm.  His German accent almost disappears. I’ve noticed that about him a lot. When he gets excited, he reverts. When he’s poised, he speaks like an English scholar.

Lonagan’s the same way—except he never talks like a scholar. He gives Harbinger a quick glance and a derisive expression. “Whadda YOU know about it? Anyhow, summa his best action is in real estate.” Lonagan punctuates his words by thumping the table with his thick index finger. “Dis guy is one o’ da first syndicators. Lemme explain how dat works, in simple terms so Alex understands.”

Harbinger shows no reaction to that.

Lonagan thumps the table again. “Da company puts together a capital structure. General partners ‘n’ limited partners. The generals are da risk takers. The limited ones want a return and a tax write-off. Clear so far?” He thumps again. “Then dey buy land. Naples Florida on da Gulf right on Vanderbilt beach! And dey get it cheap! It’s one o’ dem early Florida deals.” Another thump. “They put up eight apartment buildings—on spec! Sell ‘em to people in da northern states.” Lonagan closes his hand into a dramatic fist. “So then they take it public and sell it!” He looks at each of us before going on. “Just like dat insurance company, da thing works because he finds a smart guy t’ run da show. Ray knows howta pick talent and howta delegate power. Dat’s always key. Get da ball rollin’! Ask lotsa questions! Ya don’t hafta know ever’thing yerself—always remember that!”

After this tirade, Lonagan takes in a lungful of air. “Now Ray’s group is playin’ with more money. So whadda they do they do? Invest in a bank! What a sweet deal! And Ray stays on as director fer a long time. They eventually sell that, too. Great investment!”

Harbinger looks somewhat stunned. I don’t know if he’s losing the argument or if he’s worried about the upcoming boxing match. I can only guess. If he doesn’t know how to box, there’s only 3-1/2 hours left to learn. I top off everybody’s glasses.

Lonagan swallows a healthy slug and keeps rolling. “He starts Salespower—yeah dat’s right—da bigtime company, Salespower Inc! Ever’body knows dat one. He starts it over a disagreement with Manpower Inc, his corporate client. Ever’body knows dat one too.  Manpower, dey wanna sell product outa their own offices. But Ray says ‘Offices don’t sell products. People do.’ So he sets up dis separate entity t’ market stuff. His theory goes like dis: ‘You produce the product, we do everything else.’ And by that, he means ever’thing—marketing, promotion, sales, financials!  Beautiful concept! Now ya don’t need t’ operate no business—all ya need is a factory ‘n’ a product. If you’re a manufacturer, ya just make yer stuff and no worries about da business details. Beautiful settup!”

I have to smile at that. Think of the opportunities! Lonagan swallows his scotch and keeps talking with enthusiasm in his voice.

“At Salespower, Ray gets hold o’ two hot products right away. One’s a bottled chocolate soft drink. Nothin’ like it on da market. Den he comes up with an idea fer using it in ice cream soda. He goes straight to da supermarkets and whips these things up ‘n’ hands ‘em out. Free! Nobody’s doin’ that back then ‘n’ people love it! And he goes to da tough neighborhoods, too. Guys come in—some of ‘em reeking o’ liquor—dis is Saturday morning—and dey taste da sodas and buy cases o’ da stuff! It’s flyin’ out o’ da stores! And get this—it becomes da third largest seller in Chicago next to Coke and Pepsi!

Ray Markman Serves Free Sodas

 “So den a bottler comes t’ him. Wants to own the product ‘n makes a good offer. What does Ray say? ‘Double it!’ Whadaya think happens? The guy doubles it! Now this is important: Ray’s got da moxie t’ make that deal! He makes it before he asks the manufacturer! When he finally does and the guy hears da terms, he’s so excited he starts stuttering!  Ray makes him rich! Da guy gets cash up front and gets to keep making his product with a cut on so much per case!”

Harbinger still sits in his chair looking dignified as Lonagan goes on.

“There’s anudder Salespower product called Lifeline Battery. It’s got more power and outlasts any car battery on da market. Ray goes straight to car dealers and does demonstrations. A couple dealers take it on and they outsell all da rest. Ray gives ‘em a big margin—three times what they’re use t’ gettin’! Orders start pourin’ in over da transom! Now deeze automobile manufacturers want to own dare own battery even if it means buyin’ his. So dey make ‘im an offer. He says, ‘Double it!’ And whadaya think? They do! Deeze guys is gonna pay anything!”

I need to understand more. “Does Ray always try to double the offer? When I sold my business, I multiplied the offer by seven—and got it.”

“Yeah, well maybe Ray leaves some money on da table on dat deal. But he’s still young and he’s learnin’.”

Harbinger seems to be brooding.

“Something on your mind, Alex?”

He starts, as if his mind is elsewhere, so I repeat the question. “Alex, do you have anything to add?”

He stares at me a moment then composes himself. “Yes. A story I find poignant and highly significant.” He folds his hands on his lap and goes quiet.

“And?”

Harbinger clears his throat and begins…

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.

Copyright © 2012 John Jonelis – All Rights Reserved

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SIX KIDS PUT TECH COMMUNITY TO SHAME

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

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

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

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

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

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

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

“What about that 12-year old?”

“Of course.”

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

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

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

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

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

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

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

I have to smile. Can you beat that?

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

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

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

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

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

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

ATONA 

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

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

Good start.

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

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

TOSIgram

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

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

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

The Living TEG

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

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

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

TiqFolio

Kevin WangIMSA

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

Sofi

Shawn JainIMSA

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

QuickLine

Jennifer Ren, Mitch Bieniek, and Konrad WrobelIMSA

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

What’s next?

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

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

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GO BACK TO PART 1 – THE TWO LAWS

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

© 2012 John Jonelis – All Rights Reserved.

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