Tag Archives: new ventures

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

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

Comment on this article — Name and email optional

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

Copyright © 2012 John Jonelis – All Rights Reserved

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THE FACEOFF

Rocco SpumoniVERBATIM – from a recording by Bill Blaire and Jim Kren. Transcribed and formatted by Janet Case.

[Begin Recording]

“You know I ain’t got no time to waste readin’.” Bill Blaire’s tall beefy frame towers over Jim Kren’s desk at the Chicago Venture Magazine offices and his huge fists are clenched. “Then I gets blindsided,” he says. “Big-time. Pierce O’Shea reads that article to the boys—out loud, real loud, hamming it up—and they laugh me outa the bar.” He pauses. “So what you findin’ so funny, smart guy?”

Jim’s eyes are closed and he’s quietly chuckling. Finally he wipes the tears away with a sleeve and chokes out a few words. “Slow down Bill.” He clears his throat. “You’re almost entirely incoherent when you get excited.”

“Shuttup you scrawny SOB. Doncha use them thee dollar words on me.”

“Jim smiles. “You’re not stuttering yet. That makes you upset, not angry. Your feelings are hurt. Is that why you’re here? For a shoulder to cry on?”

“Shut yer face. Yer makin’ me out some kinda soft-headed idjut.”

“Nobody called you soft-headed.”

“Funny guy. From now on, clean up my talk when ya print it ‘steada havin’ yer seckertary copy exactly what I sez the way I sez it, you lazy good for nothing’—”

“Impossible.  This series is called Verbatim, and that’s what it is—Verbatim.”

“I told you—quit with the three dollar words.”

Jim sighs.  “Stop the big act, will you Bill?  You can’t fool me.  Your vocabulary isn’t any weaker than your biceps.  But whenever you get over-excited, you talk like you never saw third grade.  So if you want clean copy, bring down your blood pressure and clean up your mouth.  If it takes a couple drinks, okay.  I can’t make your report sound pretty just to salve your ego.  John would fire me the first time I tried it.  I’m supposed to print what you say.”

“Here—take yer stinkin’ MP3 player and shove it—you know where.”

Jim takes the recorder and examines it.  “Just for my personal interest, let’s get more specific.  Where exactly would you suggest I shove this thing, Bill?”

Bill glares at him, then shows a set of yellow teeth.  “I got somthin’ you oughta hear about.  After Pierce mocks me to the boys, Rocco follows me outa the bar and lays out a sweet deal.  Says he’ll make this whole problem go away—permanent like.  And he gives me a good price.”

“Bill, are you threatening me?”

A pause.  Still standing, Bill looks at his two massive fists as if surprised they’re balled in anger.  “Well, yeah.”  He squints at Jim.  “Cancha tell?”

“I’m disappointed to hear you take that tone.  That Pierce O’Shea mob is nothing more than a pile of dirt–and that’s putting it nicely.  Hell, it’s probably the fifth alias I’ve heard Fingers O’Hanrahan smear around.  And that’s not his real name either.  The guy’s not even Irish.  He stole that name to make himself sound highbrow.  And Rocco Spumoni is an outright hoodlum.  It’s a violation of your parole, hanging around known felons.  You’re not in the unions any more.   I hook you up with a high-grade crowd and what do you do?   You embarrass me.  You’re with a top-flight company here.  Don’t mix with the mobs.  Hell, if you want to intimidate people, you don’t need any help—your physical presence is enough to scare most anybody.  And if that isn’t enough, look at your face.  That’s what made you such a good boilermaker superintendent.  That’s what made you such a good union contractor where others failed and still fail.”   Jim picks up the MP3 player and turns it over in his hands.  “Hey—this thing’s still on.  I think I’ll—”

[End Recording]

Bean's Spumoni Ice Cream

[Next recording]

Bill squints down at Jim.  “What da hell did ya do to that thing?”

“Put in a fresh flash card.”  Jim pats his shirt pocket.  “I’ll just keep the old one for a while and make some copies.  What do you suppose will happen if the DA hears it?  Could mean a cozy new home for you, pal—in an orange suit.  I don’t think I’ll be hearing from Rocco and the gang any time soon, either.  When I print this, maybe they’ll come after you instead.  Hey Bill—Bill, you’re turning purple—don’t bust a blood vessel.  Here.”  Jim pulls a bottle of single malt from his desk, pours three fingers and slides the glass across.  “Park yourself.”

Bill drops into a big soft chair and swills the whiskey in one gulp then licks his lips.  “You just make me mad is all.”

“You’re still not stuttering, so I think I’m safe.  But you lay one of those sausage-sized fingers on me and you’ll regret it.  Listen.  You have no idea why you’re so valuable.  Let me spell it out for you.  You’re big, right?  Real big.  A scary retired boilermaker out of the bowels of Local 1.  Now you traded in your coveralls and always wear the same cheap blue sport jacket.  Looks like it’s going on five years without a pressing.  You shoot your mouth off and never hold anything back.  But even so, you’re not banned from any meetings like that guy Rong Mayhem, and you’re actually a lot worse than he is.”

“That don’t sound nice, Jimbo.”

“I’m not done yet. That means you found a place with these people. They respect you just the way you are. And nobody can intimidate you. Your slant on these new ventures is completely unbiased. You never get swayed by the crowd. You’re intelligent—maybe cunning is a better word—but you hide it and hide it well, so people tell you things they might hold back from the others. You know business. Since you gave up the tools, you made a success as a contractor then sold out for big money so now you’re on the loose as a qualified investor. That gets you invited to all the best events. Besides all that you’ve got an instinct for picking winners. You’re a natural, Bill. You’re in your niche. I can’t afford to lose you.” Jim slides the MP3 player across the desk. “Here, take your recorder. It’s all ready to go. Get out there and give me your best, just like you always do. Stop some place and get your head together so you can speak more like a gentleman. But stay away from that Pierce O’Shea bar. He tosses a set of keys and Bill snags them with a big mitt. “Use the Mercedes. Pick up John on the way out.”

“You want I should pick up Mr. Jonelis? What’s he need me for? It’s his school. I never got no MBA.”

“Multiple events, Bill. Last time I checked John can cover only one at a time. And don’t give him any lip. He gave you this chance because he saw something of value in you. Don’t screw that up. You’ve got three assignments—reporter, chauffeur, bodyguard.”

Bill tilts the glass again to capture the last drop of single malt then slammed it down on the desk. “Okay Jim, I tries it one more time.”

[End recording]

Comment on this article–name and email optional.

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

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Copyright © 2012 John Jonelis – All Rights Reserved.

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24 Comments

Filed under Chicago Venture Magazine, CORE Insight Story