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Entrepreneur Energy – LaunchUp #33 20120906

LaunchUp at Mountainland Applied Technology College. Thanks to all the sponsors, presenters and companies. Keep it up! Companies that presented:


Drew Izzo
We provide a free service to find lost stuff. I lost a $500 key. It is very valuable to me. It is for a Lexus.
Who has this problem? 400 million key, billions of phones, cameras, kids, pets. We create a service that anonymously connects a finder with an owner. We launched an MVP then I got a day job. During Launchup We have learned a ton.
How it works?
It’s an iPhone app. It sits on your home screen with the “if Found text this ID to that number.” We would connect the finder so you can instantly connect with someone and they can connect with you. We send message via SMS and email.
We also sell tags like fresh value cards. We also have adhesive decals for things that are valuable.
Business Model:
Initial was free service and sell media company (.99 cent tag)
Free service and merchandise. As you register key, phone and camera we find out who you are. Our database of customer information is very actionable. It is not like you are going to register for SPAM. After a number of discussions we thought we would start with the attempt at trying to make money all the way.
–Let’s try to make money on the tags.
–Perhaps property insurance. This can be a way to take a picture and registering valuable items in an app and you would have a list of things you have registered with the company. Then we thought about fraudulent claims.
–OEM with product companies
1) Prove the model first. We spent a ton of time over 1.5 years and we could’ve have launched much quicker if we had focused on the right thing.
iPHone app – people who want to have a tag want elegance.
2) Go highly manual and we spent weeks on automation and it delayed our launch and wasn’t used.
3) I thought .99 was the right price abut people who own iPhone are not concerned about that when they want to find their expensive item.
What do you think? etc

Q? Do you have customers?
A. We don’t know what draws people to this. We did not leverage that excitement. I don’t have any real answer yet.
Q? YouTube channel or video?
A. Good idea. Our app right now is not working. Our site is just brochure ware now. We have thought about having a blog where people can talk about tags and technology.
Q? Radio frequency is getting easier and cheaper. Can you do that with Text?
A. We developed in the original app that we pull out Gmail.
Q? Do you have a competitor?
A. The original plan was low pricing and there are others. They are focused on family though.
Q? Why the anonymous?
A. If you find my key you won’t want me to know where I live. It is an issue of reverse lookup. On a key you could find the house.
Q? Have you thought about channel – low jack or the home security company?
a. Great idea for the people who are already spending money. We were thinking property management / insurance but that is a great idea

John Fenley
I am an only child of a single parent – don’t ask for things
I am now married with 2 kids.
I love sci fi, robots (worked on DARPA challenge).
My family is in rental property business
I hate paying money for things (especially monthly)

There are thousands of great movies that are not available online. People have great movies at their home that are collecting dust.
Media vs a Car a new car loses 40% of its value.
Media loses 90-100% of its value.
WE combine
Market – Storage of Media – Access :
Wharehoused media is in my store and no one ever touches it.
We have here a digitized version of a VHS tape that is playing on your iPad. What’s that worth?
If you have an active marketplace where there is liquidity you can get high transaction rates and we can take a commission on each transaction.
We want to facilitate you finding what you want.
Our competitors
Netflix, Hulu, Amazon, cable/satellite,
Redbox, murfie is still dealing with the physical media
Pirate Bay is outside the box
We want to produce it for all the media you want to play on.
This could be the biggest problem. I think we will get sued. The lawyers think we will get sued. The key questions have not been answered.
Can you space shift your media? Do you have to keep the item in the same form? We want to stay on the legal side of things.
Change in the last 2 months.
I have moved from 40 DVDs. we have been moving and are ready to launch this service.
Ux/Ui design
Beta testers (if you have media that I can stream for you let me know)
– see me for a beta code
Vote for crossies on (we can win 5000.00)

Q? Marketplace? Are you selling from one to the next.
A. Only one person can watch it and they have to sell the ownership to the product. John explained to me that once he digitized Spiderman he has only done that once. The money comes in that he can sell a transaction. I keep a VHS, DVD, BluRay copy and then I scan the bar code.
Q? If I bought access then I can stream it?
A. Yes, you can stream that on my iPad.
Q? Are you renting the storage space?
A. The physical media is not that much of an issue. I am not going to be charging for storage.
Q? Who sets the price?
A. Commodity market for the owners. The lower price will attract the market. If there are 50 copies. If the price really drops that low.
Q? How is it different than Voodoo?
A. They take your media with a stamp and they don’t possess it. If you have online access then you pay a fee and can only watch what you don’t own.
Q? Why not subscription model?
A. I hate them.
Q? Why not music as well?
A. There are about 500 albums. Your buying the discs so you have access to everything.
Q? You are the dealer / market maker. You take .08 % with minimum .24 cents. You can make the case for being a market maker. Floor brokers?
A. Right.
Q? It seems like the physical media is dying then that could be an issue?
A. When the physical media dies I think they will send it to me versus throwing in the trash.

Dave Oldham
Struck is awesome with Jason Bangerter. He and I have been good friends for a long time. Corporate Pepsi came to him and they said we are using this tool and we hate it. We want to go in a different direction. We want a creative company to do this.
Strck went and did the creative stuff with Gatorade things. We want you guys to build and design the visualization on top of Radial6. There are too many conversations that are happening all the time. We are all participating in that at different levels. YouTube, Twitter, etc. Gatorade wanted to see how to do a real time analysis and then turn things around immediately. What they had was too late.
Struck helped Gatorade design this Mission Control center with 6 analysts 24/7 monitoring and responding to it. They will engage and watch sometimes. I can let you know what are some of the reasons they take action or not.
Demographics, location, influences etc.
After Struck built Mission Control others said they wanted to do it too. There were already other companies like Radial6 doing it.
The customers were coming to Struck and they drug us in to it.
It is nice to have customers drag you in. We built NUVI and we did not want to build another Mission Control because it was on a competitors platform. They were embarrassed by Struck.
Jason and I have been collaborating and we spun out a team to be a separate company to build the SaaS. We did that. We gave Struck equity and started NUVI. We started from scratch building our own backend like Radial 6 so we could have control.
We took some Angel investment money. I have pitched a bunch of times. I re-pitched them.
This is on a Google platform. Real Time visualizations. These bubbles move across the stream real-time. Last night “Obama” was moving through the screen really fast. Size and brightness is based on the influence versus a mention.
Green / Red (Blue neutral). We do some natural language processing. Sentiment is not easy but we have worked up some language that is getting smarter. It is really fun to watch.
You can then compare two brand or people against each other.
Momentum, volume, reach and spread.
Consistently negative, consistently positive.
We track locations on a Geo map.
NLP – over a time period we look over it and see mentions and similar sentiment in general.
In April we started with a few customers. After Gatorade we have picked a few to deliver with.
50k revenue / month now
Apache Mahout

Q? Are you aiming to provide more in-depth analysis?
A. We can deconstruct it by looking at the message and spread. We know how your message gets out. We can show over time how it grew and spread.
We can do some forecasting and some A/B testing. We are headed to look at that.
One of our guys teaches physics at Cal Berkley. When we showed him this stuff he has friends who have professors.

Q? Where you took an idea that was existing and spun that off – could you address that?
A. That is what I did with my first idea. I pitched it and got some customers and they pulled me a different direction.
Pepsi was a client for other things and they helped with commercials etc. They wanted to improve their social. They begged and paid $500,000 to do this product. Struck isn’t in that business. They were so successful and asked what he should do about it.
Struck is a service agency and their model is that.
Software company and services don’t mix well. I suggested we spin out to separate and we had this list of customers who were a waiting list.
You don’t plan that. It is based on luck and doing a Great job on the project.
They had an existing brand and relationships. There is a big difference of trying to find an audience.
Wherever you can do the latter it is great.

Q? What’s the demand for programming talent?
A. I don’t have a better answer than in HS. I would find the kids that don’t fit in anywhere else. I think that if you can create something yourself you can do anything you want. You can solve a lot of problems if you can code.
You should learn it like how to count and read. If you can expose kids at an early age and encourage them then that’s good.
My education you were afraid to try and feared it. Encourage to learn from mistakes. To try and fail. I am an old entrepreneur as 41 year old. I hate a fat lazy job. I did not work nearly as hard as I have until now.
I wish I would have started when I was 16-18 you can fail a thousand times you can live off your family. When you have a family, mortgage and kids and it is 10 times harder.
If you have an idea then go and do it. The sooner the better. The more failures the more likely to succeed.
Q? Employees and development costs?
A. We started with 6. We have 6 full time and 3-4 part time. When you start it the first thing I did was call my Angel list. I knew what they liked. You should pick the investor that likes the products. Unless the investor has been in it then they have a hard time. I had a couple of lunches. It was a really easy thing because I spent 20 other hours on other conversations. This was the one idea that really connected.
We went on that round. We are break even now. We went out with power point and no code. Will you sign a contract right now?
I would pay for it. I pay at least that much… If I can do it for half.
I didn’t lie to people. But I wasn’t afraid to ask them to buy before it was ready.
You have to see if there is a market.
Q? I love this idea. Is there a way that an individual could use this?
What separates you from the competitors?
A. The Design look.
The long term is the architecture. It is an API that you can use across the program.
We want to have the YouTube model where ultimately the partners can get live data visualizations. Ultimately you can have a freemium marketplace for designers and math guys and developers who can create other visualizations.
We are on a collision with Domo etc but we have thought through this very carefully how to accomplish that. We don’t know what will happen.

Damon Kirchmeier – FUNDING
Friends, Family and Fools
Revenue Based loans (Auxano) – it’s new with flexible payments; fairly expensive debt
Crowdsourcing (kickstarter, indiegogo)
Angels (utah angels, parck city, sl angels)
VC (mercato, epci, signla peak, pelion, kickstart)
Companies we have worked with:
Listen, Metro, creerian, propay, ingeo, property solutions, jive communications

Q? Personal guarantee?
A. If you are not ready to take the risk then why should I?

Q? Who are the most active around here?
A. RBF guys are active here. Have been busy. Kickstart has been coming up.
Q? Active?
A. Park City Angels
Q? Terms?
A. 7 years at fixed percent based on today’s price.
Q? Other companies like Kickstarter are less consumer focused?
A. Kickstarter is better. The products are tangible. If you have something more difficult then it is hard to find. These are consumers that are buying it. If you have a cool tech consumer product then it is great.
The Investors love it too. They will increase your valuations etc.

Jeremy Hanks Q&A
Q? Dropship?
New startup that is very related to what I have been doing for the past 10 years.
Entrepreneurial arc… When I was at BYU I think my ADD reached a point that was hard. I dropped out and tried to go back a couple of times. I finally quit and built a ski swap online business – TradeGear. I didn’t know anything more than that. I talked to people who are ski swappers. I noted that we should sell closeout skis.
I learned about supply chain. Through GearTrade we raised $220,000 and I did it for a year and we ran out of money. We couldn’t keep going. But the 2 of us made it another year.
The key to success is largely a matter of holding on longer.
We sold the assets to pay off all the credit cards and the upside didn’t happen.
I then started my second company and it became Doba. I learned a lot more about Supply Chain and ran in to some situations where we could work with manufacturers and connect them. They could connect via drop shipping and skip a retailer.
Inventory is such a big cost to contain and so we saved by creating Doba in 2007 we have lots of employees now.
We wanted to grow in to another business. We talked to manufacturers and others so that you can look at a product catalog and taxonomy. We built some tools and software.
But everyone has that same problem with virtual supply chains. we worked at it and the best way to move forward was we took $1.5 million of Doba and spun it in to a new company. We are finding software solutions in the supply chain software. It hasn’t changed and we are trying to do that. We are working on a new round of capital.
My point is that there is an arc. My whole career has been started because I have started with problems. Ski swap led to 13 years later building a large software company and we should go big. If not, I will still continue my arc in this business.
The thought that I have is that you don’t know where this will take you, but until you start engaging and failing and succeeding you will never be an entrepreneur. Ultimately the ideas and solutions that you see are very shallow.
60 entrepreneurs try to solve little problems with college students but you have to get out in the brave world. That is my quick story about what we do at and how that already works better.
My next start up continues on that next arc. This is going to take a lot of years to work through. But I already know what this can get to. As I’ve gotten more experience.

Q? Is the GearTrade the same as Backcountry?
A. They sold it after us. They pushed all the stuff. They have some personal value and it still works and persists.
Q? How did you raise money for Dropship?
A. We funded ourselves through my other business. This was possible with my partners. We are working with some investment groups. Our other company is still running,and I am on the board. But Dropship will provide all the software. Next year will spend half as much on what it was spending. Then we should be at the market rate. We have to make the product better for everyone. At the end we will only have to pay $150k/year.
We are happy with where we are at.
Q? Clark is one of our first customers – Curious about other companies,
A. The short answer is business model. Those companies have a model that will cause them to fail and we will take their customers. They built software 13 years ago and SaaS didn’t exist. The way they chose to roll out means that they charge $1 million per year. Their customers are huge. Doba is a good business and a good value proposition. We couldn’t scale the walls at Doba. At Dropship it makes us money. The middle market needs our solution and we will have the standard.
They send us customers now so we are winning with them.
Q? Did you explore cutting the same deal to Doba customers?
A. We didn’t because we decided that the IP was going to be owned by the same owners as Doba. We didn’t do the long-term deal. SaaS is too low revenue model. When you sell SaaS you have to deploy a decent amount of capital. The Sales and Marketing still cost the same but the revenue is lower initially .
Q? How do you think we can build entrepreneur in K12 education?
A. I don’t know. I believe entrepreneurs are born. You need to figure out the ways to identify those who have the natural ability. 90 out of 100 aren’t. Some of you in this room think you are. You can’t be a broad based approach. These kids exhibit tendencies and we should pull them out.
Go through your school and find all the ADD kids and it will be a high ratio.
Q? Disruption – Doba was running below the radar. It was a good lesson to piss people off?
A. There will be a lot of people against that. You kind of know you are on the right track if people fight against you.

Tom Albrech
I run Incubatre at Miller campus. I ahve been doing that for a year. Thre are really no good collaboraive pace. THre is one in UVU.
Provo there is one.
THis past year we worked on BoomStartup there. We are going to give smart card 24/7 access with Internet $20/month ona motnh to month basis / person.
StartupAmerica 9/10

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