Two scrappy entrepreneurs squared off with two beneficent angel financiers to discuss the state of entrepreneurial innovation at the MIT Enterprise Forum on Tuesday, March 16. The entrepreneurs were Jeff Judge of Interactive Mediums, which provides a platform for managing and implementing mobile ad campaigns, and Chris Hill of PerkSpot which helps corporations communicate and manage access to third-party employee benefits, like AFLAC or discount programs from Dell or Six Flags. Judge is not seeing capital while Judge is quietly raising a round of that he says he would like to be $1M.

The investors were Jeff Carter of Chicago's Hyde Park Angels and Laurence Hayward of Cornerstone Angels. They represent "angel" consortia, groups of investors who buy into early stage companies. Angel investors come into companies early -- often before they have any customers and invest smaller amounts than "Venture Capital" firms. Angel investments will typically be rounds that range from $100K to $1M, while Venture Capital invests in the $3M - $7M range.

Linda Darragh, Director of Entrepreneurship Programs and Adjunct Associate Professor of Entrepreneurship at the University of Chicago's Booth School of Business was an excellent and knowledgeable moderator.

Both of the entrepreneurial bootstrappers were very successful. Both had started their companies with their own money, and not a lot of it by venture standards. Both companies have Fortune 100 companies in their client portfolio. PerkSpot was lucky to get Anixter (just out of the Fortune 100) as one of their first clients. They had a contact in Human Resources who needed their product and who walked them into the office of the VP.

Interactive Mediums started out with several bars and restaurants, small local businesses with a hip, mobile-friendly clientele. Then they want to a trade show (with four employees and four friends, a classic fake-it-until-you-make-it move) and found some corporate marketers who wanted an easy, inexpensive way to test out mobile campaigns. Judge said he was caught off-guard when the first corporate client said "yes"!

Both companies have grown, and from the sound of it, Judge's company has changed the most in terms of their product offerings. He says that the company will transform dramatically in the next six months in terms of who they target and what their system does.

While this wasn't a formal "pitch session", both of the investors responded favorably to the entrepreneurs. They have solid products. They described good teams and an ability to adapt to the marketplace. Most importantly, both had "marquee customers."

In terms of "elevator pitches," neither described themselves as solving a "big, pressing problem" and neither discussed their competition, be it a company or the status quo. Nor did the discuss barriers to entry for competitors.

Since neither was pitching for investments at this event, it was understandable that they did not address the issue of how an investor would make money out of the deal, which would include a discussion of how scalable the business is and who would be potential acquirers.

Interactive Mediums' Judge said he would avoid outside investment as much as possible. His biggest concern was that Angels and VC's don't sufficiently value the founder's equity. Hill expressed more flexibility. Both agreed that seeking funds and keeping investors engaged and happy would take up much of the CEO's time and energy.

When asked "how did you bootstrap?" Hill said that there is "a major lack of early funding in Chicago. I bootstrapped because of that environment." He focused on solving the problem of companies communicating and managing discount programs for employees and looked for his first sale. He wanted a good developer and used equity as an incentive.

Judge started with personal funds and, before the credit crunch, was able to get a $100K loan. He follows the formula, for every $10K in increased monthly revenue, he can hire one more person.

On the investment side, Carter and Hayward provided some insights into Angel Investors in general and Hyde Park Angels and Cornerstone in particular.

Cornerstone has done 17 deals since 2006, investing $4.5M. There is wide variation between deals, from $50K to about $750M. The entrepreneurs are mostly looking for $500K to $2M. They funded three manufacturing companies who had "better processes" for industry.

They have twenty full members and they have five or six investment meetings where two or three candidate companies present. These events get forty to fifty people by invitation only, generally members and some entrepreneur guests. Members collaborate on due diligence and write individual investment checks. Only a third to a half of the presenting entrepreneurs get funding from these events.

In addition, Cornerstone holds five or six screening events per year, with 5-10 members from the screening committee in attendance. This year, Hayward says there are good entrepreneurs are coming out of the woodwork. Even the best connected entrepreneurs are having trouble finding funding from their close circles of friends and family, so more deals are coming to light in semi-private Angel Investment circles.

Cornerstone will invest outside the Midwest, while Hyde Park Angels keeps their investments "one day's drive" from Chicago. They have fifty-five angels and will cap membership at one hundred.

Hyde Park Angels lists four companies on their portfolio page, with a fifth deal recently closed and the Chicago Tribune reports they have invested "about $3M" in the four companies.

Hyde Park's investment criteria can be found at http://hydeparkangels.com/invest.html In addition, Carter has two other investments outside of HPA. They are in Tallgrassbeef.com, and windetergent.com.

Angel groups like to get other angel groups to invest with them. It spreads the capital risk to other communities and brings in capital from places other than Chicago and the Midwest. Angels want to get the first round of financing full because later rounds will often dilute their equity position.

In contrast, VC investments average around $7M (Carter says that "over $3M is VC territory").

Hyde Park Angels works with the Polsky Center for Entrepreneurship at Chicago Booth. They have ten interns (hiring 5 per year from a pool of over a hundred applicants). Carter praises the U of C students as being critical to the success of HPA. Entrepreneurs pay $100 fee to submit a deal. Hyde Park gives "a fast no and a slow yes." They present three potentially qualified deals at each quarterly meeting, and their goal is for members to fund all three of those deals. The format of the meeting is 10 minutes to pitch and 10 minutes Q&A with the panel.

Carter brought up that .05% of companies go public, so investors want to know how they will get paid. Hayward explained that investors are looking for an IRR from their fund of 19%. Since one or two out of ten investments provide 90% of the return, they are targeting a minimum of 25% IRR from each deal.

The point was made more than once that angels look to invest in scalable businesses that can be acquired, not "lifestyle businesses." This is a key point. Many entrepreneurs have really great ideas for businesses. They might not be a perfect fit for an angel investor because they are not scalable enough to become big business as envisioned by the entrepreneur. However, this shouldn't dissuade entrepreneurs from starting businesses. You can provide a pretty good income for yourself and family by starting up and running your own business.

As is usual with the MIT-EF meetings, there were some excellent questions. Both of the investors said they would like to see a social platform where they could have visibility to all local "deal flow" -- who is seeking funding, and who is investing. Carter recommended the book "World Wide Rave" by David Meerman Scott on the subject of Social Networking. He encourages every entrepreneur (and angel) to read it. The entrepreneurs were split on the value of Intellectual Property protection, but neither had pursued patents due to costs (much to the chagrin, I'm sure, of event organizer Bob Brill and event sponsor Ungaretti & Harris). The issue of control came up. The Angels generally take a minority position. Hyde Park Angels want a seat on the board, while that's not always a requirement for Cornerstone's investments.

As always, feel free to contact me with any questions or corrections (grammatical edits aside).

Labels: bootstrapping, cornerstone angels, entrepreneurs, hyde park angels, innovation, mit enterprise forum chicago, mobile marketing, polsky, venture capital

Entrepreneurial Innovators Take to the Stage

Part One: The Winners

Tuesday, June 16, 2009

Ten entrepreneurs presented their five-minute pitches in an effort to win the top prize of $3,000 in the MIT Enterprise Forum’s annual Whiteboard Challenge. The top three presenters won $3,000, $1,500, and $500 in prize money from sponsor law firm K&L Gates.

There were about 90 entries this year. A panel from The Big Idea Forum preselected the ten finalists. Last year’s Whiteboard Challenge received entries from approximately 60 entrepreneurs.

The Winner: TiltAlign Therapy for Cerebral Palsy

This year’s winning entrepreneurial idea, as selected by a panel of four judges and a phone-in vote from the crowd, was Northwestern student, James Rein. Rein’s winning concept was called "TiltAlign", a therapy for people with cerebral palsy.

Rein, a Biomedical Engineering student at Northwestern stated that there are 800,000 people with cerebral palsy in the US. One of the symptoms of the disease is that patients have poor motor control and poor perception of where they are in space. Their spine and extremities get tilted from vertical and movement becomes difficult and strenuous.

This symptom of cerebral palsy is generally treated by physical therapy. One of the more common treatments is to teach them to move in a six foot cage, as seen  in these videos. Rein pointed that the efficacy of "cage therapy" for cerebral palsy is "just OK" and the cage itself costs five- to six-thousand dollars and is too big to fit in most homes. Thus the patient doesn’t have frequent access to the therapy.

Rein’s TiltAlign concept is to provide a more portable feedback mechanism to provide feedback to patients when they are misaligned. The device he described uses 1) a device with an accelerometer (the electronics that tell when an iPhone or Wii controller is moving), 2) attached to the chest, arms, or legs by a Velcro strap. The controller communicates to 3) a transceiver which controls 4) a device, either a DVD Player or Music, so that music or video instructions pause when the patient becomes misaligned during therapy.

The TiltAlign concept provides rewards for maintaining good habits and provides instant feedback. It can be used at home and the controls would have adjustable sensitivity, customizable for each patient’s needs. He estimated that the cost of each unit would be $200, compared to the thousands for the "therapy cage".

My question, prior to Rein's winning the prize, was to ask why this couldn't be a software solution built on Nintendo's Wii platform?

Second Place: The BFF <3 Necklace

The second-place prize of $1,500 went to Avelo Roy, who presented eMotion’s "BFF ‹3 Necklace". Roy said eMotion’s vision is to serve people who are physically separate and emotionally connected. Roy is also no stranger to entrepreneurial competitions, the eMotion team won $25,000 in November at Entrepreneur Idol, held at Northwestern University.

There are 8 million "tweens", girls between the ages of eight and thirteen. 27% of them participate in online social communities. These girls are three times more likely to be the victims of cyber bullying or pedophiles. eMotion’s product, the $29.99 BFF<3 Necklace gives people a way to add friends in person. Once matched, you can share private messages and communicate via the necklace. CNN.com describes the "BFF ‹3 Necklace" as "a wireless communication device that takes the form of a fashion accessory."

The BFF Necklace is heart shaped and has color LEDs. The units are encoded so that friends who share necklaces can join each other’s networks. They can send messages that are conveyed by coded configurations of the blinking LEDs and they can exchange private messages on the eMotion web site.

The actual use of the BFF Necklace wasn’t clear to many audience members (anecdotally), nor was it clear (to me) how this product could protect from either cyber bullies or pedophiles. However, the company has assembled an impressive board of advisors, is selling an introductory product, and, according to Roy, the site is "becoming a destination" for their target audience.

Third Place: Portion Controlled Dinnerware

The third-place prize went to Thu Nguyen, who brought to the competition a simple, practical entrepreneurial idea: Portion Controlled Dinnerware. "For as long as I can remember, I have been dieting," said Nguyen in her opening.

After many diets, Nguyen was diagnosed as being "pre-diabetic". She was put on a special diet that required counting points – "I had ten choices per day, compared to the twenty to thirty choices I was eating before the diagnosis." She started measuring her portions, especially when eating carbohydrates. This meant that when she dined with friends, she had to take her portions in measuring cups. It was both complicated and stigmatizing.

Nguyen’s entrepreneurial solution to this situation was to conceptualize dinnerware that integrates portion control into the design. The designs on the bowls and plates clearly and artistically identify half-cup and one-cup servings. Nguyen envisioned, on the whiteboard, a wine glass with portion control markings for eight or sixteen ounces, much to the amusement of the audience. Her concept enables portion control to be managed without having to pull out measuring cups.

Food can be attractively served without the extra, potentially embarrassing, step of measuring when serving. Nguyen placed in the competition with a simple solution to a non-obvious, but frequently recurring problem.

Those were the winners. Over the next couple of days, I’ll provide a write-up of the other seven entrepreneur’s presentations from the 2009 MIT Enterprise Forum Whiteboard Challenge.

Labels: bff necklace, chicago networking events, competition, entrepreneurs, innovation, MIT-EF, portion controlled dinnerware, tiltalign

April 7, 2009

Four interesting and innovative companies presented their concept pitches to the monthly Business Networking Chicago Venture Capital meeting. Hosted by Len Bland and David Carmen, the attendees included entrepreneurs, service providers, students and perhaps a half-dozen actual investors.

The companies presenting at BNC Venture Capital are generally early in the cycle of seeking investment, and both participants and audience have an opportunity to learn how to make their business case to potential venture capital investors. Each speaker is given ten minutes to present and fifteen minutes to answer questions from the crowd.

Moderator Bland asks them to make sure they answer three questions: 1) What is your product or service and why will customers buy it? 2) Why is the management team qualified to execute the business plan? 3) How will your investors make money?

Of the four companies that presented at the meeting on Tuesday, April 7, 2009, two were related to education; One was an innovator in sustainable (e.g. "green") transportation options; and one offered to transform the manufacture and distribution of a common retail product.

INNOVATE2LRN – Dedicated Workstations for Urban Students

The first company, Lake Forest based INNOVATE2LRN, branded as QWK2LRN provides "thin client" computers to urban schools, with the objective that each student have a working computer at their desk full time. They provide hardware and infrastructure utilizing on-demand remote (or "cloud") server capacity.

It was interesting that the audience did not have a clear understanding of the Innovate to Learn's business model. That their service is related to providing computers and a "cloud-based" infrastructure to schools. This may be because QWK2LRN CEO Bill Lowe focused much of his presentation on the efficacy of having a dedicated computer workstation for each student in urban schools. He then recommended that the schools use web-based educational programs; the QWK2LRN solution does not provide software or teacher training, though they do have one person available to consult with teachers and administrators on selecting appropriate web-based educational programs.

A key to QWK2LRN 's business plan is that the management team works with school district superintendants to get access to already-allocated federal funds to pay for the hardware. The core team is made up of executives from Xerox, they bring Xerox's top-down approach to sales. The executive team has built strong connections with philanthropists who are active in urban and educational causes. This has given them access to school district superintendents rather than going in through the IT department. We note that, at this writing, their web site is "undergoing site maintenance".

SCHOOL TOWN – Web-based Teacher-Parent-Student Communication Platform

The second education-related company to present at the BNC Venture Capital meeting, School Town, provides tools to help teachers, students, and parents communicate about school assignments and schedules. School Town also provides capabilities for teachers and parents to collaborate and share lesson plans and other educational information. School Town CEO Michael A. Kritzman also stated that School Town provides a platform for teachers to implement "differentiated learning" in the classroom.

Based out of the Chicago suburb of Glenview, they have had successes with their initial installations. The solution helps teachers and parents communicate with students, and helps students develop time management skills. One concern of the audience was whether competition in the education marketplace represented a good opportunity for the company to be acquired for integration or if the company could succeed as a stand-alone SaaS offering. Kritzman indicated that their strategy is to develop the product and be acquired. Another question from the audience was how much time School Town would save teachers versus the complexity it added to their jobs.

PARRY TRANSIT – Ultralight Rail Using Hybrid Power

Parry Transit is an American subsidy of a British company that developed the hybrid trolly. They offer a sustainable ultralight rail solution. CEO Barry Seifer described ultralight rail as an affordable green transit technology. Light rail has a 10-year sales cycle, but ultralight is less expensive for both the track and cars and can go to market more quickly.

Despite Mayor Daley's repeated tries to build light rail in Chicago, this Chicago audience could not relate to the Trolly concept, asking if they could put tires on the cars. Unfortunately, that would eliminate many of the benefits of the Parry Transit system. Light rail has enjoyed success in other locations, including downtown Portland as an outstanding example.

On one hand, with federal stimulus dollars on the table, Parry's ultralight rail looks like an appealing investment. On the other hand, high-speed rail for the Midwest has been getting the PR buzz lately. A lot of Parry's success rides on managing all aspects of selling to government, including setting public expectations.

NOVUS ICE SYSTEMS – On-site Ice Production for Retail Locations

Chicago-based Novus Ice proposes to "redefine the distribution chain for bagged ice" in retail locations by placing automated systems in stores. The systems run quietly and have the same footprint of current ice vending systems, with added height.

The manufacture and distribution of ice is typically a local monopoly, with some 2,000 suppliers nationwide. There are two large public companies trying to roll up this market: Reddy Ice and Arctic Glacier. Novus' business model is to finance the placement of the systems and take a percentage of sales from each unit. They will guarantee the retail price of a bag of ice. Eliminating the manufacturing and transportation costs of ice should improve margins on ice to around 20%.

The machines use standard components, assembled for Novus by the hardware suppliers. The makers of the freezer units have an existing nationwide maintenance operation, which Novus says will minimize the exposure of the maintenance risk.

The use of standard components raised the question of competition. Novus said that there is no competition currently in the market and that their projections are to take 4% of the retail ice market, focusing on chains with larger stores. Their business plan showed 64% EBITDA at the end of five years. They are in the planning stages for a pilot with Walmart.

Note, however, that a later Google search for "in-store ice production" yields a February announcement from Arctic Glacier of their in-store ice production system, and another system from Louisiana based Ultra Pure Water Technologies, dating back to November, 2005. (see http://findarticles.com/p/articles/mi_hb5559/is_200102/ai_n22604092/ and http://www.upwt.com/icemakers.html ). It appears that there may be more to the story behind this innovation. If I were Ron May, I'd probably take up the space to also point out that the management team is not listed on the company's web site.

FEEDBACK FROM THE CROWD

At the end of each presentation Bland polled the audience to vote their confidence in the presentation's investment potential on a scale of one to ten. Novus Ice Systems was the best received of the companies presenting. School Town received the most tepid support from the audience. Parry Transit appeared to have the widest dispersion of low-to-high votes.

The next Business Network Chicago Venture Capital meeting is Tuesday, May 5.

Labels: BNC, business network chicago, chicago, innovation, venture capital

If I worked for Facebook, I would wake up every day saying "How close are we to replacing Outlook as people's communications and contact management center?"

I'd buy Eventbrite, so that event management and registration would be done right inside Facebook.

I'd buy 30 Boxes, so that events and birthdays would go right on a calendar that could compete with Google Calendar. And I'd integrate meeting scheduler capability like Timebridge.

I'd build a better inbox! And maybe let people pick up copies of their POP email from FB.

And I'd figure out a way to let people tag their contacts, color-coding and filtering views - friends & family & business: clients, active prospects, acquaintances, frenemies, etc. And I'd integrate those views or color codes into the calendar and email functions.

And I'd let people build useful applications to help make Facebook be the place that organizes all people's personal and professional contact information. Of course, if my mission in life was to "organize all the world's information", I'd buy Facebook and implement/integrate the above ideas using my existing catalog of applications.

Labels: facebook, Google, innovation

The MIT Enterprise Forum meeting on January 13 offered two views of "Innovation and the 2008 Presidential Campaign". Former Obama Campaign Chief Technology Officer, Kevin Malover, provided the insider's view, while Steve Rhodes of the Beachwood Reporter provided an unvarnished, sometimes cynical, reporter's view of the campaign innovations. This panel was moderated by Ravi Baichwal, Emmy Award winning news anchor and reporter for WLS-TV. Baichwal opened the panel by commenting on the experience he had of witnessing and reporting on a story that had a global connection and historical significance. This significance came from the intersection of three elements: the candidate, the global situation, and the innovations used to engage the public in the campaign.

Malover was quick to attribute the true innovation of the Obama Campaign to the campaign's New Media group, which did not report in to the Technology group. He spoke instead about the innovative leadership of the Obama campaign. "Campaigns are start-ups. They move quickly and last for a limited duration." The Obama campaign approached Malover, wanting to run the campaign "like a business."

From the start, the campaign established a collaborative "low drama" work environment. Malover was asked to create an infrastructure that included things that one would normally do in business, but were new to politics. For example, everyone would have a Blackberry. They also wanted to leverage online tools: social networking, collaborative platforms, video streaming, and text messaging.

Malover joined the campaign in February, 2007. They had a month to launch the social networking platform with solid, scalable email capabilities and to assemble a team that could expand their ability to grow at the needed pace. Their success was beyond anything they could have planned for, and they, along with service provider Blue State Digital, were able to keep operations running without significant service failures.

Steve Rhodes followed the Obama campaign for his online publication, the Beachwood Reporter, as well as other well-established, more traditional media publications. He complemented the campaign for delivering a "solid brand" with "remarkable consistency." There was "no sense of zig-zagging." He observed that Obama's New Media team "used technology to get closer to 'the customer'".

Rhodes said that so many web sites end up creating a barrier to the candidates, while the Obama campaign created the feel that "it's 1 a.m. and David Plouffe is sending me an email!" They were masters of both the medium and the message. They used celebrity, media, and advertising to counter any negative coverage.

More importantly, they conveyed the sense that "this is your campaign," with promotions like "we're going to pick five people to have dinner with Barack" and allowing supporters to publish dissenting opinions on the Obama web site's forums. But to Rhodes, this was a "false sense of inclusion." The Obama campaign talked about "the cynical way Washington insiders sliced and diced" the electorate, but, Rhodes pointed out, that's exactly what the Obama campaign did! That's what all politicians do. He gave the example that Jesse Jackson Jr. has a "war room" in his basement.

Rhodes and Baichwal both agreed that the campaign's handling of traditional media was a necessary element for the campaign's success. Baichwal pointed out that his media, television, still reaches the broadest audience and largely sets the tone for the national conversation.

Rhodes' opinion was that, ultimately, the Obama campaign didn't transform politics or the process, but did apply an innovative use of technology.

Our research at Metrist Partners into how the Obama campaign used new media showed many lessons that will be used by candidates for a long time to come, and can be used by businesses as well.

As Rhodes observed, the Obama campaign delivered a consistent brand message and brand experience. The vision for Obama's online campaign can be expressed as: "Connect with our people and get them to talk to others." This simple and well-defined vision turned out to be essential to the success of the campaign. Chicago-based analyst Nate Silver of FiveThirtyEight.com wrote that for the presidential race, "each 10-point advantage in contact rate translated into a 3-point gain in the popular vote...."

In a way, Rhodes was correct. The strategy followed by the new media team, as described by Chris Hughes, Facebook co-Founder and member of the Obama campaign leadership team, "When computer applications really take off, they take something people have always done and just make it easier for them to do it, and maybe bigger."

We describe the campaign's online strategy as "Motivate people and give them the tools to easily take action." Email was the backbone of the campaign, providing regular contact between supporters and the campaign. The emails helped to define the candidate, circulated talking points, invited participation and donations, followed the news cycle and fought back quickly against disinformation. It was through the emails that the Obama campaign did the most to make people feel that they were part of the campaign.

The Obama web site functioned as the community center, writ large. The new media team effectively utilized social media, search, blogs and public relations. They innovated in the use of mobile text messaging. The "Get Out the Vote" tools on the Obama web site put hundreds of thousands of people into action on behalf of the brand while a room full of people did the web analytics work needed to make a campaign of this scale succeed. The internet, because it is interactive, can give people the tools to take action in a way that television , despite its wide reach, can not.

While Rhodes' cynicism may be well-founded, his concern that the campaign was not as innovative or authentic as they are generally credited is, in our opinion, misplaced. The Obama leadership approached the campaign with clarity of vision and mission and executed flawlessly. Malover's technology team (and his successors) were nimble in providing an infrastructure that supported this level of innovation. But it was Obama's new media team that delivered the "Obama brand experience". Good ideas are one thing. Great execution creates legends.

More coverage:

Chicago Tech Report

Chicago Sun-Times: Obama web team performed more like Google than earlier dot-bomb duds

Labels: Barack Obama, campaigns, innovation

The MIT-EF White Board Challenge gives emerging companies and entrepreneurs in the Chicago area an opportunity to give a five-minute presentation on an innovative business concept, with over $5,000 in prizes going to the top three presentations.

There were 67 applications, from which 13 finalists were selected to present at tonight’s event. The finalists showcased innovation from a wide range of technologies, from a better spray bottle to a "smart" electrical outlet that can prevent electrocutions and home fires.

The first prize, $ 3,000 and a business model study from the Coleman Center, valued at $ 1,500 went to the Guardian Angel Outlet, presented by Dan Masterson. Masterson was easily the best presenter of the group. He opened with some “shocking” statistics: 2400 children are treated each year for electric shock. Hundreds of them die. And 3300 household fires start at electric outlets. Masterson presented the “Guardian Angel Outlet”, a “smart” electric outlet.

The Guardian Angel Outlet contains a microprocessor that uses a capacitive sensing technique (Masterson name-checks the iPhone for using this technique). It senses that a hand is near and turns off the power. The outlet can identify safe/unsafe conditions: the nearness of a hand, excess heat, or an arcing situation.

This is the same technology licensed to Fellowes for their Safe Sense shredder, which won the 2007 Chicago Innovation Award and was Fellowes biggest selling item ever. They hold four pending patents on the technology.

They estimate the 16 Million dwellings with children under three years old as being a market that is emotionally ready to purchase their $10 outlets. They are currently negotiating to license the Guardian Angel technology to the top outlet manufacturers.

Second place went to MagDrive, presented by Igor Stamenkovic. MagDrive has patented technology that makes electric motors and generators more efficient. This is basic electric technology: fixed magnets, copper coils and a spinning core. The folks behind the MagDrive used sophisticated physics and numeric analysis to optimize the configuration of the electric motor or generator.

Over 15 million electric motors of varying sizes are sold every day, and the motor/generator components represent a $500 Million per day spend. The MagDrive’s efficiency makes it less expensive to operate. The design is modular and can scale up or down depending on the size and power requirements. The MagDrive component retrofits easily into existing equipment.

What was missing from Stamenkovic’s presentation was a clear statement of how much more efficient the MagDrive is compared to current technologies. I have no idea of the expected savings, or payback period for investing in a MagDrive. Nor was it clear what stage of development the MagDrive has reached.

RevStor, presented by Russ Felker, was the third place winner. RevStor uses existing corporate data resources to build a secure computing cloud on your premises. RevStore ties together an existing network to provide systems management, backup, archive, and security.

This provides an internal alternative to the external “cloud” or “on-demand” computing solutions offered by Google, Amazon, or Seagate; the (antiquated and possibly expensive) tape-based solutions offered by the likes of HP; and the (expensive) SAN solutions offered by the likes of EMC. RevStor shares CPU, storage, and network resources inside an enterprise in a secure managed environment. RevStor was also a finalist in the MIT-EF “Below the Radar” event last month.

The panel of judges for the Chicago MIT-EF White Board Challenge included Raman Chardha from the Coleman Center at DePaul University; Bernadette Freeman, Admin Law Judge from the City of Chicago, Adam Masia, Partner at Bell, Boyd & Lloyd; and Bill Myers, Director of Business Development at Motorola’s Early Stage Accelerator. David Weinstein was unable to attend due to an illness in his family. Attendees were given a vote as well, calling a toll-free number and entering their choice. The attendee votes counted as one judge, and I was told that the crowd choice coincided with the judges’ winner.

That’s the winners in a nutshell. I’ll share my notes on the well-deserving runners-up tomorrow.

Labels: chicago technology, innovation