I met with Hank Weghorst of Troux who talks about his next project-- a startup in the mobile space as well as the local startup environment. Hank is also working on an idea for starting an incubator to help seedstage companies get up and running.
What do you see in the local startup scene?
The model has changed dramatically today from when I started Troux five years ago. A company like mine needed $20M dollars. Now that same company needs $5M or even less. The whole software world has moved to a different model. It’s beginning to come to angel groups like yours.
What are you doing now?
I moved out of Troux a few months ago. I’m working on another startup idea. We’re going to focus on the mobile space. I’ve done several enterprise deals. All of them have $10M, $20M, $30M dollar deals a piece. The whole enterprise space is dead. The next step down from that is the Software as a Service model. The intent of it is to build an annuity stream. The success stories are few and far between, because if you run the financial model on it. It takes forever before you make money. If you have an enterprise company now trying to convert to an SAAS model it could take 3 to 5 years before you turn the corner and make the same amount of money as a perpetual license. When you take the perpetual license you get all the money up front. On a subscription model, it could take 3 to 5 years to get the same amount of cash. Now the good news, is that once you get to the 3 year mark then it’s gravy. It just takes a long time to get there and you have to have very patient investors and huge amounts of startup capital. This panacea of SAAS is talked about by everyone who hasn’t seen the bottom line. If you go one step down you get back to the old “eyeball” web deals. A lot of the deals that are successful now aren’t good, they’re just lucky. I don’t like to depend on luck. I want to depend on hard work. In an enterprise deal you were always looking at a 5 to 7 year horizon. The first 12 to 18 months I’m developing the product. In the next 12 to 18 months I’m rolling it out to my alpha/beta customers. Then in my 4th year, I’m in a growth cycle. If you only have a half million dollars you have to turn the whole thing on in 12 to 18 months. If you look at that model, you have to pick something where you believe the discontinuity is only about 12 to 18 months away.
I believe the mobile market disruption is about 12 to 18 months out. With such a short timeline, it’s all about execution. The smarter guy isn’t necessarily going to win because of the shortened timeline. An investor has to be willing to do whatever it takes in that short timeframe to make it successful. I believe the funding required will be $3M to $5M in total but will be consumed in a short period of time. It has to be a model of killer execution. The challenge is that in a 3 year timeframe, everyone can see the discontinuity coming up. The entrepreneur with a view on it no longer has an exclusive.
You mentioned the mobile market. What do you see in the mobile space now?
There’s a huge discontinuity in the 18 to 36 month window. I don’t know if you’ve been following it but we’re about to transition from cellphones to smart phones. Apple showed us what that will look like. The difference between a smartphone and a cellphone is the access to data. It’s not the communications. It’s in the web access capability. In a sense, the device becomes a disconnected computer. In less than five years, when you walk into your office your device will sense the monitor and keyboard and they will come alive. It’ll be your computer you’re carrying around. Then when you go to your car, your car will sense it. Sprint just announced that they are spending $5B in the next five years to rollout a WiMAX network nationwide. WiMAx is Wi-Fi everywhere.
What kind of product/service would you offer?
The thing I’m focusing on is the form factor and usability of the mobile device. When I’m on my phone, I want this thing to be smarter than my desktop computer. I want it to go and do things for me. “Here go do this for me.” If you go back to the advent of the web there was also the “semantic web” which was built for computers to communicate with computers. The shift from the desktop computer to the mobile device will use that concept in a real way.
The mobile phone in the future will have an “agent” mentality that will go do things for you. Any applications will reside on the web. If you take Google apps and move them to the mobile phone you can start to see what that will look like. Google is going to own this. Two months ago they released their Android software and opened up a contest to developers to show the best Android applications.
In a few years, you’ll go to Fry’s and you’ll find the Apple stuff on one side of the aisle and on the other side will be the open hardware—Motorola, Nokia, and so on but they’ll have a Google OS. I don’t know where Microsoft will be in all of this. I think they get belted by this. It’ll be Google vs. Apple.
What about Research in Motion?
With the advent of ubiquitous broadband networks, RIM’s advantage goes away. There are two distinct markets – mobile professionals and then there are the digital natives (kids from 13 to 25) who use it because it’s their digital lifestyle.
In a few years everyone will own a pocket PC and there will be no need for that big thing under their desk. There will be servers in the backroom running it.
The usage paradigm for mobile computing will change dramatically from a ‘desktop—I have time to sit and search’ to a ‘do’ mentality of the mobile space. I want to be the ‘do’ company. I want them to be configurable. I want to give people toolsets that can let people do what they want.
What’s a killer app?
It’s more of an approach than a killer application. Imagine an iPhone screen with a set of icons and you can configure those icons to do something for you. It could be anything from “have there been any new contacts that have come in for my territory in the last six hours?” All the way to “show me the latest score for my basketball team and who do they play next?” You can imagine configuring a matrix of thirty of these things to do. I want to extend that to something bigger. These agents that are collecting the information are storing it in a central area so you can access it from a desktop as well. It would be a mistake to build a mobile only application at this time.
The mobile phone and the desktop have to work in concert. The iPhone is one example of how well that works. What do you think?
That’s right. The computer and the phone always works as one although the biggest thing the iPhone missed is that you have to plug it in to synchronize it. The Blackberry does this already. I can’t believe they missed that one.
Tell me about the incubator idea you’re working on.
There are a couple of models out there for incubating startups. The one I like is called YCombinator. I just thought it was relatively unique in that it was team shotgun approach. Instead of hunting for one deal at a time, we hold a competition. They find the five or six best ideas and put them in a class and move them through a training process. That class gets a little bit of funding. We could hold once or twice a year a well publicized competition to find the people who want to join that class. We’ll surround them with the resources that they need to get going – not just funding but management, operational, financial, etc. The goal is to get them to the next level whether that be angel funding or something else. Typically the entrepreneur knows what they want to do but they need help.
Where I began to hang up is that I found myself becoming a VC – raising funding, etc. I could get the funding but then I’m competing against the guys I want to hand them off to.
I’m now looking at gathering a group of four with backgrounds in management, financial, operational, and HR along with four entrepreneurs. They may take an equity position. It’ll need some operating capital. I don’t know where that will come from just yet.
Best regards,
Hall T.
Monday, January 21, 2008
Wednesday, January 16, 2008
Austin American –Statesman Article on Angel Investing
Not too long ago the Austin American-Statesman ran an article on angel investing in its TechMonday section. I was glad to see the extensive coverage which drew on survey information from the University of New Hampshire. CTAN fills out their survey forms regularly as we support the information they gather about angel investing. The Angel Capital Association is also engaged in a similar effort to provide data and stats about funding, membership, etc.
The article highlighted two companies CTAN recently funded: Minggl, a social networking site, and Displaypoints, an at the restaurant table digital media play. Both companies have solid product offerings and strong management teams behind them. According to the stats, Angels funded 24,000 companies last year compared to 1822 by venture capitalists. That’s quite a difference.
It’s interesting to note that the data shows a flat to slightly down trend for angel investing across the USA. This is a little surprising as CTAN continues to see strong deal flow and increasing investments. I’m not sure what caused the numbers to slow. Angel investing runs in five to seven year cycles. We had a strong cycle starting in 1994 and then closing in 2001. Starting in 2005 the cycle started again. We currently see about thirty deals a quarter submitted to our website from which we can choose four deals to present. Of the four deals that present we typically fund two of them. Next year we plan to increase the number of presentation meetings so we can view more deals.
Best regards,
Hall T.
The article highlighted two companies CTAN recently funded: Minggl, a social networking site, and Displaypoints, an at the restaurant table digital media play. Both companies have solid product offerings and strong management teams behind them. According to the stats, Angels funded 24,000 companies last year compared to 1822 by venture capitalists. That’s quite a difference.
It’s interesting to note that the data shows a flat to slightly down trend for angel investing across the USA. This is a little surprising as CTAN continues to see strong deal flow and increasing investments. I’m not sure what caused the numbers to slow. Angel investing runs in five to seven year cycles. We had a strong cycle starting in 1994 and then closing in 2001. Starting in 2005 the cycle started again. We currently see about thirty deals a quarter submitted to our website from which we can choose four deals to present. Of the four deals that present we typically fund two of them. Next year we plan to increase the number of presentation meetings so we can view more deals.
Best regards,
Hall T.
Monday, January 14, 2008
Leslie Price –an Angel Investor Profile with an Outlook for 2008
I recently had the pleasure of interviewing Leslie Price, a new member of the Central Texas Angel Network who recently moved from Dallas to Austin. Here’s her take on angel investing and the outlook for 2008.
What is your background?
Corporate communications. Developing communications strategy and programs for technology companies. I was over corporate communications at Sabre Holdings out of Dallas, a travel technology company whose businesses include Travelocity. Before that I worked many years at Texas Instruments. My last position there was VP of strategic communications, which involved the external positioning of the company during a time of major transformation. Before that I was over communications for TI’s European operations for more than four years, living first in France and then Belgium.
One area where I’ve gained a lot of experience is in acquisitions and divestitures – which is where I also developed my interest in working with startups. When I came back to the U.S. in 1997, TI was in the midst of its transformation to primarily a semiconductor company, selling off several businesses and buying in a number of small technology companies. In a three-year period, I worked on more than 20 acquisitions and divestitures, and more later at Sabre.
These communications are very involved, and multi-phased. One critical element is determining how to best integrate the newly acquired company and build that brand going forward. Given the entrepreneur’s personal investment in their company, it may be challenging to see any change to their company’s identity -- which I can understand. But you have to look at how to bring the most clarity to customers and how the acquiring company can best generate that new value. Sometimes that will mean maintaining the existing identity, and sometimes the decision is to fully integrate into the acquiring company’s brand. But there has to be a framework in place to guide those decisions.
Why do you like startups?
I have always admired entrepreneurs – people who have an idea and take the risk to go off and start a business and get it going. It’s exciting to see them succeed. We have a culture here in the U.S. that encourages some level of risk taking and innovation. I haven’t seen that everywhere – there is a lot more understanding here if a company doesn’t succeed.
What do you look for in an angel deal?
I look at the management team. I think the quality of the management team is so significant. You have to determine if they can take the product idea all the way through and make it successful. And other factors include the market opportunity, the technology, what differentiates them from what’s out there.
You recently invested in Displaypoints. What did you like about them?
I think they have a strong management team as well as a great idea. They’ve met their milestones and progressed very well. I think they’ve found a niche that has some real interest as seen by the companies who are in talks with them. They’re at an early stage but progressing well and getting a lot of interest that is helping them refine their product and expand their customer base. They’re about to roll out version 2 of their product, and they’ve just gotten approval for a pilot program with a national restaurant chain. I think we’re going to be hearing a lot more about them.
What is your day job?
I work at Edelman, which is a global public relations agency, the largest, independently owned PR agency in the world. They’re family owned and have been in business for over fifty years. It really combines the best of a boutique – local presence, specific expertise – with the resources of a global company. I focus on technology companies.
Why change from the corporate world to the agency world?
I like the idea of applying my experience to many companies, and I admire Edelman’s creative history and how they continue to shape the PR profession.
How does Edelman work with startup companies?
We recognize that there are unique needs with a new company. We recently designed a PR model that’s specifically for companies at this stage – to help smaller companies get noticed. We’ll work with these companies to help develop their initial communications platform and build that early buzz that they need. The level of support the startup needs is different from a more established company, and we offer a lot of flexibility with this program.
What are some of the tactical ways a startup gets their message out there?
It really depends on their business needs and the markets they want to reach. Certainly talking with industry analysts and the media is key. And being visible at key forums – conferences, trade shows. But you need to first build a strategic PR program based on the company’s business objectives, and then a variety of tactics will fall in place.
PR is evolving based on technology. What do you see as trends for 2008?
Social networking and mobile marketing are going to be the key trends in 2008. It’s becoming more and more important to a solid PR program. Edelman has been on the forefront of this. For example, one client, a technology startup, needed help in building its name and customer base and countering misinformation about them. Edelman used social media – in particular blogs, and built up a program and trained execs and had it live in under two weeks, with great results. It allowed them to open up a dialogue and talk with potential customers, and clarify who they were. They were able to correct the misinformation as well as sign up new customers. It’s all about getting that initial conversation going rather than having a one way communication. Mobile marketing is growing too – but these programs must be opt-in. You have to earn the right to be on their handsets. These are complicated programs to develop, but it can be an effective tool if used in the right way.
Best regards,
Hall T.
What is your background?
Corporate communications. Developing communications strategy and programs for technology companies. I was over corporate communications at Sabre Holdings out of Dallas, a travel technology company whose businesses include Travelocity. Before that I worked many years at Texas Instruments. My last position there was VP of strategic communications, which involved the external positioning of the company during a time of major transformation. Before that I was over communications for TI’s European operations for more than four years, living first in France and then Belgium.
One area where I’ve gained a lot of experience is in acquisitions and divestitures – which is where I also developed my interest in working with startups. When I came back to the U.S. in 1997, TI was in the midst of its transformation to primarily a semiconductor company, selling off several businesses and buying in a number of small technology companies. In a three-year period, I worked on more than 20 acquisitions and divestitures, and more later at Sabre.
These communications are very involved, and multi-phased. One critical element is determining how to best integrate the newly acquired company and build that brand going forward. Given the entrepreneur’s personal investment in their company, it may be challenging to see any change to their company’s identity -- which I can understand. But you have to look at how to bring the most clarity to customers and how the acquiring company can best generate that new value. Sometimes that will mean maintaining the existing identity, and sometimes the decision is to fully integrate into the acquiring company’s brand. But there has to be a framework in place to guide those decisions.
Why do you like startups?
I have always admired entrepreneurs – people who have an idea and take the risk to go off and start a business and get it going. It’s exciting to see them succeed. We have a culture here in the U.S. that encourages some level of risk taking and innovation. I haven’t seen that everywhere – there is a lot more understanding here if a company doesn’t succeed.
What do you look for in an angel deal?
I look at the management team. I think the quality of the management team is so significant. You have to determine if they can take the product idea all the way through and make it successful. And other factors include the market opportunity, the technology, what differentiates them from what’s out there.
You recently invested in Displaypoints. What did you like about them?
I think they have a strong management team as well as a great idea. They’ve met their milestones and progressed very well. I think they’ve found a niche that has some real interest as seen by the companies who are in talks with them. They’re at an early stage but progressing well and getting a lot of interest that is helping them refine their product and expand their customer base. They’re about to roll out version 2 of their product, and they’ve just gotten approval for a pilot program with a national restaurant chain. I think we’re going to be hearing a lot more about them.
What is your day job?
I work at Edelman, which is a global public relations agency, the largest, independently owned PR agency in the world. They’re family owned and have been in business for over fifty years. It really combines the best of a boutique – local presence, specific expertise – with the resources of a global company. I focus on technology companies.
Why change from the corporate world to the agency world?
I like the idea of applying my experience to many companies, and I admire Edelman’s creative history and how they continue to shape the PR profession.
How does Edelman work with startup companies?
We recognize that there are unique needs with a new company. We recently designed a PR model that’s specifically for companies at this stage – to help smaller companies get noticed. We’ll work with these companies to help develop their initial communications platform and build that early buzz that they need. The level of support the startup needs is different from a more established company, and we offer a lot of flexibility with this program.
What are some of the tactical ways a startup gets their message out there?
It really depends on their business needs and the markets they want to reach. Certainly talking with industry analysts and the media is key. And being visible at key forums – conferences, trade shows. But you need to first build a strategic PR program based on the company’s business objectives, and then a variety of tactics will fall in place.
PR is evolving based on technology. What do you see as trends for 2008?
Social networking and mobile marketing are going to be the key trends in 2008. It’s becoming more and more important to a solid PR program. Edelman has been on the forefront of this. For example, one client, a technology startup, needed help in building its name and customer base and countering misinformation about them. Edelman used social media – in particular blogs, and built up a program and trained execs and had it live in under two weeks, with great results. It allowed them to open up a dialogue and talk with potential customers, and clarify who they were. They were able to correct the misinformation as well as sign up new customers. It’s all about getting that initial conversation going rather than having a one way communication. Mobile marketing is growing too – but these programs must be opt-in. You have to earn the right to be on their handsets. These are complicated programs to develop, but it can be an effective tool if used in the right way.
Best regards,
Hall T.
Brewster McCracken of the City Council Talks about the Pecan Street Project
Brewster McCracken of the City Council Talks about the Pecan Street Project
How did the idea for the Pecan Street Project get started?
I was having lunch with BJ Stanbury, Steve Darnell, and Dave Bowen, over at Taverna on March 7. We were talking about Helivolt’s plans. BJ was very passionate about how our focus needs to be on the locally sited solar rather than big, remote solar panel farms out in the hinterlands. That’s how you create the jobs and make it directly relevant to people.
I got together with Isaac Barchas and Joel Serface and started working through it. If you have solar covering offices, homes, stores, then you would need to have thin-film or a building integrated material, and you would need to reinvent the way utilities deliver electricity.
We asked ourselves what success would like 20 years down the road. Imagine we have solar all over the city. What changes would be needed to make that system as reliable and affordable as conventional fossil-based power? Currently, solar is intermittent now and it’s subsidized, so what does it take to get it as reliable as polluting energy. You would have to connect the solar systems coating the buildings to 2-way wiring systems. In turn, the wiring would send the solar energy large, interconnected storage servers. It sounded a lot like the internet. We learned from reading Google.org that Google had already reached a similar conclusion about the future of clean energy—that you have to reinvent the energy system into one with the architecture of the Internet. Thomas Friedman and former Motorola CEO Robert Galvin are also is advocating for the creation of an energy Internet. Friedman writes that this is the most important thing we could do to promote economic opportunity and to address the world’s biggest environmental challenge, climate change.
So we had our first formal meeting on April 16 at MCC.
It was Joel Serface, Isaac Barchas, Rachael Proctor May, Marsha Inger of UT’s Advanced Computing Center, UT engineering professor Michael Webber, Jose Beceiro with the Greater Austin Chamber and Austin Energy General Manager Roger Duncan there. Shortly afterward, Joel moved away and Colin Rowan from I&O Communications and Heath Hignight from UT’s Engineering School joined us. We started hashing through it what we needed to do in Austin to lead in clean energy – both economically and from a utility perspective. It took us three months to develop the consensus plan that became the Pecan Street Project.
Why did you call it the Pecan Street project?
It was initially called the Austin Project but that name it was already taken. Interestingly, the Austin Project was the name for the the job training initiative from Sematech. We didn’t want to use a generic name like “clean energy project.” So we decided to call it Pecan Street Project because Pecan Street used to be Austin’s original main street. We felt it fitting because we’re talking about taking energy away from the hinterlands such as from a coal-fired gas plant and bringing it into Austin’s main street.
When Edison was building out the infrastructure for generating and distributing electricity he had a choice between centralized and decentralized. He chose centralized which many people say is now outdated.
The most direct analogy is the evolution of broadcast television to the internet. If you look at broadcast television you get your news from three networks that they broadcast from big towers (with no way to store it) and you had to be in front of the TV at a certain time. Later VCRs, cable, and other devices came along but the fundamental structure was still there. Then along comes the internet in which information is deposited into servers and the users can pull out that information at your own convenience and the user can also put information out there. If power were structured like the internet then users could put energy out on the grid or take it back off at their convenience.
After the landline phone companies deregulated, that after twenty-five years later we’re basically back to one landline phone company. It’s a natural monopoly. It makes no economic sense to have duplicated line systems. It is likely that utilities will also be natural monopolies on the wiring side. Even in Austin, we essentially have a competitive market for the source of power, because we go out for bid on coal, uranium and natural gas. If you have a decentralized smart grid Energy Internet system and it’s just as reliable as from traditional energy sources, then it doesn’t matter from a systems perspective that the power would be coming from solar panels on people’s roofs rather than big power plants in remote locations This won’t just be an engineering and technology challenge. Developing an Energy Internet will also be a major software challenge. It will require the creation of a new business model for how utilities pay for solar panels and excess solar power coming from people’s roofs.
It’s too early to say what kind of business model will emerge from the Pecan Street Project. Duke Energy is paying put solar panels on its customers roofs. SoCal Edison is paying rent to building owners to place solar on their rooftops – that is a model similar to the cell phone tower business model in the mobile phone industry.
Christian Reed of E6 Capital made the point that Austin pays for putting in a solar panel system when it should pay for power put into the grid. How successful is the current solar power rebate project for Austin?
It’s too successful. The current way we do the rebate program will bankrupt the utility if we keep doing that because we’re spending more than we’re getting back. But we are sending our energy dollars outside of Austin in other ways, too. Right now as rate payers, we’re doing a massive export of our dollars out to Wyoming for coal and west Texas and Oklahoma for uranium and natural gas. Not only that but if you can get the technology for locally-sited systems to work as efficiently as carbon-based electricity then you could eliminate not only the several billion dollar cost of a power plant generating the electricity but also the inputs to that plant such as coal. About half of a customer’s electric fuel bill goes to pay for the cost of the fuel such as coal. With solar and wind, the fuel is free, so if we could develop a reliable, affordable delivery system for wind and solar, theoretically half the charge on your electric bill – the charge for the fuel to run the power plants – would be lopped off. It’s a long way off but that’s the vision.
What is the Pecan Street Project’s contribution to this effort?
We have everyone in Austin coming together to tackle this problem including Austin Energy, the City of Austin, the University of Texas, Austin Community College, the Environmental Defense Fund and leading technology companies, including SEMATECH, Cisco, Dell, Freescale, GE, GridPoint, IBM, Intel, Microsoft and Oracle .
As Thomas Friedman writes, creating an Energy Internet will require innovation in utility systems, building codes, land use policies and information technologies. It will require economic development investments. The City of Austin has all of the components needed to create and implement an Energy Internet – utility policymaking, economic development, building code authority and land use authority – integrated into one organization — the City of Austin. so We can, for example, change building codes to match the needs of the energy technology required to make this work. Utilities alone can’t do that. We can do this in one near-seamless body. We are likely the largest city in the nation and the largest public utility run by the same management – the Austin City Manager and the same board –the Austin City Council. That gives Austin an important differentiator in clean energy that can position us to lead economically and to make an important positive contribution to this national priority.
The vision is to have 100,000 homes and businesses in Austin equipped with solar. To make a vision like that work, we will need a reliable, cost-effective Energy Internet and a new business model – likely one in which we’re getting paid for the electricity we produce from our own rooftops. We can do make Austin the home for researching, developing and implementing this vision. Through the Pecan Street Project, we are bringing together the best in the nation to do precisely that.
Has anyone put up any money for it?
The corporate partners are dedicating 2 to 4 employees at 25% of their time for the next 7 8 months. On August 1st, we’re going to have recommendations from all our partners about what technologies and investments we will need to make to implement the vision.
How can angel investors help?
We believe there will be a tremendous amount of innovation and entrepreneurship coming to this effort. As we create in Austin an Energy Internet that makes it possible for entrepreneurs and innovators to introduce new clean technologies into the electric grid, many of which will involve the commercialization of university technologies, angel investors will be key to funding the innovators who will be making this vision a reality. We are talking about major opportunities for new applications in software, energy storage, solar, and home and business “operating systems.” Just like the internet created untold number of jobs, the distributed smart grid Energy Internet being researched, developed and implemented through the Pecan Street Project offers the promise of creating a tremendous number of jobs and startup opportunities. A distributed smart grid Energy Internet also offers the prospect of much lower barriers to entry for entrepreneurial start-ups to compete on the electric grid. We’re bringing the partners together to make this system work. Everyone involved in this project is tremendously excited about the future we can create – both environmentally and economically.
Best regards,
Hall T.
How did the idea for the Pecan Street Project get started?
I was having lunch with BJ Stanbury, Steve Darnell, and Dave Bowen, over at Taverna on March 7. We were talking about Helivolt’s plans. BJ was very passionate about how our focus needs to be on the locally sited solar rather than big, remote solar panel farms out in the hinterlands. That’s how you create the jobs and make it directly relevant to people.
I got together with Isaac Barchas and Joel Serface and started working through it. If you have solar covering offices, homes, stores, then you would need to have thin-film or a building integrated material, and you would need to reinvent the way utilities deliver electricity.
We asked ourselves what success would like 20 years down the road. Imagine we have solar all over the city. What changes would be needed to make that system as reliable and affordable as conventional fossil-based power? Currently, solar is intermittent now and it’s subsidized, so what does it take to get it as reliable as polluting energy. You would have to connect the solar systems coating the buildings to 2-way wiring systems. In turn, the wiring would send the solar energy large, interconnected storage servers. It sounded a lot like the internet. We learned from reading Google.org that Google had already reached a similar conclusion about the future of clean energy—that you have to reinvent the energy system into one with the architecture of the Internet. Thomas Friedman and former Motorola CEO Robert Galvin are also is advocating for the creation of an energy Internet. Friedman writes that this is the most important thing we could do to promote economic opportunity and to address the world’s biggest environmental challenge, climate change.
So we had our first formal meeting on April 16 at MCC.
It was Joel Serface, Isaac Barchas, Rachael Proctor May, Marsha Inger of UT’s Advanced Computing Center, UT engineering professor Michael Webber, Jose Beceiro with the Greater Austin Chamber and Austin Energy General Manager Roger Duncan there. Shortly afterward, Joel moved away and Colin Rowan from I&O Communications and Heath Hignight from UT’s Engineering School joined us. We started hashing through it what we needed to do in Austin to lead in clean energy – both economically and from a utility perspective. It took us three months to develop the consensus plan that became the Pecan Street Project.
Why did you call it the Pecan Street project?
It was initially called the Austin Project but that name it was already taken. Interestingly, the Austin Project was the name for the the job training initiative from Sematech. We didn’t want to use a generic name like “clean energy project.” So we decided to call it Pecan Street Project because Pecan Street used to be Austin’s original main street. We felt it fitting because we’re talking about taking energy away from the hinterlands such as from a coal-fired gas plant and bringing it into Austin’s main street.
When Edison was building out the infrastructure for generating and distributing electricity he had a choice between centralized and decentralized. He chose centralized which many people say is now outdated.
The most direct analogy is the evolution of broadcast television to the internet. If you look at broadcast television you get your news from three networks that they broadcast from big towers (with no way to store it) and you had to be in front of the TV at a certain time. Later VCRs, cable, and other devices came along but the fundamental structure was still there. Then along comes the internet in which information is deposited into servers and the users can pull out that information at your own convenience and the user can also put information out there. If power were structured like the internet then users could put energy out on the grid or take it back off at their convenience.
After the landline phone companies deregulated, that after twenty-five years later we’re basically back to one landline phone company. It’s a natural monopoly. It makes no economic sense to have duplicated line systems. It is likely that utilities will also be natural monopolies on the wiring side. Even in Austin, we essentially have a competitive market for the source of power, because we go out for bid on coal, uranium and natural gas. If you have a decentralized smart grid Energy Internet system and it’s just as reliable as from traditional energy sources, then it doesn’t matter from a systems perspective that the power would be coming from solar panels on people’s roofs rather than big power plants in remote locations This won’t just be an engineering and technology challenge. Developing an Energy Internet will also be a major software challenge. It will require the creation of a new business model for how utilities pay for solar panels and excess solar power coming from people’s roofs.
It’s too early to say what kind of business model will emerge from the Pecan Street Project. Duke Energy is paying put solar panels on its customers roofs. SoCal Edison is paying rent to building owners to place solar on their rooftops – that is a model similar to the cell phone tower business model in the mobile phone industry.
Christian Reed of E6 Capital made the point that Austin pays for putting in a solar panel system when it should pay for power put into the grid. How successful is the current solar power rebate project for Austin?
It’s too successful. The current way we do the rebate program will bankrupt the utility if we keep doing that because we’re spending more than we’re getting back. But we are sending our energy dollars outside of Austin in other ways, too. Right now as rate payers, we’re doing a massive export of our dollars out to Wyoming for coal and west Texas and Oklahoma for uranium and natural gas. Not only that but if you can get the technology for locally-sited systems to work as efficiently as carbon-based electricity then you could eliminate not only the several billion dollar cost of a power plant generating the electricity but also the inputs to that plant such as coal. About half of a customer’s electric fuel bill goes to pay for the cost of the fuel such as coal. With solar and wind, the fuel is free, so if we could develop a reliable, affordable delivery system for wind and solar, theoretically half the charge on your electric bill – the charge for the fuel to run the power plants – would be lopped off. It’s a long way off but that’s the vision.
What is the Pecan Street Project’s contribution to this effort?
We have everyone in Austin coming together to tackle this problem including Austin Energy, the City of Austin, the University of Texas, Austin Community College, the Environmental Defense Fund and leading technology companies, including SEMATECH, Cisco, Dell, Freescale, GE, GridPoint, IBM, Intel, Microsoft and Oracle .
As Thomas Friedman writes, creating an Energy Internet will require innovation in utility systems, building codes, land use policies and information technologies. It will require economic development investments. The City of Austin has all of the components needed to create and implement an Energy Internet – utility policymaking, economic development, building code authority and land use authority – integrated into one organization — the City of Austin. so We can, for example, change building codes to match the needs of the energy technology required to make this work. Utilities alone can’t do that. We can do this in one near-seamless body. We are likely the largest city in the nation and the largest public utility run by the same management – the Austin City Manager and the same board –the Austin City Council. That gives Austin an important differentiator in clean energy that can position us to lead economically and to make an important positive contribution to this national priority.
The vision is to have 100,000 homes and businesses in Austin equipped with solar. To make a vision like that work, we will need a reliable, cost-effective Energy Internet and a new business model – likely one in which we’re getting paid for the electricity we produce from our own rooftops. We can do make Austin the home for researching, developing and implementing this vision. Through the Pecan Street Project, we are bringing together the best in the nation to do precisely that.
Has anyone put up any money for it?
The corporate partners are dedicating 2 to 4 employees at 25% of their time for the next 7 8 months. On August 1st, we’re going to have recommendations from all our partners about what technologies and investments we will need to make to implement the vision.
How can angel investors help?
We believe there will be a tremendous amount of innovation and entrepreneurship coming to this effort. As we create in Austin an Energy Internet that makes it possible for entrepreneurs and innovators to introduce new clean technologies into the electric grid, many of which will involve the commercialization of university technologies, angel investors will be key to funding the innovators who will be making this vision a reality. We are talking about major opportunities for new applications in software, energy storage, solar, and home and business “operating systems.” Just like the internet created untold number of jobs, the distributed smart grid Energy Internet being researched, developed and implemented through the Pecan Street Project offers the promise of creating a tremendous number of jobs and startup opportunities. A distributed smart grid Energy Internet also offers the prospect of much lower barriers to entry for entrepreneurial start-ups to compete on the electric grid. We’re bringing the partners together to make this system work. Everyone involved in this project is tremendously excited about the future we can create – both environmentally and economically.
Best regards,
Hall T.
Tuesday, January 8, 2008
The Frank Peters Show—Dave Berkus the Uber Angel
One of my favorite podcasts is the Frank Peters Show in which Frank Peters describes the startup scene in southern California. A long-time member of the Tech Coast angels, Frank interviews entrepreneurs, venture capitalist and angels about their experiences. I met Frank last year at the Angel Capital Association summit meeting in Chicago in which he gave a round table talk on generating PR. As a podcast it’s one of the best in both content and production values. It is unique in content since there are very few podcasts that focus on startup investing. This shows up in Frank’s download numbers which reach 25,000 monthly. Frank is also a prolific podcaster as he’s been doing this for about two years and has over 100 podcasts already published on his web site.
One of my favorite shows is the one with Dave Berkus, who Frank called the Uber Angel. In this interview Dave talks about sitting on the board of startups and helping the entrepreneur get the business off the ground. Dave summed it up well when he said that all companies go through three crises. The first is the “funding crisis” which is why the company comes to the angels and VCs in the first place – to get funding for their startup. The second is the “operating crisis” in which the company now has the funding but must hire and put the core processes in place to grow the company. Third is the “quality crisis” in which the company produces a product and places it in the market place and undoubtedly encounters problems that must be resolved. In working with startups in Austin, I found that view rather insightful. If you’ve invested in a startup you can look forward to these three phases with expectation rather than surprise when the company comes back struggling with one of these issues.
I recommend you download a Frank Peter podcast when you have the chance. The interviews with angels and entrepreneurs are quite insightful.
Best regards,
Hall T.
One of my favorite shows is the one with Dave Berkus, who Frank called the Uber Angel. In this interview Dave talks about sitting on the board of startups and helping the entrepreneur get the business off the ground. Dave summed it up well when he said that all companies go through three crises. The first is the “funding crisis” which is why the company comes to the angels and VCs in the first place – to get funding for their startup. The second is the “operating crisis” in which the company now has the funding but must hire and put the core processes in place to grow the company. Third is the “quality crisis” in which the company produces a product and places it in the market place and undoubtedly encounters problems that must be resolved. In working with startups in Austin, I found that view rather insightful. If you’ve invested in a startup you can look forward to these three phases with expectation rather than surprise when the company comes back struggling with one of these issues.
I recommend you download a Frank Peter podcast when you have the chance. The interviews with angels and entrepreneurs are quite insightful.
Best regards,
Hall T.
Monday, January 7, 2008
Ravi Rao of AnaLogix Making 3D Game Controllers
I had the chance to meet with Ravi Rao of AnaLogix. Here’s a summary of our discussion on his 3D game controller product.
How did the Founder, Pierre Touma come up with this idea?
The idea for the 3D technology that evolved into the 3D motion-controlled game controller was originally a way to map a 2D mouse into the 3D space. The thought at the time was that 3D and holographic monitors would be a natural evolution of the 2D screens and there would be a need for a pointer/mouse that would allow a user to interact with such 3D monitors, hence the need for a 3D mouse. The initial research and development effort was started in the 1990’s and took a few years due in part to it being a self-funded effort and the fact that the concept was ahead of available applications. After an earlier design based on photoelectric technology, the choice of MEMS technology was based on our aim to have a self-contained, accurate yet easy to manufacture technology as photoelectric technology was deemed to be too expensive for a consumer product. A prototype was finally ready in 2004 in the form of a 3D mouse/pointer for 3D CAD/CAM as well as multimedia applications. A field visit at the Media Lab and other companies involved in the development of 3D applications, as well as a thorough evaluation market maturity and economics, made us focus from
primarily on a 3D controller for video games as a first commercial application with a 3D mouse/pointer in the latest phases of commercial development.
So what does AnaLogix do?
AnaLogix is developing Micro Electro Mechanical (MEMS) – based technology enabling innovative devices for entertainment, simulation and navigation / control applications. The technology is based on a highly advanced integration of sensing devices with state-of-the-art signal processing that optimizes responsiveness and reliability.
In the application that I demonstrated to you, this technology has been embodied in a programmable 3D game controller which could be integrated as a stand-alone controller or integrated into proprietary game console systems such as Sony Playstation, Xbox360, etc.
The key differentiator in this product is that it’s based on MEMS technology so it’s a solid state device so we bridge between a controller and the console with 6 degrees of freedom. So the advantage of our product in this market currently dominated by the WII which is a proprietary platform is that our product can work with any PC-based game. Also our 3D game controller is backward compatible with all the older PC games. All I need to do is plug this into the computer and configure it to work with that game and you’re off and running.
How hard is that to do with say a Sony game?
So for the Playstation game which is proprietary we need to work with them to make our technology compatible with their console environment. We need to work out a deal with Sony. The Xbox 360 is going to soon open up their gaming system to 3rd party developers. The WII ships approx. 1.9M units per month and are currently in a shortage.
What is the Founder, Pierre Touma’s, background?
Pierre A. Touma is an entrepreneur with 18 years experience in
technology development and commercialization. He graduated from Texas
A&M University with degrees in Electrical and Industrial Engineering as
well as an advanced degree in technology management from Ecole Centrale
in France. In prior professional work he has been involved in the
fields of Telemedicine and E-health and industrial management consulting (Andries Tek, Nasa MCTTC, USIS and ARIG).
What is your background?
I have over 20 years of experience in high-tech management in microchip and embedded technology (Schlumberger Smart Cards, USIS, MedTech, Online Services Corp., IndusRAD, Iyoke), flight simulation technology (CAE Inc.) and Optical Communication (Nortel). I have also worked as a VP – Marketing and Strategic Alliance for various start-up companies (Shakti Solutions, Perfica Solutions, and Sulekha). I established partnerships with Best-in-Class solutions.
Pierre and I previously worked at USIS where we were providing a smart card solution for the healthcare industry in 1999. USIS was one of the first companies in the world to be credentialed for Data Security, Privacy and Confidentiality in France and Switzerland. We were a niche technology provider for the UK NHS and we helped SAIC get the contract with DOD Health Affairs. Since we have complied with the European Privacy standards we were easily able to help companies in the U.S. meet the Privacy, Security and HIPAA standards.
Smartcards never caught on in the USA. Why is that?
There was a cost factor difference. A plastic mag-stripe card costs 4 - 10 cents, but the Smartcard cost around a dollar so it was more expensive. At that time the Smartcard readers were very expensive at $50 so the infrastructure wasn’t there. Today, the reader is very low in cost, but still it won’t catch on until the smartcard provides a multiple application solution. Everyone wants their own name on the card for the branding. When I worked with Schlumberger Smart Cards (now known as Gemalto) we actually came up with a multi application smartcard which we were going to launch in San Francisco with one of the major U.S. banks. It had about eight different applications on it, but the group was acquired by another major bank and the project was cancelled so it didn’t go through.
Another challenge we faced, Austin wasn’t a healthcare community at that time in 1999. Today, it’s different. Austin is much more open to an EMR smart card-based healthcare application like that with three major VC companies taking a foothold and planting their roots here in Austin.
What was your goal in building this 3D Game Controller and future gaming products?
AnaLogix first product is a USB 3D motion-based game controller for the PC. This initial product will be upgraded to a wireless game controller in the next generation controllers. This next generation device will have advanced functions allowing it to interactively interface with games. AnaLogix will then launch an advanced game system on its technology, offering an unparalleled experience to gamers.
AnaLogix will also be embodying its open platform technology in different form factors for the different sports games (tennis, baseball, golf, bowling, etc.) offering gamers an even more immersive gaming environment. In a subsequent development, the company will adapt this system into a robust simulation and training platform for hazardous and unmanned systems.
We wanted to build the next generation of open platform game console and products. It would be built on open platform so everyone could use this to get to the next generation. We’ve tested it out and we are in discussion with a major PC manufacturer for distribution and other channels. We feel were competitive against 2D game controllers, because we can also provide the 3D functionality. We’re seeking for six or seven distribution customers such as major game controller and two major PC manufacturers.
What are the Market Opportunity / Market Size?
The video gaming industry has a 9 % annual growth and market size estimated in 2011 will exceed $54B. In 2007 the market size was $38 B and a $1B PC games market in the U.S. alone.
When will you launch it?
In the next couple of months.
Where are you building it?
We are currently outsourcing the manufacturing in Asia and hope to eventually do it in Austin.
How about the competition?
There are 3D devices out there in the market but they are much more expensive (> $1000). Ours will be at a much lower cost (< $100) that will provide the same functionality as the older generation of 3D CAD / CAM devices.
The company will not be really competing with existing players, but AnaLogix will be charting in new territory where gaming companies will eventually have to follow. The competition would be in existing gaming system companies and game peripheral companies such as Saitek, Belkin, LogiTech, Mad Catz, Kensington, etc.
The company’s patent pending technology is an entry barrier to such players. Furthermore, the company’s innovative advanced gaming system will be complementary to the offering of PC-based gaming systems from companies such as Alienware, Vodoo, etc.
What will be the pricing?
Around $80 to $100 per unit.
Do you have a website?
No, not yet.
Best regards,
Hall T.
How did the Founder, Pierre Touma come up with this idea?
The idea for the 3D technology that evolved into the 3D motion-controlled game controller was originally a way to map a 2D mouse into the 3D space. The thought at the time was that 3D and holographic monitors would be a natural evolution of the 2D screens and there would be a need for a pointer/mouse that would allow a user to interact with such 3D monitors, hence the need for a 3D mouse. The initial research and development effort was started in the 1990’s and took a few years due in part to it being a self-funded effort and the fact that the concept was ahead of available applications. After an earlier design based on photoelectric technology, the choice of MEMS technology was based on our aim to have a self-contained, accurate yet easy to manufacture technology as photoelectric technology was deemed to be too expensive for a consumer product. A prototype was finally ready in 2004 in the form of a 3D mouse/pointer for 3D CAD/CAM as well as multimedia applications. A field visit at the Media Lab and other companies involved in the development of 3D applications, as well as a thorough evaluation market maturity and economics, made us focus from
primarily on a 3D controller for video games as a first commercial application with a 3D mouse/pointer in the latest phases of commercial development.
So what does AnaLogix do?
AnaLogix is developing Micro Electro Mechanical (MEMS) – based technology enabling innovative devices for entertainment, simulation and navigation / control applications. The technology is based on a highly advanced integration of sensing devices with state-of-the-art signal processing that optimizes responsiveness and reliability.
In the application that I demonstrated to you, this technology has been embodied in a programmable 3D game controller which could be integrated as a stand-alone controller or integrated into proprietary game console systems such as Sony Playstation, Xbox360, etc.
The key differentiator in this product is that it’s based on MEMS technology so it’s a solid state device so we bridge between a controller and the console with 6 degrees of freedom. So the advantage of our product in this market currently dominated by the WII which is a proprietary platform is that our product can work with any PC-based game. Also our 3D game controller is backward compatible with all the older PC games. All I need to do is plug this into the computer and configure it to work with that game and you’re off and running.
How hard is that to do with say a Sony game?
So for the Playstation game which is proprietary we need to work with them to make our technology compatible with their console environment. We need to work out a deal with Sony. The Xbox 360 is going to soon open up their gaming system to 3rd party developers. The WII ships approx. 1.9M units per month and are currently in a shortage.
What is the Founder, Pierre Touma’s, background?
Pierre A. Touma is an entrepreneur with 18 years experience in
technology development and commercialization. He graduated from Texas
A&M University with degrees in Electrical and Industrial Engineering as
well as an advanced degree in technology management from Ecole Centrale
in France. In prior professional work he has been involved in the
fields of Telemedicine and E-health and industrial management consulting (Andries Tek, Nasa MCTTC, USIS and ARIG).
What is your background?
I have over 20 years of experience in high-tech management in microchip and embedded technology (Schlumberger Smart Cards, USIS, MedTech, Online Services Corp., IndusRAD, Iyoke), flight simulation technology (CAE Inc.) and Optical Communication (Nortel). I have also worked as a VP – Marketing and Strategic Alliance for various start-up companies (Shakti Solutions, Perfica Solutions, and Sulekha). I established partnerships with Best-in-Class solutions.
Pierre and I previously worked at USIS where we were providing a smart card solution for the healthcare industry in 1999. USIS was one of the first companies in the world to be credentialed for Data Security, Privacy and Confidentiality in France and Switzerland. We were a niche technology provider for the UK NHS and we helped SAIC get the contract with DOD Health Affairs. Since we have complied with the European Privacy standards we were easily able to help companies in the U.S. meet the Privacy, Security and HIPAA standards.
Smartcards never caught on in the USA. Why is that?
There was a cost factor difference. A plastic mag-stripe card costs 4 - 10 cents, but the Smartcard cost around a dollar so it was more expensive. At that time the Smartcard readers were very expensive at $50 so the infrastructure wasn’t there. Today, the reader is very low in cost, but still it won’t catch on until the smartcard provides a multiple application solution. Everyone wants their own name on the card for the branding. When I worked with Schlumberger Smart Cards (now known as Gemalto) we actually came up with a multi application smartcard which we were going to launch in San Francisco with one of the major U.S. banks. It had about eight different applications on it, but the group was acquired by another major bank and the project was cancelled so it didn’t go through.
Another challenge we faced, Austin wasn’t a healthcare community at that time in 1999. Today, it’s different. Austin is much more open to an EMR smart card-based healthcare application like that with three major VC companies taking a foothold and planting their roots here in Austin.
What was your goal in building this 3D Game Controller and future gaming products?
AnaLogix first product is a USB 3D motion-based game controller for the PC. This initial product will be upgraded to a wireless game controller in the next generation controllers. This next generation device will have advanced functions allowing it to interactively interface with games. AnaLogix will then launch an advanced game system on its technology, offering an unparalleled experience to gamers.
AnaLogix will also be embodying its open platform technology in different form factors for the different sports games (tennis, baseball, golf, bowling, etc.) offering gamers an even more immersive gaming environment. In a subsequent development, the company will adapt this system into a robust simulation and training platform for hazardous and unmanned systems.
We wanted to build the next generation of open platform game console and products. It would be built on open platform so everyone could use this to get to the next generation. We’ve tested it out and we are in discussion with a major PC manufacturer for distribution and other channels. We feel were competitive against 2D game controllers, because we can also provide the 3D functionality. We’re seeking for six or seven distribution customers such as major game controller and two major PC manufacturers.
What are the Market Opportunity / Market Size?
The video gaming industry has a 9 % annual growth and market size estimated in 2011 will exceed $54B. In 2007 the market size was $38 B and a $1B PC games market in the U.S. alone.
When will you launch it?
In the next couple of months.
Where are you building it?
We are currently outsourcing the manufacturing in Asia and hope to eventually do it in Austin.
How about the competition?
There are 3D devices out there in the market but they are much more expensive (> $1000). Ours will be at a much lower cost (< $100) that will provide the same functionality as the older generation of 3D CAD / CAM devices.
The company will not be really competing with existing players, but AnaLogix will be charting in new territory where gaming companies will eventually have to follow. The competition would be in existing gaming system companies and game peripheral companies such as Saitek, Belkin, LogiTech, Mad Catz, Kensington, etc.
The company’s patent pending technology is an entry barrier to such players. Furthermore, the company’s innovative advanced gaming system will be complementary to the offering of PC-based gaming systems from companies such as Alienware, Vodoo, etc.
What will be the pricing?
Around $80 to $100 per unit.
Do you have a website?
No, not yet.
Best regards,
Hall T.
Thursday, January 3, 2008
Central Texas Angel Network – 2007 A Year in Review
The Central Texas Angel Network is now just over 18 months into operations. As the year comes to a close, we take a look back at 2007. We grew membership from 28 members t0 50 and since inception invested over $3.6M in fourteen deals. The membership represents the diversity of the central Texas economy including angels from the film/video/media industry as well as software, wireless, internet, medical device, biotech, healthcare, and more.
CTAN held four rounds of Screening/Education/Presentation meetings this year. Dealflow remains strong with 30+ deals submitted each quarter to the CTAN website. In addition to our regularly scheduled meetings we held joint funding events with the Acton School of Business, TIE Austin, and the Austin Technology Incubator in the form of the Wireless Funding Forum.
In addition to increasing membership and dealflow, CTAN also saw increased public exposure with articles in the Austin American-Statesman, the Austin Business Journal and a growing relationship with the Business District Magazine. CTAN gave numerous speeches and panels throughout the year promoting angel investing in general and CTAN in particular.
Angel Education was a high priority for the group this year. CTAN held five angel education sessions focusing on topics such as valuation, due diligence, financial due diligence, angel/entrepreneur interaction, and planning for successful M&A exits. In addition, CTAN participated in a Mock Terms Sheet session ran by Andrews/Kurth in which angel investors negotiated a mock terms sheet with entrepreneurs from the Austin Technology Incubator.
CTAN continues to work closely with the Houston Angel Network to syndicate deals. Several other groups throughout the state are in the formation stages with whom we plan to syndicate deals in the coming days.
It was a great year and now looking forward to 2008.
Best regards,
Hall T.
CTAN held four rounds of Screening/Education/Presentation meetings this year. Dealflow remains strong with 30+ deals submitted each quarter to the CTAN website. In addition to our regularly scheduled meetings we held joint funding events with the Acton School of Business, TIE Austin, and the Austin Technology Incubator in the form of the Wireless Funding Forum.
In addition to increasing membership and dealflow, CTAN also saw increased public exposure with articles in the Austin American-Statesman, the Austin Business Journal and a growing relationship with the Business District Magazine. CTAN gave numerous speeches and panels throughout the year promoting angel investing in general and CTAN in particular.
Angel Education was a high priority for the group this year. CTAN held five angel education sessions focusing on topics such as valuation, due diligence, financial due diligence, angel/entrepreneur interaction, and planning for successful M&A exits. In addition, CTAN participated in a Mock Terms Sheet session ran by Andrews/Kurth in which angel investors negotiated a mock terms sheet with entrepreneurs from the Austin Technology Incubator.
CTAN continues to work closely with the Houston Angel Network to syndicate deals. Several other groups throughout the state are in the formation stages with whom we plan to syndicate deals in the coming days.
It was a great year and now looking forward to 2008.
Best regards,
Hall T.
Monday, December 31, 2007
Larry Upton’s Edioma Brings Language Education to the Mobile Phone
Larry Upton originally from Mississippi lived all over the world as his father was a serial entrepreneur and came to Austin about five years ago in which he started work at MessageOne to develop their Latin America infrastructure. He left and about a year ago he launched Edioma which provides language translation education over the mobile phone. Idioma in Spanish means “language”. They transposed the “I” to an “E” and had their company name. They currently offer Spanish but plan to expand into Mandarin and Hindi languages in the future.
A linguist by education he got involved in IT development. He noticed that students today learn by digital media not traditional means. A few years ago he contracted some help to do some stonework at his house. In the process, he noticed that some of the workers didn’t speak English well, and that everyone had a cell phone. Over seventy percent of the workers don’t have access to the internet. From that experience came the concept of providing education over the mobile phone. Follow on market research indicates that over 90% of the respondents in a survey were interested in learning better English, and nearly half were willing to pay (up to $21 per month) in order to do so. They have about 30,000 downloads (in about 5 weeks) from their first partner, called Movida which is a Sprint company selling prepaid phone cards through Walmart.
The language education focuses on practical phrases categorized by various situations: banking, traveling, shopping, etc. It’s a J2ME application which lets the user select a text phrase, and then by clicking on it, it gives the translation in words and also a voice speaking over the phone. If the user can’t pronounce it, they just show the phrase on the phone to who they are talking to.
Over the next six months Larry and his team are proving out the business model. There are 40 million people in America that rely on Spanish as their primary language and 400 million in Latin America so the market is large and growing. He plans to roll out games to provide education as well.
Best regards,
Hall T.
A linguist by education he got involved in IT development. He noticed that students today learn by digital media not traditional means. A few years ago he contracted some help to do some stonework at his house. In the process, he noticed that some of the workers didn’t speak English well, and that everyone had a cell phone. Over seventy percent of the workers don’t have access to the internet. From that experience came the concept of providing education over the mobile phone. Follow on market research indicates that over 90% of the respondents in a survey were interested in learning better English, and nearly half were willing to pay (up to $21 per month) in order to do so. They have about 30,000 downloads (in about 5 weeks) from their first partner, called Movida which is a Sprint company selling prepaid phone cards through Walmart.
The language education focuses on practical phrases categorized by various situations: banking, traveling, shopping, etc. It’s a J2ME application which lets the user select a text phrase, and then by clicking on it, it gives the translation in words and also a voice speaking over the phone. If the user can’t pronounce it, they just show the phrase on the phone to who they are talking to.
Over the next six months Larry and his team are proving out the business model. There are 40 million people in America that rely on Spanish as their primary language and 400 million in Latin America so the market is large and growing. He plans to roll out games to provide education as well.
Best regards,
Hall T.
Wednesday, December 26, 2007
Tom Ortman – Solar Energy Entrepreneurs Network (SEEN)
I met with Tom Ortman of Concurrent Design who recently started the Solar Energy Entrepreneurs Network (SEEN) along with Paul Ballentine of Freescale to foster networking among those working in the solar energy space in Austin and Central Texas.
They recently held their first meeting and received a greater than expected turnout -- over 150 attendees. Tom’s initiative catalyzes the discussion by focusing on solar energy issues and connecting people together to form and progress their business in this area. Tom plans to run meetings regular next year and is currently surveying the group to identify the needs.
There’s ample room for innovation in the area of solar energy. I recently tried to have a solar panel array installed on my residence. A 3.2Kw system goes for $22K but a rebate from the city cuts that price in half. And there’s also a $2K federal income tax credit on top of that. Unfortunately, my house had too much tree shading to make it worthwhile. In the end, I went with two solar powered attic fans ($700 each) that cut my electric bill by almost $100/month in the summer. I’m quite happy about that. In the area of solar energy p anels, I can see a number of areas in packaging, installation, and maintenance that could benefit from innovation.
Best regards,
Hall T.
They recently held their first meeting and received a greater than expected turnout -- over 150 attendees. Tom’s initiative catalyzes the discussion by focusing on solar energy issues and connecting people together to form and progress their business in this area. Tom plans to run meetings regular next year and is currently surveying the group to identify the needs.
There’s ample room for innovation in the area of solar energy. I recently tried to have a solar panel array installed on my residence. A 3.2Kw system goes for $22K but a rebate from the city cuts that price in half. And there’s also a $2K federal income tax credit on top of that. Unfortunately, my house had too much tree shading to make it worthwhile. In the end, I went with two solar powered attic fans ($700 each) that cut my electric bill by almost $100/month in the summer. I’m quite happy about that. In the area of solar energy p anels, I can see a number of areas in packaging, installation, and maintenance that could benefit from innovation.
Best regards,
Hall T.
Thursday, December 20, 2007
Jared Slosberg –Experienced Entrepreneur Starting Angel Investing
I had the opportunity of talking with a new CTAN member today, Jared Slosberg, the President of ProfitFuel which sells online advertising primarily to small businesses. They’ve been doing this for over five years. They started by selling advertising on Yahoo! and later expanded to sell advertisements outside of Yahoo. They built a site called Clicksmart, which focuses on driving ROI for their small business advertisers.
Jared previously helped run HomeCity an online real estate company in which customer acquisition is done over the web. The company targets people moving to town and then provides all standard real-estate services. They have 50 realtors and recently expanded to Dallas. It was originally designed to serve corporate relocations but now includes private relocations.
Jared is not new to angel investing. He invested in Autowraptec a company that makes a machine that automatically wraps silverware for restaurants. A big restaurant in a casino will have full time staff for wrapping napkins, but even small restaurants will typically make their waiters and waitresses come in before their shift to wrap. The company is currently ramping up manufacturing to serve larger customers.
Angels bring startup experience to the investment process. An angel investor puts 5 to 10 hours a week into angel investing – finding deals, screening deals, presenting them, performing due diligence and so on. We look forward to Jared’s contribution to angel investing in Austin.
Best regards,
Hall T.
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