Alexia Erlichman of Music Gorilla talks about starting Music Gorilla to highlight unsigned musicians, how she leverages South by Southwest, and how she came to Austin.
What is Music Gorilla?
Music Gorilla is an online service company which provides unsigned musicians access to film, TV, video games and songwriting opportunities and to play at major label showcase events among other things.
How did you come up with the idea for Music Gorilla?
Lawrence Erlichman came up with the idea from interaction with musicians in Austin. He’s an entrepreneur in general. He saw musicians needed access for their music to get out there. You don’t necessarily need to make a record with a major label to become known and, right now, even if you tried, you’re not likely to get one since they’re not signing a lot of new artists. Musicians are using MySpace and Facebook to get their music to fans and sites like ours to find success.
How do you make money?
Mostly Membership fees with a few other revenue streams. Placements happen but can be infrequent at times so it’s hard to live off a percentage of placements.
How about advertising?
No. The site is industry focused and is not highly trafficked by the general public.
How did it start?
We built it up from nothing. We self-financed it ourselves. It’s built up a reputation in our industry. We even have a partnership with Starbucks. They had those Hear Music kiosks in some of their stores a few years ago. They missed the technology because the kiosks burned CDs but you couldn’t plug your MP3 player or iPod into it to download music. They selected artists from Music Gorilla to highlight in their kiosks.
Are they going back after it?
No. They developed a partnership with iTunes to place their music there.
How many users do you have right now?
We have about 1000 Artist Members and 300 industry members use the site and 10,000 fans. S0me artists register as fans first to check it out so some of those fans are prospective artists.
There are quite a few music sites out there. I just read about one in Scotland where the registered members decide which artists get to play in the festival. How are you different?
There are a ton of music sites out there. On most of them, you can just put a profile on their site with your music. They are not at all geared toward the industry. We are one of the few that markets to the industry. We also showcase the artists in showcases such as those that take place during South by Southwest. We also do a lot of film, tv and songwriting submissions where we put together a cd and send it to the music supervisor or producer for the project. They don’t necessarily want to download it from the internet.
When did you launch the site?
In February, 2003.
Have you ever done any cross promotion with music festivals like the ACL Music festival?
ACL is less our target market because they showcase established artists. South by Southwest is a more interesting festival for us. We used to have a booth at South by Southwest but the longer it goes on the better venue it becomes for artists who are already signed. Record labels are breaking their bands to the public and other industry at South by Southwest. We now do our own showcases during South by Southwest by getting our own venue. They wanted to select some of our artists and place them in venues all over Austin. We decided to do our own showcase because they charge a significant amount for an afternoon party. We couldn’t afford that so we do our own events and have done so for the past four years. We bring in an A&R rep to give feedback to the artists we showcase so it’s quite helpful to the musicians.
How much are you trying to raise?
$150K to $200K.
Are you trying to expand?
There’s no need to expand geographically because everything is done online and we have members all over the world.
So what would you use funding for?
Marketing and advertising to get the word out on the service. We want to get articles into the magazines such as Billboard. We have found that when people find out about our services they sign up because the membership fees are reasonable especially for the amount of opportunity that we provide.
How did you get to Austin?
Randomly. I used to work for Robert De Niro as a production assistant. I was driving across the country after college when there was a film/TV strike in New York. Austin was one of the places we visited. We returned to New York three days after September 11th, 2001, and the city was shut down. I later decided to return to Austin because it’s such a laid back city and they have a great film community which is what I was doing at the time.
Best regards,
Hall T.
***
Monday, May 19, 2008
Friday, May 16, 2008
Global Moot Corp 2008—Judging the Best of the Best
I judged the Global Moot Corp competition again this year. Run by Rob Adams it is the Superbowl of business plan competitions since the entrants have won a competition elsewhere. This year 38 teams competed with just under half coming from international. The competing teams’ plans ranged from social software to medical devices to clean tech and more. The winners this year were:
Third Runner-up: OvaGuard from Thammasat University, Thailand, cultivates market dominating Phalaenopsis, growing highly demanded orchids.
Second Runner-up: qcue from the University of Texas at Austin provides a white label software application that transforms existing box offices into efficient markets.
First Runner-up: Klymit from Brigham Young University uses noble gas enabled fabric to control the temperature of the clothing.
2008 Global Moot Corp Champion: NeuroBank from Carnegie Mellon University. The company developed a breakthrough proprietary technology for minimally invasive extraction, isolation, expansion and cryopreservation of adult neural stem cells.
The full list of participants can be found here. It’s interesting to see how the local culture impacts the business focus of the presenting teams. The Thailand team always focuses on family-style businesses. Last year the Thai competitor focused on prawns while this year they focused on orchids. Universities with strong medical centers focus on therapeutics and medical devices. The Brigham Young team this year focused on climate-controlled clothing. The quality of the plans continues to climb and the number of teams actually starting the proposed business continues to increase as well.
Best regards,
Hall T.
***
Third Runner-up: OvaGuard from Thammasat University, Thailand, cultivates market dominating Phalaenopsis, growing highly demanded orchids.
Second Runner-up: qcue from the University of Texas at Austin provides a white label software application that transforms existing box offices into efficient markets.
First Runner-up: Klymit from Brigham Young University uses noble gas enabled fabric to control the temperature of the clothing.
2008 Global Moot Corp Champion: NeuroBank from Carnegie Mellon University. The company developed a breakthrough proprietary technology for minimally invasive extraction, isolation, expansion and cryopreservation of adult neural stem cells.
The full list of participants can be found here. It’s interesting to see how the local culture impacts the business focus of the presenting teams. The Thailand team always focuses on family-style businesses. Last year the Thai competitor focused on prawns while this year they focused on orchids. Universities with strong medical centers focus on therapeutics and medical devices. The Brigham Young team this year focused on climate-controlled clothing. The quality of the plans continues to climb and the number of teams actually starting the proposed business continues to increase as well.
Best regards,
Hall T.
***
Monday, May 12, 2008
I2P Product Competition – Developing Technologies for the Market
I had the opportunity to judge the UT Idea2Product Competition in which engineering students take a technology and productize it for commercial purposes. The goal is not to create a business with a management team per se but rather to turn technology into products that solve a problem in the market. Steve Nichols of the University of Texas has been running the competition for 8 years now. As he indicated the top three goals of the competition is education, education, and education. Steve travels extensively to bring more universities into the program with a particular emphasis on international universities. The global version of the competition includes submissions from over 40 universities.
This year the competitors include:
ProTrix – uses protein templated nanocrystals in the floating gate layer of a semiconductor device to double the capacity of flash memory chips.
Avatarus – uses a technique to encode a large number of 3D data points to represent a 3D object. They plan to use it for scanning the human face into a digital avatar for video games.
Turn2Live – uses semantic web techniques to characterize live music events and deliver the information through the web and mobile applications to users.
Bevo-MEA – uses lower cost materials to replace the platinum used in the membrane electrode assembly of fuel cells to reduce the cost of a fuel cell system.
Bevo-MEA edged out ProTrix to win the competition. This is a great event for generating exposure to the many technologies within the University.
Best regards,
Hall T.
This year the competitors include:
ProTrix – uses protein templated nanocrystals in the floating gate layer of a semiconductor device to double the capacity of flash memory chips.
Avatarus – uses a technique to encode a large number of 3D data points to represent a 3D object. They plan to use it for scanning the human face into a digital avatar for video games.
Turn2Live – uses semantic web techniques to characterize live music events and deliver the information through the web and mobile applications to users.
Bevo-MEA – uses lower cost materials to replace the platinum used in the membrane electrode assembly of fuel cells to reduce the cost of a fuel cell system.
Bevo-MEA edged out ProTrix to win the competition. This is a great event for generating exposure to the many technologies within the University.
Best regards,
Hall T.
Wednesday, May 7, 2008
DBLive Team Talks about Solving the Landscape Irrigation Water Waste Problem in the U.S.
Chris Eckhoff and Tom Fairey of DBLive talk about saving a huge amount of water in the U.S. with their predictive landscape irrigation control technology, and give their fast pitch.
What is your offering?
DBLive has a technology that enables its Irrigation Decision Device (IDD) which retrofits existing irrigation controllers and reduces water use by predicting future soil moisture based on 31 current and forecasted environmental variables such as precipitation, soil type, wind conditions, cloud cover etc.
What do you have that is unique?
Automated, global, point weather forecast. It enables weather-aware devices. For years weather forecasts have been given to people, but now we have them going directly to devices so the devices can make decisions about the future without human intervention.
There are five levels of technology in our software engine, each building on the one before. Together they represent a significant barrier to replication by our competitors.
1-Automatic, global, weather-forecast engine
2-Point forecasts for the actual latitude and longitude
3-Scaled up to more than 70 on-demand five-day forecasts per second
4-Ability to overlay weather forecast layers on any electronic map
5-Point-forecastfor soil moisture
You can see a demo of the Point Forecast technology at www.infoweather.com. It presents a Google map that lets you find your target point anywhere in the world. Move or zoom the map and left click on any point to receive a five-day weather forecast for that point.
What is your target market?
Our primary target market is the 25 million home sprinkler systems in the top 100 metropolitan areas of the U.S., and it is addressed through water distributors like major city utilities and municipal utility districts.
What is the hardware unit?
It’s called the Irrigation Decision Device (IDD) and can be installed on existing irrigation system controllers in ten minutes. The unit makes a decision each day whether to allow or suppress the irrigation system’s watering schedule using a small amount of proprietary data broadcast via satellite or FM wireless from our data center.
Are you in pilot tests?
For more than two years. We completed tests at Southwestern University where we did a 4.5 month side by side comparison with an industry standard “ET Smart” irrigation system and our solution saved over 43% against that system. We did pilot tests at Sun City in Georgetown and we saved 83% of their usage, a number higher than usual because of an unusual amount of rain last spring, and the fact that they don’t adjust their water usage based on current or forecasted weather.
What about the city of Austin?
The city of Austin has adopted 20 strategies to build, over ten years, to a 10% peak day water savings at a cost of $1.14 per peak-day gallon. They are uncertain about the ultimate success of some of these strategies. If Austin mounted a rebate strategy on DBLive’s IDD, it would save the same 10% at a cost of only $0.44/peak-day gallon. That’s a huge cost savings. Austin is still giving away toilets. The IDD would save 4 -5x what a toilet exchange saves. The staff of Austin’s water utility worked hard to identify and obtain council approval for their 20 strategies, and they are not anxious to revisit the issue. The elected officials are concerned that we need to save more water and are beginning to understand that an IDD rebate program could produce the desired savings at one third the cost of the 20 adopted strategies.
How many units have you sold so far?
In addition to those purchased by Southwestern University, Harris County Water Control and Improvement District #132 has bought 50 units to start installing in the 264 residential sprinkler systems in their district. We have only received our first production units from our out-sourced manufacturer this month. Eleven more MUDs have added the IDD to their list of conservation devices approved for existing rebate programs.
What’s the biggest issue?
The sales cycle to large cities is slow. They can take up to 2 years to make a purchase decisions. There are more than 400 Municipal Utility Districts in Harris and Montgomery Counties alone (Houston area). They have much shorter sales cycles, and they are our first adopters.
How much does each unit sell for?
$125 per unit in quantity. The IDD’s installed cost is comparable to that of rain accumulators, which are required by law in 15 states, and for which there are established rebate programs. The professionally installed cost of an IDD is comparable to that of a rain accumulator.
Can we hear your FastPitch?
DBLive has the ingredients to become a $300M company:
1) A team of achievers: diverse, experienced, and determined to make it happen,
2) A breakthrough technology with significant barriers to competitors. A complex technology, but such a simple first product that the man on the street understands it in seconds,
3) A market exceeding $3 Billion,
4) A plan to make it happen,
5) An exciting, green product. The population is growing like bacteria but the water supply is static. The best way to make supplies last is effective water conservation.
In two years of testing, this device has saved no less than 40% of water used by expensive competitor systems.
It retrofits existing sprinkler controllers, forecasts soil moisture, and suppresses watering if there are wet conditions ahead.
Its $125 price fits city rebate programs, enables wide spread adoption.
It’s already manufactured and sold.
The public is ready for this green product – and this green company.
Come and join the fun
Best regards,
Hall T.
What is your offering?
DBLive has a technology that enables its Irrigation Decision Device (IDD) which retrofits existing irrigation controllers and reduces water use by predicting future soil moisture based on 31 current and forecasted environmental variables such as precipitation, soil type, wind conditions, cloud cover etc.
What do you have that is unique?
Automated, global, point weather forecast. It enables weather-aware devices. For years weather forecasts have been given to people, but now we have them going directly to devices so the devices can make decisions about the future without human intervention.
There are five levels of technology in our software engine, each building on the one before. Together they represent a significant barrier to replication by our competitors.
1-Automatic, global, weather-forecast engine
2-Point forecasts for the actual latitude and longitude
3-Scaled up to more than 70 on-demand five-day forecasts per second
4-Ability to overlay weather forecast layers on any electronic map
5-Point-forecastfor soil moisture
You can see a demo of the Point Forecast technology at www.infoweather.com. It presents a Google map that lets you find your target point anywhere in the world. Move or zoom the map and left click on any point to receive a five-day weather forecast for that point.
What is your target market?
Our primary target market is the 25 million home sprinkler systems in the top 100 metropolitan areas of the U.S., and it is addressed through water distributors like major city utilities and municipal utility districts.
What is the hardware unit?
It’s called the Irrigation Decision Device (IDD) and can be installed on existing irrigation system controllers in ten minutes. The unit makes a decision each day whether to allow or suppress the irrigation system’s watering schedule using a small amount of proprietary data broadcast via satellite or FM wireless from our data center.
Are you in pilot tests?
For more than two years. We completed tests at Southwestern University where we did a 4.5 month side by side comparison with an industry standard “ET Smart” irrigation system and our solution saved over 43% against that system. We did pilot tests at Sun City in Georgetown and we saved 83% of their usage, a number higher than usual because of an unusual amount of rain last spring, and the fact that they don’t adjust their water usage based on current or forecasted weather.
What about the city of Austin?
The city of Austin has adopted 20 strategies to build, over ten years, to a 10% peak day water savings at a cost of $1.14 per peak-day gallon. They are uncertain about the ultimate success of some of these strategies. If Austin mounted a rebate strategy on DBLive’s IDD, it would save the same 10% at a cost of only $0.44/peak-day gallon. That’s a huge cost savings. Austin is still giving away toilets. The IDD would save 4 -5x what a toilet exchange saves. The staff of Austin’s water utility worked hard to identify and obtain council approval for their 20 strategies, and they are not anxious to revisit the issue. The elected officials are concerned that we need to save more water and are beginning to understand that an IDD rebate program could produce the desired savings at one third the cost of the 20 adopted strategies.
How many units have you sold so far?
In addition to those purchased by Southwestern University, Harris County Water Control and Improvement District #132 has bought 50 units to start installing in the 264 residential sprinkler systems in their district. We have only received our first production units from our out-sourced manufacturer this month. Eleven more MUDs have added the IDD to their list of conservation devices approved for existing rebate programs.
What’s the biggest issue?
The sales cycle to large cities is slow. They can take up to 2 years to make a purchase decisions. There are more than 400 Municipal Utility Districts in Harris and Montgomery Counties alone (Houston area). They have much shorter sales cycles, and they are our first adopters.
How much does each unit sell for?
$125 per unit in quantity. The IDD’s installed cost is comparable to that of rain accumulators, which are required by law in 15 states, and for which there are established rebate programs. The professionally installed cost of an IDD is comparable to that of a rain accumulator.
Can we hear your FastPitch?
DBLive has the ingredients to become a $300M company:
1) A team of achievers: diverse, experienced, and determined to make it happen,
2) A breakthrough technology with significant barriers to competitors. A complex technology, but such a simple first product that the man on the street understands it in seconds,
3) A market exceeding $3 Billion,
4) A plan to make it happen,
5) An exciting, green product. The population is growing like bacteria but the water supply is static. The best way to make supplies last is effective water conservation.
In two years of testing, this device has saved no less than 40% of water used by expensive competitor systems.
It retrofits existing sprinkler controllers, forecasts soil moisture, and suppresses watering if there are wet conditions ahead.
Its $125 price fits city rebate programs, enables wide spread adoption.
It’s already manufactured and sold.
The public is ready for this green product – and this green company.
Come and join the fun
Best regards,
Hall T.
Monday, May 5, 2008
Steve Wagh of Lakeside Mediations talks about the Mediation Process
Steve Wagh of Lakeside Mediation talks about the mediation process, how it works, and what drives some to reach a resolution.
Why did you get into mediation?
One of the worst things that can happen to a businessman is to get involved with a lawsuit. Whether it is over IP, partnerships breaking up, an unhappy employee, or changing a CEO, I’ve been through all of this. The first thing you do is go to your business lawyer. He or she tries to help you out by sending some tough demand letter. If that doesn’t work, you go get the “hired guns”; the litigators. Then it will cost $20K to $30K or even $5oK for each round and a year or more of turmoil. A pending lawsuit definitely impacts your business negatively. Suppliers and partners don’t want to get involved with a company when it’s going through litigation because they don’t want to get dragged into it. Win or lose, it can kill your company.
Most litigators admit that even if everything seems to be in their favor, they still run the risk of losing a jury decision. If you lose in court, it’s a disaster. If you win big, it will probably get appealed and stay locked in the courts for another year or so. If you win a monetary judgment, you’ll get only about 50% of the stated amount – the rest goes to the lawyers and court costs.
So I asked my trial lawyer friends how often they actually go through a trial? They said maybe only once a year because 95% to 98% of all their cases settle before their trials begin. Judges are busy and oftentimes demand you first try mediation. From a lawyer’s point of view, mediation doesn’t compete with their business because they’d rather settle earlier than later. A settlement is considered a “win” for their client and them.
So how does one get started in mediation?
There’s a forty hour course one takes to get certified.
How does mediation work?
As the mediator, I’m not the judge or jury or arbitrator. I don’t decide who’s right or wrong. My job is to be totally neutral; working hard with both parties to see if there is any way I can help them come to a fair settlement by the end of the day. Instead of a judge or jury making the win or lose decision for them, this is their chance to work out a reasonable deal between themselves.
I know the fear that one has when faced with the possibility of litigation. Sometimes that helps drive people to work harder on the mediation because they know if this doesn’t work they will have to go through depositions, interrogatories, and expert witness testimonies, and the cost is going to be huge in both money and time.
If we don’t reach a settlement by the end of the day there’s no harm, no foul. Nothing said or done at this mediation can be used later in court. I keep strict confidentiality. I can’t tell the other what each one tells me in confidence, unless they say it’s okay. The fact that you almost reach a settlement or were willing to compromise on some issue can’t be used in court, either. Either party can change their mind at anytime.
How does it work from a practical point of view?
I start with both parties in the same room unless they are so bitter that we have to start by meeting individually. We discuss the ground rules for the mediation and make sure we all know the issues and the stakes. After that, I may or may not break them into smaller groups in different rooms so that they feel comfortable laying all their cards on the table for me. Sometimes they don’t want to talk or don’t know what to talk about so we start off talking about their background or the business. After awhile they start to vent about the issues that are on the table and from there we can move forward. So often they don’t know how the other feels because they haven’t been talking to each other. I get to hear both sides of the story and might be the only one who really sees the whole picture.
Even if they don’t come to a settlement during the mediation, the process usually highlights the history of the conflict and narrows it down to a few key issues that can be addressed in the following week or so.
How are you different from other mediators?
There are many attorney-mediators in Austin because they take mediation class as part of their CLE-continuing legal education requirement. Most mediations are for divorces, car accidents, personal injury or medical malpractice. That requires some level of experience with the legal process. I only handle business disputes where I bring 40 years of understanding and experience. If the parties talk about software development and how one is taking code from the other, I understand what they are talking about. If it’s a CEO or employee issue, or a partnership problem, or a contract issue – I’ve been there. I want to help the same people I’ve worked with for so many years. No one should have to go through unnecessary litigation.
How often is mediation successful?
About 75 to 80% of the mediations resolve.
How much does it cost?
Mediators have different rates. I charge $2K for most full-day mediations, with each party paying half. There’s no other compensation from the process.
What do you find rewarding?
When I take on a case, sometimes it starts out with both parties so very far apart and angry, it seems like they’ll never come together. But by the end of the day they usually do. And then it’s over for them. No more bitterness. No more expense. No more effort. And no more stress. It’s a huge relief. That’s what makes it worth the while.
Best regards,
Hall T.
Why did you get into mediation?
One of the worst things that can happen to a businessman is to get involved with a lawsuit. Whether it is over IP, partnerships breaking up, an unhappy employee, or changing a CEO, I’ve been through all of this. The first thing you do is go to your business lawyer. He or she tries to help you out by sending some tough demand letter. If that doesn’t work, you go get the “hired guns”; the litigators. Then it will cost $20K to $30K or even $5oK for each round and a year or more of turmoil. A pending lawsuit definitely impacts your business negatively. Suppliers and partners don’t want to get involved with a company when it’s going through litigation because they don’t want to get dragged into it. Win or lose, it can kill your company.
Most litigators admit that even if everything seems to be in their favor, they still run the risk of losing a jury decision. If you lose in court, it’s a disaster. If you win big, it will probably get appealed and stay locked in the courts for another year or so. If you win a monetary judgment, you’ll get only about 50% of the stated amount – the rest goes to the lawyers and court costs.
So I asked my trial lawyer friends how often they actually go through a trial? They said maybe only once a year because 95% to 98% of all their cases settle before their trials begin. Judges are busy and oftentimes demand you first try mediation. From a lawyer’s point of view, mediation doesn’t compete with their business because they’d rather settle earlier than later. A settlement is considered a “win” for their client and them.
So how does one get started in mediation?
There’s a forty hour course one takes to get certified.
How does mediation work?
As the mediator, I’m not the judge or jury or arbitrator. I don’t decide who’s right or wrong. My job is to be totally neutral; working hard with both parties to see if there is any way I can help them come to a fair settlement by the end of the day. Instead of a judge or jury making the win or lose decision for them, this is their chance to work out a reasonable deal between themselves.
I know the fear that one has when faced with the possibility of litigation. Sometimes that helps drive people to work harder on the mediation because they know if this doesn’t work they will have to go through depositions, interrogatories, and expert witness testimonies, and the cost is going to be huge in both money and time.
If we don’t reach a settlement by the end of the day there’s no harm, no foul. Nothing said or done at this mediation can be used later in court. I keep strict confidentiality. I can’t tell the other what each one tells me in confidence, unless they say it’s okay. The fact that you almost reach a settlement or were willing to compromise on some issue can’t be used in court, either. Either party can change their mind at anytime.
How does it work from a practical point of view?
I start with both parties in the same room unless they are so bitter that we have to start by meeting individually. We discuss the ground rules for the mediation and make sure we all know the issues and the stakes. After that, I may or may not break them into smaller groups in different rooms so that they feel comfortable laying all their cards on the table for me. Sometimes they don’t want to talk or don’t know what to talk about so we start off talking about their background or the business. After awhile they start to vent about the issues that are on the table and from there we can move forward. So often they don’t know how the other feels because they haven’t been talking to each other. I get to hear both sides of the story and might be the only one who really sees the whole picture.
Even if they don’t come to a settlement during the mediation, the process usually highlights the history of the conflict and narrows it down to a few key issues that can be addressed in the following week or so.
How are you different from other mediators?
There are many attorney-mediators in Austin because they take mediation class as part of their CLE-continuing legal education requirement. Most mediations are for divorces, car accidents, personal injury or medical malpractice. That requires some level of experience with the legal process. I only handle business disputes where I bring 40 years of understanding and experience. If the parties talk about software development and how one is taking code from the other, I understand what they are talking about. If it’s a CEO or employee issue, or a partnership problem, or a contract issue – I’ve been there. I want to help the same people I’ve worked with for so many years. No one should have to go through unnecessary litigation.
How often is mediation successful?
About 75 to 80% of the mediations resolve.
How much does it cost?
Mediators have different rates. I charge $2K for most full-day mediations, with each party paying half. There’s no other compensation from the process.
What do you find rewarding?
When I take on a case, sometimes it starts out with both parties so very far apart and angry, it seems like they’ll never come together. But by the end of the day they usually do. And then it’s over for them. No more bitterness. No more expense. No more effort. And no more stress. It’s a huge relief. That’s what makes it worth the while.
Best regards,
Hall T.
Monday, April 28, 2008
Amy George, Melissa Nathan and Paige Davis of Blue Avocado talk about reducing a shopper’s carbon footprint at the grocery store
Amy George, Melissa Nathan and Paige Davis of Blue Avocado sit down to talk about reducing a shopper’s carbon footprint at the grocery store, the size of the grocery bag market, and gives a FastPitch for the company.
What is the Blue Avocado Company all about?
We’re a lifestyle products company. When you look around the world people are starting to ban plastic bags. Thirteen cities in the US already have proposals on putting a ban in place. Customers are going green and in the area of bags there are no alternative bags that have a comprehensive system and are committed to reducing their customer’s environmental impact through education, packaging, materials, and their supply chain.
How big is the bag market?
It’s a $1.9B industry. With the urgency global warming presents, customers know they have to have to change their lifestyle to make a difference. We want to make choices easy, functional, and fashionable.
What does the system include?
It is a multi-component system that addresses the need for insulation for hot/cold items, ventilation for produce and durability for bulk items. We also have an “avocado pod” that clips on your keychain that has a self-collapsing single bag for last minute shopping needs. Nobody has taken the bag to the next level here in the USA. There are examples in Australia and Germany that demonstrates there is a market for it and of course that is a great deal of awareness for the need.
Why do you call it the “blue” avocado?
Blue stands for blue sky which represents our commitment to reduce carbon emissions in the air – by eliminating plastic bags, using recycled materials in our products, and implementing a smarter supply chain. The avocado represents that we all have some ‘green inside’ – even if we don’t look like the stereotypical environmentalist.
What is your channel to distribute the product?
In our early research 70% of shoppers indicated they would buy it at the store but we see an online channel is also important. Retailers are looking for ways to manage the proposed bag bans. Major retailers in Austin such as Wal-Mart are coming out with plans to manage this. In addition to a high-end line, BlueAvocado is offering retailers a private label opportunity.
What is the competition like?
There are definitely bags out there but what no one is addressing is the need for the next level of a bag which has a system with a purpose. We’re providing a bag for the entire shopping experience. It’s compact. It’s got its own carbon footprint. It’s all there.
How much can each bag hold?
Twenty pounds per bag.
What are the bags made of and when will it be available?
Recycled polyester. The majority of the materials are recycled. We’ll start our beta program in July.
What’s the status of the product?
We’ve developed three industrial prototypes, are producing our first samples for pre-sales activities, and are in negotiation for our first order.
Can you give us your Fastpitch?
We are producing more carbon dioxide than the earth’s environment can handle. Almost half of the carbon dioxide you put in the atmosphere today will still be there when your grandchildren are born. So what can we do? At BlueAvocado™ we are passionate about creating lifestyle products for millions of consumers - making it easy to “do good and get it done”™. Our first product is a grocery bag system to help shoppers reduce their carbon footprint by offering an alternative to today’s petroleum-based disposable bag. It reduces the hassle of shopping and reduces our carbon footprint by introducing an eight piece, durable system. Some countries around the world are introducing plastic bag bans including China. BlueAvocado is an Austin-based company seeking $1M in angel funding to pursue the $1.9B market. By 2010 we want to make the earth 5 billion pounds lighter. BlueAvocado invites you to join us on this journey.
Best regards,
Hall T.
What is the Blue Avocado Company all about?
We’re a lifestyle products company. When you look around the world people are starting to ban plastic bags. Thirteen cities in the US already have proposals on putting a ban in place. Customers are going green and in the area of bags there are no alternative bags that have a comprehensive system and are committed to reducing their customer’s environmental impact through education, packaging, materials, and their supply chain.
How big is the bag market?
It’s a $1.9B industry. With the urgency global warming presents, customers know they have to have to change their lifestyle to make a difference. We want to make choices easy, functional, and fashionable.
What does the system include?
It is a multi-component system that addresses the need for insulation for hot/cold items, ventilation for produce and durability for bulk items. We also have an “avocado pod” that clips on your keychain that has a self-collapsing single bag for last minute shopping needs. Nobody has taken the bag to the next level here in the USA. There are examples in Australia and Germany that demonstrates there is a market for it and of course that is a great deal of awareness for the need.
Why do you call it the “blue” avocado?
Blue stands for blue sky which represents our commitment to reduce carbon emissions in the air – by eliminating plastic bags, using recycled materials in our products, and implementing a smarter supply chain. The avocado represents that we all have some ‘green inside’ – even if we don’t look like the stereotypical environmentalist.
What is your channel to distribute the product?
In our early research 70% of shoppers indicated they would buy it at the store but we see an online channel is also important. Retailers are looking for ways to manage the proposed bag bans. Major retailers in Austin such as Wal-Mart are coming out with plans to manage this. In addition to a high-end line, BlueAvocado is offering retailers a private label opportunity.
What is the competition like?
There are definitely bags out there but what no one is addressing is the need for the next level of a bag which has a system with a purpose. We’re providing a bag for the entire shopping experience. It’s compact. It’s got its own carbon footprint. It’s all there.
How much can each bag hold?
Twenty pounds per bag.
What are the bags made of and when will it be available?
Recycled polyester. The majority of the materials are recycled. We’ll start our beta program in July.
What’s the status of the product?
We’ve developed three industrial prototypes, are producing our first samples for pre-sales activities, and are in negotiation for our first order.
Can you give us your Fastpitch?
We are producing more carbon dioxide than the earth’s environment can handle. Almost half of the carbon dioxide you put in the atmosphere today will still be there when your grandchildren are born. So what can we do? At BlueAvocado™ we are passionate about creating lifestyle products for millions of consumers - making it easy to “do good and get it done”™. Our first product is a grocery bag system to help shoppers reduce their carbon footprint by offering an alternative to today’s petroleum-based disposable bag. It reduces the hassle of shopping and reduces our carbon footprint by introducing an eight piece, durable system. Some countries around the world are introducing plastic bag bans including China. BlueAvocado is an Austin-based company seeking $1M in angel funding to pursue the $1.9B market. By 2010 we want to make the earth 5 billion pounds lighter. BlueAvocado invites you to join us on this journey.
Best regards,
Hall T.
Wednesday, April 23, 2008
Ed Dato of Data Recognition talks about creative ways of Fund Raising
Ed Dato of Data Recognition talks about creative ways of raising funding for hardware products, why he never entered entrepreneur contests, and why audited financial statements from the beginning help close the sale of his company.
Most people think there are only two ways to raise funding: a bank or an angel…OTM (other people’s money). But there are at least 2 or 3 other ways to do it. Your back pocket is one of them. (That is another blog to explain the very simple formula that allows you to spend no time raising money and all of your time selling).Your manufacturer or subcontractor is another. They could be your partner. It’s in their interest to work with you.
Do you know any manufacturers that look for that sort of deal?
Absolutely. There are all kinds of deals they look for. I’ve done it before. It was a small deal but they had to buy the tooling. I made an arrangement to give them a SPIF on every unit they made. I gave them sole source as long as they could make the volumes. It just depends on how creative they are. They are in the manufacturing business. They need one thing desperately, customers. If they get a SPIF on top of it, that’s great. The only way they lose is if they screw it up. It’s better than giving your equity away. It also incentivizes the manufacturer to help get the cost down by relaying out the boards, and redesigning the product so it goes through the manufacturing process faster and cheaper. Now you’ve got someone who knows the manufacturing side of it to help you improve the product. Then when a competitor comes in, and don’t tell me there’s not going to be a competitor, you’re prepared to drop the price if you need to because you have taken the cost out of it. Ironically, I stayed with them when our volumes justified outsourcing to Asia for lower prices. I did so because of their loyalty and commitment to me when I needed them. That is a partnership…and we all need partners to succeed!
You’re an entrepreneur by background. What were some of your early efforts to innovate?
I remember in the late 60s/early 70s, a drummer in my band and I who decided to build a nifty product – a digital alarm clock. They didn’t exist at that time. So we went down to Radio Shack to buy the parts and it actually worked. There was not any market for it at that time. No one was in the business then. I went to the Senior VP of TI and I showed it to him. At that point, I was 25 years old. He said it was really an incredible product but when TI, Casio, and National Semiconductor get into that business they are going to crush you. And that’s exactly what happened. They came out with alarm clocks, wristwatches and calculators and it totally crushed us. Fortunately, I listened to him and moved onto the next great adventure.
Are you doing any angel investing now?
I was until last week, but the stock market is just awful, but it’ll come back. I think I have some ideas that can help entrepreneurs. If you’ve never ridden a horse it’s hard to teach someone how to ride a horse. I’ve had my share of failures and successes. When I ran my own company back in the 90s, I never entered into any of those competitions that Inc. Magazine ran, and people asked me why. I told them that those things won’t generate one new lead for my product. It’ll only generate phone calls from attorneys and other service providers wanting to sell me their services. It would never sell another barcode data collection product or service. We marketed only to those who would buy from us.
When did the business start?
We started in business March 13, 1989, after 25 yrs. experience and 1 year of intense planning and modeling the business. We didn’t know from the beginning that we would sell the business. In fact, we didn’t think we could ever sell it to a 3rd party. But we sold it in 2000 to Brady Corporation. When they contacted me I knew we had 90 days to complete the deal. If not, they were going to suck my brains out negotiating the deal, taking my time away from running the business, and lower valuations because the chief salesman was in negotiations and off the job. What made a 90 day close possible and a cash closing on Feb. 29, 2000 was the fact that we had audited financial statements for the previous three years from one of the national firms. Soon thereafter, the national firms were significantly reduced in size and stature. That fact is evidence that behind every idea that is well conceived and executed, there is definitely the spice of luck that we all need to attain our goals.
Best regards,
Hall T.
Monday, April 21, 2008
The Rice Business Plan Competition 2008--Getting Bigger and Better
I participated in the Rice Business Plan Competition again this year. It’s my third year running and I must admit it’s quite impressive how the quality of the business plans and presentations has risen each year.
This year the program showcased 36 teams (28 from the USA, and the 7 international), with prizes totaling $675,000. About 20% of that is in-kind services. About 1/3 of the presented plans were companies that are up and running as a business. The surprising news from the conference is the number of previous year competitors who have gone on to launch a company. It was about 50%.
There are 170 judges of which 53 are from venture capital, 21 from an angel community, and 18 from private equity. I enjoy judging the competition because I learn a great deal about the industry from talking with the other judges and listening to the questions they ask.
I judged the life science competition and have done so for the past two years. Two years ago, almost none of the plans had a strategy for achieving FDA validation. Today, most have a fairly sophisticated plan for how to do it at the lowest price possible. Two years ago, most plans sought $2M with the goal of creating a pharmaceutical company which was completely unrealistic. Today, most plans focus on partnering with a pharma company for clinical trials and then licensing the technology after trials finish. Today, some of the plans still emphasize the science, but the winners are those who can present a business case including productization, go to market strategies, and financial numbers with some backing.
Business plan competitions have grown substantially in the past few years. There are quite a number of business plan competitions available to the student today. For a general list check out this link.
The top six finalists this year are:
Etoh Pharmaceuticals, University of Chicago—a triple drug combination for treating alcoholism.
Qcue, University Texas at Austin—dynamic pricing solution for concert promoters.
Enexra, Harvard University—reduces cost of silicon wafer-based solar cells by 30%.
Filigree Nanotech, Wake Forest University—improves battery performance through silver nanowire.
Klymit, Brigham Young University—noble gas-based insulation in clothing.
Microtransponder, University of Texas at Dallas—uses subcutaneous neurostimulation device to mitigate pain.
Best regards,
Hall T.
This year the program showcased 36 teams (28 from the USA, and the 7 international), with prizes totaling $675,000. About 20% of that is in-kind services. About 1/3 of the presented plans were companies that are up and running as a business. The surprising news from the conference is the number of previous year competitors who have gone on to launch a company. It was about 50%.
There are 170 judges of which 53 are from venture capital, 21 from an angel community, and 18 from private equity. I enjoy judging the competition because I learn a great deal about the industry from talking with the other judges and listening to the questions they ask.
I judged the life science competition and have done so for the past two years. Two years ago, almost none of the plans had a strategy for achieving FDA validation. Today, most have a fairly sophisticated plan for how to do it at the lowest price possible. Two years ago, most plans sought $2M with the goal of creating a pharmaceutical company which was completely unrealistic. Today, most plans focus on partnering with a pharma company for clinical trials and then licensing the technology after trials finish. Today, some of the plans still emphasize the science, but the winners are those who can present a business case including productization, go to market strategies, and financial numbers with some backing.
Business plan competitions have grown substantially in the past few years. There are quite a number of business plan competitions available to the student today. For a general list check out this link.
The top six finalists this year are:
Etoh Pharmaceuticals, University of Chicago—a triple drug combination for treating alcoholism.
Qcue, University Texas at Austin—dynamic pricing solution for concert promoters.
Enexra, Harvard University—reduces cost of silicon wafer-based solar cells by 30%.
Filigree Nanotech, Wake Forest University—improves battery performance through silver nanowire.
Klymit, Brigham Young University—noble gas-based insulation in clothing.
Microtransponder, University of Texas at Dallas—uses subcutaneous neurostimulation device to mitigate pain.
Best regards,
Hall T.
Wednesday, April 16, 2008
Jan Wagner of Yello Dyno Talks about the rise of Child Predators in our society
Jan Wagner of Yello Dyno Talks about the rise of Child Predators in our society, how to teach children to protect themselves, and the next stage for her company.
What is Yello Dyno?
It’s a proven, research-based program for protecting kids against child predators. We’ve reached over 3 million kids, and in Texas over 500,000 kids are taught the lessons each year. It focuses on the 4 to 12 year olds. Child Predators is a key topic today. In our society now, child predators are our modern Al Capones. Since we can’t catch Al Qaeda, we pick someone we can and that focus is on child predators. Since a third of Americans have been through some level of victimization, it’s clear they are going to protect their kids. In Jan’s workshops she reinforces what has been seen on Datelines “To Catch a Predator”, that the Internet is literally creating child predators.
What does the program teach children?
How to recognize and protect themselves from “Tricky People”. It’s not what people look like, their age, or if you know them – it’s what they ask you TO DO that matters. (Children learn to recognize deceptive behavior patterns.)
What is the background to the company?
I founded this company 20 years ago. Our revenues are under $500K per year. Our focus has been on research and development for the past few years. I’m currently looking for someone to take the next round of products to the market. In the mid 1990s NEST Entertainment licensed the rights to take Yello Dyno to the market. They put $1.8M into development back then. In 2000 they crashed in the Dot Bomb. During the 1990s we had franchisees who merged with the NEST Party Plan system. So when NEST went under we lost most of them. We were able to get the rights back to the property. Over the next seven years, I did this part time. We have one key Yello Dyno Director, a former franchisee, in New York who does around $500K a year in revenue.
What are you raising money for?
Our five years of independent research is completed and validated the exceptional effectiveness of the program. This research uniquely qualifies us in personal safety for children. We are ready to launch the products, curricula and training through a national marketing campaign. We also are ready to market to publishers and media the content for two new books for adults and a book and television series for children. Our well-established courses are ready to translate for the online Yello Dyno University to meet state and federal training mandates.
How many employees work at Yello Dyno in Austin?
We’ve stayed learn during this developmental and research phase. I have 2 employees plus we use specialists and consultants.
What is the exit strategy?
To license the rights or to sell the company to a major player. These four options are not mutually exclusive. The rights could be broken up, such as we did with NEST whom we licensed the exclusive marketing right to but we retained the publishing rights. Here are the options:
1. I could hand it off to someone in the educational arena. The Discovery Channel, through Discovery Health, has an online program they offer to schools for $750/year. Our programs fits right in with what they are doing. Scholastic would be another good company to approach.
2. A prime candidate would be a company seeking a cause – some call it cause-related marketing. Any corporation could choose to do this. One category would be insurance companies; we had strong interest from All State in the 90’s.
3. Another company such as NEST Entertainment. In the past HBO also considered buying the marketing rights from Nest Entertainment. Plus PBS was working on a contract for a series of 24 animated cartoon shows with Yello Dyno with NEST .
4. A large non-profit that would like to offer our complete prevention program for communities throughout the United States. Our program has been offered by hundreds of small non-profits throughout the United States and meets the mandates of many charities. The programs have proven to be excellent PR for them. Plus, they have used it to attract funding to their crisis and recovery programs that are hard to talk about.
Can we hear your elevator pitch?
Hi, My name is Jan Wagner, President of Yello Dyno. We are child protection specialists. Yello Dyno arms educators and parents with the DVD's, CD's, curricula and training needed to teach and protect children, ages 4-12, from people who mean them harm.
We teach the Yello Dyno Method that is based on the Nobel Prize winning research of Dr. Roger Sperry and the internationally recognized research on the effect of violence on children of Dr. Bruce Perry. The high level of effectiveness of our programs is grounded in five years of independent research. This research uniquely qualifies us in the field of personal safety for children.
Over the last twenty years we have taught over 3 million children to stay safe nation-wide and in Texas alone we have over 500 thousand children being taught Yello Dyno’s award-winning program each year. There are hundreds of instances when children stopped child predators. In the last two years there are three Texas police documented cases of children ages 4, 5 and 9 in life-threatening circumstances with child predators who saved their own lives because of their Yello Dyno training.
We are ready to roll out our products, curricula and training through a national marketing campaign. Our market is targeted at 60 million children under the age of 12 and the caring adults around them.
We are also ready to market to publishers and media the content for two new books for adults and a book and television series for children. Our well-established courses are ready to translate for the online Yello Dyno University to meet state and federal school training mandates.
We are looking to raise $1 million that would be invested in stages. The investment and profit would be recouped by an exit strategy involving increased sales and licensing the marketing rights in the educational field, entertainment and/or retail markets.
Please consider bringing your expertise and financial strength to Yello Dyno to protect children from child predators.
Remember, when a child’s life is at sake this is what works.
Please visit www.YelloDyno.com to learn more.
Best regards,
Hall T.
***
What is Yello Dyno?
It’s a proven, research-based program for protecting kids against child predators. We’ve reached over 3 million kids, and in Texas over 500,000 kids are taught the lessons each year. It focuses on the 4 to 12 year olds. Child Predators is a key topic today. In our society now, child predators are our modern Al Capones. Since we can’t catch Al Qaeda, we pick someone we can and that focus is on child predators. Since a third of Americans have been through some level of victimization, it’s clear they are going to protect their kids. In Jan’s workshops she reinforces what has been seen on Datelines “To Catch a Predator”, that the Internet is literally creating child predators.
What does the program teach children?
How to recognize and protect themselves from “Tricky People”. It’s not what people look like, their age, or if you know them – it’s what they ask you TO DO that matters. (Children learn to recognize deceptive behavior patterns.)
What is the background to the company?
I founded this company 20 years ago. Our revenues are under $500K per year. Our focus has been on research and development for the past few years. I’m currently looking for someone to take the next round of products to the market. In the mid 1990s NEST Entertainment licensed the rights to take Yello Dyno to the market. They put $1.8M into development back then. In 2000 they crashed in the Dot Bomb. During the 1990s we had franchisees who merged with the NEST Party Plan system. So when NEST went under we lost most of them. We were able to get the rights back to the property. Over the next seven years, I did this part time. We have one key Yello Dyno Director, a former franchisee, in New York who does around $500K a year in revenue.
What are you raising money for?
Our five years of independent research is completed and validated the exceptional effectiveness of the program. This research uniquely qualifies us in personal safety for children. We are ready to launch the products, curricula and training through a national marketing campaign. We also are ready to market to publishers and media the content for two new books for adults and a book and television series for children. Our well-established courses are ready to translate for the online Yello Dyno University to meet state and federal training mandates.
How many employees work at Yello Dyno in Austin?
We’ve stayed learn during this developmental and research phase. I have 2 employees plus we use specialists and consultants.
What is the exit strategy?
To license the rights or to sell the company to a major player. These four options are not mutually exclusive. The rights could be broken up, such as we did with NEST whom we licensed the exclusive marketing right to but we retained the publishing rights. Here are the options:
1. I could hand it off to someone in the educational arena. The Discovery Channel, through Discovery Health, has an online program they offer to schools for $750/year. Our programs fits right in with what they are doing. Scholastic would be another good company to approach.
2. A prime candidate would be a company seeking a cause – some call it cause-related marketing. Any corporation could choose to do this. One category would be insurance companies; we had strong interest from All State in the 90’s.
3. Another company such as NEST Entertainment. In the past HBO also considered buying the marketing rights from Nest Entertainment. Plus PBS was working on a contract for a series of 24 animated cartoon shows with Yello Dyno with NEST .
4. A large non-profit that would like to offer our complete prevention program for communities throughout the United States. Our program has been offered by hundreds of small non-profits throughout the United States and meets the mandates of many charities. The programs have proven to be excellent PR for them. Plus, they have used it to attract funding to their crisis and recovery programs that are hard to talk about.
Can we hear your elevator pitch?
Hi, My name is Jan Wagner, President of Yello Dyno. We are child protection specialists. Yello Dyno arms educators and parents with the DVD's, CD's, curricula and training needed to teach and protect children, ages 4-12, from people who mean them harm.
We teach the Yello Dyno Method that is based on the Nobel Prize winning research of Dr. Roger Sperry and the internationally recognized research on the effect of violence on children of Dr. Bruce Perry. The high level of effectiveness of our programs is grounded in five years of independent research. This research uniquely qualifies us in the field of personal safety for children.
Over the last twenty years we have taught over 3 million children to stay safe nation-wide and in Texas alone we have over 500 thousand children being taught Yello Dyno’s award-winning program each year. There are hundreds of instances when children stopped child predators. In the last two years there are three Texas police documented cases of children ages 4, 5 and 9 in life-threatening circumstances with child predators who saved their own lives because of their Yello Dyno training.
We are ready to roll out our products, curricula and training through a national marketing campaign. Our market is targeted at 60 million children under the age of 12 and the caring adults around them.
We are also ready to market to publishers and media the content for two new books for adults and a book and television series for children. Our well-established courses are ready to translate for the online Yello Dyno University to meet state and federal school training mandates.
We are looking to raise $1 million that would be invested in stages. The investment and profit would be recouped by an exit strategy involving increased sales and licensing the marketing rights in the educational field, entertainment and/or retail markets.
Please consider bringing your expertise and financial strength to Yello Dyno to protect children from child predators.
Remember, when a child’s life is at sake this is what works.
Please visit www.YelloDyno.com to learn more.
Best regards,
Hall T.
***
Monday, April 14, 2008
Nasir Pirani of NGN Valve Talks about Bringing a Self-Regulatig Tire Valve to Market
Nasir Pirani of SumNett Inc. talks about bringing a self-regulating tire valve to the market, the challenge with ETF funding, and practices his elevator pitch for the upcoming FastPitch Competition.
What is your background?
I was part of a team that helped establish the first private university in Pakistan in 1983, the Aga Khan University, and was later responsible for raising $200 million for its endowment. . This university now has faculties in Afghanistan, Kenya, Tanzania, Uganda, Syria, Egypt and the United Kingdom. I’m an architect by training, and since coming to Austin in 1996 I’ve been working in real estate, mostly investment properties. I was appointed CEO of SumNett Inc. in July 2006 to help bring the NGN Valve to market.
What does NGN stand for?
No Gauge Needed.
What is the concept?
Filling air in car tires is a chore we tend to postpone until absolutely necessary, and that’s why 40% of the cars on the road have tires that are 30% below the recommended inflation. Besides being a safety hazard, it reduces tire life, increases gas consumption, and adds an extra 20% to car expenses. In dollar terms, with today’s gas prices, under inflation costs us an extra $40 per month. According to EPA estimates, 4 million gallons of gas would be saved per day if tires were properly inflated. That would help save a whopping billion and a half gallons per year in the US alone.
We have taken the humble tire valve, which has essentially remained unchanged since August Schrader patented it in 1896 (http://en.wikipedia.org/wiki/Schrader_valve), and turned it into a two way valve. If your car tires need 32 pounds of pressure, all you do is install 32 psi NGN Valves. Simply fill air and drive off. The valve releases excess air and automatically seals at 32 psi. It takes less than half the time, because you don’t need a tire gauge to check if you have filled enough air. By making it fast and easy to fill air, hopefully more people will maintain proper tire pressure and save hundreds of dollars for themselves, and help the environment as well.
How does it work?
The beauty of the NGN Valve lies in its simple, low tech, but practical technology. Since the technology is well known and not esoteric, it also minimizes the risk of the valve failing. Each valve is precision calibrated, ranging from 20 to 120 psi, and suitable for all kinds of tires. If your car needs two different psi for its front and back tires, this can be easily accomplished, and you don’t have to remember the specifics. After filling air the valve self adjusts to its designated pressure. When the pressure inside the tire builds up beyond 25% of its designated psi, the calibrated spring compresses, air is released, and the spring once again seals the valve. We have also designed NGN Caps, that you can screw onto a regular tire valve, converting it into an NGN Valve in seconds.
How much does it cost?
The cost of the valve is practically the same as a regular valve. Its choice should be a no-brainer because for a few pennies more you get vastly improved convenience, safety and economy.
What is your channel?
The consumer is generally not the decision maker when it comes to buying tire valves. The tire retailers usually install new valves along with new tires. New cars will hopefully have the NGN Valve preinstalled. However, caps will be available for purchase at auto retail stores.
Did you try to get ETF funding?
Yes, but we didn’t make it. Our project went through the due diligence and approval of all the review committees, but at the final stage the decision of the Governor, Lt. Governor, and Speaker has to be unanimous – and it wasn’t. In many ways this was a blessing in disguise, because one of the requirements of ETF funding is that the product be manufactured in Texas. It turns out that 99% of the world’s valves are built in China. I think manufacturing it in Texas would have been much more expensive. They are able to do it for less than 10 cents a valve, whereas in Texas despite our best efforts, our projections could not bring the cost below 34 cents.
Are you going to manufacture the valve yourself?
No, we plan to license the technology to major manufacturers of tire valves, and let them use their production, distribution, and retailing experience to speed the phase-in of the NGN Valve. By major I mean companies that are already manufacturing over 100 million valves annually. There are only 6 or 7 such companies worldwide. In fact just two of them jointly produce almost 600 million valves. The annual global production of tire valves exceeds 1.3B, so it is a massive market.
How much are you trying to raise in funding?
About $300K for the first round. Later, we’ll need to raise another $400K. We’ve had a lot of interest from unaccredited investors, but what we are looking for are angels with expertise and contacts in the automobile and tire industry. Having them on our board would be very helpful when we start negotiating with manufacturers. When it comes to royalties, losing even one cent per valve can make a huge difference because of the volume involved.
What about competition from the new RF-sensors on valves that is coming out?
The NGN Valve can be easily adapted to conform to the Tire Pressure Monitoring System (TPMS) mandated by the government. The self inflating tire systems, available for high end cars, is a costly option upwards of $1000. Whereas, the cost of manufacturing the NGN Valve is in pennies.
I see you will be in the FastPitch competition on April 18th. Can you give us your elevator pitch?
I haven’t finalized my one minute pitch, and need to shave off at least another 10 seconds or so, but it goes something like this:
Filling air in car tires is a chore we tend to postpone until absolutely necessary. That’s why 40% of the cars on the road have tires that are 30% below the recommended inflation. Besides being a safety hazard, it reduces tire life, increases gas consumption, and costs an extra $50 per month.
My name is Nasir Pirani, and I’m the CEO of SumNett Inc. We have designed a tire valve that makes it fast and easy to fill air – without the need to check pressure with a tire gauge. It’s called the NGN Valve™. NGN is the acronym for No Gauge Needed.
After filling air, the valve releases excess air and automatically seals at its designated pressure. It takes less than half the time, because you don’t need a tire gauge to check the pressure.
Global sales of tire valves exceed 1.3 billion annually, and we have patent protection in the US, Europe, Japan and several other countries. The NGN Valve costs about the same as a regular tire valve, with vastly improved convenience, safety, and economy. We expect to take customer orders in six months time, and production is planned from 4Q 2009. Currently we are seeking $300,000 in funding, with a projected three year ROI of 1000%.
Best regards,
Hall T.
What is your background?
I was part of a team that helped establish the first private university in Pakistan in 1983, the Aga Khan University, and was later responsible for raising $200 million for its endowment. . This university now has faculties in Afghanistan, Kenya, Tanzania, Uganda, Syria, Egypt and the United Kingdom. I’m an architect by training, and since coming to Austin in 1996 I’ve been working in real estate, mostly investment properties. I was appointed CEO of SumNett Inc. in July 2006 to help bring the NGN Valve to market.
What does NGN stand for?
No Gauge Needed.
What is the concept?
Filling air in car tires is a chore we tend to postpone until absolutely necessary, and that’s why 40% of the cars on the road have tires that are 30% below the recommended inflation. Besides being a safety hazard, it reduces tire life, increases gas consumption, and adds an extra 20% to car expenses. In dollar terms, with today’s gas prices, under inflation costs us an extra $40 per month. According to EPA estimates, 4 million gallons of gas would be saved per day if tires were properly inflated. That would help save a whopping billion and a half gallons per year in the US alone.
We have taken the humble tire valve, which has essentially remained unchanged since August Schrader patented it in 1896 (http://en.wikipedia.org/wiki/Schrader_valve), and turned it into a two way valve. If your car tires need 32 pounds of pressure, all you do is install 32 psi NGN Valves. Simply fill air and drive off. The valve releases excess air and automatically seals at 32 psi. It takes less than half the time, because you don’t need a tire gauge to check if you have filled enough air. By making it fast and easy to fill air, hopefully more people will maintain proper tire pressure and save hundreds of dollars for themselves, and help the environment as well.
How does it work?
The beauty of the NGN Valve lies in its simple, low tech, but practical technology. Since the technology is well known and not esoteric, it also minimizes the risk of the valve failing. Each valve is precision calibrated, ranging from 20 to 120 psi, and suitable for all kinds of tires. If your car needs two different psi for its front and back tires, this can be easily accomplished, and you don’t have to remember the specifics. After filling air the valve self adjusts to its designated pressure. When the pressure inside the tire builds up beyond 25% of its designated psi, the calibrated spring compresses, air is released, and the spring once again seals the valve. We have also designed NGN Caps, that you can screw onto a regular tire valve, converting it into an NGN Valve in seconds.
How much does it cost?
The cost of the valve is practically the same as a regular valve. Its choice should be a no-brainer because for a few pennies more you get vastly improved convenience, safety and economy.
What is your channel?
The consumer is generally not the decision maker when it comes to buying tire valves. The tire retailers usually install new valves along with new tires. New cars will hopefully have the NGN Valve preinstalled. However, caps will be available for purchase at auto retail stores.
Did you try to get ETF funding?
Yes, but we didn’t make it. Our project went through the due diligence and approval of all the review committees, but at the final stage the decision of the Governor, Lt. Governor, and Speaker has to be unanimous – and it wasn’t. In many ways this was a blessing in disguise, because one of the requirements of ETF funding is that the product be manufactured in Texas. It turns out that 99% of the world’s valves are built in China. I think manufacturing it in Texas would have been much more expensive. They are able to do it for less than 10 cents a valve, whereas in Texas despite our best efforts, our projections could not bring the cost below 34 cents.
Are you going to manufacture the valve yourself?
No, we plan to license the technology to major manufacturers of tire valves, and let them use their production, distribution, and retailing experience to speed the phase-in of the NGN Valve. By major I mean companies that are already manufacturing over 100 million valves annually. There are only 6 or 7 such companies worldwide. In fact just two of them jointly produce almost 600 million valves. The annual global production of tire valves exceeds 1.3B, so it is a massive market.
How much are you trying to raise in funding?
About $300K for the first round. Later, we’ll need to raise another $400K. We’ve had a lot of interest from unaccredited investors, but what we are looking for are angels with expertise and contacts in the automobile and tire industry. Having them on our board would be very helpful when we start negotiating with manufacturers. When it comes to royalties, losing even one cent per valve can make a huge difference because of the volume involved.
What about competition from the new RF-sensors on valves that is coming out?
The NGN Valve can be easily adapted to conform to the Tire Pressure Monitoring System (TPMS) mandated by the government. The self inflating tire systems, available for high end cars, is a costly option upwards of $1000. Whereas, the cost of manufacturing the NGN Valve is in pennies.
I see you will be in the FastPitch competition on April 18th. Can you give us your elevator pitch?
I haven’t finalized my one minute pitch, and need to shave off at least another 10 seconds or so, but it goes something like this:
Filling air in car tires is a chore we tend to postpone until absolutely necessary. That’s why 40% of the cars on the road have tires that are 30% below the recommended inflation. Besides being a safety hazard, it reduces tire life, increases gas consumption, and costs an extra $50 per month.
My name is Nasir Pirani, and I’m the CEO of SumNett Inc. We have designed a tire valve that makes it fast and easy to fill air – without the need to check pressure with a tire gauge. It’s called the NGN Valve™. NGN is the acronym for No Gauge Needed.
After filling air, the valve releases excess air and automatically seals at its designated pressure. It takes less than half the time, because you don’t need a tire gauge to check the pressure.
Global sales of tire valves exceed 1.3 billion annually, and we have patent protection in the US, Europe, Japan and several other countries. The NGN Valve costs about the same as a regular tire valve, with vastly improved convenience, safety, and economy. We expect to take customer orders in six months time, and production is planned from 4Q 2009. Currently we are seeking $300,000 in funding, with a projected three year ROI of 1000%.
Best regards,
Hall T.
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