Jeff Amerine says there is no cure for serial entrepreneurs whether they are age 17 or 37 or 97. Even if launching a startup venture and seeing it through two years or more is likely to age the founders in dog years, he said during his emcee duties at the Northwest ARK Challenge Demo Day held Thursday (Sept. 4).
Amerine, director of technology ventures at the University of Arkansas, said the idea of building and sustaining a knowledge-based economy is the core mission of the ARK Challenge partnership. The Challenge was launched in 2012 through a deal with Winrock International, UA and NorthWest Arkansas Community College with funding from state and federal agencies. The 2014 program is state funded and active in Northwest Arkansas with a brand new cohort added in Central Arkansas.
Five entrepreneurial teams, each with local ties, could barely contain their excitement as they took the stage for 10 minutes to pitch their ventures to a room full of investors, mentors and other entrepreneurial junkies, including Rick Webb, senior vice president of global business processes at Wal-Mart Stores. The event was held at Crystal Bridges Museum of American Art in Bentonville.
Webb, a self-proclaimed geek and a mentor in the ARK Challenge for all three years, said he identified with the teams and their longing to find solutions to big problems using technology and processes.
Amerine said this year’s competition — a 2.0 version and new iteration of the past two years — was tweaked to try and bring more mature ventures along faster to fully scalable levels.
Five teams were chosen out of 70 ventures from around the world seeking entry into the 12-week startup bootcamp. Each team gave up a 6% stake in their business for $50,000 in seed money and unlimited mentorship and counseling over the 12-week period. The Demo Day was moved to the middle of 12 weeks to give each team more time to make connections and secure funding that can ensure a viable future.
“This is just the beginning of a process that takes the entire community’s support to keep this fire burning,” Amerine said. “It’s not possible without our angel investors and our mentor base.”
Amerine said all of the teams in the 2.0 cohort have the opportunity to be “positive disruptors” in their space bringing solutions to real world problems.
Edward Haddock, senior area manager of the U.S. Small Business Administration, said he was pleased to see teams in this cohort focused on helping small businesses solve real problems.
• HIPAA RISK MANAGEMENT
Anne Drachenberg, co-founder of HIPAA Risk Management, said her team has had their company up and running for several months, and they assumed they would need to travel to Silicon Valley or elsewhere for funding and mentorship.
“We have been to Seattle and San Francisco for funding, but neither of those markets offered anything like the ARK Challenge with the cohesive mentorship program 24/7 over a 12-week period. It’s been amazing to have this opportunity in our own backyard. We have made valuable connections through mentor introductions to people that would never return our call otherwise. I can’t say enough about the benefits we have received in just five weeks,” Drachenberg said.
The HIPAA team sells a cloud-based data security tool to small health care organizations at risk of data breach. She described their product like TurboTax for HIPAA compliance. Their target clients are doctor’s offices, county health departments pharmacies and community hospitals.
The company has ready garnered 90 customers with $250,000 in revenue contracts. At this time the business is generating $20,000 per month, expected to reach $80,000 per month by this year. Sales projections are $10 million by end of 2016.
Drachenberg has made a believer out of investors so far raising $350,000 of the $550,000 needed to continue marketing their service. The company signed on with the Texas Medical Association and will soon be in front of 750 potential clients.
Justin Urso and Jason Kohring, founders of Skosay, offer small businesses a way to manage their customer service more efficiently.
Urso said consumers today want their voices to be heard but just 1 in 27 actually say something. He said comment cards and 800 phone numbers are antiquated systems for gathering feedback and they don’t get the job done.
The local manager at Chick-fil-a in Fayetteville told Urso that he spends up to three hours a month combing through the comment cards – ime he would rather spend with his customers.
Urso explained that when a consumer has a bad experience and they don’t get it rectified, 91% won’t return. He said companies spend $60 billion annually trying to improve customer service based on feedback.
Their product provides a private two-way communication channel for customers and business owners or key managers. The comments are made in real time with chat platform on mobile web application.
Skosay has already enlisted Piggy Back shuttle service in Fayetteville and Impressed Cleaners in Bentonville to use their service beginning this fall. Northwest Arkansas Regional Airport has also expressed interest in the service. The service is subscription based at $100 a month per location for retail users, and free to consumers. The company is seeking $250,000 to take the venture from beta testing to a full sales operation within the next year.
Cade Collister, creative director at Acumen Brands, said the Skosay duo could have started their company anywhere but chose to plant their passion in Northwest Arkansas.
• CROWD TO GO
Jet Castro wants to solve the last-mile delivery problem for retailers, restaurants and consumers. He see’s his company using vetted crowd sourced personnel to deliver lunch to Wal-Mart suppliers during crunch time or run small packages from retailers to consumer homes in a particular area.
The company is seeking between $250,000 and $500,000 to fully market this alternative delivery system. He owns a software development company in Asia employing 40 developers crafting the product.
Castro said he was glad to see Wal-Mart IT execs at the demo day event and was excited they offered to schedule a meeting on his behalf.
• HUMAN LINK
Ven Vadiamani, co-founder of Human Link, said his startup was rooted in an experience he encountered recently in trying to find in-home care for his ailing 84-year-old grandmother in India.
“I had to find that care from here in the U.S,” Vadiamani said.
Human Link applies a LinkedIn strategy to find vetted in-home health providers that best meet a consumer’s needs. He explained the system today is a franchise, a list of possible health care associates that may not be compatible with a loved-one. He said finding the right match is time consuming.
The in-home health care market is valued at $75 billion today, expected to grow to $200 billion by 2030. Vadiamani said the Human Link service does not have a subscription fee for caregivers or consumers. The company works off of a 6% to 10% fee per transaction, a cost they are working to reduce which can be passed on to the user.
His firm is seeking $750,000 to $1 million to market their platform around the world.
Cyber security is an ever present threat in today’s marketplace. NEO founders Justin Farmer and Travis Fischer operate a parent company known as Kernel, in which they do cyber security work in the Middle East with oil companies and government entities.
They said this type of ongoing cyber protection is costly, and oil companies can afford the costs. However, Urso said small businesses are often not able to afford cyber security services.
Neo is a product they have developed to “democratize” a high level of cyber security down by offering it to small businesses at $49.99 per month, which includes the hardware.
The team is seeking $300,000 to $400,000 to build their team and bring the product to market. They expect a project market launch by the end of next year and said it will take selling 750 units to break even.
Target applications for Neo includ health care HIPAA audits, the legal industry, and financial services.
Mark Brandon, CEO of QBox, formerly Stack Search, gave the audience an update on his startup which was one of three original ARK Challenge winners in 2012. Brandon said he’s aged 10 years in the three years and his venture has come within a week of closing at least four times but things are finally looking up.
“We have nearly 700 customers for QBox at this time and we finally became profitable in August for the first time since we launched,” Brandon said as the crowd applauded. “We are managing data on five continents today.”
He said revenue is growing at 15% to 25% each month. Brandon and his small team are ready for a Series A funding round for $1 million to heavily market the product and build out their team.
“Raising this funding has been challenging. I have been coast to coast and we have had four investors tell us they would be a second lender but we are still looking to take the lead in this Series A round,” Brandon said.
QBox helps companies manage their big data analytics in dash board format. He too, was excited to hear from a Wal-Mart executive who offered to get him a meeting with the retailer’s chief technology officer.
“That alone makes my day,” Brandon said.