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TechAlert June, 2006

Welcome to a new edition of TechAlert, the monthly newsletter of the Illinois Technology Development Alliance. Our issues feature articles of great interest to entrepreneurs, to investors interested in leading-edge, high-tech opportunities, and to established companies who are looking for innovative solutions to pressing business needs.

ITDA Receives $1 Million Department of Defense Contract
RiverGlass, Inc. Transforms Data into Information Real-Time
UPONUS Technologies, LLC
PatientMD
Pearl Productions Launches New Tourism and Entertainment Website
April Monday Morning Meeting Retrospective
Entrepreneur's Briefcase - DOA Business Plans by Joel Dryer
ITDA Launches State-of-the-Art Website
 

 

ITDA Receives $1 Million Department of Defense Contract

The Illinois Technology Transition Center (ITTC), a commercialization arm of the Illinois Technology Development Alliance (ITDA), a public-private nonprofit that serves high growth technology companies, has received a second $1 million contract from the US Department of Defense’s Office of Naval Research (ONR). The grant brings the center’s total committed and accessible funding to $2 million over two years.

“The Office of Navy Research is very interested in moving early stage technologies rapidly down the development path, but like everyone else, they lack staff,” says John Noel, ITDA vice president and manager of ITTC. “ITTC sources well-qualified and pre-screened businesses that can supply cutting-edge technologies to meet the Navy’s mission critical requirements.”

ITTC offers a defined, straightforward, and proven four-step program structured to benefit the Navy, regional entrepreneurs, and the economy of Illinois and surrounding states. ITTC’s mission is straightforward—to match Navy requirements with technology and intellectual property from this area.

The program begins with ITTC doing the leg work to identify the funded programs within the Office of Naval Research where technologies are sought or are under development. Next ITTC searches out companies and technologies that offer possible solutions to the Navy’s needs and then assists those companies with business and commercialization planning and market research. Finally, ITTC will represent the entrepreneur and contact the appropriate ONR program manager to arrange an efficient and focused review of the company’s technology and application.

In operation less than a year, ITTC already has a number of clients. Santec Systems, Wheeling, IL, a start-up company built around an innovative ultra sonic imaging technology, has potential applications in numerous defense related areas including non-destructive inspection of air cracks in aircraft after the craft is in service.

“ITTC has helped us do things we couldn’t do otherwise,” says Jas Sandhu, CEO of Santec Systems. “Under their guidance we are expanding our product line. We have increased our marketing strategy to include private and military sectors, and we are going after niche opportunities with private defense contractors.”

Compared to other states, Illinois ranks eighth in overall R&D expenditures and sixteenth in terms of federal R&D. “There is a huge amount of R&D in Illinois,” John Noel says. “From a raw dollar standpoint, most of that is in the private sector rather than in federal labs or in universities. We are working to increase our share of those federal budgets. We believe that Midwestern companies with technologies that satisfy a commercial need may discover that that same technology meets a Department of Defense need as well.”

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RiverGlass Inc. Transforms Data into Information Real-Time

In the last thirty years, mankind has produced more information than in the previous 5000. More than 15,000 web sites and 3000 newspaper and magazine articles have discussed information overload in the last two years. While everyone else is talking about information overload, RiverGlass Inc, Champaign, IL is on the cutting edge doing something about it.

“The way people are making decisions now with information isn’t effective,” says Kirk Dauksavage, CEO of RiverGlass Inc. “It has nothing to do with the humans; it’s the vast amount of information that they are being asked to understand.”

Consider these facts from Inc.com:

Organizations recognize that to remain nimble and competitive they must have ways to manage mountains of data, uncover the data that is important to them, figure out what it means, and then act—but recognizing the problem and being able to do something about it are two different things.

Moving from Data Overload to Intelligent Action

RiverGlass Inc. (www.riverglassinc.com) develops and markets software that merges and analyzes data from multiple pipelines in real-time creating one easy-to-use “intelligent desktop” that makes patterns and connections easy to spot. The company’s technology is based on intellectual property developed at the National Center for Supercomputing Applications (NCSA) at the University of Illinois. This is the same laboratory that developed the Mosaic web browser which became Netscape.

There are many software applications that use statistical and analytic patterns to produce predictions or conclusions; however, because most if not all data analysis/knowledge discovery requires processing time and lacks immediacy, the benefit is often lost. RiverGlass’ revolutionary software allows customers to view and manipulate data from real-time data streams.

“We make tools that automate data gathering, present information visually, identify unforeseen relationships and patterns, and provide a painless way for decision-makers to share their resulting insights, recommendations, and actions,” says Brian Buck, Chief Technology Officer of RiverGlass Inc.

Unlike many start-up companies at a comparable stage of growth, RiverGlass has real paying customers. Target markets include homeland security, financial services, market intelligence, and network security. The best way to understand the groundbreaking potential of the RiverGlass software is to look at some application examples from the markets they serve.

Law Enforcement and Homeland Security

RiverGlass is in the final stages of implementation of a $1 million contract with the Illinois State Police. The Statewide Terrorism and Intelligence Center, which is part of Illinois’ new State Emergency Operations Center that opened in Springfield last October, will use the software to share up-to-the-minute intelligence information to evaluate threats and prevent potential acts of crime or terrorism.

With the RiverGlass software, an analyst tracking a suspected terrorist can gather real-time information from news wires, email messages, travel records, and other sources and then examine them in a single view. The chessboard of effective counterterrorism requires identifying connections among people who might carry out attacks, the methods they might use, and the locations they might target. The RiverGlass tools should greatly enhance the productivity and effectiveness of the state’s approximately eighty analysts who work with crime data.

 “Our software should save the state police much time and money,” CEO Dauksavage says,” but more importantly it will help analysts act in a proactive manner. If RiverGlass can help an analyst see relationships between terrorist suspects and recent events, if our product helps identify a pattern, which in turn leads to an arrest of a dangerous suspect, then we have created something that goes beyond cutting-edge technology.”

In January, Gov. Rod R. Blagojevich of Illinois announced that RiverGlass Inc. would receive a $150,000 IPG grant through the state’s Homeland Security Market Development IPG Program. RiverGlass plans to use the money to fund additional software developers to accelerate the commercial release of two products.

“Riverglass has a phenomenal technology that has the substantial prospect of making our state and our nation safer and more secure,” says Thomas V. Thornton, President of ITDA. “Additionally, the company is an example of the incredible progress Illinois has made in commercializing quantum leap innovations out of research universities to meet clear, large and growing market applications. It’s our job to foster the development and growth of these types of companies. 

The ITDA has worked with RiverGlass to facilitate discussions with federal agencies as well as private sector security providers. “The people at ITDA have a good understanding of what it takes to make a company succeed in Illinois,” Dauksavage says. “They helped us in the federal space to gain access to appropriate lawmakers and to get introductions at the Office of Naval Research, and then gave us excellent advice on how to best prepare.”

Financial Services

Traders, analysts, and other decision-makers with financial services companies must monitor the stock markets, the news, and the daily activities of the companies in their portfolios. They scour the Web for new companies that might provide good investment opportunities for their clients. Simply identifying important information can be an overwhelming task; NASDAQ alone hosts trading in 3300 companies with billions of daily price quotes and trades.

Using RiverGlass Profit™ financial analysts and traders can collect and analyze streams of data from a wide collection of high-volume, heterogeneous, internal and external sources to produce meaningful information so that they can make better investment decisions faster. "As the number of information sources proliferates and the frequency of information arrival accelerates everyone increasingly suffers from information overload, especially financial analysts and traders,” says Brian Buck, “although characterizing the problem as information overload actually describes the symptom not the underlying cause.”

Buck quotes Herb Simon, the father of artificial intelligence and winner of the 1978 Nobel Prize in Economics: ”What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention, and a need to allocate that attention efficiently among the overabundance of information sources that might consume it."1

“The key to solving what is really an attention deficit and not an information overload problem,” says Buck, “lies in employing sophisticated analytics and a deep domain ontology (a description of the terms, concepts, and relationships important to a user) to understand the context of the user, and to provide just the right information and insights at just the right time.”

Forging a High Tech Stronghold in the Heartland

Kirk Dauksavage, who grew up in Chicago, attended Purdue University and has more than a decade of experience with high tech start-ups, says he’s a Midwesterner who wants to stay in the Midwest. “Being a Midwest high technology company can be a challenge,” he says. “Our state isn’t yet known for our high tech industry, and that’s something that we and the people at ITDA are trying to change.”

RiverGlass Inc. is assembling a seasoned team of high tech professionals and executives. “Recruiting the right talent is fairly easy,” Dauksavage says. “We are building an industry in this town where people can be productive and network to find jobs.” The company is building a national direct sales channel and also working with distribution partners.

In the last eight years, more than $20 million in public and private funds have been invested in the core technologies that form the basis of the RiverGlass software suite. As the first company to be directly commercialized out of the University of Illinois, RiverGlass Inc. has raised more than $1.8 million in equity funding. Investors include IllinoisVENTURES of Chicago and Champaign, the Illinois Finance Authority (IFA), and Waypoint Ventures, Ann Arbor, MI as well as several angel investors.

The company currently employs almost two-dozen people. Kirk Dauksavage is committed to meeting and exceeding the critical milestones that can make or break a new company’s business plan.  “The challenge right now is maintaining our focus,” he says. “Our products have the potential to be revolutionary. There is no way to stop the flood of data. At RiverGlass our goal is to keep our customers from drowning in it, help them navigate through it, and ultimately allow them to tame that data and put it to use.”

1(Computers, Communications and the Public Interest, pages 40-41, Martin Greenberger, ed., The Johns Hopkins Press, 1971.)  

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Uponus Technologies, LLC

Imagine a secret code that no supercomputer can crack or a data compression technique that is so fast that the largest, most complex music or image files can be compressed and decompressed at speeds that keep up with a multi-gigabit Ethernet pipe without losing a single character of the original data.

These are kinds of market requirements that the groundbreaking, lossless compression and encryption technologies developed by Uponus Technologies, LLC, Wilmette, IL, are targeting. “I’ve waited my whole life to be here, says Lawrence B. Tropp, Uponus Technologies President and CEO. “All my life, I’ve been a change agent. The greatest challenge to a change agent is to bring breakthrough technology to the world. It doesn’t get better than this.”

Uponus Technologies Breaks Through Barriers

By approaching data compression, encryption, and communications in a fundamentally different way than other technologies currently in the marketplace, Uponus delivers a suite of technologies that can adapt to virtually any data format; overcome the speed, ease of use and capacity limitations of older technologies, and effectively handle real-time streaming data.

Uponus’ technologies are different—by design. Their compression method does not use data dictionaries, data trees, or similar methods which create burdensome overhead in existing systems. Because their compression and encryption systems both operate with very little overhead, they are cable of compressing and encrypting streaming media in real time.

This means that using Uponus’ technologies, material that is being transmitted may be read, heard, or viewed as it is being delivered. This ability to compress and encrypt on-the-fly with very little overhead also means that advanced compression and encryption can now be a standard element of every communication system, including computers, PDAs, and cellular phones, just to mention a few.

Cary Nourie, Vice President of the Illinois Technology Development Alliance (ITDA), says that when he was introduced to Uponus, his first thought was that encryption and compression software occupied an already crowded space. “But then I saw how Uponus worked,” he says. “At ITDA, we look at a lot of technologies, and we don’t come across something like Uponus very often. It’s rare to see a technology that could potentially have such an impact on the marketplace.”

The Market for Tailored Encryption and Compression

Encryption has been around since the early Roman Empire when Julius Caesar swapped letters of the alphabet to disguise his messages. Coded messages have always been part of trade, war, and politics; with the explosion of the Internet, encryption has become a household word.

Compression is the process of using a particular encoding scheme to send and receive information in fewer characters (or bits) than the original file. There are two types of compression—lossy and lossless. With lossy compression, certain parts of the original data are discarded in the interest of faster transmission. Lossless compression means that when you decompress a previously compresses file, the data is character to character (or bit to bit) identical to the original file.

For some applications, lossy compression may be suitable. A person watching a video might not notice or care if some details are removed. The same thing might be true for a person listening to music on their iPOD.

On the other hand, if you are editing music in a studio, conducting a financial transaction online, or if your doctor is wirelessly sending your MRI from the laboratory to the hospital where you are about to have surgery, lossless compression is essential. Discarding even a single bit of the original data cannot be tolerated.

Uponus is focused on the markets that require lossless compression or where security is a paramount concern. “There are many companies who supply off-the-shelf encryption and compression software that is standard in marketplace and works for many applications,” Tropp says. “If the standards work for a client they don’t need us. However, there are applications in markets that range from the military and Homeland Security, to healthcare and financial, to music and entertainment that are inadequately served by existing technologies. Those are the markets Uponus Technologies wants to satisfy.”

Uponus’ technologies are highly adaptable. Certain applications in the markets they choose to serve require technologies embedded in a hardware solution; other applications require a software solution that is especially fast and resource efficient. Uponus is able to work with its prospects to identify their specific needs and to tailor a solution that meets those needs.

Tropp says that adaptability of Uponus technology is unique. “According to the clients we are currently working with,” he says, “there isn’t anything like us. It could be out there, but if it is, they haven’t found it.”

Proving the Technology

As a start-up with technologies that are not yet a standard, Uponus has encountered some skepticism. Compression is relatively easy to prove using specifically designed computer programs that clock compression speeds, determine compression ratios, and verify that after compressing and decompressing the new data file is identical to the original. But if you are a top security government agency, how do you build confidence that an encryption technology can’t be broken?

You can do what Uponus has done—invite experts to test the algorithms and bring in extremely smart, nationally recognized cryptologists to examine the science behind the method. In plain language, you hire someone to break your code.

“Our technology has been validated by experts,” Tropp says, “and we continue to seek further validation. When a prospective client tells me that nobody can do what we say we can do, my response is test us. I’m a CPA by training. Test us, I tell them. Then when we audit out true, I say, let’s talk.”

An Experienced, Enthusiastic Management Team

“Uponus has great technologies,” Tropp says, “but if you can’t implement your strategy, technology doesn’t matter. We have the management team to bring our plans to fruition. Each member of our team brings to the table extensive experience with selling and implementing technology solutions for customers, and we all have the drive to make it happen.”

Uponus is not a capital intensive business.  Staffing is lean, but with a core management team, a several independent advisors, and a sales force well-positioned to sell to strategic partners, Tropp is confident that he can execute on his business plan. Tropp makes use of outside resources where he can and appreciates his association with ITDA. Uponus has participated in the Monday Morning Meeting program, and Tropp says that ITDA’s staff has always been an excellent sounding board.

“The people at ITDA are tenacious, and they are working to help us be successful,” he says. “They understand the potential of our applications and technology and work hard to identify markets and early stage capital sources that could be beneficial to us. They prod our grant applications along. We aren’t always going to win, but it’s good to have someone fighting along side of us who’s on the same page.”

Next Steps

Uponus is down to the final phase of closing a $1 million plus round of outside financing. Tropp believes that the most critical next step is to establish key relationships with strategic partners by industry segment.

“These partners will work with Uponus to bring the company’s technologies into markets and industries which Uponus as a start-up would have a hard time entering,” he says. “Because of the highly confidential and sensitive nature of some applications using our technologies, Uponus likely will be in many cases a critical, but behind- the-scenes player. This model has the advantage of limiting the infrastructure we need to build, and because our customer will be the strategic partner who in turn will service their customers, we can more effectively manage our growth.”  

Ultimately, Uponus believes that the company will be a candidate for acquisition.

For more information, please contact Larry Troop at ltropp@sbcglobal.net

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PatientMD

“Where healthcare resides”

The healthcare industry in this country faces a daunting task—improving the quality of patient care while controlling costs. Christ Pavlatos, M.D., Chairman, and CEO of PatientMD, Chicago, IL, (www.PatientMD.com) is on a mission to accomplish both.

“Medical costs are increasing due to a number of factors,” Pavlatos says. “Some of these factors include the increase use of technology for clinical purposes, medical errors, duplication of tests, and lack of available patient information.”

As a board certified orthopedic surgeon with the Illinois Bone and Joint Institute, one of the three largest orthopedic medical groups in the United States with locations throughout the Chicago area, Pavlatos thoroughly understands these challenges because he deals with them every day.

“Industry experts report that a doctor has the complete record of a given patient available less than 5 percent of the time,” Pavlatos says. “This has to change. As a patient, I want my doctors to have ready access to my information in order for them to make the best decision possible regarding my care.”

Pavlatos founded PatientMD to address this major opportunity.

Incomplete or delayed information drives costs up and quality down.

The Institute of Medicine reports that between 44,000 and 98,000 Americans die from medical errors annually. Thousands more end up in the emergency room. A significant portion of these errors, especially events that occur from drug interactions, may be preventable once a patient’s complete medical record is available to the appropriate caregivers electronically.

“The patient’s medical information needs to follow the patient to and from whatever doctor, hospital, or institution the patient chooses for consultation or treatment,” says Pavlatos, who in addition to his medical degree holds an MBA from the Kellogg School of Management at Northwestern University, Evanston, IL.

”The healthcare industry is fast in adopting improvements in clinical care technology,” he says, “but on the administrative side, things move much more slowly. Attending Northwestern allowed me to look at healthcare from a business perspective. In order to modernize our industry, we need to develop the business case and business model that allows physicians to adopt information technology and electronic medical records into their practices.”

It was Pavlatos’ focus and commitment that captured the attention of ITDA. “Dr. Pavlatos opened the conversation with such passion,” says Arun Bhatia of ITDA. “He said I am a physician, and it’s killing me to see what is happening to the quality of patient care and what is happening to my profession, and I want to do something about it.”

Evolving technology makes sharing electronic health records (EHR) feasible.

PatientMD will provide physicians with a shared infrastructure that offers the hardware and software required to cost-effectively create a paper-less office. In partnership with the physicians’ hospitals, the sharing of information will lead to creating the electronic health record of the patient.

The company will partner with major technology firms to provide a highly secure and HIPAA¹-compliant network that enables authorized physicians to share patient information with both colleagues and patients. Instead of wasting precious time chasing down a patient’s records, doctors will be able to access that information when they need it from their device of choice with the appropriate privacy and security measures.

“Portal technology and web services have matured along with the applications, infrastructure, and the service oriented architecture (SOA) that we needed to implement our business model,” Pavlatos says. “Storage technology that uses information life cycle management and integration engines that interface with multiple devices and applications are available. The combination of all these changes over the past several years makes the PatientMD solution possible.”

 

PatientMD: A sustainable and affordable business model.

"Physicians and others don’t like changing how they operate,” Pavlatos says. “PatientMD offers an easy and cost efficient way to introduce electronic record keeping and sharing. Our solution allows each doctor and each practice to move at a pace and budget that is comfortable for them.”

A major problem with current approaches to automating patient records is that physicians must bear the full up-front cost of the hardware and software involved while most of the value created goes to other parties, specifically insurance companies. Pavlatos says that since many physicians practice in groups of less than five, the payback for the full technology cost often just isn’t there and that the operational impact of converting from paper to electronic medical records is often impractical or simply not doable.

PatientMD follows the application service provider (ASP) business model, which relieves participating doctors from having to bear up-front hardware, software, or operational costs. Instead, charges will include transaction and subscription fees for various stakeholders.

“Our primary customer is the doctor,” Pavlatos says. “You have to help the people who are at the front line taking care of the patient. To modernize health care, you have to start by providing an easy and cost-effective means of improving internal operations while working within the workflow of the physician. That’s the focus of PatientMD.”

Pavlatos says that by improving the way physicians record and share patient information, the potential for medical errors is reduced which in turn helps avoid complications, emergency admissions, and surgeries. These steps can translate into improved patient care and significant cost savings for patients and for many healthcare industry stakeholders as well, including insurance companies, employers, and state and federal governments.

In addition, as PatientMD creates a clinical patient data repository, the company will develop a data warehouse to add decision support systems to the data to educate patients and physicians on evidence based medicine; to perform analytics for physicians to participate in a pay for performance market, and to assist the public health department in homeland security and bio-surveillance.

“Our focus is to create a win-win situation,” Pavlatos says.

PatientMD: A patient-centric system controlled, protected, and managed by patients and physicians.

“Patients trust their doctors, and doctors trust doctors,” says Pavlatos. “For a solution like this to work, the service provider must have the trust of the patient and the physicians, and who better to gain that trust than physicians?” He describes PatientMD as a grass roots mobilization of the physician community to improve patient care and protect the privacy of patient information.

“The patients own their data. The physician is the trusted custodian of the patients’ data,” Pavlatos says. “Physicians and their hospitals in partnership with the patient should control the flow of information. We are the main producers and users of patient care data, and our patients, with their doctors, want to determine access to their information rather than other stakeholders in the industry.”

 

PatientMD will incorporate sophisticated technology for security and privacy. There will be a perpetual audit trail recording anyone who accesses the data. Subscribers will have dual methods of authentication, including flash drives with role-based access to the infrastructure. Patients will be provided an audit trail of anyone who accesses their information.

Pavlatos is assembling a board of directors and an advisory panel consisting of practicing physicians, hospitals, and other stakeholders in health care. He is also looking to include representatives from state and national medical societies, leaders in the business community, and patient advocate groups. While diverse, the group will be patient-centric and physician-focused and guided.

PatientMD: Next steps.

PatientMD has a senior management team and a core group of technical people. The company will be working with major technology companies to architect their infrastructure, to integrate several applications, and to implement a prototype in Lake County serving a group of physicians and a hospital.

Pavlatos is raising the capital to move PatientMD’s demonstration system into a functional prototype. “We want to attract investors who have a true interest in modernizing our healthcare delivery system,” he says. “We are currently in discussion with angel investors and high net worth individuals and are targeting a $2 million round.”

ITDA believes that once Patient MD concludes a successful pilot, the company will attract a lot of attention. “Dr. Pavlatos can grow the network by tapping into hundreds of doctors’ groups across the region,” says Bhatia. “There is also a huge medical association in this state looking for a solution.”

ITDA is helping research other models including regional health information organizations (RHIOs) so that PatientMD can further strengthen their approach. PatientMD will first serve local markets, then expand regionally, and eventually progress to a national solution, but Pavlatos acknowledges that things won’t happen over night.

“We have momentum,” he says. ”The market forces driving IT and EMRs are so great that the adoption curve is going to accelerate rapidly over the next five years. The healthcare industry, however, is very large with 700,000 to 800,000 doctors in the U.S. It may take time to implement our model across a sizable portion of the market. In the markets we do serve, our infrastructure will be a powerful communication channel for patients, physicians, and our medical societies, in addition to various other stakeholders.”

¹ Health Insurance Portability and Accountability Act of 1996.

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ITDA Client, Pearl Productions Launches New Tourism and Entertainment Website

CHICAGO, April 27, 2006 – ClickAroundChicago, Chicago’s newest, most innovative, and comprehensive tourism and entertainment website, is now up and running. Chicagoans, tourists, conventioneers, event planners and those just wanting to find out what is happening in Chicago now have a single source for easily accessing information on hundreds of Chicago’s finest venues with a simple click.

This highly interactive website, features a video database of the very best that the Windy City has to offer in key categories including: dining, music, theater, nightclubs, museums, family fun, shopping and numerous neighborhood and ethnic venues, festivals, and events. With one simple click, entertainment seekers can experience a unique and highly interactive mix of video clips, music, photos and text that recreates the essence of a visit to a particular location.

ClickAroundChicago’s primary mission is to be the city’s #1, most comprehensive resource for helping tourists and residents find out what there is to do in the city. After website visitors find the venue they want, they can watch a commercial quality 60 - 90 second video, review a logistics page, get a general description, view still photos and locate the venue on a searchable, interactive map. In the near future, website viewers will be able to click on links to make reservations or purchase tickets. It will also feature links to the Chicago Convention and Tourism Bureau’s website and the Greater North Michigan Avenue Association’s www.themagnificentmile.com website. It is the only online, one-stop-shopping entertainment resource available in Chicagoland.

"Chicago is a mecca of entertainment opportunities for local residents, tourists, and business travelers. We want people to spend more time enjoying themselves and less time sifting through newspapers, brochures and magazines trying to find where they want to go," said Arnold Jackson, president and CEO of Pearl Productions. “Visitors to our site can find all the entertainment information they need with one simple click.”

“We have invested thousands of hours creating a format that is easy to access by people of all ages and all levels of computer savviness,” said James B. Tucker, Jr., Executive Vice President and COO. “We look forward to setting a new standard for a stress-free entertainment search that brings together those seeking attractions with the right venue.”

By its very nature, and by the nature of the entertainment scene in Chicago, the ClickAroundChicago website will continue to evolve. So there will always be something new to see and experience. Discover this easy to use, one of a kind entertainment website, by going to www.clickaroundchicago.com, the Fastest Way to Get to the Best of Chicago.

Contact: Arnold B. Jackson 708-259-6258
Email: info@clickaroundchicago.com

Website:
www.clickaroundchicago.com

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April Monday Morning Meeting Retrospective

The April Monday Morning Meeting featured presentations by three unique and innovative start-up companies.

Sun Phocus Technologies, LLC, Chicago, makes revolutionary solar panels that out-perform their competitors and have the look of stained-glass; Network Blackbox, Chicago,  (www.networkblackbox.com), produces plug-and-play back-up appliances inspired by the blackbox recorders on commercial jets; and SuperMaterials, Inc., Rockford, IL, formulates and produces materials that can perform reliably and cost effectively under the ugliest of conditions and even in outer space.

The University Technology Park of IIT and ITDA co-host the April event.

The University Technology Park (UTP) (www.universitytechnologypark.com) of the Illinois Institute of Technology (IIT) and the Illinois Technology Development Alliance (ITDA) co-sponsored the event, which included an overview of the Park’s state-of-the-art facilities that are designed to support companies at multiple stages of development from incubator to IPO.

“We are devoted to supporting company expansion,” says David Baker, Vice President of External Affairs of IIT and Executive Director of University Technology Park. “The Park is not just another real estate deal; it’s focused to provide a comprehensive suite of services to support company growth.”

The Monday Morning Meetings are part of the Park’s strategy, and Baker encourages client companies to apply to present at the appropriate time in their development. He sees the meetings as an effective venue to test marketing approaches and business plans.

“IIT is really stepping up into the game,” says Cary Nourie, ITDA Vice President. “They have enhanced their focus on entrepreneurism and have a state-of-the-art facility at University Technology Park where they incubate start-ups and help them continue to grow.” 

Monday Morning Meeting attendees represent a diverse group of experts.

The April Monday Morning Meeting audience of more than 150 attendees included angel investors and venture capitalists; serial and first time entrepreneurs; consultants and service providers from legal, financial, and marketing firms, as well as individuals who were looking for employment in the start-up space.

Joel S. Dryer, owner and principal of Lab To Company, moderated the session. Before the presentations began, attendees and presenters benefited from a structured networking session over a continental breakfast.

“My role as a moderator is to solicit constructive comments from a very intelligent audience and to add my own viewpoint and constructive input,” Dryer says. “The audience wants to be and is constructive; the tone and temper of the meeting do a great deal to help entrepreneurs in Illinois.”

Dryer says that because the companies chosen to present are thoroughly pre-screened, the presentations tend to be about notable technologies and appealing markets. “Sometimes the business case and the presenters are quite compelling,” he says. “In all instances the business cases presented are very interesting.”

“Joel did an exceptional job,” says Cary Nourie, ITDA Vice President. “He structured the line of questioning around each presentation and ensured that feedback was delivered in a positive and constructive way. He provided more than just moderating by offering advice based on his direct experience as an experienced and successful entrepreneur.”

Most participants, whether presenters or audience, arrive at the Monday Morning series with agendas. For investors, the sessions represent an opportunity to see what new businesses are being started in the region and to meet the entrepreneurs. For entrepreneurs in the audience, the sessions provide an opportunity to observe how other entrepreneurs present their business cases and to hear the sorts of questions that they might expect to encounter when doing their own fund raising. For the presenters, the Monday Morning Meetings are a way to meet people who can connect them to money as well as a way to float their business plans before an expert audience that will offer constructive suggestions and advice.

April presenters represent high technology and advanced manufacturing.

Sun Phocus Technologies, LLC, and Network Blackbox are clients of the University Technology Park. Sun Phocus Technologies designs and manufactures innovative solar window technology that is appropriate for installation into environmentally friendly commercial and residential buildings. The company uses holography to concentrate the sun’s rays and produce electricity from standard solar windows more cost effectively than other available technologies. Sun Phocus panels are aesthetically attractive and can mimic stained glass with a myriad of colors.

“Sun Focus was actually relying on the expertise in the room to help them with a decision on their business model, which was a first for this forum,” Nourie says. “They received very good response from the audience.”

Network Blackbox is preparing to launch a flagship version of its revolutionary data backup system. The product will be ready for use straight from the box, is priced at $2,000, and is designed to serve small- to medium-sized businesses looking to safeguard their data against natural, technological, or man-made disasters.

Inspired by the blackbox recorders on airplanes, this network-attached storage device can automatically comb, flag, store, and archive data from up to 100 workstations. It performs at a higher rate and can be sold for a lower cost than any known competitor in the market.

The third company, SuperMaterials, Inc. (SMI), an affiliate of Materials Modification, Inc. of Fairfax, VA (www.matmod.com), is looking to relocate to the Midwest. SMI creates customized ceramic and metallic super materials, formulations, and component application engineering for extreme environments, producing materials with extreme strength and resistance to extreme heat or corrosion. If volumes warrant, SMI will build production equipment for the client’s facility. SMI’s website is currently under construction; to learn more visit www.acorncommerce.com.

Presenting companies follow rigorous process.

ITDA follows rigorous criteria for selecting companies to present at the Monday Morning Meeting series. Presenting companies are not always from Chicago; they come from Peoria, Rockford, Champaign, and other parts of Midwest. Nourie says that one St. Louis-based company secured $1 million in funding as a result of contacts they made at the event.

Larry Martinelli, co-founder and partner of SMI, and his associates attended several Monday Morning Meetings before they applied to present. “We have been working and striving for a few months to get on the agenda,” Martinelli says. “ITDA sent us away a few times, but we kept working and coming back, and we are the better for it. “

Martinelli says that ITDA represents an objective view. “ITDA doesn’t have an agenda except to help build companies and assist them with their growth in the commercial marketplace,” he says. “They don’t pull any punches. They ask the tough questions. There were a few things we didn’t exactly agree with, but we figured that the folks from ITDA had done this before, so we listened.”

That advice meant that SuperMaterials spent more than 50 hours reworking their presentation. “We stripped it all apart and redid the whole thing, which in turn changed our business plan,” Martinelli explains. “ITDA offered some excellent suggestions, including one that actually prompted us to re-name our venture to be far more explicative of what we do.”

Monday Morning Meeting produces immediate benefits.

Martinelli says that SuperMaterials benefited from the Monday Meeting on the spot and at multiple levels. “We had a sit-down with one of the investment groups, and now they are on our A list as an approach for follow up funding,” he says. “Not only that, there were other people who approached us with an interest in buying our products.”

“The audience contributes to the advancement of the presenting companies just by being there to offer comments, expertise, and advice,” Nourie adds.

“The Monday Morning Meetings are a great place to go and get to know the space,” Moderator Dryer says. “You never know who you are going to meet.”

The next Monday Morning Meeting will be in September. More details to follow.

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Don’t Write a Business Plan that Arrives DOA     

By Joel Dryer

A well-developed, focused business plan is critical for any entrepreneur who wants to commercialize an idea or technology. "In my work as an entrepreneur, says Joel S. Dryer, President of Lab To Company, (www.labtocompany.com), “I’ve reviewed hundreds of business plans. Unfortunately, all but about 10 percent of those plans were rejected, not because the businesses presented were inherently bad ideas, but because the entrepreneur failed to present enough of a plausible business case to evaluate whether the proposed business had potential or not.”

Understand the market as well as you understand your technology.

The executive summary is the entrepreneur’s one-shot opportunity to capture an investor’s attention enough to keep them reading through the rest of the plan. If you can’t describe what your business is doing in one or two paragraphs of simple language, you aren’t ready to be raising capital.

While the executive summary is important, Dryer says that the number one problem with business plans is that the entrepreneur doesn’t demonstrate a deep understanding of the market to be served. “It is important to research the size and growth potential of the market, but it’s more important to actually talk to the people who will be buying and using the product or service you plan to provide,” he says. “Before the business plan is written, an entrepreneur should have spent many months contacting the people who are in the markets where they intend to sell.”

Know your competition better than they know themselves.

It is vital to show a thorough understanding of the competition—both competitors who already exist and those who may be entering the market in the future. When a business plan states there is no competition or lightly discounts competitors, Dryer says that it is clear the entrepreneur hasn’t done enough homework. Every idea, product, or company has competition, and investors demand that the founders of a new company understand fully the other players in any market being served.

Investors know the management team can make or break the company—do you?

Nothing kills a business plan faster than when a technical person with limited or no operating experience fashions themselves as the CEO. Without demonstrable business experience running companies or operating corporate divisions a person cannot understand the nuances of the business matrix, and it’s a mistake to represent they can.

Conclusion

While technology is at the core of a start-up company, it is the science of business that converts it to commercial value. “You can never know enough about your competition or the markets that your business is planning to serve,” Dryer says. “It takes a business person to turn a start-up into a growth company. Clear language supported by hands-on market research makes it easy for potential investors to consider your business plan.”

Read the full text of Mr. Dryer’s article here.

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ITDA Launches State-of-the-Art Web Site

This month the Illinois Technology Development Alliance launches a new, state-of-the-art web site at www.illinoistechnology.com. The interactive site, which was designed specifically as an efficient and comprehensive communications tool and information source, significantly expands and improves ITDA’s services to clients and stakeholders.

“Our web site has been completely redesigned and redeveloped with the end user experience as the number one goal,” says Tom Thornton, ITDA President. “This new site underscores ITDA’s mission of speeding cutting-edge technologies to the marketplace by connecting innovators to investors and customers.”

Clients can use the web site to gain access to resources as well as to request assistance. All the information that a company needs to begin a working relationship with ITDA is now available online. The site is very interactive and provides a short request for assistance form where entrepreneurs can enter a few key points about their businesses to initiate the ITDA process.

“We want the companies and entrepreneurs that we can help to realize that quickly up front and contact us,” Thornton says. “When our services aren’t a fit, we also want to efficiently redirect those companies to one of our partners or to another resource.”

The new web site provides complete, up-to-the minute information on ITDA services and programs as well as links to dozens of additional resource sites. The site is very flexible; information can be loaded quickly, and ITDA will be updating the content regularly as programs change.

“Anyone in this space who doesn’t have the time to go through multiple web sites can visit ours,” Thornton says. “We welcome our partners and people in the technology industry who want to get ideas and keep in touch with the challenges and opportunities that technology entrepreneurs face.”

Clients and stakeholders can also use the site to register for events and subscribe to ITDA publications, such as FundingAlert and TechAlert, which have been redesigned and improved. With the launch of www.illinoistechnology.com, ITDA also inaugurates Entrepreneur Briefcase, a program of expert articles on topics of specific interest to entrepreneurs. Prior issues of all three publications, as well as other articles of interest, will be archived on the site.

ITDA engaged Zant Development Group, of Roscoe, IL, to design and implement the site. “Our company’s whole business focus is on helping clients create an appealing web site and use the web effectively so that end users get the information they need as easily as possible,” says Kathy Zant, President of Zant Development Group. “The new ITDA web presence accomplishes this very well.”

The site offers graphics that are colorful and pleasing with text that is easy to read. The pages are light and download into a user’s browser quickly. A special style sheet prints only the information that a user selects without extraneous text or graphics, such as navigation information. The enhanced site also features a quick and robust search engine and offers an easy-to-follow hierarchical drop down navigational system so that no matter where users are on the site, they can maneuver to another place or exit with only a couple of clicks.

“We welcome feedback,” says John Noel, ITDA Vice President and Program Manger. “Visitors can send an email through ‘Contact Us’ with their suggestions. We want to keep www.illinoistechnology.com lively, timely, and tailored to our clients’ needs.”

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