Startups make pitch for future
FAYETTEVILLE — Using jokes, charts, analysis and charm, the entrepreneurs take turns spotlighting their companies.
Their peers and a project mentor pepper each presenter with questions, critiques and praise. The spokesmen have eight minutes to convince potential investors that their enterprise is worth considering.
This is “pitch practice” at The Iceberg Coworking Space for competitors in the ARK Challenge, a boot camp for technology startups that began in early August.
The 15 companies are on the final leg of the program. They are preparing for Demo Day, where they’ll pitch their companies in front of more than 200 potential investors Thursday at Crystal Bridges Museum of American Art in Bentonville. It’s a rare chance to seek seed money and a crack at $150,000 in additional funding that the challenge can award.
Participants receive $3,330 to cover cost-of-living expenses in Northwest Arkansas and a $15,000 investment in their companies, in exchange for a 6 percent equity stake. The startups also get free office space in downtown Fayetteville at The Iceberg Coworking Space, with access to industry research and marketing services. The participants also receive advice from mentors and can communicate with various experts.
The payoff for the state and region is the chance to foster small start-up companies that will employ highly skilled workers — who in turn will potentially spawn even more small start ups.
“Over the next 20 years, success in economic development will come through brain gain,” said Mike Harvey,
chief operating officer of the Northwest Arkansas Council, a nonprofit organization that promotes the region.
Technology start-ups tend to bring fewer jobs, but they’re high paying, said Carol Reeves, associate vice-provost for entrepreneurship at the Sam M. Walton College of Business at the University of Arkansas at Fayetteville. She added that the collegiate and collaborative environment that such companies foster tends to lead to expansion.
Northwest Arkansas is home to Fortune 500 giants Wal-Mart Stores Inc., Tyson Foods Inc. and J.B. Hunt Transportation Services Inc. Thus, the ARK Challenge focuses on technology products serving retail, food processing and logistics.
The ARK business accelerator program began in March and operates the ARK Challenge. The ARK is one of 20 winning projects of the U.S. Department of Commerce selected to receive $2.1 million in federal funding, said Jeannette Balleza, the program’s director. The ARK is a coordinated initiative by Winrock International, the University of Arkansas and Northwest Arkansas Community College in Bentonville to advance regional competitiveness.
Investment funds for the ARK Challenge came from the ARK Investment Fund LLC., supported by the Fund for Arkansas’ Future, the Arkansas Development Finance Authority, Winrock International, Gravity Ventures and individual investors.
ARK Challenge participants were selected from more than 83 applications from 14 different countries and 14 states.
NABBING CUSTOMERS
Janakiram Gianesan and Pavan Kumar of Bangalore, India, came to Northwest Arkansas to develop their company, MineWhat.
MineWhat is designed to help e-commerce sites nab customers and keep them engaged and returning, improving conversion rates — the number of visitors performing a desired action, like purchasing a product.
MineWhat provides human-like interaction for ecommerce sites but without the human, Gianesan said. It brings the personal service experience of a brick and mortar shop to online stores.
Online shops are spending millions of dollars to get users to their sites, but they often bounce out within seconds, he explained
MineWhat assesses why the user is coming into an online shop and helps them do what they want to do.
“When I walk into a shop today, I may not want to buy, I may want to explore,” Gianesan said. “We don’t necessarily have to sell a user on the first attempt.” When the customer returns, there is a potential not only for a sale , but to interest him in additional products or services.
Kumar said one of the benefits of the ARK Challenge Is learning about Northwest Arkansas and its people. He said the program broadened his understanding of other cultures, and understanding a customer’s needs is what MineWhat is designed to do.
CONSTANT QUESTIONS
Jeff Ford, co-founder and chief executive officer of Perks.com, a program mentor who helped establish the ARK accelerator program, said the Ark Challenge businesses target problems that are important for large companies, but not something for which an in-house solution is needed.
He said the ARK Challenge helps the start-ups refine their business plan through constant questioning and analysis and then teaches them how to communicate that concept to investors and corporate customers.
The ARK Challenge itself is a start-up, Ford noted, and it’s going through a period of testing and development.
The program is funded for an additional year, but Ford and other backers hope to continue it for a third year with privatesector investment.
“We don’t want this to simply be an exercise that dies,” he said.
PLAYING THE GAME
Pablo Arellano Jr., co-founder of Earn & Play, is from Cincinnati.
“We are the first grocery app where you actually make money as you shop,” Arellano said.
The smart phone application asks customers what section of the store they’re closest to, then forms a trivia-type question based on that location — say, for laundry detergent. If the player doesn’t know the answer, it can usually be found on the packaging, resulting in a scavenger hunt of sorts.
The answer is then entered into the app, and the consumer will get a discount coupon for the product, or he can opt for a small cash amount that can build over time.
Meanwhile, the producer gets the chance to lock his brand in with potential customers when they’re presented with a sea of choices.
Arellano said the company opted to try for the ARK Challenge to gain access to Wal-Mart and its network of vendors, like Proctor and Gamble, who Earn & Play has developed relationships with.
Previously, Arellano worked for Proctor and Gamble in brand management and as an entrepreneur.
He said that after testing and the project launch, it’s the company’s intention to come back to Bentonville to establish its headquarters and hire more workers, because the area is rich in potential corporate customers.
“It’s Vendor-ville, right?” he said.
FAILING EARLY
David Moody is president of Little Green Windmill Inc., a high-tech battery company based at the Arkansas Research and Technology Park in Fayetteville.
He’s also one of the 60-plus ARK Challenge mentors.
“I try to surround myself with people who are smarter than I am, and it’s easy to do when you walk into the Iceberg these days,” Moody said.
Moody said sometimes losing teaches more than victory.
“We believe in the concept of failing early and often and working your way to success,” he said.
Moody added that sometimes knowing the risk can stop a great idea dead in its tracks. He said risk-aversion is rare at The Iceberg.
“It’s rejuvenating for me to be around folks who are relatively fearless,” he said.
EYES ON THE PRIZE Chuong Nguyen , co-founder of Streamix, was born and raised in Rogers.
The Streamix subscription service allows venues to create a custom listening environment for their patrons. It takes what sites did for personal music selection and makes that viable for commercial establishments, like bars.
Venue owners pay a monthly fee for the service and can customize the music to fit their need.
Patrons can use an app to interact with the system and see how many other Streamix users have checked into the venue. If they want to request a song, users can pay small fee, or they can lobby with the other Streamix users to rally the group and push through the song selection.
Nguyen was in IT before focusing his efforts on Streamix. He said development was moving too slowly and the ARK Challenge was a great opportunity for the start-up to move forward.
When asked about getting ready for Demo Day, Nguyen grinned.
“We’re preparing with a lot of caffeine and realistically limited sleep,” he said. “We want to go for the win, but we’re not going to stop until we get where we want to be. This is not the endgame.”
WHERE TO SEND NOTICES
Notices of executive promotions, new hires or job changes should be sent to: People Editor; Business News Department; Arkansas Democrat-Gazette; P.O. Box 2221; Little Rock, Ark. 72203, or by e-mail to trobinson@arkansasonline. com. Notices should be limited to a few paragraphs and may be accompanied by a photograph, preferably a glossy black and white, which will be used on a space available basis. Photos cannot be returned.