It seems in an era of fast-paced innovation and change, the city that can attract creative people, give them an environment in which to thrive and facilitate their success would have a significant start toward long-term prosperity. I can’t really rattle off a list of ideas or businesses connected to Knoxville that changed the world. We are home to Pilot Oil which, until recently, seemed invincible. We produced Goody’s, but they ultimately failed. There’s the Dempster Dumpster, of course. Back in the day there was White Lily Flour which had a national following, as well as JFG coffee. I’m sure there are more.
But today’s world is high-tech and ideas or companies that change the way we do things or the way we view our world are likely to come in those areas. So, how does our city foster the people who might come up with the next amazing innovation or the next Fortune 500 business? One way is through the Knoxville Entrepreneur Center. Its mission is to help polish entrepreneurs by connecting them with mentors and then, hopefully connecting them with investors.
Here’s where you get to pick: I attended an event earlier this week sponsored by the center and Entrepreneurs of Knoxville. It was billed as a pitch competition which included five contestants. Each had an idea and had to pitch it, attempting to convince a panel of three judges that their idea was the best. One thousand dollars was on the line, with first place getting five hundred, second getting three hundred and third getting two hundred. The other two people got free beer for the evening.
I asked someone present why this was worth their time, given that the money needed to launch their proposed projects dwarfed the prize money. She pointed out that they will each have to do the same thing in front of potential investors with the money to make it happen, so practice in a similar situation helps. Additionally, the top two presenters would get to pitch to the Angel Group and receive mentors to help them along their journey.
So, I’ll give you the five ideas as best I can and you decide who is most likely to succeed. I realize you don’t have the benefit of the full descriptions, but you also don’t have any real money, so let’s play, shall we? After the descriptions I’ll tell you who the judges felt most worthy. Ready?
Contestant number one is Dave Seaman and his project is a gift-giving web portal called Willow List. It allows for a universal gift registry for any events. The design allows for the gift registry to include any item found on the entire internet in one portal. It also allows for group giving, so that if a bride and groom want a two-thousand dollar couch, guests would be able to add money to the purchase of the couch, essentially “going in with” people you may not even know. There are no duplicates and no returns and gifts are delivered to the door of the recipient. He needs about $10,000 to get started and he projects $40,000,000 in annual revenue by the third year. He backs up his projections under questioning from the judges. His plan would be to sell the business to Amazon or a similar company.
Contestant number two is James Horey, Ph.D. His idea is the democratization of data by offering a data analytics marketplace. The portal, which he calls Open Core, would allow companies in need of data support to log in, answer a series of questions and within a couple of hours they should have the software they need and the data services behind it to begin work. This process currently can take months to achieve as companies do it on their own. His target would be emerging companies and they would pay a monthly subscription ranging from $60 to $500 per month. He needs $250,000 to get started and projects $50,000,000 in annual revenue in five to six years at which point he would expect an acquisition. Amazon was, again, named as a likely company for that acquisition.
The third presenter, Kyle McClain has a non-intrusive application that would monitor blood sugar for diabetics, retaining the data and charting trends. It replaces the need for close monitoring by individuals who often don’t self-monitor as well as they should. He pointed out that a third of the US population has diabetes or pre-diabetes, so the market is huge. The application is called “Gluti” and he refers to it as a diabetes virtual assistant. It also includes a social component allowing a friend (or parent of a child) to see the data in real time so they might encourage the patient to do better. He needs $125,000 to get started and projects $3,000,000 a year in a few years and $15,000,000 down the line. He feels it could pull in a $1,000,000,000 world-wide and he expects an acquisition, probably from an insurance company.
Kathryn Eaton presented next. She’s an accountant and former award-winning skater who is currently affiliated with the Hard Knox Roller Derby Girls. She proposes a family skate center with equal parts health and nutrition classes, team sports, a café and partnerships with other fitness centers. She wants to build in west Knoxville where she has determined the numbers of home-schooled students (8,000 in Knox County) and Day Care Centers (45 centers with 5,000 children) would be enough to make the business thrive. She points out that home-schooled students are required to have physical education as a part of their curriculum. Purchase of physical space would be the primary reason for her initial need of $500,000 to $750,000. She anticipates an 8% to 12% return on the money invested and looks to franchise the concept.
Finally, the fifth presenter was Dan Grabel who operates Camp Manitowa in southern Illinois. He and his partner have twenty years experience in the summer camp business and own the camp they now run. It continues to grow and repeat customers and word-of-mouth seem to be working for them. They want to incorporate a two week program and offer it several times a year, in which one week would be at the camp and the second week would be a mountain experience in the Great Smoky Mountains. To launch the project they feel they need $50,000.
So there you go. Which projects seem worthy of the funding? I found the exercise fascinating because it is so foreign to my world. I can see how the practice in front of judges who ask pointed questions could be very helpful in sharpening the presentation and, perhaps, in convincing a person to alter a portion of their proposal. They were forced to defend projections and asked if they had considered alternative to some of the portions of the various projects? So are you ready? Don’t read further until you pick. Here goes:
First, I’ll give you mine: My third place pick was the skating rink. Given her background and solid research, I felt like it was possible it could work. It also seemed very grounded in reality. In second place I had Willow List. It seemed to me to be possible it will work, though I’m not sure to the millions imagined. Still, with a modest up-front capital ($10,000), it seems like a safe gamble. In first place I had Open Core presented by James Horey. You don’t have the advantage of seeing the nerdy wheels turning behind this guy’s eyes, but I think he knows what he’s talking about. I don’t, but I believed him.
The judges picked James Horey and Open Core as their third place choice. They selected Kyle McClain’s Gluti app as their second choice and they picked Willow List as their number one best pitch prospect.
I enjoyed seeing creative, hungry people reaching for something big. I’m rarely in a room where financial numbers that big are discussed with a straight face and without reference to winning the lottery, so I felt it offered me a glimpse into a world to which I rarely have access. Finally, it reminded me that these nerdy, driven, creative people live amongst us and do their thing off my radar. I’m glad they are out there. They give me hope for our future.