One company puts safe hair care products in the hands of pregnant women. Another company lets iPhone users exchange information with each other through a simple fist bump.
Founded by Chicago Booth students, each start-up won a $25,000 first prize in the largest Edward L. Kaplan, ’71,New Venture Challenge to date after the final competition at Harper Center on May 28.
Four other teams among 10 finalists also collected prize money at the annual competition, which is sponsored by the Michael P. Polsky Center for Entrepreneurship.
In all, 128 teams from the Chicago, London, and Singapore campuses competed in the business plan competition, which began in the fall. A panel of investors and entrepreneurs determined the 10 teams that advance to the finals.
Judges chose Bump Technologies, Inc., the iPhone application company, in part because “the fact that we have so many users already helped us show that this is real and that customers love to bump,” said first-year student David Lieb, company cofounder. The free application had more than 800,000 downloads in just two months and achieved the distinction of being the one billionth application downloaded from the Apple Store.
Another reason for the Bump team’s contest success was Bump’s “very flexible business model” in that Bump can be used for so many different things, Lieb said. The company aims to make Bump a platform technology that will work across mobile phone platforms and wireless carriers. A future release will enable “bumping” of photos and multiple contact cards.
Second-year student Nicole Shariatzadeh, founder of NINE Naturals, said her team impressed the judges with the company’s unique idea and proof that the team could execute the idea. “We are very committed to turning our business idea into a reality, and I think that commitment showed in our presentation and our progress thus far,” she said.
NINE Naturals sells shampoos and conditioners free of pthalates, sulfates, parabens, and DEA. The products are sold in retail stores in Chicago, in a New York boutique, and on the web. Other team members included first-year students Grace Lee and Rebecca Wenngatz and second-year student Umar Haider.
The New Venture Challenge gave Shariatzadeh’s team the skills to “take an entire business and condense it into ten minutes of convincing information,” she said. “From an individual business perspective, we got tremendous feedback on our business that helped us grow our idea and make it attractive to investors.”
The prize money will allow the company to invest heavily in its Chicago-based marketing plan. “By the end of this summer, we want NINE Naturals to be on the tip of every expecting mom’s tongue and we think our marketing plan will help make that happen.”
Bump Technologies will use the award money to help pay salaries for additional software developers the company is currently interviewing, and also for legal expenses of filing initial intellectual property, Lieb said.
Both Lieb and cofounder and first-year student Jacob Mintz are electrical engineers. Also playing an integral role on the team was fellow first-year student Dominic Hofstetter.
Lieb said he first wanted to bump phones together to transfer such information as phone numbers back in 2005. But it wasn’t until accelerometer technology developed that he could pursue his idea. “When daydreaming in accounting class in the fall, it struck me that we could finally build a system to exchange info by just bumping phones together,” Lieb said. “I sketched out the first schematic on my accounting notes.”
The contest helped the team “really focus in on our core value proposition and prioritize what future products we should focus on,” he said. “When presenting a business idea to a group of investors, it is crucial to understand the backgrounds of the audience. Connecting on a personal level with the audience in the first two minutes of your pitch is essential.”
Mintz said it’s important to make a presentation “personal and tangible.”
“One of the problems with technology businesses is it’s really easy to describe your product in a way that no one understands,” he said. The group made it tangible by offering an explanation of the technology followed immediately by a demonstration. To make it personal, Mintz explained that he hates business cards and said “our technology lets me exchange contact information in a better way.”
The NVC, founded in 1996, has awarded $600,000 to date and has helped launch more than 45 companies that have gone on to raise more than $100 million in equity capital. The NVC title sponsor is Edward L. Kaplan, founder and former chairman of Zebra Technologies.
Other sponsors of the New Venture Challenge included Mitsubishi Corporation, Market Strategy Group, LLC, Reed Smith LLP, Deloitte Consulting LLP, and individual sponsors Fred Dotzler and Immanuel Thangaraj.
In addition to seed funding, the winning NVC teams also will receive legal services, professional consulting, and incubator space.
Other winners each received $7,000. They included Card Tag, a secondary marketplace for gift cards; In Context Solutions, a market research company; Masala Wala, a “fast casual” restaurant concept for healthy East Indian food; and Virtual Lab, which develops solutions that help high tech product developers minimize their test and measurement equipment costs.