Four Driven Chicago Entrepreneurs

Toys inspired by video games, an unconventional yogurt startup, and a Web site offering educational videos to doctors

Fun and Games

Playing video games all day can be tiring, at least according to Shawn Smith, who left his job as an editor at Ziff Davis (ZFDH.PK)'s Electronic Gaming Monthly to create an alternative world of his own. In 2002 the visual artist began Shawnimals, a line of quirky plush toys such as butt-kicking ninjas, bouncy radishes, and talking moustaches. Smith, 32, hand-made the toys with his wife, Jennifer Brody, in Chicago's Bucktown neighborhood until last year, when he outsourced the work to China to keep up with orders. Now Smith is expanding from toys—available in 200 stores at $6 to $30—to get back into the 2D realm of video games. He's helping develop a game for Nintendo (NTDOY) DL based on Ninjatown, a Shawnimals property. It's scheduled for release next fall. —Oscar Raymundo

Leaving Kraft Singles Behind, She's Doing It Her Whey

Daphne D. Mazarakis can make whey protein sound pretty appealing. A former brand manager at Kraft Foods (KFT) (Velveeta and Kraft Singles), Mazarakis, 35, says she sprinkled whey powder on her regular meals and, without doing anything else differently, she lost a skirt size in six weeks. Now she's preparing to roll out her own line of yogurt with whey protein. Her startup, Tula Foods, plans to begin supplying its Better Whey products to Whole Foods Market (WFMI) in July.

Body builders have been consuming whey protein since the 1970s. But extracting it from milk isn't easy. Plus, the substance often tastes chalky. "It requires delicate treatment and high technology," she says. Although whey protein could be added to other products, Mazarakis chose to start with all-natural yogurt because its sales are growing 35% a year in organic markets. The alum of the University of Chicago Graduate School of Business invested $800,000 in Tula after leaving Kraft in 2007. She hopes her Evanston business will be profitable within three years. —Jing Zhou

No College Degree Behind

Two years ago, Rishi Shah and Derek Moeller were economics majors at Northwestern University batting around ideas for a business plan competition in Professor William J. White's engineering entrepreneurship course. Today the two are dropouts—running their own startup with the backing of White, a former chairman and chief executive of Bell & Howell who, along with their families and others, anted up $700,000 for their venture.

Their business, ContextMedia, distributes educational videos to doctors specializing in diabetes. The free programs, interspersed with drug and medical-equipment ads, are then shown in waiting rooms. Shah, 22, says he and Moeller, 24, have installed more than 350 screens in the practices of 1,500 physicians and expect 6 million patient views in 2008. Revenue comes entirely from ads, which work out today to about $4,000 per screen annually. ContextMedia will break even this year with $2 million in sales, says Shah, and expects to be profitable next year. —Howard Wolinsky

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