Welcome to America's Most Promising Startups, an ongoing series profiling new companies from across the country that embody the creativity and resilience common among today's entrepreneurs. Based on suggestions from our readers and staffers, we'll be adding more profiles on a regular basis, so check back often. Our goal is to showcase promising companies before they become household names.
If you have a suggestion of a new company worth profiling, use this suggestion form to jot down its name, Web site, contact information, and a sentence or two describing what sets it apart. We'll follow up on your best suggestions. Flip through this slide show for a look at all the profiles.
Allwyn Lobo and Murali Subbarao
In 2003, Murali Subbarao anticipated that individuals would soon prefer to pay bills online, and he was frustrated by how clumsy the process was. "People were paying bills at the bank website, and the only way you could pay was with your checking account," he says, noting it took days for payments to take effect. He envisioned a way to instantly make a payment at a company's website using credit and debit cards as well as bank transfers. Subbarao, a former finance executive for Hewlett-Packard, used $100,000 of his own money to start Billeo with co-founder Allwyn Lobo. They built a browser application to remember passwords, addresses, and credit-card information. The browser add-on automatically fills out payment forms, saves receipts from purchases, and reminds users when their next payments are due. Billeo makes money by selling branded versions of the add-on to financial companies such as Visa, American Express, and Wells Fargo. Billeo had about $4.3 million in revenue in 2010 from about 40 clients, says Subbarao, 48. The 17-employee company, which is based in Santa Clara, Calif., has raised $11 million from investors, became profitable last September, and has more than 1.4 million users, Subbarao says. He expects revenue to double this year, partly driven by an iPad app slated to launch in September. —Tori Stilwell (posted Aug. 25, 2011)
Health-care IT at most hospitals is outdated. Clinicians rely on noisy overhead intercoms, bulky pagers, and scratchy cordless phones to convey crucial information. A 2009 study by the University of Maryland Robert H. Smith School of Business found that poor communication costs U.S. hospitals $12 billion a year. To help nurses work more efficiently, 3-year-old startup Voalté sells an app compatible with BlackBerrys, iPads, and iPhones that consolidates hospital alert systems with phone and text messaging. Cell phone service is notoriously bad in hospitals, so Voalté runs the system over hospital Wi-Fi. Hospitals buy the smartphones directly from manufacturers, while Voalté provides servers, software licenses, and accessories. Support staff monitors everything from call traffic to battery life from afar. Pricing varies, but CEO Rob Campbell says a hospital can get started for about $75,000. If it all seems obvious, Campbell says the best products usually are. The 30-employee, Sarasota (Fla.) company has signed up 11 hospitals, including Texas Children's Hospital in Houston, the country's largest pediatric hospital. As the manager of application software for Apple in the 1970s and founder of the company that created PowerPoint, Rob Campbell likens the rapid development of applications for smartphones to the software push driven by the personal computer. He hopes to triple revenue in 2011, from a little more than $2 million last year, and expects to be profitable by the end of 2012. Campbell’s optimism is fueled in part by new record-keeping and diagnostic apps that are pushing the smartphone to the forefront of patient care. "Clinicians are mobile people," says John Moore, a managing partner at Chilmark Research in Cambridge, Mass. His firm projects that the market for mobile health-care apps in hospitals and other institutions will hit $1.7 billion by the end of 2014. "They want information without having to log into a computer on wheels." —Patrick Clark (posted July 6, 2011)
Amy Norquist (left) and Tad Floridis
Green roofs—hardy rooftop gardens intended to beautify and insulate buildings—have been popular in Germany and Japan for more than 50 years. Now they’re starting to catch on in the U.S., says Amy Norquist, founder and CEO of green roof designer and installer Greensulate in New York. The 10-person Manhattan company installed more than one-third of the new green roofs in New York City last year, she says. Norquist, the former deputy director at Beacon Institute, a nonprofit environmental research group in New York, started the company in 2008 after being underwhelmed by the options available for her Long Island home’s 900-sq.-ft. roof. Greensulate’s sales pitch to businesses and homeowners: Because plants absorb sunlight, adding rooftop vegetation lowers building air conditioning costs. "On a 90-degree day, air on rooftops can reach 150 degrees," says Tad Floridis, Greensulate's chief operating officer. Greensulate’s installations of sedum, grasses, and perennials average $13 to $35 a square foot, including warranty and maintenance. Floridis says customers will recoup that cost in energy savings in five years. The company recently completed installations of more than 10,000 sq. ft. for the Fashion Institute of Technology and Regis High School in Manhattan. Now Floridis says it is drafting designs for Fortune 500 office buildings and manufacturers in Pennsylvania, Ohio, and Florida within 18 months. Floridis says Greensulate had $1.2 million in revenue last year and expects more than $3 million this year. Industry advocacy group Green Roofs for Healthy Cities estimates that nationwide, the square footage of such installations increased from some 3 million to roughly 8 million from 2006 through 2010. Floridis anticipates the market will grow from $60 million this year to $120 million by 2014, aided by New York’s 20-year, $1.5 billion Green Infrastructure Plan and Philadelphia's 25-year, $2 billion Green City, Clean Waters initiative. —Antoine Gara (posted July 6, 2011)
Tom Murray (left), David Rochon
David Rochon started his career in groceries at the age of 17, packing shelves at a Brockton Public Markets in Hanson, Mass., in 1973. Over the decades that followed, he went from deli and dairy manager to an executive at grocery-marketer Catalina Marketing, and then to president of Upromise, a college saving service that allows shoppers to apply credit earned at grocery stores and other retailers to college tuition. At Upromise, he noticed digital coupon businesses hadn't managed to launch a paperless model with national scale—despite diminishing competition from newspapers. After raising $9.25 million in venture capital, Rochon launched SavingStar in April, offering shoppers digital coupons redeemable at more than 24,000 grocery stores and pharmacies across the country. Users enter identification numbers on the backs of their loyalty cards at SavingStar.com, select coupons on the website or the company's iPhone app, then present their loyalty cards at checkout to redeem the coupons. They pay full price at the register, accruing savings in an online account that can be tapped via direct deposit, PayPal, or Amazon.com gift certificates. Brands pay SavingStar 50¢ for each coupon redeemed. The 30-employee, Waltham (Mass.) company has registered 410,000 users since its April launch and recently surpassed 350,000 downloads for its app. Digital coupons are 33 percent more likely than print coupons to be redeemed by new buyers of a product, according to a study published by Knowledge Networks in Palo Alto, Calif. Rochon says that SavingStar's paperless redemption system gives the company a leg up on Coupons.com, the digital coupon giant that raised $200 million in a June private placement (that gave the company a $1 billion valuation), because Coupons.com often requires shoppers to print coupons at home. Maintaining a nationwide network of stores is critical, according to Rochon, who serves as CEO. "Wherever you are, you can take action on our savings," he says. "That national platform creates efficiency for the brands." It also lets SavingStar tap into larger, national marketing budgets. Rochon projects $2 million in revenue this year and $20 million in 2012. —Patrick Clark (posted July 6, 2011)
Wiley Cerilli wants to be the bridge between restaurants and the growing gaggle of mobile apps and websites that promise to connect them with diners. His year-old company, SinglePlatform, lets restaurant owners plug information about menus, hours, and promotions into one system that pushes the data out to thousands of apps, review sites, hotel directories, and networks like Facebook and Twitter. Restaurants pay a one-time sign-up fee of $100 to $200. SinglePlatform generates a unique phone number for each restaurant's listing and tracks how many diners call through the system. It charges $1 for each call that lasts more than 30 seconds, presumed to be a reservation. The 31-year-old Cerilli, a veteran of online food delivery company SeamlessWeb, says the technology behind SinglePlatform isn't complicated. "The difficulty is signing up that network of restaurants who are not tech-savvy," he says. Most of his 23 employees are salespeople who have enlisted 3,000 restaurants in New York (where SinglePlatform is based), Boston, Chicago, San Francisco, and Los Angeles. The company raised $1.2 million in venture capital in September. Cerilli says SinglePlatform had sales of about $500,000 in its first year, and he's projecting more than $1 million this year.
—John Tozzi (posted on April 15, 2011)
While the Internet has changed the way people buy and sell many things, most of the art market still operates as it has for decades, with collectors and galleries scouting art fairs and buying art after they see it in person. Boris Pevzner aims to change that. "What I wanted to do, really for as long as I could remember, is figure out a way to combine art and technology," says Pevzner, 39. He's a veteran of three previous startups, including game company XFire that Viacom acquired for $102 million. Pevzner's latest venture, Collectrium, is a mobile app that acts as an electronic catalog for art fairs. Collectors can point their phones at artworks to learn about the artist, the gallery, the price, and save it to a list of favorites. Since the business's launch in Basel in May 2010, Pevzner says he has enlisted about half of the 180 art fairs around the world, which pay up to $20,000 per event for the service. Other versions are available for galleries, collectors, and artists for $20 to $50 per month. Galleries use Collectrium to manage their inventories; collectors browse works in distant places. Pevzner projects more than $1 million in revenue in 2011 for the seven-employee New York company.
—John Tozzi (posted on April 15, 2011)
Sean Harper and Josh Krall
In 2008, Sean Harper, 30, and Josh Krall, 32, grew frustrated shopping for credit-card processing while running their own businesses because they found it hard to compare rates and services. At the time, Harper was selling satellite radio gear online and Krall operated a custom-electronics maker. "There's like, 900 of these companies selling credit-card processing under their own name," says Harper, although most are intermediaries to the handful of companies that actually handle transactions. Merchant processing typically comes with a byzantine contract loaded with fees, he says. The two, who were then getting MBAs at the University of Chicago, launched FeeFighters in April 2009 to make the market for merchant processing more transparent and easier to navigate. "We're disintermediating the people who sell this stuff door to door," Harper says. Merchants tell the site how much credit-card volume they process, as well as the average transaction size. Processors bid for their business based on that information. Processors that list on FeeFighters must agree to drop many charges, such as the cancellation fees common in processing contracts. FeeFighters gets a fee, typically a few hundred dollars, from the processor when a merchant signs up. The Chicago company, with a team of six, has raised almost $2 million in venture capital. Harper says FeeFighters has a few hundred transactions each month and projects that revenue will grow from $200,000 in 2010 to $1 million this year. He says FeeFighters plans to expand eventually to other financial services for businesses, such as insurance and payroll services, and may hire as many as eight additional employees in 2011.
—John Tozzi (posted on Feb. 4, 2011)
Eric Golden, a former executive vice-president and general counsel for iconic camera maker Panavision, was sure that the technology advances he witnessed over the three years he spent trying to reinvent the struggling company would be valuable outside Hollywood. Fast-forward to a meeting at a trade show with Steadicam inventor Garrett Brown in 2006. Golden licensed the Steadicam technology, which isolates its user's movement from the camera, with the goal of creating a new tool to protect injury-prone tradesmen doing precise work such as riveting fuselages and grinding metal. He founded Equipois the following year to design and manufacture mechanical arms that make tools feel weightless for users, but don't limit the operators' range of motion. Customers reported dramatic decreases in injuries and increases in productivity—bringing Equipois a slew of innovation and ergonomics awards. During the Great Recession, demand came to a "screaming halt," but picked up in the second half of 2010 and is booming today, says Golden, 42. He estimates that half of sales for the $5,000 and $10,000 systems come from aerospace, automotive, and heavy machinery manufacturers, including Airbus and Boeing, Ford and Toyota, Caterpillar and John Deere. With approximately $10 million in venture capital backing, Golden expects revenue at the 22-employee Los Angeles business to triple this year, to around $4 million, and projects it will be profitable by 2013. Next up: a $2,000 to $3,000 device, launching in March, that makes its user's arm feel weightless. It is intended for use by dentists, surgeons, and other professionals who work for long periods with arms outstretched.
—Nick Leiber (posted on Feb. 4, 2011)
Soraya Darabi, Ted Grubb, and Alexa Andrzejewski
The founders of Foodspotting wanted to take advantage of two trends enabled by smartphones: People seek restaurant reviews on the go and diners post pictures of their meals. "We looked and realized there were many ways to rate and review restaurants but no way to rate specific dishes," says Alexa Andrzejewski, Foodspotting's 27-year-old chief executive officer, who co-founded the company with Ted Grubb and Soraya Darabi in late 2009. The website and iPhone app, which has been downloaded 600,000 times, show users top-rated dishes near them, invite them to look up specific restaurants and see others' favorite meals, and let them share snapshots and reviews of what they're eating. Foodspotting has published more than 300,000 recommendations since the beta version launched at the start of 2010. The company raised $3.75 million in angel and venture capital and has a team of six full-timers, plus a few contractors working out of its San Francisco loft. Deals for sponsored local guides from brands such as the Travel Channel generated some revenue, but Andrzejewski says the broader plan is to test a local advertising system that would let restaurants alert nearby Foodspotters to specials and discounts. Apps for Android and BlackBerry smartphones are expected to be released in March, and the company's goal is to tailor recommendations for dishes to suit each user's taste. Says Andrzejewski, "Our long range vision is to see Foodspotting become the Pandora for food."
—John Tozzi (posted on Feb. 4, 2011)
Mike Salguero and Seth Rosen
Back in 1996, Ted Whittenkraus, a woodworker in central Massachusetts, launched CustomMade as a marketplace for woodworkers to sell handcrafted goods. Operated for years on a shoestring budget, his site got a boost in 2009, when Boston University buddies Seth Rosen and Mike Salguero bought it for $150,000 and embarked on an ambitious redesign, spending $20,000 at first and eventually hiring five full-time developers to improve search and enable vendors to update pages themselves. Today artisans of all stripes can display three sample projects for free or buy subscriptions ranging from $400 to $1,200 per year to post additional projects that get preferential search rankings on the site. Buyers can browse from thousands of listings—from handmade pens to furniture to houses. CustomMade also collects a 15 percent commission for already-made works sold through the site (there's no commission for custom projects). Rosen and Salguero, both 29, say unlike competitors Etsy and EBay, CustomMade focuses on custom goods and services from professional artisans rather than hobbyists. The partners say the 20-employee Boston business has 1,500 paid accounts, has raised $1.45 million from angel investors, and generated about $500,000 in revenue in 2010. They expect to become profitable by mid-2011 and bring in $5 million by the end of the year. The next steps, Salguero says, are to add functions that make it easier for shoppers to find goods and improve navigation around the site.
—Venessa Wong (posted on Jan. 11, 2011)
Prerna Gupta, Parag Chordia, and Alex Rae
Prerna Gupta and Parag Chordia were shutting down their first website business in 2009 when they found a fresh business idea: an app that would compose music around a cappella singing. Chordia had developed the artificial intelligence software as director of the music intelligence lab at Georgia Institute of Technology in Atlanta. The pair, who are married, and Alex Rae, 35, a childhood friend of Chordia's, started an Atlanta company called Khu.sh to commercialize the technology through an iPhone app they dubbed LaDiDa. It went on sale for $2.99 in October 2009, but Gupta, 29, says sales were sluggish until they added a pitch-correction feature in February 2010. Instead of just composing music around the voice, the program now improves bad singing. "We try to detect the key you are singing in and then try to detect the pitches you’re trying to sing, and if you’re slightly high or slightly flat, we try to correct," says Gupta, the chief executive. LaDiDa has had more than 250,000 downloads, and monthly sales, now in the $75,000 to $100,000 range, continue to increase. Gupta plans to rent the five-employee company's first office space and hire new developers to work on more music apps in 2011, including an Android version of LaDiDa. The company, which became profitable in September, has raised less than $250,000 in grants and angel investment and is in the process of raising more funding.
—John Tozzi (posted on Jan. 11, 2011)
Twenty years ago, Andrew Stewart, founder of his eponymous nature book publishing house, wanted to put his heavy reference guides onto portable electronic devices so readers wouldn't have to lug them into the field. Such devices—iPhones, Kindles, and the like—had yet to be invented, but that didn't stop Stewart, an avid camper, hiker, and overall outdoors nut, from buying digital rights to thousands of texts, maps, and illustrations. Fast-forward to April 2009: Stewart, who also headed Harry N. Abrams and other renowned publishers, launched Green Mountain Digital to create nature guides for smartphones with his longtime friend, Charles Rattigan, a producer for PBS and National Geographic, and David Roberts, a former Citigroup (C) banking executive. A little more than a year later, the 12-employee company is selling 27 mobile apps focused on North American flora and fauna. Audubon Birds: A Field Guide to North American Birds, which is exactly what it sounds like, is the most popular of Green Mountain Digital's offerings and sells for $20. A close second is A Field Guide to Birds, Mammals, Wildflowers, and Trees, also Audubon, which costs $40. Rattigan, 68, Roberts, 64, and Stewart, 72, say that the company had $120,000 in 2009 revenue, projects $1.5 million in 2010, and has raised $2.35 million from angel investors. They expect Green Mountain Digital to be profitable by mid-2011. Its next two apps—Orvis Fly Fishing: The Ultimate Fly-Fishing Guide and Audubon Butterflies: A Field Guide to North American Butterflies—are each in review at Apple (AAPL) and will go live this August, the founders say.
—Lauren Hatch (posted on August 4, 2010)
Jim Kirsch and Rudy Martinez
For the past decade, Hispanics reaching for the next rung in Corporate America have turned to iHispano.com, the country's largest job board and networking website focused on Hispanic professionals. Convinced that iHispano's formula could be replicated to create further popular sites for multicultural talent seeking jobs, its founder, Rudy Martinez, a former executive recruiter, partnered with serial entrepreneur Jim Kirsch in 2004. In 2007 they founded Professional Diversity Network to do that, using about $2.1 million of their own money. Simultaneously, they launched AMighty River.com for African Americans, and the site quickly gained traction. To keep up with demand for job postings on AMightyRiver and iHispano, the duo that year struck a licensing deal with Monster.com, whereby the career listings giant pays PDN to post its jobs. Today, Kirsch, 49, and Martinez, 50, say PDN's two sites list over 90,000 jobs and have nearly 850,000 registered users, with around 5,000 new users joining on peak days. In addition, 12 professional associations, including the National Society of Hispanic MBAs, use PDN's software to build and run their own internal job boards. Kirsch says the 16-employee, Chicago-based business is profitable, had over $5 million in revenue in 2009, and is on track for a 38 percent increase in revenue in 2010. By mid-2011, he expects the percentage of revenue from corporate sponsorships and Monster to be about equal. Up next: an interactive tool that guides career-seekers to education providers and recruiters, plus new sites for women, Asians, American Indians, veterans, and people with disabilities.
—Nick Leiber (posted on August 4, 2010)
Jim Patchett, Dr. Bill Peterson, Aaron Powers, and David Reusswig
Washing your hands is a chore. And alcohol-based sanitizers such as Purell don't last long enough. That's the pitch from the folks behind Prefenz Botanicals, a cleaner that retains its potency for 24 hours and through multiple hand-washings. Founders Aaron Powers, Dave Reusswig, Jim Patchett, and Dr. Bill Peterson, the technology's patent-holder, say what sets Prefenz apart is a silica compound that attaches to the outside of the washer's hands, forming microscopic needle-shaped structures that kill germs by rupturing their cells. The four friends founded the St. Charles (Ill.)-based business three years ago, using $500,000 of their own money and drawing on their backgrounds in related industries. Since launching the product last fall, they've raised $1.2 million from friends, family, and private investors. Available for $7 at Whole Foods (WFMI) and REI stores across the country, Powers expects Target (TGT) and 10 other big retailers to sell it by yearend. He says 18-employee Prefense had $400,000 in revenue in 2009 and projects $1.6 million to $2.5 million in 2010. Powers, who also heads water-treatment company Bioquatic Technologies, this fall plans to license the silica technology to multinationals that make household cleaners and sanitizers. He expects Prefenz to receive FDA approval by 2011, allowing him to sell it to regulated industrial and medical markets.
—Lauren Hatch (posted on July 2, 2010)
David Block and Dr. Scott Strome
The founders of Baltimore-based biotech startup Gliknik first met on the sidelines of their children's lacrosse games in 2005. Two years later, David Block, former head of international operations at DuPont Pharmaceuticals, and Dr. Scott Strome, who runs head and neck surgery at the University of Maryland School of Medicine, set to work creating new classes of drugs to treat cancer and autoimmune disorders that they say are cheaper and easier to produce than anything on the market. By engineering laboratory-made versions of drugs instead of relying on blood donors, the five-employee business is pioneering new treatments that strengthen the body's immune system to fight against a range of diseases. Gliknik's drug for autoimmune diseases, for example, has been used in animals to successfully treat rheumatoid arthritis. Now, two of Gliknik’s drugs are in human clinical trials, and two more are in the works. Such drugs normally take up to 15 years to be approved for human use, and Block says Gliknik's drugs will be on the market in seven years. Once the drugs do gain approval, he plans to license them to major pharmaceutical companies, though he doesn't expect to generate revenue for another decade. Until then, Gliknik will rely on external investors, from which it has so far raised $4 million.
(This slide has been corrected. The original slide inaccurately reported that one of Gliknik’s drugs has been used in animals to successfully treat rheumatoid arthritis, Type 1 diabetes, and severe asthma. The drug has successfully treated just one of those conditions in animals, rheumatoid arthritis. This slide also shows that the Gliknik is creating new classes of drugs, not one class of drugs, and that the founders met in 2005, not 2004.)
Lauren Hatch (posted on July 2, 2010)
Adam Siegel and Nathan Kontny
How can companies the size of Microsoft (MSFT), Ford (F), and Cisco (CSCO) use their massive workforces' knowledge to improve performance? Nathan Kontny and Adam Siegel think the answer is in prediction markets. The two Accenture (ACN) veterans started Chicago-based Inkling Markets in 2006 to develop software that lets workers make bets using virtual currency on questions such as whether a product will ship on time. "Large organizations have trouble rolling up people's feedback," says CTO and co-founder Kontny, 32. "Typically they're worried if something's going to be late or if something's not going to happen. They'd like to know about those things sooner rather than later." The Inkling Markets algorithm weighs thousands of bets that employees make and produces a price that represents the probability of an event happening. Companies generally pay $10 to $15 per user per month. Kontny and Siegel got $18,000 in funding from the Y Combinator startup incubator in 2006 and bootstrapped the rest. Inkling Markets, with three employees, was profitable within nine months, Kontny says.
—John Tozzi (posted on Mar. 30, 2010)
When Betty Heiman began managing the business side of a radiology practice in Yonkers, N.Y., five years ago, she noticed most uninsured patients were middle-class workers, not poor or unemployed people. They paid far more out of pocket for care than the discounted rates that insurance companies or Medicare were charged, which are typically one-half to one-third of the "sticker price." In the New York area alone, Heiman says, there are 500,000 uninsured households that have income greater than $60,000.
Heiman, 44, decided to assemble a network of doctors who would offer uninsured patients similarly discounted prices, since those patients, unlike insurers, pay at the time of service, eliminating the paperwork involved in filing claims. Last year, she recruited more than 2,000 health-care providers in the New York area to join Transparent Health Network and agree to give patients in the network discounts comparable to what they charge Medicare. Patients pay $39 per month (or $54 per household) to join. They can look up rates for different procedures online ahead of time. Only a handful have signed up so far, but about 250 will join in April through employers.
Heiman raised $1 million from private investors and has a staff of 14 at Transparent Health's headquarters in Media, Pa. She expects the venture to be profitable in about six months and plans to expand throughout the East Coast, beginning with Atlanta.
—John Tozzi (posted on Mar. 30, 2010)
Prompted by demand for sustainable materials and high oil prices that make plastic more expensive to produce, MicroGREEN is commercializing a method to pump air bubbles into plastics and expand the material to five times its original size. Its technology means manufacturers that make everything from cars to coffee cups could use lighter-weight, less dense plastic, reducing materials costs. "There's about 50 billion pounds of plastic that is getting used in applications that we can address," says CEO Tom Malone. The 21-employee company, founded by current Vice-President of Technology Krishna Nadella when he was a grad student at the University of Washington in 2002, raised $2.4 million in 2006 and expects to close a Series B round soon. With that funding in place, Arlington (Wash.)-based MicroGREEN will begin to manufacture material to compete with the plastic-coated paper used in coffee cups and common food and beverage packaging. While a Japanese company has licensed the technology to make TV panels, the plastic sheeting material will be MicroGREEN's first manufactured product. The material can be made with recycled plastic, and it can be recycled itself. Malone, 54, envisions a "closed loop" system of manufacturing plants near major cities that source plastic from the municipal solid-waste stream. The rising price of oil, which affects the price of conventionally made plastic, helps make MicroGREEN's process competitive. "We can be about half the cost of a conventional plastic," Malone says. He projects revenue of $5 million in 2010 and expects to break even by the end of the year.
—John Tozzi (posted on Mar. 30, 2010)
Heikal Gani, Jeffrey Mallett, and Kyle Vucko
A tailor's job might seem darn hard to offshore. But two college pals not only have figured out how to do it; they've turned it into a dot-com business that has attracted backing from former Yahoo! (YHOO) President Jeffrey Mallett and customers in 60 countries. Profits at their startup, "IndoChino", have been a bit more elusive, however. Kyle Vucko and Heikal Gani came up with the idea of custom-tailoring men's suits via the Internet in 2006, when both were students at the University of Victoria in Canada. (Vucko, now 24, was studying commerce, while Gani, 27, was majoring in political science and psychology.) Gani needed to buy his first suit for a conference. He wanted something from Hugo Boss but ended up with a cheaper pair of pants and jacket that needed $100 worth of tailoring to fit well. Through a university mentoring program, Vucko met Hannes Blum, CEO of Internet book retailer "AbeBooks", who fronted them $40,000. The duo dropped out of school and went to Shanghai to line up a network of tailors who could assemble suits, one at a time, from measurements supplied by each customer. They launched their Web site in September 2007 and booked their first order a few days later. Since then, Vucko and Gani have raised $650,000 more from other investors, including $175,000 from Mallett, who is now IndoChino's chairman. After finding it too hard to manage 40-plus individual tailors, they moved their business to a single factory in Shanghai. Shoppers get fitting instructions from an online video. They're promised their suit, priced at $349 to $429, within two weeks. If it doesn't fit right, IndoChino will pay $75 for local retailoring, and if something is still wrong, buyers can ship it back for a free redo or refund. Vucko says 12% of shoppers aren't initially satisfied, but he compares that with a 20% return rate for e-tailing in general. The Vancouver-based chief executive won't disclose revenue, but he says sales nearly quintupled last year, with 35% of orders coming from repeat customers. He and Gani, who is chief creative officer and has remained in Shanghai, hope to raise at least $1 million this spring to fund more marketing. As for profits, Vucko adds, maybe next year.
—Michael Arndt (posted on Mar. 9, 2010)
Claude Kennard and Tony Lammers
No manufacturer wants to admit it’s failing to meet Environmental Protection Agency regulations when disposing of industrial waste. So when prospective factory clients call MAR Systems, a Cleveland maker of a sorbent that removes mercury and arsenic from industrial waste streams and water in municipal treatment plants, they lean on anonymity and the subjunctive. "Our phone rings all the time with questions like, ‘If I did have a problem, would your stuff work?’" says Chief Executive Tony Lammers. The "stuff" is called Sorbster, and the way it works sounds magical: Within seconds of being added to contaminated water, Lammers explains, the patented product binds with a slew of heavy metals, making the resulting material disposable without restrictions, even sellable as concrete filler. He says the compound, made from an industrial by-product called alumina and sold by the pound in granular form, is a breakthrough invention that could turn the way waste water is cleaned on its head, drastically reducing the time, cost, and and hazards involved. Sorbster, which has been on the market since last April, was developed by former BP (BP) procurement specialist Claude Kennard with EPA scientists. As the owner of Metaloy, a recycler of industrial waste materials, and founder of an earlier spinoff that processes waste material for reuse by refineries, Kennard has access to plenty of alumina. Lammers, 53, who met Kennard, 62, while both were earning MBAs at Case Western University, says the eight-person company has raised $2.5 million from investors and expects to be profitable by yearend, with more than $1 million in revenue.
—Nick Leiber (posted on Mar. 9, 2010)
Chris Barbin, Glenn Weinstein, Mike O’Brien, and Narinder Singh
Google (GOOG) Chief Executive Eric Schmidt seemed like a prophet when he began talking up cloud computing in 2006. He wasn't the only one with an early hunch that Internet-based software would be a new way to go, however. That same year, Chris Barbin decided to reunite a group of colleagues from his former employer, webMethods, to start a venture that would help businesses tap into programs and services accessed on the Web. Barbin, who was chief information officer at "Borland Software" in Cupertino, Calif., pooled $100,000 with Glenn Weinstein, Mike O’Brien, and Narinder Singh to launch "Appirio". Based in San Mateo, Calif., with a staff of 200 people, Appirio offers a range of services. It advises medium to large companies—such as "Japan Post Network", Dell (DELL), Starbucks (SBUX), Cisco Systems (CSCO), and Flextronics (FLEX)—on migrating from costly enterprise software to the cloud by using Google apps, for instance. It also builds custom applications for clients to enhance their use of products from partners, including Google, Salesforce.com (CRM), Amazon.com (AMZN), and "Workday", and manages companies’ IT. Since 2007, Appirio has raised $16 million in funding from such investors as "GGV Capital" and "Sequoia Capital" and helped more than 300,000 enterprise end-users move to cloud. In 2008, Appirio’s revenues more than doubled, and last year sales exceeded $25 million, but CEO Barbin, 39, says they’ve only skimmed the market. A recent report by "Gartner" forecasts that by 2012, one-fifth of businesses will own no IT assets. "Traditional enterprise software is really hard. It’s messy; it’s dirty," Barbin says. With the cloud, new applications can be built on top of existing software in a few weeks or months, compared with years, and at lower costs. "Our goal," he says, "is to build the next generation IBM (IBM) without the baggage of a hardware business."
—Venessa Wong (posted on Mar. 9, 2010)
Angie Onassis Parlionas
Angie Onassis Parlionas admits that she was "obsessed with lip gloss as a kid." But between softball games and wrestling matches, she often ended up having to buy yet another tube after losing the one she had been using. Today's generation of girls can be flighty, and it won't cost them. Parlionas, 31, has patented a tube of gloss that's attached to a retractable string inside a "yoyo" that can be clipped to a belt, lapel, or bag, like a fashion accessory. Her YoYo Lip Gloss comes in several colors and flavors, such as "Girly Green Apple" and "Kissable Kiwi," and retails for $3. Parlionas says she has had the idea for the product since she was young, but it was not until studying for her MBA at St. John’s University in New York that she decided to develop it into a business. She found suppliers in China and tested the products in labs in the U.S. After graduating in 2006, she established YoYo Lip Gloss in New York, with the help of her family and a private investor. They have so far spent $1.2 million and will invest an additional $650,000 this year, in part to buy ads on Nickelodeon and MTV. Since the product went on the market last October, her team of four employees and 30 independent sales reps has brought in more than $78,000 by selling 260,000 tubes of the sweet, shimmery gloss through YoYo's Web site and retailers such as Joyce Leslie, Ricky’s NYC, Rainbow Shops, and Discovery Clothing. Parlionas expects sales to reach $500,000 by yearend and projects that the company will be profitable by 2012 with sales of $2 million. She is now developing other cosmetics, such as lipsticks, eye shadows, and nail polish.
—Venessa Wong (posted on Feb. 16, 2010)
Megan Shea and John Hilliar
Back in 2006, while working in marketing consulting and business development at Sterling-Rice Group in Boulder, Colo., Megan Shea had to help find care for her grandparents in West Virginia. Frustrated that the aging services industry was "so fragmented and so localized," she launched a free consumer information site called RetireLife to address the problem last May, the same month she completed her MBA at Babson College. By early February, it had grown into the most comprehensive Web site on the topic in Massachusetts, with some 5,800 listings of residences and professionals across the state. Now she has gone national, increasing total listings to more than 194,000. That means the three-person venture is competing with more established sites such as OurParents and Gilbert Guide. But Shea, 26, is betting RetireLife’s flat-fee lead generation service and sophisticated analytic tool will persuade nursing homes and other providers to pay the annual fee it charges to upgrade listings ($599 for residences; $299 for professionals). She and co-founder John Hilliar, 35, who met in a marketing class at Babson, aren’t the only ones who see promise in the business. Monster Worldwide (MWW) founder Jeff Taylor, whose consumer sites Eons, Tributes, and Meetcha, are aimed at a similar audience, invited RetireLife to move into his new business incubator in Boston’s Charlestown neighborhood, rent-free. Shea says RetireLife, which has raised $79,000 from friends and family, is working on securing an angel round of financing and expects around $326,000 in revenue this year and $3.6 million in 2011.
—Nick Leiber (posted on Feb. 16, 2010)
Judy Fortin, Jerry Krieg, Lisa Porterfield, Hans Luxemburger, Jim McManus, Linda Saether, and Kathryn Beane
For the past century or so, news reporters have turned to public relations firms and their press releases for story ideas and sources. Lately, though, this arrangement has fallen short. As the media have downsized and news has become a 24/7 operation, reporters and editors are too busy to hunt through old files for contacts or direction. NewsCertified.com, founded in January 2009 by CNN veterans, is trying to update the old model. Via a searchable online database, it pairs "interview-ready" experts who want exposure with journalists who need sources. Unlike more established services such as ProfNet and HelpAReporterOut, NewsCertified's experts agree to be screened and undergo media training. After making the cut, they pay $4,000 for the training and to list their profiles on NewsCertified for three years (NGOs and nonprofits pay half). Journalists pay nothing for access to the site. So far, the service has more than 300 experts, ranging from philanthropist Steve Hilton to a Harvard-educated, former mujahideen from Afghanistan. Co-founder and CEO Kathryn McManus, who launched CNN Japan, expects the 10-employee Atlanta-based business, which raised $1.1 million from angel investors, to go from beta to public version by the end of March and be cash-flow positive by the end of the year, with $1 million to $2 million in revenue.
(This profile has been changed to correct the location of the company’s headquarters.)
—Nick Leiber (posted on Jan. 26, 2010)
Xunming Deng and Liwei Xu
Xunming Deng and Liwei Xu left Nanchang, China, 25 years ago to begin graduate studies at the University of Chicago—Deng in physics and Xu, his wife, in chemistry. Though both had 10 years of English instruction and were outstanding students—each was awarded an all-expenses scholarship—neither had ever set foot in the U.S. before. What they've accomplished since receiving their PhDs may be more exceptional: They've established a green-energy company in Toledo, Ohio, in the middle of America's struggling automotive manufacturing belt. Moreover, their solar-panel startup, Xunlight, is making products different from most others on the market. Conventional solar panels are rigid and relatively heavy. Xunlight's are flexible and lightweight, which means they should be easier to install and could work in more settings. Deng, 46, and Xu, 45, founded their company in 2002, when both were professors at the University of Toledo. They licensed their technology, which they had helped develop, from the university. Xu then put her grant-writing skills to use to get money. She got $100,000 from the Small Business Innovation Research program in 2003, which allowed the couple to outfit an office and hire a couple of students. Since then, Xunlight has received $29.6 million more in government grants and loans and $42.5 million from venture capital funds in the U.S. and Europe. CEO Deng has invested much of that to equip a factory that can coat thin sheets of stainless steel with sunlight-capturing silicon film. The plant now has the annual capacity to make panels capable of generating 25 megawatts of electricity, enough for 25,000 homes. Xunlight, which is up to 110 employees, has sold gear for a few test sites, including a billboard in New York's Times Square. Pending a seal of approval from Underwriters Laboratories, it could enter the commercial market by early April.
—Michael Arndt (posted on Jan. 26, 2010)
Skiddy von Stade
After five years working as an executive recruiter in the finance industry, Skiddy von Stade started his own shop in 1995, landing clients like Lehman Brothers, Greenhill & Co., and Perry Capital. Then the Internet beckoned. Convinced by the success of Monster (MWW) and CareerBuilder that he could build a specialized site that made the recruiting process faster and cheaper for financiers, von Stade founded OneWire in New York in 2007, raising more than $15 million from finance executives. (He shut down his brick-and-mortar business in 2008.) He envisioned a site that would collect detailed, searchable information about candidates' backgrounds, rather than just upload résumés. Since launching last June and deploying a sales team in November, the site has signed some 100 client companies and amassed 50,000 prospective-employee profiles. Users applying for jobs answer customized questions based on employment history. Employers have unlimited access to these profiles, or "fingerprints" as von Stade calls them, for $15,000 per year. Von Stade, 48, says industry woes have meant an increase in demand for affordable recruiting services and expects his 52-employee company to pull in more than $3 million in revenue in 2010 and be profitable by 2011, with $10 million in revenue.
—Venessa Wong (posted on Jan. 26, 2010)
Alex Burney, Wil McCarthy, Dr. Richard Powers
Buildings guzzle more energy than any other sector of the U.S. economy—more than cars or any other culprit—and their heating and cooling demands account for the biggest share. Serial entrepreneur Alex Burney, 41, engineer and writer Wil McCarthy (author of the seminal book Hacking Matter, 43, and engineer and scientist Dr. Richard Powers, 44, founded clean-tech startup RavenBrick in 2007 to use their nanotechnology innovations to improve the energy efficiency of building materials, raising $3.5 million from venture capital firms and angel investors, including Michael Barnstijin, co-founder of Research In Motion (RIMM). The 12-person company's signature product, windows that automatically shift from a transparent to a reflective state based on changes in outside temperatures, can defray heating and cooling costs by as much as 50% in most buildings. Since landing the first sale in August to the U.S. Energy Dept. for the new National Renewable Energy Laboratory, RavenBrick has been on a roll. Burney says virtually every major glass company in Canada and the U.S. is interested in purchasing the technology to apply to their own windows. "We thought we’d originally manufacture the filters in our office in downtown Denver, but given the fact that interest is so huge, we’re now looking to outsource that production to a big facility to meet demand." At the end of December, RavenBrick secured a notice of allowance for each of its 53 patent claims from the U.S. Patent Office. Burney estimates the company will be profitable in the second quarter of 2010, with more than $5 million in revenue by yearend.
—Nick Leiber (posted on Jan. 5, 2010)
Patrick Mizer, Mario Feghali, Jeffrey Cherewaty, and Chuck Gordon
Chuck Gordon, then an art student at UCLA, balked at the thousands of dollars he would have to pay to store his belongings while spending a semester in Singapore two years ago. He ended up stowing his stuff in friends’ homes and garages. Gordon thought plenty of people with extra space would rent it out if they could easily connect with renters. That was the original plan behind the Web site he launched with his college roommate Mario Feghali in December 2008, now called SpareFoot. When they found that storage companies were listing their vacant units alongside individuals with extra closet space, they refocused the site on driving customers directly to professional storage firms. That was around the same time SpareFoot moved from Los Angeles to Austin to take part in the Capital Factory startup incubator, a 10-week mentoring program that yielded $20,000 in seed funding, as much in in-kind business services, and connections to investors. SpareFoot raised the first part of a Series A round expected to total about $1 million in September. Gordon, 22, says revenue at the four-person company has doubled each month since September and now has more than 100,000 listings from more than 1,100 storage companies nationwide. The site works on an auction system in which companies bid for favorable placement. When customers book a storage unit, SpareFoot takes a cut of half the first month’s rent. Individuals can still list their storage space, but by focusing on companies, "we’re able to get thousands of thousands of listings in a matter of a couple months," Gordon says.
—John Tozzi (posted on Jan. 5, 2010)
At its heart, the health-care reform debate is about reconciling efforts to cut costs and increase access to care. IT veteran Kent Dicks is building a business that does both—and positioning it to benefit indirectly from the stimulus money President Barack Obama intends to use to expand electronic record keeping. Dicks' latest company, MedApps, founded in 2006, makes wireless devices designed to make it easier for doctors to monitor patients with chronic diseases remotely. The idea is to reduce the need for patients to visit doctor’s offices while encouraging them to take responsibility for their own health. For example, when a diabetes patient sitting in her living room sets a MedApps gizmo next to her glucometer, it will automatically upload her blood-sugar readings to her electronic health record, which her doctor can access from his office computer across town. "If patients know someone out there is watching for their readings to come in, they’re more likely to take their reading, their medication, and then are more likely to stay out of the hospital and keep health-care costs down.” So far Dicks, 48, has raised $5.5 million from friends and family for his 14-person Scottsdale (Ariz.) company, signed licensing agreements with Google Health (GOOG) and Microsoft HealthVault (MSFT), and worked to make his products compatible with dozens of off-the-shelf devices sold by big manufacturers in such chains as Walgreens (WAG:US) and CVS (CVS). He says MedApps, which received FDA clearance in June, expects more than $10 million in revenue in 2010, primarily from sales to existing clients, such as AT&T (ATT), Baptist Health, Cleveland Clinic, United Health (UNH), and Verizon (UNH).
—Nick Leiber (Posted Jan. 5, 2009)
Jeff Blasius, Ben Berkowitz, Miles Lasater, Kam Lasater
Ben Berkowitz got nowhere when he called City Hall two years ago to report graffiti in his neighborhood in New Haven, Conn. His frustration became the seed for SeeClickFix, a Web site where citizens can flag such problems as graffiti and potholes to authorities. Berkowitz, a 30-year-old Web developer, and three friends built a prototype using the Google Maps API in four hours. Eventually they created a system to set up "watch areas" to alert officials by e-mail every time a new complaint comes in. SeeClickFix launched in spring 2008, but it remained a side project until early 2009, when the Boston Globe agreed to use the site for a "pothole map" on Boston.com. Berkowitz and his team bootstrapped the company—two of the four still have day jobs, and he worked from coffee shop until recently—before the group raised an undislcosed sum from angel investors in October. They plan to use the money to expand and expect to be profitable in 18 months. SeeClickFix has three revenue streams: licensing the tool to media sites, selling advertising, and selling premium accounts to cities that want to use the site for complaint management or integrate it with existing 311 systems. In May the startup landed a $20,000 contract with Houston to provide 100 premium/paid accounts for public works inspectors. Berkowitz estimates 50 to 60 cities have adopted SeeClickFix so far, including his native New Haven, which now responds to his graffiti alerts within hours.
—John Tozzi (posted on Dec. 15, 2009)
Sometimes a bad habit can turn into a good idea for a startup. Whenever Keith Belling went out for a sandwich, he recalls, he had to have a bag of Doritos even though he knew fried chips weren't good for him. So his business partner, Patrick Turpin, called Belling immediately when, while looking for their next venture in early 2005, he heard about a Southern California business that made private-label snacks. Its products were limited to rice cakes, but Belling figured the same process could be used to air-pop a healthier type of snack chip. Pooling nearly $1 million of their own money, the partners bought the factory and in mid-2007 launched Pop Chips in San Francisco. Belling, 52, who is chief executive, had more than a gut feeling to go on. Pop Chips is his fourth business. He began in 1986 with a coffee bar in San Francisco, which grew to a 30-unit chain by the time he sold out in 1992. He was also part of the team that took over money-losing Restoration Hardware in 2001. Pop Chips began with a bang, with shelf space in 1,000 Safeway (SWY) grocery stores in the West. Today 100-calorie bags sell for $1.29 at Jamba Juice (JMBA, while 3-oz. bags are available for $2.99 nationally in Target (TGT), Costco (COST), and Whole Foods Market (WFMI). Pop Chips employs 30 people, plus another 100 at its factory. Revenue should top $18 million in 2009, up from $6 million the year before, Belling says. But he says the company won't become profitable until 2011, as it plows its cash, plus $10 million from private equity fund TSG Consumer Partners, into marketing efforts such as chip giveaways. As for Doritos, Belling says he hasn't had any in years.
—Michael Arndt (posted on Dec. 15, 2009)
Lisa Stone, Jory Des Jardins, and Elisa Camahort
As bloggers gained mainstream media attention earlier this decade, one frequently repeated question—"Where are all the women?"—rankled early adopters Elisa Camahort, Jory Des Jardins, and Lisa Stone. They were convinced plenty of women were writing distinctive posts; they just lacked exposure. In 2005 the three were part of a group that organized a day-long conference in Santa Clara, Calif., to raise women bloggers' prominence and connect them with their peers. The event sold out, with more than 300 attendees paying $99 each. Within a year, Camahort, Des Jardins, and Stone, who respectively have backgrounds in technology product management, business development, and journalism, rolled out a plan for a series of annual conferences and launched a Web site, BlogHer.com, to showcase some of the best blogs and offer their readers and writers a place to meet. As the site gained traction, the three rolled out an ad network for blogs that meet editorial guidelines Camahort says are stricter than new Federal Trade Commission rules requiring bloggers to disclose paid posts. San Francisco's BlogHer, which has raised $15 million in venture capital, now has more than 2,500 blogs in its network, a waiting list of hundreds more, and it attracts 20 million unique visitors a month. Camahort, 45, expects the 44-employee company to become profitable in 2010, with about 80% of its revenue coming from its online operations.
—Nick Leiber (posted on Dec. 15, 2009)
Jonathan Makar, who had worked as a stockbroker for two years, plowed $30,000 of his own money and another $300,000 from investors into a 50-seat restaurant in Philadelphia's Rittenhouse Square in 2006. He called the place Snackbar and has obsessively catered to customers ever since. Makar, 29, who lives above the cloth-napkin restaurant, says he lets patrons sit as long as they want and his staff makes sure to know customers (and their kids) by name. They even know the kind of Champagne customers drank at their weddings. His hospitality paid off. Clothing retailer Urban Outfitters, which had been headquartered a couple of blocks away, tapped Maker to open a second Snackbar at its Space 15 Twenty mini-mall in Hollywood last year. The California location is about four times larger, and 75% of its business is daytime, corporate, and takeout. Still, Makar says he has been able to keep doing what worked in Philadelphia. He makes sure staffers remember the names of customers. He calls repeaters if they haven't ordered lunch, goes out of his way to prepare their favorite dishes, and even has the chef bake a cake and bring it over to patrons. "I might be forgoing a certain amount of revenue that day but it all works out," he says. Indeed, despite the recession, Makar says revenue from both places should come to about $2 million this year.
—Stacy Perman (posted on Nov. 24, 2009)
By now everyone knows the power of the crowd in creating goods and services. As Andrew Mason, 29, has discovered, the crowd can be a pretty big force when it comes to buying, too. As founder of the Point, a social fundraising Web site, Mason was well-versed in aggregate spending. In November 2007, that led him to start a second Chicago business, Groupon, a site where people sign up for a daily coupon via e-mail. The discounts are usually good pretty good, averaging around 65% off from companies as diverse as skydiving and restaurants in 18 major cities, such as Chicago, New York, and Seattle. The catch: The coupon doesn't activate until a minimum number of people have pledged to buy. Customers enter purchase information, but no one is actually charged until the minimum is met, so there are no refund hassles. It's free for the business offering the deal, and the guaranteed revenue offsets the juicy discount. Groupon collects all the money, takes a cut that varies from client to client, and passes the rest of the money along to the offering business. CEO Mason says businesses are thrilled with the exposure of targeted e-mails and are reporting increased revenues. When the Art Institute of Chicago offered a Groupon on July 31, for instance, 5,000 people purchased a yearlong membership—or 5.9% of the total 85,000 in the museum's history. Moreover, nearly 98% were first-time members. Since Groupon's start, some 850,000 people have signed on, nearly 250,000 in the last two months alone. The 103-employee company is already pulling a profit, Mason says, and expects to clear $100 million in revenue next year.
—Damian Joseph (posted on Nov. 24, 2009)
Julia Pimsleur Levine
Her father, renowned linguist Dr. Paul Pimsleur, was the brains behind a language learning system that bears his last name. So when Julia Pimsleur Levine, then a documentary filmmaker, wanted to teach her first son how to speak French, she was understandably picky. Audio learning materials for myriad languages based on her father's method continue to be sold by Simon & Schuster, but are intended for adults. After finding nothing suitable for the under-5 set, she shot a $30,000 pilot video she and her husband paid for themselves and launched Little Pim full time in early 2008. A departure from her father's audio method, her animated series features a panda as instructor and is intended to be as entertaining as any children's TV fare. "We recognize that no child is going to say, 'Mommy, I want to learn Chinese.' But if they fall in love with the panda, which many of them do, they're going to say, 'Mommy, I want to watch the panda' and then the next thing you know, they're learning Chinese." Little Pim has won numerous awards and earned positive reviews and parent testimonials. Still, distribution is a challenge, because the New York-based company has to compete with such big players as Fisher-Price and Walt Disney (DIS) for shelf space. The courses are available on DVD in 10 languages and will soon be available via two iPhone apps. Pimsleur Levine, 41, says her seven-person startup has landed about $2 million from angel investors, will bring in about $500,000 in revenue in 2009, and expects about $1.2 million in 2010.
—Nick Leiber (posted Nov. 24, 2009)
Jonathan Miller, Maria Sutanto, and Jonathan Kelly
No matter how great a new product is, it can't succeed unless would-be customers know about it. Jonathan Miller, 29, has understood this from the get-go. A student at Northwestern University's Kellogg School of Management, Miller had been making his own high-protein nutrition bars when his wife, Jennifer, introduced him in December 2007 to another DIY energy-bar baker, Maria Sutanto, a PhD candidate in molecular nutrition at the University of Chicago. Within a month, they had a business plan: custom-producing fresh, all-natural bars to the specifications of each customer. They brought in a third partner, Jonathan Kelly, to help set up a Web site and oversee operations at a contract bakery in Chicago, and in April 2008 the three incorporated Element Bars. Then Miller got busy marketing. Copying tactics from his years running price-comparison site GetCheapBooks.com, he bought keyword ads on Google and Facebook. He also e-mailed blogs and got picked up by TechCrunch.com, which profiles Internet startups. Element Bars grossed $18,000 by year-end 2008 and was selling about 1,000 batch-baked bars a week—at $41 for each minimum 12-bar shipment—through last summer. That's when Miller really scored. Last May he had pitched Element Bars to Shark Tank, an ABC reality-TV series, and on Sept. 13 the episode aired. Element Bars sold more in the next 24 hours than it had in the first six months of 2009. Moreover, the show triggered inquiries from a national nutrition-products retailer and a national chain of gyms. Turned down by banks for loans, Miller, Sutanto, 28, and Kelly, 27, pitched in $70,000 to launch the Chicago company. CEO Miller says Element Bars turned profitable post-Shark Tank and he projects sales of $200,000 this year.
—Michael Arndt (posted on Nov. 3, 2009)
Steve Pogorzelski and Brian Farrey
Steve Pogorzelski, formerly group president-international at Monster.com, found a new calling when he met Colby West, an entrepreneur looking to get a startup funded. West, 30, had co-founded AuctionPal, a Web-based company that helps people sell their belongings online, but wanted to shift his focus from consumer-to-consumer transactions to business-to-consumer. He saw an opportunity in helping small and mid-sized enterprises—dentists, plumbers, salons, electricians, law offices, and so forth—market themselves online. West founded ClickFuel in Boston late last year. Pogorzelski became ClickFuel's first investor by putting up $250,000 and last January was appointed chief executive. The company raised an additional $2.5 million in June through Chicago-based venture capital fund Baird Venture Partners. To build the startup, Pogorzelski, 48, recruited old colleagues from Monster.com: Brian Farrey (president of Monster Technologies), Rob Hayes (vice-president of finance-global sales), and Denise Cautela (senior director of marketing-emerging markets). "At Monster, we were able to take customers and put them on the Internet, which was transformational at the time," says Pogorzelski. "Now we're looking at the migration from the Yellow Pages to the Internet." ClickFuel, which has 20 employees plus outsourcers in India, Ukraine, and the Philippines, builds Web sites and manages online marketing campaigns for a monthly fee, typically between $1,500 and $2,500. Fuel Station, a Web-based ClickFuel application that was recently included in the QuickBooks app center, tracks results such as leads generated, clicks on a company's site and advertisements, and consumer calls made to a phone number listed online only. So far, ClickFuel has attracted 400 clients, mostly with 10 to 15 employees, and expects numbers to skyrocket in 2010 as it partners with such companies as Intuit.
—Venessa Wong (posted on Nov. 3, 2009)
Deric Haddad and Heather Wylie
After graduating from San Diego State University, Deric Haddad tried to make a living as a screenwriter, but Cannes Man, a mockumentary he co-wrote, was the only feature he managed to get produced. At 29, trying to pay bills and decide what to do with his life, the Bakersville, Calif., native took a $10-an-hour job driving a truck for a Silicon Valley contractor. The company specialized in building cleanrooms for the likes of Intel and Hewlett-Packard to test and make circuitry in a dust-free place. Intrigued by the esoteric trade and buoyed by the steady paychecks, Haddad spent the next seven years working on a swath of design-build construction, maintenance, and manufacturing jobs. By 2004, Haddad says he had accumulated enough confidence in his skills to invest $25,000 with his wife, Heather Wylie, to launch cleanroom construction company Haddad-Wylie Industries. Aware of a new federal mandate that required certain types of hospital pharmacies to install cleanrooms, they focused on the life sciences industry and landed Duke University as their first customer. Haddad, 42, says the Pittsburgh-based company became profitable in 2006, now has 12 full-time employees, and has expanded into manufacturing its own systems as well as doing turnkey design-build jobs for other industries, including nanotech, aviation, and semiconductors. Most jobs are in the $500,000-to-$3 million range in the U.S. and abroad for clients that include the Cleveland Clinic, AstraZeneca, and W.L. Gore. The recession has forced the duo to impose temporary pay cuts and outsource some work. Still, Haddad says the company had around $5 million in revenue in 2008, will have $7 million this year, and $10 million to $20 million in 2010. He thinks Haddad-Wylie could go public within five years.
—Nick Leiber (posted on Nov. 3, 2009)
Michael Frakes and Dan Reynolds
Dan Reynolds didn't set out to become an entrepreneur. Instead, the full-time firefighter and former commercial truck salesman from suburban Chicago wanted to hire on with a big crime-scene cleanup company. But when he was treated rudely during his interview in early 2007, he vowed to found his own company as payback. His Chicago Crime Scene Cleanup got its first job—a messy suicide in a home in Minooka, Ill.—three months later. He's been busy ever since. Today, in fact, the startup is up to nine part-time employees, drawn mostly from haz-mat teams at nearby fire departments, who scrub down everything, including foreclosed homes that have been soiled by vagrants and/or wild animals and meth labs. Says Reynolds: "If another contractor comes in and says, 'Ew,' that's where we go to work."
Reynolds, 35, and his 50/50 business partner, Michael Frakes, 36, who's also a full-time firefighter, began with $20,000 of their own for training in removal of biohazardous materials and equipment and $6,000 for marketing. They also went without pay for a spell. Reynolds projects $400,000 in revenue in 2009 and at least $700,000 in 2010. Chicago Crime Scene Cleanup's with the U.S. Drug Enforcement Administration in Minnesota, Wisconsin, and northern Illinois accounts for about a third of revenue. The expected bump in 2010 income stems from getting licensed to dispose of prescription medicines.
—Michael Arndt (posted on Oct. 13, 2009)
Eric Greenberg When Eric Greenberg, an entrepreneur in Silicon Valley, learned he was pre-diabetic, he overhauled his lifestyle. The then-275-lb. New York native gradually revamped his diet and built up to three-hour runs, losing 70 pounds. He also was inspired to launch a new venture, Beautifull, which would serve fresh, prepared foods free of hormones, steroids, and antibiotics, such as Golden Beet Salad with Tarragon Vinaigrette for $5 and Tea Smoked Salmon and Red Quinoa-Edamame Salad for $13.
Greenberg, 45, says do not always use healthful ingredients. For example, they might use white flour, butter, and refined sugar. He hired a team of experienced Bay Area chefs and a licensed nutritionist to create great tasting food that focuses on nutrition rather than calories. Established in mid-2007 with undisclosed investments from Greenberg's own venture firm Innovation Investments, where he is still chief executive, and Mohr Davidow Ventures in Menlo Park, Calif., Beautifull began as a meal-delivery service reaching 300 customers a week, but last April it opened a "fresh foodspace," or a retail dine-in and take-out store, in San Francisco. The new outlet boosted sales to nearly 2,500 customers per week and to date has had over 60,000 transactions.
Beautifull, which now has 20 full-time and 20 part-time staffers, expects $1.5 million in revenue this year and to be up to eight stores by the end of 2010. "It's about real food," says Greenberg. "Eating fresh, natural, whole food is more effective than treatment and drugs."
—Venessa Wong (posted on Oct. 13, 2009)
Tom Meloche, Gus Mondalek, Eric Justusson, Rich Roberts, and William Cavnar
Companies regularly shell out big bucks for employees to attend professional training seminars. But research shows employees forget 80% of what they learn within a month of the event. Software developer and serial entrepreneur Tom Meloche, 46, a figure within the agile development community who has taught corporate seminars since the late 1980s, is trying to change that. Building on clinical research on human cognition, his Ann Arbor (Mich.) company makes software designed to increase knowledge retention by customizing lessons based on an individual user’s responses. Meloche says students who use the software need to study only three to five minutes three to four days a week in order to recall material over an extended period. His team is also writing algorithms meant to determine the most important information for students to learn in the first place.
So far, five-person Procuit, founded in 2007, has created a test app for Facebook (over 10,000 people have used it), landed one commercial customer for custom work, and launched a home-schooling application, HomeSchoolAdvantage.com (which charges $20 per user), in August. Meloche says Procuit recently received a $50,000 unsecured loan from a local incubator to develop and market the home-schooling product. He expects just under $100,000 in revenue in 2009 and around $500,000 in 2010.
—Nick Leiber (posted on Oct. 13, 2009)
The average Joe loves fast-food burgers and pizza. Chipotle Mexican Grill (CMG) proved that Joe also has an appetite for chain-restaurant tacos and burritos. Now, with America's Indian population rising, Vijay Puniani thinks average Joe is ready for chicken tikka masala and pork vindaloo at Chutney Joe's. Puniani, 58, a retired real-estate developer, opened his quick-serve restaurant in Chicago's Loop last February. He modeled Chutney Joe's on Chipotle, which boasts all-fresh ingredients in dishes prepared in front of you to your specifications. Customers start by choosing either basmati rice or naan, or flatbread. Then they select from four meat or five vegetarian entrées. There are also appetizers, desserts, and, of course, chutney. A full meal can be had for less than $10. Puniani began experimenting with recipes and preparation methods about two and a half years ago, using focus groups of 15 to 30 people. He had experience: In 1974, he opened a restaurant in New Delhi. Chutney Joe's turned cash-flow positive about four months in and now grosses $15,000 to $17,000 a week. Puniani, who put $500,000 of his own into the business, is looking for investors and franchisees to expand in Chicago and beyond. Why start in Chicago? A Starbucks (SBUX) exec once told him that if something succeeded in Chicago, it would succeed everywhere.
—Rachel Z. Arndt (posted on Sept. 22, 2009)
While at Babson College, Matt Lauzon saw something shiny and sparkly in the country's $60 billion jewelry industry. Most Americans had plenty of options for rings at jewelry and department stores, of course, but he thought people might like another: rings custom-made to designs they submitted to a Web site. In May, after earning a degree in entrepreneurship and raising $5.8 million from Highland Capital Partners and Canaan Partners, Lauzon began offering jewelry buyers that alternative through something he calls a "virtual display case." The online showcase, which shoppers can access from partner retailers, contains over 1,200 designs of rings and other jewelry. By changing the type of metal, stone or other features, each style has roughly 1.5 million permutations that customers can sort through at the store or from home after setting up an account at a retailer. Lauzon's startup, Paragon Lake in Lexington, Mass., has signed up 39 independent retailers, mostly in suburban strip malls, in 22 states. The pieces are made in the U.S. and arrive at the retailer in two to three weeks. Revenue is split between the store, Paragon Lake, and its 44 jewelry designers. Lauzon, 24, says the average sale is $1,250, but rises to $3,000 to $4,000 for bridal jewelry. He estimates $500,000 in revenue by yearend.
—Venessa Wong (posted on Sept. 22, 2009)
Erik Groset and Robin DeFay
There are a gazillion accessories for the iPod (AAPL) and iPhone, from thongs to toilet-paper holders to handbags. Undaunted by the competition, childhood buddies Erik Groset and Robin DeFay, now both 25, have added another device to the lineup: Livespeakr, a petite but powerful (15-watt) portable speaker system designed to blast tunes from the iPod, iPhone, or any other device with a headphone jack. Originally, the duo hoped to license the concept to a manufacturer. Good thinking—since neither has background in audio engineering or product design. To get feedback, they posted 3-D drawings of the prototype on a Web site they built and elicited interest from peers and investors. So in 2007, Groset and DeFay, who had kicked business ideas back and forth since sixth grade, decided to try to make the product on their own. Two years later, with the help of $400,000 from two angel investors, an outsourcer who set them up with a manufacturer in Shenzhen, China, as well as $50,000 investment of their own savings, the pair started selling their speakers via their Web site and Amazon (AMZN) in January for $80. They say their Carlsbad (Calif.) Digital Group Audio has doubled sales month to month, selling a total of about 4,500 units, and expect $600,000 in revenue by the end of the year.
—Nick Leiber (posted on Sept. 22, 2009)
At least 1.7 million U.S. patients contract infections in hospitals each year, claiming 100,000 lives and costing $30 billion, according to the Centers for Disease Control. Orlando entrepreneur Ben Favret, a business-side veteran of biotech startups and pharma companies like Pfizer (PFE), hopes to reduce those numbers with a new type of fabric for hospital garments, curtains, linens, and furniture. The material, dubbed Vestex, is coated with an antimicrobial to kill germs. It also repels fluids while remaining breathable enough to wear. Favret, 44, licensed the technology from Swiss textile giant Schoeller in mid-2008 and formed Vestagen to commercialize the fabric. The material doesn't need approval from the U.S. Food & Drug Administration, but the company is running clinical trials nonetheless to prove medical benefits. Favret funded Vestagen out of his own pocket before raising $2 million in May from V10 Capital Partners in Richmond Va. The company, now with six employees, expects to have initial trial results this fall. After that it will take its first scrubs and lab coats, manufactured at plants in Massachusetts and India, to market.
—John Tozzi (posted on Sept. 1, 2009)
Tim Ferguson and Ron Walker
Inner-city businesses have historically been underserved by banks and financial advisory services. To longtime bankers Ron Walker and Tim Ferguson, that void looks like an opportunity. The duo, who met on the board of the Boston Center for Community & Justice, founded Next Street Financial in 2005, modeling it after a traditional European merchant bank to provide credit and "Wall Street-quality" strategic advice to entrepreneurs. Influenced by Michael Porter's research on inner city economics,Walker, 47, a Boston native and former executive vice-president for retail banking at Sovereign Bank (SOV), and British-born Ferguson, 51, a former senior managing director at Putnam Investments, wanted to create a one-stop shop for high-performing, high-potential companies in the inner city. Though Walker says the 20-employee Roxbury (Mass.) bank has made only two $1.5 million loans so far, it has helped half a dozen companies raise capital from other sources, and is currently advising some 40 clients on strategy. He estimates he could put $100 million to work in metro Boston and New York, depending on the bank's own ability to raise funds.
—Nick Leiber (posted on Sept. 1, 2009)
"I probably have a dozen or more pictures of every building in North America," Dale Thornberry claims. He also may have found a way to monetize them. Thornberry, 50, is founder of GeoEstimator, an Indianapolis company that can measure the area and perimeters of building roofs by analyzing satellite images from Digital Globe, Google Earth (GOOG), and Pictometry. His estimates are within 5% of measurements taken by a human climbing up on a roof to do it himself, Thornberry says, but his method is faster, safer and maybe cheaper—GeoEstimator charges $29.95 for most jobs. Thornberry has been self-employed since he started a construction company when he was 18. Just before launching GeoEstimator, he began Thornberry Consulting, a software engineering firm. He got the idea for GeoEstimator after talking with a construction materials vendor who was looking for a way to sell the right amount roofing products without having to measure the square footage manually. Thornberry spent $1 million on computer programs to make accurate measurements from downloaded images. So far the company has had 660 customers, with 450 returning for a second job. He says GeoEstimator will turn profitable in late 2009.
—Tania Chen (posted on Sept. 1, 2009)
By now, Scott Baxter could be comfortably retired even though he's just 46. In 1991, Baxter formed Icon CMT, a company that provided Internet infrastructure to Wall Street and which he took public and then sold to Qwest Communications (Q). He went on to co-found Hawk Holdings and sell its search engine to Ask.com. But after building a house in Bergen County, N.J., he was unimpressed by his choices for doorknobs and decided to create yet another company. Using $3 million of his own money in 2006, he built a foundry in Chester, N.Y., to make customized brass hardware for doors, cabinets, and windows from wax casts, a method invented by the Egyptians thousands of years ago. Today the company, SA Baxter, has 27 full-time employees and a showroom in Manhattan that sells to designers such as Frank Delledonne and Robert Stern. Wax-casting is time-consuming, and Baxter's products are therefore expensive, with knobs selling for $150 to $600 apiece. SA Baxter lost money in 2008. Despite the collapse of high-end home building, though, Baxter says sales quadrupled last year, and he expects to be profitable in 2009.
—Emily Schmitt (posted on Aug. 11, 2009)
Jeff Avalon, John Goscha, and Morgan Newman
Sometimes a product idea is as obvious as the wall right in front of you. In 2005, three Babson College undergrads were brainstorming on a whiteboard, but had to keep erasing proposals to make room for more. Then, recalls Jeff Avalon, one of them said, "Wouldn't it be great if we could have a dry erase board that just took up the entire wall?" Over the next three years, Avalon, John Goscha, and Morgan Newman collaborated with chemists to come up with a durable, smooth, and nonabsorbing paint that could turn a flat surface into an erasable board. They released IdeaPaint at the NeoCon home-furnishing trade show in 2008 with a 3,000-sq.-ft. display and won its Innovation and Gold Awards. Since then, the Cambridge (Mass.) startup has generated $2 million in revenue. The water-based paint, which now comes in nine colors, is made under contract by three paint manufacturers in the Midwest and distributed by MDC Wallcoverings of Elk Grove Village, Ill. The three founders, now all 25, financed their venture with money from angels at Babson until they secured $5 million from Breakaway Ventures of Boston. The trio are among the company's 14 employees, but they're no longer the bosses: Knowing their own limitations, they hired Phil Damiano, who had run two other startups, as chief executive in January.
—Tania Chen (posted on Aug. 11, 2009)
If more and more motorists are excited about electric cars, maybe fishermen are ready to trade their outboard motors for battery-powered boats. Frank Jones has wagered $500,000 that they are. His Carolina Electric Boats makes a two-seat boat that looks a bit like a rectangular plastic kiddie pool—its hull is recyclable polyethylene—with a couple of cushioned lawn chairs in the middle. Its bigger difference from conventional boats is that the 10-ft. craft is propelled by two 36-lb. electric motors that can run four to eight hours on a charge. Twin Troller X10 is also hands-free operated; controls are in two foot pedals. Jones, 51, president of the Benson (N.C.) company, came up with the idea when he saw a boat created by a "backyard inventor." After getting patents, finishing a redesign, and partnering with Nova Chemicals for resin for the hulls, Jones and his handful of employees began production. Since June 2008, he has sold about 300 boats, at $2,395 apiece. Jones, a veteran operations manager, picked an admittedly bad time to launch a boat biz. Brunswick (BC), the recreational-boat industry's leader, predicts industry sales will fall to 150,000 in 2009, half 2005's volume, and it sees no snapback for years. Jones says, though, that his sales have picked up this summer. He says he's adding a dealer or two every week, though he's still looking for more, especially in the Upper Midwest. If his startup can top $450,000 in sales this year, he says he'll break even.
—Rachel Z. Arndt (posted on Aug. 11, 2009)
Lugging a stash of fresh batteries isn't something Aaron LeMieux wanted to do while hiking the Appalachian Trail. He had no alternative back in 1996, but he hopes he's got one for hikers, runners, and even walkers. It's called the nPower Personal Energy Generator. The 9-oz., 9-in.-long cylinder harvests kinetic energy from the human stride and turns it into 2.5 watts of electricity, enough for an iPod, cell phone, or other gadgets. LeMieux invented the generator after convincing his wife that he should quit his job as a management consultant in Cleveland. He then "emptied out the savings account," netting $20,000. After three days of tinkering in his basement, the mechanical engineering graduate finished a prototype. In 2007, he formed Tremont Electric, in Tremont, Ohio, with himself as CEO. He's now selling the product for $149 through Tremont's Web site, greennpower.com. LeMieux, 34, didn't get this far on his savings alone: He's raised $135,000 from friends and family and a $55,000 loan from Cuyahoga County. And he's trying to bring in $1.5 million from government agencies and venture capitalists. He and his one full-time and seven part-time employees aren't paid. The generator, which is manufactured in Cleveland, may be pricey. But it means no more batteries to throw out or dead devices while you're away from a recharger too long.
—Rachel Z. Arndt (posted on July 21, 2009)
There are plenty of mattresses on the market, but how many can be squished into a box to be delivered to your door—and claim to be green at the same time? Joe Alexander started selling compressible, eco-friendly mattresses in mid-2007, after selling conventional mattresses for 15 years. He and two friends pooled $300,000 to open their first store, in San Francisco. Called Keetsa, the retail shop was profitable within three months—thanks, says the 43-year-old co-owner, to its low-cost business model. That starts with manufacturing: The father of one of Alexander's partners has a factory in China that constructs the products from recycled and natural materials such as foam and steel coils. The company pays a fixed cost to ShipWire, a fulfillment and warehousing company, to maintain its inventory. The mattresses, which list from $439 to $2,159, are available from four Keetsa outlets, partner retailers such as Blu Dot in New York, and online. Because Keetsa mattresses don't have rigid frames, they can fit easily in the back of a car. For buyers who can't get to a Keetsa shop in California's Bay Area and Toronto, mattresses are shipped via UPS. That minimizes the company's carbon footprint since it doesn't have to put its own delivery trucks on the road. Alexander won't disclose revenue, but he says the partners are talking with a venture capital group about opening up to 20 stores in the next two years.
—Emily Schmitt (posted on July 21, 2009)
John Bellaud, Joy Berry, Kay Koplovitz, and John White
First there was Joy Berry the children's book author. Now there's Joy Berry the brand. Over the past 30 years, the former Northern California public school teacher and day-care center operator has written over 250 books for Scholastic (SCHL), Random House, Penguin, Grolier, and Childrens Press, with titles such as Do-It-Yourself Potty Training and Help Me Be Good About Being Rude. Though Berry, 64, has sold over 85 million books that brought in some $450 million in revenue, she felt her work had become lost among her various publishers and distributors. Instead of renewing her licenses, she let them lapse with the goal of republishing under her own name. She hired John Bellaud, 35, and John White, 31, as branding consultants, in 2006. In turn, they brought on Kay Koplovitz, 64, the founder of USA Network (GE), as a consultant (and later as an equity partner.) Now Berry, who holds a masters degree in human development, is selling her lifes work through startup publishing house Joy Berry Enterprises. With $2 million in personal funds and a $1.6 million investment from Brock Capital, JBE hired Morty Mint, the former president of Pearson's (PSO) Penguin Putnam U.S. and Canada unit as a brand consultant; contracted with a 40-person national sales team through Continental Sales; and signed a long-term contract with distributor Quebecor World. Launched in April, JBE has released 80 of her titles, which retail for between $8 and $13 each, and plans to produce 175 more titles over the next 18 months. White projects $2.1 million in revenue in 2009 and more than double that in 2010.
—Nick Leiber (posted on June 30, 2009)
Josh Green and James Psota
As imports of everything from sweaters to activated carbon surged into the U.S., Harvard Business School grad Josh Green, 31, saw a void: How could buyers vet all these foreign suppliers offering up goods? With support from angel investors, he teamed up with MIT-trained James Psota in 2006 and raised $5 million in venture capital to develop Panjiva, a searchable, online database of 700,000 suppliers from 190 countries. The service launched in February with nine employees in New York and Boston and has attracted over 200 clients, including apparel-maker VF (VFC) and Home Depot (HD). Panjiva's data sources range from the U.S. Customs & Border Protection to Sinosure, a Beijing-based export credit insurance company, to nonprofits like Social Accountability International. Unlike single-site sources, Panjiva uses algorithms to clean up and analyze data to score suppliers on, for instance, whether business is growing, stable, or declining. "We take multiple data sources and triangulate them to see if they are telling you the same story," says Psota, 29, chief technology officer. Clients pay $10,000 annually for search-engine access and can subscribe, starting at $100 per month, for company alerts. Chief Executive Green says Panjiva is no substitute for due diligence, but "it's a quick way to do a background search and get a short list of suppliers."
—Venessa Wong (posted on June 30, 2009)
Kevin Cohen, Ryo Fujita, Frank Harris, Ron Kurti, and Tal Pink
When Tal Pink and Kevin Cohen were growing up in California's San Fernando Valley in the 1980s, they performed Beastie Boys songs for elementary school parties. Today the duo and three other thirtysomethings—Frank Harris, Ryo Fujita, and Ron Kurti—host a Web site where hip-hop vocalists and producers can collaborate and record music of their own. Their site, Dopetracks.com, allows musicians to upload beats or the basics of a song. Vocalists or MCs can pick out whichever they like, plug a microphone into their computer, and record their rhymes on top. Visitors can then listen to streams of any song, post comments, and vote for the "dopest" track. (The artists maintain rights to their original work, while Dopetracks owns their collaborations.) Since the site was launched in 2007, it has recorded more than 200,000 songs. The site is also "sticky," with listeners spending an unusually high 15 minutes per visit. The startup isn't a cash machine, however. Cofounders Pink, Cohen, and Fujita spent $60,000 of their own money to create the Van Nuys (Calif.) venture. Later, the founders, Kurti (who designed the site), and Harris (who was brought in to run the business), raised $150,000 from their families. But 2008 revenue totalled $50,000, mostly from ads, and CEO Harris projects revenue of $100,000 this year. Other money-generators are in the works. Dopetracks plans to conduct more company-sponsored contests like a Suzuki competition in 2008 for a hip-hop paean to its Hayabusa motorcycle. And come September, site users will be able to download ringtones snipped from songs cataloged on the site.
—Michael Arndt (posted on June 30, 2009)
Call it a lesson in trickle-down economics. As the recession deepened, sports fans quit buying as many game tickets. That caused teams to cut their budgets, which in turn threatened DXD Sports, a Kansas City (Mo.) company that produces graphics for stadiums and arenas, like photos of players that are flashed up on big screens when they're coming into the game. DXD, founded by former TV employee Sean Hopkins in 2001, pulled in $3.1 million in 2008 from clients including the Atlanta Braves and San Antonio Spurs. To keep revenue from sliding, Hopkins turned over the CEO role last year to Willie Lanier Jr., 41. Though Lanier's background was construction and real estate, he quickly came up with a new product: interactive video games that a randomly selected ticket-holder could play in front of the crowd. In April, for example, one lucky fan got to virtually shoot the duck logos of Dri-Duck, a sports apparel company that sponsors the Kansas City Royals. And season ticket-holders for the Cleveland Cavaliers have had chances to play games of Family Feud with their favorite players.
—Emily Schmitt (posted on June 9, 2009)
Back in 2005, indie rocker Jared Gutstadt (pictured at right, with his CFO, Dan Demole) landed a sweet job between tours: lead editor and composer on Chappelle's Show on cable TV's Comedy Central. Before long, his ability to quickly crank out tunes earned him the nickname "Jingle Punk Jared." The nickname stuck. So, too, did his feeling that there wasn't enough culturally relevant music available for producers trying to make their TV shows or commercials feel current. In October 2008, Gutstadt opened a stock music company out of his New York City apartment as a way for struggling bands, unsung composers, and unpublished writers to get their work on top shows on network and cable TV.
Today, Jingle Punks licenses music from a swath of musicians ranging from Chip Taylor (he wrote the 1960s hit Wild Thing) to Gutstadt himself. Gutstadt, 31, whose "musical and entrepreneurial hero" is P. Diddy, says TV network clients pay between $10,000 and $20,000 for four months of access to Jingle Punks' searchable database of 10,000 songs, but the real money is in the royalties after a show airs. He says Jingle Punks has pulled in about $220,000 since its launch, from networks such as Bravo, MTV, VH1, and A&E, and brands such as Coca-Cola (KO), Kimberly-Clark's (KMB) Huggies, and Geico. After landing a deal in late May to license music to a roster of Viacom (VIAB) properties, Gutstadt embarked on his first vacation since starting the company.
—Nick Leiber (posted on June 9, 2009
When Brett Stern sees a problem, he fixes it. A lifelong tinkerer, the 50-year-old inventor used his expertise in industrial design to market snack foods. Unable to find a beer-flavored potato chip, Stern whipped up his own batch. Within two years, he was shipping packages of aptly named Beer Chips, which retail from $1.39 to $3.60, to Whole Foods (WFMI), SuperValu (SVU), and Publix grocery stores. Stern used $11,200 of his own money to launch the Portland (Ore.) company. He says he generated $500,000 in revenue in 2007 and $1.3 million in 2008. He claims a profit margin of 11%, which he credits to his virtual business model: He outsources everything but the creativity. Controlling only the design and direction of the product, he relies on others to manufacture and distribute it. That keeps his overhead low: His only employees—a bookkeeper and a marketer—both work part time from a garage. Stern, who's known to carry chip samples in his car and give them to strangers, also keeps his eye on the big picture. He hopes to create enough demand for Beer Chips, with such new flavors as margarita and Bloody Mary, that a snack-food company will purchase it.
—Emily Schmitt (posted on June 9, 2009
On auction sites like eBay (EBAY), there are generally two parties: the buyer and the seller. Reza Bundy wants to make it a threesome. Last year, he raised $7.5 million from angel investors and venture capitalists and started a Web-based company, Mota Motors, that seeks to instill trust between online buyers and sellers and take advantage of the growing online used-car market. The Venice (Calif.) startup runs basic background checks on both the seller and the car itself (via Carfax). Mota also asks sellers 20 questions about their vehicles, including such basics as to whether the car has a spare tire or key, which can affect value. Beyond collecting listing fees from firms like eBay Motors and payments from sellers, Mota also draws revenue from insurance companies who pay for customer leads that it provides from its list of buyers. CEO Bundy won't give out revenue information, but says his 20-employee firm should turn profitable by yearend. With Mota, Bundy, 37, is falling back on a business plan that has already worked well for him: In 1999, he founded IronPlanet, which grew into the largest online auctioneer of used construction equipment thanks in part to independent inspections that gave prospective buyers piece of mind.
—Brian Burnsed (posted on May 19, 2009)
Dave Roberts and Rick Carlson
Opening manhole covers, which weigh up to 400 lbs., is difficult at best and dangerous at worst. Dave Roberts, 51, who spent 25 years lifting them while working for waste-water authorities in Minnesota's Twin Cities, decided to find a better way. A perpetual tinkerer, Roberts designed a machine to remove the heavy cast-iron lids using a powerful magnet and a hydraulic hoist that attaches to a back of a vehicle. He assembled the first device in his garage five years ago and sold seven of them to his employer. Roberts quit his job in 2005 and financed the business with more than $100,000 borrowed against his house and from credit cards. Last October, he and business partner Rick Carlson, 53, relocated to Rock Valley, Iowa, after economic developers there connected them with a group of 12 local investors who invested an undisclosed amount in the company, which they renamed Rock Mills Enterprises. The patented device, called the Lifter, sells for $3,595, and they have shipped about 90 so far, with $63,500 in revenue in 2008. Roberts and Carlson pitch their tool as a way to save time and reduce the risk of injury to workers, and they see a vast market for the product in municipalities, utility companies, and institutions like military bases and universities.
—John Tozzi (posted on May 19, 2009)
Some people you just shouldn't mess with. When Turkish-born Banu Ozden couldn't get a straight answer from her health insurance company about treatment costs after being diagnosed with breast cancer in 2005, she got mad. And she got madder still as she went through treatment and received myriad bills filled with unintelligible codes and statements that didn't accurately reflect what she owed. When she finally sorted through the mess, she discovered that she had overpaid by about $4,000. Instead of simply complaining, Ozden, 44, decided to get even. Formerly a computer science professor at the University of Southern California and director of computing systems research at Bell Labs, Ozden built a medical-billing management service designed for fellow patients. Her Web biz, Smart Medical Consumer, launched in January 2007, with $380,000 from angels. The New York-based company has spent no money on marketing but already has 1,000-some registered users who upload their confidential claims and invoices. Smart Medical Consumer plans to make money by selling ads to medical and pharmaceutical companies. Though Banu continues to undergo cancer treatment, she says she feels healthy and plays tennis when she can and would like to get back into windsurfing.
—Nick Leiber (posted on May 19, 2009)
Chris Baggott and Ali Sales
Showing up near the top of Google (GOOG) search results is the Holy Grail. The trick, of course, is figuring out how to gain such prominence without forking over a fortune on paid keywords. One way to do that is to post as many blogs as possible sprinkled with keywords aimed at attracting readers. But Chris Baggott, who co-founded e-mail marketer ExactTarget after the dot-com crash, found that blogging tools designed for businesses keen on raising their profiles didnt really exist. The result is software-as-a-service (SaaS) business Compendium Blogware, which Baggott, 48, co-founded with Ali Sales, 28, a colleague from ExactTarget, in July 2007. So far, Baggott says the 45-person Indianapolis company has raised almost $3 million from investor angels, friends, and family and has nearly 400 clients, from a family-owned liquor store in Greenfield, Ind., to Roto-Rooter franchises in the Midwest. Those customers pay an average of $6,500 a year to Compendium for 50 blogs. Are these "white-hat" or "black-hat" tactics? One blog on a Web developer's site says Compendium is essentially gaming Google's algorithm. "Simply untrue," retorts Baggott, dismissing the online jab as the work of "IT guys–the enemy of SaaS."
—Nick Leiber (posted on Apr. 28, 2009)
Her Web site is officially called 20x200, but founder Jen Bekman calls her online mart the gateway drug to the art world. The Manhattan gallery owner launched the site in September 2007 to sell limited-edition prints and photography at prices low enough to attract first-time collectors, starting at $20 for a print from a run of 200. Bekman, 39, worked for Internet companies including Meetup before opening Jen Bekman Gallery, where prices range from $1,000 to $20,000. She bootstrapped the now-profitable Net venture for less than $1,000, with the help of contacts who donated time get the site running. She now runs it with a staff of five (plus contractors), who also operate her gallery and a third venture, photo competition Hey, Hot Shot! that leads her to many of the photographers for 20x200. She splits profits 50-50 with the artists, and her art-world cred assuages artists' fears that their work will be commoditized. People know that I am not just moving product, she says. But the product moves nonetheless. The e-gallery has shipped more than 40,000 prints, with $1.2 million in revenue in 2008.
—John Tozzi (posted on Apr. 28, 2009)
Raymond Aker, OBrian Woods, Gavin Stone, Candice Stone
When Raymond Aker ran a cleaning business in San Diego, he was frustrated by how hard it was to find customers. Akers solution became his next business: BidMyCleaning.com, a Web site designed to connect clients with cleaners in a transaction as smooth as buying books on Amazon (AMZN). Users select what type of cleaning they need, punch in their Zip Code, and BidMyCleaning spits out price quotes from vetted providers. Customers schedule online and pay through the site after service is provided. BidMyCleaning takes a cut of 20% to 30% on each bookingthe average sale is $130. Aker, 36, says he and three thirtysomething co-founders built the site in about six months with $100,000 raised from friends, family, and angels. The company, which now has four employees besides the founders, was profitable nine months after launching in April 2008, with $390,000 in revenue in the first year. Based in San Diego with a second team in Houston, BidMyCleaning is now seeking investors to expand to other services like lawn care or repairs
—Nick Leiber (posted on Apr. 28, 2009)
Sean O'Connor and Nate Steck
Sean O'Connor opened his first restaurant in San Francisco shortly before the dot-com bust. As business tanked, O'Connor, who had grown up in a restaurant family and studied hospitality management, retooled his concept, turning the full-service establishment into a bar and laying off most of his staff. For fun, he spent a lot of time in the kitchen, playing around with various gizmos. A failed experiment making beignets with a whipped-cream charger sparked an idea: Why not put pancake batter in spray cans and market them to consumers? In 2005, he teamed up with Nate Steck, a food manufacturing wizard, and raised $1.5 million to create the line and buy manufacturing equipment. Last year, San Francisco's Batter Blaster and its 16 employees squeezed out $9 million in sales, retailing the cans for $5 a pop in over 10,000 stores across the country, including Costco (COST) and Whole Foods (WFMI). O'Connor, 37, and Steck, 40, plan to reinvest the 30% of their gross revenue into marketing and hope to double sales in 2009.
—Nick Leiber (posted on Apr. 7, 2009)
On a visit to Portland, Ore., about three years ago, Bill Leikam watched curiously as his brother used an odd piece of plywood to pull a hot rack from of the oven. "I said: 'What was that?'" recalls Leikam. It was the family's "oven buddy" he was told. Like every inventor, Leikam believed that he could design a much better version. For about six months, the retired chief of a Silicon Valley high-tech firm ruminated on the idea and then headed to a local lumberyard to try his hand as a toolmaker. After devising five different iterations and plowing $12,000 of his own savings into the new venture, Leikam launched the Oven Claw in Palo Alto, Calif. Last Christmas he began selling the hardwood utensil online and at seven specialty stores. Although there are other similar devices on the market, Leikam, 68, says the Oven Claw is sturdier and better designed. The 18-in.-long grabber can easily extract a cooked turkey from the oven without making a cook reach her arm inside. Eventually, he hopes his "high-end" Oven Claw will be sold in stores like Crate & Barrel and Williams-Sonoma (WSM). By May, Leikam expects to be profitable and says the company will pull in $50,000 in sales this year. "People tell me that I should come up with other utensils," says Leikam, whose cooking interests tend toward casseroles and Italian foods. "But for the moment I am focusing all of my energy and money on this one before I branch out."
—Stacy Perman (posted on Apr. 7, 2009)
Lauren Porat and Cari Sommer
While Craigslist is many things, it's not a well-filtered place to find workers without weeding through unfit applicants. Lauren Porat and Cari Sommer think their new Web site, Urban Interns, will fill that niche. Launched in beta in New York in February, Urban Interns aims to link small businesses with students and grads looking for part-time work in their fields. The duo recruited applicants through campus career centers and reached out to small business groups to line up employers. The site makes matches based on the hours available, the tasks involved, and whether the spot is paid or not. Porat and Sommer expect the idea to catch on in the downturn, when companies need inexpensive labor and students or grads want gigs that will get them connections and experience. Urban Interns is free for now, but it plans to charge employers in the coming months. Porat, 34, a veteran of Internet conglomerate IAC (IACI), and Sommer, 32, an attorney formerly with law firm Bryan Cave in New York, are bootstrapping the venture. They began working on it from their homes last fall. (Contract developers built the site). They hope to expand Urban Interns to other cities this year.
—John Tozzi (posted on Apr. 7, 2009)
Think caviar is a tough sell in a recession? Rich Brauman begs to differ. His four-year-old Somerville (Mass.) company, The Little Pearl, moved $500,000 of the pricey delicacy last year, mostly through Whole Foods (WFMI) and his own Web site. A former research associate at the Federal Reserve Bank of Boston, Brauman left in 2001 to pursue his longtime interest in aquaculture, tapping family and friends for seed money. The Little Pearl buys fish eggs harvested sustainably from farms and rivers as far flung as Idaho, Alaska, and North Carolina. Brauman, 33, has a full-time staff of 6 and anywhere from 4 to 10 part-time helpers in his 1,500-sq.-ft. plant. The caviar ranges in price from $12 an ounce for salmon to $70 for the white sturgeon eggs that Brauman dubs Transmontanus Rex. (The company turned an operating profit last year, he says, but recorded a loss because of the cost of developing aquaculture technology that Brauman hopes will eventually boost his operations.) These days, Bauman says that when he offers free samples, people are less squeamish about trying fish eggs for the first time than they are worried that they'll acquire a taste for them: They're afraid, because its a recession, that they're going to like it.
—John Tozzi (posted on Mar. 17, 2009)
Jennifer Wilhelmi Sargent and Gregory Ellwood
Jennifer Wilhelmi Sargent and Gregory Ellwood first met in 1996 at Variety while helping the Hollywood trade publication with its Internet strategy. Now Sargent, 32, a Harvard MBA and former marketing honcho at Reed Business Information, and Ellwood, 36, a former editorial consultant and contributor to MSN and The Los Angeles Times, have their own Web venture. HitFix is an entertainment news site that eschews celebrity gossip for breaking news. One scoop: HitFix was first with word that rapper M.I.A. had delivered her baby and would not be performing at the 2009 Academy Awards broadcast. Apart from publishing around 10 original posts a day (written by Ellwood and a staff of four), the site is fine-tuning an interactive tool for entertainment junkies who want to plan their free time around upcoming movies, concerts, and TV shows by punching in their Zip code and preferences. The site went live in December, and the first-time entrepreneurs say it had more than 200,000 unique visitors in February. The economic sinkhole hasn't slowed them down, either. They took in $850,000 in angel money in February, and movie studios and TV networks have been snapping up ads. The co-founders says theyre saving on overhead by working remotely—Sargent lives in Washington, while Ellwood is in Los Angeles—and expect the business to break even by yearend.
—Nick Leiber (posted on Mar. 17, 2009)
In 2007, as lead-tainted toys made headlines, consultant Mike McKinnon encountered a government-developed method to remove lead dust and other heavy metals from the skin. The technology, created by the Centers for Disease Control and Prevention, seemed easy and cheap to manufacture, didnt have competitors on the market, and was something that people would actually buy—all the criteria McKinnon used when helping corporate clients develop new products. His consulting company, Numidian5, licensed the technology, and he raised $500,000 from private investors to spin it out as a new venture last year. The product, dubbed Hygenall, is a hand wipe with a substance that bonds to lead dust and allows it to rinse away. Based in Huntsville, Ala., Hygenall has 14 employees and outsources production to a plant in Pennsylvania. The product comes in 20-ounce cans with a suggested retail price of $6.99. McKinnon, 48, is targeting young mothers concerned about lead contamination, and he hopes to sell to drug stores and other mass retailers, as well as online. The company is also developing a separate product called Field Scrub for military use. Hygenall just shipped for the first time in February, but McKinnon expects to sell at least $3 million worth in 2009.
—John Tozzi (posted on Mar. 17, 2009)
Bill Boone, Katherine Otway, Dave Tabaczynski, Erik Skala, and Kurt Mangold
Dave Tabaczynski is worried about your innards. Most people, he says, don't have enough of the benign bacteria in their guts that research suggests aids digestion and immune function. A 38-year-old Babson MBA and veteran of several biotech companies, Tabaczynski abandoned a genetics degree at the University of Pennsylvania in 2006 to start Mass Probiotics. The Groton (Mass.) drink company hopes to tap into growing consumer demand for products with live bacteria—a market that some estimate could reach $20 billion globally by 2010. The company contracted a California plant to make its flavored water, Probiotic Health Daily, in two varieties: Berry Balance and Citrus Boost. Tabaczynski expects the first batch to ship in February to specialty and natural food stores in Canada and the U.S., particularly in California, and he eventually hopes to sell to chains like Whole Foods (WFMI). To get this far, he and his three partners have relied on $288,000 raised from friends and family, angels, a Babson business plan competition, and their own pockets. The partners are also working for free.
—John Tozzi (posted on February 24, 2009)
By now, we all know that the Internet is tomorrow and the printed media are yesterday. So when, to borrow from Lost, is Joshua Karp? The 36-year-old former consultant from Chicago is publisher of the Printed Blog. The content buzzes like the World Wide Web: Every bit comes from the blogosphere or photos snagged from Flickr (with creators' permission). But the format is undeniably 20th century: ink on paper, or to be more specific, four-color ink on eight sheets of 11 by 17 glossy stock bound by staples. The free weekly debuted in late January in Chicago and San Francisco, where volunteers and some of Karp's 14-person staff handed out 3,000 copies to commuters at train stations. It expanded to New York and Los Angeles in February and Karp hopes to add Washington in March. The paper is a huge money drain. Karp says he's bringing in $500 to $600 a week from advertising. But it's cost him more than $15,000 to print the first three editions. Add in payroll and office rent and the $30,000 that Karp says he's pulled out of savings to start his venture will be spent before the publication can roll into D.C. No worries, says Karp. He says he's negotiating loans for as much as $50,000. Besides, his credit cards aren't maxed out yet.
—Michael Arndt (posted on February 24, 2009)
A wedding is one of the most important days of your life. It can also be one of the most expensive, running $28,000 on average, according to some estimates. For those who don't have that much, there's a new company out of Norwell, Mass., that could help: Wedding Payment Plan will finance your wedding. Scott Almeida, 35, says he got the idea from watching a family friend succeed at financing orthodontia and Lasik eye and cosmetic surgery. “My first thought wasn't weddings; it was funerals,” he laughs. “But weddings are a lot more fun.” He wrote up a business plan as a nighttime MBA student at Babson College and began raising money from family and friends. He also tapped $100,000 from an account that he and nine former classmates had set up to back whoever came up with the best startup idea. In 2007, he left his day job as a venture capitalist to work full-time on Wedding Payment Plan. The average loan runs about $10,000 with a fixed 9.9% interest rate paid back over five years. The company hasn't yet financed 500 weddings, but in the last year applications have jumped 333%. Almeida is raising $500,000 to go national and says the lending venture could turn profitable as early as mid-2009.
—Damian Joseph (posted on February 24, 2009)
Dustin Sapp and Robert Compton
Vontoo started out as a voice-messaging tool, blasting targeted lists of people with prerecorded pitches from the likes of Greg Oden, the No. 1 pick in the National Basketball Assn.'s 2007 draft, who "called" Portland Trailblazer season ticket holders to re-up for another year. But as times have grown tougher, the 25-employee company has morphed into a service for bill collectors. Dustin Sapp, 30, and Robert Compton, 52, co-founders of Indianapolis-based Vontoo, had already launched and sold a successful business—NoInk, a digital information service for the medical-device industry—before they began their new company in 2005 with $1.5 million from angel investors. Prices range from $15 for 100 message minutes to $1,000 for 10,000 message minutes. Lately, the founders have discovered their automated phone calls are an effective collection tool. More than a third of Vontoo's clients today use it to get customers to pay past-due bills, and Sapp expects the share to grow. (Celebrity voices aren't used for these calls; companies typically record a company exec or someone in customer service.) Since turning to Vontoo, one client has cut its own collection staff by more than 50% while realizing a 60% jump in collections.
—Amanda Zusman (posted on February 3, 2009)
Don Kubley says he is "as mechanical as a stump." But that hasn't stopped the fourth-generation Alaskan from developing a business around a nifty piece of engineering: a portable building that looks like an igloo (with a door and windows) and can be assembled by hand. Kubley says pieces of his InterShelter dome fit together like fish scales and can be stacked in the back of a pickup truck, a noteworthy quality for customers looking to transport units to hard-to-reach locations. The standard 314-sq.-ft. structure retails for $12,500 and is available from dealers in a dozen countries as well as online, at intershelter.com. Kubley, 56, credits architect Craig Chamberlain, a former student of geodesic dome inventor R. Buckminster Fuller, with dreaming up the design and says he bought the rights to commercialize it two years ago. After a protracted search, Kubley recently found a manufacturer in Idaho to build kits. So far, Kubley, a former consultant who says he ran a fleet of charter boats out of Juneau for 20 years, has raised $250,000 from friends and family. Though 2008, revenue was only around $140,000. Kubley says he is negotiating with the U.S. military and Afghan authorities and projects up to $5 million in sales in 2009.
—Nick Leiber (posted on February 3, 2009)
While pulling an all-nighter studying for his MBA at Babson College, Jason Kensey (an avowed non-coffee drinker) went to purchase his usual jolt—a highly caffeinated, high-sugar soda—only to find the vending machine broken. Kensey, now 39, got something else: an idea for a business making bite-size candies packed with caffeine. Until 2000, Kensey back-burnered the idea while he worked at Kellogg for two years. Over the subsequent three and half years, Kensey invested $150,000 of his own savings and hired a confection and flavor company to formulate a product. He even mixed up a few batches in his own kitchen. His Vroom Foods launched online in 2004, selling Foosh Energy Mints, Buzz Bites Chocolate, and Mint Energy Chews for $3.99 a tin. The Costa Mesa (Calif.) company has grown to three employees, and its "seriously caffeinated candies" are now sold in stores and gumball-like machines in 4,000 locations in the U.S., Canada, and Australia. Sales last year jumped to $1.3 million, and Kensey says Vroom is profitable. The chief executive likes his candy kick: He pops four a day, starting at 5:30 a.m.
—Stacy Perman (posted on February 3, 2009)
William Hildebolt and Daphne Kwon
In 2004, William Hildebolt and his wife, Daphne Kwon, quit their high-powered, well-paying jobs as a principal at General Atlantic Partners and chief financial officer of Oxygen Media, respectively, to become "netrepreneurs." "It was like falling off a cliff backward," Hildebolt recalls. Their idea was to launch a Web site where consumers could submit videos of product reviews. The first review, of a portable DVD player, was uploaded on Sept. 9, 2005, on expotv.com. By the end of that year, the site was up to 2,500 reviews. By yearend 2007, expotv.com boasted 150,000. Today there are more than 300,000 "Videopinions," including videos by Hildebolt, 39, and Kwon, 40, who can be seen critiquing a toaster oven, a Quadrilla Twist & Rail Set, and a hike through Puerto Rico’s El Yunque rain forest. Categories range from pets to clothing to books. Revenue is piling up, too, thanks to product-linked ads from Procter & Gamble (PG) and LG Electronics as well as "where to shop" ads from Google (GOOG). So far, angel investors and venture capitalists have put more than $6 million into ExpoTV. The couple predict their New York venture, which now employs 17, will turn profitable in 2009.
—Amanda Zusman (posted on January 13, 2009)
Strawberry-flavored pacifiers. Spoons that taste like raspberry. Minty fresh mouth guards. Corey Capasso of Woodcliff Lake, N.J., came up with the idea for yummy plastics in his freshman year at the University of Wisconsin at Madison. He shopped it around to private investors and secured $250,000 in venture capital in early 2006. Since then, the 22-year-old has put off completing his degree in finance to get his business, Add the Flavor, moving ahead. Capasso’s technology infuses flavor in the hydrocarbon molecules of plastic: Suck on the material, and the taste is released for up to 100 hours. The plastic is dishwasher-safe and contains no Bisphenol A. Capasso, who is working with plastic maker A. Schulman and polymer researchers at Wisconsin, recently secured more than $100,000 in bridge financing in exchange for equity in his startup. He's now talking with several consumer-products companies about adding flavors and scents to their goods and hopes to have the first such product on store shelves in 2009.
—Maggie Gilmour (posted on January 13, 2009)
Jason and Kim Wenig
After spending nearly a decade working in New York—two years on Wall Street and seven at an auto-parts dot.com—Jason Wenig and his wife, Kim, looked around the country for a place to start a business of their own. They settled in Dania Beach, Fla., spent two years and hundreds of thousands of dollars fixing up a rundown building, and opened a classic-car restoration outfit. Their Creative Workshop is no ordinary garage. Restorations cost from $100,000 to $250,000, while a custom-designed roadster can go for $1 million. In four years in business, the shop has done work for customers from Seattle to Costa Rica to Germany. The staff is up to 14 mechanics, plus Kim, 39, who does the bookkeeping. The collapse of the Florida real estate market and the overall economy are troubling Wenig, 38, who says his backlog has shrunk. But, he says, "I kind of like this environment. It makes you less of a prima donna and a bit more hungry for business." Besides, he adds, "what better way to distance yourself from a miserable day of watching the market than by talking about a 1957 Lancia?"
—Andrea Castillo (posted on January 13, 2009)
Want to drown your economic worries? HowstheBar.com, a new social-network site that lets members rate bars in real time to find the most hopping places, may help. Some 600 members in Illinois are already clicking on where to go—and where not to—says Randy Rantz, founder of the Grayslake (Ill.) venture. After working as a real estate investor for more than a decade, the 37-year-old entrepreneur says he’d spend evenings texting with friends about which bars were hot. Their back and forth led to the site, which he launched in November 2007. Rantz lists some 15,000 bars in Illinois and plans to expand across the Midwest and the rest of the country. “The purpose of the Web site is to join, meet people, and exchange information by giving and taking ratings when you are out,” he says. Bars are listed for free, but they can pay for featured space and a link to their Web sites. The new business owner, who started his venture with some $250,000 from 13 relatives and friends, may have reason to take a drink himself—he says the company is burning through $15,000 to $20,000 a month, though he’s hoping profitability could arrive by next June.
—Manuel Baigorri (posted on December 23, 2008)
Lyn Huffman and Leigh Rubio
In 2005, when Leigh Rubio, a Portland (Ore.) stay-at-home mother of two, saw her infant daughter accidentally scratching her face, she wished for a simple solution that she couldn’t find: baby shirts with fold-over sleeves. That only added to what she disliked about the little kid clothes on the market. Baby pants were too high so their waistbands pressed into tender, healing belly buttons. Some shirts lacked neckline snaps and were painful to stretch over soft heads. And cloying pastels and duck patterns were everywhere. So Rubio, now 34, and women’s apparel designer Lyn Huffman, 32, teamed up to design a fitted and stylish layette. Targeting newborns also helped them carve out a niche in the crowded children’s apparel market. They scraped together $75,000 in savings, a $50,000 bank loan, and, says Rubio, “supportive husbands who never second-guessed us” to create their first line. Since August, they've expanded to offer clothing made in the U.S. for toddlers up to 24 months old. Within a year they turned a profit and now bring in $5,000 to $10,000 monthly through their online store, newforbaby.com.
—Francesca Levy (posted on December 23, 2008)
Don’t let the name fool you—Three Twins Organic Ice Cream started as a one-man band. When Neal Gottlieb opened his shop in San Rafael, Calif., he did everything himself. He sold just $365 of ice cream his first day, Aug. 27, 2005. Three Twins is up to 25 employees now at two locations and expects to generate at least $750,000 in revenue this year, double 2007’s sales. Gottlieb, a 31-year-old Cornell University graduate, got into the organic ice cream business after stints in finance and the Peace Corps in Morocco. He started Three Twins—Gottlieb used to live with his twin brother and the brother’s fiance[need accent mark on first e]e, who was also a twin, hence the store’s name—with $70,000 of his own and has since raised $1 million from folks in the organic food biz to open a factory to make ice cream for retailers such as Whole Foods. Gottlieb’s California outlets stock more than a dozen flavors, and he has a notebook with more than 100 more he wants to try. One is organic rocky road. The hitch: He hasn't been able to find a source of certified organic marshmallows.
—Albert Sun (posted on December 23, 2008)
In mid-2006, Susan Perry (BusinessWeek.com, 6/20/07) was inspired by her niece, who suffers from macular degeneration. Sitting at a restaurant, Perry grabbed a napkin and sketched an idea for a talking menu that would help blind people place orders. Two years and $600,000 in investments later, her Miami company, Taylannas, produces audible menus that can be found in roughly 30 locally owned restaurants in South Florida as well as two chains, the Original Pancake House and the Lion and the Rose. Perry's Menu That Talks allows diners to hear options by pushing buttons—press one, for instance, and a voice reads off dishes, descriptions, and prices. The menu also features flashing lights that can be activated to alert waiters when a customer wants service. A package of five costs $3,500, offset by a 50% federal tax break for small businesses that provide services to people with disabilities. Her client base could soon become international. Perry, 51, who also runs an export business, says an upscale Italian cruise line is testing the menu in its dining rooms.
—Brian Burnsed (posted on December 2, 2008)
What's an online service with real-time info on parking spots in California doing in Flint, Mich.? Showing the lengths a downbeaten region will go for startups—and the distance entrepreneurs may have to travel for their new businesses. Rick Warner, 48, founder and chief executive of ParkingCarma, started sketching out a Web-based parking database in 2002 after driving around San Francisco for 45 minutes one day looking for a place to park. By early 2007, he had everything ready. The last step was moving 2,400 miles to claim up to $2 million in public and private backing in Flint. He says he had little choice: "Frankly, parking isn't sexy to really get venture capital interested in it." Visitors to parkingcarma.com can find location and rate information about public garages in 70 markets. In addition, for $9.99 a year, registered users in San Francisco and San Diego can reserve spaces via a computer, PDA, or mobile phone. Warner hopes to add that service in Los Angeles, Chicago, and Detroit in 2009. The 11-employee company also gets revenue from ads and a percentage of what customers pay for parking.
—Manuel Baigorri (posted on December 2, 2008)
Shea'la Finch and Jon Buonaccorsi
Providence, R.I., is becoming a showcase for up-and-coming artists, but you won't necessarily find their work in a gallery. Every Tuesday, Shea'la Finch and Jon Buonaccorsi display a new print of an original drawing or painting on their Web site, tinyshowcase.com, and sell 100 to 200 for $20 apiece. In three years, Tiny Showcase has given more than 100 artists an audience—the site receives up to 10,000 visitors on a busy night—and has made art accessible to those with modest means.
Finch, 29, and Buonaccorsi, 30, were living together in 2005, trapped in office jobs they hated. To keep up morale, they left each other funny sketches on the fridge. Then Finch, who has an art degree from Bennington College, thought of putting their sketches and other underexposed art online in limited editions. Buonaccorsi, a Web designer, created the site, limiting their startup costs to only a few hundred dollars. Revenue, which reached $250,000 last year, comes from a 20% commission on artists' sales, and the business became profitable quickly. But the two still depend on day jobs to pay the bills.
—Francesca Levy (posted on December 2, 2008)
Bryan Goldberg, David Nemetz, Zander Freund, and David Finocchio
David Nemetz and his high school buds grew up in Silicon Valley getting their sports info from espn.com. But the mainstream site was, well, mainstream. Where, they muttered, were the reports on mixed martial arts? So after college, the foursome pooled close to $100,000 from their families to hire software developers to create an "open-source" forum where fan-journalists could blog about any sport they like. Four months after its official launch last February, bleacherreport.com and its 2,000 writers hit 1 million unique visitors in a month.
Bleacher Report is more than a message board. To bring coverage above unfiltered ramblings, the site's tech team designed an algorithm that employs reader ratings to lift higher quality contributions to the top of the page. Also, an editorial staff of five screens every post. In June, Fox Sports (NWS) began carrying Bleacher Report content. Nemetz, who had worked at a Los Angeles talent agency, says revenue is still meager and doesn't cover costs. But the site has a financial cushion: Hillsven Capital and other angel investors have fronted it several million dollars.
—Francesca Levy (posted on November 11, 2008)
Brett Beach and Timothy McCollum
Brett Beach and Timothy McCollum hold the title of "exclusive U.S. importer of Madagascar chocolate." That is no small privilege since the island's aromatic cocoa bean is considered by some to yield the world's best dark chocolate. From 1999 to 2001, Beach served in the Peace Corps in Madagascar, where he befriended volunteer McCollum. Beach, now 33, stayed on five more years, working for the U.S. Embassy and the U.S. Agency for International Development. He then returned to Lawrence, Kan., and launched Madécasse, with hopes of turning a natural resource into a job source for Madagascarians. McCollum, 31, left his job at American Express (AXP) in June to focus full-time on the startup, which they've funded with $50,000 from their own pockets and a $25,000 prize from a New York University business contest. Madécasse now distributes chocolate and vanilla extract to over 100 shops in the U.S., and Beach projects 2009 sales of $500,000.
—Matthew Lawyue (posted on November 11, 2008)
Catherine and Peter Drogin
After piling away savings while working at dot-coms in the 1990s, Catherine Drogin, 39, and her husband, Peter, 40, decided it was time to make the switch from employees to entrepreneurs. They also chose a market about as far from the glamour of the Net as they could get: tongue depressors. The Drogins saw their opportunity in 2001 when a pediatrician told them that the worst part of a doctor's visit for children, after getting a shot, is the oral exam. They thought kids might be less scared if the wooden probes were printed with colorful cartoons of dinosaurs or smiley faces. They founded Silver Consumer Products in Brooklyn, N.Y., and spent two years and $50,000 finding a manufacturer in China, test-marketing, and registering with the FDA. Sales took off after major medical-supply distributors added their FunDepressors in 2005, with revenue rising 20% this year. A jar of 200 sells for $22.99. Their business is also profitable, the couple says.
—Sara Hennessey (posted on November 11, 2008)
What do you get if you cross a skateboard with Rollerblades? If you're Ryan Farrelly, it's a new sport and a startup that could pull in $5.5 million in revenue this year. Farrelly, 29, invented Freeline Skates in 2002 while bumming around from one odd job to the next, surfing in the morning and skating at night. The skates are like a polished metal skateboard that has been cut in two, with the wheels mounted sideways. Riders balance one foot on each half. He then spent three years living on friends' couches as he and surfing buddy Jason Galoob tinkered with the design and raised money for a first batch of 500 skates. Based in Carlsbad, Calif., Freeline Sports sold 5,000 pairs in 2006, and 20,000 in 2007, thanks largely to buyers in South Korea and Japan. He predicts sales of 40,000 this year, at $134 a set, through freelineskates.com or 40 sports shops mostly in California. Farrelly says he has turned down Wal-Mart Stores as a retail outlet. Why? Bad for Freeline's street cred.
—Albert Sun (posted on October 21, 2008)
James Hamilton and Philip Streich
At 17, most people are stressed out over their next term paper. But Philip Streich of Platteville, Wis., is helping discover technologies to make flat-screen TVs as thin as a poster. The home-schooled high school senior is part of Graphene Solutions, along with James Hamilton, a University of Wisconsin-Platteville chemistry professor, and Chief Executive Phillip Jackson (who, along with Hamilton, started Photonic Cleaning Technologies, another nanotech firm). Using a spectrometer that Streich designed, the company has developed a process to dissolve materials previously thought to be insoluble, including carbon nanotubes and graphene sheets. This breakthrough allows tiny nanotubes—a material that could one day replace silicon—to be processed and sold on an industrial scale. The technology has battery and solar cell applications, too. Graphene Solutions won the 2008 Wisconsin Governor's Business Plan Contest and has caught the interest of investors both at home and abroad. The venture wants to raise $3.5 million in funding, and it plans to break even in three years on what Hamilton calls conservative sales of $12 million.
—Jacob Stokes (posted on October 21, 2008)
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Eric Fosse knows that if you want pizza, your options are almost unlimited. So when he told friends that he had left his job as a loose-diamond salesman to open yet another pizza joint in Chicago and that his pies would be truly different, he was ready for snickers. Today, with 23 HomeMade Pizza locations in metro Chicago and Minneapolis/St. Paul, and plans to move into Washington, D.C., later this fall, it looks as if Fosse's career leap wasn't as reckless as it seemed.
HomeMade Pizza's pies are made to order and can be picked up or delivered—same old, same old. But unlike pizzas from Domino's or the prepared-food section of Safeway, its take-and-bake pies are uncooked and unboxed: Customers slide the fresh pizzas, which come on heatable parchment paper, into a 425-degree oven, and in 10 to 15 minutes they have dinner. They're also premium-priced: Pizza Hut may offer three medium pizzas for $15. At HomeMade, a 14-inch pie with wild mushroom toppings and a whole wheat crust costs $19.90.
Fosse, 47, and his two initial partners—Audrey, his wife; and Matthew Weinstein, his brother-in-law— spent $500,000 of their own money and two years cooking up 270 batches of dough before opening their first site. The business turned profitable in Year Two. Fosse expects sales to hit $9 million in 2008, up 50% from last year. Its first pizza—Wisconsin mozzarella—remains the most popular.
—Rachel Arndt (posted on October 21, 2008)
Thomas Morrow, a serial entrepreneur and former Motorola manager in Asia, thinks he has just the thing for home schoolers: the Internet. Morrow, 46, founder of Home School in Des Plaines, Ill., says that data-storage technology for home schooling up to now has been PC-based. "This meant if you lost your hard drive, you lost the records that many states require to prove you're following the curriculum at home," he says. His online service, home-school-inc.com, offers free lesson plans and a regulatory reporting tool so well backed up, he claims, that only a nuclear strike could knock it out. Home School pulled in less than $100,000 last year from selling books and educational materials online, but Morrow is forecasting revenue to jump to $1.8 million in 2008. He has 11 employees now but expects to finish 2009 with as many as 40. Morrow, who plowed more than $600,000 of his own money into the business, takes home schooling seriously. This fall, he pulled his 11-year-old daughter and 9-year-old son from school; they're now enrolled at home.
—Howard Wolinsky (posted on September 30, 2008)
Glenn Dunlap grew up a Cincinnati Reds fan in Summitville, Ind., but when the marketing consultant looked for vacation packages to visit all 30 Major League Baseball stadiums, all he found were of the overcrowded "bus and ticket" variety. So Dunlap wrote a business plan, put up a slick Web site and $10,000, and started Big League Tours. By the start of the 2006 season, Big League Tours was booking deluxe trips to famous ballparks, including meet-and-greets with former players, close-in seats, as well as private-bus travel, meals, and four-star lodging. A sample four-day excursion? For $2,325 a person, a Red Sox game in Boston (including a Fenway Park tour and time with former pitcher Bill "Spaceman" Lee), the National Baseball Hall of Fame in Cooperstown, N.Y., and one of the final games in Yankee Stadium. Dunlap, 39, runs the business on nights and weekends after his day job in Indianapolis, with the help of one full-time employee. Revenue rose more than 300% in 2008, after a 400% increase in 2007, and the company is "close to profitable."
—Lawrence Delevingne (posted on September 30, 2008)
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Just after his daughter, Nova, was born in June, Dinesh Singh couldn't wait to tell upwards of 40 friends. But e-mail felt too impersonal, texting too clunky, and making that many calls personally too time-consuming. So Singh used Phonevite to record a message about his new daughter and send it to phone numbers he had entered on Phonevite's Web site. John Nahm, 34, the company's co-founder, points out that the service isn't limited to birth announcements—it works just as well for last-minute barbecue rain cancellations or practice reminders from Little League coaches. Nahm and Kalvin Kim, 35, both technology startup veterans, launched their San Jose business in mid-2007 with $15,000 of the pair's savings. Although revenue is just $4,000 a month, they secured $600,000 in seed funding last January. In July the company premiered Phonevite To Go, which enables users to input everything over a phone. Nahm's driving mission? "To make this service dumb simple, for the average Joe."
—Francesca Levy (posted on September 30, 2008)
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Andre Woolery had already done a lot—starting an IT company, opening a Caribbean restaurant, and enrolling at Stanford University's business school—before he started MagnoGrip in Menlo Park, Calif. Woolery, 32, who was born and raised in Jamaica, got the idea for his latest venture in 2005 after he helped his brother-in-law, a makeup artist, design a wristband to hold his brushes. Woolery noticed he was always dropping stuff when he worked on house projects, and started thinking of a product that could similarly keep tools easily accessible. His answer: a nylon tool belt lined with magnet pockets.
With $5,000 of his own and $40,000 from his parents and friends, he hired a couple product designers from Stanford to snazz it up. Another Stanford alum introduced Woolery to a manufacturer in Shenzhen, China, who agreed to make the product. After getting his MBA in 2006, he then traveled all over the San Francisco Bay Area to persuade hardware merchants to carry the MagnoGrip. Today, some 300 stores, including units of Ace Hardware and TrueValue, stock the line, accounting for 40% of sales, with the rest coming via the Internet.
—Maggie Gilmour (posted on August 4, 2008)
Left to right: Pop! Technology's Eileen Leonard, Jon Cameron, and Steven Gonzales
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It was a bottle of Hungry Jack that gave Jon Cameron the idea for a new generation of bar codes. The 43-year-old chief executive of Pop! Technology was microwaving the syrup and noticed the label came with temperature-sensitive ink that changed color to tell when the bottle's contents had warmed enough for use. He thought, why not apply that ink to universal product codes? Pop—the name refers to "point of placement"—prints a temperature-sensitive tag next to the regular UPC. This extra code can be reversible, changing color based on the temperature of the product at the time being, like that Hungry Jack bottle. Or it can be irreversible, changing only once in response to some temperature increase or decrease. With irreversible ink, mishandling of perishable products including chicken and medicines becomes much easier to detect: Once the product has been exposed to unsuitable temperatures, the color acts as an alert.
Though Cameron secured the patent for Pop's technology in 1999, Pop was only formed in 2004. Now that the company is finishing up beta testing, though, he says clients are a-calling. Cameron has already secured $1 million in funding, with another million on the way. He says Pop will make roughly $1.2 million this year, with projections of $5 million by 2009. With that revenue Cameron plans to expand his operation from three employees (including himself) to four sales teams, turning up the heat—and perhaps changing the color of Pop's own UPC, too.
—Oriana Schwindt (posted on August 4, 2008)
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In the early 1990s, Don Kellogg's wife, June, developed lymphedema, a condition that causes excruciating swelling of the limbs. A former product developer at Nabisco, Kellogg thought maybe he could ease her pain. He fabricated a lightweight, comfortable sleeve that he filled with foam. The device wicked away moisture and gently pushed excess fluid away, allowing the skin to breathe.
Today, his invention has turned into a $150,000 company and Kellogg into a 72-year-old entrepreneur. His Belmont (Mass.) startup, Telesto Medtech, wouldn't be here, however, if not for the San Francisco 49ers. Kellogg dropped his research after June died in 1994 in San Francisco, where she had been getting treatment. But the NFL team had heard about the sleeve from therapists who had seen its benefits, and in 2002 began using it to treat swelling from injuries.
Sensing a bigger market, Kellogg rang up an old friend and former Chicago futures trader, Mitch Kasper, who invested $100,000 to help launch the company in 2006. The made-to-fit garments cost $250 to $900, and customers include lymphedema patients as well as the Oakland Raiders and Dallas Mavericks.
—Havovi Cooper (posted on August 4, 2008)
Harry Ipema and David Beckwith
Last year for the first time, more golf courses closed in the U.S. than opened, suggesting interest in the game has peaked or is waning. Harry Ipema and David Beckwith have an Internet tool that could help course owners survive a shakeout. In 1995, the pair formed Fore! Reservations and set up a Web site, teeitup.com, where golfers could sign up for tee times. Now they're also pitching a service to owners; they've turned their Burr Ridge company into a customizable database courses can tap into, in order to e-mail customers special offers or simple reminders to come play again. About 2,000 of the nation's 10,000 courses pay $500 to $1,500 a year to subscribe to Fore! Reservations, which employs 26 people. Ipema, 53, anticipates 2.5 million tee-time bookings this year, up from 1.7 million in 2007, when revenue hit $3.5 million
—J. Duncan Moore Jr. (posted on July 7, 2008)
Denise L. Maple
As Bank of America was getting ready to take over last year, LaSalle Bank executives had some big decisions to make. For Denise L. Maple, 39, it was a no-brainer: Take a buyout, cash-in some options, and, after 17 years at the bank, hit the open road on her new, dual-sport motorcycle. The former vice-president for corporate development also became an entrepreneur, investing $31,000 in VaVaVroomonline.com, a Chicago startup that sells hoodies and snug, multicolored riding tops she helped design alongside accessories and apparel of other brands.
While motorcycle sales overall have declined, the number of female buyers has increased 20% since 2003. "I saw a need in the market," Maple explains. "When I started riding five years ago, there was almost no motorcycle gear in women's sizes, let alone with style." Racer Café in St. Charles, Ill., was the first of 14 Chicago-area stores to retail her T-shirts. Maple is expanding into more sizes and aims to hit $300,000 in sales in 2008. This is one easy rider.
—Clare Curley (posted on July 7, 2008)
Adam Rodnitzky, Scott Roberts, and George Aspland
Adam Rodnitzky spent four years in advertising before launching ReTel Technologies with two other former students, Scott Roberts and George Aspland, of the University of Chicago's Graduate School of Business. The trio came up with a new way to reach consumers—a postcard-size gadget that hooks onto grocery shopping carts and flashes coupons as folks move up and down the aisles. If customers see a coupon they want, they press the touchscreen. Then, at checkout, the coupon's savings is subtracted from their bill. General Mills and Beech-Nut have agreed to pay ReTel to feature their coupons in tests in September. Rodnitzky, 33, who just received his MBA, hopes the in-store experiment will encourage others to sign on.
—Maggie Gilmour (posted on July 7, 2008)
It was on the course in April, 2004, that Jennifer Glaspie realized she just hated her golf shorts. "They were heinous," she says. When a friend suggested she start her own line, she responded, "You know, that's not crazy."
She quit her consulting job at Bain, hired a designer from Chicago's International Academy of Design & Technology, pulled $50,000 from personal savings, whipped up some samples, and several months later took her Aphira line to high-end pro shops. Glaspie, a graduate of Northwestern's Kellogg School of Management, generated $50,000 in sales in 2005. She hopes to hit $1 million next year.
The 33-year-old Bucktown resident spends a mere $50,000 a year on marketing, relying mostly on word of mouth. Still, she says her reorder rate is an astonishing 80%.
At Butterfield Country Club in Oak Brook, bestsellers include the longer Urban Short ($82) and polos with waist belts ($42). "Ladies have only had the khaki short and the white polo shirts for so long," says Marianne Saso, merchandise manager for the club's pro shop. "They really appreciate this line."
(posted on June 30, 2008)
At age 21, Michael Dworecki is already a serial entrepreneur. He started a video-game café in high school and an apartment-listing Web site in college. Now, after winning $18,000 in seed capital from a University of Chicago Graduate School of Business program, he has launched Collectica.com, an online marketplace for collectors from all over the world, who trade in everything from stamps to Pez dispensers.
"Most online business plans go something like this: We'll get a ton of people to come to our site, and then we'll get advertising," says Waverly Deutsch, an investor in the site and a professor of entrepreneurship at the school. "Collectica had a lot of revenue streams built in." For instance, if a collector buys from another on the site, Collectica gets 3% of the sale. Future moneymakers include hooking collectors up with appraisers for a fee.
(posted on June 30, 2008)
postured, Alexandra Efimova surveys her domain, a 2,100-sq.-ft. store on Chicago's Michigan Avenue. Actually, it's not right on Michigan Avenue'visitors have to take an elevator up one floor and walk down a hall to reach her ballet shop, called Russian Pointe. "That is as it should be," says Efimova, 30, a former ballet dancer who moved to the U.S. from Russia in 1993. "We are a specialty store, a destination. The people who need to find us, do."
Efimova, who studied dance in St. Petersburg, opened Russian Pointe in early 2006 after selling ballet shoes as a wholesaler, first in Ann Arbor, Mich., and in the Loop since 2005. Official supplier to the Joffrey Ballet, she opened the retail suite to bring, in her words, "the love of dance, and beauty, to this magical city of Chicago." The store is lavishly decorated: thick cabernet-colored velvet curtains hang in the windows, and a row of old opera-house chairs runs along the middle of the store. A stage with a large mirror and barre make the store a favorite with little princesses who come for their first fitting. Local ballet schools Ruth Page and Boitsov ensure a steady stream of wannabe Giselles coming through the door. Sales rose from $7,065 in her first month as a retailer to $29,286 in October.
—Maggie Gilmour (posted on June 30, 2008)
Ori Sivan and Joe Silver
Late in 2004, Ori Sivan popped into a building-supply store owned by the family of a childhood friend and hit upon a retail startup of his own: a "sustainable" building-supply store. It took Sivan, a graduate of Northwestern University's environmental-engineering school, six months to persuade his friend, Joe Silver, to leave his family's business and become Sivan's partner instead.
The 31-year-olds opened Greenmaker Supply a year later, drawing on $500,000 of personal funds. The store, on Chicago's Northwest Side, sells such items as recycled countertops, bamboo flooring, and nontoxic latex paint (pictured above). Verifying that the goods have only limited impact on the environment is tough and requires a lot of homework, the partners acknowledge. Still, sales have doubled, to $2 million in 2007, and could hit $5 million next year, Sivan says.
Homeowner Adam Secher, who is turning his Highland Park home "green," is glad to have a one-stop shop. Says Secher: "No one has the extensive supplies or expertise of Greenmaker."
—Chi-an Chang (posted on June 6, 2008)
Dr. Cara-lynn V. Nowinski and Chirag V. Patel
Many biotech startups get their money from venture capitalists or by hitting up friends and family. SanoGene Therapeutics has found another source of cash: winning contests for the best startup business plan. The Chicago company has scored $139,500 from 10 national and international competitions over the past two years.
It has been nip and tuck, however. SanoGene was launched in early 2006 by two former MBA classmates at the University of Illinois at Chicago, Dr. Cara-lynn V. Nowinski and Chirag V. Patel, to research a gene therapy that might work in fighting cancer. By that fall, the company was almost out of money. Just in time, Nowinski won a $50,000 grant from the Illinois Commerce & Economic Opportunity Dept. in the annual Midwest Venture Summit competition.
SanoGene is using the money to fund research by Jasti S. Rao. The head of cancer biology and pharmacology at the University of Illinois College of Medicine at Peoria, Rao developed a process to turn off a genetic switch that makes a cell cancerous. Co-founder Patel, 26, left SanoGene in 2007. For now, acting-CEO Nowinski, 29, is keeping her day job as an associate at ARCH Development Partners.
—Chi-an Chang (posted on June 6, 2008)
Watching a program on Brazil's ethanol-fueled cars one evening in his Streeterville home, Mitch Sremac wondered: What would it take for people in the U.S. to start running their cars on alcohol, too? For today's fleet, his answer was a fuel-conversion kit. After 18 months of tinkering and $1 million from friends and family, Sremac, 55, an auto-parts company president, built just such a device'the first to be certified by the U.S. Environmental Protection Agency'and established Flex Fuel U.S., with himself as chief executive, in October. The Flex-Box Smart Kit is about the size of an old Walkman and mounts under the hood of a car. It automatically sips the fuel to determine its alcohol level and throttles the fuel injector accordingly. The kit allows cars to drive smoothly on everything from E85, a blend of 85% ethanol and 15% gasoline, to pure gasoline. Flex Fuel is field-testing its product in a Chicago police car and hopes to begin retailing the kit at $1,295 in April.
—Chi-an Chang (posted on June 6, 2008)
The idea of using data centers around the world to accommodate huge numbers of Web surfers isn't new. Akamai, for instance, which provides and manages servers, has done far-flung storage of "read-only" online content since 1999. Now, native Chicagoan Jason Rexilius is using the same concept for sites that require user input, such as blogs and small online stores.
Rexilius, 34, started HostedLABS in Evanston in 2004 and spent the next 2 years and $25,000 of his own money developing software. For a fee, HostedLABS will place a client's data—sittercity.com and complaints.com are two customers—in data centers around the world, so that when too many people access the site from one location, the site won't shut down. Instead, visitors can continue to access it via backup repositories.
Revenue came to $250,000 in 2007. But Rexilius predicts his four-person shop will hit $1.5 million this year.
—Oriana Schwindt (posted on May 16, 2008)
T.J. Shanoff and Brad Spirrison
In Seinfeld parlance, T.J. Shanoff and Brad Spirrison were winter friends. While attending Chicago's Latin School, the two hung out together. But every summer, they split up to go to separate camps in Wisconsin to be with their summer friends. Now they've teamed up to create a Web site, MyCampFriends.com, where everyone can be year-round friends. Since its start last September, 2,500 camp alums have registered, most to find old pals, though some have used it to organize reunions. Shanoff, 34, a music director at the Second City, and Spirrison, 33, president of Midwest Business, a Chicago Internet service, expect ad revenues to hit $250,000 in 2009. They spent $35,000 to get the venture started. Are the entrepreneurs happy campers? "We're ecstatic campers," says Shanoff.
—Howard Wolinsky (posted on May 16, 2008)
Karen Gruber and Jill Haas
Forget Boston Market or the prepared-foods section of Jewel or Whole Foods. In Oak Park, there's the Perfect Dinner, a kitchen that prepares "home-style" take-out and delivered meals. The startup is aimed mostly at "El" riders, who can go online to scope out the shop's menu of eight to 10 daily entrées and order ahead before exiting Oak Station on the Green Line. The business was founded by Karen Gruber, 48, who formerly handled the Kraft cheese account at ad agency J. Walter Thompson, and Jill Haas, 47, a onetime food scientist at Kraft Foods. The Perfect Dinner broke even with $500,000 in revenue last year'the average check is $41'and is looking at 8% to 10% growth this year, Gruber says. The pair, who started the venture with $250,000 from friends, family, and their own savings, is now trying to drum up $700,000 to open two more sites this fall.
—Howard Wolinsky (posted on May 16, 2008)
Ian Ginoza, 35, sells sneakers in Wicker Park, but there's no chance shoppers would mistake his boutique for a Foot Locker. Sure, Ginoza's Saint Alfred carries Nike and Reebok, among other brands. But the store orders shoes only every three months, in 12-pair batches, and when a style is sold out, that's it'Saint Alfred never restocks. Bewitched by the limited supply, fashionistas and collectors pay up to $400 for a pair of sneakers. Ginoza got into high-end sneaker retailing in 2001 when he opened Kicks/HI in Honolulu, after working as an art director for IPath, a skateboard shoe and apparel company now owned by Timberland. Oddly, some of his best customers ordered from Chicago. So Ginoza flew here to size up the market. He and three partners then spent $150,000 to open Saint Alfred'the patron saint of footwear, they joke'in late 2005. The shop turned profitable within six months, Ginoza says.
—Rachel Arndt (posted on April 23, 2008)
Playing video games all day can be tiring, at least according to Shawn Smith, who left his job as an editor at Ziff Davis' 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 Bucktown 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 DL based on Ninjatown, a Shawnimals property. It's scheduled for release next fall.
—Oscar Raymundo (posted on April 23, 2008)
Daphne D. Mazarakis
Daphne D. Mazarakis can make whey protein sound pretty appealing. A former brand manager at Kraft Foods (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 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. Though 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 (posted on April 23, 2008)
Rishi Shah and Derek Moeller
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 with $2 million in sales this year, says Shah, and expects to be profitable next year.
—Howard Wolinsky (posted on April 2, 2008)
Graham Thompson, owner of Optimo Fine Hats in Beverly, has for years gone to Ecuador to buy toquilla straw for Panama hats and to Italy and Portugal for fancy felts for fedoras. Now the hatmaker wants to reverse at least some of that trade flow, by opening stores in London and Milan. A shop in downtown Chicago is also on the to-do list.
Thompson, 36, who grew up in Oak Brook, had hat dreams as far back as the 8th grade, idolizing men in hats from 1930s and '40s movies. As a teen, he hung out with South Side master hatter Johnny Tyus and ended up buying Tyus' business, paying him $75,000 from cash flow over three years.
Today, Optimo draws locals willing to spend $500 to $20,000 for custom-made hats, though it boasts celebrity clients, too, including bluesman Buddy Guy, comedian Bernie Mac, and actor Andy Garcia. Thompson also has made hats for movies, including Road to Perdition. He's now working on Michael Mann's Chicago gangster film, Public Enemies, starring Johnny Depp and Christian Bale. To supply his new stores, Thompson plans to jack up production to as many as 100 hats a week from 36 today. Revenue should hit $1 million in 2008, he adds, up from $700,000 in 2007 and $100,000 when he opened in 1994.
—Howard Wolinsky (posted on April 2, 2008)
Dori and Carson Boneck
When Dori Boneck began making organic food for her newborn, Madeleine, in 2006, she decided other mothers might want to feed their little ones the same thing'without the hassle of cooking up meals themselves. So last May the former elementary school teacher launched Maddy's Organic Meals, the first USDA Certified Organic product for children in the Midwest. Boneck and her husband, Carson, produce and package the meals in a professional cooking space they rent in Chicago. Each 8 oz. package costs about $6. There's Perfect Pears for four-month-olds, for instance, or Scrumptious Succotash for eight-month-olds. Maddy's is sold at the Goddess & Grocer and other markets in town and, since February, can be ordered through the company's Web site, maddysorganicmeals.com.
—Oscar Raymundo (posted on April 2, 2008)
The Internet has become the podium for rants. But Andrew Mason hopes his Web site will spur actions, not just more hot air. ThePoint.com invites people to create or join a campaign on anything, from winter-proofing Chicago with a dome to pressuring Pfizer to cut drug prices in developing countries. Signing up is free, and site users are not required to follow through on promises to act or contribute money until the campaign has reached what its creator has deemed the "tipping point"'the minimum number of members or funds needed to make a change. In the case of the Chicago Winter Dome, the tipping point is $10 billion. (So far, $233,085 has been pledged.) Mason, 27, dropped out of the master's program in public policy at the University of Chicago to start the site last October. He raised $1 million from angel investors and $4.8 million from New Enterprise Associates, a venture capital firm in Chevy Chase, Md. The site may soon reach a tipping point of its own: Mason plans to start posting ads. "If the campaign is trying to stop late fees at Hollywood Video," he notes, "it makes a great advertising venue for Blockbuster or Netflix."
—Oscar Raymundo (posted on March 19, 2008)
Language Stars is going to school. The company, which teaches foreign languages to children as young as three, has begun classes in 70 public and private schools in the Chicago area, including Brook Forest Elementary in Oak Brook and Lincoln Park Preparatory in Chicago. The 45-minute courses are taught once a week before, during, or after school and cost $400 for the academic year.
The expansion comes almost a decade after Leslie Lancry opened her first classroom in Lincoln Park. Lancry, 39, got hooked on foreign languages when she was 12 and learned to speak French after spending four months in France visiting her pen pal. Her schools also use the total immersion method, in which instructors speak and write only in their native tongue. Today, Language Stars has eight centers, 95 teachers, an enrollment of more than 5,000 kids, and annual revenue of more than $4 million. It's also up to five languages: Spanish, French, Italian, German, and most recently, Mandarin Chinese.
—Oscar Raymundo (posted on March 19, 2008)
Wood says she's used to weeping at work. She runs an online bereavement-gift outfit, Comfort Co., from suburban Geneva and gets calls all day from people who want to buy something special for someone who has just lost a loved one. Compassion comes naturally to Wood, she was a social worker in a neonatal unit in Little Rock for years before she moved to Illinois, but it was only in 2000 that she figured out how to make money from it. Her sister-in-law's father died, and Wood couldn't find a suitable gift. She crafted a pendant out of her daughter's Play-Doh and took it to a silversmith to make into a necklace. Wood put a photo of the pendant on the Web and sold 150 of them. After getting a $6,000 home-equity loan from Harris Bank, she went to gift shows and found more items to carry on her site, thecomfortcompany.net, including Christmas tree ornaments to remember lost ones at the holidays. Wood, 42, has added Spanish-language products and would like to expand her pet-sympathy line. Revenue jumped to $625,000 last year, from $53,000 in 2003. "The more I grow, the more people I help feel better."
—Maggie Gilmour (posted on March 19, 2008)
When Chicago Public Radio decided it should try to reach a younger audience, it didn't do it by fitting a hipper program into its lineup. Instead, it went with a hipper medium'and created Vocalo.org last summer. A social networking Web site, Vocalo lets registered users upload audio, video, photos, and text. The material is filtered by one of 15 CPR producers, then becomes accessible online, with some audio clips aired on CPR's WBEW-FM 89.5 station in Chesterton, Ind. CPR, which has $2 million in funding for the project, plans to amp up the experiment soon. The site is being upgraded to allow users to put up various media in one single post. The radio signal will also be strengthened to reach up to 2 million listeners. "It's very unlike anything you hear on mainstream public radio," says Torey Malatia, CPR's general manager. "We are in a position to be successful if we just let this thing find an audience on its own." Vocalo will do without one public radio mainstay, though: pledge drives.
—Oscar Raymundo (posted on March 19, 2008)