All of the entrepreneurs presenting at the University of Texas’ 1 Semester Startup Spring Demo Day Thursday night appeared polished and professional.
The 10 company teams had solid ideas and at least one, PhotoWhoa is already turning a profit.
Josh Baer, one of the instructors and founder of Capital Factory and with UT’s Department of Computer Science, said he’s already recruiting for the next class and is looking for more mentors and motivated students.
The class teaches entrepreneurs how to write a business plan, market their products, network with other business professionals and pitch their ideas to potential investors. They also must write one single page paper a week along with two ten page papers. Baer along with Bob Metcalfe, professor of innovation in the University of Texas Cockrell School of Engineering and Johnny Butler of the IC2 Institute and the McCombs School of Business, also tells them to look out for their health.
“Doing a startup is not about staying up all night and eating bad food,” Baer said.
No one has failed the 1 Semester Startup class yet, but a couple of students dropped out, said Metcalfe. He doesn’t’ have a favorite company, because “I’m not allowed to have such things.”
He likes the smaller size of the class, but if they received an overwhelming number of applications from good companies they might expand it, he said.
For the Spring, 1 Semester Startup got dedicated space for its companies at Longhorn Camp, a 30,000 square foot building. It housed about 25 companies altogether. The others are from student entrepreneurs not enrolled in the class. But the space is going away at the end of the semester so 1 Semester Startup is looking for a new home.
“We failed to create the critical mass I was looking for,” Metcalfe said. He’s a general partner with Polaris Venture Partners in Boston. Polaris runs four incubators around the world. Whenever he visits them they are seething with energy and ideas and people running around, he said. The difference is they are all out of school and they dedicate most of their time to their startups. At UT, students have other courses and social lives, Metcalfe said. The kind of physical interactions and esprit de corps that exists in outside incubators is tough to replicate in a campus environment, he said.
Overall, UT has made a big commitment to fostering startups by students, said Thor Lund, student government president at UT-Austin.
Lund and Wills Brown, student government vice president, plan to write legislation creating a student run accelerator on campus aimed at helping students start and fund businesses. They spoke briefly to the crowd of about 300 people attending the Demo Day event at the LBJ Library and Museum.
“The student accelerator is aimed at getting students connected and empowered,” said Lund.
Nick Spiller, a junior and chairman of the UT entrepreneurship council, runs UThinkTank at the Longhorn Camp along with three other founders.
“What we really want to do next year is to reinvent Longhorn Camp to be for the students by the students,” Spiller said.
Eventually he has hopes to create a Big 12 Startup Team to collaborate with other universities.
“We want to create jobs, create wealth and clear up our national debt,” Spiller said. “We need to get the cash flowing in the right direction.”
The latest crop of entrepreneurs at UT showed Thursday night that they are serious about business. All of the companies planned to continue operating beyond the end of class. All of them are bootstrapped with some friends and family money backing them.
Its primary revenue stream comes from a fee on all transactions and secondary streams come from a coupon portal for restaurants, leads to financial institutions and app purchases for advanced features. The company is offering a special to people who pre-register for the AgreeOn app by Friday midnight, they will waive the transaction fees. The app is in beta and is expected to launch within two months.
Next up, Simeon Duong introduced beDJ in which “You are the DJ.”
Duong and four other engineering friends didn’t like the music in a coffee shop in which they were studying. They decided to do something about it. They wrote code. They created an app that lets people control the music in a coffee shop, nightclub, store and other places.
“We’re using music as an icebreaker to promote conversation on a micro specific level,” Duong said.
The beDJ app just launched Thursday in three app stores. Austin is the test market to understand how the app functions in the ecosystem, Duong said. Then, the app will expand to New York and Los Angeles.
“We’re developing a communications platform that has never been done before,” Duong said.
A veteran from the first 1 Semester Startup course, Power Smart Labs aims to reduce electrical costs for data center operators. The company’s software works to maximize efficiency at the data center by turning off servers when they are not needed.
Its competition is Vmware, MiserWare, HP, Dell and Google. But Power Smart Labs targets a data center with annual revenue of $12 million. It predicts it can save that customer $115,000 a year on a $750,000 electric bill. By the end of the summer, Power Smart Labs will be installed for a data center customer.
“Put your checkbooks down, because we’re not looking for an investment today,” said Michael May. The company will most likely seek a $50,000 investment in August, May said.
Another veteran of the first class, Predictable Data seeks to fix and filter data for companies.
“People aren’t predictable but your data can be,” Smurdon said.
Every day, 230,000 people move, change jobs, get married or die, he said. “Businesses are never done cleaning their data,” Smurdon said.
Poor quality data costs U.S. business more than $600 billion each year, Smurdon said. For example, Overstock.com had errors in 25 percent of its order forms, which cost the companies millions.
Predictable Data has built a software program that is scalable and secure and relies on proprietary algorithms to clean data, Smurdon said. Its aiming its product at small and medium sized businesses.
On the consumer side, ReQwip wants to help families sell sporting goods gear that they no longer need through its niche marketplace, said Dan Driscoll, cofounder.
A recent New York Times article showed that parents spend about $500 for sports gear every year just for little league baseball, he said
ReQwip’s peer to peer marketplace first plans to sell bikes and accessories and then move into team sports. The company makes money by taking 10 percent on each sale or rental.
ReQwip has created a mobile app. Dealing with a locally based trusted source is less risky than selling on Craigslist or eBay, Driscoll said.
“We are ReQwip and we are changing the game by making it easy to buy, sell and rent sports gear affordably” Driscoll said.
In addition to Driscoll, the team behind ReQwip includes Jay Combs, an MBA student, David Isquick, MBA student, Matt Wedgwood and Saaket Dubey. The team members met each other last Fall during a 3 Day Startup weekend. They came up with the idea and then decided to apply to the class, Combs said.
“The class was inspirational,” Isquick said. Mentors like Carol Thompson, Ben Dyer, Ryan Pitylak and others helped the company tackle business problems and deal with technical issues, he said.
“The mentors were phenomenal,” Isquick said. “They gave us lots of key insights.”
Another veteran from the first class, Solspot Systems is creating solar charging stations for electric vehicles. It is working with Reva, an electric car manufacturer in India. By 2020, India is projected to have 7 million electric vehicles.
Solspot Systems is building a prototype at the JJ Pickle Research campus and expects to have it finished soon.
“We would like to be in production by the beginning of next year,” Springer said.
Stache Studios is also a repeat in the class.
“We make games like gentlemen” is their tag line. The company is making a game, Teknedia for PC, Mac and Linux users and another one for the IOS mobile platform.
Two of the companies zeroed in on the college market for their products.
Nowoncampus.com is an online events directory and aggregator that pulls information from Facebook to compile a weekly list of events at a college campus. The idea is to let students see the events they have not been invited to in case they might want to attend.
Personab.ly is an online registry of who like who, said Jimoh Ovbiagele, cofounder. The product is aimed at making dating simple and easy through online matchmaking. Its competition is DatemySchool.com, which has 100,000 users. It expects to release a beta version in the fall. The site is free. It makes it revenue by charging food and entertainment sites to advertise in its recommendation site for dates.
The site is even on Angellist.
Lastly, Eric Yang and Kevin Tang founded PhotoWhoa. Yang had already founded a photography software business with $3 million in revenue in two years.
The market for photography gear was $68.4 billion in 2011, Yang said. PhotoWhoa sells photography software and other products at a discount on its site.
After five months, PhotoWhoa has 15,000 subscribers and all of them are photographers, Yang said.
This month, PhotoWhoa will have revenue of $40,000, Yang said.
“That’s a small drop in the bucket,” Yang said. “The photography industry is growing at 8 percent a year.”
And PhotoWhoa wants to change the way photography products are sold, Yang said.
Getting the first 1,000 customers was the hardest, Yang said. But the class helped accelerate their business, he said. They learned from mentors how to maximize their use of Google Ad words to reduce their customer acquisition costs from $5 to 75 cents. They also learned how to build a network.
“Through Josh Baer we’ve been able to connect with people to do deals with,” Yang said.
PhotoWhoa is completely bootstrapped. Each founder put in $250 to startup the company. Five months later, PhotoWhoa is profitable and growing, Yang said.
Damon Clinkscales, an Austin software developer, volunteers with the 1 Semester Startup class as a mentor. He generally spends two to four hours a week helping Personab.ly, the company he helped out.
“I guess you could put as much time into it as you choose to,” Clinkscales said. He also served as a mentor for the first 1 Semester Startup Class last fall. This class is smaller and more focused, Clinkscales said. They chose companies that were beyond the idea phase, he said.
“It is really awesome that they are getting this experience now,” Clinkscales said. “Just imagine them in a few years.”