http://chicagobusiness.com/section/on-technology http://www.chicagobusiness.com en-us Fri, 24 May 2013 00:02:51 EST 10 http://www.chicagobusiness.com/article/20130522/BLOGS11/130529926/debiase-joins-akta-as-chairman?utm_source=BLOGS11&utm_medium=rss&utm_campaign=chicagobusiness 20130522/BLOGS11/130529926
He's teaming up with CEO John Roa to help AKTA grow. The company, which helps companies create new Web and mobile products and improve existing ones with better user experience, has 18 employees. "It's everything from, how do you scale the company and find new partners? to building out an advisory board," Mr. DeBiase says.

Mr. DeBiase, 54, runs a consulting firm, Reboot Partners, and has been a board member of the Chicagoland Entrepreneurial Center for more than a decade. He was CEO of TNS Media, Autoweb and Imagination Network. Most recently he was CEO of Troy, Mich.-based Entertainment Promotions, publisher of the Entertainment Book coupon book for local businesses, which was sold in January.]]> Wed, 22 May 2013 09:30:00 EST http://www.chicagobusiness.com/article/20130521/BLOGS11/130529952/how-google-hatches-big-ideas-try-to-break-things?utm_source=BLOGS11&utm_medium=rss&utm_campaign=chicagobusiness 20130521/BLOGS11/130529952
Two weeks ago, more than 300 people from Chicago companies crowded into City Winery for a day to talk about innovation with a bunch of Lightbank-backed startups and guys like Fieldglass CEO Jai Shekhawat and Comscore Inc. Chairman Gian Fulgoni.

But here's some insight into how Google Inc. — which has developed Internet-connected glasses and a self-driving car — tackles innovation at its Google X lab in Silicon Valley. It's more about attitude than IQ. Last week, Google showed off some of those toys at its I/O developers' conference. Here's the secret to how they get created:

“It's a place where responsibly irresponsible behavior is vigorously encouraged, and failure is OK,” Astro Teller, the Evanston native who is captain of moonshots for Google X lab, the company's skunkworks, said recently at South by Southwest Interactive. “It has to be OK: If failure isn't a significant outcome, if it doesn't happen at least half the time, we aren't shooting big enough.”

That's not how most companies operate, he said. “When I talk to small companies, they say, 'We don't have the resources. That's for big companies.' When I talk to big companies, they say, 'We buy innovation — that's what small companies do.' Academics say, 'We get paid to write about moonshots, we don't build them.' Governments, they say, 'When we get to cash-positive, come talk to us about moonshots.' ”For Google, it starts at the top, he said. When CEO Larry Page agreed to green-light a new project in control systems, he said, “ 'You can have money to do the project, but make sure you break at least five prototypes,' ” Mr. Teller recalled. “If you're going slowly enough that you're not breaking prototypes, you have no hope of going radically fast. He understands that at an intuitive level. He's saying, 'Don't settle for it.' ”

Google co-founder Sergey Brin has proposed putting a big ring of foam around the self-driving car. It's his way of challenging engineers to come up with something radical in safety. “He's actually pushing and guiding very wisely. . . .It's not that he thinks a ring of foam is some kind of ultracool fashion statement. . . .He's saying, 'Imagine if you had to make the cars not 10 times safer than human drivers. Imagine making them 100 times safer.' He's saying, 'If you don't like my foam idea, awesome. Go make a better one,' ” Mr. Teller said.

These are the guys who started a company with the goal of “let's organize the world's information.”

“I think the VCs beat them down to something that small,” Mr. Teller said. “Their attitude more than their intelligence is what's so valuable to Google. 'Do something great, and the money will find you.' It sounds like something all businesses do, but they don't.”]]> Tue, 21 May 2013 10:00:00 EST http://www.chicagobusiness.com/article/20130521/BLOGS11/130529957/grubhubs-seamless-deal-puts-the-m-back-in-m-a?utm_source=BLOGS11&utm_medium=rss&utm_campaign=chicagobusiness 20130521/BLOGS11/130529957 reminded us yesterday that the M in M&A stands for merger.

At nine years old, and six years since its first round of venture funding, most were expecting Chicago-based GrubHub to head for the exits. An IPO had been rumored, but an acquisition also seemed like an option.

Instead, online restaurant-ordering service GrubHub merged with rival Seamless in an all-equity deal that puts GrubHub CEO Matt Maloney in charge of the combined company but lets Jonathan Zabuski, who was named president, keep running Seamless from New York."This represents another potential milestone, if you build a company like this, other than just an acquisition or IPO," says Justin Massa, CEO of Chicago-based startup restaurant-data company Food Genius.

Tech M&A levels have held steady for the past three years, averaging about 6,000 annually, according to Dealogic, a New York-based research firm. Mergers are more rare than acquisitions, which tend to be neater and cleaner. One company buys another, picks a management team and a headquarters, and pays off investors and employees. Mergers are messier.“It depends on the circumstances. In some cases (a merger) makes sense," says Steven Kaplan, a finance professor at University of Chicago's Booth School of Business, who runs the New Venture Challenge business-plan competition that GrubHub won in 2006. "It's good for Chicago that the business stays here, gets bigger and has a good chance of winning its space. (The merger) increases the likelihood they'll go public."

The merger likely will eliminate concerns about who is the dominant player. GrubHub had more restaurants signed up, but Seamless had more revenue, estimated at about $85 million, much of it from Seamless' corporate-catering business. With 32,000 restaurants, the combined company is larger than San Francisco-based Eat24.com.

A similar deal happened with Zipcar, which merged with rival Flexcar, then went public in 2011 before being acquired by Avis last year.

The all-stock merger also saves precious cash for GrubHub, which raised $84 million in five rounds of venture capital-raising.

Of course, there's no guarantee that GrubHub goes public and becomes another success that Chicago desperately craves in its effort to establish itself as more than flyover country when it comes to tech.
But GrubHub backer Bill Gurley showed remarkable patience with another restaurant-tech company, OpenTable, waiting a decade to take it public.]]> Tue, 21 May 2013 10:30:00 EST http://www.chicagobusiness.com/article/20130521/BLOGS11/130529960/fandium-serves-up-virtual-sports-betting-social-network?utm_source=BLOGS11&utm_medium=rss&utm_campaign=chicagobusiness 20130521/BLOGS11/130529960
His Chicago-based company, Conor Sports LLC, just launched a mobile-gaming app with a social networking twist called Fandium. Players can download the game from iTunes, which allows them to buy virtual currency and bet on sporting events, such as baseball games. It expects to launch a Facebook version this week.

But what's potentially a game-changer is that Fandium built a social networking feed from people at sporting events. So, if you're really interested in a Cubs game, you'll be able to see a stream of Tweets and photos from people at Wrigley Field; or if you're a Northwestern fan, you'll be able to see posts only from Ryan Field. Fandium uses geolocation technology to grab the feeds from Twitter or Instagram coming from the ballpark or stadium.

Fandium is one of several companies, such as Chicago-based Evzdrop, that are trying to create a new generation of social networking apps based on location rather than personal relationships.

“It's TMZ meets ESPN,” said Mr. Lucas, 58, a one-time gambling lobbyist who, in 2002, briefly was chairman of YouBet.com, an online horse-racing company that later was sold to Churchill Downs for $127 million. “There are people who cover what's going on off the field at the stadium pre-game and post-game, but not during the game.”

While there's the obligatory stream of pictures of random friends and the occasional celebrity, and even a tab called “hotties” that will amuse casual fans, Mr. Lucas thinks it's serious bettors who will want to monitor the feed and even interact with people at the stadium via social media. "It's no different than traders reading blogs and tweets for clues about the market," he said.Users can log in and peruse the Fandium feeds free. People who post “reports” to the feed can get fan points, the virtual currency to bet games. Otherwise points sell for 99 cents for 5,000 points or 2 million points for $99.99.

Morgan Stanley estimates that the social media gambling base is 170 million players, or three times the size of the population of traditional online gambling. Fandium is not the only player at the table. Lucky Play, formerly Sports Casino, offers virtual sports betting on Zynga, the social-gambling leader.

Conor Sports raised about $1.5 million from angel backers and started working on Fandium about a year ago. It launched a beta version in September with about 100 bettors.

Like a lot of other online startups, Fandium uses a "freemium" model. Ultimately, Mr. Lucas thinks serious bettors will pay for a premium feed edited by Fandium staffers searching for relevant information. He also sees a potential advertising play.

Mr. Lucas is chairman. Prentice Salter, a restaurant-industry veteran who opened Chicago's N9NE Steakhouse, is CEO. They're joined by California-based YouBet alums, former CEO Chuck Champion and former Chief Financial Officer Gary Sproule.

Long term, Mr. Lucas is betting that online sports gambling will become legal beyond horse racing, giving Conor a leg up by having an established base of customers. In the meantime, he's encouraged by TimeWarner's acquisition of Bleacher Report, the crowdsourced sports-information site, for $180 million.]]> Tue, 21 May 2013 09:00:00 EST http://www.chicagobusiness.com/article/20130521/BLOGS11/130529956/putting-callers-on-plain-old-hold-thats-so-over?utm_source=BLOGS11&utm_medium=rss&utm_campaign=chicagobusiness 20130521/BLOGS11/130529956 TIP Solutions, a Chicago company whose software adds call management features to mobile phone calls, is releasing its first product today at CTIA, a mobile industry conference in Las Vegas.

The product is an Android app called CallSnap and represents a change of pace for TIP Solutions because most of the company's efforts are focused on selling its software to phone makers and carriers who will hard-wire TIP features into their devices. Until CallSnap, TIP's products haven't been apps, but rather features that are integrated into a smartphone's operating system. For example, one of its features allows users to press a button ask incoming callers to hold while the user wraps up a previous call.

Those products have been well-received by industry peers: TIP Solutions won an innovation award at CTIA last year. Yet the company, which was founded in 2009 and has raised $2 million from private investors, has yet to see any phones hit the market using the company's software. President Michael Unetich hopes the CallSnap app will allow TIP Solutions to earn revenue and build brand recognition while he finalizes deals for the company's core products with carriers and device manufacturers. Mr. Unetich expects a first run of 500,000 phones loaded with TIP Solutions' core software to make their debut in India this summer.

Meanwhile, he hopes CallSnap, which allows smartphone users to respond to a call by sending a photo, capitalizes on the popularity of photo-sharing apps such as Instagram. He's even hopeful of getting a major celebrity endorser to back the new app — an agreement he thinks will be in place by the end of the week.

Mr. Unetich tells Crain's contributor Steve Hendershot more about the new app.

How does the app work? It works by adding a new option to the incoming call screen. When you select this option, it immediately declines the call and sends a text message back to the caller telling them that there's going to be a CallSnap photo on the way.

Once you've done that, a camera app pops up and you can take a photo. If you're happy with that photo, you hit the send button and it sends the photo off to the caller with a little frame around it. The frames are fun, and they each have a little script that says something such as "I'm busy right now; here's what I'm doing." And you can take a live photo or pick a photo from your camera roll.

So not only do you let somebody know that you saw their call, solving one little piece of the communication problem, but you're also letting them see what you're doing and adding some personality to the communication. It can be fun.

The uses are endless. There are already about 50 different situations where I've used this app, everything from a sporting event to pumping gas or playing with my kids. It's a fun way to shed some light on what you're doing. We think it's going to be extremely popular with people in their 20s and younger, not only because younger people are more comfortable sharing their status, but they're also part of this wave of photo-sharing apps that are very popular right now. And this is a photo-sharing app with a purpose.

You're deviating slightly from your strategy by offering a mobile app. What's motivating this move?

The goal of this app is no different than the rest of what TIP is working on, which is to make your communication more efficient. This also has the benefit of making communication more fun.

We wouldn't roll anything out if we didn't think it had a chance of being a big success. That said, one of the challenges of our business model is to strike deals that embed core functionality into a phone. That's a very high bar, and it's a long sales cycle.

This should help survive that long sales cycle that the core business has. For a while, I was jokingly referring to this app as our next round of funding. Now, I'm not joking — we have high hopes that this can be one of the hits of the summer of 2013 and beyond, because we have a pretty deep road map of other things we want to do with it, such as adding the ability to send a short video, and a few other interesting things that we're going to try to roll out along the way.

Where did you get the idea for the app? How close is the app's functionality to an existing TIP feature?

One of our other, embedded features plays a voice message back to a caller saying, in essence, 'Hey, I saw your call, and I will be reminded to call you back later.' When we were discussing the popularity of photo-sharing apps, we realized it would be both fun and informative to provide someone a chance to send a photo back to a caller, and that we could do it as a simple, downloadable app.

CallSnap is Android-only right now. Is there an iPhone version in the works?

(Apple's mobile operating system) does not allow us any ability to manipulate an incoming phone call. So instead, we are currently building a version for people that are willing to open their phones up, the process known as jailbreaking your iPhone. We have a couple of people working on development for that. The value for us in partly just the proof of concept, showing our product working on an iPhone. And there are more than 20 million people with jail-broken iPhones, so it might be interesting to have that as an offering.

"Silicon City" is a weekly report on Chicago tech startup news and newsmakers written by Crain's contributor Steve Hendershot.

Share your ideas and news tips on the local tech startup scene with Steve via email: stevehendershot@gmail.com. Check out Steve's blog here. And follow him on Twitter: @stevehendershot. And join Crain's LinkedIn group for Chicago entrepreneurs.]]> Tue, 21 May 2013 10:00:00 EST