On June 16, four West Michigan startups pitched their ideas to aimWest, a group of local professionals and technology experts. The startups are backed by Momentum, a Grand Rapids-based venture firm focused on web technology entrepreneurs. Each of the startup companies are using the web and social media for their fledgling businesses. Members of aimWest and other attendees were invited to critique the startups’ presentations and business plans.
I’ve known about aimWest for a while, but hadn’t been to any of their events. Because I’m interested in the intersection of entrepreneurship and tech, this sounded like a great opportunity for me to see what others are doing in this space, and learn from their success or missteps.
Varsity News Network (VNN)
Problem: High school sports have ceded media coverage to college and professional sports in the last few years.
Solution: Give high schools the ability to publish sports blogs, especially aimed at the high school sports that receive less coverage than basketball, football, and baseball, such as soccer, swimming, tennis, and lacrosse. In addition to basic scores and stats, VNN focuses on stories about the athletes and teams.
Business model: Schools pay VNN for the site infrastructure, then maintain the sites themselves. VNN has started locally (near Holland, Michigan), and plans to expand to the region, state, and entire US.
My take: VNN will need to turn the students at each school into fans of their school’s site. This will be best accomplished by convincing a few well-connected students how great the site is, so they tell their friends. Students are much more likely to visit their site based on their friends’ recommendations, rather than their school’s recommendation.
Problem: Greenwashing has made it difficult to determine what products are truly sustainable.
Solution: Create an online marketplace for verified sustainable products (locally created, abiding by fair labor laws, eco-friendly, recyclable, etc.). Allow the site’s community to police the products.
Business model: Offer affiliated sales through the site. Sell JaiPlace branded products. Sell advertisements for sustainable products and services.
My take: Because the consumers of “sustainable” products are often skeptical of companies that pitch themselves as green, JaiPlace will have a difficult time convincing users that it’s a reputable site. Displaying advertisements from certain businesses may offend potential customers that have anti-corporate leanings. JaiPlace will need to build credibility by forming a genuine community that can vouch for its authenticity.
Problem: Textbooks haven’t kept up with interactive technology, preventing students from learning effectively.
Solution: Replace dusty paper textbooks with digital e-textbooks. Students can make notes, watch videos, and play games, by themselves or with other students. Teachers can create polls and track students’ progress. Data analytics track students’ use of the e-books to provide feedback to schools and publishers, allowing for rapid improvement to the e-books’ content.
Business model: Partner with publishers and author their own e-books. License e-books, sell subscriptions, and sell data analytics to the schools.
My take: I see the book publishing industry as a sleeping giant. It’s behind the times right now, but once it wakes up, it’ll take a spaghetti approach to e-books: throwing out lots of different products and services to see what sticks. Just within the last year, the e-book industry has come a long way. A small company like LearningInterfaces would do better to master one niche (possibly analytics) and aim for acquisition, rather than attempt to tackle a wide range of e-book related technologies.
Problem: Decoupled utilities must motivate their customers to reduce their energy consumption.
Solution: The Energy Flair “game” uses competition and peer pressure to incentivize consumers to lower their energy costs. Consumers link their utility accounts to Facebook and Twitter, and earn Energy Flair for lowering their bills. TerraPerks determines genuine consumption reduction by evaluating consumption trends, seasonal temperature, and other factors, and comparing to a control group outside of the Energy Flair program.
Business model: Utilities pay fees for each consumer that participates in Energy Flair. Companies such as Lowe’s or GE pay for sponsorships to promote their energy-related products or services.
My take: The Energy Flair game on social networks sounds dangerously faddish. Consumers are more likely to be motivated to reduce their energy consumption by keeping money in their wallets than by displaying flair on their profile pages. TerraPerks would be better off showing customers how much money they’re saving (or how many resources their conserving, for the environmental crowd) by reducing their consumption.
My main takeaway from the event: no matter how innovative the idea or charismatic the entrepreneurs, a tech startup still depends on the same things any startup does to become a profitable business:
- distinguishing itself in the market
- creating a loyal customer base
- maintaining cash flow
- scaling up as the business grows
Please share your thoughts by commenting below! As always, contact OptimWise for more information or assistance!