Bizdom is a non-profit founded by serial entrepreneur Dan Gilbert, Founder and Chairman of Quicken Loans, Majority owner of the Cleveland Cavaliers, and General Partner at Detroit Venture Partners. Bizdom provides the support and resources necessary for the best and brightest aspiring entrepreneurs to get their businesses off the ground in Detroit and Cleveland.
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Feb 16, 2016
Comments DETROIT, MI - Start-up tech companies in 2013 seem more nuanced than ever, thanks to the advent of smart phones and tablets. There are hundreds of start-ups in the United States ever-so eager to be the next Facebook or Groupon, and the quickest route to get there more often than not seems to run through an iPhone or an Android. If you think the next-Facebook-or-Groupon comparison is unfair, consider that Detroit Ventures Partners CEO and ePrize Founder Josh Linkner said this at Bizdom 's Demo Day last week: "When the next Facebook or Groupon comes out of Detroit, instead of California, that is going to be a magic moment for us. " Linker made the comments before 11 start-up firms that have recently completed the Bizdom program, a non-profit incubator started by Quicken Loans founder Dan Gilbert, gave their pitches for more seed capital. Bizdom invest up to $25,000 in seed capital into the start-ups in exchange for eight percent equity. Only a minority of the latest, graduating start-ups, which are in varying degrees of maturity, rely solely on mobile app technology. All of them are tech-based in some fashion though, a requirement of the Bizdom program. Last week, all of the pitches came with the conviction that they had, indeed, found a void in the market that would lead to the wealth that entrepreneurs often crave. More telling, perhaps, was what a more rough-and-tumble business researcher told me after the event, as everyone gathered for cocktails and hors d'oeuvres on the roof of the M@dison Building. He said that not only do one out of every 10 start-ups fail, but investors often bank on that 10 percent success rate, and also pin their hopes to the one that does succeed for paying off their losses and covering the entire return they had aimed for. Regardless of what the past has told us, could any of the recent Bizdom graduates and tech-based start-ups be the next Facebook or Groupon? Who's to say they can't? Let us know what you think. Below are some of the latest Bizdom start-ups and their pitches. Tell us in the comments section if you think they have the longevity to survive or even thrive in the go-go 2000-teens. . Chalkfly Founded by Ryan Landau and Andrew Landau The pitch: Chalkfly is admittedly "unsexy," according to co-founder Ryan Landrau. That's because it operates in the bland realm of office and school supplies, a segment that, though it may lack sex appeal, is worth $30 billion in annual sales. Chalkfly bills itself as the only internet-direct provider of supplies within that realm. Landau said the company would like to emulate companies such as Zappos, a fantastically successful online shoe retailer acquired by Amazon.com in 2009 for $1.2 billion. Chalkfly's revenues have been growing at an impressive clip; they were $100,000 from December through March, then jumped to $120,000 this month and Landau expects to surpass the $2 million mark on the year. Quixby Founded by Jack Hilton, James Hilton and Austin Kettner The pitch: Quixby can save online computer parts buyers hassle while generating more money for suppliers, Co-Founder James Hilton said. The Quixby software accomplishes this by automatically telling online computer parts buyers whether or not the parts they are buying are compatible. It uses multiple algorithms to become an "engine that thinks for itself," Hilton said. "Computer hardware is dynamic, and more than ever people are building their own computers," he said. The company is looking to raise $100,000 in seed money, and has already raised $25,000. Backstitch Founded by Jordan Warzecha and Stefanie Warzecha The pitch: Internet surfers today are bombarded with an endless amount of windows and tabs. "Everything we care about is fighting for our attention," co-founder Jordan Warzecha said. Backstitch combines social media, news, shopping and other information into a single destination, and can apply filters by keywords, prices, etc. Warzecha said Backstitch already has had 8,000 users and 40,000 data feeds subscribe to its service. "With content that is highly personal, there is a big opportunity for premium marketing," Warzecha said. Brys & Edgewood Brys & Edgewood co-founder Jessica Malouf says the do-it-yourself fondant cake industry is worth $2 billion, but the products offered to consumers to actually make their own fondant cakes at home are too cumbersome. It costs about $20 for one tub of fondant, different flavors are hard to find, and then several additional accessories need to be purchased. "So we were inspired to create a kit that has everything you need to make your own fondant cake at home," she said. Her company sells the kits fro $48 at retail and $28 wholesale. They launched on a mere $9,000 from a Kickstarter campaign. Recently, they landed an exclusive deal with an unnamed, major national retailer that put in an initial order of 5,000 kits. Social 2Step Social 2Step is a an online and mobile app that helps companies market to their employees' vast social networks. Each of us, co-founder Susan Burke said, has an average of 634 social network connections, so if you multiply that by a company's number of employees, there are thousands of marketing opportunities. "We've spoken with so many companies who don't know how to get their employees engaged," Burke said. Social 2Step so far has been targeting the automotive, entertainment and consumer goods sectors. Burke is also the creator of autotrader.com, which is now a billion-dollar company. Social 2Step is looking for about $150,000 in seed capital. Whip Hand Cosmetics This former Hatch Detroit contestant is rare in that it makes nearly all of its small batch cosmetic products in Detroit. Whip Hand Cosmetics sells its products on the web, which one of the company's co-founders says is a $170 billion industry - but one in which only 10 percent of the products are sold over the web. the company has quicker production times too, with a 1-3 month turnaround from the beginning of production cycle to products hitting the market. That compares to major competitors' 12-to-24-month cycle. Mascot Secret Mascot Secret is a mobile app-based company that connects with sports stadiums to allow fans to automatically upgrade their seats during a game. The company is currently beat testing with Gilbert's Cleveland Cavaliers, but says it would like to target four major professional leagues. For pro hockey, basketball, baseball and football fans pay about $6.5 billion a year for tickets, the company says. The company takes a 20-30 percent commission on each upgrade. It is looking for $500,000 in seed capital. SkuServe Seventy-nine percent of consumers rarely or never buy a product that has incomplete information accompanying, the co-founders of SkuServe said. That's where their company comes in, using algorithms to automatically, fully update basic spec information on products such as industrial tools being sold online. Company co-founder Moses Olaniran is focused on the industrial tool segment because it's one he knows well; he spent eight years running a sales website. Large companies such as Granger have spent upwards of $40 million build up product databases, but SkuServe could do the same work for about $30,000 a month, Olaniran said. the company is looking to raise about $460,000. Guidesmob Guidesmob is a mobile app that puts university town hotspots in one place for college students. Mobile apps for universities often cannot list off-site places for activities such as dining or drinking, but Guidesmob can, and does so to college students with some $120 billion in discretionary spending, founder Dan Kerbel said. Kerbel said the app was tested at Michigan State University, and received 3,000 unique visitors a day. He aims to spread the app to Big Ten universities and then eventually to all major universities. The pitch for his product is that it is clean-looking and easy to use, and automatically sorts information based on what students have been searching for. He is looking for $325,000 to accelerate the company's expansion. eCollect eCollect takes the costly administrative burden from companies or government entities that deal with bounced checks, co-founder Kelcey Lehrich said. Lehrich said about $127 billion is lost to bounced checks every year. "It's a huge market, and it's a huge problem," he said. eCollect operates as an online platform that clients can monitor to see the eCollect's progress in tracking down money from bounced checks. The company does not charge the clients anything, instead taking the $30 fee from whoever wrote the check that bounced. So far, the company has focused on government sectors and trade associations, which often deal with bounced check regularly. The company seeks $200,000 in seed funding. Canopi The creators of Canopi say their online platform uses algorithms that sorts blogs and news-feeds in order of importance for readers. There are 75 million active blogs on the web, and there are 250 million people searching for information, co-founder Colin Flynn said. Many of those blogs are held back by editing and distribution, he said. Canopi acts as both an editor and a distributor. Its algorithms rate the blogs based on a point-scale for engagement (number of tweets, shares, etc. ) and a percentage score for relevance. It has about 1,000 bloggers using its platform, and reaches about 6.2 million people, Flynn said. It is currently trying to raise $500,000 in a seed round.