One of our moderators, Seth Kravitz, runs Technori Pitch.  It’s the premier event for startups here in Chicago.  He’s been nice enough to get us Bootstrappers a discount code for the next event.  It’s a great event and a wonderful crowd of people.

From the Technori staff:

Due to the rise in the number of startups based in Chicago, Technori is hosting the premier monthly showcase of the latest and greatest in innovative startups.

In the style of the New York Tech Meetup (which has launched startups like Foursquare and Tumblr), Technori Pitch is a catalyst for empowering emerging companies.  Entrepreneurs, developers, designers, tech companies, investors, and enthusiasts alike come together to bear witness to the most innovative Chicago companies present their newest products.

Held on the last Tuesday of each month, Technori Pitch features live demonstrations from 6-8 companies.  Each company will receive five minutes to Pitch their startup or new product, with a three minute Q&A from audience members immediately after.

This month’s event will be held on Tuesday, January 31 at Chase Auditorium in the Chase Building, located at 10 South Dearborn St. Chicago, IL.

This month will feature Moosejaw, Leap Year Project, AttorneyFee.com, GeoRama, Phaxio and a keynote speaker.

Want your startup to pitch at the event? Visit http://pitch.technori.com to signup today

We have a discount code for you to use and receive 15% off your ticket price.
Register online in order to reserve your spot with the discount code of: bb

Griffin Caprio

The showcase will feature technologies including:

Transportation

• Driver Assistive System: a portfolio of technologies that provide vehicle navigation assistance in low visibility conditions.
• High Precision Vehicle Navigation: a navigation system utilizing inexpensive inertial and image sensors for precise position and orientation in GPS-denied scenarios, Unmanned Aerial Vehicles (UAV) and Autonomous Vehicles.
• Evacuation Route Planning Software: identifies and highlights the most efficient set of routes to minimize the transit time for emergency evacuations and large event traffic dispersions.

Medical Education & Simulation

• Novel curricula and simulation models to drive healthcare education from surgery to patient education.
• A system and method for virtual prototyping, design, verification, and manufacture of medical devices.

Technology in Education

• Two computer-based assessment technologies that provide educators with screening, progress monitoring and skills analysis tools for elementary education.

Thursday, January 19, 2012 4:00 – 6:00 p.m.

University Enterprise Laboratories
Dorsey Ewald Conference Center, Atrium
1000 Westgate Drive, St. Paul, MN 55114

Register by January 12, seating is limited to 100 attendees.
RSVP here or call 612.624.0550

Register on Meetup at http://www.meetup.com/Bootstrappers-Breakfast-SV/events/40430102/

• When: Nov. 15, 2011 6:00pm – 9:00pm
• Where: Screenland Crown Center, 2450 Grand Blvd. Kansas City, MO 64108
• Cost: $20-$30 depending upon how early you purchase

Speakers

• Bo Fishback, Founder & CEO, Zaarly
• Tyler Prochnow, Co-Founder, Think Big Partners
• Debra L. Ellies, Ph.D, CEO & President, OsteoGeneX Inc.

From Entrepreneurs Unpluggd website

Entrepreneurs Unpluggd shares entrepreneurs stories through intimate events, video interviews, and
engaging content. Hear actionable advice and insight from entrepreneurs who have been there, and will share their secrets regarding customer acquisition. The entrepreneurs speaking will answer “How Do I Get My First Customers?”with examples from their own experiences, including successful strategies and not so successful strategies

Related:

• TECHdotMN offers a similar roundup of events and profiles for Minnesota Startups

If you are aware of other good sites that cover startups outside of Silicon Valley please leave a  comment, we are working on a roundup blog post.

Rich has a long and successful track record developing innovative system management software and has co-founded three software companies.

Currently Rich is co-founder of Reactor8,  a company focused on automation and configuration management in agile development and deployment environments.  Prior to his work with Reactor8, Rich worked in the area of virtualization system management at his company Replicate Technologies.  Rich also brings experience from his position as Director of Engineering at Cisco Systems where he led research and development in network management.  He joined Cisco through the acquisition of Netsys Technologies, which he also co-founded and was a key inventor of their intelligent network management product.

Rich started his career in the research center environment after receiving a Ph.D. in Computer Science (Artificial Intelligence) from the University of Rochester. He holds a number of patents in networking technologies, and is co-author of a book on AI planning and temporal reasoning.

Today Rich will focus on lessons learned when trying to determine the best functionality and scope of a new software product or service being brought to market.  Bring your questions and join us for a lively discussion.

Venue: Coco’s Bakery on Oakmead at Lawrence (1206 Oakmead Parkway Sunnyvale, CA)
Time: 7:30-9:00AM Tue-Oct-18
Cost: $5 in advance, $10 at the door (plus the cost of your breakfast, tax, and tip)

BioCurious is not a substitute for formal training in biochemistry, biology, and genetics. But it is a place for people to get a feel for what biologists do and for real biologists without access to expensive equipment to do research of their dreams.

I thought of my two children, both of whom pursued musical careers. I wondered how they would have felt about music if kids weren’t exposed to music until junior high school, whereupon they were sat down and forced to learn the circle of fifths and first species counterpoint. That’s sort of how we present biology to the public–and then, even those who do show an interest are denied access to affordable equipment. BioCurious is on the cusp of a new scientific revolution.

From http://www.motherboard.tv/2010/7/6/put-your-money-where-your-bio-hackerspace-is-video–2

Science was once a cultural activity, carried out by wealthy “gentlemen scholars” who had the leisure and material resources to experiment. The 20th century saw an unprecedented centralization of science around an industrial model. The plummeting costs of enabling technologies has brought meaningful biological research back within reach of the independent citizen scientist. From Bio-Art to BioFuels, the wave of next generation biotech applications is set to transform our culture and economy. BioCurious will be Ground 0 for this revolution.

Coordinates:

• 845 Stewart Drive, Suite C,  Sunnyvale, CA 94085
• http://www.meetup.com/biocurious/
• http://groups.google.com/group/biocurious

• 2010 Nature article “Life hackers” (PDF version has great pictures/images)
  • Related Editorial: Amateur scientists who experiment at home should be welcomed by the professionals
• Genspace is a New York nonprofit organization dedicated to promoting education in molecular biology for both children and adults. We work inside and outside of traditional settings, providing a safe, supportive environment for training and mentoring in biotechnology.
• DIYbio is an organization dedicated to making biology an accessible pursuit for citizen scientists, amateur biologists and biological engineers who value openness and safety. This will require mechanisms for amateurs to increase their knowledge and skills, access to a community of experts, the development of a code of ethics, responsible oversight, and leadership on issues that are unique to doing biology outside of traditional professional settings

Carl Ludewig is CEO of Ludewig Multimedia. Carl wants to change the way applications are developed by empowering designers and business users. In a world where the cloud, mobile and desktop need to fit together, Ludewig Multimedia looks to take a holistic approach with the next generation of software design tools. Carl’s prior venture was the mobile advertising company Ad Infuse, which was sold to Velti in 2009. Carl is a software engineer and musician who believes
that creative talent is the key to success.

Q: Can you talk a little bit about your background?

I’m a UC Berkeley computer science graduate whose first job was with the company that invented index funds and evangelized computer-driven passive investment strategies. I watched it grow incredibly fast and saw first hand how technology could create a whole new market. Since then, I have worked with a number of early stage startups, including a mobile advertising company I co-founded called Ad Infuse, which we sold in 2009.

Q: Can you talk a little bit about what led you to found your company, what was the problem that motivated you?

My entire career, it has bothered me that many applications that seem simple are surprisingly hard to build. I believe that there’s a certain class of application that should be as easy to create as using Microsoft Word or Excel, and it should work across platforms and devices.

Q: How did you get started?

Rather than seek angel or VC funding, I decided to leverage consulting opportunities to bootstrap the business. I look for projects that teach me something I need to know and provide experience with the technology we’re using in our products.

Q: Can you give me a brief overview of where the company is today?

We have 3 employees and a technical advisor. Revenue has grown around 50% year over year. Although consulting still accounts for the bulk of the revenue, about half of our customers are subscribers to services rather than consulting clients.

Q: What are the two or three things that you have been able to accomplish that you take the most pride in or satisfaction from?

The number one is team building. The talent and enthusiasm of those who have joined so far is impressive and gives me hope for our future prospects. The other is that bootstrapping and customer development has allowed us to get started without taking on outside investment.

Q: What has been the biggest surprise?

Even after years of experience, I am still surprised at how difficult it is to develop software, which, ironically, is the problem we are trying to solve.

Q: What development, event, or new understanding since you started has had the most impact on your original plan? How has your plan changed in response?

I have needed to learn patience. Given that product development can take time, we’ve adopted a “sell what you have” attitude and offered hosting and related services in order to engage with potential customers sooner rather than later.

Q: Any other remarks or suggestions for entrepreneurs?

Know yourself and why you want to be an entrepreneur. Do you want to start and flip your company quickly? Are you building a business for the long haul? Your goals will guide you to the path you might take to get there.

Francis noted:

Geva joined the company while it was still a startup and played a significant role in helping the company grow. I thought the Bootstrappers Breakfast community might benefit from Geva’s lessons learned. In addition to this Q&A blog post, Geva will be joining the round table discussion as a featured guest speaker on Friday, November 4 at the Palo Alto Bootstrappers Breakfast. Come join us and ask Geva your own questions.

BB: Hi Geva – Thanks for taking the time to share your entrepreneurial insight with the Bootstrappers Breakfast community.

Geva: Hi Francis, glad to be here.

BB: Prior to Fraud Sciences, what were you doing?

Geva: Before Fraud Sciences I worked in several other startups. One was SofaWare which built small office Firewall and VPN appliances. SofaWare was partnered with CheckPoint and the initial code base was derived from CheckPoint’s Firewall code. Another company was Savantis – a pioneer in Database Virtualization systems. Savantis closed down after 2.5 years. I learned a valuable lesson there – it’s almost impossible to sell datacenter critical solutions to large enterprises when you are a small startup. Duh. Even though the startup didn’t succeed, it was a great experience, and I was even able to get an algorithm I built filed for patent.

BB: What did Fraud Sciences do?

Geva: Fraud Sciences did e-commerce credit card fraud analysis. E-commerce merchants would send us the details buyers provided in the checkout page (name, address, credit card number, etc.), we would analyze the transaction information, and reply to the merchant with a green or red light. The interesting part of course was how we were able to make good decisions… this was a combination of outstanding technology and outstanding fraud analysts who understood and defined legitimate and fraud behavioral patterns. Let me give an example of what I mean by outstanding technology: in a typical e-commerce situation, an American credit card is presented at a checkout page of an American commerce site like amazon.com. A quick geo location checkup shows that the buyer’s IP address is actually in Romania. Most fraud systems would automatically decline such a transaction as the IP geo mismatch here is severe. Our technology enabled us to automatically analyze the buyer to see (and confirm) he works in an international corporation which has a branch in Romania. All of a sudden, the story looks completely different and some of the red lights dim.

Overall, our technology was so great we offered 100% fraud chargeback guarantee. If we “approved” a transaction and it was later chargedback, we covered 100% of the item cost. It was that simple. The value prop for merchants was outstanding – they could now sell to new risky markets they were avoiding before. Think about the ability to ship a $10k diamond ring to Russia without having to worry.

BB: How big was the company when you joined?

Geva: I joined the company when we were still sharing half a floor of a small building with 3 other startups. I was the fifth employee at the time with one other developer, an analyst and the two founders. Seeing the company grew from this early stage to being acquired has been really inspirational.

BB: What were some the early sales/marketing challenges you faced during the first couple of years in business?

Geva: The biggest challenge is getting through the first door. Online merchants are pretty busy people and they get a lot of offers from startups to fix/change/improve/solve/expand their business. Then comes the question of trust:  who is this small startup that wants us to share our checkout information? How can I trust their recommendations to approve/decline a transaction? “I have my own fraud management system…”

BB: What did the company do to overcome these challenges?

Geva: To overcome these challenges we started selling to very eccentric and non-mainstream merchants – people who really have high-fraud and funky businesses. Some of our initial merchants were selling anonymous web-browsing services. As you can image that attracts a lot of fraudsters who want to be anonymous on the web. We actually saw that fraudsters are using the anonymizer services to fraudulently buy more subscriptions from them! Another genre of merchants we integrated with were e-gold brokers. E-gold is like a virtual currency – where there is money there is always fraud. After we had a proven record with these types of merchants we continuously worked to revisit and improve our offering. We simplified the integration process to a 10 minute exercise. We simplified the feedback to the merchants to a simple Yes/No. We slowly grew to the 100% fraud chargeback guarantee. In parallel, the sales force continued improving their sales pitch, and we worked very hard to get supportive feedback from top-notch merchants (like www.ice.com) that we used in order to reduce new merchants objections.

BB: As the company grew, what were some of the operational challenges you faced as you gained traction?

Geva: One of the biggest challenges we had was scale. For a long time our analysis process was 100% manual human review. Technology played a big role by scanning through 1000s of data sources, scraping the web, running sophisticated algorithms and aggregating data to make the decision process easier for the human analysts. But it was still a human analyst who made the final decision. Hiring these human analysts wasn’t scalable either – these were top notch, super intelligent, high SAT, highly analytical kind of people. There is no standard job posting nor school education that you can look for.

By far, my biggest contribution to the company was in building the automated decision platform. My team and I spent hours interviewing our human analysts to try to quantify and frame their thought process into something we can let a computer do. We studied machine learning algorithms, data mining processes, statistics etc. and then started implementing. In 3 months we had the first version out. This version outperformed most of our human analysts, and of course worked much faster. It was a great success…

BB: How long was the company in business before you raised venture capital?

Geva: The founders worked 3-4 years by themselves without raising venture capital. They then raised a small series A funding before they started recruiting employees.

BB: What risk reducing milestones did the company achieve that merited risk capital investment?

Geva: On the business side, we worked very hard to have a repeatable and predictable sales cycle. That was of uttermost importance. New merchant acquisition had to be streamlined and efficient, while trying to reduce the paperwork as much as possible. On the technology side, we needed to show that we can grow our maximum transaction processing volume by x10, and then by another x10, and then to a point where to scale would only mean buying more servers.

While this might seem like no big deal to a bootstrapper, it is a serious handicap.  Today when I meet someone with a new idea but no money (i.e. a bootstrapper), I suggest they document their invention well, test market it and if it looks like a winner, file for patent protection. The current law allows me to argue the actual invention date and not the filing date for determining priority over other inventions. The bootstrapper gets a chance to gauge success before spending money on a patent.

Under the new law, if a person conceives an invention they must file soon. If they take the time to test the market, another inventor might file for the invention first.  The inventor who takes the time to determine marketability might lose the race to the patent office.

While it is too early to know what the overall affect of a first-to-file system will be, the research indicates that smaller organizations will suffer from this new patent scheme.  Bootstrappers will need to understand the risks of waiting to file for a patent and develop patent strategies, such as filing many provisional patent applications before market testing, to protect themselves.  Either way the new law is another obstacle to getting a company off the ground.

We had a great conversation  and a full house for the SandBox Suites’s location for Bootstrappers Breakfast. It was a mix of entrepreneurs; social gaming, mobile apps, B2B solutions, and video platforms.  We had several thought provoking conversations on the topics of finding early employees/co-founders, marketing to small businesses, and how to partner with big corporations.

Steve Mock, our featured guest speaker, shared a few tips on how to get someone else to pay for your marketing and how to develop a win-win value proposition to make that happen. He gave three examples from three different companies on how he structured deals with Fortune500 partners to fund his companies marketing efforts. Below is the core of his three examples.

1) Major media companies. We had a great product that we wanted them to resell. Every major media company agreed it was a great idea, but seemed to lack the impetus to actual do a deal with us. Something was missing. We finally made a deal (loss leader) to one company to get things going. Once one was on board, the others fell like dominos. It took getting that first deal to ‘bless’ us to get the others motivated. Nobody wanted to be the first, so we offered the ‘first’ a deal they couldn’t refuse to get going.

2) Enterprise networking company. Starting with the “customer in common” in mind, we reached out to customers of all the major players in the networking space. Once we had customer validation, we reached out to the big networking companies to see if our solution would help reduce their sales cycles. All agreed that the solution was beneficial to their customers, but it only helped reduce the sales cycle for a few of the players. Those are the firms that we ended up partnering with. We actually partnered with the sales team in the field, got their buy in, and got them to take the mutual solution into their own internal product and marketing groups. We made the sales team our internal champion.

3) Enterprise software company. We wanted a giant Israeli company to resell our product.  After showcasing our technology, we asked for product feedback and they would not provide us with any information. They were a very opaque organization.  We could not gauge their thought process. We got their major customers to ask for the mutual solution. Still nothing. As a last ditch effort, we managed to meet the CEO for five minutes and pitch the idea. He loved it and made it happen. In this case, getting to the top of the organization is what got the deal done.