Red Rocket's Best Startups of 2014

Red Rocket's Best Startups of 2014

Red Rocket gets introduced to a couple hundred startups each year, in the normal course of doing business, or via our involvement with FireStarter Fund, TechStars, Techweek, VentureShot, Founder Institute or other startup groups or events.  We wanted to honor the best of these startups that we met, or got reacquainted with, in 2014, in Red Rocket's 3rd Annual "Best Startups of the Year".  This list is not intended to be an all-encompassing best startups list, as there are many additional great startups that we are not personally exposed to each year.  And, this list is not intended to be only for businesses that launched in 2014, it is open to startups of any age, that they or their advisers had some personal interaction with us in the last 12 months.  The business simply needed to have a good idea, good team or good traction, that caught our attention.  Congrats to you all!!

THE BEST STARTUPS OF 2014 (in alphabetical order):

Abe's Market (CEO Richard Demb) - B2C E-commerce for Natural & Organic Products

Change Lane (CEO David Harig) - B2C Mobile Oil Change Station at Your Home

ClutchPrep (CEO Marcio Souza) - B2C Video Guides for College Textbooks 

Datatopia (CEO Paul Brizz) - B2B Buy and Sell Data Marketplace

DoggyLoot (CEO Jeff Eckerling) - B2C curated ecommerce and deals for pet supplies

Dryv (CEO Dan Parsons) - B2C Dry Cleaning Delivery App

eForward (CEO Josh Morales) - B2C Low Cost Overseas Shipping

Fitness Cubed (CEO Arnav Dalmia) - B2C Under Your Desk Pedal Exerciser 

HealthIPASS (CEO Rajesh Voddiraju) - B2B Healthcare Payments Platform

Inventables (CEO Zach Kaplan) - B2C Digital Invention Manufacturing for Masses

Legal Funding Central (CEO Joshua Schwadron) - B2C/B2B Legal Funding for Plaintiffs

MightyNest (CEO Chris Conn) - B2C School Donations From Kids Ecommerce

MoxieJean (CEO Sharon Schneider ) - B2C upscale resale ecommerce for kids clothing 

Office Hero (CEO Marcelo Lanzarotti) - B2B Lease Free Office Space Finder

Options Away (CEO Robert Brown) - B2C Call Options For Airfares 

Project Fixup (CEO Sarah Press) - B2C Takes Work Out of Online Dating
Public Good (CEO Jason Kunesh) - B2C philanthropy portal site

Ridogulous Labs (CEO Sean Kelly) - B2C Smart Dog Collar Technology

Sensor Jet (CEO Julia McLachlan) - B2C Fire Supression System for Home Kitchen

Shelfbucks (CEO Erik McMillan) - B2B in-store beacon promotion platform

Social Market Analytics (CEO Joe Gits) - B2B/B2C Social Listening for Stock Trading

The Tie Bar (CEO Michael Alter) - B2C E-commerce for Men's Accessories

ViralHeat (CEO Jeff Revoy) - B2B Predictive Social Analtyics

Wavve App (CEO Andrew McNealy) - B2C At-Location Dating App

WeDeliver (CEO Jimmy Odom) - B2B Same Day Delivery Service

And, don't forget to check out the 2012 winners and the 2013 winners, many of whom continue to be doing great things.

Congratulations to you all!!  Keep up the good work.  

RED ROCKET BLOG - BUSTING THE LEAN-STARTUP MYTH

Busting the Lean-Startup Myth

The below is a really great guest post by Howard Tullman (@tullman), CEO at 1871 (the largest shared space for startups in Chicago), Partner at G2T3V (an early-stage venture capital firm) and good colleagues of Red Rocket.  I couldn't have said the below any better, myself .  Thanks, Howard, for sharing your wisdom.  You can also check out the original post on Howard's blog at Inc.com.

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One of the greatest TV commercials of all time featured a crotchety old Chicago woman (Clara Peller) whose plaintive 3-word inquiry ("Where’s the beef?") became not just a huge advertising home run for Wendy's but a national catch phrase. Every comedian, late-night television host, news commentator, and politician seized on the expression and couldn't use it enough.

"Where's the beef?" is a question that's still worth asking today, specifically at those many startups that have jumped aboard the latest and greatest craze--"lean" everything. That's because, when it comes to "lean," the same question applies: Where, exactly, is the beef?

IS THERE "V" IN YOUR "MVP"?

I find myself thinking fondly of Clara's pronouncement whenever I have to sit through another bogus business review session where someone with the bare bones of an idea is trying to convince a group of otherwise intelligent investors that there's a real business opportunity buried beneath all the B.S., and that (a) all the shortcomings of the story being spun and (b) all the gaps in the gospel aren't actually problems at all. They're not bugs, oversights, or misses; they're the intentional result of trying to be "lean" and trying to launch "something" (not to say, "anything") to get the ball rolling.

I'm not sure when it got to be OK to try to do the least work possible in developing  something that you are seriously trying to do well, but maybe I missed a memo or two. But when people tell me that it's the minimum viable product (MVP), not the meat of the matter, that actually counts I remember that Clara knew better. This entire lean startup movement not only misleads and misdirects people into building mediocre products and potential services, it's also much more of a curse than a cure.

We're encouraging an entire generation of young entrepreneurs to rush things out to prospective customers--to throw a bunch of stuff against the wall and see what sticks. In the old days, people thought this was a good way to test to see if the spaghetti was al dente, but it actually wasn't. Pasta that sticks to the wall is most likely overcooked and too gummy to taste good.

Like so many other things in life, there's no simple shortcut or quick way to do these things right.  It takes time and craft and patience to build things that will matter and last. "Quick and dirty and out the door" sucks as a strategy for successful startups. Maybe you can never be too thin or too rich, but a startup can clearly be too lean. The ultimate goal isn't to build skinny start-ups, it's to build smart ones.

I understand that it would be naïve to delay your launch until you thought you had every single detail exactly right. We know that even the experts can completely overlook glaring interface flaws or other obvious omissions that the simplest novice user will see right off the bat. And it's equally arrogant to assume that you can't learn a single thing from the marketplace or your users. But that's a different issue. 

As I see it, there's a basic flaw in the common understanding of the "lean startup" concept, and then there are three main problems with the way most young entrepreneurs are trying to adopt and implement it.

THE BASIC FLAW

Even the best MVP won’t succeed without an MVA. An MVA is a Minimum Viable Audience (that's my simple shorthand for a bunch of potential buyers). Long before you start creating your product, crafting your code, and designing your UI you need to find out if anyone gives a damn about your idea and your proposed solution. This isn't easy work. You have to actually get off your butt and get out into the field and find and talk to actual people--not your co-founders or your folks--about what you're hoping to do.

You have to find actual problems that are generating real pain for a large number of people. You have to determine whether those people recognize the problem, appreciate the pain, are willing to admit that they have the problem, and are willing to pay for a solution. Then you might have a fighting chance to define and build a viable solution

You have to also recognize that: (a) there's an infinite demand for the unavailable (anyone can say they'll buy something that you don't have for sale); and (b) the easiest way for a buyer to get you to leave them alone is to say "Yes" and "Come see me when your product is ready," and then show you the door.

PROBLEM 1: THEY WON'T CARE

If you haven't done your homework and identified the right pain points and the right target customers, you might as well take a hike because no one wants the cure for no known disease; no one is going to invest in solutions in search of problems; and you'll end up building and wasting a lot of time on the greatest software never sold. The way you start the process determines where you end up, and these businesses are hard enough even for the people who do all the proper research, preparation, and planning.  A goal without a plan is just a daydream on someone else’s dime.

PROBLEM 2: THEY WON'T SUFFER

The idea that you can dump some partially-baked solution on your first prospects and they will then help you figure things out is another pipe dream. Trying to make your first users into your last beta testers is a waste of everyone's time because smart users want simple solutions that work right out of the box, not more problems. And it doesn't really matter what the problems are (implementation, training, support, stability, or security) because they're all just more noise and aggravation that busy people don't need. We are quick to try and even to adopt things that work for us, but we're much quicker to dump stuff that doesn't. And while there is an obvious trade-off between the degree of the customer's pain and the customer’s otherwise heightened expectations, in the end no solution that simply swaps one set of problems for another is going to get out of the gate.  

PROBLEM 3: THEY WON'T WAIT

As the Heads & Shoulders people say, you don't get a second chance today to make a first impression. Customers won't (and don't) wait for you to figure things out; if your first attempt falls flat you can bet that they won't let you come back. It's ridiculously easy to burn your bridges and impossibly hard to rebuild them when there are fast followers and copycats galore standing by, watching your mistakes. Customers don't want stories or excuses; they want workable solutions.

THE RIGHT WAY

There is a right way to do this and it's pretty simple. Do your homework and find an important unmet market need. Recruit the right early users who are invested (by virtue of their own desires) in your success. Build your MVP to their specifications and with their input and buy-in.  And then prepare to enter the perpetual iteration loop.

Launch, Measure, Modify, Re-Launch and Repeat the Process ad nauseam.

Successful solutions today are all the same: moments of mad creativity followed by months of maddening maintenance. Continually raising the bar and improving your offerings is the only way to stay in the game. 

TRIBECA FLASHPOINT ACADEMY CEO HOWARD A. TULLMAN'S ADVICE FOR ENTREPRENEURS FEATURED ON RED ROCKET BLOG

A place for entrepreneurs to learn and engage on various topics and lessons with George Deeb, founder and former CEO of iExplore, Chairman and former CEO of MediaRecall and Managing Partner at Red Rocket Partners, LLC.

Howard Tullman's Acceptance Speech at the Chicago Entrepreneurship Hall of Fame

Howard Tullman is a serial entrepreneur in Chicago, and the current Founder and CEO of the highly successful Tribeca Flashpoint Media Arts Academy.  Success has followed Howard from one business to the next, which is well detailed on Howard’s biography page.  Howard recently won the Lifetime Achievement Award from the Chicago Area Entrepreneurship Hall of Fame, sponsored by the Institute for Entrepreneurship within the College of Business Administration at the University of Illinois at Chicago. 

Below is an excerpt from Howard’s acceptance speech, that Howard graciously allowed me to share with all of you.  There are some terrific words of wisdom herein, for all you aspiring entrepreneurs:

“When I was looking back over the last 55 years (since I started my first business), I want to talk about some lessons I’ve painfully learned, and reflections which I hope will be of use and value to you, as you go forward to build and grow your own businesses.

First, you will discover that (except for your grandmother) the people from whom you really learned things of value (good or bad) were not warm and fuzzy folks. They were sharp, hard-edged, driven people with a clear sense of purpose who were always asking more of you. And, the real reason that those times were so instructive was that, in the midst of all of the blood, sweat and tears, and occasional screaming, you never doubted for a moment that they believed in you and that you were up to the task and could do whatever it took to get it done AND that they would be there working and standing right beside you when you did. People today don’t commit to institutions (if they ever really did), they commit to other people. It’s nice to be liked; it’s more important to be respected. Try to be one of those people.

Second, most of the world’s great art, films, games and music – as well as most of the great inventions throughout history – were ultimately the result and expression of a single, uncompromising vision - albeit managed, massaged, and manipulated through a sea of change, confusion and compromise. Consensus is about finding the middle ground and making people feel good about themselves and each other. Teamwork is about getting the help you need to see your vision through to completion. But these tools and approaches will only take you so far. In this life, you’ll each have a chance, a moment, an opportunity to make something special and spectacular and to make a difference – if you have the courage of your convictions, the confidence in your abilities, and if you’re willing to make and stick to the hard choices that will inevitably arise. Don’t miss the train – it won’t wait for you.

Third, get your priorities right from the start. If you want to be an entrepreneur, get to the back of the line. The company (and its investors) comes first. The customers come second. The employees come next. And you come last. Get used to it. In more than 50 years, I’m proud to say that I never once put my personal desires, goals or even my financial interests ahead of those of my partners, investors, customers or employees. If anything, I’ve done just the opposite. I’ve done it all – lent risky money to employees and customers and even other entrepreneurs; co-signed home mortgages; helped with education and medical expenses; and subsidized people’s salaries when the various businesses couldn’t afford to do so. And, I’d do it again in a minute. It just comes with the territory when you believe in what you doing and in the people that you’re doing it with.

Fourth, plan on biting your tongue and eating lots of humble pie. At least it’s not fattening. There are plenty of people who think I’m outspoken, demanding, hard to say “no” to, etc. and they’re not wrong, but they don’t know the half of it. In this life, especially when you make a business of being in the business of using other people’s money (which entrepreneurs almost always eventually do), you learn to hold your tongue and suck it up and to eat LOTS of crow. I love to hear about all these successful guys (as they used to say about my friend Steve Jobs) who don’t suffer fools gladly. That’s all well and good - especially for billionaires at the top of their game – but it’s just a formula for failure for the rest of us. Part of the curse of being an entrepreneur (and one of the best ads I ever wrote for TFA) said: “I’ve spent way too much time explaining my talents to people who have none”. The truth is that’s just another part of the job.

Fifth, nothing is more important than making room for people. All kinds of people – because talent comes in lots of different sizes, shapes and packages. We want the talent, but we aren’t always willing to understand that it’s a package deal. Some work all night; some don’t bathe; some are insufferable and brilliant at the same time. You need to make room for these people and run interference for them if you want to build a great company. Too often, entrepreneurs try to find and hire people that look, act and talk like themselves and this never works beyond the first few employees. You need all kinds of people – even people just looking for a job – not a career and not looking to join your sacred crusade – just as long as they’re willing to do their job and do it as well as they can. And honestly, your employees also don’t have to love each other or go bowling every Thursday night. They just all need to show up and each do their jobs. Everything else is Kumbaya and gravy.

But the best part of having a terrific group of employees is when they leave the nest and go on to do great things themselves. I’ve had thousands of employees over the years and I couldn’t be prouder of how so many of them have turned out and how many are now leading companies all over the city and the country.

Lastly, I love sugar as much as the next guy (probably much more) and I have nothing against cupcake companies per se, but how about if we all hunker down and try to build some real businesses which will matter in the long run and which can help make a concrete difference in people’s lives. Education, energy, and health care – these sectors of the economy will all be disrupted and radically changed in our lifetimes – and these are also the areas that provide the greatest prospects for doing good while you’re doing well. It could just be me, but I’d rather have better batteries and cleaner cars than bacon or more butter in my candy bars.“

Certainly lessons we all can learn from, from a veteran who has been in the trenches.  Thanks, Howard, for sharing your lifelong lessons, and pioneering the way for the rest of us entrepreneurs in Chicago.  Wishing you many more great years to come.