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WORTHY OF AWARDS


The Chicago Innovation Awards – Part 3

John Jonelis

Time Share Gulfstream JetI’ve jumped aboard a Gulfstream G450 to interview the legendary Loren Bukkett. I want his take on the Chicago Innovation Awards. He finally puts away his phone and turns to me. “Okay, let’s talk,” he says.

I take that to mean he’s already finalized all the deals that peaked his interest. Nice to have a large staff to handle the details. But here in the jet cabin, it’s just Loren, his wife Aussy, and me.

Aussy is doing some form of shorthand on a tablet computer. That woman hasn’t spoken since I climbed in the plane. Maybe Loren asked his wife to keep it buttoned. Maybe he wants to control what information gets out. At this point, I’m afraid to ask her a direct question. I even wonder if this is their secret strategy to keep outsiders off balance. If so, it’s working.

They give out so many honors at the Chicago Innovation Awards tonight that I can’t keep it all straight. So much glitz and pizzazz. Jumbo screen. Music. Entertainment. Applause. Streaming internet content. I appreciate the way they present a standardized set of videos to highlight the mission of each winner. A professional job and it moves things along nicely. With sponsors like Disney, Comcast, and Wrigley, they can afford to do it right.

Chicago Innovation Awards

Chicago Innovation Awards – jaj

I pull out my notes. “Let’s do the ‘Up-and-Comer’ category first.” I proceed to read off the list but Loren waves me to a halt.

“We’ll do it my way,” he says. And he goes on to tell me about every company that won an award at that event. He does it in depth. No notes. No prompts. At his age, that kind of memory astounds me.

“Now John, keep in mind that for twelve years, every company with an award from this group is a success. And there are a lot of them. That’s impressive and gives an old investor like me a feeling of confidence. Of course my people check out these companies in depth, but you can’t help but come away with some degree of certainty—a belief deep down that every one of them will find a way to make it.”

“You said they’ll break that perfect record this year.”

“That’s the awards to those two politicos, not the companies. No as I see it, what we have here is a large pool of opportunity. I already set some wheels in motion. Don’t ask me which ones.” He clasps his hands behind his neck and leans back. “When you get to be my age, you either turn into a curmudgeon or you win back some of that idealism you enjoyed as a youth. These days, a big part of my strategy includes companies that are doing-well-by-doing-good. I saw a few tonight. One of them is BriteSeed.

I nod. “I saw them pitch earlier in the year—at BNC I think. They made a big impression on me.” I splash three fingers of his excellent Hennessy into each of our snifters. Maybe the combination of spirits and altitude will keep him loose.

“It’s a hot sector,” he says. “Their SafeSnipstm technology could be life-saving. Imagine it on a large scale. No more surgical accidents. Billions of dollars saved.” He leans toward me and lowers his voice. “Keep your eye on Northwestern Global Health and their rapid HIV diagnosis. And Recall-Connect built an automated system to match defective medical implants with patients. No more wading through reams of paper files. Medline came out with an anti-viral face mask. Preventing disease is real attractive to me, but this one’s a family company, so…”

“No need for investors?”

“We’ll wait and see. My only concern with Feeding America is scalability. But they won the Social Innovator Award so people need to take that group seriously—very seriously. Any way we can fight hunger, we oughta do it.” He gingerly takes a tiny sip of his cognac as if he’s already had enough to drink. “I’m interested in the People’s Choice Awards winner,” he says. A little company, New Futura, wants to help Latinos achieve the American dream. Naturally I’m attracted to those kinda offerings. Then there’s Moneythink helping high school kids with their careers. That’s about it for the do-gooders.”

“What about Belly?”

He pauses a moment, pats his stomach, then grins. “That’s another hot sector. That company is off and running in 10 markets with half a million customers already. I’m sure they’ll do well. But I’m not in the mobile app or social media space.”

“Doesn’t that limit your exposure to startups?”

“That it does, John. That it does.” He takes another tiny sip of cognac. “Anymore,” he says, in his Midwestern idiom, “Anymore there’s so much money chasing mobile. So many new startups and only a few will pay off. The good ones get bid-up. Way too high for my liking. New York, Boston—all those great centers for venture capital are in love with mobile and social media. Maybe it’s good for Silicon Valley but it doesn’t fit my strategy. That’s why I come to Chicago. Of course I make exceptions.”

“Do you see a bubble?”

“Well, you always need to keep that in mind. For me it’s more a problem of value.”

Anybody that follows Loren Bukkett knows that deep value is his favorite strategy. Then he shifts gears. “Do you know anything about NuMat Technologies?

That catches me off-guard. “Some. I saw them present at the MIT Whiteboard Challenge. Seems like a winner to me but with so many great offerings, the judges at that event looked elsewhere. Do you think the technology is practical? Can they actually store and transport natural gas in bulk the way they suggest?”

“Keep your eye on them,” he says. And suddenly I wish my investment portfolio could stretch that far.

“And Coyote helps trucking avoid dead runs by sharing between companies. That’s the same thinking that put you and me on this beautiful jet. I like that business model.”

He takes more from his snifter and my hopes of getting him to comment on the awards to the governor and mayor are one step closer to reality. “1871,” he says. “That is without a doubt the most significant incubator I’ve come across. They made up their minds to do it right. 50,000 square feet with an option to double. Three universities keep offices there. Venture capitalists too. A successful startup from Northwestern keeps two big rooms to teach folks to code in new languages. Lots and lots of aspiring companies—and you gotta pass their standards to get in! This is one of the new hybrids—part incubator, part accelerator. Most of their companies are outside my investment horizons but every one of them is highly interesting. It must be a great resource for you.”

“Sure, I’ve been there a number of times. They run a lot of events and always invite the community. If they expand, I may take an office there. What’s your opinion on Options City?”

Loren lifts his feet back to the tabletop. “That one hopes to cure a sore point of mine. They want to help the little guy fight back against high frequency trading syndicates. We’re talking trading in-and-out in nanoseconds. Nowadays these guys own 70% or more of the volume on most of the exchanges. And naturally, the exchanges reciprocate by giving them the same privileges as market makers. But they don’t carry any responsibility like market makers. Or risk. They don’t make orderly markets. No, they hit and run. They’re speculators. Why should they get the first look at all the trades?  It’s all driven by greed on the part of the exchanges. I think it should be illegal.”

I’m leaning forward and nodding vigorously. “It’s the High Freaks that changed my approach to trading. I had to slow my timing way down and widen my stops—take on more risk.”

“Well alotta people are going broke because of it. These operations spend upwards of $100,000 a month for the fastest hookup and shortest wire to the exchanges and then run everything by computer algorithm. This new company wants to level the playing field.”

“Can they do it?”

“The jury is still out.”

Loren talks another twenty minutes to cover it all. Food Genius, mentormob, and mobcart, all leverage the Internet to aggregate information and communication. Cummins Allison of all people is selling a document scanner for banks. Borealis makes a light that takes 90% less energy and lasts 30 years.

That leaves Bright Tag, Catamaran, Littelfuse, and SMS Assist. An impressive event in execution, scope, and promise.  It amazes me that so many fine businesses are right here in Chicago.  All they need to succeed is a boost in the economy. 

We clink glasses. “So Loren, I still want to talk in-depth about the awards to the governor and mayor.”

He flashes me a dirty look.

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Find Chicago Venture Magazine at www.ChicagoVentureMagazine.com Comments and re-posts are welcomed and encouraged. This is not investment advice – do your own due diligence. I cannot guarantee accuracy but I give you my best.
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Copyright © 2012 John Jonelis – All Rights Reserved

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THE NEW NORMAL


The Chicago Innovation Awards – Part 2

John Jonelis

Time Share Gulfstream JetI’m on Loren Bukkett’s Gulfstream G450 trying to squeeze an interview out of him. “I asked you about the mayor and the governor but I didn’t get a response. What about it?”

“There are plenty of real businesses that won real awards. Let’s talk about those.”

“Okay, what did you think of the pre-show?”

He slouches in his leather chair. “I slipped in quiet-like. Why not give me your impressions?”

Once again, he’s turning the tables on me. But I close my eyes and bring up the picture in my mind. “I get there early. I’m in the lobby and it gets louder and louder. 1,500 people hitting the portable bars and yammering at each other.”

I check to see if he’s listening. I should know better. This guy misses nothing. “So I’m sitting on a bench, ignoring the throng. I turn to the fellow beside me and it’s my marketing professor, Phillip Kotler. Haven’t seen him in 20 years.”

Philip Kotler

Philip Kotler

Loren looks comfortable and satisfied. “That man wrote something like 50 books and I’ve read every one of them.”

That’s a lot of reading.  I think back to a time when Kotler drove a Ford Taurus and loved it while his students traveled in Beemers and Benzes. They couldn’t figure him out. And there’s something he said to our class at Kellogg that I’ve never gotten out of my head. ‘It’s not your job to satisfy your customers,’ he said as the students dropped their jaws. Then he went on: ‘It’s your job to DELIGHT your customers!’ He doesn’t take credit for the line.  Now, in this economy, students are graduating college with no jobs. So the school shifts focus. Northwestern is teaching them to start businesses. And they’re succeeding at it. It’s the new normal.

Snifter of HennessyLoren pours us each a huge snifter of Hennessey VSOP.

I inhale the rich aroma. It goes down nice and helps loosen my tongue. “This crowd is completely different than I expect. Dressed to the nines—some in tuxedos. But they let me in the door anyway and call me ‘sir.’”

He gives a sneer of distaste. “I hate that ‘sir’ talk.”

So do I.  “By the way, it turns out Kotler’s on the board of advisors for this event. He introduces me to Tom Kuczmarski who moderates with Dan Miller. These guys founded The Chicago Innovation Awards twelve years ago.”

“Just give me the meat of it.”

I can do that. “First thing that surprises me—the pizzazz—lots of loud, lively music and entertainment. Like the academy awards on steroids. Then Tom Kuczmarski and Dan Miller get introduced with a promise to take them out of their comfort zone. And that’s what happens—big time.”

Loren leans back and lifts his cowboy boots to the table. “Risk taking is the only way you get innovation.”

“Yeah, that’s the way I heard it. Then they’re in a video skit. It’s a reality show—kinda like American Idol. They’re competing with the The FootworKINGz.

The FootworKINGz

The FootworKINGz – jaj

“This is a group that dances in tightly choreographed rapid rhythmic jerks—moves taken from the streets of Chicago. And they’re sensational. Tom and Dan do a magic act but those dancers are a tough act to follow. It turns into a nightmare. That sleazebag Howard Stern leads a panel of judges. At least I think that’s who it is. They all gang up on Tom & Dan and their magic act. They criticize it and cut it to pieces.”

Loren sips his cognac and nods. “Like a presentation before investors.”

I see the connection and grin. “So Tom passes a hula hoop over Dan and suddenly he’s undressed to his boxer shorts.”

Loren smacks his lips. “Just like going through due diligence.”

“Then he shrinks Dan to the size of a baby and the guy squawks like a parakeet.”

Loren passes his snifter under his nose. “Man’s ego always gets in the way.”

“Then the judges give absurd advice about how to improve the act.”

“Expert coaching,” he says.

It occurs to me that Loren got a lot more out of this thing than I did. “Then Tom and Dan decide, ‘If you can’t beat ‘em, join ‘em.’ And they perform on the live stage with The FootworKINGz.”

“You don’t need classical training to be a success. Sometimes it holds you back.”

“You saw all this yourself, Loren. I’m supposed to interview you.”

Hennessy VSOP Cognac

Hennessy VSOP Cognac
- image from Wikipedia

He smiles. “You just did, John. You just did.”

I feel like he taught me a lesson of some kind but I can’t quite put my finger on it.

His phone rings and he checks the screen. “Gotta take this call.” And I sit and wait. From what I can make out, he’s talking to some staffer that’s buying up shares of tonight’s companies. Finally he pockets the phone and sips his Hennessy. “Let’s get down to the real businesses that won real awards.”

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Find Chicago Venture Magazine at www.ChicagoVentureMagazine.com Comments and re-posts are welcomed and encouraged. This is not investment advice – do your own due diligence. I cannot guarantee accuracy but I give you my best.

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Copyright © 2012 John Jonelis – All Rights Reserved

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THE SECRET OF HARD TIMES


The Chicago Innovation Awards – Part 1

John Jonelis

Time Share Gulfstream JetI’m talking to investing legend, Loren Bukkett—the Prophet of Pekin, immediately after a big event in Chicago. “Twelve whole years,” he says. “A hundred percent of their winners are all still in business. And tonight they break that perfect record.” He’s talking about the winners of the Chicago Innovation Awards and he’s got my attention. Which companies are going down?

This guy is seemingly unassuming. Uncombed hair. Rumpled blazer. Now he leans across the lounge table of the big Gulfstream G450 and speaks softly to the lady taking shorthand. “Pardon me Aussy,” he says, “Would you please file this conversation with the rest of tonight’s papers?”

She nods and then graces me with a striking smile and I think back to a time before they got hitched. One smile, that’s all, and I’m lost in the past, only vaguely aware of the man’s voice in the background. This gal sure doesn’t show her age.

“Hey Jonelis, you awake?”

With that, I stop ogling his wife and look him in the eye. This is turning into a strange interview. Because of his tight schedule, we’re going Mach 0.8 at 40,000 feet in this beautiful corporate jet enroute to—I don’t know where. In an hour, he says he’ll send me back in another plane. I’m hoping for something small. A Piper Citation can land at my home airport for an early-to-bed. This big jet is a corporate timeshare. I saw a similar timeshare scheme pitched tonight, but with trucks instead of airplanes.

Gulfstream G450

Gulfstream G450 – photo from Gulfstream website

An acerbic voice jars me to my senses: “Jonelis—are you done daydreaming yet?”

I smile. “For now, I guess—till I get another chance.”

“Good, then stay alert. As I was saying, Chicago’s in big financial trouble. A lotta trouble. You know it as well as I do. Heck, the whole state’s in trouble—almost as bad as California.” He gives me a down-home grin. “And as you’re no doubt aware, that’s what brought me here tonight.”

“You see a bottom?”

“A bottom? Nobody ever knows if it’s the bottom but use your common sense. This place will bounce back eventually. I’m not saying this town will solve its problems—likely as not they’ll do nothing or move in exactly the wrong direction. But business here has such a long, long way to bounce—a heck of a long way. I’m willing to take a position on that. The trouble with young investors any more is they don’t have the nerve or the stamina.”

I scribble some notes. It seems a safe bet he just took a stake in some of the companies honored at tonight’s event—maybe all of them. Could be he acquired all of them. He’s going on:

“One thing most people don’t understand about hard times—and John, these are real hard times—no doubt about that. The thing people get wrong is this: Tough times don’t blunt the sharp point of innovation. Not at all. When it gets this bad, desperation feeds creativity. Invention kicks in. People find a way to survive. Look how India and China exploded out of utter ruin in spite of their governments. I see Chicago as the next center for thought leadership in the entrepreneurial world. It could rival New York, Boston, Silicon Valley.”

Chicago Innovation Awards

Chicago Innovation Awards – jaj

“You’re really sold on Chicago?”

“I think I made myself clear on that. I’m not betting on the city—not even the state. No, I’m looking at individual companies that rise out of these terrible circumstances. Only strong organizations succeed in an environment this nasty. If they can make it without greasing palms, I’m interested.”

I scribble more notes and try to memorize as much as I can. “You’re telling me that squalor makes it easy for you to pick winning companies.”

“You think you got me figured out. Put away that blasted pencil.” He glances at his wife. “Aussy, see that Mr. Jonelis gets a transcript, would you please?” Then he swivels his leather chair and faces me head on.

“I’ll lay it out for you straight. It’s real simple. Here’s my secret: Hard times create a supply and demand imbalance. Innovation takes off, but at the same time investors run scared. Banks won’t lend. You end up with too many good ideas and not enough capital. That’s when I buy.”

“At a bargain?”

He looks at me from under his shaggy eyebrows. “D’you think?”

That draws a laugh out of me and I tuck away my notes.

“John, you’re the one that lives in that town. Look around. Don’t you see the huge vacuum? You know what happens in a vacuum?”

“Sure. It gets filled. Real fast.”

“That’s exactly right.”

Now that I’m in on his game, I can picture how it unfolds. “And when that happens, politicians grab the credit.”

He just smiles.

“And you laugh all the way to the bank.”

He tenses like a gambler holding his cards to his chest. “Let’s just leave it that the vacuum gets filled.”

“So what’s your take on the mayor and governor getting awards at the event?”

He grins. “That’s how the Chicago Innovation Awards loses its perfect record. But you do not want to get me started on politics!”

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Continue to Part 2

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Find Chicago Venture Magazine at www.ChicagoVentureMagazine.com Comments and re-posts are welcomed and encouraged. This is not investment advice – do your own due diligence. I cannot guarantee accuracy but I give you my best.

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Copyright © 2012 John Jonelis – All Rights Reserved

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