Mark Cuban with the Longhorn Startup team of Pinecone
By LAURA LOREK
Founder of Silicon Hills News
The fifth Longhorn Startup Demo Day at the University of Texas drew the largest crowd ever.
Close to 1,000 people registered to attend the event and most of them showed up despite the cold front and blustery weather that blew into Austin on Thursday.
The evening featured two accomplished entrepreneurs, Cotter Cunningham, founder of RetailMeNot and Mark Cuban, co-founder of Broadcast.com. The evening also spotlighted pitches from 14 student run startups.
Cunningham with RetailMeNot.com, the world’s largest online coupon site, kicked off the evening with a talk about his entrepreneurial hits and misses and lessons he has learned.
At 46, Cunningham left his job as COO of Bankrate in Palm Beach and founded Divorce360.com. He invested $1 million and raised another $1 million from Austin Ventures. The site failed but Cunningham learned from the experience. He founded a new company in Austin, which came to be known as RetailMeNot.
Following Cunningham’s talk, 14 undergraduate teams pitched their ventures.
This class had the most diversity of any Longhorn Startup class, said Bob Metcalfe, professor of innovation at UT and one of the instructors. It featured a hardware startup – a 3D Printing service: Sinigma, a medical device maker: Austin Thermal, a battery charger embedded in a shoe: Everywhere Energy, mobile apps and some websites, he said.
“What always amazes me is how much the presentations improve in the last two days,” Metcalfe said. “It has happened all five times.”
“We had lots of great companies,” said Joshua Baer, instructor with Longhorn Startup, serial entrepreneur and co-founder of Capital Factory.
Baer and Metcalfe teach the class along with Ben Dyer, founder of Peachtree Software and now Entrepreneur in Residence at UT. Dozens of mentors in the Austin startup community also volunteer to help the students.
This time, the pitches featured four biomedical companies and a partnership with the Texas Medical Accelerator, Baer said.
Mark Cuban with the MicroMulsion team
The students gave great pitches, which impressed Cuban, who said he would consider investing in half of them.
Baer had a favorite too. He liked MSpaces, a hospitality startup that signs long term leases for apartments in Austin in desirable locations. Then MSpaces furnishes them with second-hand furniture and local artwork, and then posts them on AirBnB as short-term corporate and vacation rentals.
Hunter Monk, the company’s founder, said it’s seeking to be like “Uber for AirBnB.” He rents the apartments out at competitive rates from $60 to $139. His apartments generate $10,000 in revenue monthly and $3,600 in profits, Monk said. He’s essentially running a hotel business without having to own any brick and mortar buildings.
Another company, Suit of Clubs, a management platform for student organizations, has merged with InterviewStreet, a Y-Combinator company, said Siya Raj Purohit, its founder. She has taken the class twice. She graduates Friday with a double major in computer engineering and economics. She plans to work with InterviewStreet for a few months and then she’ll join Udacity, an education and technology startup based in Mountain View.
“I have always liked business,” Purohit said. “But this class solidified that. This class has had the greatest impact on my educational experience here. “
Siya Raj Purohit, founder of Suit of Clubs
The best part was learning directly from successful entrepreneurs, she said.
“Every week we got to hear from a different entrepreneur,” she said. The professors, Metcalfe, Baer and Dyer, also shared their experiences and provided excellent advice, she said.
The team behind BluSense, an networking app that maps attendees at a convention, also took the class last semester. The startups can take the class again to further develop their ideas, which often results in a pivot or change of course. Last semester, Forrest Dukes with BluSense pitched a wristband with built-in sensors to allow people to network at conferences. Now the device is an app.
Following the event, Cuban visited with many of the startups. He stayed until after 11 p.m. to give them advice. He also took pictures with each team. And he even met the team behind
The Zebra, a car insurance aggregation site, which Cuban has invested in but he had not met the team until Thursday night.
In a brief interview, he praised programs like Longhorn Startup and said that anytime startups can get advice from experienced entrepreneurs it’s a good program.
Asked about his failures, Cuban said he had a lot. He tried to market powdered milk. He ran a bar, which went out of business in college.
When asked if Dancing with the Stars was a failure, Cuban said absolutely not.
“That’s hard work,” he said.
Cuban and his professional dancing partner, Kym Johnson, got eliminated from Dancing with the Stars during its fifth season in 2007. Cuban, who is highly competitive, did not like to lose.
The Austin Thermal team of Zi-on Cheung, Ashvin Bashyam and Emmanuel Nunez (photo courtesy of Austin Thermal)
Following the pitches at Longhorn Startup Demo Day, one of the first startups Cuban spoke with was the three-person medical device team of Austin Thermal made up of Ashvin Bashyam, Emmanuel Nunez and Zi-on Cheung. They created Hot IV, a medical device that warms intravenous fluid before it is injected it into the body. Hot IV is targeted at hypothermia recovery and prevention, Bashyam said. Their initial market is trauma victims and the military, he said. They already have a working alpha prototype, intellectual property, and Food and Drug Administration clearance on a previous version of the device. Cuban liked the idea and told them to email him.
Cuban also met with MicroMulsion, which is creating micro gels for cell cultures. The product has lots of applications in biomedical research, said Anirudh Sharma, one of the four-team members. They all wore white lab coats.
“He wants to give us money,” Sharma said. “We weren’t expecting this. We don’t even have business cards.”
The company, like a few others, doesn’t even have a website yet.
Cuban spent a lot of time answering questions from the Pinecone team. They developed project management software for onboarding new employees.
“It’s a good idea,” Cuban said. “But you’ve got to find that sweet spot.”
One member of the team asked Cuban if he had heard of other startups with the same idea.
“I don’t know of any but I haven’t researched it,” he said.
Selling the product to small businesses to integrate their applications is a huge market but it’s a grind, Cuban said.
The other startups pitching included:
Everywhere Energy – a battery charger embedded in the sole of a shoe – sole charger that can provide up to two hours of charging energy for a cell phone or other device.
Sinigma – a 3-D printing service that can print in five different colors targeted at consumers.
UpNext – a mobile app to replace pagers in restaurants. The idea is to give the user more flexibility on long waits.
Basedrive – onsite data storage for businesses.
Recommenu – a mobile app that provides restaurants with feedback on their food.
SocialToast – a mobile app to help people find their friends at bars.
Aurality Studios – a software program for disabled people to interact with everyday technologies.
DayOf – a mobile app that curates daily events.
3. What’s Special About Your Startup? “I always look to see what’s the special sauce,” Cuban said. They have to have something that differentiates them from everyone else. They need a “special sauce” that sets them apart from the competition. Superlatives don’t benefit the entrepreneur, Cuban said. Anything that ends in “er” or “est” like cheaper, fastest, better – are big red flags because the competition isn’t going to go away, Cuban said. They’ll just improve on their product. “I try to find entrepreneurs that aren’t lying to themselves and that’s very difficult.”
6. Don’t be a Copy Cat. Everyone thinks the Internet is new. But bits are bits, Cuban said. The servers that YouTube uses are no different than the servers that Comcast uses. If 10,000 people are distributing something on YouTube, why do you want to be 10,001, he said. I try to look where people aren’t looking. I try to look where people think it’s archaic or wrong, he said. That’s why he put his movies made for Magnolia, his production company, on video on demand. For example, he thinks video on demand is growing much faster than Internet viewing of video. It’s going to grow even faster as the satellite and cable companies get their user interface perfected, Cuban said.
