story by Josh Taylor Souza, special to The City Wire
Editors Note: The Ark Challenge competition winds down next week. This is the first of three stories that highlight the 15 teams vying for the top two prizes of $150,000 each.
FAYETTEVILLE – Some of the most ambitious young minds in technology and business have made their way to Fayetteville to take part in a 14-week accelerator program known as the “ARK Challenge.”
The ARK program is one of 20 projects partaken by the U.S. Department of Commerce that received federal funding to help award two start-up companies a $150,000 grant. More than 100 start-up companies submitted entries and only 15 were selected as finalist to take part in the three month training-coarse.
The challenge focuses on three fields (retail, transportation and logistics and food processing) and includes two boot-camp challenges with the goals to introduce 15 viable ventures that are primed for funding, pilot-ready and adequately positioned for new job creation in Northwest Arkansas.
Each finalist was awarded $18,333 in start-up money in exchange for 6% stake in each company. The teams have been given developmental support, unlimited access to a workspace (Iceberg co-working center in Fayetteville) countless contacts through various business mentors who offered their help to the program.
“These teams have put in an incredible amount of work. Many have left their 9 to 5 jobs and sacrificed time with friends and family to focus nonstop on their venture,” said Jeannette Balleza, director of the Ark Challenge competition.
Nov. 8 will be a moment of truth for the teams as they will pitch their venture to a panel of investors, much like contestants on the popular television show Shark Tank. Only two teams will be selected for the $150,000 prize, but there will be several investors invited to “Demo Day” in hopes more teams will secure additional funding.
FIRST 5 FINALISTS
Unlike most of the companies in the ARK Challenge, StackSearch already has a few paying customers.
The company founders, Mark Brandon and Sloan Ahrens, are serial entrepreneurs and each tried their run at a couple of different business models, including a cloud app for market places, before pivoting to a better Internet search engine.
Brandon said StackSearch is an enterprise software company that has invented a product search server that is scalable and powered by the Cloud. It helps e-commerce merchants create a better search experience for their products onsite, which has a demonstrable effect on conversions – turning browsers into buyers.
Time spent and number of visitors online are precious commodities for e-commerce sites but even the most successful online retailers have only a 5% conversion rate, according to Brandon. That means 95% of the visitors abandon the site without making a purchase.
StackSearch hopes to improve those metrics for small to medium-size retailers who need help achieving better conversion rates through more user-friendly and better filtered searchable sites.
“What sets us apart from some of the competition is that we are not a social networking site, or a mobile app,” said Brandon. “Most of these companies are involved in a two-sided market. That can make it tough when you have to depend on popularity to drive your product ... it’s a tough nut to crack. Certainly those companies can make billions, but when you have a one-sided market like we do, it helps take away some of the risks involved with a technology based business.”
In a world where music rules the web and there are nearly a dozen websites and programs for users to find music at the drop of a hat, Streamix has found yet another way to tap into the market.
The company is headed up by Chuong Nguyen, Josh Pham and Kenny Cason. Streamix is a music application geared toward public venues – specifically bars and taverns.
The application will offer owners, who typically rely on juke boxes or illegally using their own I-phones, an opportunity to purchase a monthly subscription that will offer access to a music library. It is similar to Pandora, however, with Stremix, the patrons will be able to select music for the house as well.
“I recently heard about a California restaurant owner who was fined close to $200,000 for using their own I-phone to provide house music. ... We want to give power of music selection to the patron as well as the owners,” said Nguyen. “If you own a bar you typically rely on touch-tone juke boxes which can be expensive to maintain and own. Our product offers owners a simple way to control their music while also giving patrons the same opportunity to pick songs as well.”
If the vision becomes reality, customers would be able to walk into a bar and design a playlist of their liking by simply accessing their cell phones. Songs are projected at 25 cents per play or 99 cents to own.
The future could hold several possibilities for this technology, especially in terms of how the music information is processed. Not only would it allow consumers a chance to create the background music to their evening, it would allow owners of the venue to process what types of music their customers prefer.
Truckily (Kansas City, Mo.)
The idea for this company came about when friends and co-founders Derek Kean and Matthew Berkland took a road trip to California. The duo was in search of Koji Bar-B-Q, a famous food truck, and spent an entire day trying to locate the mobile eatery.
The search continued when they found that no mobile apps existed to help find the whereabouts of the truck, thus giving Kean and Berkland an idea for a business model they could call their own.
“We went to a few different Apple stores in California trying to find an app that could help us locate the food trucks, but we didn’t find anything. So from that basic premise we thought there was a solid business model,” said Kean. “We talked to several catering truck companies and other vendors and found out we really had a market to work with.”
Like most of the other teams in the ARK challenge, the Truckily team has gone all in with the opportunity, and have seen their idea blossom into a business. Truckily is the only team in the field that incorporates transportation and logistics, though both co-founders have backgrounds in software development.
“The biggest thing for us is being able to focus 100% of our time on making this business succeed,” said Kean. “In April we knew we had an idea that might work. Now we have a business and more contacts than we could have ever dreamed.”
Zack Hill and fellow University of Central Arkansas graduates Alex Chalupka, Jonathan Peoples and Gabe Couch co-founded “Refurrl” over a year ago. The group has been commuting to and from Conway to Fayetteville to take part in the ARK Challenge and are less than a week away from launching their website/app that will allow users to post items for sell and share the items with their friends.
Refurrl isn’t the first application of its kind, but unlike Pinterest and Ebay, users of Refurrl will be able to tag their friends posts and share them on Facebook and Twitter.
“Our business makes it very easy for friends to help each other find and sell items online,” said Hill. “We think the model is crucial because it will give members complete trust in the product. Also, it will make it easier to spread the word when you have an item for sell. All it takes is a couple clicks and your item can be seen on three or four different websites as opposed to one if you use Craigslist for example.”
Sooligan (Berkeley, Calif.)
The “dream” team of the field – Natasia Malaihollo and Nikka Umil – both gave up opportunities to practice law in order to take part in the ARK Challenge because of a dream which prompted the two Berkeley Law graduates to pack up their belongings and spend three months working on a business model they call Sooligan.
The idea for Sooligan is to digitalize “word-of-mouth,” by allowing users of its website to navigate activities, eateries and hotels in an area. It borders on the same model as YELP, but is more in depth.
The Sooligan team was born in the “Silicon Valley” and has found the transition to life in Arkansas to be smooth for the most part. The company has already received interest from Google among others.
“This business is a passion of ours,” said Malaihollo. “We had the dream of starting a word-of-mouth website and it has come true. Coming to Fayetteville to take part in this challenge has been exciting and a great experience. We could have tried to do something similar in California, but the resources here are second to none and this town has huge potential for growth. It reminded us a lot of Berkley.”
Balleza said the sponsors for the Ark Challenge came through in a huge way.
The Ark Challenge sponsors include Winrock International, a non-profit focused on rural development, University of Arkansas and NorthWest Arkansas Community College.
The program has received $2.1 million in funding from three federal agencies: Economic Development Administration (EDA), the Small Business Administration (SBA), and Employment and Training Administration (ETA). It’s also received cash from Winrock International, Gravity Ventures, and the Fund for Arkansas’ Future.
She said the teams have also had an “amazing opportunity” to hear from 60 guest speakers – business professionals in the area – who also mentored and worked with the teams as needed during the past three months.