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Chicago SUN-TIMES

After the bust of 2001, you think the Internet business, with notable exceptions, such as Amazon, eBay and Google, was a digital dodo that went extinct.

But, bunkie, the reports on the demise of the Net are premature.

COMING TUESDAY
What’s the hottest recipe for Internet success in Chicago? How about restaurant delivery?

Howard Wolinsky reports Tuesday on a two-year-old startup that provides a restaurant delivery search engine/guide with a side order of community a la reviews spiced with coupons.
A new Internet generation of young entrepreneurs, chastened by the excesses of their predecessors with their half-baked business plans and shaky technology, and experienced hands alike are betting on online success.

One of them is Keith Schacht, 27, a serial entrepreneur in Chicago who now is running JobCoin to link employers with potential employees through blogs and Web sites. “You just have to read www.TechCrunch.com [a blog dedicated to profiling Internet companies and products], or walk into any San Francisco coffee shop to see that there’s a resurgence of Internet startups,” he said.

It’s happening here, too.

Take note: Wired magazine recently listed the 10 hottest next generation Web companies. Two of them, 37signals, the developer of Web-based collaboration tools such as to-do lists and calendars, and so forth), and FeedBurner, a major provider of services to blogs, are based here. Both companies won Chicago Innovation Awards in 2006 from the Chicago Sun-Times.

Locally based Tickets.com, the online secondary ticket broker, and Threadless, the hit T-shirt design outfit, are already big and getting bigger.

Schacht runs Chicago Beta, a social gathering of young or “in beta” companies, and the Web site ChicagoBeta.com features a growing list of in-betas.

The emphasis is on “Web 2.0,” a term loosely referring to user-generated content and collaboration and social networking a la MySpace. Web 2.0 also refers generally to this next generation of online companies and software.

Schacht said, “There is still no guarantee that any given startup will figure it out and turn a profit, but there are a lot more examples of people who have done it, there are some tried-and-true methods of doing it. So people are more confident. Internet adoption among the population in general is greater, so all of a sudden you have a bigger user base than you did five years ago. All of this is just a natural progression as an industry matures.”

Fred Hoch, president of the Illinois IT Association, representing software and other tech companies in the state, said Web 2.0 companies use Internet connectivity to do such things as “change the way you order take-out or the way you manage your storage. These companies are focused on creating greater efficiencies in business processes.

Secondly, it’s about access. New software companies that provide software as a service give users greater access, and therefore better use, of applications and in so doing change the way business is done.

Third, it’s about community. How can you be more efficient or find out more by being part of a directed community? It’s not the entire Internet community. It’s a community specific to an issue, challenge, business or otherwise.

To the left are the elevator pitches — an entrepreneur’s business-plan pitch that’s short enough to make in an elevator ride with a venture capitalist — at the next generation Chicago Internet companies.

Who they are
BLAGICA STEFANOVSKI, 30
CondoPerks at condoperks.com, a one-stop shop for condo and townhome associations
“CondoPerks is a free service that will enable condominium/townhome associations to earn money by continuing to do what they do today — shop online. Each condo will have its own Web site, containing an extensive shopping engine. CondoPerks negotiates the rates with each retailer (current partners include Apple, Dell and Orbitz) and after that condo’s residents make a purchase, a percentage of the sale goes back to the condo building/association. This money can be used to help offset assessments and/or build reserves.”

AASHISH DALAL, 29
ParkWiz.com at parkwhiz.com, which helps motorists access parking information or reserve a space en route to their destination.
“Parking your car can be a nightmare. You may be driving to a sporting event, theater or a business meeting not knowing where you will park, let alone how much you will pay. But imagine, if before you reached your destination you knew exactly when and where to park and for how much. ParkWhiz.com is the only place where you can find all of the parking that is closest to you, whether it’s a parking garage, surface lot, or a person renting out their driveway. You simply enter your destination, and we show you the prices, specials, discounts, availability and more of the parking facilities near that location. The service is free for buyers to search, and free for sellers to list their available parking.”

NOLAN BAYLISS, 29
Co-founder of Naymz, the online identity management company at Naymz.com.
“Naymz is an online provider of reputation and identity management and promotion services for people. The Naymz Web site provides a simple and user-friendly experience for those who are concerned with promoting an accurate and positive picture of their personal or professional online reputation and identity.”

PAUL BIRMAN, 25
Chief executive, Pawky.com, the short film Web site at www.pawky.com.
“Pawky provides high quality, award-winning short film and animation to the masses through off-line venues as well as its Web site, www.pawky.com.”

MATT MOOG, 37
Founder of Viewpoints Network, a Web site at viewpoints.com designed to help people make major life purchases.
“Viewpoints.com is a user-driven ratings-and-reviews Web site, where people write reviews of products and services that they have direct experience with. Our sole focus is improving the quality and relevancy of reviews. We do this by creating a large and active community of reviewers. We will give them the freedom to review across a very broad range of categories, and in doing so highlight their personalities, passions and personal profile.”

KARAN GOEL
Founder of PrepMe.com, online test prep service.
PrepMe delivers high-quality, customized test preparation services to students through the Internet. Students begin by taking a diagnostic test, which creates a learning profile and personal schedule for them, and then iterate through our course as we continuously attack their areas in need of improvement.”

MATT MALONEY, 31
Founder of GrubHub.com, an online guide to restaurants that deliver in Chicago and other cities.
“Grubhub.com is the only place you can find all of the restaurants that deliver to you. Simply enter your address, and we display all of the menus and coupons for every restaurant that delivers to that location. You can order online or by phone, and it is entirely free for users because restaurants pay a small flat fee for every order they receive through our Web site.”

NETREPRENEURS’ ‘ELEVATOR PITCHES’
GENEVIEVE THIERS, 29
Founder of Sittercity at sittercity.com.
“Sittercity is the ‘match.com’ of childcare, with over 150,000 baby-sitters and nannies nationwide. We are about to expand to be the leader in in-home care, with pet-sitters, house-sitters, elder-care providers and tutors.”

KEITH SCHACHT, 27
Founder of JobCoin at jobcoin.com, developer of software that adds job boards to blogs and Web sites.
“JobCoin assists employers reach talented individuals on the Web sites where they already are spending their time — their favorite blogs, trade association sites, industry news sites. These Web sites and bloggers get paid for allowing companies to post job openings on their site. JobCoin is a way for them to make money off their audience beyond traditional Web advertising.”

ALEX CHIZHIK, 23
Chief operating officer, Planypus, an online planning organizer for busy young professionals at www.planypus.com.
“Planypus solves the pain of organizing groups of friends for events large and small by introducing a wiki-like mentality to the plan-making process. Rather than having one person come up with all the details, it takes just a few seconds to suggest an idea, have your friends fill in the details, and get notified via e-mail, text messages, or RSS when the plans have been made.”

ADAM SIEGEL, 33
Founder of Inkling at inklingmarkets.com, an online predictive market.
“Inkling helps you capture the collective wisdom of a diverse group of people to give you insight about what may happen in the future vs. relying solely on high-paid consultants or individual experts. This is important because it can help you mitigate risk, make better strategic decisions, spawn innovation and entrepreneurship, and change your corporate culture.”

Matt Maloney, 31, founder of GrubHub.com, an online guide to restaurants that deliver in Chicago and other cities.
Didn’t the Internet craze die back in 2001? Why launch an Internet business?

The Internet is not a craze. It is a fundamental shift in communication patterns and in support you can see that online adoption rates continue to increase around the world. Additionally, there are many applications that are possible online that were not conceivable in the pencil-pushing world pre-TCP/IP.

The Internet business craze in the late 90’s centered on connecting digital information to consumers via this new fangled Internet. For example, there were nine sites that took ISBN numbers, indexed them and put books for sale online. Successful companies from the first Internet bubble took information that was already in computers and opened it up to everyone. The rest were riding coat tails and died the flaming death their weak business models deserved.

There is now a resurgence in Internet business models that center on creating information. This could either be original content (user generated/blogs/wisdom of masses/etc.) or existing information that could never be indexed on paper (i.e. restaurant delivery areas).

We started Grubhub.com in 2004 because we figured out a way to organize all of the restaurant delivery areas, offer users a search to find all of the restaurants that deliver to them, and capture some of the economic benefit that flows to each restaurant when thousands of new customers start ordering from them.

Where did your idea come from?

Mike Evans and I were working for Apartments.com in 2000 and realized that we could apply a similar radius search to restaurant delivery areas and provide a comprehensive database of restaurants that deliver — searchable by address. We started it as a hobby and grew our business into a lead-generation cost per click-type model that is now the largest online ordering Web site for restaurants in Chicago.

In 2006, Grubhub placed over $4 million in Chicago delivery orders. We have already placed over $2M in orders in January and February of 2007.

What is the elevator pitch?

GrubHub.com is the only place you can find all of the restaurants that deliver to you. Simply enter your address and we display all of the menus & coupons for every restaurant that delivers to that location. You can order online or by phone and it is entirely free for users because restaurants pay a small flat fee for every order they receive through our Web site.

How is your proposition different from earlier generations of online businesses?

a) Grubhub.com lists every restaurant that delivers whether or not the restaurant is paying for orders.

b) Grubhub.com offers telephone ordering in addition to online ordering.

Every other Web site that has ever provided online ordering has always viewed themselves as “order facilitators” that provide a conduit from the user’s computer to the restaurant’s kitchen. In that model, the Web site doesn’t get paid unless users order online and it makes no sense to display restaurants that can’t or won’t accept online orders.

GrubHub views itself as a restaurant delivery guide where people can find discover all of the random and diverse restaurants who are already setup to deliver to their address. As such, we list every delivery restaurant and sell exposure to restaurants. One of our key innovations is a VOIP system that tracks telephone orders placed by users on our website.

Because we can track telephone orders, we are able to display every restaurant’s phone number so people can order via phone or online–and we can list every restaurant, whether or not they are setup for online ordering or not. Grubhub.com is the first and only comprehensive database of delivery restaurants and where they will deliver to — in fact, we are accurate down to 10 meters.

Why will you succeed? What are your biggest successes so far?

Grubhub.com is a successful business because we have created a website that answers the universal question that we all ask ourselves when we’re tired and hungry… Who delivers? We have created a Web site that elegantly solves a problem for users while generating new business for restaurants and sharing those rewards.

Mike and I both have master’s degrees in computer science, his from MIT and mine from University of Chicago, and I am completing my MBA from Chicago’s GSB. We have the industry-leading technology product and our business model was proven when we beat out over 50 entries to win the University of Chicago’s New Venture Challenge this past year. The final judges were a panel of over 30 nationally renowned venture capitalists and entrepreneurs who listened to our 10-minute pitch and asked over 30 minutes of questions. We were also listed in the WSJ as one of the ways to improve your life in 2007 (see our press page at www.grubhub.com/press.jsp).

However, our biggest success was opening our San Francisco market totally off-site and signing up the first 50 restaurants for our service. It proved that our business processes are scalable and that Grubhub is ready to make the jump from regional website to national phenomenon. We have now opened our San Francisco, New York City and Milwaukee sites and have collected the restaurant data for Boston, Seattle, and Washington D.C. as well.

How will you make money on the Web?

Our key is to create the best place for people to find restaurants that deliver to them. This has always been our overarching goal as delivery customers are the value that restaurants seek and ultimately pay us for. To attract and retain users we have consistently released features that aid in restaurant selection such as ratings, reviews, favorites, map-based searching, and distance based sort.

Have you received funding? If so, how much and from whom?

We have twice been offered but not yet accepted investment capital. Our business has bootstrapped itself to over a million in annual revenue, however we are currently courting multiple investors to help us fund a national expansion.

Michael Dworecki, 20, founder of Collectica, the online community for collectors:
Didn’t the Internet craze die back in 2001? Why launch an Internet business?

What happened in 2001 was that you had vast amounts of money committed to hundreds and hundreds of different business ideas. The problem, though, was that the Internet was moving too fast; consumer preferences take time to change. So ultimately, when these Internet companies suddenly weren’t seeing the revenue that they had expected (and which fueled extreme stock prices), the pyramid fell. Over the six years since then, we’ve been building the pieces back together. The blue-chip Internet companies like Amazon and Yahoo, and now Google, have provided real legitimate markets for both consumers and businesses to test out and trust the Internet again. Now we are in a time where consumers ARE actually spending large amounts of money on the Internet, and trusting it as an extension of their lives.

Where did your idea come from?

As we had just came out of the startup phase of a company called Recompass, my [much] younger brother called me one night. Currently in high school, he had been assigned a report on Indian arrowheads, yet he could not find anything substantive except listings on eBay and 1990s era Web sites.

I looked into it, and as a collector myself (wooden “brain” puzzles), I immediately saw a need for a company that could provide a great technology platform for collectors, fans, and enthusiasts. These people are passionate, collecting things from American political memorabilia, to antique coins, to Pez sticks. Each tells a great story about a place, time, or idea; almost like a lifeblood of Americana.

I wanted to create a community for collectors that made it simple for them to carry out their pursuits (share and organize collections, meet new friends from around the world, and get the latest news and events on their passions), and simultaneously dispensed with the need for them to worry about keeping a Web site up. From all of this, over the next months, Collectica was born.

What is your elevator pitch?

Collectica is a community for collectors, fans, and enthusiasts. Whether you collect comic books, stamps, or Pez sticks, you can organize and share your collections, meet new friends, get the latest news and events, and take your passion to a whole other level. Collectica, quite simply, is the space for collectors.

How is your proposition different from earlier generations of online business?

First, but probably less importantly, we benefit from low marketing costs to reach collectors. Secondly, we are building Collectica with a solid financial platform, i.e., not burning through all of our cash in six weeks. We aim to be around for a long time vs. building a business that is losing money every month and hoping someone is going to acquire us before we crash and burn. Finally, we have a physical presence as well at collector and fan conventions across the country. It is another channel for us that reinforces and complements our online community.

Why will you succeed? What are your biggest successes so far?

Well, some of that I can’t share just yet, but I’ll say this: We’ve gotten a phenomenal response for collectors. Maybe because we are collectors ourselves who happen to be businessmen, or is it businessmen who happen to be collectors? Sometimes I forget. But from individual collectors through the largest clubs and associations out there, a lot of people are working with us because of our mission and values to stay true to collectors and fans.

What is your age and previous business experience?

So I’ve actually achieved all of this while still being 20 years old. Sometimes being this young is rewarding in that people are amazed at what I’ve accomplished. But at the same time, I didn’t build the company to get my name in papers. Other times, it can be an initial hurdle when I’m meeting with a big executive who would laugh and say “I’m meeting with a 20-year old kid. However, every single person I’ve ever worked with forgets my age; I believe in proving my capabilities with my actions, and that has gotten me this far today.

This will be my fourth business. I started with a non-profit foundation, United Charities, which I launched in high school to teach teens the importance of community service. This fed my interest for business as well as contributing back to the community, which I feel is very important. From there, I went on to found an Internet gaming cafe for teenage computer game players. After that, Nodorm, an apartment listing service aimed at college students, which is expanding to the East & West Coasts this year under a separate team. Then Recompass, which focuses on business supply and logistics with SMBs [small and medium businesses], lower prices than the Big Three office supply stores, guaranteed. Now Collectica, with which I plan to stay for a long time. You learn after a while that you can start 20 different things if you have the opportunity and resources, but devoting yourself to one thing, and making it truly superb, is something else altogether.

Have you received funding? If so, how much and from whom?

We have received funding from angel investors. I can’t disclose how much, but the concept is simple. One primary angel who can supply funds, and network of smaller angels who contribute not only money but strategic expertise. I’m always looking for the latter, as a good investor is an incredible value add.

How will you make money?

We make money through fee-based services such as collection valuation and additional organizational tools. We are also building an advertising network to deliver targeted advertising to our members, because we can be very specific. When a publisher wants to target comic book collectors, just in Chicago, or reach coin collectors who specialize error coins, our systems can do it.

Blagica Stefanovski, 30, CondoPerks at condoperks.com, a one-stop shop for condo and townhome associations:
Didn’t the Internet craze die back in 2001? Why launch an Internet business?

This is a new time with Internet start-ups. The dot-com bust was a result of VCs investing millions of dollars in vaporware and/or companies that did not have a clear plan for profit. The craze of 2001 was also the result of investors wanting to get rich with this new thing called the “Internet.” There was a lack of experience, planning and plain good sense.

Today, starting a business online has never been easier. There are countless examples of good and bad online business practices to glean lessons from, in addition to inexpensive tech tools that get a unique idea up and running within days.

Where did your idea come from?

After purchasing my South Loop condo, I learned that my building, along with others around Chicago, were looking for ways to raise money. Residents were being special-assessed for unexpected repairs and the monthly assessments of new buildings were skyrocketing. I matched those needs with my online marketing background and CondoPerks was born.

What is your elevator pitch?

CondoPerks is a free service that enables condominium/townhome associations to earn money by continuing to do what they do today - shop online. Each condo that signs-up gets its own Web site, containing an extensive shopping engine. CondoPerks negotiates the rates with each retailer (current partners include Apple, Dell and Orbitz) and after that condo’s residents make a purchase, a percentage of the sale goes back to the condo building/association. This money can be used to help offset assessments and/or build reserves.

In addition to the shopping component, each CondoPerks site serves as that condo’s central portal for local news, information and events. CondoPerks aims to be a one-stop source for creating both a sense of community, but also financial stability for condos and townhomes across Chicagoland.

How is your proposition different from earlier generations of online business?

CondoPerks is a tangible solution to a problem in today’s real estate market. Earlier generations of online business didn’t necessarily aim to fix a problem. The loyalty model behind CondoPerks exists in multiple consumer channels and is easy to understand and adapt. This idea is applicable to markets across the country — clearly outlining a growth strategy that didn’t always exist before the “bust.”

Why will you succeed? What are your biggest successes so far?

I conducted a survey of 100 condominium and townhome owners. Seventy-two percent of those owners said they would shop online more often if they knew a percentage of those purchases went towards their condominium fees. The market is there.

Thirty-three percent of the respondents would not have purchased their units had they known how much their monthly assessments would increase. Real estate developers in the midst of new projects will benefit by offering new residents a free service that will help create a financially healthy building –months before those owners even move in. Sign-up is free.

The number of buildings, neighborhood associations and property managers interested in signing up with CondoPerks grows weekly.

I have solid relationships with managers of major online shopping destinations. This is important for adding those stores to the CondoPerks network quickly, in addition to negotiating top promotions and discounts for each building.

From the salon to the bank, I talk about CondoPerks with anyone that will listen and it seems that every condominium owner I meet has a story about assessments hikes or unexpected repairs. People enjoy the convenience of condo living, but don’t expect the sudden expenses that come along the way.

How will you make money?

Two Ways:

1. Minority percentage of the rebates negotiated from each retailer.

2. Traditional banner advertising from national and local companies.

What is your age and previous business experience?

I am 30 years old and worked at some of the top Chicago technology companies. I started with Giant Step (now ARC) in 1998, joined Orbitz’ first eMarketing team in 2001 where I managed multiple multi-million dollar marketing campaigns and launched the Affiliate Program. After Orbitz, I joined Q Interactive (formerly CoolSavings) and managed their search engine marketing and affiliate marketing efforts. I started my consulting company, Bsolutions, in 2005 and helped shape the affiliate programs of clients such as Wynn Las Vegas, Restaurant.com and Quicken Loans.

Have you received funding? If so, how much and from whom?

No, I am currently the sole financier of CondoPerks

Adam Siegel, 33, founder of Inkling at inklingmarkets.com, an online predictive market.

Didn’t the Internet craze die back in 2001? Why launch an Internet business?

The Internet craze didn’t die in 2001. Companies with no path to profitability, no plan, and excessive irrational behavior died in 2001. The possibilities of the Internet in relation to consumer behavior and transforming business are still as potent as ever.

Where did your idea come from?

Our idea came from doing consulting for several large companies and working in one for several years. We watched the lack of quality information flow between the hierarchies. We saw how people with relevant knowledge, whose input should be key in strategic decisions, were completely left out of the process, and we saw broken business processes for innovation and coming up with new ideas. We also read a lot about collective intelligence and the wisdom of crowds, paired our understanding of those two worlds, and out came the idea to do Inkling. We certainly weren’t the first to say prediction markets should be used by corporations, but we think we’re taking an approach that sets us apart from our predecessors and current competitors.

What is your elevator pitch?

Inkling helps you capture the collective wisdom of a diverse group of people to give you insight about what may happen in the future vs. relying solely on high paid consultants or individual experts. This is important because it can help you mitigate risk, make better strategic decisions, spawn innovation and entrepreneurship, and change your corporate culture.

How is your proposition different from earlier generations of online business?

Online business services, beyond eCommerce solutions, still usually required an expensive consulting component. There also was not traditionally a focus on ease of use. We’ve tried to address both by creating “do it yourself” tools to allow anyone to manage their own prediction marketplace. We’ve taken something as complex as trading in a stock market mechanism and made it easy enough for our Mom’s to use. Related we’ve obsessed on our user-interface and iterate on it constantly to make sure people can use it. After all, you can’t say you sell software that helps you capture the wisdom of a crowd if the crowd can’t use your software.

How will you make money?

We make money by selling service agreements to large and small businesses to set up and maintain prediction marketplaces. We also do a fair amount of customization work for our larger clients.

Why will you succeed? What are your biggest successes so far?

In less than a year we have attracted several thousand users to our public marketplace and have about 20 clients. We are working with Abbott Labs here in Chicago, ABC-KGO in San Francisco, the Government of Singapore, AlderTrack, think tanks, a video game maker, and an array array of small businesses and non-profits. We think we will continue to see success because of our well designed product and because we think this is a blue sky market that people are just beginning to think about as a way to changing the way they do business. We also think we’re going to be successful because we are largely self-funded. When the success of your business means you can or cannot pay the mortgage and your bills, it makes you a little hungrier.

What is your age and previous business experience?

The two co-founders of Inkling are Adam Siegel and Nate Kontny. We are 33 and 29 respectively. Adam worked at Accenture here in Chicago for 10 years in the Accenture Technology Labs and was a senior manager when he left. Nate worked at Accenture as well in the same group and left as a consultant to work as a senior developer at Digital River.

Have you received funding? If so, how much and from whom?

We received a small amount of funding (18k) from yCombinator when we incorporated but have taken no funding since.

Nolan Bayliss, 29, co-founder of Naymz, the online identity management company at Naymz.com.
Didn’t the Internet craze die back in 2001?

To be quite honest I was still in college during the “craze” of the 1990s.

However, in my opinion the problem with Internet businesses during the late ’90s was that they were built on speculation.This speculation caused many very smart people to overlook the lack of substance in a business plan - i.e. revenue, profits.

You had a plentitude of good ideas and business plans coupled with unusual willingness of venture capitalists to fund these businesses without much due diligence. Eventually, the marketplace responded, and made a downward adjustment.

So in my opinion the “craze” was over-speculation by investors, and in a sense, we as an industry are better off without it.

Today, investors are a little bit more cautious in evaluating whether an Internet business has the legs to provide an expected rate of return on investment. In addition, I think entrepreneurs are less concerned about “going IPO,” and more focused on building a good product and a strong healthy business.

Now some would argue that we are beginning to see the “craze” make a come back in recent months (i.e. YouTube buyout of $1.6 billion). Regardless, the industry is in a much better place today then it was in the late 1990’s due to the fact that you have very good environment for companies to develop, launch, and market good online concepts/ideas with little investment and little risk. It’s entirely up to the up to marketplace to determine the winners and losers.

Lastly, usage is probably the most important indicator into defining a “craze,” and if you compare usage today vs. in the late 1990’s you will see that the “craze” did not die.

Why launch an Internet business?

Why NOT launch an internet business? For us the Web is what we know best, and so it’s where we feel like we can be the most successful in developing something useful.

However, as general advice to others, starting an Internet company is a great way to prove your concept or idea with very little investment or risk relative to other brick and mortar businesses. Hardware and development costs have come down substantially over the past few years, and marketing your business to the 1 billion people on the Internet is possible with a little budget.

Essentially, proof of concept can be reached with a little time and investment, which in the past has not always been the case.

Where did your idea come from?

The idea is really an accumulation of several ideas that have evolved over the past 18 months. We originally started out with this concept of allowing people to create ads on Google for their friends and family members — a la birthday messages, etc. We took it from there and totally flipped it on its head, added 100 different components, and it is what it is today.

What is your elevator pitch?

Naymz is an online provider of reputation- and identity-management and promotion services for people. The Naymz Website provides a simple and user-friendly experience for those who are concerned with promoting an accurate and positive picture of their personal or professional online reputation and identity. There is a need for reputation and identity management services, which will meet the needs of individuals who are looking to monitor, manage and promote their online reputations and brands.

How is your proposition different from earlier generations of online business?

Well, I would say that the challenges are very different. For instance, there is much more exposure to competitive forces, very little sustainability in product differentiation, and difficulty in gaining and keeping the attention of customers.

That leads to different strategies in value propositions across the board. Web 1.0 was about retail and tangible goods, and Web 2.0 is about social media/content.

What does that mean for us? Naymz is a content-driven site with an optional fee-based service. Everyone and their mother can sign up and get something for free. We like free and so does everyone else. With a shift of advertising dollars moving online, we (and many others) see the opportunity to monetize our free-based service via onsite ads.

Why will you succeed?

We will continue to innovate and provide good solutions for the problems associated with online identity and reputation.

What are your biggest successes so far?

First sign up was our biggest success. Next is the 1 millionth.

What is your age and previous business experience?

Nolan Bayliss: 29 previously held online marketing and finance roles at Orbitz.com

Tom Drugan: 30 previously held online marketing roles at Orbitz.com and Proceed Interactive

Tony Czupryna: 28 previously held technology roles at Orbitz.com

Have you received funding? If so,how much and from whom?

We have received funding from friends and family. Amount undisclosed but less then $500k. And we are currently looking to raise additional money.

Aashish Dalal, 29, ParkWiz.com at parkwhiz.com, which helps motorists access parking information or reserve a space enroute to their destination.
Didn’t the Internet craze die back in 2001? Why launch an Internet business?

The craze may have died, but the Internet didn’t. In fact, it has matured. and the companies that have survived and succeeded are those that brought valid solutions to people’s problems. The Internet is all about communicating and sharing information, and ParkWhiz is all about communicating and sharing parking information. A business, Internet-based or otherwise, must manage cash flow appropriately, hire great people, and execute without fail. If you don’t, you will fail.

Looking at companies like TicketsNow, based here in Chicago, you can see they have grown tremendously through solid execution, managing a lean operation, and taking advantage of a market opportunity.

Other, more recent successful Chicago Internet-based companies, such as FeedBurner and 37 Signals, to name a few, have shaped the Internet and changed our way of life, all the while creating a successful business.

Where did your idea come from?

The idea came a few years back and was from a culmination of frustration in finding optimal parking. We’d drive around looking for a place to park our car, but parking meters were always occupied, and we had no idea how much garages were charging until after we entered them.

We didn’t want to deal with the shock of paying an obscene amount, and all this was while passing private open lots and empty driveways that people owned.

We felt (1) if parking garages could advertise their specials/rates/hours/locations etc. to the public, it would increase our likelihood of parking with them, and (2) increasing the supply of parking spaces through an online portal that enables individuals to rent or lease out private parking spaces, such as driveways and private lots while they are unused could benefit everyone.

What is your elevator pitch?

Parking your car can be a nightmare. You may be driving to a sporting event, theater or a business meeting not knowing where you will park, let alone how much you will pay.

But imagine, if before you reached your destination you knew exactly when and where to park and for how much. That’s what ParkWhiz can do for you. ParkWhiz save you time, money and frustration. ParkWhiz.com is the only place you can find all of the parking that is closest to you, whether it’s a parking garage, surface lot, or a person renting out their driveway.

You simply enter your destination and we show you the prices, specials, discounts, availability and more of the parking facilities near that location. The service is free for buyers to search and free for sellers to list their available parking. When a space is reserved via ParkWhiz we collect a small commission on the sale. You can visit us at www.parkwhiz.com for more information.

How is your proposition different from earlier generations of online business?

I don’t know if our proposition is necessarily different.Technology continues to advance at an exponential rate, and we are taking advantage of the tools out there to create a beneficial service to our buyers and sellers. The key for us is about building a great team and executing our vision without fail.

How will you make money?

ParkWhiz.com is free for buyers to browse or search general parking information, and free for sellers to list their available parking. When a space is RESERVED via ParkWhiz.com, we collect a small commission on the sale.

Why will you succeed? What are your biggest successes so far?

We will succeed because (1) parking is a pain, and there is a need to know when, where, and how much to park for whether going to the theater, a ballgame, or shopping downtown, and (2) because we are putting together a great team to help us execute our vision.

We recently placed first in the FastPitch Competition held on Feb. 26 at the Gleacher Center. We were also recently named as finalists to the Navteq LBS Challenge, which will be held next month in Orlando, Fla. The Navteq LBS competition highlights our mobile solution, so consumers who are on the move can access parking information or reserve a space enroute to their destination.

What is your age and previous business experience?

I’m 29, previous life as a consultant at IBM.

Have you received funding? If so, how much and from whom?

Privately held with no substantial funding

Paul Birman, 25, chief executive officer, Pawky.com, the short film Web site at www.pawky.com.
Didn’t the Internet craze die back in 2001? Why launch an Internet business?

Many start-ups failed during the 2001 boom because the average household’s Internet capability was limited to a dial-up connection.

Web site expectations exceeded the general dial-up connection capabilities to transmit data. It was like building a metropolis for a few thousand people with no transit system. Today, a vast majority of Americans are connected through broadband. We are now spending more time on the Net and have the ability to move around within and between sites within seconds.

Where did your idea come from?

We noticed a convergence of trends, which was leading the public into a transformation of media consumption, especially video. We saw an opportunity to provide an outlet for short film, an art form that has not been in the mainstream since the ’30s. We truly believe that quality, short-form video content is the future of entertainment, where everything is on-the-Net, on-the-go, and on-demand.

What is your elevator pitch?

Pawky provides quality award-winning short film and animation to the masses through off-line venues as well as its Website, www.pawky.com

How is your proposition different from earlier generations of online business?

Today’s Internet entrepreneurs have witnessed the mistakes of the 2001 boom. At the time, there were only “Do’s”, now we know the “Don’ts”… and you can’t run a successful business without being aware of the “Don’ts.”

Why will you succeed? What are your biggest successes so far?

Every community-oriented Web site lives for the daily user. The user that watches everything, comments on everything, invites friends, and generally participates in the project exclusively from the front end. Once we got a few of those, we knew that we had a good thing going. That and celebrity shorts in our library.

How will you make money?

We have the standard ad-supported revenue stream, membership fees for enhanced features, and DVD compilations for sale through our site. What makes Pawky’s business model unique is the ability to take the content beyond the Net into offline venues, such as wireless providers, movie theatres, on-demand service providers, even airlines.

What is your age and previous business experience?

Our entire team consists of twentysomethings. Some of us have run our own online and off-line businesses, so whatever previous experience we can tap into, we do. We understand that business experience is a limited resource for us.

Have you received funding? If so, how much and from whom?

Yes, we have received seed funding from angel investors. We are currently seeking venture capital to help us expand our operations.

Alex Chizhik , 23, chief operating officer, Planypus, an online planning organizer for busy young professionals at www.planypus.com.
Didn’t the Internet craze die back in 2001? Why launch an Internet business?

There are several things happening now that are creating a new boom in Internet business.

First, the commoditization of technology, not only in hardware, but in software, and hosting services as well. Frameworks for Web development, user interfaces, and so on, are now plentiful, free, and high quality. We also no longer have to worry about building our data centers, we have virtualized hosting that is cheap and easy to scale. That means that a lot more people can now focus on solving business problems without worrying about technological problems that were previously prohibitive. So now is an excellent time to build an Internet business.

Where did your idea come from?

As busy young professionals, we found that we were seeing our friends less and less. We could not spend time e-mailing and calling each other back and forth to organize casual get-togethers. We set up a wiki, which served as a place for everyone to contribute ideas about when and where to hang out.

However, the wiki was too cumbersome to manage, as it often became too wordy and long. We wanted a better solution and Planypus was born. With Planypus, we created a wiki-like feel to event planning. We gave power to the group and decreased our time of planning casual events from 30 minutes to 10 seconds.

What is your elevator pitch?

Planypus solves the pain of organizing groups of friends for events large and small by introducing a wiki-like mentality to the plan-making process. Rather than having one person come up with all the details, it takes just a few seconds to suggest an idea, have your friends fill in the details, and get notified via e-mail, text messages, or RSS when the plans have been made.

How is your proposition different from earlier generations of online business?

We are very different from mostly everything online today. Unlike the rest of the event-planning tools out there, we focus on discussion and interaction. We give the power to the group rather than to the individual organizer. Very rarely does one person suggest a time, a place, and an event, and all of their friends agree to all of the details of the activity.

We tried to model our Web site to actual social interaction that happens when plans are made. In every group there is plenty of discussion before a plan is carried out. We are the only Web site that makes it simple and fun for friends to decide what to do together without the hassle of back-and-forth phone calls and e-mails.

Planypus uses three main strategies for generating revenue. First, revenue is derived by offering concert tickets, restaurant reservations, movie tickets, and other complementary services through affiliate partners. Second, Planypus charges for CPA (cost per action) promotions in its event listings engine. Finally, the Planypus engine is sold as an embedded service to Websites that have static event listings but wish to enhance their offering to their users by becoming an interactive destination for making plans.

Rather than compete directly with Evite, the event-planning giant, Planypus aims to address the gaps left behind by Evite: casual event planning, where the group, rather than one person, decides what to do. In this particular area, the competition includes Renkoo.com, who launched shortly after Planypus, and Skobee.com.

Planypus is the only player that has a radically different planing methodology: It focuses on the group to self regulate and plan events, where as Renkoo and Skobee, similar to Evite, still have the more traditional hub-spoke, inviter-invitee methodology. Additionally, Planypus is the only player in the social planning space that is focusing on building a sustainable business model that does not involve advertising revenue.

Why will you succeed? What are your biggest successes so far?

Our biggest success is the fact that our users e-mail us and praise us for how much easier Planypus has made their lives. We have many user e-mails telling us how they now see their friends more and how getting together has, now, become fun and easy. We are glad to help our users see more of their friends!

What is your age and previous business experience?

We have a team of five with ages ranging from 23 to 26. I am 23 with previous finance, accounting and consulting experience. I have run (and failed) my own start-up in the past, and helped another one grow to a multi-million dollar business. The other team members have all had previous start-up experience and are world-class web developers.

Have you received funding? If so, how much and from whom?

We are currently completely funded out of pocket and are looking for angel investment.

Karan Goel, 23, founder PrepMe.com, online test preparation service.
Didn’t the Internet craze die back in 2001? Why launch an Internet business?

The craze died, and the desire to create profitable, real businesses began. Too many people wrote off the Internet and forgot that along with mobile phones, it is probably the most profound new technology since the personal computer.

My business partner and I had a vision — that every student deserves high-quality, customized test preparation. The only way to make this vision become reality was through the Internet.

Where did your idea come from?

The idea came from seeing how awful and expensive most test preparation is. My classmates in high school spent hundreds, if not thousands of dollars, on boring, low-quality, one-size-fits-all classes, and learned next to nothing. Some people get irritated by such low-quality industries. We saw opportunity.

What is your elevator pitch?

PrepMe delivers high-quality, customized test preparation services to students through the Internet. Students begin by taking a diagnostic test which creates a learning profile and personal schedule for them, and then iterate through our course as we continuously attack their areas for improvement.

How is your proposition different from earlier generations of online business?

We are cash-flow positive, and deliver a highly valuable service. Our business is not about “eyeballs.” It’s about how many young minds we can help to attain great results on standardized tests to enable them to attain academic and professional success in life.

Why will you succeed? What are your biggest successes so far?

We will succeed because we listened to the customer, and created a product that makes a significantly positive impact on a student’s learning. Our biggest success so far is being the SAT preparation provider of choice for the State of Maine — the first state to require the SAT for all of its students. I think it speaks volumes that we are the ones helping take Maine’s students to the next level.

How will you make money?

We already do make money through two types of customers: (1) Families — parents buy our retail product for their teenagers to help them get into college, and (2) Schools/institutions/athletic groups/states — buy our product to help hundreds/thousands of their students to get into college

What are your ages and previous business experience?

Karan Goel (23), University of Chicago undergrad and MBA, interned at The Pritzker Organization and The Boston Consulting Group; Avichal Garg (24), Stanford undergrad and masters, product manager at Google; Joe Jewell (25), Caltech undergrad, Michigan grad, Rhodes Scholar. Bios at: http://www.prepme.com/about/who-is-prepme.php

Avichal and I have done another start-up called myTrak in the college admissions space while we were both in college in 2003. We didn’t raise enough funding for so we moved our focus to PrepMe.

Have you received funding? If so, how much and from whom?

We used a combination of scholarship money, a loan from my dad, and business plan competition prize money to launch the business. It’s not a lot, but we’ve built a very efficient business and have a small team of rockstar engineers and tutors who make sure we continue to serve our students and their families while delivering great results.

Genevieve Thiers, 29, founder of Sittercity at sittercity.com.
Didn’t the Internet craze die back in 2001? Why launch an Internet business?

It’s funny, I came out of college in 2000, and while in school was blissfully unaware of current events. I “missed” the whole dot-com crash, which I think worked strongly in my favor.

However, when launching my company, I was not able to get any funding at all.Investors frequently said “my wife handles that,” or “it’s a babysitting club,” or “it’s the middle of the crash! What are you thinking?”

This forced me to grow Sittercity organically, which was the best thing that ever happened to us. I took a full-time position and $40,000 a year salary at IBM in Boston, and launched Sittercity with whatever earnings I was not living on.

Two college friends of mine created the site after I sketched it onto pieces of paper. I flyered the city of Boston with 20,000 flyers to gather the first 600 sitters. My dad had to lend me the $80 we used to buy our domain name.Now, we are nationwide, a multi-million dollar company with over half a million users nationwide.

Where did your idea come from?

I am the oldest of seven kids, so I have been sitting since the day I turned eight. In college, I sat for about 30 families to work my way through school. There was always an overwhelming need and demand for me and my friends to sit.

One day, right before I graduated in 2000, I was sitting in my dorm and I saw a pregnant mom walking up the 239 steps from BC’s lower to upper campus. She was posting flyers to find a sitter. I was horrified.

I took the flyers, sent her home, and posted them for her. While I was posting one next to an elevator, I had this idea: what if there was one place in a city where parents could go to find all the babysitters in that city? And Sittercity.com was born.

What is your elevator pitch?

Sittercity is the “match.com” of childcare, with over 150,000 babysitters and nannies nationwide. We are about to expand to be the leader in in-home care, with petsitters, housesitters, elder care providers and tutors.

How is your proposition different from earlier generations of online business?

There never was an online childcare source when Sittercity was launched. We were the first site to create the model and “launch” online care. So we’re pretty unique. What existed before Sittercity were day cares and agencies, which were extremely expensive, and also bricks and mortar. We came in and shook up the entire childcare world, by recruiting hundreds of thousands of sitters and nannies nationwide, and taking the same agency four-step screening process that a center will do for you, and automating it in a do-it-yourself online process.

How will you make money?

We primarily make money based on our parent subscriptions. Parents can pay either $40 initiation and $10 a month, our monthly plan, which they can cancel anytime, or they can pay $95 to join for a year. This gives them access to our lists of thousands of caregivers in a city, and our four-step screening process, which includes everything from background checks to online feedback from families that have used the sitter.

We also have a few other revenue sources, among them our new corporate program. Companies like Monster Worldwide, Children’s Healthcare of Atlanta and FOX Networks are a few examples of companies that have bought Sittercity for the entire corporation.

Why will you succeed? What are your biggest successes so far?

We’re already so successful! Crossing the million mark early last year was just amazing. We also now have frequent appearances on the Today Show, we’ve been featured by every major media outlet in the USA so far, and we were the 2006 SBA Champions. (We ended up getting an award from President Bush, in the White House; nine winners in the nation were chosen.) Not bad for a babysitting club!

What is your age and previous business experience?

I am 29. This is my first company. I do, however, get a huge amount of support and help from my other half, Dan Ratner, Sittercity’s VP and my finance. He and I also run a small opera company in Chicago, called Operamoda, found at www.operamoda.com . And Sittercity has an amazing team of directors that we’ve worked carefully to hire — Brad Trost, Christopher Atkinson, Melissa Underwood and Jason Haefner.

Have you received funding? If so, how much and from whom?

We received one round of angel investment from RMS investment corporation in Cleveland. It was an angel round — $500,000. This is the only funding we have ever taken. Other than this, we have grown organically.

Matt Moog, 37, founder of Viewpoints Network, a Web site at viewpoints.com designed to help people make major life purchases. Viewpoints Network launched today (April 30).
Didn’t the Internet craze die back in 2001? Why launch an Internet business?

Despite the public financial failures in 2000 and 2001, usage of the Internet continued to grow. There are now 1 billion worldwide users of the Internet, and 175 million every month in the US.

This growth has been spurred on by the growth of broadband, which is now in nearly 50 percent of American homes. This in turn is driving video and richer experiences.

The hype surrounding the Internet in the late ’90s, was not wrong, just optimistically fast.

It is a fantastic time to launch an Internet business for several reasons. First, it is one-fifth to one-tenth as cheap and much faster than it was 10 years ago because of the advances in hardware and the popularity of open-source software.

Second, business models are more established and proven. Internet advertising was a $16 billion business last year. When we started CoolSavings in 1996, it was less than 1 percent of that.

Third, powerful technology and low-cost, high-speed connectivity are changing media, which is in turn reshaping the way people interact with each other and society at large. There is a fundamental democratization of information creation and dissemination that will literally change our society.

It is very exciting to me that we have a chance to be a part of that change.

Where did you idea come from?

This is a question that my father [Robert Moog, the inventor of the Moog Synthesizer] used to get asked all the time.

I think it is a mistake to believe that ideas fall out of the sky and are fleeting. The entrepreneurs that I know have their periscope up at all times looking for trends and related opportunities. My 15 years of experience at Microsoft and CoolSavings/Q Interactive helped me to understand some of these trends, appreciate their importance, and have the confidence to act on my convictions.

What is your elevator pitch?

Viewpoints.com is a user-driven ratings-and-reviews Web site, where people write reviews of products and services that they have direct experience with. Our sole focus is improving the quality and relevancy of reviews. We will do this by creating a large and active community of reviewers. We will give them the freedom to review across a very broad range of categories, and in doing so highlight their personalities, passions and personal profile. We will help make user reviews more personally meaningful, credible and helpful in making informed decisions.

How is your proposition different from earlier generations of online businesses?

This generation of Web business is characterized by user participation. This manifests itself in not just a two-way exchange of information between the publishers and contributor, but millions of separate interactions among the community of users.

The term we favor for this seismic shift is “social media.” Some people call it conversational media. The growing use of broadband, video and mobile helps to make these types of interactions richer and more meaningful.

Also, it is not just businesses that have changed. One look at Barack Obama’s use of online video, and social networking shows how widespread and influential the medium has become.

Why will you succeed? What are your biggest success so far?

We have an incredible team of people who have deep experience with the Internet over the last decade and a passion for building this business. With this incredible team we will launch Viewpoints.com after just seven months of development.

How will you make money?

Advertising is our main revenue source. Advertisers will have no influence over the tone or content of the reviews.

What is your age and previous business experience?

I am 37. 1996 to 2006 at CoolSavings/Q Interactive (leaving as CEO). 1992 to 1996 at Microsoft in Business Development.

Have you received funding? If so, how much and from whom?

Our Series A round of funding was $4.8 million from 10 individuals. Most of our investors are successful entrepreneurs, venture capitalists and CEOs. Several of them have invested in prior ventures that I have been involved with. The investors that we have disclosed are the members of our board (which can be found here: http://www.viewpoints.com/aboutUs/directors.html) and Matt McCall from Portage Venture Partners.

Where to meet?
Chicago entrepreneurs running startups can catch up with each other at the monthly Chicago Beta meetings and meet with designers, software developers, vendors and the like. Execs from new startups make 60-second presentations. To find out about the meetings, go to www.chicagobeta.com.

Visit the clubhouse
Startup execs who are stuck downtown between meetings might want to check out TechNexus. The Illinois IT Association’s “clubhouse” provides members with wireless Internet access, comfortable chairs, cubicles and conference rooms. To find out more about TechNexus and the Illinois IT Association, go to www.illinoistech.org.

Filed under: Success stories - online biz