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Making shabu “chic”

Kien Ha describes himself as a risk-averse entrepreneur. And given that restaurants are notoriously risky start-ups, Ha went with a concept he knows well – shabu-shabu. Shabu-shabu, or Japanese hot pot dining, is a trendsetting phenomenon that has long driven technology transplants  from California to expect its healthy, simple, and affordable food on almost every street corner. Ha’s discovery that Washington is the fourth fastest growing state for Japanese-style restaurants convinced him to launch Shabu Chic at the UW’s 2008 Business Plan Competition.

Open Friday through Sunday in Seattle’s International District, Shabu Chic boasts fans who are true devotees talking and sharing photos of the restaurant and the unique food presentation. Yelp gives Shabu Chic a 4.5, and the restaurant got 200+ Facebook “likes” when it posted the possibility of adding a Kimchi sauce in the fall. “Word of mouth has been great,” Ha says. But once a customer is in the door, he relies on wait staff training and social media to share little morsels of Japanese food history along the way.

Still working part-time as an advisory manager for a Seattle accounting firm, Ha is content taking things a bit more slowly than his tech entrepreneur peers. “Most restaurants fail in the first year because they’re under-capitalized. Having no outside funding from the outset has kept us on task and deliberate in all that we do,” he said. His hope is to break even in year two, make a profit in year three, and go full-time with a second location.

Ha sees tech start-ups and restaurant start-ups in the same light. “Whether it’s a tech or food,” he says, “you have to own everything from end to end.”  By serving Seattle’s unmet shabu-shabu need, Ha is developing a market for something people in Seattle never knew they’d love. An entrepreneur’s dream.

Less pivot, more mountaintop

Erik Viafore, the CEO of Mountains Plus Outdoor Gear is Mr. Focus. His small Seattle-based start-up has seen 237 percent three-year sales growth by focusing on core competencies: delivering excellent gear, emphasizing customer service, and tending to vendor/supplier relationships. Since founding the company in 2003, Viafore has clearly kept his eye on the mountaintop. So much so that the 2012 INC Magazine 500/5000 rankings listed Mountains Plus at  #64 in retail, #24 in Seattle, and #1,301 overall.

Though there have been temptations along the way to “pivot so much we’d end up going in a circle,” as Viafore puts it, he chose to step back from an extremely successful product line in the economic downturn of 2008 to stay true to the “outdoor gear” of Mountains Plus’s core mission. Car rooftop rack boxes had been selling like crazy, but Viafore recognized that shipping them all over the country was not a smart business decision.

Viafore’s experience in the 1998 Business Plan Competition with “Personal Jukebox” won his team second place. The process, he said, did two things: it “helped round out the rougher edges that younger entrepreneurs have,” and it drilled into his brain that an entrepreneur should “never undercapitalize his business.” What Viafore has loved about the growth of Mountains Plus, which has doubled its number of employees this past year, is the experience of “growing up” alongside a few now-great outdoor gear brands that were also very small and just starting out. “It’s fun to look back and see how much we’ve all contributed to one another’s success along the way,” he says.

Being named to the INC Magazine list (for the second year) certainly is a marketing boon, making Mountains Plus Outdoor Gear more credible in the eyes of its customers, vendors, and competitors. But, as Viafore wryly notes, “It also means my phone rings more often, with very cold calls.” Good thing he has his choice of gear and so many happy customers to keep him warm.

Accelerating first-time start-ups

The start-up process is messy and unpredictable. And student start-ups are certainly no exception. When teams that wow judges and win competitions move to the real world, the sheer enormity of the transition can be overwhelming. Licensing intellectual property, producing a manufacture-ready prototype, lining up customers, raising money—all critical and all daunting. The Foster Accelerator helps early-stage, student-led companies through those decisive first six months.

At  CIE, we believe it’s possible to create a TechStars-like program within a public university environment. True, we can’t pay a modest living wage to the founders. But we do look at the broad range of start-ups—and we don’t take equity.  In the Foster Accelerator, we provide six months of mentoring, a framework for achieving “reasonable but measureable” milestones, much-needed connections, and an incentive—as much as $25,000 in follow-on funding.  May not sound like much, but $25,000 can represent another three months of runway for a young company.

This year there are 10 start-ups in the Foster Accelerator.  There’s everything from consumer products (JoeyBra, Strideline,  MyPartsYard) to cleantech (SuperCritical Technologies, LumiSands, Green Innovation Safety Technologies) to service companies (PatientStream, Urban Harvest) and socially responsible companies (Haiti Babi and Microryza).

Does this work? It does!  In the last two years, we’ve worked with 10 companies—6 of which are still making progress.  Cadence Biomedical, which makes a medical device that helps people with mobility impairments walk, has raised $1.2M and is now selling a commercial product. Wander, formerly YonogPal , morphed from helping Korean students learn English via the web to a cultural exchange mobile app. And they were one of the top three 2011 “stand-outs” in Dave McClure’s 500 Startups. Stockbox Grocers just opened their first store-front location in the South Park neighborhood of Seattle, selling fresh food in a “food desert.”

The Foster Accelerator started with a three-year grant of $240,000 from the Herbert B. Jones Foundation to create the Jones Milestone Achievement Awards. Since then, other donors have come on board to provide additional financial support. You can follow this year’s Foster Accelerator teams on the Foster Unplugged Blog. They’ll be writing about their experiences over the next six month.

Challenges drive environmental innovation

Why are “challenges” so crucial in driving innovation?  We asked Connie Bourassa-Shaw, the director of UW’s Center for Innovation and Entrepreneurship about this, specifically in relation to the Center’s annual Environmental Innovation Challenge.  Here’s what she had to say:

We launched the Environmental Innovation Challenge in 2009 because we believe that “challenges” drive innovation, and we were looking to engage smart, passionate students in the quest to produce real, market-conscious solutions to environmental problems.  My story at the time was the Solar Car Challenge, which has been going on for the last decade or so. Most people know it. But the point is that we’re still not driving solar cars. That’s what I didn’t want to see. I wanted to see market results with the EIC.

So we narrowed it down to this: Tell me what the environmental problem is, tell me about your solution, show me that it works, tell me about the market opportunity, and demonstrate the potential for impact. Now, what we’re asking students to do is hard. Designing and building a prototype is hard. Getting it to work is even harder.  And we’re not interested in the $5,000 solution to the $500 problem. It’s got to be appropriate technology, especially when you’re looking at technologies targeted for third-world countries.

The Challenge is run by CIE (which is in the Foster School of Business), in partnership with the College of Engineering and the College of the Environment. We want cross-disciplinary teams–from undergrads to PhD students. We start the process with a fall quarter class–the Environmental Innovation Practicum. Those students walk through the process of thinking about and planning for the Challenge, which happens late March or early April. We get $25,000 from the College of Engineering to provide small grants ($500 to $5,000, but generally under $2,000) to teams that need prototype funding. We give all the money away.

This year (2012) GIST won the $10,000 grand prize. Barrels of Hope and Urban Harvest won prizes as well–and both went on to our annual Business Plan Competition, which follows the Challenge. In fact, about half of the EIC teams go on to do the BPC.

What happens is really interesting–students get caught up in the excitement of thinking about making this a real company. Many are very serious.

The EIC is full of great stories, and the “challenge” process itself is the key.

Reaching the milestones of start-up success

When it comes to student start-ups, more seed capital is better than less, motivation is an imperative, but a team of trusted and experienced advisors might be the greatest asset of all. So in an effort to provide more attention and resources for the most promising start-up teams after the UW Business Plan Competition, the Center for Innovation and Entrepreneurship worked with the Herbert B. Jones Foundation to launch the Milestone Achievement Awards.  “We wanted to accelerate some of these start-ups,” says Michael Bauer, president of the Jones Foundation, a long-time supporter of the competition. “So we came up with this idea of a real financial incentive for the teams to set and reach key developmental milestones.”

Serious about starting their companies, five of the winning teams from the 2010 competition have spent the last six months participating in the Jones program. The start-ups worked with CIE staff and a special advisory committee made up of CIE board members and past winners of the Business Plan Competition to draw up a short list of “realistic but measureable” milestones they could reach within that timeframe.  “We’re proud to say four of the five start-ups reached their milestones and will receive awards,” said Connie Bourassa-Shaw, director of CIE. “But what’s really stunning about each of these teams is that they all raised angel or grant funding and have made great progress on their prototypes or pilot projects.”

Led by CEO Brian Glaister, EETech is developing a medical device that enables people in wheelchairs to walk again and received a $25,000 award. Another $25,000 went to YongoPal, a service created by Darien Brown, for South Korean university students who want to hone their conversational English with American peers at top US universities. WISErg, with team members Brandon Baker and Jaimee Jewell, developed a solution that uses compostable organic waste to create natural fertilizers and biogas, and received $15,000. Emergent Detection, led by Eric Fogel and Keegan Hall, also received $10,000 in additional seed funding for their handheld device that measures and records fat loss.

“The committee helped us identify what the most important milestones would be for our first six months, in order of priority and contingency,” said WISErg’s Jaimee Jewell. “That helped us keep each of our revenue streams fresh in our minds, but also prioritize what needed to happen to bring them all together.”

“For me, the mentorship was the best part of the program,” said Brian Glaister of EETech. “As a first-time entrepreneur and a first-time CEO, it was really helpful to have an outside view of the company, particularly to put the advice of our internal team and directors into the proper perspective. Even though the program is finished, I expect the relationships with our mentors will continue, which I’m very happy about.”

Members of the Jones committee included Marc Barros of Contour, Bill Bromfield of Fenwick & West, Alan Dishlip of Billing Revolution, Geoff Entress of Voyager Capital, Alan Portugal of Ivus Energy Innovations, Adrian Smith of Ignition, and Michael Bauer, of the Jones Foundation. And the committee had their share of accolades for the teams, noting that it was gratifying to help fellow entrepreneurs start off on the right foot and avoid some of the common pitfalls and “newbie” mistakes. “I got a real kick out of seeing the teams make progress on their first set of milestones,” said Geoff Entress. “I’m already looking forward to next year.”

Photo left to right: Brandon Baker and Jaimee Jewell of WISErg.

Software and hutongs and buses, oh my

IMG_0178Today was a really packed, informative day.  We started out with a presentation by Francis Zhang and Johnson Chen of F5 Networks, a company that has found significant success in the Chinese market by entering relatively early (2001) and being patient and consistent.  We then hopped on our bus with our guide Elaine and visited the new U.S. Embassy in Beijing, a large and impressive compound designed by a world-reknowned architect and filled with incredible works of art.  We spoke with press officers, commercial officers, and economic officers; the sheer complexity of the environment in which they are operating was eye-opening.  As we toured around the lobby area to see the art collection, we passed by Jon Huntsman, the new U.S. ambassador to China, who just came to Beijing in August.

After an enormous lunch at a Belgian restaurant called Morel’s, we visited Microsoft’s new offices just northeast of the city center.   Mr. Fengming Liu, a UW Law alum, gave us an illuminating presentation on their intellectual property challenges since entering China in 1992.  For example, Windows 7 is set to launch in late October of this year, and they have already found versions of the software online, as well as the security key (removed now, so no need to go looking for it, you pirate).  The sheer size of the Chinese market is difficult to imagine, but we’re definitely getting a better idea after hearing from these companies and organizations.  (An additional special guest at the meeting was Felix Liu, just about to start his senior year at the Foster School of Business; it seems like everywhere we go, more Huskies appear).

After the MS visit, Elaine took us to the lovely Houhai Lake area, which is surrounded with “hutongs,” narrow traditional alleyways with low multi-family houses surrounding small courtyards.  We took a rickshaw tour of the area, and had the opportunity to visit a hutong compound that is currently occupied by 26 members of the same family, five brothers and their wives and children (one per family).

After all this activity, we were hungry and ready to explore the Wangfujing area and try some Beijing street food.  We struck out on foot only to find that, due to the rehearsal for the 60th Anniversary celebrations, all the streets were closed off and filled with military equipment and buses full of children in matching dance costumes.  Huge military vehicles rumbled by with what appeared to be large missiles draped in canvas, and a nearly endless line of buses headed towards  Tian’anmen Square.  Every store and restaurant on the street was closed and will remain so all night.  After a bit of exploring, we found a restaurant (all on our own, without Elaine or Ming, who speaks Mandarin), and enjoyed a wonderful meal for about $5 each.

The working portion of the trip has come to an end.  We’ve learned a lot, and we’ll surely be processing it for some time to come.  Tomorrow, we will visit the Great Wall, and since I scheduled nearly no time at all for shopping, hit some markets in the afternoon.  It’s supposed to be rainy, but hey, we’re from Seattle.  After a farewell dinner together, we’ll be off on our various flights home on Sunday, after what I believe to be a successful pilot faculty study trip.

Posted by Krista Peterson, Associate Director, Global Business Center

New China turns 60

DSCN1268Yesterday, we walked across a Tian’anmen Square that was bustling with preparations for New China’s 60th anniversary celebration, just over a week away.  On October 1, the Square will fill with military, government, and citizenry to recognize this auspicious occasion, complete with an address by President Hu.  Huge video screens are being erected, bleachers established for VIP viewing of the celebrations, and huge red painted columns installed on both the east and west sides.  As Beijing pulled out all the stops for the 2008 Summer Olympics, the mood in the Square suggests a similar energy is being given to celebrate China’s progress since 1949.  Now that we’ve seen what’s being done to prepare, we’ll have to tune in on TV or online on September 30 to see the result of all this effort.

Posted by Krista Peterson, Associate Director, Global Business Center

I don’t know what it is, but it’s really good

And this is just the appetizer course!
And this is just the appetizer course!

Speaking for myself, as an amateur foodie of sorts, I came to China with a pretty good idea that my idea of “Chinese food” was quite limited.  Fortunate as we are in Seattle to have a wealth of options in regard to international fare, I can now quite confidently say that we are missing out.  It’s cliché, but true:  to better grasp the breadth and variety of Chinese cuisine, you’re going to have to visit China yourself.

Given the short duration of our visit, we have not been able to follow Anthony Bourdain’s footsteps down any back alleys or deep into a market to try what is surely delectable street food.  However, we have had the good fortune of excellent guides Jennifer (Shanghai) and Elaine (Beijing), who have directed us to an assortment of very satisfying restaurants, as well as an outstanding banquet I mentioned before that was hosted by our partners at Shanghai Jiao Tong University.

It was not a requirement to join the study trip, but everyone in the group is a pretty adventurous eater.  Sitting at a large round table over lunch or dinner, chopsticks in hand, curious questions pepper the conversation:  Is it a kind of potato? What is in that sauce? Is that fish?  Things are familiar in texture or taste, but we can’t quite identify them.  Ming and our guide taste, discuss, and don’t have an English equivalent for this vegetable or that seasoning.  Though there is always too much food, everyone tries just about everything on the table, passing one another the dishes identified as favorites:  “try this, it might be jicama or a yam”, “no, that’s not beef, I think it’s eggplant,” “these shrimp are so tender, who’s going to eat the last one?” 

We have an opportunity to strike out on our own for dinner tonight.  I’m not sure what we’ll find, but I’m sure it will be delicious!

Side note:  the faculty members on this trip are more than willing to submit blog entries, but we didn’t allow for a lot of free time in our daily schedules, and most of us are nearly asleep in our soup at the end of our long days.  I hope they will be able to contribute their thoughts once we get back to Seattle. 

Posted by Krista Peterson, Associate Director, Global Business Center