America's Most Promising Startups

BusinessWeek

Welcome to America's Most Promising Startups, an ongoing series profiling new companies from across the country that embody the creativity and resiliency common among today's entrepreneurs. Based on suggestions from our readers and staffers, we'll be adding more profiles on a regular basis, so check back often. Our goal is to showcase promising companies before they become household names.

Pancakes from a Spray Can

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Batter Blaster

Founders:

Sean O'Connor and Nate Steck

Sean O'Connor opened his first restaurant in San Francisco shortly before the dot-com bust. As business tanked, O'Connor, who had grown up in a restaurant family and studied hospitality management, retooled his concept, turning the full-service establishment into a bar and laying off most of his staff. For fun, he spent a lot of time in the kitchen, playing around with various gizmos.

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A failed experiment making beignets with a whipped-cream charger sparked an idea: Why not put pancake batter in spray cans and market them to consumers? In 2005, he teamed up with Nate Steck, a food manufacturing wizard, and raised $1.5 million to create the line and buy manufacturing equipment. Last year, San Francisco's Batter Blaster and its 16 employees squeezed out $9 million in sales, retailing the cans for $5 a pop in over 10,000 stores across the country, including Costco and Whole Foods. O'Connor, 37, and Steck, 40, plan to reinvest the 30% of their gross revenue into marketing and hope to double sales in 2009.

Domes for Homes

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InterShelter

Founder: Don Kubley

Don Kubley says he is "as mechanical as a stump." But that hasn't stopped the fourth-generation Alaskan from developing a business around a nifty piece of engineering: a portable building that looks like an igloo (with a door and windows) and can be assembled by hand. Kubley says pieces of his InterShelter dome fit together like fish scales and can be stacked in the back of a pickup truck, a noteworthy quality for customers looking to

transport units to hard-to-reach locations. The standard 314-sq.-ft. structure retails for $12,500 and is available from dealers in a dozen countries as well as online, at intershelter.com. Kubley, 56, credits architect Craig Chamberlain, a former student of geodesic dome inventor R. Buckminster Fuller, with dreaming up the design and says he bought the rights to commercialize it two years ago. After a protracted search, Kubley recently found a manufacturer in Idaho to build kits. So far, Kubley, a former consultant who says he ran a fleet of charter boats out of Juneau for 20 years, has raised $250,000 from friends and family. Though 2008, revenue was only around $140,000. Kubley says he is negotiating with the U.S. military and Afghan authorities and projects up to $5 million in sales in 2009.

An Online Guide to Parking Spots

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ParkingCarma

Founder: Rick Warner

What's an online service with real-time info on parking spots in California doing in Flint, Mich.? Showing the lengths a downbeaten region will go for startups—and the distance entrepreneurs may have to travel for their new businesses.

Rick Warner, 48, founder and chief executive of ParkingCarma, started sketching out a Web-based parking database in 2002 after driving around San Francisco for 45 minutes one day looking for a place to park. By early 2007, he had everything ready. The last step was moving 2,400 miles to claim up to $2 million in public and private backing in Flint. He says he had little choice: "Frankly, parking isn't sexy to really get venture capital interested in it." Visitors to parkingcarma.com can find location and rate information about public garages in 70 markets.

In addition, for $9.99 a year, registered users in San Francisco and San Diego can reserve spaces via a computer, PDA, or mobile phone. Warner hopes to add that service in Los Angeles, Chicago, and Detroit in 2009. The 11-employee company also gets revenue from ads and a percentage of what customers pay for parking.

Driving Car Sales Online

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Mota Motors

Founder: Reza Bundy

On auction sites like eBay there are generally two parties: the buyer and the seller. Reza Bundy wants to make it a threesome. Last year, he raised $7.5 million from angel investors and venture capitalists and started a Web-based company, Mota Motors, that seeks to instill trust between online buyers and sellers and take advantage of the growing online used-car market.

The Venice (Calif.) startup runs basic background checks on both the seller and the car itself (via Carfax). Mota also asks sellers 20 questions about their vehicles, including such basics as to whether the car has a spare tire or key, which can affect value. Beyond collecting listing fees from firms like eBay Motors and payments from sellers, Mota also draws revenue from insurance companies who pay for customer leads that it provides from its list of buyers. CEO Bundy won't give out revenue information, but says his 20-employee firm should turn profitable by yearend.

With Mota, Bundy, 37, is falling back on a business plan that has already worked well for him: In 1999, he founded IronPlanet, which grew into the largest online auctioneer of used construction equipment thanks in part to independent inspections that gave prospective buyers piece of mind.

Green Grows This Home-Supply Store

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Greenmaker Supply

Founders: Ori Sivan and Joe Silver

Late in 2004, Ori Sivan popped into a building-supply store owned by the family of a childhood friend and hit upon a retail startup of his own: a "sustainable" building-supply store. It took Sivan, a graduate of Northwestern University’s environmental-engineering school, six months to persuade his friend, Joe Silver, to leave his family's business and become Sivan’s partner instead.

The 31-year-olds opened Greenmaker Supply a year later, drawing on $500,000 of personal funds. The store, on Chicago’s Northwest Side, sells such items as recycled countertops, bamboo flooring, and nontoxic latex paint (pictured left). Verifying that the goods have only limited impact on the environment is tough and requires a lot of homework, the partners acknowledge. Still, sales have doubled, to $2 million in 2007, and could hit $5 million next year, Sivan says.

Homeowner Adam Secher, who is turning his Highland Park home "green," is glad to have a one-stop shop. Says Secher: “No one has the extensive supplies or expertise of Greenmaker."

Financing for Weddings

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Wedding Payment Plan

Founder: Scott Almeida

A wedding is one of the most important days of your life. It can also be one of the most expensive, running $28,000 on average, according to some estimates. For those who don't have that much, there's a new company out of Norwell, Mass., that could help: Wedding Payment Plan will finance your wedding.

Scott Almeida, 35, says he got the idea from watching a family friend succeed at financing orthodontia and Lasik eye and cosmetic surgery. “My first thought wasn't weddings; it was funerals,” he laughs. “But weddings are a lot more fun.” He wrote up a business plan as a nighttime MBA student at Babson College and began raising money from family and friends. He also tapped $100,000 from an account that he and nine former classmates had set up to back whoever came up with the best startup idea.

In 2007, he left his day job as a venture capitalist to work full-time on Wedding Payment Plan. The average loan runs about $10,000 with a fixed 9.9% interest rate paid back over five years. The company hasn't yet financed 500 weddings, but in the last year applications have jumped 333%. Almeida is raising $500,000 to go national and says the lending venture could turn profitable as early as mid-2009.

Where Consumers Post Videos of Product Reviews

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ExpoTV

Founders: William Hildebolt and Daphne Kwon

In 2004, William Hildebolt and his wife, Daphne Kwon, quit their high-powered, well-paying jobs as a principal at General Atlantic Partners and chief financial officer of Oxygen Media, respectively, to become "netrepreneurs." "It was like falling off a cliff backward," Hildebolt recalls. Their idea was to launch a Web site where consumers could submit videos of product reviews. The first review, of a portable DVD player, was uploaded on Sept. 9, 2005, on expotv.com.

By the end of that year, the site was up to 2,500 reviews. By yearend 2007, expotv.com boasted 150,000. Today there are more than 300,000 "Videopinions," including videos by Hildebolt, 39, and Kwon, 40, who can be seen critiquing a toaster oven, a Quadrilla Twist & Rail Set, and a hike through Puerto Rico’s El Yunque rain forest.

Categories range from pets to clothing to books. Revenue is piling up, too, thanks to product-linked ads from Procter & Gamble and LG Electronics as well as "where to shop" ads from Google. So far, angel investors and venture capitalists have put more than $6 million into ExpoTV. The couple predict their New York venture, which now employs 17, will turn profitable in 2009.

A New Sport and a Startup

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Freeline Skates

Founder: Ryan Farrelly

What do you get if you cross a skateboard with Rollerblades? If you're Ryan Farrelly, it's a new sport and a startup that could pull in $5.5 million in revenue this year. Farrelly, 29, invented Freeline Skates in 2002 while bumming around from one odd job to the next, surfing in the morning and skating at night.

The skates are like a polished metal skateboard that has been cut in two, with the wheels mounted sideways. Riders balance one foot on each half. He then spent three years living on friends' couches as he and surfing buddy Jason Galoob tinkered with the design and raised money for a first batch of 500 skates. Based in Carlsbad, Calif., Freeline Sports sold 5,000 pairs in 2006, and 20,000 in 2007, thanks largely to buyers in South Korea and Japan. He predicts sales of 40,000 this year, at $134 a set, through freelineskates.com or 40 sports shops mostly in California. Farrelly says he has turned down Wal-Mart Stores as a retail outlet. Why? Bad for Freeline's street cred.

Bake-It-Yourself Pizza

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HomeMade Pizza

Founder: Eric Fosse

Eric Fosse knows that if you want pizza, your options are almost unlimited. So when he told friends that he had left his job as a loose-diamond salesman to open yet another pizza joint in Chicago and that his pies would be truly different, he was ready for snickers. Today, with 23 HomeMade Pizza locations in metro Chicago and Minneapolis/St. Paul, and plans to move into Washington, D.C., later this fall, it looks as if Fosse's career leap wasn't as reckless as it seemed.

HomeMade Pizza's pies are made to order and can be picked up or delivered—same old, same old. But unlike pizzas from Domino's or the prepared-food section of Safeway, its take-and-bake pies are uncooked and unboxed: Customers slide the fresh pizzas, which come on heatable parchment paper, into a 425-degree oven, and in 10 to 15 minutes they have dinner. They're also premium-priced: Pizza Hut may offer three medium pizzas for $15. At HomeMade, a 14-inch pie with wild mushroom toppings and a whole wheat crust costs $19.90.

Fosse, 47, and his two initial partners—Audrey, his wife; and Matthew Weinstein, his brother-in-law— spent $500,000 of their own money and two years cooking up 270 batches of dough before opening their first site. The business turned profitable in Year Two. Fosse expects sales to hit $9 million in 2008, up 50% from last year. Its first pizza—Wisconsin mozzarella—remains the most popular.

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