As I sit down to do my research into the contestants in the 2015 Startup of the Year competition, my goal is not to just rehash the article linked to each company on Celebrate.tech.co. Instead, I will dive into other available data surrounding the company. I will examine comparable products or ideas, the team, the source(s) of funding and its current stage, mentors and advisors, and incubators or accelerators that helped develop the product.
I understand that every new startup idea must solve a problem in order to find traction. In addition to soothing someone's pain point, the team and its investors must be viable and function as a unit in order for anyone to make money.
HERE is the Tech.co article which gives a basic rundown of the product and its functions. The idea behind PBX is to provide a mobile tracking platform by which airline passengers can locate their luggage quicker should it be lost.
From reading the article, it looks like RFID tagging for luggage. The primary customers of PBX would be airlines and airports that could see a reduction in lost luggage and cost savings by making tracking simpler and more efficient. That's two of the three things Jono Young talked about as essential app design success factors. Read about that HERE.
Like I said, this looks like RFID tagging for luggage. When I first read about this product, I also thought of Tiles. PBX is on a much grander scale that Tiles. The utility of an app like Tiles capitalizes on the lack of mindfulness of the average person. Losing your cell phone, wallet, or keys is annoying but solvable by paying attention a little better.
PBX is focused on helping people whose job is to deal with several thousand pieces of someone else's stuff on a daily basis. When you give your bag to a ticket counter agent, it's out of your control. PBX attempts to create peace of mind by getting your lost stuff back to you sooner.
We'd all like to think that baggage handlers care about each and every piece of luggage they touch. Not really. They want to get their job done as quickly and efficiently as possible. That's why airlines tell you to carefully and safely package your breakables in your luggage.
Brandon and Michael Eason are the founders of PBX. Brandon's LinkedIn profile is HERE. Michael's LinkedIn profile is HERE. Both men graduated from University of Central Arkansas with degrees in Economics. Each also worked in the airlines industry before starting PBX. Brandon spent the majority of his pre-startup career as an Operations Manager for FedEx.
In the tech.co piece written by Kristin Pryor, Brandon says his weakness is networking. This is where Michael covers his brother and lights up the room when he shows up.
Further examination of the Pryor article shows that Brandon values the concept of team building and finding people to cover for each other's weaknesses.
I like that each has experience with the airline industry. Each has an inside perspective on daily operations of moving people and their stuff from one point to another in a timely manner. The fact that Brandon worked for FedEx means his sense of urgency is about as strong as it gets. Anyone who has ever worked through a holiday season at UPS or Fed Ex will never survive without a sense of urgency and ability to get stuff done in the most efficient manner possible.
My one concern is that these men are brothers. It's not like Document Order at The Mill Pitch Event where a divorced couple were starting a business. Mixing business and family can be toxic if not handled properly. Check out what I wrote about Document Order HERE. Scroll to the bottom and read the comments between David Schnell-Davis and myself. It was very enlightening.
According to Angel.co, PBX only has one outside investor. On March 18, 2015, the Arkansas Development Finance Authority invested in PBX. Further research into the ADFA shows several programs available through the State of Arkansas.
These programs provide a range of options for available capital for Arkansas-based businesses. While Angel.co doesn't exactly say which program provided the funding, the Arkansas Risk Capital Matching Fund seems the likely source of funding.
The program description page says it matches funds up to $100,000 for validation and up to $750,000 for enterprise development. Right now, PBX is still in a beta testing stage so the Eason's have invested some of their own money along with any incubator funds and received matching funds to help run the user tests and validate the product.
The program requirements don't mention how much equity PBX would have to give in return for capital. The terms are probably negotiated based upon a formula taking into account the amount of personal funds the Eason's brought to the table and the amount of matching funds being sought.
Another interesting part of the ADFA funding programs is that this particular fund, and a few others, are State Small Business Credit Initiative Qualified (SSBCI). That program was signed into law by President Obama in 2010 as part of a jobs act. You can find details about that Federal program and the participating states HERE.
PBX's current valuation on Angel.co is $1,000,000. They are currently seeking $150,000 in seed funding and a software engineer to develop the product further. There is no salary listed for the developer position. PBX is offering 3%-5% equity in return for the position.
Say what you want about governments investing in startups. Funding is funding. I am interested to speak with the Eason's personally and find out about their relationship with Brad Henry. HERE is a quick bio on him.
Mentors and Advisors
PBX lists two advisors on their Angel.co page. Innovate Arkansas and Mike Smith.
Mike Smith is a seasoned investor with a large portfolio of companies and another group of companies to which he provides direction.
Innovate Arkansas is a technical and financial services firm that helps technology products find traction and develop for the betterment of Arkansas jobs. Their client list and board is impressive.
I could write several posts about each of these mentors. Suffice it to say you can click the links and quickly scan the portfolios of each. While I am not a veteran of the startup investment world, I can recognize the Eason's have excellent backing and people who are genuinely interested in seeing PBX succeed.
PBX is coming out of The Ark as its primary incubator. The Ark invests $50,000 in a technology startup in return for 6% equity. The Ark provides boot camps, research, and mentoring to help the company grow. They have a great PDF on their site about future needs of three industries in which they target. Download it HERE.
A quick scan of Jeff Amerine's LinkedIn Profile reveals his previous work experience at FedEx and American Frieghtways. I would wager he was a major reason PBX was picked up by The Ark.
A few of The Ark's other startup investments include Qbox.io, MineWhat, and Truckily. You can find a full list of investments on The Ark's page at Angel.co. I must admit when I saw Truckily, I immediately thought of my friend Joel Cettina at FoodMoves. Looks like he has direct competition.
I could write for days about the various pieces and factors that will lead to the success or failure of PBX. My initial reaction is confidence. With this kind of funding and backing, PBX has the resources to move beyond just a beta test into something larger. They would not have made it to the semi-finals of this competition without that possibility being realistic.
I want to speak directly with Brandon and Michael. I bet their insights into the process and growth of their idea from a just a notion on a napkin to a 6am beta test is a great story. I want to tell it myself.
Leave your comments below. Let me know which semi-finalist you'd like me to write about next.