Video: GenZ CEO Grant Thompson on life at his startup
Grant Thompson is not an engineer, nor is he an expert on the crop sprayers designed by Boise’s GenZ Technology. He was hired as the startup’s CEO for one reason: to raise money.
GenZ’s two founders, Chase Newsman and Rich Johnson, had already hatched a promising business plan to build crops sprayers that reduce pesticide and herbicide waste and pollution. But ideas without money wither on the vine, and selling ideas to investors takes skills the founders lack.
In part thanks to Thompson, GenZ has attracted attention — and money. That is why Business Insider has chosen it as one of seven Idaho tech startups worth keeping an eye on over the next couple of years.
Thompson speaks investors’ language after years working as a Boise consultant with companies such as Winco Foods and St. Luke’s Health System.
Before accepting the job, he Googled crop sprayers to make sure GenZ’s concept — placing the sprayers under hoods that prevent spray from floating away in mist form — wasn’t already on the market. Watching a handful of videos convinced him that the market was overdue for disruption.
“I’m watching these videos, and I didn’t know whether to laugh or cry,” Thompson says. “Chemical was flying everywhere. I’m looking at this ag technology and thinking, ‘My gosh, this looks like it’s from the Dark Ages.”
Today, seven employees work at the GenZ shop on South Featherly Way near the intersection of West Victory and South Maple roads. Co-founder and Vice President of Product Development Chase Newman leads the team building the sprayers for the company’s few sales. Eventually, Thompson says, GenZ wants to be purely a research and development company, contracting out the manufacturing and distributing through equipment dealers that already have relationships with farmers.
The sprayers are designed for row crops, such as grapes, lettuce and strawberries, though Thompson says they could also be used on two of Idaho’s farm staples, potatoes and sugar beets. So far, Thompson has focused on the farmlands of southern California in his search for potential customers. He travels there often, holding demonstrations and lending GenZ sprayers for farmers to try in their fields.
Farmers are hard sells, he says, but can be persuaded by the chance to cut their spray costs in half. Large farms, such as one of the country’s largest, Grimmway Farms, have bought GenZ sprayers to work into their rotation of dozens of sprayers as a trial run, Thompson says.
“Farmers are very conservative people from both a business and political standpoint. They don’t like a lot of change,” Thompson says.
GenZ sprayers cost in the “low to mid $30,000s,” Thompson said. Traditional bar or boom sprayers cost about $25,000, he said.
Thompson says he has pitched to 40 to 50 investor groups, including several in Idaho. Thompson has made more than 25 trips to California and around the Northwest to pitch to investors.
“When I first started pitching in Idaho, I’d go to different investor groups, and it was always the same people,” Thompson says. “There were about 10 investors in the entire state. Now, maybe it’s 30 people.”
His efforts have started to pay off: GenZ received investment funds from the Capitol City Angel Fund, though it won’t say how much. It also received investments from angels in West Coast states.
One angel investor, Dr. Byron Aram of Palo Alto, Calif., says he was skeptical about GenZ because he does not think of Idaho as a technology hub. He says he devoted extra research before investing. He, too, declines to say how much.
“I’m always interested in game-changing technology that might bring not only benefit for the company, but also for the industry itself and possibly to humankind,” Aram says. “This met all three criteria.”
GenZ founders, Thompson and board members own about 40 percent of the company, Thompson said. Angel investors own the rest.
Thompson projects to increase sales from $150,000 in 2015 to $1.2 million this year. Unlike software startups, which can see huge leaps in sales, Thompson says he expects adoption to increase steadily in coming years. He expects the company to turn its first profit in the fourth quarter of 2016.
Thompson says success would likely lead to GenZ’s eventual sale to an equipment company.
“There are about 10 big ag companies in the world that are gobbling everybody up,” Thompson says. “If we are successful over the next three to four years, it’s highly likely we’ll get an attractive offer.”
2. INERGY HOLDINGS
Business Insider’s second choice is known by its customers as Inergy Solar. The Pocatello company develops and sells portable, lightweight solar panels, batteries and generators.
One of Inergy’s smaller products is the Spark, a five-ounce battery for $29.99 that can charge cell phones and other small devices.
Inergy’s break-through product was the Kodiak, a 20-pound solar generator capable of powering camp trailers or home appliances for days at a time. It sells for $1,600. CEO Sean Luangrath says the Kodiak is one-fourth of the weight of its closest competitor.
Inergy sells through its website and a growing number of outdoors retailers. It says sales tripled from 2014 to 2015. Luangrath projects sales to reach $2.6 million and profitability this year.
“In addition to establishing retail channels in the United States and Canada, Inergy will also introduce its portable solar solution in the developing countries as part of its mission to bring affordable solar power to the world,” Luangrath says.
As its name suggests, SaaSfocus specializes in software as a service. But CEO and cofounder Nathaniel Mueller says explaining the company’s offerings isn’t easy.
SaaSfocus offers several services to help businesses improve their operations by using cloud-based applications. The best-known is Salesforce, a suite of apps helping businesses manage sales, support, marketing, workflow and mannaging custom applications. Mueller says Salesforce has driven $5 billion in sales for its subscribers.
The company’s three founders worked at Hewlett Packard for more than a decade. The company, which became profitable in its second year, expanded sales by 300 percent in in 2015 and expects to generate $11.2 million in sales this year, Mueller says.
The founders own the company, though they plan to pursue a fund-raising round in the coming year, Mueller says. The company recently decided to locate its global headquarters near the intersection of West Main Street and East Idaho Avenue in Meridian. It plans to ramp up Idaho employment to 50 by mid-2017.
The company has employees in Boise, California, Australia, India, South Africa and Singapore. Its customers include UNICEF, St. Luke’s Health System, the states of Idaho and California and Healthwise.
4. PSIFLOW TECHNOLOGIES
Terry Gilton founded PSiFlow in Boise in 2009 in the pool and spa market, selling a software service that allowed pool owners to send digital photos of water test strips and receive recommendations for what chemicals to add to reach safety standards. The company sold the pool and spa portion of the business to LaMotte Co., a water and environmental testing company based in Maryland, in 2011
Carter Borden came on board to in 2014 lead pSiFlow in a new direction: creating a mobile app that makes testing water quality faster in developing nations.
Borden, who holds a Ph.D in civil engineering with a focus on water management, has worked for more than two decades on water quality projects around the globe. Now he is working to develop a system that will allow users to take photos of water-testing strips on their smartphones. The photos would then be sent to a lab, which would analyze the strips and respond with results. That would cut the testing process from hours or days to less than an hour.
The company, located near 11th and Main streets in Downtown Boise, is not yet profitable. Borden is its only employee. He is working on fund-raising and starting a pilot water testing program in India. If pSiFlow gains traction, it will make money by selling its water test-reading technology and selling test strips and consulting services to water managing agencies in developing companies, though Borden says the app could be useful in a handful of industries.
About 10 investors own the company, including Gilton.
Living wills — legal documents spelling out preferences for expensive end-of-life care — are useless if nobody can find them when their owners are dying. Willoop’s three founders — one of whom is Lisa Brennan-Jobs, daughter of the late Apple cofounder Steve Jobs — think their mobile app, which gives loved ones access to living wills, will ensure that users’ wishes, which often call for less care rather than prolonging life, will be honored if a catastrophic illness or injury befalls them.
In addition to appealing to families wanting to honor wishes of loved ones, CEO and co-owner Heather Dermott says the app will be attractive to the health insurance industry, which is often on the hook for expensive end-of-life treatments that policy holders may not want.
“Ninety percent [of people age 65 or older] say they would prefer to receive end-of-life care in their homes,” Dermott says. “This isn’t happening, and it’s costing the health-care economy billions.”
The company has no customers yet. The Willoop app is in beta testing and preparing to launch in the Apple App Store, Dermott says. The founder-funded company is offering yearly subscription packages and looking to partner with health providers and insurance companies looking to provide a planning tool for their patients, members and employees, she says.
As a longtime engineer in land development, David Bailey hatched a plan to consolidate the many data sources used in and around real estate and development industries into a single, easy-to-use platform. His company, LandproData, sells subscriptions to its website, which compiles interactive maps, land records, permits, zoning, traffic and other data useful to engineers, planners, and commercial and residential real estate professionals.
LandproData reports will help users analyze markets and win jobs with fast and thorough proposals, Bailey says.
The company, based off Idaho 55 in Eagle, says it is is nearly breaking even. Bailey expects to turn a profit this year. LandproData services are available in Idaho, but Bailey hopes to expand to the Northwest and, eventually, nationwide.
7. ADVANCED CERAMIC FIBERS
President Ken Koller explains his Fi-Bar fibers as “re-bar for materials.” Advanced Ceramic Fibers’ materials make metal stronger, lighter and more heat-resistant.
A plethora of industries could use better metal, and Koller says his company is in line for a breakout 2016 with an award on the way from the U.S. Department of Energy’s Office of Science and a multiyear contract from the U.S. Navy’s Office of Naval Research.
Koller says the self-funded by its four founder, including Koller. The company received commercial contracts for energy-efficiency-related projects, and expressions of interest from international customers in Europe, South America, and Mexico.
“ACF will control production of Fi-Bar strictly within the U. S. borders, and our model allows ACF to gain revenues through licensing and royalties associated with “field of use” licensing scenarios,” Koller says.
He says ACF will become profitable in 2016 with bookings close to $2.5 million from government, commercial and international contracts.
Year started: 2013
Market: Agriculture equipment
Founders: Chase Newman, vice president of product development; and Rich Johnson, no longer with company
Traction: Nearly $3 million raised, $150,000 in sales in 2015
Year started: 2012
Market: portable solar panels and generators
Founders: Brad Barrott, chairman; James Brain, chief technology officer
Traction: $460,000 raised via Indigogo crowdfunding campaign, nearly $600,000 in 2015 sales, 4 patents pending.
Year started: 2013
Employees: More than 200 globally, 10 in Idaho
Market: Cloud-based business applications
Founders: Nathaniel Mueller, CEO); Manvir Sandhu, vice president of marketing and business development; Jesse Barker, senior engagement manager
Traction: $6 million in revenue in 2015
Year started: 2009
Market: Water testing mobile app
Founder: Terry Gilton
Traction: Projected 2016 revenue of $30,000; two fund-raising rounds equaling $675,000 before the company pivoted to target the drinking-water market.
Year started: 2013
Market: Living will software
Founders: Heather Dermott, CEO; Kai Barry; Lisa Brennan-Jobs
Traction: One patent pending
Year started: 2014
Market: Real estate software
Founder: David Bailey, president
Traction: About $100,000 in sales in 2015
Advanced Ceramic Fibers
Location: Idaho Falls
Year started: 2013
Market: Building materials
Founders: John Garnier, CEO and CTO; Kenneth Koller, president; Shawn Perkins, VP of business operations; David Harell, CFO
Traction: $150,000 in 2015 sales; 4 patents held, 2 pending