MIT Enterprise Forum newsletter
Entrepreneurs Cite Lessons, Progress Since Initial Presentations at Forum Holiday Party
Newsletters.com has retooled its business plan and landed more funding.
Digital Addiction has spun off a new company that’s marketing perhaps the next "killer app" for creating large Web communities.
And TGV Rockets, Inc. is talking up the angels and VCs while advancing it plan to produce a small initial fleet of "suborbital" launch vehicles.
Principals of all three firms reported on the progress they’ve made and the lessons learned since their previous business plan presentations to the MIT Enterprise Forum of Washington and Baltimore, at the group’s "holiday party" December 14 at the NRECA conference center in Arlington, VA.
The session, moderated by Phil Rosenthal of Fastcase.com, differed from the normal format, which typically involves one entrepreneur presenting his firm’s business plan and getting feedback from a panel and the audience.
The three presenters December 14 were Roger Patrick Bahn, CEO, TGV Rockets, Inc., Bethesda, MD; Jamey Harvey, CEO, iKimbo!, Silver Spring, MD; and Elie Ashery, co-chairman and executive vice president, Newsletters.com, College Park, MD.
"We learned an awful lot from giving our business case presentation here (June 29, 1999)," said Bahn, who started first. "We were strongly advised to work with our customers," he noted, reporting that he’s since logged 18,000-25,000 miles talking with customers. In addition, Bahn said, "we’ve been able to tune up the product we’re offering."
The product, he noted is "the first practical reusable launch vehicle" that TGV Rockets is producing: "It’s optimized for the suborbital [less than a complete orbit of the earth] market, and we intend to revolutionize the industry," Bahn said.
The company’s product is the Michelle B, which will be a piloted rocket that will travel straight up 100 kilometers (62.5 miles), launch a payload, return to earth safely, and be reusable. According to Bahn, the rocket is about the size of a V-2 rocket, 40 feet long by eight feet in diameter, and "fits very nicely on the back of an 18-wheeler."
Advantages of its vehicle, says TGV’s Web site, include: lower launch costs, increased flight frequency, guaranteed payload recovery, improved ride quality, greater flight stability, customer accompanied research products, and payload oriented design.
He noted that TGV’s primary market is the atmospheric science community and military research and development. "This is only a $300 million, $400 million a year market…very small by aerospace standards." However, he pointed out that the Boeing Company grew from a tiny firm in the 1950s into the behemoth aeropace company of today largely because of an early contract to build fuel tanker jets for the military. Boeing subsequently modified the product to produce commercial jetliner. Along these lines, he said that once TGV gets its vehicle in service it can then think about commercializing it.
Bahn said TGV aims to raise $65 million to implement its business plan and build an initial fleet of three vehicles – additional rockets will cost in the "single millions."
He noted that since his original business plan presentation in June 1999, TGV has had "lots of interest" from customers, spoken with angel and VC investors, and is now in working on arrangements with major research universities while trying to raise capital.
Asked why TGV doesn’t launch its rocket from an airborne vehicle, like the X-15, Bahn cited complexity and operations cost. "We’re interested in optimizing shareholder value and free cash flow. So not having the B-52 attached saves us an awful lot of cash," he quipped.
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Odds and Ends
Jamey Harvey, iKimbo!
Most Positive Surprise: Seeing the plug pulled, an hour before the check was to be picked up, of a bridge loan to fund the transition and spinout of iKimbo! from Digital Addiction. "We had $3,000 in the bank. And the biggest positive surprise was that we stayed in business."
Roger Patrick Bahn, TGV Rockets, Inc.
Biggest Surprise: "How much I like selling and how easy it is for me to do that now."
Elie Ashery, Newsletters.com
Best Lesson Learned: "That not all money is created equal. There’s definitely value associated with the money [specific investor] that you accept."