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‘Shark Tank’ class took Alamo Heights H.S. students into the business world

San Antonio Express News logo San Antonio Express News 4/25/2019 By Krista Torralva, Staff writer

In a tight space between their classroom and the presentation floor where five judges waited, four Alamo Heights High School seniors tightened some last-minute loose ends.

Who introduces herself first? Which way does the microphone get passed around? Do we shake the judges’ hands before or after we present?

“We’re starting to get nervous,” said Reed Knapp, 18, of team Shirt Mob in that Monday huddle.

Their work and that of 37 other teams in the school’s new Heights Business Incubator class had come down to a few days of presentations. On Thursday, the competition to earn a ticket on stage next week in front of real investors narrowed to just a handful of teams.

Only five teams would get to ask for thousands of real dollars to back their ideas, in the style of ABC’s TV show “Shark Tank.”

Over the course of the school year, the students navigated the pitfalls and unforeseen obstacles of business creation. Some left their teams to create new ones, still facing the same deadlines.

They consulted with professionals — lawyers, marketing managers and investors — and they showed the results to judges who had to be convinced that they were hearing serious ideas from serious entrepreneurs — never mind that the entrepreneurs had yet to receive their high school diplomas.

The students had become well-versed in the lingo, talking with authority about marketplace value and minimum viable products. Some had even sought the help of software and hardware development, which required instructors to find engineers to aid them.

But there were reminders they’re still students.

“I get to go fail a math test after this,” Nathan Dahl, 18, said backstage.

Cathy Klumpp, one of their instructors, was upbeat and cheerful in the waiting room. She reminded them of the hours spent practicing and the presentation skills they’ve acquired.

“This is when your impromptu speaking comes into play,” she said. A moment later, Klumpp got the signal from the judges that they were ready for the next presentation. “OK sugars, are you ready?”

On Thursday, four of the teams left school knowing they’ll face the judges one more time. Seven other teams will be allowed to compete for a “wild card” spot on the stage, setting up booths on Pitch Night so attendees can vote to see which one advances.

On May 3, the five teams will compete for $10,000 to jump start their business. If the winners don’t form the required limited liability corporation to pursue it, they won’t get the money. A second place prize of $8,000 is also up for grabs. A third place winner of $5,000 will be selected by the audience.

Getting there

In January, days before teams in an earlier round were set to make their case for $500 to create a product, the students pitching Shadow Energy weren’t sure what they’d tell the judges or even if they’d all make it there.

One had broken his arm and missed weeks of classroom time. Another suffered a concussion playing football. A third teammate had his wisdom teeth removed and a fourth abruptly left the country for a family emergency.

“We were pretty beat up,” said senior Kiefer Luken, 18.

The Shadow Energy members spent half their lunches in the Incubator room, making up for lost time. In the final days, it all came together.

“A week ago we wouldn’t have been able to give that presentation,” said Beni Resendiz, 18 and also a senior.

Even a few minutes before presentation time, one of them was missing. A search party found him in a calculus class from which he was supposed to be excused for the event.

Their pitch - a caffeine patch to be marketed to students, parents and athletes - impressed the judges. Then came the serious questions.

“Obviously there’s a lot of competitors out there,” said judge Mike Fulton, president of Fulton Property Group LLC, which invests in and develops apartment complexes. “What are you guys going to do to make it different?”

“Have you consulted a lawyer about product liability?” judge Julie Hill asked. The senior vice president of liquidity and asset management for iHeartMedia explained that she needed more information about a warning and disclaimer before funding a prototype.

The judges awarded the money on a contingency agreement that Shadow Energy would consult a Food and Drug Administration attorney, which they did. Other teams faced a similar gauntlet. Some were told to pivot from ideas or research competitive products more. Those teams were given an opportunity to present again two weeks later. For some other teams, they were given less than the requested $500, Lead Instructor Patrice Bartlett said.

The incubator class draws on INCubatoredu, a national program that’s now part of 120 schools nationwide and in Mexico. A program graduate, Martin Dimitrov of Illinois, took an idea that he developed in his school’s incubator class to “Shark Tank” last year. At 18, Dimitrov got a combined offer from celebrity investors Mark Cuban, Lori Greiner and Alex Rodriguez that was contingent on him graduating from college.

The Alamo Heights ISD Foundation, the school district’s nonprofit support arm, will hold onto the prize money and ensure it is doled out appropriately. Not all teams are made up of graduating seniors but the winners will have options for pursuing their business and must periodically report to the foundation’s board, instructor Patrice Bartlett said.

Next year, the high school will add an accelerator program so the money can be awarded to students when they’re still juniors, and they could then spend a second year launching their businesses, Bartlett said.

More than a class

The questions this week had been tougher than in January.

The team that came up with Soteria Locks, an idea the judges really liked, had to confess their prototype wasn’t ready and, when pressed, couldn’t promise it’d be finished in three days, when the Pitch Night contestants would be announced.

Soteria Locks uses NFC, a wireless technology, to replace Bluetooth on phones that can act as keys.

Team member Gage Bierschwale said he genuinely believes in the idea, and the emotions that come with trying to convince people to back it are much different from the traditional classroom experience.

“I never get anxious before a test. I feel like there’s more than just a grade on the line here,” Bierschwale, 18, said.

Fulton told the team he could use their product himself if they could find a way to make it work. Judge Sue Bonar, chief operating officer of Sirius Computer Solutions, said it’d relieve the stress of digging through her purse when her hands are loaded with groceries.

“It’s absolutely on trend,” Fulton told the team.

But the judges hesitated at the Monday pitch when they learned the prototype wasn’t done. The students said they were still programming the software with the help of a mentor.

“We’ve got to put five (teams) in front of the judges and it’s hard to do when we don’t have the prototype done,” judge John Tippit, who is managing director for Mays Family Enterprises, told them.

At this point in the game, judges said, they were looking for teams to explain how they tested their hypothesis with the $500 they received in January and demonstrate how they will use the big award money.

It’s not a bad sign if the product didn’t work flawlessly after the first try, judges said. It’s even OK if teams pivoted from their original idea if testing revealed problems.

But the judges do want to see an ability to move beyond just an idea, to make money and to grow. And they have to be in tune with the realities of the world today — some teams might be ahead of where the retailers are, Hill said.

A team called Get Gifted, for example, is designing a mobile app for storing and trading gift cards so they don’t go unused. For convenience, they’d like to incorporate the ability of stores to scan a consumer’s phone to use the gift card. Starbucks currently has a similar model for payments and their own gift cards, but many stores have not yet followed suit.

That team is probably ahead of the curve, Hill said.

Other teams have had to split and pursue new ideas. The class started with 30 teams but had grown to 38 because of this. The newest formed only two weeks ago, Bartlett said.

Allowing teams to break apart was tough because instructors did not know how it would affect workflow and worried about the pressure placed on individuals who went on their own.

But, Bartlett said, they had to allow for the students’ creativity. What resulted was more excitement and passion for the ideas headed for a final pitch.

Making the cut

A gathering of cheerleaders and administrators formed in front of the high school Thursday for the announcement of the finalists, in the style of a sendoff for a football team contending for a championship.

Friends of the teammates chanted their company names. Teams Shirt Mob and Soteria Locks waited next to each other.

Bartlett announced the confirmed finalists: Bowrestrictor, Roo, Spice Strips and Swift Size.

Shirt Mob members said afterward they were surprised to not secure a spot on stage. They’d already turned a $500 profit from finding and selling vintage T-shirts, Dahl said.

But they did make the wild card list. So did Soteria Locks, whose teammates said they managed to show the judges a prototype after all, late. They were looking to Pitch Night for some redemption for their rushed presentation.

Both teams expressed confidence. But only one will advance, and whichever that is also will have to get past Dock Sensor, Dos Energy, KC Squared, Running With Scissors and SideKick.

Shadow Energy and Get Gifted did not make the cut.

“We’re going to take that last spot and we’re coming for the 10K,” Jacquelyn Welsh, of Shirt Mob, said.

Krista Torralva covers several school districts and public universities in the San Antonio and Bexar County area. Read her on our free site, mySA.com, and on our subscriber site, ExpressNews.com. | Krista.Torralva@express-news.net | Twitter: @KMTorralva

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