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May 25, 2018
On the move: Innovations at a web-based logistics company

Photo: Alex McKnight

Bobby Harris, President and CEO of BlueGrace Logistics: "We have a lot of mavericks here. We don't fit the normal corporate profile."

Innovation

On the move: Innovations at a web-based logistics company

A Tampa man starts a web-based business that lets retailers and others take advantage of excess space on trucks to ship their products.

Amy Martinez | 11/28/2016

BOBBY HARRIS PURSUED an unconventional path to entrepreneurship. For much of his childhood, his father was a career airman stationed at MacDill Air Force Base in Tampa. His mother, a Cuban immigrant, worked two jobs at times to take care of the family.

While attending the University of South Florida, Harris became a dock worker at a local trucking terminal. Later, while still in his mid-20s, he moved into a sales management role for a freight services company. By 30, he was ready to strike out on his own.

“I’m not a person who’s very concerned about risk,” he says, attributing his risk tolerance to close family and friendship ties. “I always knew if I failed, there would be a safe space for me to fall.”

In the mid-2000s, Harris acquired nearly two dozen local franchise resellers of services provided by DHL, a logistics and shipping firm based in Germany. At the time, the resellers served small- and medium- sized businesses by arranging transportation of packages and parcels.

Harris saw an opportunity to expand the resellers’ portfolio of freight services to larger shipments. Ultimately, he proposed a private equity-backed rollup of the entire franchise network. But in late 2008, DHL withdrew from the U.S. market, and the roll up deal fell apart.

“I went from being about to do a massive deal that was going to set me up for generations to not knowing how I’m going to stay in business,” he says.

Harris decided to start his own business. Avoiding debt, he cashed out his savings, including his 401(k), to launch a company called BlueGrace Logistics — named using the middle names of his two daughters.

Harris describes the company’s website as akin to an Orbitz or Travelocity that enables retailers, manufacturers and others to take advantage of empty space on trucks that are already scheduled to go to destinations where they need to ship goods.

Users type in where and when they want their cargo picked up and delivered, get instant price quotes for open carrier space and can then schedule a shipment, all within minutes, Harris says.

Initially, BlueGrace used transportation management Software developed by Cary, N. C.-based MercuryGate. Once it had an IT team in place, BlueGrace built a proprietary software system called Blue- Ship to arrange pickups and deliveries, optimize routes and allow customers to track their inventory online.

While some smaller customers still ask a service representative to book a shipment for them, most of the business is do-it-yourself.

Opportunities

BlueGrace began operating in 2009 out of a leased corner unit at a strip center in southern Hillsborough County.

Harris says he persuaded a core group of carriers to give him a chance, and customers soon followed.

As the company grew, it used its clout with carriers to offer small- and mediumsized shippers lower prices than they could get on their own. Given the then-sluggish economy, Harris says, “carriers needed more business, and businesses needed to control” their shipping costs. “That was the opportunity we took.”

In its first three years, BlueGrace brought in enough business to move to larger space off I-75 and to launch a national franchising program.

Eventually, it had 54 franchises across the U.S., but it switched strategies last year and has since bought back most of the franchises.

The company generated $168 million in sales last year, earning a spot on Florida Trend’s list of the 225 biggest private companies statewide. It is expected to surpass $200 million in sales this year.

Today, BlueGrace occupies roughly half of a 55,000-sq.- ft. Building in Riverview, near Tampa, and has satellite offices around the country. The company employs 450, including 250 at its headquarters.

In addition to a large IT department, the company has salespeople who work on commission and make cold calls, attend trade shows and use other traditional marketing techniques to find customers.

After years of avoiding outside funding, Harris now has a private equity partner. In August, New York-based Warburg Pincus announced an investment of $255 million.

Harris, who remains the company’s majority owner and CEO, says he’ll use the money to buy similar businesses and to speed up hiring. “It’s going to allow us to put a massive footprint in Florida,” he says.

Even as BlueGrace continues to build out its headquarters, the company looks to eventually move to downtown Tampa. “By the end of 2018, it’s very likely you’ll see about 1,000 people here,” he says.

Free beer Fridays

Harris says he has tried to create a fun workplace. At the end of each workweek, employees gather for “free beer Friday.” Offices are named after well-known songs such as “Comfortably Numb” (break room) and “Come Together” (conference room). The dress code is “first date” casual.

A “Plinko” prize board, set up in the main office, offers the chance to win a weekly cash bonus of $300. Next to that is a large gong that employees can strike to herald a big sale — on a recent Friday morning, a young 20-something male employee, wearing jeans, Tshirt and sneakers, got up from his desk and picked up a padded mallet after signing a deal with an Ohio manufacturer of industrial fans.

Harris says part of his motivation in making work fun is selfish. “I’m wealthy enough for several lifetimes. So why would I ever want to come into a place that made me unhappy?” he says. But he also believes an engaged workforce is good for business. “If you treat employees right, they’re going to take really good care of your clients,” he says.

BlueGrace Logistics

» Founded: 2009

» Headquarters: Riverview
(Hillsborough County)

» CEO: Bobby Harris

» 2015 sales: $168 million,
up 15% from 2014

» Employees: 450 nationwide;
250 in Riverview

» What it does: BlueGrace Logistics is a transportation management company that uses custom software to help businesses ship inventory around the country.

Only eight out of every 1,000 firms that start small in Florida reach more than 50 employees within 10 years, according to the Kauffman Foundation, a Kansas City non-profit focused on entrepreneurship

Promising Startups

» KynderMed
St. Petersburg

Each year, nearly 1 million children worldwide die from complications of preterm birth. Those who survive can suffer from cerebral palsy, blindness and learning disabilities. In many cases, the exact cause of preterm birth is unknown, making prevention difficult.

KynderMed, a St. Petersburg startup based on technology developed at Florida State University, says it has created a sleep mask that gives off low levels of blue light to help pregnant women avoid going into labor too early.

The solution lies in a connection between the onset of labor contractions and a hormone called melatonin. The vast majority of pregnant women go into labor at night, when melatonin levels peak. Melatonin receptors appear in a woman’s uterus before birth, and the interaction between melatonin and the receptors causes contractions.

James Olcese, a professor at FSU’s College of Medicine, found that exposing pregnant women to light at night caused their melatonin levels to drop and contractions to slow or stop.

Two years ago, Olcese teamed with industry professional Don Rosenkoetter to form Kynder Med. The company hopes to receive regulatory approval to sell its light-emitting sleep mask to hospitals next year. It also sees potential to sell the mask for preventive home health care to pregnant women at risk for preterm labor. Rosenkoetter pegs the price tag between $400 and $500.

Neonatal care for an infant born prematurely — anywhere from 20 weeks to 37 weeks early — costs an average of $55,000. Kynder Med’s mask, Rosenkoetter says, is a “$500-solution to a $55,000-problem.”

» FullScaleNANO
Tallahassee

Elevator pitch: Full Scale NANO has developed software to help academic and industrial researchers measure and characterize vast amounts of nanomaterials in seconds.

Problem and solution: The only way nanomaterials can be seen is by taking pictures with an electron microscope. In the past, researchers have relied on manual characterization methods — measuring each object in a picture, for example. Full Scale’s Nanomet software converts those images into useful data, speeding up time to market and reducing the risk of human error.

Leadership: Chin-Hui Lee, a professor at Georgia Tech’s electrical and computer engineering school, and Jeffrey Whalen, a research faculty member at the National High Magnetic Field Laboratory at Florida State, formed Full Scale NANO in 2012 with help from Richard Benham, an entrepreneur in residence at FSU’s College of Law. Jodi Chase, previously a consultant to hedge funds, became CEO in August.

Market applications: Think tiny medical devices that can deliver a precise dose of a drug to a specific part of the body or new fabrics that can change colors, communicate with computer networks and detect explosives. The applications are “only limited by your imagination,” Chase says.

Sales: A planned upgrade of its software platform could push the company’s 2017 sales above $1 million, Chase says.

» RedCap Valet
Fort Lauderdale

Elevator pitch: RedCap Valet is a software company that enables automakers and dealerships to offer their customers on-demand delivery of test-drives and loaner cars. A customer can have a loaner dropped off at the time and place of her choosing while her personal car is picked up and taken in for service. Or, if shopping for a new car, she can have a vehicle delivered for a test-drive at home or work.

Business model: RedCap sells software subscriptions to automakers and dealerships, which, in turn, offer the delivered test-drives and loaners at little or no extra cost to customers. In most instances, dealers use their own delivery drivers (though for a service fee, RedCap also sends out drivers).

Leadership: Founder and CEO David Zwick, a former real estate investor, launched RedCap in 2010 as a personal driving service for south Florida seniors, executives and other residents. After burning through $2.5 million, he noticed that many customers were using the service to take their cars in for maintenance and repairs. Four years ago, he narrowed his focus to the auto industry. “If we made a mistake early on, it was that we were trying to do a little bit of everything,” he says. Since then, the company has raised more than $3 million.

Sales: RedCap expects to post a record $12 million in sales for 2016, Zwick says.

» CarePredict
Plantation

Every Saturday, Satish Movva makes the 10-mile drive to see his elderly parents in Broward County.

During one visit three years ago, Movva noticed his dad was shuffling around the house with swollen ankles — a possible sign of impending heart failure. Movva took him to the emergency room, where he was treated for edema and released.

Although the feet-shuffling had begun two days earlier, neither his dad nor his mom had noticed. “That’s when it struck me,” Movva says. “I was relying on the observational powers of my mom to keep my dad safe and vice versa.”

Movva, an IBM alum and veteran software entrepreneur, went to work on his latest brainchild: CarePredict, a Plantation startup that has created a sensorenabled wristband to detect unusual changes in daily activity.

The wristband, called Tempo, interacts with battery-powered beacons placed throughout a home or senior living facility to get a sense of the wearer’s routine. CarePredict then monitors the wearer’s activities and alerts caregivers when there might be a problem — less tooth brushing could be an early sign of memory loss, for example.

Since 2015, CarePredict has raised more than $4 million. The company plans to begin selling Tempo to assisted-living facilities and home health care agencies next year.

» Apellix
Jacksonville

Elevator pitch: Apellix is developing a drone-based system to paint large structures like bridges and ships, spray chemicals and pressure-wash buildings. The Apellix Worker Bee consists of custom software and a quadcopter that flies with an umbilical cord tethered to a power supply, keeping it charged up and able to receive a steady stream of paints and other materials.

Problem and solution: Falls from heights are a leading cause of workplace deaths. Apellix says its spraypainting drone can reduce the risk of a fall from a ladder, scaffolding or other structure by doing “dull, dirty and dangerous” tasks.

Leadership: Founder and CEO Bob Dahlstrom wrote his first computer program in 1986 at AT&T Microelectronics, where he worked in a wafer fabrication “clean room.” As a faculty member at Florida State University, he taught a technical skills boot camp to communications students. After moving to Jacksonville in the late-1990s, he founded an internet security software firm he continues to head.

Aha moment: Two years ago, Dahlstrom decided to repaint a two-story stilt house he owns in Port St. Joe. The project seemed easy enough given that he had worked his way through college painting houses. But he soon began feeling pain in his shoulders and back, “and I remembered I’m not in college anymore,” he says. “I thought, ‘There’s got to be a better way.’ ”

Target market: Apellix aims to rent its patent-pending drone to clients for large-scale painting projects involving oil and manufacturing facilities, ships, water towers, bridges and other infrastructure.

Game plan: The Worker Bee works at heights of up to three stories, but a new model in development will stretch its capabilities to 10 stories, Dahlstrom says. He hopes to launch the drone in mid-2017.

» WIN Lab
Miami

A robotics company, an online liquor store and an organic tea brand are among the 20 startups that comprise the inaugural class of a new accelerator program for women entrepreneurs in Miami.

WIN (Women Innovating Now) Lab was created by Massachusetts-based Babson College and its Center for Women’s Entrepreneurial Leadership. After opening its first WIN Lab in Boston in 2013, Babson expanded the program to Miami with $800,000 from the John S. and James L. Knight Foundation.

Participants in the eight-month program receive coaching, opportunities to pitch to investors, office space and other resources to grow their businesses. Most have at least a working prototype and some early market traction.

Nationwide, women make up only about 15% of accelerator program participants, says Heather-Jean MacNeil, global director for WIN Lab. That low participation rate can affect whether women entrepreneurs get funding, since accelerator graduates tend to do best at raising venture capital. WIN Lab aims to increase access to capital for women entrepreneurs, in part, by helping participants hone their messages and attract investors, MacNeil says.

» Kore
Orlando

Orlando entrepreneur Raj Koneru’s latest venture, Kore, helps businesses build Siri-like “chatbots” to automate conversations with customers or employees.

Businesses can use Kore’s platform to build their own bots, or they can buy Kore-built bots from the company’s online store. Koneru launched the Kore bots platform last summer after working on it for more than a year.

Before Kore, Koneru co-founded Intelligroup and Seranova, both now publicly traded companies. He also founded Kony, a cloud-based mobile application development platform that helps businesses build apps for smart phones and tablets. In 2014, Kony announced a $50-million financing round led by Japan’s Soft Bank Capital and Insight Venture Partners.

» One Health Labs
Gainesville

“One of the biggest problems in veterinary medicine is resistant bacteria and dealing with infections that don’t respond to antibiotics,” says Jennifer Bentley. “We’re seeing a lot more of that.”

Bentley is in her third and final year of residency at the University of Florida Small Animal Hospital in Gainesville, where she keeps a wary eye on bacterial infections in dogs and cats undergoing surgery.

In 2013, she began working on a solution with Mauricio Dujowich, a veterinary surgeon. As co-founders of One Health Labs, they developed a device that uses ultraviolet light to kill bacteria and prevent surgical wound infections in animals.

Today, they have two patents and a working prototype, which they hope to have ready for sale next year — with a price tag of about $2,000.

Update

Magic Leap
Dania Beach

Broward startup Magic Leap, founded by surgical robotics pioneer Rony Abovitz, has played its mixed reality, or augmented reality, technology close to the vest [“Florida’s $500-Million Man,” August 2015]. Aside from promises of great things in store — changing the future of computing — and a few video releases, Magic Leap has not shown the wide world what it has. But what it has shown discreetly to investors has so far drawn $1.4 billion from Google, Kleiner Perkins and others, making Magic Leap the most successful fundraiser in Florida history. But Facebook, Google, Apple, Amazon, Microsoft, Sony, Samsung and a slew of others are developing their own virtual reality and mixed-reality devices and software. And questions hang over Magic Leap: Is its product any better, and, even if it is, will it get to market in time to take on giant rivals and get the support of software developers?

Abovitz hasn’t said when he’ll be ready. But he got encouragement from Wired magazine, whose reporter spent five months visiting the big names and became one of the few people to describe in detail what Magic Leap has. The Wired piece was subtitled: “The world’s hottest startup isn’t located in Silicon Valley — it’s in suburban Florida.” Said Wired of Magic Leap’s images, “Its reality is stronger than I thought possible … Magic Leap is not the only company creating mixed reality technology, but right now the quality of its virtual visions exceeds all others.” — Mike Vogel

» AKQYS
Orlando

In August 2013, celebrity fashion stylist Felix Mercado accidentally left his laptop in a checked bag at New York’s JFK Airport. When he arrived home in Orlando, his suitcase and Mac- Book were nowhere to be found.

As a stylist, Mercado had worked with members of the media such as Megyn Kelly and celebrities, including Nicki Minaj. “On that laptop were their profiles, photos and some really important information,” he says.

After two months of waiting for the airport and TSA to find his laptop, he was told it would never turn up. “I was furious,” he says.

In October 2013, Mercado developed AKQYS, a GPS luggage tracker that records and transmits data from two hidden cameras via wireless networks to the cloud. In addition to pinpointing the location of a piece of luggage, he says, AKQYS can provide visual proof of the bag or its contents being stolen.

Earlier this year, Mercado pitched his company to a roomful of potential investors, who got him thinking about a business-to-business strategy. He is now working toward a B2B product launch next year. “Our focus is on tracking shipments for the trucking industry,” he says.

» Candidate.Guru
Boca Raton

As an executive recruiter for a New York consultancy, Chris Daniels used LinkedIn and other resources to help spot talent. Time and again, however candidates who looked good on paper were ultimately deemed a bad “fit” for the job.

“I got really frustrated by how hard it was to get to the best people quickly and costeffectively,” he says. “I thought, ‘Gosh, there must be some sort of technological solution.’”

In 2014, Daniels launched Candidate.Guru, a software application that helps companies vet applicants based on how well they’re likely to mesh with hiring managers.

The Boca Raton startup doesn’t administer personality tests or questionnaires — millennials have no patience for them anyway, Daniels says. Instead, Candidate.Guru analyzes publicly available data to prescreen applicants for culture fit and ranks them accordingly.

To determine fit, the software takes into account things like average job tenure, hobbies, interests, outlook on the economy and communication patterns (but not demographic factors such as age, gender or race). Rankings are then passed along to corporate recruiters and managers.

“At the end of the day, hiring will always be a human decision,” Daniels says. “It’s just the upfront process that doesn’t need to be so painful and inefficient.”

Candidate.Guru has raised more than $1.2 million to date, including a financing round led by Orlando’s FAN Fund. It expects sales to grow from about $250,000 this year to $1 million next year. The company employs five people full time and four others on a part-time or contract basis.

Tags: Research & Development, Technology/Innovation

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