December 1, 2013
John MacLeod's new tech company, HearHere Radio, will launch as a free iPhone app early this month.
The concept is modeled after online radio service Pandora, except the rolling content is news, not music. The Rivet News Radio app will feature national and local news, hyperlocal traffic reports and weather. Users can also adjust the settings so that songs stored on one's iPhone play between the news reports.
"If you say, 'Yes,' to music, then every 10 or 15 minutes, you get a little music with your news," MacLeod said.
MacLeod, 56, has raised more than $650,000 from angel investors, friends and family; hired about 25 contract workers, including radio veteran Charlie Meyerson, the former news director of WGN-AM 720; and built a radio studio in leased office space at 300 W. Adams St. in the shadow of Willis Tower.
The Kenilworth resident has a coastcentric resume that's rare in Chicago tech circles, including an undergraduate degree in economics from Harvard and an MBA from Stanford University. He's held leadership roles at Walt Disney Co., Sony Pictures Entertainment and most recently Navteq, where he was executive vice president of sales and marketing.
That job brought him to Chicago in 2000. And after Navteq acquired Traffic.com in 2006, the company set out to integrate digital maps with traffic data. MacLeod has since earned three patents, which concern the animated display of traffic information, personalized audio and visual traffic reports, and location-enabled advertising in traffic channels.
So with those credentials, HearHere should have been an easy sell?
Not at all.
"This is the third iteration of the concept," MacLeod said. "And I've had over 30 rejections from VCs (venture capital firms) and individuals. I've had several VCs saying we're doing too much. This was about two years ago, and finally one of them said, 'John, here's your problem. You're trying to boil the ocean. You're asking for too much money, and it's too much risk.'
"They basically said, 'You're not going to get money from us. Go ask your friends and family. Raise a half-million dollars. Go build something and come back with it.' It took me a year, a year and a half of hearing that before I finally understood."
So he built it. But he's still not taking a salary.
"I've been working on this full time for 2 1/2 years," MacLeod said. "Maybe that tells you a little bit of the pain."
HearHere's goal is to deliver radio news based on "where you are and what you're doing." So instead of a Chicago traffic report, there's a North Shore traffic report, or a South Side traffic report, or a far western suburbs report. Once a listener's device crosses certain geographic lines, the report changes.
"More local information and less clutter," MacLeod said.
So has he inked any advertising deals to support this? No. Not yet. And given the similarity of the app's concept to Pandora's, which still isn't profitable, what makes MacLeod believe his app will succeed?
"Pandora doesn't have a listener problem, and it doesn't have an advertiser problem," MacLeod said. "In fact, it is basically fueling car companies to adopt Internet radio in their cars. It's even helping carmakers sell cars. Those are three very powerful pluses. The minus is that they have a high cost of content because of their license agreements (with agencies to compensate composers, songwriters and publishers). We have a different structure. We produce our own content or obtain it from elsewhere at a far lower cost than Pandora's."
Larry Levy's 'blank check' quest
Larry Levy says he's out looking for what every investor is looking for: a well-run, fast-growing company.
His hunt, however, is focused on a few businesses, namely restaurants, consumer foods and hotels. He has more than $150 million to invest. And he's on a two-year timetable.
And whatever Levy buys, it better have a strong brand. Because Levy said that brand may become the new name of Levy Acquisition Corp., which raised the money in a public offering that closed in November.
Levy Acquisition is what's known as a blank-check company. The company's whole purpose is to engage in a merger, acquisition or similar combination with an unidentified target or targets. (Hence, the "blank check.") The combined business will remain public. Among Levy Acquisition's largest investors is New York hedge fund Davidson Kempner Capital Management LLC, according to regulatory filings.
"There's far more high-quality restaurant concepts with high returns and lower risk than existed 20 years ago," Levy said, explaining why he's re-entering the business after selling Levy Restaurants to Compass Group PLC for $377 million in a two-part transaction that ended in 2006. He said he's starting this new venture with Compass' approval.
Levy Restaurants is best known for the highly regarded Spiaggia, but it makes the bulk of its revenue running concessions in sports venues and arenas, such as Wrigley Field.
Levy has invested the money he reaped from the Compass sale across a wide range of industries, including a local tech startup focused on weight loss, called Retrofit; sneaker-maker BucketFeet; and the River Point office tower along the Chicago River at 444 W. Lake St., which had its groundbreaking in January.
Among his largest investments are Esperanza, a seaside resort in Cabo San Lucas, Mexico, and The Redbury in Miami's South Beach neighborhood, a conversion of the old Fairfax hotel that reopened last week. Levy has held stakes in both properties since 2006.
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Tribune reporter Becky Yerak contributed.
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