Tyler Paxton, U-M MBA 2011, CEO
Reid Tatoris, U-M MBA 2011, COO
Benjamin Blackmer, U-M MBA 2012, CMO
Real live person or spambot? Are You a Human can tell: Everybody knows them—those irritating computer programs known as CAPTCHA that make users decipher squiggly confusing letters in order to get to the web content they want. For many, the experience is simply one of the challenges of Internet life. For three co-founders of Are You a Human it was the inspiration to found a new company and realize entrepreneurial success.
Are You a Human’s breakthrough authentication technology tells real people from the bots with PlayThru, a quick, easy game that requires the user to drag an object into a specific location. Simple as it sounds, PlayThru does a much better job of thwarting a spam bot, plus it’s fun for the user and it has tons of marketing potential.
Coming up with the big idea was just the start for the three men who joined forces when all were in the MBA program at the U-M Ross School of Business. They also needed to develop the technology to run at a large enough scale, identify their market, and obtain venture capital. Tyler Paxton, U-M MBA ’11, who had the original idea, says they tapped the University of Michigan’s innovation ecosystem at every step to bring the company along.
Easy, effective, and fun: PlayThru requires users to identify and move an object, like the image of a piece of pepperoni, and drag it to a particular location, such as the top of a virtual pizza. For a person, that’s a snap. But identifying a specific image of pepperoni, and transporting it quickly to its rightful place is a daunting task for the artificial intelligence driving a spambot, Paxton said.
And even though the CAPTCHA exercise takes a user about as long as PlayThru, company surveys show the game feels about 50 percent faster to the person doing it.
“When people try PlayThru they aren’t thinking about how awful the experience is,” Paxton says. “They’re thinking, ‘I can do this.’”
Authentication is a serious business for online enterprises that fight a variety of threats from spambots. For one, the bots are notorious for stealing Web addresses to create ever-bigger spam campaigns. And they can corner the market on an Internet sales opportunity. In fact, it was when a friend came away empty handed after concert tickets sold out in six seconds that Paxton came to his “aha” moment for Are You a Human.
Entrepreneurial ecosystem: The team credits U-M’s Zell Lurie Institute for Entrepreneurial Studies and the Center for Entrepreneurship in the College of Engineering for providing valuable guidance.
Paul Kirsch, program manager for the Zell Lurie Institute, says, “The Are You a Human team demonstrated all of the qualities that we look to cultivate in teams: motivation, flexibility and a willingness to incorporate feedback. The company saw early on that a good idea does not equal a good business and has worked very hard at building a valuable company with their efforts.”
Step by step, the nascent company tapped U-M resources. The founders participated in the Michigan Business Challenge, a competition sponsored by the ZLI. The coaching they received as part of that process helped them prepare for the Rice University Business Plan competition where they won $15,000 as overall second place winners, and an additional $100,000 Most Promising Technology Start-Up award.
Next they secured an investment of $750,000 from a syndicate that included the Zell Lurie’s student-run Frankel Commercialization fund. The syndicate also was made up external venture capital firms, Detroit Venture Partners and First Step Fund, both based in Detroit.
The company also landed two ZLI Dare to Dream grants, and a Norman C. Harbert Summer Accelerator award from the U-M Center for Entrepreneurship, located in the U-M College of Engineering. In addition, Are You a Human was selected to move into TechArb, U-M’s two-year old student accelerator, sponsored by the Center for Entrepreneurship and the Zell Lurie Institute. Tech Arb provides space for 10-12 student companies in downtown Ann Arbor, where they can concentrate on developing their companies alongside students fired by the same entrepreneurial drive.
More recently, the team received first place among student business startups in the statewide Accelerate Michigan Innovation Competition.
Doing the pivot: Co-founder Benjamin Blackmer, U-M MBA ’12, chief marketing officer for the business, says a major business challenge emerged when the team realized it needed to find a market that would see value in replacing the current, no-cost CAPTCHA technology with a paid alternative. The answer lies in PlayThru’s advertising and marketing potential, Blackmer said.
For example, the time a user would spend building a pizza amounts to a valuable marketing interaction, says co-founder Reid Tatoris, chief operating officer and U-M MBA 11. “This is a situation where a company gets 10 to 15 seconds of engagement with a customer. That’s worth paying for.”
Creating the technology and bringing it up to scale was another need. Again, U-M provided the answer in the form of engineering alumni from the College of Engineering. “The recent grads have been fantastic for us,” Blackmer said.
“We can tell when a group is passionate and committed,” says Moses Lee, assistant director of student ventures in the Center for Entrepreneurship who works with the TechArb companies. “Most of the time we meet entrepreneurs with a lot of enthusiasm, but they don’t necessarily know what to do when problems start coming up. These guys hit hurdles and pivoted and kept at it.”