Young entrepreneurs got message, changed business

Two years ago, aspiring entrepreneurs Jeff Nellans and Pete Denton received a valuable lesson from Warren Buffett, the second-richest man in the world.

The pair, who dropped out of the University of Washington to run their Web-design company full time, learned that substance is more important than glamour.

The message came when Nellans and Denton sent Buffett a letter in 2003 offering to jazz up the Web site of Buffett's company, Berkshire Hathaway. Buffett's unexpected handwritten response explained that the site was intentionally plain, "like a woman who wears no makeup."

That lesson and an invitation from Buffett to attend Berkshire Hathaway's annual meeting in Omaha, Neb., have stayed with the two and underscores their new venture: creating interactive shopping-mall kiosks.

In March, Nellans and Denton decided to shut down Cube Three Design, their Web development company, to focus their energy and attention on NDR, a company they hoped would carry more weight than polish.

"We had 60 clients at the end, and even if we really started to build up, we weren't building a product," said Nellans, 25, president and chief executive of the new company.

The two young men met at the UW, where both were members of the same fraternity. It's there that they cut their teeth on entrepreneurship by running the Web design company from their frat room.

After corresponding with Buffett on one more occasion, Nellans and Denton have attended Berkshire's annual meeting twice and have an open invitation to come for life.

Now the two are wrapped up with their second company, this time adding manpower by recruiting Nellans' childhood friend, Jeff Razore, a new UW graduate; Brian McAniff, 18, a friend of Razore's younger brother; and two others. The six-person company occupies an office in Bellevue.

NDR's product, called i-Concierge, is designed to replace a static mall directory with an interactive, customizable kiosk.

The 42-inch flat-panel touchscreen gives some basics, including directions and an index of shops, but it also displays other information in a video-gamelike experience.

There are movie trailers, show times and coupons. An attached printer lets users take maps, mall and store information and the coupons with them.

For mall management and retailers, the kiosk is easy to update because it can be controlled from an Internet login.

The idea marries the technology Nellans and Denton learned and developed at Cube Three and what Buffett said about creating something that counts. The kiosk may look like a glitzy plasma screen, but it's more than that.

Denton, 26, said, "It's all about adding value for customers."

So far, Crossroads Bellevue — the two men's hometown mall — has installed three kiosks. The main functions revolve around navigating the mall, but NDR is working on other features.

At Crossroads, the interactive map draws a bread-crumb trail from your location to your destination. Another section focuses on entertainment, with movie trailers as well as listings of live music acts at the mall.

The kiosk also lists or maps amenities such as restrooms, automated teller machines, Crossroads' well-known giant chessboard and the mall's wireless Internet network.

A number of coupons have already been loaded, including ones for Edward Jones and Blockbuster.

Some of the other amenities offered — but not used at Crossroads — include weather information and a higher definition panel. Plans are for users to be able to buy movie tickets and gift cards, printing them out at the station.

NDR also envisions a loyalty-card program similar to those at grocery chains, which would track purchases and the demographics of mall visitors.

Each kiosk costs about $25,000, with the price depending on the size and quality of the screen and other factors. But NDR also offers a revenue-sharing agreement that involves advertising.

Ron Sher, managing partner of Crossroads Bellevue, said he decided to buy the new kiosks because the old ones needed updating and were a pain to update when a store moved out.

Of all the options available, Sher said, NDR's were flashier.

"In the shopping-center business, you are looking for a little bit of flash. We are somewhat in the entertainment business," he said. "It's pretty amazing. Everyone who sees it is very impressed."

Is Sher as impressed with the inventors of i-Concierge?

"I like their youthful enthusiasm. They are not pretentious or trying to act older and sophisticated. They are also not blasé, and I think that's great," he said. "I'm trying to act 25, too."

Tricia Duryee: 206-464-3283 or tduryee@seattletimes.com