Dan Sullivan, an electrical engineer and guitar player, has spent nine years and $4 million bucks of investor money getting his JamStik virtual guitar from idea to bona fide product.
Ed Cannon, a successful engineering entrepreneur and investor in JamStik’s parent company, has just helped Sullivan raise another $5 million from individual investors to accelerate production of the made-in-America instrument.
The $300 JamStik goes on sale this month at Apple stores, and is available on Amazon.com and at www.jamstik.com.
This is the big leagues of retail distribution for a small, local company.
Cannon, 62, a long-term investor in several Twin Cities start-up companies, predicts Zivix, JamStik’s parent company will post revenue of about $10 million over the next 12 months.
Essentially, JamStik seeks to make learning and playing the guitar easier for the masses by letting users plug the 15-inch-long device into an Apple iPad or other digital device.
Cannon sold his privately held Cannon Technologies to Cooper Industries in 2006 and became intrigued with the JamStik story. In 2008, he signed on as an investor with Sullivan and that same year as “volunteer CEO.”
Sullivan said Cannon saved the company with his capital, expertise and connections. Cannon brought in his musician son to test out a prototype and also solicited other investors.
“If I hadn’t met Ed, I think I’d still be [trying to put together the JamStik] in my basement,” said Sullivan, a technology whiz who once took a sabbatical in Europe as a street musician.
“I am patient capital,” said the zero-salary Cannon, who threatened facetiously to “double, maybe triple, my salary” if the company generates positive cash flow as expected in September.
“I believe in the people here,” Cannon added in all seriousness. “And we’re adding more good people.”
Sullivan and Cannon, the largest shareholders, also will get rich if JamStik takes off. That could include eventual sale to a larger consumer products company.
“But we’re going to run this company like we’ll own it forever,” Cannon said.
“We believe our current products are just the beginning and we are already engaged in creating derivative [products],” he added. “Faster adoption and innovation could be accomplished by a strategic buyer with deeper pockets and strong consumer product experience.”
Cannon is a veteran entrepreneur and onetime power-company engineer. His former company in the 1980s used paging to advance wireless “power saver” technology, which allows utilities to conserve electrical demand at peak times.
“I’m the electrical engineer who made money turning off the electricity when you want the air conditioning,” said Cannon, a wry quipster. “My dad told me that money is only a tool and not to fall in love with it. So, I’m having fun now investing in start-up companies.”
The JamStik is not for guitar purists, but for the masses who are interested in learning or playing for fun, said Chad Koehler, vice president of business development and a veteran of California-based Activision and its boom-to-bust “Guitar Hero” product.
With JamStik, the user doesn’t mash buttons. JamStik has strings and frets like a guitar, but makes no sound. It uses electronic sensors to track the vibration of its strings and the movements of a person’s fingers. It sends those digital signals via Wi-Fi to an iPhone, iPad, Windows PC or Apple Macintosh. The JamStik’s digital signals are played as music, without a delay. As as a result of software, it can sound like a guitar, a horn section or a piano.
Zivix’s educational apps display different graphics on the computer screen, teaching consumers where to place their fingers.
The $300 price tag and easy-to-store features also makes it easier for amateurs to travel with the JamStik than a $3,000 guitar.
Popular Science magazine named JamStik one of its top 10 inventions of the year in 2013, mostly based on the way it teaches amateurs how to play the guitar.
Herve Sarteau, a veteran venture capitalist and a Zivix board member, said in an e-mail last week that he invested because it’s a bona fide, unique and “user-centric” way to approach guitar playing that is backed by patents and hailed by industry enthusiasts and consumers. He also believes in the management team.
And 14-employee Zivix, which has been granted several patents for the JamStik, has started to ramp up production at its contract manufacturer, Electronic Systems Inc of South Dakota, a firm Cannon has done business with since the Cannon Technologies days. That could mean up to 25 additional jobs over the next several months.
“It’s not a simple product to manufacture,” said Sullivan, who spent years designing JamStik after he quit a “comfortable” corporate job with a company that bought his last technology firm. “Our product is simple to use, but it’s got a lot of strings and sensors and electronics and a lot of moving parts.”
This 21st century innovation is underway at Zivix’s headquarters in the Minneapolis Warehouse District that more than a century ago was a box factory with indoor stables for the horses.
“I’m very excited to see how Zivix grows and evolves,” Sarteau said.