A wonderful day in the neighborhood

A wonderful day in the neighborhood

Entrepreneurs by Jean Gruss | Editor/Lee-Collier

Want to complain to transportation officials about that clogged interstate or talk back to a news anchor? Neighborhood America creates and manages sophisticated Web sites that let you do just that.

The idea of social networking on the Web conjures visions of teens poring over the latest postings on YouTube or FaceBook.

But a Naples-based company called Neighborhood America is bringing the idea of social networking to government, big media and corporations. In contrast to the free-for-all blogs that have mushroomed over the Web, the company builds networking sites that promise structure and control.

The company landed some high-profile projects in recent years, including managing viewers' suggestions for CBS Evening News Anchor Katie Couric's signoff line, gathering public input for the United Flight 93 memorial for the National Park Service and collecting comments for major transportation projects around traffic-clogged Boston.

Neighborhood America partnered with industry goliath IBM in 2004 to land more government contracts and recently acquired Sarasota-based MOVO Mobile to help expand its networking system to mobile phones.

Although government contracting has been its main source of revenues since it was founded in 1999, Neighborhood America is making a big push into helping media companies establish social networking systems to connect with viewers and readers. With the MOVO acquisition, the company also plans to target corporations who want to advertise to customers via their cell phones.

Neighborhood America's top executives decline to cite revenues, but they expect the company to be profitable starting next year.

Lawyer becomes techie

At first glance, Kim Kobza's credentials aren't exactly Silicon Valley grade. He's a former corporate attorney whose specialty was helping developers with complex land-use issues in Florida. Before that, he had been a municipal attorney in Michigan.

But it was his understanding of the complex communications with government agencies in Florida over 18 years that led him to start Neighborhood America with co-founder David Bankston in 1999. Bankston, who is the company's chief technology officer, directed Web development for giant data firm LexisNexis prior to joining Neighborhood America.

Kobza and Bankston realized that the Internet could make citizen involvement in public issues more efficient. The key would be to set up a mechanism that would accomplish this in a timely and cost-effective way. "We don't always hear the best ideas at public meetings," Kobza says.

So they developed software that would allow governments to set up Web sites so anyone could comment on various projects, not just those vocal few who attended meetings in person. They created Neighborhood America in September 1999 and their first project was helping the city of Fort Worth, Texas create a master plan in April 2000 with input from citizens via the Web. That led to subsequent work in cities such as Denver, where Neighborhood America helped the city decide how to transform the old Stapleton airport into a residential community.

Partners with IBM

Following the terrorist attacks of 9/11, the Municipal Art Society of New York commissioned Neighborhood America in 2002 to create a Web site to solicit public comment on nine proposals for the redevelopment of the World Trade Center site.

Through the site, the society received more than 25,000 online comments from around the world. The project, Imagine New York, received the American Vision Award from the American Planning Association.

It also caught the attention of IBM, which is a leading supplier of software services to municipal and state governments. "That was a real inflection point for us," says Kobza.

In 2004, the companies signed a revenue-sharing agreement that allows Neighborhood America to offer services to state and local government agencies that have contracts with IBM. Public-comment Web projects cost $20,000 to $100,000, depending on the complexity and number of sites.

The IBM partnership gave Neighborhood America immediate credibility. As a result, the company landed big contracts in Florida and Massachusetts, as well as cities such as Atlanta, with more on the way. In Florida, for example, the company got a contract to manage public comment for the Florida Department of Community Affairs' Century Commission.

In Massachusetts, Neighborhood America created Web sites to elicit public comment for three massive road projects, including the study of the I-93/I-95 interchange through which 375,000 cars pass every day.

In Atlanta, the company set up a public-comment site for the city's $2.8 billion BeltLine project, which was a proposal to build a light-rail line around the city. The rail loop would cut through 22 jurisdictions, so it was essential to make sure residents approved. Neighborhood America designed and launched a Web site in two weeks that drew responses from more than 10,000 residents.

"The big deal for us is landing those big accounts," Kobza says. "We're negotiating with other states quickly."

Courting Katie Couric

Building on the success of its government contracts, Kobza figured Neighborhood America could do the same for media companies. In its first project, the company helped CNN develop the Hurricane Katrina Safe List, which allowed viewers to post their names and messages to say they were safe after the devastating storm in 2005.

That opened doors at ABC, where Neighborhood America developed a site called "Seen and Heard in America" in anticipation of President Bush's State of the Union Address on Jan. 31. Viewers were invited to submit videos of their own State of the Union address, some of which were selected for airing on television. "We'll let you build your own YouTube," Kobza says. Over 4,000 people submitted videos via the Internet.

Then, earlier this year, Neighborhood America created a Web site that let CBS News viewers suggest ideas for Katie Couric's signoff from the evening newscast. Viewers sent in 40,000 suggestions within 48 hours.

Expect more media deals, including with other networks such as Fox, Kobza says. By next year, Neighborhood America executives expect revenues to be evenly divided between government and media work.

Going mobile

With the acquisition of MOVO, Kobza says Neighborhood America can deliver its services to any computer device. "MOVO is such a big deal," Kobza says.

One reason it's a big deal is because the company can manage an interactive mobile campaign for corporations, a potentially lucrative new source of business. For example, companies can send advertisements to mobile-phone customers who request them. In August, Neighborhood America hired technology veteran Michael Faulks to be director of sales for the company's corporate line of business. Faulks was previously with well-established tech companies such as CA, ADP, PeopleSoft and RightNow Technologies.

Neighborhood America can also apply the mobile technology to the public-comment arena, such as sending video from a phone to a media outlet or sending a text message to a government agency. For example, it recently established a system where Collier County businesses can receive alerts from government agencies ranging from schools to law enforcement in the event of a hurricane.

To accommodate the growth, Neighborhood America plans to double the number of employees to about 130 people and double the size of its headquarters to 24,000 square feet.

"Now's the time when you go fast," Kobza says.

Preaching patience

Kim Kobza acknowledges that it took longer than forecast to build Neighborhood America. While he declines to cite revenue figures, he expects the first profitable year in 2007.

"We were naïve," Kobza says. "I don't think we fully appreciated the barriers."

The technology itself was new and it was difficult to sell the concept at first. One of the biggest challenges was building a sales organization, particularly since Naples isn't known as a hotbed of technology. Despite a favorable quality of life, recruitment of sales managers proved more difficult because of the company's location far from other tech companies in California or the Northeast.

Fortunately, Kobza's investors are a patient bunch. Seven years is a long time for investors to wait on a return on their investment, particularly in the technology industry. But that's one reason why Kobza says he didn't turn to venture capitalists, who generally expect a return within three to five years.

"Their investors are pretty sophisticated guys," says Dan Miller, cofounder and CEO of MOVO, who sold his Sarasota-based company to Neighborhood America earlier this year in a cash-and-stock deal whose terms weren't disclosed. "The ability to raise money from dedicated, long-vision investors is very unique." Miller is now Neighborhood America's vice president of Mobile Solutions.

To raise money, Kobza turned to the people he knew in Southwest Florida, including Naples developer Scott Lutgert and Don Gunther, retired vice chairman of commercial construction giant Bechtel Corp. These and other undisclosed investors helped Kobza raise $20 million the company needed over the last seven years.

"We stay focused on building a great company," says Kobza. "Our job is to create maximum opportunity for shareholders and the organization."

Kobza acknowledges receiving "stacks" of proposals from outside bankers and investors, but he keeps the company's future plans close to the vest. "Nobody can tell you what the future holds," Kobza says with a knowing smile.

-Jean Gruss