Kline Technologies – Maryville
Sebastian Kline doesn’t fit the standard entrepreneurial profile.
His company, Kline Tech, which seeks to design and produce the world’s first functional smart pallet, is his first commercial endeavor, formed when he was a younger teen. (He’s just 17 now.)
His idea: automated pallets that can scoot around a warehouse under their own battery power. The pallets require no manual control whatsoever, commanded by Kline Tech’ radio-frequency identification device (RFID) warehousing system. If the user so chooses, however, he can retake manual control using a mobile device app. The beauty of such an app is that it allows warehouses with the RFID system to do business with nonupgraded warehouses.
This might sound far-fetched, but it’s firmly rooted in current technology. RFIDs are increasingly miniaturized and sophisticated devices that can be affixed to any object to track and manage inventory, assets, people, cats and dogs — almost anything that can be tracked. RFID offers big advantages over bar codes: the tag can be read if passed near a reader, even if it is covered by the object or not visible. And unlike barcodes, RFID tags can be read dozens at a time.
Kline’s idea takes this concept one step further. He and his team, fellow Central High student Max Mitchem, the firm’s head of marketing, design and websites, and software specialist Brian Simon, are perfecting a smart phone app that can be used to call up whatever pallets you want shipped. Just point the device, and pallets move to the loading dock automatically.
Like most ah-ha! moments, inspiration struck unexpectedly. Kline was waiting for a flight home from an uncle’s wedding at Tokyo’s Narita Airport and noticed planes being loaded with mobile pallets made of hardened plastic; the pallets used a system of rotating balls. This was clearly an innovation. Most pallets today are made of wood and are immobile. Wooden pallets have a very short life span and simply cannot withstand the damage caused by today’s high-volume shipping tools.
How could these smart pallets be made even smarter, he wondered? Could they be engineered to load themselves onto vehicles? Kline rejected that idea. Such a pallet would require costly upgrades in warehouses and trucks. But a tough, reusable pallet that could get itself to the dock for loading would save man-hours of forklift and other warehousing operations, not to mention the cost of constantly replacing pallets.
Kline has benefitted from the sound business advice of first Larry Lee, director of the Northwest Missouri State University (NMSU) SBTDC and of the Center for Innovation and Entrepreneurship, a business and technology incubator, then of Rebecca Evans, director of the NMSU SBTDC in St. Joseph, his current advisor.
Kline plans to move his operation into the Center next year and, with the input of Lee and Evans, has priced the pallet at around $1,500.
Lee was instrumental in the company’s formation from the start, aiding Kline with a broad array of business essentials such as writing a sound business plan and a deal sheet; identifying funding sources; perfecting his pitch; and creating cash flow projections, valuation and other financial pro formas.
“I met Larry when I was a freshman in high school,” Kline says. “I continue to be amazed by him, he’s so experienced. He encouraged me to pursue this as a business idea. He really built up my confidence and helped me build the bare bones of a business.
“Rebecca is now my main advisor, and she helps me with financial statements, among other things. She keeps on top of pitching and other events and offers feedback and suggestions. She’s also very frank with me. She’s just a whiz in Excel and spreadsheets. Sometimes I come up with a number; she’ll look at it and say, ‘Where’d this come from? This won’t work,’ and really, I’m glad. Were I to go to an investor, I would be questioned like that or worse.”
Such poise is not typical of a teenager. But Kline is no ordinary teenager.
“He’s well-spoken and articulates what he wants very well,” Evans says. “Investors are typically not as concerned with age. They’re more concerned with if there’s a market for something and if they can make money on it.”
The MO SBTDC may also have helped Kline find the ideal investor, one of the world’s largest makers of pallets and other warehousing tools. The firm’s CEO saw a news report on Kline and the smart pallet, liked what he saw and contacted Lee; Lee then introduced Kline and the CEO.
After a round of negotiations, this firm has agreed in principle to manufacture the pallet from hardened plastic, leaving Kline and his crew to concentrate on the software.
“We still have to produce the RFID tags, lay them out and perfect the app,” says Kline. “It’s going to be a lot of work, but at least we won’t have to manufacture pallets.”
That firm’s executives recognized the smart pallet’s enormous potential immediately: Kline says one executive ticked off more than a dozen industries, from cosmetics and retail to food service, which could use smart pallets in their distribution centers. And a very large fast food company has also expressed interest in the smart pallet. How large? Their Midwestern regional distribution center serves hundreds of restaurants in five states.
Many entrepreneurs fiercely resist handing over control of their innovation. Not Kline.
“I am more than willing to give up a portion of the company,” he says. “I’m flexible. My main concern is getting this product going. There’s a bunch of versions of our product we’ve been thinking of, more applications, too — this app is just the beginning.”
Adds Lee, “Will the smart pallet be a success? There is no way of knowing. But if anyone can make it, Sebastian will.”
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