Business Profile: Purple Tree Technologies

No mere siren song: Purple Tree transforms emergency alert technology for modern devices

The genesis of Bill Karl’s business came on a muggy morning in May. After breakfast Bill Karl put on an Al Green record, cranked up the volume and started to wash the dishes. Suddenly, his German shepherd, Zeus, began to howl.

After turning down the music and listening out the back window, Karl heard the tornado siren that had upset Zeus. He turned on the TV and learned the threat already had passed.

“I was a little frustrated because no one interrupts Al Green, and I looked up at the window sill and my pager was up there,” he said. “I thought, ‘Why doesn’t someone page me?’ Then it hit me so hard.

Karl grabbed a stack of engineering books from his undergrad days at Purdue University and rushed to his computer. As an engineer at the 3M plant in Columbia, Karl’s job was to assess how a problem was being addressed and to tease out a better solution.

Armed with a checklist of specifications for his idea, he researched emergency-alert technology online and found that existing products were “close but no cigar.”

The day after the 2003 tornado warning, Karl wrote himself a letter outlining the idea for a new emergency alert system. The certi- fied mail, stamped with a date, was the first piece of documentation he would need for a patent application. Within a week he had started developing what has become the Early Alert Response System, a.k.a. EARS, which gathers the emergency alerts the government sends out to weather radios and local authorities and rebroadcasts them over cellular and radio frequencies. Karl then formed the company Purple Tree Technologies to design and market the technology.

Since then, seventy-eight investors have bought stakes in Karl’s vision, 50 of them from Columbia. As of the first of the year, they’d injected $2.9 million into the start-up technology firm. They may get their first return soon. Purple Tree CEO Rick Happel said the company has an agreement in principle to install the EARS system in 16 New England malls owned by Pyramid Development Co.

Demand for local alert systems on the rise
Discussion about site-specific warning systems spread across the country after last year’s shooting massacre at Virginia Tech and resurfaced more recently after the shootings at Northern Illinois University and the Kirkwood City Hall.

Last month, over a three-day period, a woman shot two people and herself at Louisiana Technical College; a teacher’s estranged husband burst into her fifth-grade classroom and stabbed her; and tornadoes killed 55 people in southern states. Purple Tree issued a press release the following week, saying that in each of those instances time was a critical factor in saving lives. EARS could instantly transmit alert messages to a geographically specific area.

The existing emergency alert system, or EAS, was designed as a way of disseminating information about national emergencies. In 1963, President Lyndon B. Johnson approvedthe system for use by state and local authorities. Digital television and radio broadcasters have been required to broadcast EAS alerts in the last two years.

Everyone who listens to the radio or watches TV has heard and seen the EAS in action during severe weather alerts. The morning when the tornado warning led to Karl’s idea, a National Weather Service meteorologist in St. Louis used radar, data and spotters on the ground to forecast it and sent a bulletin to threatened counties. The bulletin interrupted radio broadcasts with a blast of beeps and static followed by information about the storm. Messages appeared on TV screens, and public safety officials activated warning sirens. The whole process takes less than a minute, said Mike Hudson, a spokesman for the weather service.

Financing the Purple Tree plan
But with the dishwater splashing and Al Green crooning, Karl couldn’t hear that tornado siren in 2003. So he spent the next four years investing everything he owned into Purple Tree. He sold his house and two cars, put up his Harley as collateral for a loan, cashed his life savings and his 401(k), and refinanced his daughters’ college funds. Karl said he’s invested at least half a million dollars in Purple Tree.

Karl enlisted help to develop specific parts of the technology. Josh Brian helped him design the software for the e-fob device that receives alerts.

“He was very gung-ho,” Brian said. “There was a lot of energy about it. The biggest difficulty was he had a lot of ideas about how it should work. I was much more, sort of, ‘This is what’s possible. This is what technology allows right now.’

Most of it had to do with technical details about what you can actually pack into something the size of a pager.”
Just as he needed help developing the technology, Karl found he also needed help financing and marketing it. He started with his friends, and gradually the number of investors grew.

Rick Happel, a former Panera Bread executive, heard about Purple Tree in November 2006. When he first bought a share in the company, he intended to be a passive investor. Gradually he became more involved, and last spring, over breakfast at Karl’s house, Karl asked him to be CEO of the company.

“The idea was a good idea, but I didn’t have the business knowledge to push it to the next level,” Karl said. “Rick had a certain hunger in his eyes. I could tell he wanted to do a big deal like this.”

Mark Allen, an engineer with Purple Tree Technologies, works with the cell phone testing equipment.

How it works
With the EARS system, an aggregator scans for notifications from the federal government’s Emergency Alert System and automatically selects those alerts that apply to the surrounding area. The aggregator relays pertinent alerts to receiving devices called efobs using cell phone frequencies. The aggregator also allows for security officials to input custom alerts. For example, a university with Purple Tree’s system could send out a custom message about a building on fire.

In Pyramid Development Co.’s malls in New England, Purple Tree proposes to attach e-fobs to screens behind store cash registers. The screens will alert employees in the case of an emergency. Purple Tree also sells a keychain-size personal version of the e-fob. The personal device has red, yellow and green lights, which indicate the severity of the alert, and a two-inch screen that displays a message about the warning.

The company is selling the system to colleges, shopping centers and corporate campuses. It’s negotiating with James Lee Witt Associates, a technology and defense contractor that consults with universities, government organizations and other entities. Forty-eight universities, including small liberal arts schools and large state universities, have inquired about the EARS system, Happel said.

The University of Missouri already has a modernized alert system in place. The Glendale, Calif.-based company 3n Instacom implemented its emergency warning system last September. The 3n system sends alerts using phone, e-mail, text messaging, instant messaging, pager, fax and BlackBerry devices.

A Kansas City-based company, Mobile Media Technologies, installed its Textcaster system last year at Columbia Public Schools. The system, dubbed CPS Alert, allows school officials to send alerts to subscribers via text messaging. The number of subscribers to the system has jumped to 3,125, up from about 500 last summer. Most are parents of children in Columbia schools, but anyone can sign up at the school district’s Web site, www.columbia. k12.mo.us.

The Houston-based company Cellcast Technologies installed a system similar to MU’s for the Camden County Sheriff’s Department at the beginning of the year. Public safety offi- cials there are encouraging visitors to Lake of the Ozarks to sign up to receive alerts before coming to the area.

The difference between Purple Tree and its competitors, Karl said, is that most existing notifiers broadcast alerts via SMS, the signal used to broadcast text messages. An SMS message goes from the phone to a holding queue called a short message system and then to its recipient in the order it was received. Karl said Americans sent 12 billion text messages last June alone and all that traffic makes SMS too slow for emergency situations. He said the cell frequencies, by contrast, allow EARS to send 500,000 messages per second.

The future of alert technology In the long term, Happel and Karl hope to make EARS a public standard by licensing it to cellular providers. If mobile service phone providers adopted the technology, Purple Tree could relay emergency alerts to cell phones throughout the country. Happel said he sees cell providers passing on the cost of Purple Tree’s licensing fees to the customer. With a national market, e-fob keychains could be sold in convenience stores at a price anyone could afford, he said. Happel sees “mind-boggling” amounts of revenue in that business model.

The warning network they propose has several benefits over the government’s current notification network.

Purple Tree’s system would target an area more specific than a county, notifying only the people in the direct vicinity of the threat. Aggregators, stored in secure facilities throughout the country, would send an alert to cell phone towers, which can relay a message in a specific direction. Cell phones and mass-produced e-fobs would effectively function as weather radios.

Happel said Purple Tree has some of the connections needed to make that happen. EDS, a technology outsourcing company based in Plano, Texas, could provide hard facilities throughout the country where aggregators would be stored. Karl worked with EDS engineers in Kansas City to design and build Purple Tree’s aggregator.

Cooperation from cellular service providers
Even with the technology lined up, going from vision to reality can be deceptively tricky. James McNabb, director of Columbia and Boone County’s office of emergency management, found that working with cell phone companies to enhance public safety is a delicate and arduous process. McNabb worked with Columbia’s eight cellular providers to ensure they could provide the location of a cell phone that dials 911.

“It’s very technically invasive, intrusive and intrinsic,” McNabb said. “CenturyTel is who all the wireless carriers have to go through because they have the switch for our 911 system. The CenturyTel folks have had to do a lot of testing and coordination with the cell phone companies.”

It didn’t matter whether cellular providers wanted to comply with the 911 standards; federal law mandated them to do it. Not so with emergency alerts, which means Purple Tree will have to rely on its sales pitch.

The proposed WARN Act, a bill in Congress that was written by the Federal Communications Commission to modernize the emergency alert system, won’t mandate the mobile providers into it. The bill outlines technical standards for cell providers that opt in to offer emergency alerts, effectively establishing the rules of the game but letting providers decide whether to play.

Karl and Happel have done their best to make inroads with the cell companies. Karl traveled to Washington, D.C., last March to explain his system to the FCC subcommittee in charge of making recommendations for the WARN Act. Executives from several cell service providers sat on the committee.

“I was nervous, but they needed to hear that it was possible,” he said “That was my goal, to say, ‘Hey, I’ve already done the research, and it is possible to pull this off.’” Happel said Purple Tree has had talks with Sprint and several regional carriers about the EARS product.

MU considers emergency alert upgrades, expansion
For emergency management companies, disaster makes for good business. Last April, the Virginia Tech shooting raised security questions at universities nationwide, but Purple Tree wasn’t ready. Now the company hopes to convince schools like the University of Missouri, which installed a new alert system last year, that they need an extra layer of protection.

The UM System agreed to a one-year, $148,000 licensing deal with National Notification Network, or 3n, last September. The 3n system sends alerts through a variety of channels, including landline phones, text messages, cell phone and BlackBerry messages, to people who have provided contact information to the university. 3n has implemented the system at about 100 American universities.

Members of the university’s IT department had been shopping for a mass-notification system for internal communication purposes since September 2006.

“We were calmly investigating everything, and then April hit, Virginia Tech happened, and it went right to the top of our priority list,” said Terry Robb, the university’s director of information technology.

Purple Tree’s EARS system could add a layer of warning distribution by broadcasting alerts to TV screens visible to campus visitors as well as to students, faculty and staff members who haven’t provided contact information to the university. It could also broadcast to keychain-size personal receiving devices for students, faculty and staff members to carry with them.

As of late February, 23 percent of MU faculty and staff and 15 percent of students had provided their cell phone numbers for the 3n network. Twelve percent of faculty and staff and 4 percent of students had listed a number at which they could receive text messages.

“It’s just a matter of getting the word out and helping people understand what it is,” Robb said. “Folks don’t understand it, and then there are some among the student populations who hesitate because they think they’ll get SPAM messages through their cell phones.”

MU allowed Purple Tree to test its technology on campus but has not indicated whether it was interested in buying the system. The university system could make a deal for another emergency warning system by soliciting competitive bids from Purple Tree and other firms.