Inventor/Entrepreneur

Projects

Mahana

Mac grew up around numbers. His father was a very successful real estate developer in Hawaii. He grew up watching and/or becoming involved in his father's many projects, including the Ala Moana Shopping Center (at one time the largest and most successful shopping center in the world); the Ala Moana Hotel; the Maui Marriott; and numerous other condominium projects, hotels, office buildings, and retail projects:

As a kid, the den my dad worked in was next to my bedroom. I remember falling asleep listening to the old manual Olivetti or electric Freiden calculator computing calculations that he entered into large paper worksheets.

After studying at the University of California, Berkeley (where he had followed his father and was a fourth-generation Beta), Mac returned to Honolulu and eventually joined his father's real estate development business:

My dad made me Project Manager of a high-rise, luxury condominium project on Maui. Since there were two buildings, I named it The Mahana (Hawaiian for "twins"). Keeping track of the interest cost on the construction loan on paper was a challenge so we turned to a computer. Not having our own we used computer "time-sharing". I entered all of our parameters remotely into the computer using a telex machine as a terminal. The results were then printed on the telex machine. This process saved a huge amount of time!

Mac's years growing up with and later working with his father taught him a great deal. Mac recounts the greatest lesson he learned from his father:

One day, when we were working together as partners, my father took me aside and told me that he would tell me the secret of real estate development. He said, "Mac, there are many components to the success of a real estate project. There is the land, the design, the financial pro forma, there may be a major tenant, there's the market for the project (such as a hotel, condo or office building), there's the equity, the financing, the architect, the contractor, and the rest." He continued, "The first thing you do is to select the most important piece and hang it right here, up in the air [gesturing by hanging something in the space above his head]. Then you select the second piece and hang it right there, on the first. Then you take each succeeding piece and hang it on the last." With a sparkle in his eye, he said, "The key is that you have to do this very quickly before anyone realizes that the first piece is hanging in midair . . . for, you see, the secret to real estate development is smoke and mirrors and black thread!" My father's secret to success was that he created a future. Where others saw a pile of coral, he saw the largest (and possibly the most successful) shopping center in the world (Ala Moana Center). Where others saw a vacant lot, he saw one of the most beautiful office buildings in Honolulu (345 Queen Street Building). Where others saw an empty stretch of beach, he saw a successful, large hotel operated by one of the world's leading hotel chains (Maui Marriott). Where others saw a site on Montgomery and Market in then a sleepy San Francisco, my father saw a vibrant city with the tallest skyscraper west of Dallas, complete with a BART station before BART existed (44 Montgomery St.). My father created illusions and then put those illusions out there for others to see, admire, contribute to and agree with. No matter the opposition, whatever problems came along the way, he kept putting his illusion there day after day after day. His intention was unyielding. And do you know what the result of his persistence was? His illusions became successful realities. My father taught me to create future.

While working with his father, Mac became involved in structuring sophisticated partnerships and financings. Needing better computer methods, Mac got his first computer, a Compaq "luggable." He learned how to develop complex spreadsheets, initially using VisiCalc, then with Lotus 1-2-3.

RightRoute

In the late 1980s, Mac became interested in telecommunications. The industry had opened up after the breakup of AT&T and there were a multitude of poorly understood telecommunications options for businesses wanting to reduce the very high-cost of their existing services. Mac delved into the art and science of telecommunications network optimization:

I applied one of the many lessons that I learned from my father. He gave me the book The Richest Man in Babylon and one of the guiding principles in that book was to "counsel with wise men." I looked for the "guru" on telecommunications and discovered James Jewett (founder of Telco Research) who had written a great book on designing telecommunications networks. I read that book. In it Jim laid out each of the basic concepts involved in network optimization. In chapter nine he pulled all those concepts together and I was able to understand what Jim's art was all about. I later found myself teaching network optimization to people who had spent their careers in the telecom industry. All I had done was find the guru, study what he had to say, and understand it.

That understanding opened the door for Mac to design and develop his first software application. It was a sophisticated network optimization system for telecommunications networks. The application, RightRoute, was acquired by U.S. public corporation in 1990. This was Mac's first high-tech sale!

I learned an important lesson from RightRoute. RightRoute was a powerful application that was highly needed; it could significantly reduce telecommunications costs for many businesses. Unfortunately, it was not wanted. Telecom was simply too complex, too difficult to confront and too hard for management to understand. This prevented them from being interested in a complex method to lower their businesses' telecommunications costs. It was simply easier and less risky to leave a bad situation alone. No one would ever know about savings that were not realized. As was said at the time, "No one ever got fired for going with AT&T." For real success, I discovered that I had to create a solution that was both needed and wanted.

International CallBack

A GREAT IDEA BUT A FAILED STARTUP: In 1991, Mac applied what he had learned in telecom together with his ability to find a solution (that others didn't see) to another known problem. At that time, the cost of making international telephone calls from foreign countries was almost prohibitively expensive. A company by the name of Gateway USA had set up a system using live operators to "call back" foreign customers, provide them with U.S. dial tone, and complete calls within the U.S. at lower rates. This service saved its customers money but was inefficient and expensive to operate as it required live operators to complete its calls. Mac decided to find a better, automated, and more cost-effective method, which is precisely what he did. He prepared a business plan describing his innovative technology and then sought financing and partners to implement it. He failed in this quest. About six months later, Viatel introduced an international call-back service using exactly the technology that Mac had first described in his earlier business plan. Viatel became hugely successful, making hundreds of millions of dollars over the following decade:

The technology that I came up with for an international call-back service was extremely effective (just ask Viatel and its subsequent competitors). What I learned is that a good idea is not worth much without the ability to execute. Execution includes having a qualified and dedicated team along with proper planning, access to appropriate capital and the management skills to execute. If you don't have those things, and execute, then your "good idea" can only win the consolation prize of watching someone else prosper using the idea that you had first.

InnTechnology

In 1996 Mac co-founded InnTechnology. With InnTechnology, he designed, developed and deployed an in-room printer-copier-fax solution for hotels. Working in partnership initially with HP and later with Brother International, InnTechnology designed proprietary methods of communicating with those manufactures’ multi-function machines in hotel guest rooms. This enabled a central InnTechnology server to print into the guest rooms, delivering faxes and/or hotel messages; to monitor in-room guest printing, copying and fax activity; and to post appropriate charges to guest accounts. The system also would retrieve guest charges from the hotel property management system and format and deliver folios (bills) to guest rooms. There were many technical challenges met in developing this system (including one that Microsoft said was “impossible” to solve).

The InnTechnology system was deployed in many prominent hotels including: the Venetian Resort, Hotel and Casino in both Las Vegas and Macau; various Hilton Hotels; Loews; Paris Las Vegas; THEhotel at Mandalay Bay in Las Vegas; and boutique hotels such as XV Beacon in Boston, Bryant Park in NYC, and the Shore Club in South Beach.

Press Release From The Venetian Resort, Hotel & Casino Las Vegas, Nevada, February 4, 2000

InnTechnology was challenging; importantly it gave me the opportunity to learn both how to—and how not to—develop, deploy and support a complex technological system. Developing a complex system is challenging and satisfying when it finally works, but keeping things simple, efficient and streamlined is highly desirable.

While with InnTechnology, Mac conceived and executed the world’s first public demonstration of Bluetooth technology. It happened at Comdex in Las Vegas during 2000 in a demonstration that started in the Venetian Hotel lobby and ended in a suite. Partners such as IBM, HP, and Texas Instruments joined InnTechnology for this demonstration, along with a number of other companies focusing on opportunities surrounding the promise of Bluetooth technology.

Press Release: The Venetian Resort-Hotel-Casino & InnTechnology SHOWCASE BLUETOOTH™ HOSPITALITY SERVICES

During that successful Bluetooth demo (through which I toured hundreds of press, VIPs, and industry insiders), the head of IT at the Venetian asked me, “This is all very impressive technology, but how do you make money with Bluetooth?” That was a good question, for which I had no answer – making money with Bluetooth was years away at best, and I had no realistic idea how InnTechnology could do so. We generated positive worldwide press for InnTechnology (and I learned a valuable lesson in the difference between PR and marketing), but the week after Comdex I decided that InnTechnology was no longer involved in Bluetooth.

A YEAR OF CHALLENGES: InnTechnology was presented with significant unique challenges in 2001. It started out with Mac confronting and successfully addressing the need to redesign the InnTechnology product in order to keep the Hilton account. This required a third version of the proprietary hardware the company designed and manufactured to make its system work in the printer-copier-faxes installed in hotel rooms. Mac also faced a significant personal challenge in early August when his wife passed away after a year-and-a-half year battle with cancer, leaving him to raise their 12 and 17 year-old sons. After extensive negotiations, the Millenium Hilton Hotel (across the plaza from the World Trade Center) executed a contract in late August 2001 to install the new version of InnTechnology’s system.

On the morning of September 11 my partner was heading over the George Washington Bridge to meet with the Millenium’s manager when the world changed. The Millenium Hilton didn’t reopen for about a year and a half (the InnTechnology system was never installed). After 9/11, the hospitality industry took a major economic hit, not recovering for several years. Since we had a lot riding on the new version of our system as well as the Millenium Hilton sale, we had to lay off almost all InnTechnology staff. It was a moment of truth and I decided to keep InnTechnology going and make it win. Without any new capital, in 2002 we succeeded in closing a pre-paid contract with Mandalay Bay in Las Vegas (for its new 1100 room “THEhotel”). With this pre-payment, we covered the development cost of the fourth generation of the InnTechnology system (no more proprietary hardware) in which we evolved to a networked solution utilizing proprietary firmware that we designed, specified and had Brother International write and install into the Brother printer-copier-faxes that we installed in THEhotel. Later we continued to expand InnTechnology, improved that fourth generation solution and installed it in additional new hotels.

Waterfall-IRR Corporation

In 2004 Mac founded Waterfall-IRR Corporation to develop a portfolio management software solution that, at the time, was unavailable to the institutional real estate finance market. This application was commissioned to meet the needs of a large real estate fund. The software development was funded by that real estate fund under a pre-paid software license (i.e., zero equity with the fund having 100% of its license fee returned from later software license sales).

One of this solution's major purposes was to create a state-of-the-art and highly flexible software for Deal Strategy, Structuring and Cash Flow Distribution. This technology was geared toward equity-driven investments and investment portfolios (Mac drew heavily on the first-hand lessons learned from his father). Mac conceived of a previously untried approach to the design and Waterfall-IRR successfully developed a software technology that enabled deals with complex financial models, multiple participants, multiple layers, sophisticated payback preferences and profit hurdles to be designed, structured and managed both quickly and easily. This software was based on a multi-industry-standard philosophy of a deal structure referred to as a financial “Waterfall”. (The term “Waterfall” refers to the process of capturing from participants their desired financial relationships and allocating cash flow and profit distributions received from an investment(s) to those participants based on an incentive-based deal structure.) Up until that time the state-of-the-art for modeling such Waterfall deals was to use complex and unwieldy Excel spreadsheets. Waterfall-IRR, for the first time, provided a single, workable, sophisticated and flexible software application to finally address this issue.

THE PIVOT: As the project was nearing completion Waterfall-IRR orchestrated a major pivot. The portfolio management application was spec'd by the fund client; Mac and his partner determined that that portion of the product wasn’t sufficiently special. On the other end of the spectrum, the deal-structuring component was totally unique. People for years had tried and failed to write such software; this was hot. The pivot was to drop the portfolio management app as a going forward product and focus entirely on the deal-structuring app.

Mac publically announced the Waterfall-IRR application in June 2007 at Realcomm in Boston:

Shortly after Realcomm, Mac sought to establish a working relationship with the MRI division of Intuit Corporation. The Waterfall-IRR application was highly complementary to software and services being offered by Intuit. Once Intuit fully understood the capabilities and synergies of the Waterfall-IRR application, talks quickly became focused on an acquisition. That acquisition of Waterfall-IRR by Intuit was closed in January 2008.

Here are images of a portion of the partially completed Waterfall-IRR website (which was never completed due to the Intuit acquisition):

When I was asked to design and develop a financial Waterfall application, no one bothered to tell me that it had been tried a number of times without success. People who attempted to solve the problem essentially came to the conclusion that there were too many different deal structures; that deals were too different from each other; and that building a software program that was comprehensive and flexible enough to address most every possible configuration simply “couldn’t be done.” No one told me that it “couldn’t be done” so I simply went ahead and did it. This was fortunate, since Intuit “knew” it “couldn’t be done” and therefore didn’t even try. After they saw Waterfall-IRR perform they made an offer we couldn’t refuse.

TrustCentral

In 2009, Mac decided it was time for another technology startup. In late 2009, the first idea formed around a new concept and TOBSC Inc. (later to become T-Central, Inc.) was formed in early 2010. The first of five 2010 provisional patents was filed in April 2010. A team was being built and progress was being made. By early 2011, the ideas had advanced into what was then being referred to as TrustCentral. The first U.S. patent applications were filed in April 2011 (with effective 2010 filing dates). Additional key team members continue to be added and the various concepts and components of TrustCentral gelled into an ecosystem!

While the foundation of the unique TrustCentral functional design had been determined, the cryptography design had not been. Although Mac (together with the experienced Senior Software Architect hired for the project) did not appreciate the vital, core roll that crypto would play in the function of the design that was desired, a software prototype was embarked upon and substantially completed.

THE PIVOT: This started with the hiring of TrustCentral’s cryptography designer, the highly respected Dr. David W. Kravitz. With Dr. Kravitz on board, it didn’t take long for it to become apparent that the prototype was not properly designed. It was a tough pill to swallow but Mac had become convinced that the prototype had to be abandoned as it pointed TrustCentral’s technological approach on the wrong path (“it’s better to admit you’ve made a mistake as soon as you spot it rather than continue on, compound the error and risk your company”). It was back to the design drawing boards with a fresh technology path approach under the direction of Dr. Kravitz. It was determined that TrustCentral would be deployed on standard X.509 architecture (an international cryptographic standard). Acknowledging the complexity and sophistication required to meet the needs to be offered, more than another year and a half was invested in working out multiple security issues while focusing on both: (a) determining the new inventive methods being developed in concert with Dr. Kravitz and the TrustCentral team; and (b) chronicling those inventions and protecting them with the U.S. Patent and Trademark Office.

To launch a successful tech company, a company must have a clear and unfair advantage. Mac identified a number of innovative elements in what Dr. Kravitz had designed. After synthesizing the over 500 pages of technical innovations that TrustCentral had filed with the U.S. Patent & Trademark Office, a number of key inventions were singled out will allow TrustCentral offer valuable innovations that nobody else is doing. As a result (as of this writing in the spring of 2017) TrustCentral has been granted four patents. Three additional patent applications are currently being prosecuted with the USPTO.

THE SECOND PIVOT: In early 2016 Mac re-examined the TrustCentral security ecosystem that had originally been designed for the financial services, legal and consumer markets. He determined that this technology could also provide innovative solutions that can play a key role in supporting the expansion and adoption of solutions for the Internet of Things (IoT). The current timing to offer this technology is excellent as it uniquely addresses key, fundamental challenges currently confronting the Internet of Things (e.g., IoT device security and device management). For information on TrustCentral, visit www.trustcentral.com.