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Are You a Human? Ross-Driven Tech Startup Can Tell :: Video

12/20/2011 --

Detroit-based venture delivers new method to differentiate between real people and spambots.

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ANN ARBOR, Mich.—Everyone who makes Internet transactions knows them—those irritating computer programs known as CAPTCHAs that make users decipher squiggly letters in order to get to the Web content they want. For many, the experience simply is a challenge of Internet life. For three co-founders of Are You a Human it was the inspiration for a new company that recently received first place in the student category of the statewide Accelerate Michigan Innovation Competition.

The fledgling business, now located in a downtown Detroit, with close to a dozen employees and contractors, is featured in a new communications campaign to tell the stories of innovation spawned at the university.

While still enrolled as students at Michigan Ross School, the Are You A Human team—CEO Tyler Paxton, MBA '11, COO Reid Tatoris, MBA '11, and CMO Benjamin Blackmer, MBA '12—came up with an idea to authenticate online transactions using a quick, easy game that requires the user to drag an object into a specific location. For example, the user may be asked to drag green stars into a blue box.

This simple task for a human is one designed to outsmart malicious bots that seek to intervene in such transactions in order to steal Web addresses and create spam campaigns, or to corner the market on an Internet sales opportunity.

"So we tried to think about, 'hey, how can we make this a much better experience for people but much harder experience for bots?'" Paxton says.

Realizing their program was not something companies would pay for—particularly since CAPTCHA is free—the team created a marketing focus for the product. A company that sells pizza, for example, could get a few seconds of advertising exposure as the user drags pepperoni onto a pie.

"This is a situation where a company gets 10 to 15 seconds of engagement with a customer. That's worth paying for," Tatoris says.

Are You a Human tapped U-M's innovation ecosystem all along the way, says Paxton. The team credits the Zell Lurie Institute for Entrepreneurial Studies at Ross and the Center for Entrepreneurship in the College of Engineering for providing valuable guidance.

The founders participated in the Michigan Business Challenge, a competition sponsored by ZLI. The coaching they received as part of that process helped them prepare for the Rice University Business Plan competition where they won $15,000 as overall second place winners, and an additional $100,000 Most Promising Technology Start-Up award.

Next they secured an investment of $750,000 from a syndicate that included ZLI's student-run Frankel Commercialization Fund. The syndicate also was made up external venture capital firms, Detroit Venture Partners and First Step Fund, both based in Detroit.

In addition, Are You a Human also landed two ZLI Dare to Dream grants and a Norman C. Harbert Summer Accelerator award from the U-M Center for Entrepreneurship, located in the College of Engineering. The company also was selected to move into TechArb, U-Mís student accelerator, sponsored by ZLI and the Center for Entrepreneurship.

Editorís note: This story is an abbreviated version of a full feature found at innovate.umich.edu/innovator-profiles/are-you-a-human.

For more information, contact:
Bernie DeGroat, (734) 647-1847, bernied@umich.edu