Corrections or additions?
This article by Barbara Fox was prepared for the May 14, 2003 edition of U.S. 1 Newspaper. All rights reserved.
E-Z Pass for all Reasons
Scene one: You’re in line for beer at the stadium,
and after you have been waiting impatiently for 10 minutes while people
ahead of you fumble for money and change, you miss seeing your team
take the ball 80 yards for a touchdown.
asks the bartender. Sure. But at the end of the evening, you and the
bartender are arguing over whose drinks are on your tab.
Forrestal campus, Proximities LLC, aims to revolutionize waiting lines
at entertainment venues with a radio frequency identification (RFID)
system that it claims is both simple and inexpensive (609-951-9595;
fax, 646-514-5877, www.proximities.com).
Three 20-something friends — one left Princeton University in
his junior year to start this company — call this "an E-Z
pass for beer." They have a wristband that can be "charged"
by a radio transmitter chip, raised $30,000 from family and friends,
have just gotten $500,000 in first-round funding, and are hiring.
Their patent is pending on a "Proximities GO bracelet" that
disables itself if you take it off your wrist.
Proximities technology serves some of the same purposes as magnetic
strip and barcode technology but is better, claims John Lerch, CEO.
Each Proximities GO bracelet has a wire loop. When this loop is brought
to the reader, the reader transmits radio signals, and it gets a "charge."
The voltage of the charged loop powers a radio transmitter chip, which
sends a stream of unique identifying numbers to the reader.
Unlike magnetic strip cards and barcoding, the Proximities GO reader
needs neither direct contact (as when you swipe a card) nor a direct
line of sight (as with a barcode identifier), so it does not get disabled
by magnets, dirt, or water.
High-speed, reliable cash-free transactions with a card or bracelet
will, says Lerch, increase sales, prevent bartender theft, and provide
promotional opportunities — not to mention encourage the responsible
consumption of alcohol. The bartender preauthorizes the customer,
as with a hotel or car rental bill. Club customers do not need to
carry cash and can buy drinks at any bar at the club throughout the
"The restaurant doesn’t have to be extremely busy for this to
work," Lerch says, "because cash inhibits sales and using
credit cards is slow. Running a tab is a terrible system."
The GO bracelet can prevent minors from buying beer at concerts or
sports events, says Lerch. Would-be drinkers must pass through a turnstyle
that reads their bracelet, automatically subtracts the cost of a beer
from a pre-paid cash account or credit card, and pick up their beer
from an attendant. Minors equipped with a differently coded bracelet
could buy food, soft drinks, and souvenirs.
At amusement parks and water parks, the GO bracelets would go a long
way to improving customer satisfaction, says Lerch. Instead of waiting
two hours for the roller coaster, you would swipe your bracelet to
reserve a place in line and then be free to do something else, such
as spend money. He even envisions a system of message terminals, where
identifying yourself with the RFID technology would let the client
check ride reservations and send video messages to friends and family.
It seems like such a simple idea, yet it’s new. "Josh and I were
waiting in line for a roller coaster at Hershey Park, discussing the
physical inefficiency," says Lerch, "and we got the idea of
using an RFID bracelet to reserve your place in line. Then Josh was
at a Dave Matthews concert and waiting for a beer when he came up
with the idea of applying our solution to that market."
They did their homework, discovering that Disney companies use ticket-based
reservations systems, and Six Flags uses a beeper-like product to
reserve places in line. "So now we are focusing on resorts, concerts,
and night clubs — places where cash is still used and where businesses
want to stimulate impulse purchasing.
Joshua Girvin, the COO, is the 20-year-old who should
be finishing his junior year at Princeton University, but who took
a leave of absence to start this firm. His father, a physics professor
at Yale, is helping the company design the bracelet.
John Lerch, the 24-year-old CEO, is the son of a paper mill manager
and a medical transcriber. He graduated from Princeton’s engineering
department in 2001 and already has significant start-up experience,
helping to found Princeton Power Systems, a company that makes power
conversion devices for efficient motor control and converts electrical
power for alternative energy generation sources (U.S. 1, November
28, 2001). It has had some success — it has a contract with DuPont
for its first installation — but Lerch leapt to this new opportunity.
Dan Williams, the 27-year-old president, met Girvin on the rugby field.
Williams coaches rugby at Princeton, but he is also a successful entrepreneur.
The son of real estate developers in South Africa, he graduated from
Cambridge, where he started a dotcom company that recruited Oxford
and Cambridge alumni for financial services firms. He sold that firm
in March, 2000, five days before NASDAQ’s peak and now is associated
with an alternative investment fund, Middlebury Capital, and the Caydal
Fund, a Connecticut-based investment vehicle for the Daly family.
Through these funds came the $500,000 that Proximities will use to
But as Lerch says, "it doesn’t take a lot of money to beta test
at nightclubs." They are negotiating with Caribbean resorts
and some concert venues on the east coast.
The trio does have competition. Rivals are trying to install similar
systems in California and Hawaii at water parks, where the logistics
of bathing suits and beach bags put a damper on food and merchandise
sales. "You can’t carry cash in a bathing suit," says Lerch.
The Proximities crew says it measures success not only in terms of
money but also by how it is socially responsible. "We are devoted
to making life better — simpler and safer — for the people
who use our products, partnering with the communities where we do
business, we create strong networks of social support." In other
words, Big Brother might use the RFID technology to collect marketing
data, but it would also make places safer. For instance, children
could have bracelets that restrict access to certain areas and that
would not let them leave the venue without being accompanied by an
adult. Bars could be linked with taxi companies, so that a bartender
could load a drunk client into the taxi and pre-charge the ride home.
And when patrons don’t have to carry cash, there might be less crime.
This could be big? "That’s what we’re hoping," says Lerch.
— Barbara Fox
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