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Keeping pace with Shane Chalke '78

"It's really by accident that I didn't end up an engineer, because my love is with mechanical things."

By Ray Bert '93

Shane Chalke moves fast. His garage is littered with the accoutrements of speed: a Maserati, a partially built airplane frame, a snowmobile, and enough motorcycles (and parts thereof) for a Hell's Angels startup. Chalke has raced his bikes and his car competitively; he pilots both helicopters and small planes, and just for good measure he's an accomplished professional jazz trumpeter.

But Chalke's need for speed goes beyond his hobbies: he's also an extremely successful technology entrepreneur who, bored with the slow pace of large companies, built two of his own from the ground up. Many people--maybe most people--have one characteristic or one hobby, skill or accomplishment that stands out, that makes them interesting to the casual observer. What stands out about Chalke is just how many ways he stands out.

Shane's garage, tucked toward the back of his house on a pastoral 100-acre estate in Middleburg, Va., is one of two axes--the other being his family--around which his non-work life turns. It's his workshop and his refuge, where he retreats "really early in the morning before everyone else is up, or really late after everyone has gone to bed." The motorcycle assembly apparatus and innumerable other parts, tools and mechanical gewgaws, the fact that it doubled as a heliport when he used to fly himself back and forth to Manhattan--everything about the space screams "engineer."

Except that he isn't. "It's really by accident that I didn't end up an engineer, because my love is with mechanical things," Chalke says. "When I was a kid, I was always building things--taking the lawnmower engine and trying to put it on the bicycle. I built a 25-foot kite that I flew around in a bit." Despite his educational and career moves away from engineering, Chalke insists that he didn't entirely change: "Building software is almost the same thing--you get the immense satisfaction of seeing something go."

Always the math and science whiz in high school, Chalke drifted toward actuarial science, finance and computer programming at WPI. "What intrigued me was that you could advance on purely objective means, rather than political," he says. To become an actuary you take a series of 10 exams that generally takes between five and eight years. Salaries and progress are based on the exams; in other words, no speed limits. After graduating from WPI with a mathematics degree in just two and a half years, Chalke finished his exams in four years (he moves fast, remember?).

After stints at two Massachusetts insurance companies, Shane landed in California in 1981 with TransAmerica, working in the R&D department. He was soon put in charge of all R&D financial products. But by 1983 he was "itchy," he says, impatient with the pace and attitude toward innovation.

So at the age of 25, with loans from a bank and his parents, Chalke started his first company, Chalke, Inc., in Los Angeles. He struggled and came "within inches" of running out of money, but then got a big break: the company's first customer, E.F. Hutton, asked him to design a series of products for its brokerage.

Things took off from there. Within a few years, Chalke began marketing his home-grown software directly to financial institutions, so they could design their own products. He ultimately built the company to nearly $14 million in revenue and around 100 employees before merging it with another similar company and then taking the combined entity public in the spring of 1996-right in the middle of the tech boom. Speed is good, but timing is even better.

Chalke stayed on for about a year after it went public before leaving to start his second company, AnnuityNet. This time there was no need to start up on a shoestring, and he raised about $40 million in venture capital for the dot-com, which intended to build the technical platform to sell annuities (a specialized type of mutual fund) direct to consumers over the Internet, reducing investment costs much as companies like ETrade did with stocks. "Annuities have the highest commissions in the industry," Chalke says. His direct-sales model aimed to save investors money by helping them to avoid those steep commissions.

Shane Chalke

AnnuityNet recently merged with Wachovia Insurance Agency, Inc.; Chalke, shown here at his home, will remain as president and CEO of AnnuityNet.

"It took me two years to prove that that couldn't be done," he says with a laugh. "I said, 'The world shouldn't be this way.' Well, it is. We had good technology, but people didn't want it." With the company going nowhere and the dot-com bubble bursting, Chalke changed the business model in 2000. He couldn't do anything about the commissions, but there was another problem he could solve: "All the companies selling annuities were doing it with big stacks of forms and Bic pens," Chalke says. "Very out of date." AnnuityNet's new business model was to provide order exchange to the brokers, automating their processes. The reformulated strategy was a near-instant hit, and the company's 45 customers now constitute approximately 40 percent of the annuity market.

"The lesson I keep learning over and over again is that you have to be totally without hesitation to nuke your business model if it's not working fast," Shane says. "I probably should have done it even quicker. But inventors like what they invent. The attitude-mine included-is 'the world's not smart enough for me.'"

Chalke is smart, all right, and what's more, he's got style. His various collections showcase his preference for uniqueness over simply the latest and greatest. His Maserati is a 1977 Bora, a limited edition that he readily admits he bought because it was the car he lusted after as a teenager. Shane's motorcycle collection includes a Rokon Trailblazer, a civilian version of a military bike designed for desert operations, which he put to good use during Virginia's recent snowy winter to tow his daughters, Priscilla and Jillian, back up snow-covered hills after sledding. He also owns a rare MV Agusta that he bought from a museum in Tokyo, a "one of a kind" bike with, as he puts it, a "colorful but unverified history." And some of his interesting items are biological, not mechanical: Nikita, a rare and brilliantly colored Hyacinth macaw, holds court in the kitchen, and a pair of peacocks strut in the backyard.

Variety-whether in his hobbies or pets or business moves-is clearly something that appeals to him. Chalke admits that despite AnnuityNet's success-or maybe more accurately because of it-he'll soon enough be ready to try something else; he needs to scratch the startup itch again, to fly by the seat of his pants once more in a fast-paced environment.

His biggest task, however, will be living up to a promise he made to his wife, Monique: that he'd take a year off after AnnuityNet. What will keep his motor running during a year without work? "I don't know. Something. I can't imagine just sequestering myself in my garage playing with motorcycles in the day and playing jazz at night...actually, wait a minute, that sounds pretty good!" One thing's for sure: when the time comes, you can bet he'll think of something. Fast.

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