entrepreneurship : Innovation + Job News

The Minnesota Inventors Congress’ Invention Expo just wrapped up its first session in the Minneapolis Convention Center, after nearly 60 years of meeting in the small town of Redwood Falls. On May 2 and 3, hundreds of exhibiting inventors, investors and business leaders crowded into the center’s main hall to peruse the latest ideas and designs from the country’s brightest tinkerers, hardware whizzes and gearheads.

The continent’s “oldest annual invention convention,” according to its website, moved to the Twin Cities to take advantage of the local infrastructure. For Zachary Crockett, co-founder of Minneapolis-based Spark and an Invention Expo keynote speaker, the move was about connecting tech-savvy hardware and software experts, who tend to be younger and urban, with practical-minded tinkerers, engineers and designers who come from a “broader demographic” and often live in rural areas.

The exchanges of ideas, partnerships, and capital that result can be game-changing. Early on, Invention Expo’s participants often focused on clever, useful products that made discrete tasks easier—think late-night infomercials. Today’s attendees leverage cutting-edge technology to create products with far broader applications, from Bondhus Arms’ credit card-sized pistol (perfect for a post-“conceal and carry” world) to the Powerizer toolbox, which features a battery-powered charging station, USB outlet and three adapter connections to help users stay connected outdoors. Crockett’s Spark Core, meanwhile, is a node that connects everyday items and systems to the Internet via WiFi.

“Building hardware used to be hard,” says Crockett, “but the process has been democratized. You don’t need a $1 billion factory to make things anymore.” Open-source software (and, increasingly, hardware), coupled with coworking and other efficiency-enhancing trends, are making it easier for teams of three or four to develop, build, market and profit from innovative products.

Trevor Lambert, a University of St. Thomas grad who founded Lambert & Lambert (an IP and product-licensing firm) and Enhance Product Development (which turns invention ideas into marketable products), sees two value propositions for Innovation Expo participants.

First, the expo’s workshops and presentations educate novice inventors about the various aspects of product licensing and development, from pitch support with the “Pitch the Experts” panel (on which Lambert sat this year) to Crockett’s “Inventing Success” address, which discussed the potentially revolutionary impact of always-online devices.

Invention Expo, and events like it, also provides inventors with access to markets, whether through product-development experts like Lambert or direct contact with potential investors. With so many good ideas floating around, competition requires inventors to network relentlessly—something that many are less than comfortable with.

For Lambert and his team, that creates an opportunity. “We’re paid to know people,” he says.

 

Max Martin, a luxury shoe brand based in the Nokomis neighborhood of Minneapolis and recently featured in celebrity swag bags at the Grammys and Oscars, goes into production next month with its first full high-heel line. In addition to the Fall 2014 line, a Spring/Summer 2015 line is also in the works. If these two big releases prove successful, a more inclusive women’s shoe line—beyond high heels—could be on the horizon, along with men’s shoes and possibly accessories or other clothing items.

Max Martin got its start in 2012 after William Panzarella, founder of the Minneapolis-based Aegis Foundation (which helps “vulnerable, needy, underserved, and imperiled youth plan, prepare, and focus on education” according to the website), was seeking a sponsor for the foundation’s annual High Heel Dash on Nicollet Mall.

Panzarella noticed a proliferation of shoe brands with ties to celebrities. A longtime hip-hop fan, he immediately saw the potential for a hip-hop line that leveraged his connections to the music industry. Panzarella broadened the idea into a high-heel line that wouldn’t just appeal to musicians. He credits MC Lyte, a former president of the L.A. Chapter of the Grammy Association, with generating publicity about Max Martin among L.A.’s fashionable set, which has driven early sales. Panzarella donates a portion of Max Martin’s pre-season sales to charity.

Being featured at two national awards ceremonies, again thanks to MC Lyte, was a big step forward for Max Martin. For Panzarella, the marketing represented a significant investment, but “the press pays for itself,” he says. During awards season, the shoes were features on Entertainment Tonight and ABC News, as well as in local Twin Cities media outlets. Panzarella also hosted Minneapolis’ “official Oscar viewing party” at Muse. Proceeds from that event benefited the Smile Network and Aegis Foundation.

Panzarella’s fall line includes a striking boot called “Leo,” an angular stiletto called “Betty,” and a classic high-heel called “Moma,” among others. The line’s goal: to prove that true luxury footwear can be made by American hands. The shoes are manufactured in Los Angeles and reportedly are easier on the feet than many other designer shoes, which make them easier to wear on the red carpet—and around town.

The American-made angle was present from the get-go: During Panzarella’s initial market research, he realized that virtually every high-end footwear brand is made in low-cost Chinese factories or, at best, Italian workshops. Spurred on by 2012’s Chinese-made U.S. Olympic uniform fiasco, he set aside his romantic notions of master Italian cobblers manning antiquated shoemaking equipment and resolved to create a footwear line made by Americans, for Americans.

So far, Max Martin’s raw materials, components, and production processes exceed the Federal Trade Commission’s “American Made” guidelines. Panzarella has “tentative plans” to move production to Minnesota in the future.

 

In early April, Docalytics and Kidizen, two startups in the Twin Cities that utilize CoCo’s coworking facilities, headed to California to deliver pitches at the first annual Google for Entrepreneurs Demo Day. The event is a gathering for 10 early-stage tech startups from the seven cities in Google’s North American Tech Hub Network.

Both companies networked with tech industry heavier hitters. Both received funding commitments worth $100,000 from Revolution Ventures, a venture capital firm run by former AOL boss Steve Case.

According to those in attendance, Case was so impressed with the quality of the pitches—and the ideas behind them—that he made an on-the-spot decision to evenly divide $1 million of Revolution’s early-stage funding pool among the 10 entrants. At a frenetic post-pitch networking round, the other 60 or so investors in attendance connected with the startups’ principals on an individual basis about potential investments or partnerships.

“How cool is it that two startups out of Minneapolis-Saint Paul were part of this?” remarks Dug Nichols, CEO of Kidizen, an online marketplace for used children’s clothing, accessories, and knickknacks. “I have never been a part of such a truly talented group of startups at an event, and I've done a lot of these types of events.”

After the pitch round, he and Kidizen co-founder Dori Graff (Mary Fallon is the other principal) attended the hour-long networking event with investors. They spent the entire session “in constant conversation with a number of different VC firms,” says Nichols, “and we've had additional firms reach out to us after the event.”

Evan Carothers, one of Docalytics’ three founders, had a similar experience. Case’s investment was merely the most public of the company’s Demo Day wins: For Carothers, “getting up in front of a huge group of our peers, investors, and prospects…and tell[ing] them all about the solution Docalytics provides” was equally important, as was securing “the needed capital to really grow our team and product.”

Although it was widely known that prominent VCs would attend, Demo Day’s organizers framed the event more as an opportunity for entrepreneurs to pitch to industry experts and create connections that could lead to funding commitments, either at the event itself or down the line. No one expected Case to commit $100,000, and in such public fashion, to all 10 entrants.

Not that anyone is complaining. As Kidizen continues to gain users and increase its cash flow, Nichols is feeling the momentum. He plans to hire additional developers and marketing staff to grow the six-person firm.

On top of the Revolution investment, which got a wave of national press, Kidizen’s selection as “best new app” in the iTunes App Store’s lifestyle category has dramatically boosted its visibility.

Brian Martucci

In March, the tenth iteration of the Minnesota Cup officially opened to entrepreneurs across the state. The initiative provides mentoring to participants that pass the initial selection phase, as well as financial support for winners. The Cup accepts applications from nascent businesses in seven broad categories, including Food/Agriculture/Beverage, which is new this year and sponsored by General Mills. Melissa Kjolsing, the Cup’s director, ascribes the addition to a massive jump in consumables-related submissions last year. The entry deadline is 11:59 p.m. on May 9.

The Cup’s prize structure isn’t lavish, at least by the inflated standards of the venture capital business. Five of the seven division winners take home $30,000 in cash, with Student and Social winners receiving $20,000 prizes. The grand-prize winner gets an extra $50,000 when the contest wraps up in September. According to past winners, though, the money is almost beside the point.

“Starting anything on your own is difficult,” says Julie Gilbert Newrai, whose PreciouStatus software won the 2012 Minnesota Cup’s grand prize. But, she explains, the serial entrepreneurs, business leaders, and technology experts who donate their time as Cup mentors are “genuinely interested in helping [participants] win.” These veterans help their mentees craft better business plans, hone their investor pitches, and connect with potential partners, employees, and investors.

Newrai is careful not to exaggerate how PreciouStatus’ win influenced the company’s prospects, but it clearly helped. In total, she ascribes more than $1 million in direct investment to her company’s post-win visibility. And that’s just part of the “Cup boost.”

As Newrai sees it, Cup participation does three things for entrepreneurs and their teams. First, it raises startups’ profiles within the state—and, by extension, within the national VC and angel investing communities, which are plugged into local startup scenes. Second, it subjects participants to a barrage of questions and criticisms from veterans who have tried, failed, and succeeded, often in quick succession. “You can’t buy that kind of confidence boost,” says Newrai.

Last but not least, Cup participation shapes and strengthens internal culture: Even if they don’t win, entrepreneurs and their employees derive a well-earned sense of pride and accomplishment from their efforts, validating the sense that they’ve built something valuable.

Minnesota Cup isn’t a radical idea. Businesses have long sought mentoring and funding from more experienced actors, after all. But the initiative dramatically simplifies the process for ambitious entrepreneurs who want to put their ideas in the right hands. The application process is digital and requires entrepreneurs to enter just a page’s worth of data. The competition is open to entrepreneurs at various points in the startup phase, says Kjolsing, from “people with good ideas” to principals of companies with $1 million in annual revenues.

Kjolsing echoes Newrai’s sentiments about the relative merits of money and mentoring. The Minnesota Cup “does provide seed funding, but money isn’t the biggest factor,” she says. “The exposure piece is critical.” Exposure, of course, often leads to investment. And the initiative’s list of sponsors reads like a who’s who of Twin Cities business—from United Health to Digital River—making it an invaluable networking opportunity.

Even entrepreneurs who have existing investor and mentor networks? “There’s no reason why you wouldn’t want to enter the Minnesota Cup,” Newrai says.

Sources: Melissa Kjolsing, Julie Gilbert Newrai
Writer: Brian Martucci

Got big plans for April 26? Lu Lippold, the local producer for One Day on Earth’s “One Day in the Twin Cities,” has a suggestion: Grab whatever video recording device you can—cameraphones included—and record the audio-visual pulse of your neighborhood.

On the final Saturday of April, the Twin Cities and 10 other U.S. metros will host the fourth installment of One Day on Earth’s celebration of film, culture, and all-around placemaking. Founded by Los Angeles-based film producers Kyle Ruddick and Brandon Litman, One Day on Earth (ODOE) has a “goal of creating a unique worldwide media event where thousands of participants would simultaneously film over a 24-hour period,” according to its website.

The first event took place on October 10, 2010 (10-10-10); 11-11-11 and 12-12-12 followed. ODOE skipped 2013, but its organizers weren’t about to wait until 2101 for their next shot. Instead, they selected a spring Saturday—both to accommodate amateur filmmakers with 9-to-5 jobs, and to give participants in the Northern Hemisphere longer daylight hours to work with—for a bigger, bolder, slightly revamped version of the event.

For the first time, participants get 10 questions to inspire their creativity and guide their storytelling, from “What is the best thing happening in your city today?” to “Who is your city not serving?” The goal is to create a multi-frame snapshot of “cities in progress,” one that doesn’t simply answer the who-what-where of the places it covers.

As One Day in the Twin Cities’ point person, Lippold supervises local filmmakers and pitched the project to dozens of partner organizations, including the Science Museum of Minnesota and Springboard for the Arts to visual media companies like Cinequipt and Vimeo. (The McKnight Foundation and the Central Corridor Funders Collaborative are the largest local sponsors.)

The upside? “[The event] is a great way to shine a light on all the hard work that our nonprofit community does,” says Lippold.

Lippold also works with a handful of local ambassadors, some of whom enjoy national acclaim. These include noted cinematographer Jeff Stonehouse, veteran documentarian Matt Ehling, and community-focused filmmaker D.A. Bullock. They’ll be contributing their talents—and stature—to One Day in the Twin Cities’ promotion and execution.

One Day in the Twin Cities could be seen well beyond Minneapolis and Saint Paul. Along with their counterparts from other participating cities, local filmmakers may see their work incorporated into a condensed, three-part series that Litman and Lichtbau will market to PBS affiliates around the country. No word on whether TPT will air the special, but TPT Rewire has agreed to publicize the event in the coming weeks.

The real stars of One Day in the Twin Cities, though, are its filmmakers. Even if you’ve never filmed anything in your life, says Lippold, you can contribute meaningful work. Thanks to an interactive map feature on ODOE’s main site, the work will visible to anyone who visits.

“If I were just starting out in video, I would see this as a huge opportunity,” says Lippold. Since all contributions are credited by name and location, each participant “instantly becomes a documentary filmmaker,” she adds.

Source: Lu Lippold
Writer: Brian Martucci

Docalytics, an ambitious tech company that operates out of CoCo’s Saint Paul coworking space, will be debuting its next-generation document viewing technology at this year’s Google Demo Day. Thanks to a partnership between Google and CoCo, Docalytics’ founders—Evan Carothers, Ryan Morlok, and Steve Peck—are heading to Silicon Valley on April 1 and 2 to show off their cloud-based solution, absorb the wisdom of Google’s top product specialists, and rub shoulders with some of the technology industry’s leading lights.

Not bad for three guys with a startlingly simple idea. According to its website, Docalytics helps marketers “bridge the gap between sales and marketing communication,” boosting lead generation and conversion rates for businesses that utilize online content marketing—which, these days, is just about every business.

The key? “Smart” PDF documents that enable the B2B marketers responsible for putting in-depth marketing materials in the hands of executives, purchasing managers, and other decision-makers to track each prospect’s engagement with their content. Companies that use Docalytics’ application can track, measure, and analyze what potential clients do with key marketing content. That capability generates a treasure trove of relevant data, which marketers didn’t have access to before.

According to Carothers, the idea for Docalytics arose from a simple observation: Few prospects bother to fill out the contact forms on the “gated” landing pages that many companies use to track readers’ engagement with ebooks, white papers, and other marketing materials. These landing pages have “terrible conversion rates,” as Carothers puts it, both because they require effort to get past and because they can seem invasive. This is a classic catch-22: With a lack of viable alternatives, marketers are forced to employ a lead-tracking strategy that actively discourages lead generation. One could argue that they’d be better off not tracking their leads at all.

Unless they had a viable, non-invasive, flexible alternative, that is. Docalytics’ elegant solution removes artificial barriers to prospects’ engagement with high-level pieces of content marketing while dramatically enhancing their ability to analyze each viewer’s experience with the material.

This second bit is particularly important: It’s only a slight exaggeration to say that Docalytics is doing for content marketing analysis what Google Analytics has already done for website analysis. Used properly, the solution could result in far more relevant, personalized, and—perhaps most importantly—authentic-seeming marketing materials. “This tracking provides marketers with data to produce better, more effective content,” says Carothers, “and helps salespeople understand [and cater to] the interests and needs of specific prospects.”

So what do Carothers, Morlok, and Peck stand to gain from Demo Days? First of all, they’ll be pitching directly to a panel that includes some of biggest players in the venture capital space. “This group has the potential to help introduce us to new customers, markets, and growth capital to help us take our company to the next level faster than we could using conventional growth strategies,” says Carothers.

They’ll also get some valuable advice from Google’s product whizzes, who certainly know how to spot and improve game-changing technologies.

Back in Saint Paul, the future looks bright for Docalytics. “We have certainly found a pain point in the market,” says Carothers. “We are already starting to experience great growth and traction and have no plans to slow down.”

If things continue to go Docalytics’ way, the definition of “we” will expand. “[We’ll] be looking for great talent in the Midwest to help us expand and capitalize on the opportunity in the marketplace,” he says.

Source: Evan Carothers
Writer: Brian Martucci

After a long, successful career in the technology industry, Swedish-American entrepreneur Carl-Johan Torarp is bringing reliable wireless broadband to small towns and farmsteads in southwestern Minnesota and beyond. His firm, Minneapolis-based LocaLoop, is “an economically viable 4G business solution for operators providing fixed and mobile broadband Internet service and web applications for consumer, business, and government users,” according to its website. Put another way, it’s a “complete 4G business-in-a-box.”

As a (primarily) B2B firm that markets to smaller communication service providers—rural telephone companies, communications/electric cooperatives, local public utilities, and entrepreneurs who see a money-making opportunity in bringing fast, reliable mobile and fixed Internet service to previously underserved areas—LocaLoop doesn’t deal directly with individual subscribers.

It does, however, offer a complementary, consumer-facing brand called synKro, which is enabled by LocaLoop’s four-patent cloud technology. SynKro allows operators to immediately deploy this “brand-in-a-box” and leverage LocaLoop’s existing marketing infrastructure, salesforce, and client-facing services.

On top of the cachet of an increasingly recognizable brand, synKro offers benefits like on-demand support, automatic payment collection and mobile compatibility—“data roaming,” as LocaLoop describes it—with other synKro-enabled providers across the country. Subscribers who want to use their mobile devices outside their regular provider’s service area can be confident that they’ll enjoy access to consistent, high-quality broadband Internet.

If this sounds novel, it should. According to Torarp, LocaLoop’s solution is a superior—and innovatively disruptive—alternative to the three main categories of service providers that currently operate in LocaLoop’s target markets. These are larger telecom firms with huge “legacy” investments in fixed (aka landline) broadband systems that require government subsidies to remain profitable; smaller firms that rely on wireless LANs or early-generation (and thus uncompetitive) broadband technology; and wireless carriers (AT&T, Verizon, and others) whose 4G coverage is designed for high-density markets and isn’t profitable or consistent in rural areas, if it’s available at all.

Each type of provider has its own shortcomings. The legacy operators “don’t know of any other way [to profitability] than relying on subsidies,” says Torarp, and the LAN/first-generation wireless broadband operators can’t afford to scale or maintain the technology at sufficient densities. It’s possible that mobile carriers could one day build out profitable, tower-based 4G networks in rural areas, but that’s still a decade away, at best.

By then, a new technology may have usurped 4G broadband anyway—a problem that LocaLoop’s continuously updated Software-as-a-Service/Infrastructure-as-a-Service (SaaS/IaaS) avoids by adapting its “cloud service platform” to newer generations of wireless broadband hardware as they emerge.

In fact, LocaLoop’s technology is the first rural wireless broadband service that offers a speedy path to profitability for operators. According to Torarp, a new client with access to an existing tower and 180 subscribers needs less than $30,000—or $1,000 per month, if its equipment is leased—to get started.

All things being equal, the technology’s break-even point is around 100 subscribers per tower location, and an operator that adds 50 subscribers per month should recoup its investment in less than six months. When compared to the multimillion-dollar deployment costs of existing rural broadband technologies, LocaLoop’s solution looks like a steal.

Aside from local operators and entrepreneurs, LocaLoop serves vertically integrated customers like energy firms that maintain labor-intensive operations in remote areas. Its solutions are also cost-effective for prosperous farmers and ranchers who wish to set up their own towers and act as their own operators.

What’s next for LocaLoop? Growth—and plenty of it. “From a technology or business point of view, nothing prevents us from becoming a billion-dollar company [over the next decade],” says Torarp. “From now on, it’s about effective business plan execution and access to enough expansion capital.”

Sounds like a plan.

Source: Carl-Johan Torarp
Writer: Brian Martucci

It’s not quite “Pinterest for professionals” or “Facebook for freelancers.” But CreativeMinneapolis.com, developed by Mark Sandau of the Minneapolis design firm Sandau Creative in the North Loop, is an interactive, user-curated, free online community for designers, illustrators, writers, and other artists who want to get their work noticed.

After kicking the idea around for several months, Sandau soft-launched the site in early February. He invited his close friends and colleagues to make submissions and approvals. He followed up with a proper kick-off at the end of February.

According to the website, Creative Minneapolis’ member-submitted, member-approved content is “about the creative work, people, and events in and around Minneapolis.” After a trial period, during which creatives can submit their own work but can’t approve other members’ submissions, users gain “editing” privileges that give them a say over the approval and placement of the site’s content. By “hyping” chosen posts, editors can push compelling work to the “top” of niche-specific silos like “advertising,” “copywriting,” “photography,” and “digital.”

“This platform isn’t revolutionary,” Sandau says. “It’s evolutionary, an interesting idea.” The fact that users can shape submitted content—and, thus the very appearance and nature of the site—is a powerful proposition.

Sandau’s worked in the industry for nearly two decades. Prior to founding Sandau Creative 10 years ago, he worked several entry-level jobs. He then landed at Fallon for a seven-year stint. He understands how tough it is for rank-and-file creatives—especially freelancers, who often toil around the margins of the media and advertising industries—to get their work noticed by the right people.

Even smaller agencies like Sandau’s, unless they have a “sexy brand” under their belts, might not have the resources to devote to a tradeshow exhibit or promotional campaign. Creative Minneapolis aims to be a highly visible virtual portfolio for these folks.

Current focus notwithstanding, there’s nothing stopping Creative Minneapolis from morphing into something bigger or broader. In the future, Sandau hypothesizes, a close-knit group of gearheads could use the site to share pictures, videos, or animations of modified cars or motorcycles, and the most interesting of the bunch would bubble to the top alongside portfolio pieces from local graphic designers. 

“Done right,” he says, “Creative Minneapolis has the potential to mirror the audience that’s watching and contributing.”

For now, Sandau is content to see where this all leads. He has a business to run, after all, and doesn’t have unlimited time to promote the site. That’s okay, he says. “At the end of the day, it’s just fun to see other people’s work.”

Source: Mark Sandau
Writer: Brian Martucci

Lyft, a San Francisco-based ridesharing company that has expanded into nearly two dozen U.S. cities over the past 12 months, kicked off its Minneapolis-Saint Paul service last week with a stylish launch party at Northeast Minneapolis’ Public Functionary. Guests mingled to beats from DJ Sarah White and quaffed free brews from Indeed Brewing Company. Glam Doll Donuts and Maya Cuisine catered.

The beats and brews weren’t the only free items on display at PF. Lyft used the event to showcase its Lyft Pioneer program, which offers two weeks’ worth of complimentary rides—up to a $25-per-ride limit—for Twin Cities residents who download its app.

Lyft bills itself as “your new best friend with a car.” That’s actually pretty accurate: The company works with freelance drivers who use their own cars to move riders, who “hail” rides using Lyft’s mobile app, around a pre-determined service area. It’s basically a taxi service without a car barn, human dispatcher, or official licensing system.

This last bit has gotten Lyft in hot water with some local governments, including Minneapolis’. Officials fret that Lyft circumvents restrictions against unlicensed, “for hire” taxicabs. Lyft counters that it carries liability insurance worth $1 million per driver, far exceeding that of many taxi companies. For now, riders shouldn’t worry too much about the service’s legality—any liability falls on the shoulders of the company itself, not its users. And Lyft’s proponents contend that the progressive, even revolutionary potential of an on-demand ride-for-hire app is self-evident.

According to Tricia Khutoretsky, Public Functionary’s founder and executive director, such progressiveness drew the two organizations together. Khutoretsky got in touch with Nic Haggart—the point person for Lyft Twin Cities, although he’s actually based in San Francisco—through “mutual contacts,” she says, and the idea for a launch party at PF sprouted from there.

“[Haggart] thought Public Functionary would be a good fit” for the type of launch event that Lyft had already held in 20 other cities, says Khutoretsky. More so than many other galleries, Public Functionary has a diverse audience that’s heavily involved in the Twin Cities’ creative industry. Many members of the “Lyft community,” meanwhile, are hardworking creative types who either drive to make a few extra bucks or ride because they lack cars of their own.

Lyft and PF might be very different organizations, but they share a singular devotion to finding new solutions to old problems.
“We’re always thinking about how we communicate and share resources with an eye towards sustainability,” says Khutoretsky. As a company that promotes ridesharing, Lyft is nothing if not sustainable, and the launch party served as a means of “giving support for their concept, which we are totally behind.”

In return for the warm welcome and much-needed visibility, Lyft will be sponsoring PF’s next exhibition. As the organization looks for new ways to break the “stuffy” art gallery mold, it’s likely to host more mutually beneficial events of this nature.

Khutoretsky is careful to draw the distinction between this “sponsorship” model and the “space-for-hire” approach that many small galleries use to raise funds. Working with like-minded organizations is a boon, she argues, as long as it doesn’t compromise PF’s image as an accessible, progressive, occasionally subversive exhibition space that values small donors and community engagement.

“One of our resources is our space,” says Khutoretsky, “and we continuously seek ways of using it without diluting our identity.”  

Source: Tricia Khutoretsky
Writer: Brian Martucci

Saint Paul-based ThisClicks, a mobile technology company in the Payne-Phalen neighborhood that specializes in “workforce solutions” apps, recently received $4 million in new funding from three venture capital firms. In its sixth year of operations, ThisClicks is hitting its stride.

Founder and CEO Chad Halvorson aims to boost the company’s sales force and press ahead with the rollout of its time-clock app, WageBase. He’s also planning to move to a larger office in Saint Paul, and double the company’s employee headcount from 15 to 30 by December.

WageBase is ThisClicks’s second product. WageBase is a startlingly simple concept: a remote time-clock app that lets hourly employees clock into and out of work from anywhere. (A GPS tracker ensures that they’re doing so from the workplace, not bed.) The app is especially useful for big diffuse workplaces, such as construction sites.

The building blocks of Halvorson’s company have been in place for a decade and a half. As a part-time grocery jockey in the late 1990s, Halvorson grew sick of making extra trips to the store to check his weekly schedule. He dreamed up an online employee-scheduling program—WhenIWork—that would eliminate this problem. He shopped a prototype version of the app with a contact at the Mall of America, but it didn’t pan out.

“There were just too many barriers,” he says. “Many people still lacked high-speed Internet and the mobile space didn’t really exist yet.”

Halvorson bided his time with other projects. He founded a Web consulting firm in college. In 2005 he partnered with a video design company to found Meditech, a “full-service development and marketing agency for the medical device industry.” Meditech eventually acquired Boston Scientific, St. Jude’s, and Medtronic as clients.

In 2008, with the mobile revolution in full swing, Halvorson gave his teenage dream another shot. He built a new version of WhenIWork—he’d registered its Internet domain back in 1998—and used his own funds to build an organic business-development campaign driven largely by content marketing and word of mouth. He describes this approach as “consumerized B2B marketing.”

“We don’t want to market directly to the guy in the suit,” says Halvorson. Instead, ThisClicks focuses on scheduling managers and supervisors at small- to medium-size companies, counting on WhenIWork’s obvious benefits to impress upper management and engender long-term contracts.

In fact, WhenIWork has taken off—the app now counts recognizable businesses like 1-800-GOT-JUNK? as clients—without a traditional sales force or seed funding. Halvorson hired his first business development staffers in late 2013, and the recent capital infusion represents ThisClicks’s first debt tranche.

This was deliberate. “Before we could consider raising money, we needed to figure out how to make money,” says Halvorson. “When you raise money first, it’s easier to learn how to spend money.” To ensure that his company would survive if it couldn’t find decent financing terms, he vowed not to raise outside funds until ThisClicks was taking in at least $1 million in annual revenues.

It helps that, unlike many tech entrepreneurs, the Minnesota-raised Halvorson took a low-key approach to success. “We weren’t interested in breakneck growth” to start, he says. Figuring out how to appeal to hourly workers and schedulers was far more important.

What’s the endgame for ThisClicks? On this point, Halvorson sounds a lot more ambitious. “We want our apps to be the most important tools in employees’ and managers’ pockets,” he says. “We’re focused on being the premier provider of cloud-based workforce solutions.”

 

For most people, a diabetes diagnosis is a wake-up call. For WholeMe co-founders Mary Kosir and Krista Steinbach, it was a business opportunity.

In the mid-2000s, Kosir’s husband developed adult-onset Type I diabetes—an unusual, but not totally unheard of, condition that progresses differently than the age-related insulin resistance we know as Type II diabetes.

The news forced the family to eliminate gluten, grains, and most dairy products from its diet. Kosir embraced the new restrictions, sharing experimental cereal and bar recipes with friends, neighbors, and associates at her local CrossFit gym.

That’s where she met Steinbach, the former pastry chef at Minneapolis’ Bachelor Farmer. Steinbach was coming off a lifestyle change of her own: In 2011, she’d competed in (and won) a 30-day “food challenge” that required contestants to eliminate refined sugar, gluten, grains, and certain other substances from their diets. By the contest’s end date, her chronic gastrointestinal issues had vanished and her energy levels were higher than they’d been in years.

“The challenge taught me how much food impacted my daily life,” she says, “and pushed me to learn more about nutrition.”

The two women had a lot in common, so they officially joined forces in early 2013. Kosir’s first creation, the energy-dense DateMe bar, was already making waves—“Everyone was telling me to start selling them,” she says—but Steinbach brought years of culinary expertise to the table. In addition to the DateMe bar, the duo created the WakeMe cocoa bar and EatMe cereal.

And so WholeMe was born. Thanks to their CrossFit connections, the co-founders had a ready-made market of active, health-conscious clients. Kosir and Steinbach also have stocking arrangements with gyms across the metro area, and they’re looking to find other places, like yoga studios and food co-ops, that attract a similar clientele. “We want to be closer to our customers,” says Steinbach, not tucked away on a shelf at a big-box store.

WholeMe’s bars and cereals are made from whole foods that haven’t been treated or altered in any way. “Our goal is to create relatively simple products where taste comes first,” says Kosir. “At the same time, we need to be mindful of what we’re putting in our bodies.” She’s quick to note, wryly, that WholeMe’s only preservative “is a refrigerator.”

Kosir and Steinbach think they’ve found a sweet spot for their products. “There’s lots of room to grow in this segment,” says Kosir. Many “healthy” foods don’t taste very good, she argues, and most tasty foods aren’t that healthy.

The two women hope WholeMe’s simple promise—healthy, delicious food for all—resonates beyond Minnesota’s borders. Less than a year after their official launch, they’ve already shipped to gyms and stores in North Carolina, California, and Hawaii. Their burgeoning e-store puts the rest of the world at their fingertips. In March, they hope to make some new friends at the Natural Foods Expo West in Anaheim, California.

It doesn’t hurt that they have a cheeky, catchy brand campaign and an experienced chef. They plan to expand their “gear concept” with more merchandise options, like T-shirts and hats, says Kosir. They expect WholeMe’s “beta testing” arm, branded NewMe, to produce seasonal or limited-release products exclusively for online sale. If a NewMe creation is well received, says Steinbach, it could become a permanent addition to the lineup.

Ultimately, Kosir and Steinbach would like to see WakeMe, DateMe, and EatMe—and whatever else they dream up—in the likes of Whole Foods, Lund’s, and Byerly’s.

Their ambition doesn’t come cheap. To cover their travel expenses and fund WholeMe’s ongoing expansion, they’ve launched a Kickstarter campaign that aims to raise $40,000 by February 24. To encourage participation, Kosir and Steinbach plan to give donors dibs on the first-ever NewMe creation.

Source: Mary Kosir
Writer: Brian Martucci

“And Nick helps make the dough…only now he makes a lot more of it.”

With those words, spoken by President Barack Obama during last week’s State of the Union (SOTU) address, Nick Chute became the Twin Cities’ most famous pizza maker. Moreover, Chute enjoyed those moments of fame while seated with Punch Pizza co-owner John Sorrano behind the First Lady during the joint session of Congress.

Why did President Obama showcase Chute, and his bosses Sorrano and John Puckett, during the State of the Union? Because in a notoriously low-margin industry, Punch’s owners have taken a bold risk, raising the company’s “wage floor” to $10 per hour.

The President devoted several minutes of last week’s address to “honoring the dignity of work,” as he put it, noting that the current federal minimum wage of $7.25 per hour is about 20 percent lower than the wage floor during Ronald Reagan’s presidency.

In a recent press release, Punch’s owners characterized their decision to raise workers’ wages as a simple business calculation. “As we continue to grow Punch,” Sorrano stated in the release, “we recognize that only the most dedicated employees will position us to compete and maintain the highest quality food and the best service in the market.”

Puckett also underscores the importance of investing in the things that matter most to a business, regardless of how those investments might affect margins in the short-term. Punch has been around for 18 years, he notes, “and we aim to get 10 percent better each year. We’ve invested in real prosciutto, authentic marble for our customer areas…and now we’re investing in our people.”

Previously, the company started most entry-level employees at $8 per hour, so a bump to $10 represents a 25 percent hike across the board. Puckett isn’t sure how long it will take for this “investment” to pay off, but he does know how much it’ll cost: $3 million over the next decade, assuming Punch stays at its current size—which it won’t.

Although there aren’t any plans to franchise the business or mount an aggressive expansion, Punch’s co-owners plan to open one new store per year for the foreseeable future. With nearly 300 current employees across eight stores, that translates to roughly 30 new hires per year.

As a private company, Punch isn’t required to make detailed financial disclosures, but the wage raise “will result in a significant hit to our profit in the short to medium term,” says Puckett. “Ultimately, we’d rather be higher-quality and less profitable than lower-quality and more profitable.”

By making work worthwhile for entry-level employees, Punch’s co-owners hope to make their managers’ jobs easier. Well-compensated cooks and servers are more likely to prioritize work over other obligations, the thinking goes, increasing the chances that bosses can put schedules together without too much arm-twisting.  

And employees who earn a living wage tend to stick around for longer, learning valuable skills that improve the customer experience and create a deeper talent pool from which to draw management candidates. Over time, the whole enterprise runs more smoothly and boosts its reputation among diners, who may even feel comfortable paying a little more for Punch’s irresistible Neapolitan pies.

It’s too early to tell whether other business leaders in traditionally low-wage sectors will follow Punch’s example. While political handicappers are cautiously optimistic about the possibility of a federal minimum wage hike—Obama’s goal is $10.10 per hour—not every SOTU attendee was as thrilled as Chute. Any legislation would have to make it past Republican House Speaker John Boehner, who has always been cool to the idea.

Sources: Punch Pizza release, John Puckett
Writer: Brian Martucci

Patients at risk for heart disease know they need to eat better, but cooking nutritious meals is time-consuming. Also, truly beneficial foods often don’t taste very good unless they’re well prepared. According to Dr. Elizabeth Klodas, a practicing cardiologist, her new company Truhealth MD aims to solve both issues.

Truhealth MD is a Minneapolis company whose four employees manufacture and market its line of health food products. The company’s offerings include heart-healthy pancakes, oatmeal, bars, smoothie mixes, and “anytime sprinkles”—fiber-rich flakes that mix well with yogurt, fruit, and granola.

“[In large part], heart disease is a nutrition-related problem,” says Dr. Klodas. After 18 years as a cardiologist, she’s identified four common nutrients that at-risk patients often lack: antioxidants, omega-3 acids, fiber and phytosterols, a broad class of steroid that may lower “bad” cholesterol.

The trick, she says, is “supplying clinically meaningful amounts of these nutrients in a delicious package…and turn every meal into a therapeutic intervention.” While other “healthy” foods, like FiberOne cereal and Clif bars, may contain sufficient doses of fiber and omega-3 acids, few contain significant quantities of phytosterols. This is largely an issue of ingredient cost, says Klodas, and it’s a major point of distinction for her products.

Meanwhile, the taste issue basically solves itself. “We tend to forget that real, wholesome, nutritious foods actually taste good,” says Dr. Klodas. 

Many of the company’s customers report impressive reductions in their LDL and triglyceride readings within weeks of beginning a twice-a-day regimen.

Robert Kirscht, a Twin Cities-based sales director in his late 40s, is a typical case. Kirscht’s job duties—“I’m traveling and entertaining clients about half the time,” he says—make it difficult to eat right or exercise regularly. A family history of heart disease doesn’t help either. Last spring, his longtime physician confronted him with an especially bleak blood-work report and issued an ultimatum: Take a cholesterol-lowering statin drug or else.

“I wasn’t comfortable with that choice,” says Kirscht. “So I asked for 30 days.” He started using Truhealth’s products—“I usually sprinkle the ‘anytime flakes’ on my granola [in the morning] and have a cranberry or chocolate bar in the afternoon,” he says—and began to feel better almost immediately.

When he returned the next month for a round of follow-up tests, Kirscht’s doctor was thoroughly impressed. Among the highlights: his triglyceride reading dropped from 150 to 99, his LDL dropped from 155 to 118, and his HDL rose from 45 to 53. The only drawback, he says, is that he has to hide his “delicious” stash from his two teenage daughters.

Truhealth MD’s products aren’t endorsed by the FDA, and Dr. Klodas stresses that they’re just one component of a healthy lifestyle—albeit a powerful one.

Patients who truly commit to cooking heart-healthy meals, exercising regularly, and making other smart choices, says Dr. Klodas, may see even better results than Truhealth’s meal-replacement regimen can promise. “But those people are rare,” she adds. “[Our products] make dietary advice actionable…and help our customers think about what other lifestyle decisions they might be making.”

What types of decisions? Consider a hypothetical customer who, every day for a solid year, replaces a plain bagel and Snickers bar with single servings of Truhealth pancakes and chocolate bars. To absorb comparable amounts of phytosterols and antioxidants, said customer would need to consume a ton of broccoli and 150 pounds of kale over the same period. For many, that’s not an appetizing prospect.

After all, says Dr. Klodas, “Who wants to eat 150 pounds of kale?”

Source: Dr. Elizabeth Klodas, Truhealth MD
Writer: Brian Martucci

For Geoff Stenrick, owner and president of the Saint Paul-based SimpleRay Solar, sunshine is much more than a mood-lifting respite from winter’s bitter chill. It’s a way of life.

In 2006, Stenrick quit his job as a Saturn salesman and channeled his longtime fascination with renewable energy into a nascent solar panel business called SimpleRay Solar. He enrolled in a comprehensive training course in solar technology, installation techniques, and parts engineering, then signed on with three U.S. distributors and began selling their equipment through his website.

His timing couldn’t have been better. While SimpleRay’s early customers were often hard-core environmentalists committed to green living, the launch of California’s rebate program, in 2007, drew building contractors onto the site. Similar incentives followed shortly in New Jersey, Pennsylvania, Massachusetts, and other East Coast states. Still, Stenrick’s gig remained low-key through the late 2000s: After his daughter’s birth, in 2009, “I would have to send emails and work on the website while she napped,” he says.

Because of generous rebate programs, falling manufacturing costs, and end-users’ increasing demand for panels and accessories, things are much busier now. In 2011, Stenrick hired his first employee, a car-industry colleague. His company’s 2012 revenues were sufficient to earn a spot on the “Inc. 500” list for 2013. Last year, after several additional hires—SimpleRay now has seven employees—he moved into a permanent office on Raymond Avenue, in the Creative Enterprise Zone on the Central Corridor’s Green Line.

Stenrick’s team doesn’t just sell solar panels out of this new space: As part of a transaction, SimpleRay’s in-house engineering and design professionals often help clients plan and optimize their arrays.

The most exciting development, though, may be Minnesota’s recently passed “Omnibus Energy Bill,” an aggressive renewable-energy law that requires “all utilities in the state [to] procure 1.5 percent of their electricity from solar generation by 2020,” according to the Center for Climate and Energy Solutions. By the end of the decade, predicts Stenrick, this requirement could boost in-state solar panel sales by a factor of 40.

Already, the law has dramatically increased the likelihood that the Aurora Solar Project, a planned cluster of about two dozen solar arrays in the state’s eastern half, will be built. SimpleRay doesn’t typically sell to utilities—it prefers small and medium-sized commercial and residential contractors, although it will soon contribute to a one-megawatt array in the area—but the increased demand that accompanies large-scale utility projects is sure to reduce panel costs and render the technology competitive with fossil fuels.

“A solar system works like a furnace,” says Stenrick. “You don’t need to replace it every five years. Instead, you’re basically prepaying for your power over the 20-plus-year lifespan of your system.” Thanks to industry-standard warranties that guarantee efficiencies of at least 80 percent over a 25-year span, this leads to dramatic long-term savings.

Even in Minnesota, with its short winter days and frequent cloud cover?

Yes, says Stenrick, noting that Minnesota gets more sun than many solar-friendly East Coast states—and far more than Germany, the world’s reigning solar energy leader. “On average, Germany gets about as much sunlight as Seattle,” he says, “and look at what they’re doing over there.”

Stenrick doesn’t minimize the obvious environmental benefits of solar power—“It’s better than blowing up a mountaintop for coal,” he half-jokes—but he’s more interested in touting the cost side of the equation. In California, solar power is already cost-competitive with fossil fuels, and the Omnibus Energy Bill suggests that Minnesota isn’t far behind. Eventually, Stenrick believes, the tax credits and rebates that currently support the U.S. solar industry will be obsolete.

“The whole idea of where you get your power from [will] totally change by 2030,” says Stenrick. “We hope to ride that wave.”

Source: Geoff Stenrick, SimpleRay Solar
Writer: Brian Martucci

Last month, a team from Twin Cities Maker, a nonprofit organization that runs a community workshop known as the Hack Factory, snagged the $10,000 grand prize in the Ultimate Maker Vehicle Challenge. Ford Motor Company and Make Magazine sponsored the contest. 

The challenge was to reinvent the Ford Transit Connect commercial vehicle to equip makers on the go. Ten teams around the country participated in the contest, by invitation from Ford. 

“Makers were given an imaginary budget and certain build constraints, while being encouraged to define what is 'ultimate' to them as a blueprint for a potential vehicle,” the Ford website reads. 

The public voted for standout designs in an online platform during the first round, which lasted nearly a month. From there, judges from Ford and Make evaluated several finalists. The Twin Cities Maker’s Hackmobile, as the group calls it, rose to the top.  

Now, Ford plans to build the vehicle that came from team members Jon Atkinson, Becca Steffen, Riley Harrison, and Michael Freiert, according to Twin Cities Maker materials.

The Minneapolis-based team created a vehicle that “centered around the idea of a maker or artist being able to fabricate anything they needed out of the back of a vehicle,” a statement from the group reads. 

In some ways, the Hackmobile builds on an idea the group already had for a trailer, which it could bring to events, Freiert says. “When Ford invited us to participate, it seemed like a good opportunity to create what we’d been dreaming about over a beer,” he adds.  

When the Twin Cities Maker team members put their heads together, they decided that everything within the vehicle should perform multiple functions. It wasn’t about cramming things into the vehicle. “It wasn’t [like the game] Tetris, with components in it. It was a more unique storage and work surface solution all in one,” he says. 

The resulting vehicle combines a woodshop, welding, and electronic studio. It also has 3D printing capabilities along with storage for supplies. 

The work surface folds away like a Murphy bed while a single tool has several heads that allow for different uses. “I don’t think anyone else had the deep multi-purpose” aspect, he says. In the mobile workshop, someone could “knock together an Adirondack chair,” as just one example, he adds.

However, the Hackmobile is aimed more at coarse work than finishing work. “The Hackmobile isn’t an artist’s studio on wheels,” he says. 

Now, the group is deciding how to put the cash prize to best use. That could mean creating a Hackmobile-like trailer for the group or starting a tool lending library, among other possibilities. “We need to look into what’s viable. We’ve got a lot of projects we haven’t been able to get off the ground yet,” he says.  


Source: Michael Freiert, founding member, TC Maker 
Writer: Anna Pratt