emerging technology : Innovation + Job News

The Nerdery's plot for global domination is going according to plan.

The Bloomington-based web/mobile development shop opened a Chicago office on Aug. 1. Now it's taking notes on what works and what doesn't in preparation to open another remote office next year.

"As it stands right now, the Chicago office is working really well," says owner Luke Bucklin.

"We're not running into as many challenges as we expected, so I think we're well on our way to global domination through opening new offices," Bucklin deadpans.

He's joking about that global domination thing, right? The Nerdery's numbers suggest maybe not: The 7-year-old company started the year with 101 employees. Today it has 147 (including seven in Chicago.) This year's revenue is on track to hit about $14 million compared to $8.6 million in 2009.

The company's primary clients are advertising and marketing agencies, which are having a harder time keeping up with the increasingly specialized programming demands of their customers.

Just five years ago, an agency could more easily get by with a handful of in-house developers. A team of generalists could stay up to speed with all the programming disciplines necessary.

Today, though, advertising and marketing clients are demanding more interactive work, while at the same time the technology has splintered into more and more specialties. Agencies now need to offer development for iPhones, iPads, BlackBerry, Android, mobile web, social media.

"The list is significantly longer now than it used to be," says Bucklin. "We've solved that problem in a way the agencies aren't able to," by hiring teams of specialists in each area. "Today we have specialists in technologies that didn't even exist three years ago."

The Nerdery is looking into Dallas, New York and San Francisco as possible expansion locations in 2011.

Source: Luke Bucklin, The Nerdery
Writer: Dan Haugen

A local IT consulting firm has packed up its computers and relocated to St. Paul, where it joins a growing cluster of technology companies in the Capital City.

Instrumental, Inc., announced last week that it's moved from Bloomington to a new headquarters at 1450 Energy Park Drive in St. Paul. The company, which has about 15 employees, specializes in consulting for high-performance computing and data storage projects.

"We wanted to be in this cluster of technology companies like Cray and Lawson," says Bill Zwicky, vice president for operations. "There's a lot of access to universities just within a five mile radius of our new St. Paul location."

Instrumental was founded as a software company in 1991 and later transformed itself into a vendor-neutral consulting company. Its management team includes veterans of Cray Research in St. Paul.

The company's clients range from U.S. intelligence and defense agencies to Fortune 1,000 companies. CEO Henry Newman said they've had some "significant" wins in the past 45 days, but added that he wasn't able to disclose either of two new contracts yet.

Instrumental was recently awarded a contract to help the National Oceanic and Atmospheric Administration design, develop, and implement a data storage system so that historical weather data is safe and accessible to weather and climate researchers.

Source: Bill Zwicky, Instrumental
Writer: Dan Haugen

BusinessCard2 just padded its rolodex.

Workface Inc., creator of the BusinessCard2 online business card platform, announced last week that it has acquired a rival service called card.ly. The deal comes with card.ly's more than 40,000 user accounts, which will be converted into BusinessCard2 accounts in the coming months.

"It was less of a defensive move, in terms of trying to defend our market share, but more of an opportunity to grow our footprint," says CEO Lief Larson.

The BusinessCard2 service lets users create and share virtual business cards, which can be easily attached to e-mail signatures or posted to social networks.

A challenge for BusinessCard2 and many other free, web-based services is building up a critical mass of users so that it can become more than just another app.

Larson has always been tight-lipped about how many people use Workface's virtual business card service, but he said the company is seeing double-digit growth month after month. It has users in more than 60 countries but the biggest concentration is in its own backyard in the Twin Cities. Card.ly brings added geographic diversity to its user base.

Workface is based in Northeast Minneapolis and has five full-time employees.

Source: Lief Larson, Workface
Writer: Dan Haugen

Six division winners are in the running for the Minnesota Cup grand prize. The winners of the sixth annual entrepreneur competition were announced last week. Each will receive $20,000, except for the student division winner, which gets $5,000.

"This year's Minnesota Cup winners are behind some of our state's most innovative new business ideas," Minnesota Cup co-founder Scott Litman said in a statement.

The winners are:

     GeaCom, a Duluth company developing a device to help doctors and patients communicate across language barriers

    BioMatRx, a Twin Cities company that provides tissue engineering products, equipment and information to the dental industry
 
    EarthClean, a Minneapolis startup that is commercializing a non-toxic, biodegradable firefighting gel (See our previous coverage)

    Go Home Gorgeous, a Twin Cities company that provides postpartum recovery treatments to reduce the stress associated with childbirth
 
    Springboard for the Arts, a Twin Cities organization that connects artists with skills, contacts, information, and services

    Blue Water Ponds, a Twin Cities company that provides pond restoration services using barley straw and pond weed harvesting

A grand prize winner, to be named on Sept. 13, will win another $20,000. An awards ceremony is scheduled for 5 pm, Sept. 13 at the U of M's McNamara Alumni Center.

Source: Minnesota Cup
Writer: Dan Haugen

Tommy Creal rolled into town two years ago on a custom-built chopper with a full tank of ambition.

This fall, the young entrepreneur is retooling his business in hopes of finding the right gear.

As a teenager, Creal started a popular bike-building bootcamp in Chicago. After moving to Minneapolis in 2008, Creal decided to relaunch Chopper College as a "green" technical institute.

Creal's Chopper College partnered with Minneapolis Community & Technical College on a catalog of 40 courses last year aimed at gearheads interested in building alternative-fuel motorcycles.

The demand wasn't what he hoped for, so this fall he's scaled back to two one-weekend workshops that will teach participants how to build a bike that runs on E85 ethanol.

Creal's E85 bike-building workshops will be open to 48 students each. Over the course of three days (Oct. 8-10 or Nov. 12-14) students will help build a pair of motorcycles from scratch.

Meanwhile, Creal is keeping busy on the side by building custom choppers for local organizations, from the Minnesota Wild to Life Science Alley.

If the workshops suggest there's interest in ethanol-powered choppers, Creal says the next phase for Chopper College will be developing a gasoline-to-ethanol conversion kit to sell.

The lower than expected enrollment for last year's classes hasn't soured Creal on the Twin Cities. Instead he says he's struck by how much support there is for businesses here.

"People are lending hands everywhere, opening doors for us, and I'm just trying to figure out how to give back, because everybody's been giving to us," says Creal. "You can trust me on this: it's not like Chicago where everybody's out for themselves."

Source: Tommy Creal, Chopper College
Writer: Dan Haugen

A Minneapolis health-care startup is hiring as its service graduates out of beta.

Bloom Health aims to simplify the process of picking out health insurance for both employers and their employees. Instead of choosing a few health plans to offer their workers, employers deposit their contribution to a pre-tax Bloom account, which employees can apply to any plan they choose.

CEO Abir Sen says their service is like a Charles-Schwab-meets-eHarmony for health insurance. Bloom acts as a broker and matchmaker. Employees take a survey that measures their health, finances, and appetite for risk and then recommends health plans based on those factors.

The company launched last September and hoped to have one customer by this fall, says Sen. Instead, it announced late last month that five Twin Cities companies are now using its service. Meanwhile, the company is hiring. It has 19 FTEs today and expect about 25 by the end of the year.

"We found the market to be very ready," says Sen.

Sen compares the shift that's underway in health insurance to what happened with retirement saving in the 1980s. Companies were under stress from rising pension liabilities, so they transitioned to 401(k) plans, contributing funds but letting employees invest them as they wished.

Today, says Sen, we're seeing a similar climate around health care with rising costs, recession and regulatory changes.

Source: Abir Sen, Bloom Health
Writer: Dan Haugen

A nice thing about taking the skyways: you can walk around with your phone in front of your face and not worry about getting hit by a car.

A pair of local developers have created a free iPhone app to help people navigate and explore the Minneapolis skyway system.

The Minneapolis Skyway app, by Frypan Digital, includes a map and business directory that lets users search for stores, see reviews and save favorites.

Co-creator Casey Holley says the app has been downloaded more than 3,000 times since it was posted in the App Store a few months ago. They're hoping downloads will pick up some when winter arrives and more people are using the skyways to avoid the elements.

"We've had a real steady number of downloads," says Holley. "I think it's just iPhone users saying man, this is confusing, there has to be an app for that."

One of the biggest challenge so far has been keeping information up to date. With around 400 different retail spaces, there's a fairly regular turnover among tenants. They're relying largely on the crowd to keep track of changes, which has worked well so far.

Holley says they've had lots of requests for an Android edition. That's in the long-range plan, but for now their focus is increasing use of the iPhone app and then building out services for skyway business owners to advertise and promote specials.

Source: Casey Holley, Frypan Digital
Writer: Dan Haugen

A Minneapolis cleantech startup is loosening the nozzle after raising at least $765,000 from investors to roll out its non-toxic, biodegradable firefighting gel.

EarthClean recently disclosed that it was about a quarter of the way through a $3 million round of equity financing. The company's product, TetraKO, is a low-cost, environmentally safer alternative to conventional firefighting foams.

"We've had a couple of fire chiefs tell us that they understand it performs better, but quite frankly if it was just as good as foam they'd buy it because of the environmental aspects," says EarthClean CEO Doug Ruth.

TetraKO is a patented dry-mix product that, when mixed with water, forms a non-toxic gel that sticks to surfaces and suppresses flames. It was developed over the past decade by a Woodbury volunteer firefighter and a trio of former 3M and H.B. Fuller chemists and engineers.

Ruth acquired their patents and founded EarthClean a couple of years ago. The company is getting ready to manufacture its first 10,000 pounds of the product in the next two weeks and will have it available for commercial sale within four weeks.

It's hitting the market at a time when there's growing concern about the pollution left behind by chemical-based foams and gels. Minnesota health officials last year were investigating potential drinking water contamination in 15 cities. And a federal judge in Montana ruled last month the U.S. Forest Service is breaking the law when it uses harmful chemical retardants on wildfires because they can hurt fish and wildlife.

EarthClean's product is certified as non-toxic and biodegradable and offers a safer alternative, says Ruth. "It's a game-changing technology that really could change the way the world fights fires."

(Also: EarthClean is a division finalist in the 2010 Minnesota Cup competition. See our update here.)

Source: Doug Ruth, EarthClean Corp.
Writer: Dan Haugen

A local software firm is attracting global customers for its cloud-computing services.

Minneapolis-based enStratus helps companies manage their cloud-computing activities. Cloud computing is a term for using data or applications that are stored online rather than on a desktop computer's hard drive.

"In 2010, what we've done is managed to become a global business," says George Reese, the company's founder and chief technology officer. And he has numbers to back it up.

As of mid-August, 80 percent of the company's new customers this year have been from outside of the United States. A year ago, enStratus didn't have any non-domestic customers.

The company handles everything from accounting to security for companies that buy cloud-computing resources from companies like Amazon, Google or Rackspace.

Its uptick in global customers coincides with the introduction of multi-currency financial support; enStratus' product can convert and track a company's spending whether it's in dollars, euros, or another unit.

With its new global customer base, enStratus announced this week that it's adding a couple of internationally known cloud-computing experts to its board of advisors:

James Urquhart is a senior market strategist for cloud computing at Cisco and author of a respected CNET blog, The Wisdom of Clouds. He's also a Macalester grad and former Twin Cities resident.


Simon Wardley is a researcher for CSC's Leading Edge Forum and an international speaker on the commoditizing of IT, utility computing, fabrication technologies, and the open-source movement.

Source: George Reese, enStratus
Writer: Dan Haugen

Americans spend more time on Facebook than any other website. A Minneapolis social commerce company is giving users one less reason to sign off.

Alvenda announced the rollout last week of an e-commerce Facebook tab for Delta Air Lines. The service is the first of its kind for the travel industry and allows Facebook users to search, book, and buy flight tickets without ever leaving the site.

The idea behind Alvenda's technology is to embed their clients' stores on the websites where their customers are already spending time. It also allows retailers to embed stores within advertisement boxes and as a widget on publishers' sites.

Alvendra was founded in 2008 and was the winner of the 2009 Minnesota Cup competition. Its team consists of about 20 people, and it continues to grow, according to product strategist Erik Eliason. Large companies are very interested in social media, he says, and Alvenda's tools give them a way to monetize and prove the ROI of a network like Facebook.

Other services allow companies to add shopping tabs to Facebook pages, he says,  but most of them redirect customers to other sites where the transactions are completed. In e-commerce, retailers generally lose customers at every click they require. "You want the search and the transaction to be as frictionless as possible for the consumer," says Eliason.

Alvenda opened the first retail store inside Facebook last summer for 1-800-Flowers.

Source: Erik Eliason, Alvenda
Writer: Dan Haugen

A Fridley company's thin, flexible electronic displays could be the next big thing in credit-card fraud prevention.

Aveso recently secured a $1.04 million investment that will finance the company through the end of the year. By then, it's hoping some of the world's largest credit card companies will have signed on as customers of its credit-card product, Primero.

The product is a printed, blue-and-yellow electronic display that can be affixed to the front of a card. Aveso sees a big potential market for one-time passwords, which unlike regular credit card security codes could continually change.

"This is the next level of security authentication, by having the display on the card," says Nick Wood, Aveso's chairman of the board.

Aveso was spun out of Dow Chemical in Midland, Mich., in 2004. Its founder decided to set up the company in Fridley.

Earlier versions of the display couldn't withstand the heat and stress that credit cards are subjected to, but Aveso has figured out how to make the technology more durable.

Most credit-card fraud occurs when the card is not present, says Wood. The credit-card industry has already started using one-time passwords, but they're currently displayed on a separate keychain device.

Wood says he believes Aveso's product is going to be a disruptive technology. Two of the world's largest credit-card companies are evaluating the technology, and the product now meets the industry's quality standards, says Wood.

The company expects to ship between 50,000 and 100,000 units this year, mostly trials, he says, and probably 3 million next year. It is projecting that it will be profitable in 2012.

Source: Nick Wood, Aveso
Writer: Dan Haugen

The Minneapolis Biomass Exchange had added a pair of new directors to its board, giving it new expertise in the areas of cleantech and finance.

Doug Cameron is founder of Alberti Advisors and previously worked for Piper Jaffray, Cargill, and Silicon Valley cleantech venture firm Khosla Ventures.

Rajesh Aggarwal is a professor of financial markets and institutions at the University of Minnesota's Carlson School of Management.

The Minneapolis Biomass Exchange is a web application where buyers and sellers of biomass fuel can post for-sale and want ads for fuel crops. Biomass is a term for plant-based materials such as wood chips or corn stover that can be burned as a fuel. (For more on the Minneapolis Biomass Exchange and its business model, see our previous article on the company here.)

Cameron says he's been interested in biomass for most of his career, specifically with its logistics and how we can use more of it in a smarter way.

"The Minneapolis Biomass Exchange was interesting from that standpoint, but also I was just very impressed with the people behind it," says Cameron. "It was a pretty easy decision for me when they asked me if I would be interested in a board seat."

In his new role with Alberti Advisors, Cameron plans to spend about a third of his time working with "small, exciting, interesting, emerging companies," another third working with financial organizations like venture funds and capital firms, and another third working with larger corporations that also have an interest in cleantech.

Founder/CEO Kevin Triemstra said Cameron and Aggarwal provide knowledge and experience that will help the company reach its goals.

Source: Doug Cameron, Alberti Advisors
Writer: Dan Haugen

OrthoCor Medical kicked off sales last month for its first device: a knee wrap that uses heat and electromagnetic pulses to alleviate pain and swelling.

The product, called the OrthoCor Active Knee System, sells for about $200 and runs on a rechargeable battery and disposable, single-use heat "pods."

The Twin Cities company has been gearing up for sales since December, when the U.S. Food and Drug Administration approved the device for sale. In February, OrthoCor disclosed plans to raise $1 million from investors to grow its sales and marketing force. CEO John Dinusson said in an interview last week that fundraising has since exceeded $1.5 million.

(OrthoCor was the first business certified under Minnesota's new angel investor tax credit program.)

While investors appear to be enthusiastic, insurers remain skeptical. Clinical data about the product's effectiveness is limited, which will hinder any efforts to win reimbursement from insurers. Instead, the company is counting on chiropractors to be the primary distribution channel for the device.

"We know that we have a huge patient population," says Dinusson. An estimated 26 million people in the United States suffer from knee pain, and many become less active instead of seeking treatments, says Dinusson. He hopes their product can change that trend.

OrthoCor has five employees, including inventor Kin-Joe Sham. The devices are manufactured at Sham's father's company in China, and Dinusson has been contracting independent sales reps. Several other products are in the pipeline, including devices for relieving wrist, ankle, elbow, and lower back pain.

Source: John Dinusson, OrthoCor Medical
Writer: Dan Haugen

A local cleantech startup announced last week that it's signed a patent licensing agreement with the University of Minnesota.

NewWater was co-founded last year by two recent College of Science and Engineering  graduates, Joe Mullenbach and Alex Johansson. The licensing deal allows the company to move forward with its efforts to develop and commercialize an atrazine filter for drinking water that's based on university research.

"Having exclusive access to this intellectual property allows us to openly discuss our plans with potential development partners," says Mullenbach.

We wrote about NewWater earlier this summer after it was selected as a semifinalist in both the Minnesota Cup and Cleantech Open contests.

The University of Minnesota said in a press release that NewWater is the tenth startup spun off from its technology in the past 18 months. As part of the deal the school holds an equity stake in the company.

The technology is based on enzymes developed by University of Minnesota biochemist Lawrence Wackett and microbiologist Michael Sadowsky. The enzymes initiate a bacterial process that decomposes atrazine into harmless by-products, according to the announcement.

Atrazine is among the most widely used herbicides on the planet. The U.S. Environmental Protection Agency is re-evaluating atrazine in light of recent studies that have linked low levels of the chemical in drinking water to birth defects, low birth weights, and menstrual problems.

Mullenbach says NewWater's filter will be able to help municipalities save money and meet more stringent drinking water standards than is possible with the activated carbon filters currently used.

Source: Joe Mullenbach, NewWater
Writer: Dan Haugen

 

A biofuels company spun off from the University of Minnesota disclosed last week that it's raised more than $357,000 in investment capital.

BioCee, which was founded in 2007, is working on a method for creating liquid hydrocarbon fuel from bacteria, water, sunlight, and carbon dioxide.

The company also disclosed in a filing with the U.S. Securities and Exchange Commission that it is seeking to raise another $500,000 in the next year.

Co-founder Luca Zullo said it's the company's policy not to comment on fundraising and financial matters.

The company previously received a $2.2 million grant from the U.S. Department of Energy, as well as a $150,000 small business research grant from the National Science Foundation.

BioCee is also a semifinalist in this year's inaugural Cleantech Open North Central competition, which covers a seven-state region.

Source: U.S. Securities and Exchange Commission
Writer: Dan Haugen