Entrepreneurship : Innovation + Job News

A revolving investment fund at the University of St. Thomas helped five promising Minnesota technology companies get through a tough year.

The William C. Norris Institute at St. Thomas' Opus College of Business invested $280,000 during its 2010 fiscal year, which ended June 30. That included an investment in an undisclosed cleantech startup that's still in stealth mode, as well as follow-up investments in four companies that were already in the program's portfolio:

    �Apinee, which makes an environmentally friendly wood treatment

    �Dejen Digital, a web portal that aims to streamline music and dance tryouts

    �Seeonic, which makes an RFID-equipped retail display to help track inventory

    �and Xollai, which is developing a system for landing unmanned aircraft

Norris Institute Director Mike Moore said it was a difficult year for everyone.

"It was just survival. If a company matched its sales from the year before, or just lost a little bit, that was more than could be expected," Moore said.

The fund was created by the late Control Data Corp. founder and CEO William Norris in 1988 to support early-stage technology-based companies in Minnesota that address social needs as well as business opportunities. In 2001, the program became part of the St. Thomas business school, where students now help perform due diligence and other tasks related to running the fund.

Moore said this year he hopes to make first-time investments in four or five companies. Entrepreneurs can find guidelines and information about submitting business plans at http://www.stthomas.edu/norrisinstitute

Source: Mike Moore, William C. Norris Institute
Writer: Dan Haugen

From indie radio to indie T-shirts: A former Twin Cities radio personality is turning music-inspired clothing into an at-home small business.

Pop Frocks started last fall when Mandy Cox bought a T-shirt press and started making toddler and infant clothing inspired by her favorite rock and soul music legends. The goal was not only cool clothes for her then 1-year-old son, but also building a business that would reconnect her with her former music career.

Cox started out her radio career in the mid-'90s as an intern at the late-great Rev 105, and later took that experience to KFAI, where she hosted an overnight music program. She also worked behind the scenes at 89.3 The Current during the first year of the station's existence.

As she settled down a bit and had a kid, she found herself missing her old music lifestyle. "I really missed that, and thought: what can I do from the house that can bring this element back into my life?"

When the Electric Fetus recently invited her to participate in one of its MinnEconomy events (Pop Frocks is one of this month's featured artists), Cox decided to create a whole new series of shirts all inspired by Minnesota artists.

"It all started off by asking (89.3 The Current DJ) Mary Lucia if I could put her face on a T-shirt," says Cox. Since then she's received enthusiastic OKs from more than a dozen local bands and personalities, from punk pioneers The Suicide Commandos to current buzz-band Communist Daughter.

"I'm totally jazzed about the way it's turned out," says Cox. "It's nice to get that e-mail from [Duluth musician] Alan Sparhawk saying, yes, go ahead! Do it! Send me one for my daughter!"

The limited-edition collection (Cox is limiting each design to between 30 and 50 shirts) is for sale at The Electric Fetus and will soon also be available on the Pop Frocks website.

Source: Mandy Cox, Pop Frocks Apparel
Writer: Dan Haugen

Drivers looking to kick their gasoline habits can now get directions on their iPhones.

A new iPhone app by Minneapolis-based DriveAlternatives lets users search for and get directions to the nearest alternative fuel stations and carshares anywhere in the country.

The startup claims to have built the nation's largest database of its kind, compiling information from government and industry sources, as well as some 10,000 phone calls to fuel stations. The app's database covers biodiesel, E85 ethanol, hydrogen, compressed natural gas, liquefied petroleum gas, and electric vehicle charging stations, as well as carshare locations.

CEO Kavi Turnbull started thinking about the problem five years ago while he was working for statewide DFL political campaigns, which tried to fill up on ethanol or biodiesel whenever possible. Turnbull's job included finding these types of fueling stations and relaying the information to staff out on the campaign trail.

It turned out to be a tricky and at times frustrating task. The Department of Energy hosted a searchable database on its website, but at the time much of the information was outdated or incorrect.

"I was just sick of bad data," says Turnbull.

Turnbull went on to earn an MBA at the University of Wisconsin-Madison. While studying there and interning at a venture capital fund he developed the business plan for DriveAlternatives.

The app is free to download. The company plans to make its money selling advertising and sponsorships to alternative fuel stations. The number of such stations is projected to surge from around 15,000 today to more than 1 million five years from now.

The app will count on crowdsourcing from users and station owners to help keep the database up to date. Turnbull expects the early adopters to include fleet operators, especially government agencies that require employees to use ethanol or other biofuels when available.

Source: Kavi Turnbull, DriveAlternatives
Writer: Dan Haugen

Minnesota economic development officials expect to be able to launch the state's new angel investor tax credit program sometime next week.

The Department of Employment and Economic Development this week was completing and testing back-office systems for the program, says coordinator Jeff Nelson. If all goes as planned, the department expects to post applications on a new web page the week of July 19, two weeks before the deadline set by the Legislature.

The 25 percent tax credit is designed to incentivize up to $48 million per year in investments in emerging and high-tech startups in the state. The Legislature set aside $11 million for 2010 and $12 million annually for 2011 through 2014.

The money will be awarded through a two-step, first-come-first-served process. First, investors and companies need to be certified to ensure they qualify for the tax credit. Next, the investor may apply for the tax credit allocation.

Among the criteria for companies to qualify: They must be less than 10 years old and have fewer than 25 employees. Their headquarters and more than half their payroll and employees must be in Minnesota, and all employees must make at least $18.55 per hour. Qualifying companies also need to be using or researching proprietary technology in a high-technology field.

Nelson says that based on the volume of questions and requests his office has had, they very well might be swamped in the next few weeks, but it's impossible to say for sure.

"We've had a lot of interest from all parties, but we have no experience in this, so it's kind of hard to tell," says Nelson.

We'll see next week, maybe.

Source: Jeff Nelson, Department of Employment and Economic Development
Writer: Dan Haugen

Customers rummaging through the iPhone App Store last week found a new bargain: a free version of iGarageSale.

The garage-sale-mapping app by Performant Design of Maple Grove was downloaded about 10,000 times last week, by far its highest ever weekly total. Now the developer hopes some of those downloaders will eventually decide to upgrade to the $2.99 pro version.

Performant Design is the name for the one-man, bootstrapped company founded in 2007 by Aaron Kardell. It initially focused on Facebook apps, including the Risk-like strategy game World Conquest, which Kardell sold to Sillicon Valley-based SGN.

iGarageSale, Performant's first mobile app, has been in and out of the Top 100 apps for its category since it was introduced about a year ago. Kardell estimated the iGarageSale paid app has been downloaded between 12,000 and 15,000 times.

"If you look at the graphs, I'd characterize it as a little bit of a roller coaster," says Kardell. The app's first big spike came last September when Apple featured it in the "New and Noteworthy" section of its app store homepage. The pace of downloading slowed over winter as garage sale season cooled, but it's picked up again this spring. Last week was the app's biggest week for downloads, although the majority of them were for the free, basic version.

"What we're really looking forward to seeing now is the conversion rate," says Kardell. The paid verison of the app allows users to save favorite locations and search the text of garage sale ads, which are culled from craigslist postings.

Kardell also recently created a company called MobileRealtyApps.com, which creates branded home search apps for realtors.

Source: Aaron Kardell, Performant Design
Writer: Dan Haugen

A gadget to help doctors diagnose patients across language barriers is one of a dozen outstate Minnesota proposals to make the Minnesota Cup semifinals.

The annual entrepreneur contest has typically been dominated by metro-area inventors, but 12 of the 48 semifinalists announced last week come from Greater Minnesota.

"We had more entries than we've ever had from outstate Minnesota, which is something we've really been trying to develop," says Matt Hilker, director of the Minnesota Cup.

Duluth-based Geacom, for example, makes a medical communication device called Phrazer, which lets patients point to diagrams in more than 100 languages.

Hilker credits the contest's new partnership with the Arrowhead Growth Alliance in northeastern Minnesota for helping to boost participation in Greater Minnesota.

Minnesota Cup organizers received around 400 proposals for this year's contest. The 48 semifinalists will spend the next month refining their business plans before the field is reduced to 16.

By the end of summer, there will be one finalist in each of six divisions: cleantech, biosciences, high-tech, general, student, and social entrepreneur.

The social entrepreneur division, which is on a different schedule than the others, announced its finalist last week: Saint Paul's Springboard for the Arts.

Source: Matt Hilker, Minnesota Cup
Writer: Dan Haugen

A Waconia-based website that aims to be a matchmaker between patients and healthcare providers announced last week that it's received a $1 million angel investment to help expand its services.

WellClicks.com lets consumers search for physicians and other health and wellness providers by criteria such as location, specialty, gender, and years of experience. Providers, meanwhile, pay to be included in the search results.

Mark Prondzinski and Lisa Suchy launched a limited pilot version of the service in July 2009 with backing from Ridgeview Medical Center in Waconia. Up to now the site has only covered providers in the southwest metro.

The site's usage has been "low to moderate," but with a limited marketing budget and small geographic area, they didn't expect an overnight blockbuster. The goal was only to prove the concept for investors.

"Our objective now, with the investment funds, is to expand the concept, both from the product side and from a geographic point of view, and then really try to turn the business model into something that is profitable and see and realize some of our longer-term business objectives," Prondzinski said. "It's not a tremendously huge amount, but it's enough to help us take the next steps down that path."

WellClicks.com is the first product from CreateHealth, a for-profit healthcare innovation center created and spun off by Ridgeview Medical Center in 2007. Prondzinski, who previously interned in the hospital's operations department, was tapped with Suchy to co-found the center.

Source: Mark Prondzinski, WellClicks.com
Writer: Dan Haugen

A team of young entrepreneurs thinks they've come up with a better way to let restaurant diners know when their table is ready.

WaitMaster is a web application that lets restaurant hosts digitize their wait lists and send text messages to parties when it's time to have a seat.

The program eliminates the hassle and expense of making customers carry around clunky buzzers, which have limited range and are often lost or stolen.

Prodality, the new name for an aspiring startup agency founded by three recent University of Minnesota graduates, plans to charge restaurants $50 a month for the service, which runs off a netbook at the host stand.

Buffalo Wild Wings started a test of the system in its Apple Valley restaurant a few weeks ago, and set it up two weeks ago at its Roseville location. If the restaurants are full, customers can give their name, phone number, and e-mail address and then roam Bear Valley Road or Har Mar Mall until they get a text alert telling them to come on back.

"You get a text message on your phone saying your table is ready, which makes sense for consumers because they want to walk around. They want to have the flexibility, and the pagers don't really travel that far. Usually it's 100 feet, if that," says Parag Shah, one of Prodality's co-founders.

Restaurants can use the system to keep track of customer visits, and the team plans to add features in the future that will turn WaitMaster into a more robust loyalty tool. Customers who frequently add their names to wait lists, for example, could be awarded discounts, as with Foursquare check-ins.

Prodality teamed up with the local creator of TeeMaster, an online golf reservation system, to create the original wait list application, which it then adapted for restaurants. It's working on another restaurant-related app, too. LunchBox lets users place take-out orders with participating eateries using their computer or smart phone.

Source: Parag Shah, Prodality
Writer: Dan Haugen

A local firm that helps startups get off the ground announced a new online video service last week for Minnesota entrepreneurs to showcase their ideas.

The Minnesota Startup Showcase won't replace the handshake, creator J.C. Gureghian admits. But it might help cut through some of the clutter, he said.

"Entrepreneurs get 100 no's before they get one yes. The idea here is to be a timesaver for entrepreneurs, to weed through all the no's and get to the yes," Gureghian said.

Gureghian is founder and CEO of the StartupShoppe, which helps new companies with everything from refining business plans to managing human resources paperwork.

For a $300 setup fee and $100 monthly hosting fee, Gureghian will produce a 5-7 minute video and slideshow to appear on the Minnesota Startup Showcase website.

The video plays side-by-side with the entrepreneur's PowerPoint, with links underneath so potential investors can download a summary or share the video on social media.

Gureghian said he's looking to showcase quality startups with promising intellectual property. He doesn't perform intensive due diligence on the companies he profiles, but he does screen them using his instincts from ten years in the local entrepreneur community.

Ten Minnesota startup companies, including LunchBox, PrepAthlete.com and Twin Cities Coworking, are currently featured on the site, though it has no paid clients yet.

Source: J.C. Gureghian, StartupShoppe
Writer: Dan Haugen

Doris Taylor earned international acclaim in 2008 when she and her team at the University of Minnesota grew a living, beating rat's heart from stem cells in a jar.

Now, the state is betting that a Minneapolis biotech startup can grow that technology into a successful company.

The state Agricultural and Economic Development Board announced an agreement last week to loan $250,000 in seed capital to Miromatrix Medical, a six-month old U of M spinoff. Under the terms, the state's loan is to be matched by private investors.

Miromatrix has an exclusive licensing agreement with the university to commercialize the technology, which might one day be used to grow human replacement organs.

Miromatrix CEO Robert Cohen said in an e-mail that he is pleased with the state's support, but that as a "matter of corporate policy" stopped commenting publicly several months ago.

"Our preference is to let the ultimate success of our products speak for itself," Cohen said.

Cohen and Taylor did speak with MedCity News in January, when they commented on the incredibly high expectations many have for the company and its significance to the state's biotech industry.

The Ag Board has traditionally funded the expansion of manufacturing firms but its scope is broadening to include emerging high-tech businesses, according to the Department of Employment and Economic Development.

Source: Department of Employment and Economic Development
Writer: Dan Haugen

A team of students from the University of Minnesota believe they can build a sustainable business bringing biogas services to residents of rural India.

A 2007 report estimated that 82 percent of Indians rely on stoves that burn wood, dung, coal and other solid fuels--a major source of indoor air pollution, according to the World Health Organization. Solid fuels are responsible for 3.5 percent of disease in the subcontinent.

Since the 1980s, the Indian government has invested in hundreds of thousands of biogas digesters, which turn cow dung into clean-burning cooking fuel, but it's estimated that nearly half of them no longer work. The student team wants to get to work refurbishing that infrastructure with a new company called BioServ.

The students are collaborating with another group from the Indian Institute of Technology, Roorkee, on a business plan that would help families purchase digesters at-cost with a lease-to-own financing model. BioServ's revenue would come from a small monthly fee it would charge for repair and maintenance of the equipment by locally hired technicians.

Most of the cross-continent collaboration so far has taken place over Facebook and on Google Chat exchanges and Skype calls. This summer the students will work face-to-face in Minnesota, then India, to refine their business plan before seeking financing and firing up a pilot project in the fall.

The concept won the energy division last month in the 2010 Acara Challenge, an annual student social entrepreneurship contest.

"It's extremely exciting," said Judd Eder, one of four Minnesota students involved in the project. "This is the first time for me being a part of something this multiculturally dynamic. It's been really exciting and really fun."

Source: Judd Eder, BioServ
Writer: Dan Haugen

The success of Denali Marketing's Tally software is helping it add to its employee count.

The Minneapolis marketing firm, which helps companies like Best Buy, Sun Country, and Toys "R" Us manage customer loyalty programs, announced three new hires last week: a web app developer, a marketing analytics specialist, and a senior IT project manager.

The company has grown from fewer than 10 employees when it started in 2006 to more than 70  today. Guy Cierzan, partner for client services, said one factor in the company's growth has been Denali's proprietary Tally software.

"It's really been a differentiator," Cierzan said.

The software collects and mines data on customer behavior and lets companies manage and monitor every aspect of customer loyalty programs. For example, clients can use it to set program rules and send targeted communications to members.

The company provides a variety of other marketing-related services. One of its higher-profile assignments lately was working with Best Buy on the design and placement of its advertisements at Target Field.

Source: Guy Cierzan, partner for client services, Denali Marketing
Writer: Dan Haugen

Minnesota economic officials expect applications to be available for the state's angel investor tax credit before the Aug. 1 deadline set by the Legislature.

Dan McElroy, commissioner of the Minnesota Department of Employment and Economic Development, told an audience Monday that his department hopes to have documents related to the tax credit posted on its website as soon as July 1.

McElroy spoke at an angel tax credit panel discussion at ADC Auditorium presented by several local science and technology organizations.

The Angel Tax Credit was signed into law April 1. It set aside $11 million in 2010 and $12 million for each of the following four years for a 25-percent tax credit for investment in Minnesota technology startups.

"We're most interested in jobs, and good paying jobs," McElroy said. "We'd love to see a couple relatively early successes."

Among the criteria for companies to qualify: They must be less than 10 years old and have fewer than 25 employees. Their headquarters and more than half their payroll and employees must be in Minnesota, and all employees must make at least $18.55. Qualifying companies also need to be using or researching proprietary technology in a high-technology field.

More information is available at http://www.positivelyminnesota.com/angelcredit

Source: Dan McElroy, Minnesota Department of Employment and Economic Development
Writer: Dan Haugen

Starting your own company doesn't have to mean working alone.

A St. Paul co-working center recently kicked off a new Startup Saturdays theme. The 3rd Place, 2190 Como Ave., is one of two co-working centers that opened in the city earlier this year. The other is CoCo in Lowertown St. Paul.

Co-working centers are meant to be an alternative to the kitchen table or coffee shop for self-employed and telecommuting professionals, who typically pay a membership fee for access to a workstation, Internet connection and other office amenities.

The 3rd Place, a project of the social-media marketing firm Monkey Island, centers on the hope that a handful of aspiring tech startups will decide to take their projects out of the garage or basement and into its co-working space one day a week.

The sessions are free during the month of May. Amenities include high-speed wi-fi, whiteboards, and a conference room with a projector, but co-founder Zack Steven said the real reason to participate is the chance to be around other startup-minded people.

The real benefit is getting to "talk to people who have done it, and are doing it, and dedicate time to it so you can actually find out if what you're working on is worth while from a market/business standpoint," Steven said.

So far, Startup Saturdays have no formal program or curriculum � participants just show up between 9 and 5 � but Steven said they're talking with local tech groups about possibly developing sessions specifically aimed at entrepreneurs.

Source: Zack Steven, The 3rd Place
Author: Dan Haugen