Graeme Thickins

Wait, Was That My iPhone That Just Flew Over Your Head?

November 4, 2015 By Graeme Thickins

It could have been if I had a “PhoneDrone Ethos” prototype — I could be buzzing you! But, sigh, I don’t have one … and none of us mere mortals will until they ship in September 2016. That’s as soon as the Kickstarter page promises. Nonetheless, as I write this, the product boasts some $238,000 pledged (well exceeding the $100,000 goal), and more than 900 backers — who apparently have no problem waiting for 11 months.

[Note: This post first appeared earlier today on GraemeThickinsOnTech. I’m posting it here because the “Gang,” minus me, discussed the product on our most recent podcast, and I thought Minnov8 readers would like to hear more about the product.]

xCraft, the designer and manufacturer, is a drone company that scored a record-breaking $1.5 million investment on Shark Tank recently.

Quite simply, the PhoneDrone allows your smartphone to fly and follow you around. How about this line on the Kickstarter page? “Grant your smartphone access to the third dimension.” Yes, it would seem we’ll all be holding back our smartphones from their full potential if we don’t get one of these things! A smartphone’s potential is a terrible thing to waste…

That’s why the makers of the PhoneDrone Ethos say it “gives your smartphone wings, allowing you to deploy your iPhone or Android phone as an autonomous aerial camera.” Oh, the glories of innovation we can all partake in if we just pre-order on Kickstarter! … and then wait patiently for that far-off promised ship date to arrive.

The company claims their product is revolutionary because they’ve “leveraged the sensor, processor, and wireless capability of the smartphone” to give you “a powerful, cloud-connected aerial vehicle for a fraction of the cost of a typical drone.” Cloud-connected… oh, snap.

Of course they say no drone experience is necessary (!), and that their companion app is simple and intuitive. So, never fear: your phone will be out of your pocket and airborne in no time!

You can’t argue with the value proposition: “Your smartphone already has a powerful processor and multiple sensors. Why pay for all those things over again when buying a drone?” Seems reasonable.

It will work with your Android or iPhone inside, with a companion app that will be available for either platform. For the iOS version, you’ll be able to access it via the Apple Watch, too (as an extension of your iPhone), as shown in the video. And here’s a key point: for control and video streaming, the PhoneDrone can easily tether to another mobile device. And it has built-in charger, so you can charge from any USB source, or swap batteries for extended flight times.

A really cool feature is a camera mirror, which allows you to get three camera views — shoot straight down, forward, or to the side (as shown). Soo Hollywood…

Here are some other important points about the product, as stated on the Kickstarter page:

Does PhoneDrone require two devices?  No. PhoneDrone Ethos can be operated by a single smartphone in Mission mode. You set your mission by drawing a flight path over a map, setting altitude, time, any events (like snapping a photo) and then hit start. PhoneDrone will takeoff, fly your flight plan, and return home automatically.

How does “Follow-Me” work?  Follow-me uses two devices tethered through WiFi; a smartphone in the drone and another device as the “beacon”. PhoneDrone will automatically follow the GPS position of the “beacon” device at your selected altitude. We are also working on a partnership with another company to allow follow-me by image recognition through the smartphone’s camera. [My emphasis – cool!] Look for this capability in the future!

Worried about your phone? We get that. We know some of you are a little worried about sending your precious smartphone up into the air. That’s why we’ve developed
several safety features that will protect your phone in the event of the unexpected:

• Redundant Electronic Design: Borrowing techniques from full-sized aircraft design, we’ve built in redundancy into hardware and software design. This allows backup systems to take over if primary systems fail – and brings your smartphone home safely.
• Protective Universal Mount: We know (stuff) happens. That’s why we cradled the phone in a protective neoprene sheath that provides vibration isolation as well as the ultimate shock protection. It can even hold waterproof smartphone cases for some piece of mind over water.
• Still not convinced? PhoneDrone Ethos is compatible with many low cost smartphones – some as low as $50. So pick up an extra smartphone and you’ll still be flying the lowest cost cloud-connected autonomous drone on the planet.

Some other questions I would have:

1) Will my AppleCare pay up if I lose my $950 6S Plus iPhone in a crash, or if it takes a dive while cruising over water shooting awesome video of me paddleboarding?

2) If I did buy a cheap Android phone to put in the PhoneDrone, wouldn’t the quality of the images suck? But, for only $235 for the PhoneDrone body (cheapest price now on Kickstarter), plus as little as $50 for a cheap phone to insert into it, that’s a darn good deal for a drone and camera combo. Tons of would-be filmmakers can afford that.

So, what are you waiting for — ready to become a smartphone pilot? Order up right here.

Follow the latest from xCraft on Facebook and Twitter.

Raising Money You Don’t Need: Minnesota Startup Trend?

September 23, 2015 By Graeme Thickins

[UPDATE 9/28/15: At the bottom of this post, I include some great comments I got from a leading VC over the weekend.]

This thing about profitable startups raising money they don’t need is getting deafening around here. A few years ago, Code42 shocked us by taking their first VC money (a huge $52M round), which confused people because they knew they were doing fine without it. Then LeadPages raises a surprise A round in late 2013 that it soon was openly bragging it hadn’t touched — didn’t need it. Then, just months later, it takes yet more — another $27M. It’s growing crazy fast, so we wonder… do they not need that either? How about SportNgin, raising something close to $40M over four rounds going back to 2011? With the continuous growth they’re experiencing, why do they need all that cash and can they even spend it?

Now we learn about another rapidly growing Minnesota startup, Field Nation, which began as a young college grad’s idea more than a decade ago and now claims a $100M revenue run-rate, grabbing a huge (for this town, anyway) Series A round of $30M. Reading the recent news in the StarTribune and the MSP Business Journal, you had to be impressed. Another homegrown startup raises a huge initial round. Wow, yes, we say to ourselves, beaming with pride, the Minnesota startup community really is rockin’! But what’s going on here with this latest winner in the local VC stakes?

The one thing that struck me was that both the recent media stories about Field Nation said it was the company’s first outside money, when I knew it wasn’t. The first institutional (VC) money, yes, but this company was hardly undiscovered by smart investors. And it was growing just fine without using what little outside money it had previously taken in.

Field Who?
Just who is this company, you might ask? It’s true we don’t hear a whole lot about them. Well, they’re “the leading marketplace platform for contingent and on-demand workforce management” — as stated in their funding news release. (Which contains so many “Tweet This” links within it, I had to laugh. Kudos to their PR dude, Chuck Grothaus.)

Field Nation has been quietly toiling away for several years now building revenues like… well, apparently like mad if the aforementioned $100M run-rate it is any indication. Such a projection — and it is a projection — might make it seem more reasonable to understand why Susquehanna Growth Equity would inject $30M for only a minority position. Another perspective on the investment comes from a longtime advisor to the company, Ryan Weber, who told me “The market Field Nation is in is extremely hot, with well over mid-double digit growth rates expected for years to come.”

There’s no arguing the company has some impressive numbers, as stated in its funding news release: “During the past year, Field Nation has connected more than 1,000 organizations with its network of over 65,000 registered contractors.” Describing its growth rate, the company uses glowing terms: “Prior to securing this investment capital, Field Nation has been a self-funded business, growing profitably at more than 65% annually since its launch in 2008.”

There’s that insinuation again that it really hasn’t needed any outside investment.

Mynul Kahn, CEO, Field Nation

I wanted some further background on the history of the company. So, I first went to Ryan Weber, the well-known cofounder of NativeX (formerly W3i), and, later, to Mynul Kahn himself, Field Nation’s founder and CEO.

The Viewpoint of an Early Advisor
Ryan Weber met Mynul while they were both working on their BS in Computer Science at St. Cloud State University. “He graduated in 2003, one year ahead of me,” said Ryan. “At the time, I didn’t speak to him about my business; we were simply classmates. This was before he had the idea that started Field Nation. Mynul had been living in the Twin Cities for a while and we didn’t keep in contact after graduation. However, in October 2008 he reached out to me to catch up. Soon after, in December 2008, I joined as an advisor to the company. Mynul had a false start with this business in the past, but I felt he had a lot going for him and was the type of person that wasn’t going to give up on this incredible idea.”

Ryan Weber
Advisor to Field Nation

How did Ryan participate? “I definitely did not have anything to do with the refinement of the business model. Rather, I provided feedback to Mynul on various organizational and business topics that had impacted my brother Rob and I in the company we had founded, as well as other startups we associated with. Mynul was already generating revenue when I got involved. He was very lean in getting the company started. After tracking the company a bit longer, Mynul and I agreed that I should approach Young Sohn (a board member at what was then W3i) about his potential involvement. Young had more business connections in Field Nation’s target markets, and was an occasional angel investor, a seasoned operator, and an incredibly strong leader. [Note: Young Sohn is now President and CSO of Samsung Electronics.] Ryan introduced Young to Field Nation in August 2009. “He was immediately interested in getting involved, and we worked out terms for a $200,000 seed investment, from Young Sohn and 32 Degrees, the angel fund I run with my brother Rob.”

How did Mynul fund the early days of Field Nation? “The company very early funded its own existence,” said Ryan. “It reminded me a lot of our company’s formation. Field Nation and W3i (now NativeX) were both bootstrapped to profitability and only raised a seed round to strengthen our savings, but, more importantly, to attract advisors — smart money.”

So, how was this $200K seed investment used? “He never actually spent the money we invested,” said Ryan. “I think the money helped Mynul feel more comfortable that he could spend the profits Field Nation was generating without worrying about taking on debt or having a bad month. He was also able to leverage Young, Rob, and I for any special projects and business advice.”

I asked Ryan, in regard to the platform Field Nation created, what made him think they could succeed in a market dominated by the likes of Odesk and eLance. “Mynul’s focus was very different than the others. I personally had been a customer of eLance and other services like those. I found they were useful for software type service work. But Field Nation was focused on helping companies with service needs that required on-site field work. It made total sense for a contractor marketplace of technicians.”

What does Ryan now see now as the company’s critical growth challenges? “Their market is not well penetrated by any player right now,” he said. “Field Nation has its work cut out for it to convert potentials into customers and help shape the market. The biggest challenge I see is multiple growth opportunities to consider, including expanding markets and expanding products. Choosing the right focus and building the right team that can execute it will be the most critical.”

Another Perspective, from an Acquired Company’s CEO
Longtime local tech-industry player Mac Lewis was CEO of Field Solutions before its acquisition by Field Nation earlier in 2015. I asked Mac about his take on the funding announcement.

Mac Lewis, CEO, Field Solutions (acquired by Field Nation)

“This $30M financing is a significant one, from a reputable firm, which I believe is an evergreen fund,” he said. “That might minimize pressure for a liquidity event in 5 to 7 years. It will provide resources to expand investment in sales and software.”

Mac is not an employee of the combined company, though does have an advisory relationship. “Field Solutions was a complementary addition for Field Nation. Although we were in the same business, we did not see them competitively very often. From Field Solutions they got a customer base that was, for the most part, non-overlapping. We had focused more on enterprise clients. They also got a full-service delivery capability — in addition to more automated, SaaS ‘self-service’ capabilities, which were offered by both Field Solutions and Field Nation. They kept about two-thirds of Field Solutions employees.”

The Founder’s Story
This morning, I was finally able to run down Mynul Kahn (whom I originally met in 2011) and get him to briefly describe the story of his company. “The idea first came to me right after I left college. I founded a site called ‘Technician Marketplace’ then sold it in 2006. Soon after, in 2008, I started Field Nation with a much broader vision than just technicians.”

So, how many years following your founding were you in the ‘pre-revenue’ stage? “The company had revenue in its first year,” he said. “Since we were not funded by VC, it was important to generate revenue as early as possible. We created a minimal product in 2008 that was effective and customers loved it.”

But you must have had some money to start — how did you fund the early days of Field Nation? “From my paycheck,” he said. Yes, he had a day job, working for several years at an analytics firm. So, Mynul proves you can build a startup on the side while working a full-time job — but of course you can’t expect to do that with VC funding. First you put your own skin into the game. Both sweat equity and hard cash in this case.

What role did Ryan and Rob Weber play after their angel investment with Young Sohn? “As my first angel investors, they were extremely helpful,” Mynul said. “They worked as my sounding board and help connect me with a lot of people who ended working for my company.”

When did you first envision your platform strategy to serve freelancers in general (not just field technicians), and what made you think you could compete and succeed in a market dominated by the big established players? “The early success in field services broadened our ambition.” I guess so, if his next statement is any indication: “What Amazon is for retail, Google is for search, we want to be known for work – the work platform.” Can you say Think Big?

Who were your early critical hires? And how many are still with you? “The founding team is still with the company. One person built the technology team, one person built sales, one person built customer service.”

Finally, I asked Mynul. what are your goals for the immediate future, through 2016? “Further development of the platform. We’re adding lot of capabilities so the platform can handle any type of work, any type of worker classification, and eventually anywhere in the world. We’re putting a lot of effort in building the sales and marketing team.”

But how much of that $30 million will be invested in all that, and how soon? He’s not saying. But, with Field Nation generating revenues and profits as they are, will they even need to tap it?

Which Raises the Questions…

If revenue growth and profit trump everything, why do you need VC? (Truism: customer money is better than VC money.)
Why do VCs deploy large sums of money that really just then…sits there?
If founders aren’t asking for all this big money, is it flowing because VCs are pushing it on them?
Does a startup take such funds as a war chest for acquisitions?
Or all of the above?

Discuss amongst yourselves.

———–

UPDATE: When I was planning this post, I reached out to Seth Levine of Foundry Group (no stranger to Minnesota) for his take on the concept for this post. It turned out he was traveling and didn’t get a chance to respond till a couple of days ago. Here’s what he had to say…

“The reality is that the old adage is at play here – raise money when you can, not when you need to. Ultimately, it’s a sign of strength to put capital on the balance sheet. The key is to spend according to your business metrics, not according to your balance sheet. That’s where some companies perhaps get in trouble. As a practical matter, there are lots of reasons companies raise these growth rounds: they may need the money for marketing; they may want to look at M&A to grow faster; they may want to derisk the business and make sure that if things slow down in the economy they have plenty of cash as a buffer, etc. All very good reasons to shore up the balance sheet.”

[Note: This post first appeared at Graeme Thickins On Tech.]

The State — or Lack of a State — of Marketing Analytics

September 13, 2015 By Graeme Thickins

Image ©VentureBeat

(Note: this post first appeared on Graeme Thickins On Tech.)

How does one assess the landscape for an exploding technology category like marketing analytics? There’s so much confusion and hype around the topic. You’ve heard it all — too much data, we’re drowning in it, woe is us. And, along with that, too many vendors trying to sell us the latest cure. First we were shocked to hear the number of vendors was 1000, now we’re told it’s 2000! The argument that all these vendors create too many data silos is now a refrain we’re hearing more often. Hard to argue with that.

With such high numbers of players comes confusion, and complexity.

But it begs the question: how in the world do you unify all your marketing data to understand it and gain a competitive edge for your organization? Will a platform or single vendor solution emerge? Some of the big players like Oracle, Adobe, and Salesforce are certainly trying, opting in a big way for buy vs. build. (These three have led a frenzy of acquisitions in the marketing technology space.)

Yet significant roadblocks still exist to widespread adoption of marketing analytics in business today — and for companies to extract real value from it. The lack of data science skills we’ve all heard about by now till we’re blue in the face — it’s the “sexiest job title in the country,” blah blah blah. Big shortages, universities scrambling to launch graduate programs, etc, etc. But should this technology really require a PhD in every marketing department and agency in the land? That simply doesn’t compute! Why can’t there be more solutions, more tools, that marketers and general business folks — regular Joes and Janes — can use? Why does it all have to be so complex?

Well, I’m confident more answers will be forthcoming, or at least some enlightenment along the way. It’s still the early innings in this game. An attempt to dissect the landscape was recently undertaken by VentureBeat Insights. It’s a lengthy report, months in the making, which they were kind enough to let me get a look at. It’s entitled “The State of Marketing Analytics: Insights in the Age of the Customer.” Here’s a link to the summary. It provides a good overview of vendors and tools available today across all areas of marketing analytics use cases.

Pity the CMO

The report begins: “There’s more data available than ever, and that’s exactly why it’s so challenging to truly make sense of marketing data. While cloud-based data platforms have accelerated the availability and access of marketing data, it hasn’t made the marketer’s job any easier. It’s just the opposite. ‘Mo’ data, mo’ problems.’”

The VentureBeat report author goes on: “CMOs are more challenged than ever. If they’re going to spend more, they need to deliver more. The latest Duke CMO Survey clearly shows that marketing organizations feel more pressure than ever to prove their value. In fact, 65% of respondents report that pressure from their board or CEO is increasing. At the same time, 65 percent say they lack the ability to really measure marketing impact accurately. That means a huge opportunity is buried in the data, waiting to be uncovered.”

An opportunity, and also a warning: “Budgets are shifting to the CMO to take advantage of this opportunity — but those who can’t manage the data will simply be taken advantage of”… and that would be by the technology vendors. So, fair warning: they’re always happy to sell you another point solution to add to the pile you may already have. But, cruelly, that can just add to the the complexity — which is the problem.

Just Give Me the Data That Matters

Two of the insights from the VentureBeat report that I found interesting:

1) Today, there’s a “general lack of ability to prove which data matters” — which it attributes to a skills gap. And that lack of ability can be at least partially ascribed to a lack of “self serve” tools — those that are “marketer ready.” I take that to mean tools that a non-technical marketing person can use. Or at least that a data scientist, whom you must train in marketing, could easily use. (But first you must recruit and hire that person in an extremely competitive talent marketplace. More on that later.)

2) Measuring marketing ROI is not getting easier, as you might think. It’s actually getting more complex and challenging. Why? Because “the answers to these performance metrics are buried in marketing data from dozens, if not hundreds of data sources. And the first step is understanding what those data sources are all about.”

Sounds like a ton of work, huh? It is.

More on that last point, this from a post called “Marketing technology is eating the customer journey”):

“Today’s marketers own more customer data and touchpoints than ever before, and more than any other department. New digital channels and devices — including search, social media, and mobile — have empowered consumers and complicated the customer journey. On each of these, consumers create unprecedented amounts of data about themselves and their interests. And as a result, both the process and technology of modern marketing have expanded as a result of these changes in consumer behavior… Today, digital offers new channels for engagement and accurate measurements to learn from. What’s more, as marketing’s reach has grown, the traditional roles of sales and support have diminished because consumers increasingly inform and support themselves.”

And more — this from “Building a marketing tech stack that drives retention,” a post by martech vendor Sailthru:

“With more than 2,000 companies across the marketing technology landscape, it’s daunting to figure out exactly which products and services you really need… Unlike more mature technology sectors, marketing tech does not yet have a consistent, established ‘stack’ of components.”

The importance of measuring marketing performance in today’s enterprise is further emphasized by a finding in the VentureBeat “State of Marketing Analytics” report:

“Despite marketer confidence in their ability to use the data effectively being relatively low, marketers across all levels, including CMOs, view marketing analytics as being extremely important to the financial success of the firm, not just the marketing organization.”

There’s a lot riding on the shoulders of the CMO. And marketing performance or ROI — the by-product of marketing analytics technology — is a huge part of that weight.

In its survey, VentureBeat asked the marketing execs it surveyed (sample size: 1000+) what were their use cases for marketing analytics. Here are the top five:

Customer acquisition
Customer retention
Ad/campaign effectiveness
Customer lifetime value
Customer behavior/audience insights

Duke Isn’t Only Good at Basketball

Another key source for understanding the field of marketing technology today, as mentioned earlier, is the Duke CMO Survey. This semiannual survey surfaces trends in the budgets and priorities of chief marketing officers at top U.S. firms. The February 2015 study was conducted across a sample of 2,630 marketing execs. Here are two key questions they asked those execs about marketing analytics; there are some surprising answers to the second one:

1) What are the areas in which you are using marketing analytics to drive decision-making?

Customer acquisition 37.8%
Customer retention 30.2%
Social media 27.4%
Product line/assortment optimization 26.4%
Branding 26.0%
Pricing strategy 23.3%
Promotion strategy 21.9%
Marketing mix 19.8%
Multichannel marketing 14.6%

2) What factors prevent your company from using more marketing analytics?

Marketing analytics does not offer sufficient insight 21.9%
Marketing analytics does not arrive when needed 19.8%
Marketing analytics is overly complex 19.4%
Marketing analytics are not highly relevant to our decisions 19.1%

Those negative answers should certainly be a wake-up call for the industry.

Two key bright spots in the Duke report (especially for vendors), courtesy of the TrackMaven blog:

1) Marketing budgets are expected to rebound to the highest point in more than three years. Top marketing execs have lofty budgetary expectations. Over the next 12 months, CMOs expect marketing budgets to increase by 8.7%, the highest forecasted increase since August 2011.

2) CMOs expect their spending on marketing analytics to nearly double. Over the next three years, CMOs expect their spending on marketing analytics — defined by the Duke survey as “the creation and use of quantitative data about customer behavior” — to increase by 83%, up from a 6.4% share of the overall marketing budget to 11.7%.

So there are some positives. But another big downer from the Duke CMO survey:

“Only 40% of CMOs report the ability to prove the impact of short-term marketing spend on their business, and even fewer (34%) can qualitatively prove that impact in the long term.”

The obvious conclusion, again: there is much work ahead.

Wait, What, There’s a Skills Gap? (Duh)

VentureBeat’s “State of Marketing Analytics” report says marketing organizations need to “cultivate hard data science skills to stay ahead of the curve.” It notes that Gartner predicted 4.4 million data science jobs will be available by this end of this year, but only one-third of them will be filled.

Here’s another view on the topic of the skills shortage (from “Marketers are about to make new friends — or not — with data scientists”):

“Data scientists will soon take a lot of jobs away from marketers. The reasons are simple:

1) There’s already more data produced and mined every day than anyone can make sense of. Business gets this and is moving to incorporate data analytics into every facet of the organization.

2) Virtually every marketing technology of note (and there are many) is either a data analytics solution or a solution almost wholly reliant on reams of data.

3) Marketers simply don’t have the required skills to leverage these techs, or the underlying data. Unfortunately, that seems to be true at every level of the marketing organization.

Net-net, the ecosystem is changing, and the winds do not favor marketers with no data science game.”

The writer cites three types of firms in which he believes traditional marketers will soon be displaced by a new breed of data scientists cum marketers: enterprises, agencies, and marketing technology vendors. Yep, that pretty much covers it all!

The implication isn’t that overall marketing employment will not be increasing (though it might) — but that its makeup will be reapportioned. Marketing will become more about science than art. (Not news to those of us marketers who’ve been following this shift for a while.) Lesson: sharpen up those analytics skills.

But all this talk about the need for more advanced-degree data geeks would be lessened if vendors could just develop tools that non-techies can use. It’s hard to argue that, in the software technology world, those that can make the complex simple always seem to win.

One category of marketing analytics software where this is already being seen was called out in the VentureBeat report: “Self-service analytics with a big focus on data visualization (like Tableau) has found its way into marketing organizations at many levels.” Other vendors are surely noticing that one (very successful) company is proving the point.

What’s a Marketer To Do, Now?

With all this change going on in marketing, and science gaining on art in job descriptions and resumes everywhere, you can’t sit still. But there is no simple, universal action plan. The VentureBeat reports says it well: “Marketing analytics is as complex as it is unique to the individual performing it. There is no one way of prioritizing the right kinds of metrics, for the right channels, for the right products, with the right people, under the right organizational model.” Here’s a summary of their recommendations:

Develop a completely custom digital marketing analytics roadmap that incorporates establishing a well-defined strategy for your analytics organization firmly aligned to business outcomes.
Then, establish your technology requirements.
Next, define all the messy organizational requirements for your analytics strategy.

And they rightfully end with this point: “Your metrics and KPIs will be completely unique to you, but consult with experienced marketing analytics agencies in your industry. They’ll help you figure out which metrics to track.“

Land of 10,000 Data Pros (well, almost)

It goes without saying that one big thing you need to do is keep learning. Soak in as much as you can. In that vein, I must mention an upcoming conference here in what myself and my data colleagues also like to call “The State” of analytics — Minnesota! (I’m co-organizing it with Lizzy Wilkins, a marketing-focused data scientist.)

It’s the 2nd Marketing Analytics conference from MinneAnalytics, so “MAMA2” for short, and it’s scheduled for January 22, 2016 in Minneapolis. It will be educational in nature, and we expect more than 600 attendees. MinneAnalytics is the largest local/regional organization in the country for data professionals, with more than 5600 members from the region (and growing), from startups to our many Fortune 500s, across a wide range of industries. It hosts free, sponsor-supported conferences. More details on MAMA2 will be forthcoming on the MinneAnalytics web site. (You may also follow the Twitter feed.)

One thing I can say about the conference: it will be keynoted by the leading voice in the country today on the topic of marketing technology. We have spots for up to 20 other experts to give presentations on a variety of marketing analytics technologies and case histories. Those speakers (and sponsors) are now converging. It’s sure to be an enlightening event.

How to Make Interning a Great Experience

September 2, 2015 By Graeme Thickins

Need an Intern in 2015-2016? Well, MHTA has the program for you! It’s called SciTechsperience and it’s now accepting student and company applications for the 2015-2016 program year. SciTechsperience connects college students in science, technology, engineering, and math (STEM) disciplines to internships in small Minnesota companies.

The program is administered by the Minnesota High Tech Association (MHTA) through a grant from the Minnesota Department of Employment and Economic Development (DEED).

Best thing of all for the college students who are accepted as interns through the program? They get a paid work experience at a STEM-based business (many participate statewide) — with the potential for full-time employment.

Businesses that hire interns via SciTechsperience receive a dollar-for-dollar matching grant to cover 50% of the wages they pay the intern. (Each grant is capped at $2,500.) To be eligible, businesses located in the seven-county metro area must have fewer than 150 employees, and Greater Minnesota businesses (that means out-state) must have fewer than 250 employees worldwide.

Students and businesses can view requirements and apply to take part in the program here.

“We know Minnesota will need more STEM workers if our state is going to continue to have a strong economy,” said Margaret Anderson Kelliher, president & CEO of MHTA. “The SciTechsperience Internship Program is a way to develop that workforce and keep them here in Minnesota. It’s been a great success and we’re excited for the new program year to begin.”

Last session, the Minnesota Legislature increased funding for SciTechsperience to $2 million over the 2016-2017 budget cycle. The funding will be used to double the number of matching grants, which can now be up to 450 over the next two years! Note: the grants are available on a first-come, first-hired basis.

“Minnesota is fortunate to have incredibly talented students and great companies looking for future talent,” said Becky Siekmeier, SciTechsperience Program Director. “SciTechsperience is bringing these two groups together, offering students valuable hands-on experience and businesses access to potential future employees. SciTechsperience is an absolute win-win for everyone involved.”

Here’s what a past intern has to say: “Before this internship, I really didn’t know what happened on a day-to-day basis in an engineering company,” said Isaiah Salinas, intern at Kit Masters in Perham. “In class. they teach you about the equations you may need and the concepts you’ll need to know. However, until you get out and see what happens in a company and in a position, you don’t really have a good ideas about how and when to use each equation or which concepts are applicable. Internships provide that leap in understanding, from knowing how to solve a coefficient of friction problem, to knowing how to gather information and actually solve it outside a textbook.”

And a past employer in the program adds this: “We think offering students opportunities to participate in small to medium sized biotech companies near the end of their undergraduate career is invaluable,” said Nancy Timm with Rebiotix in Roseville. “This is a fantastic program, and we will continue to participate as long as it is available.”

SciTechsperience was established in January 2012 to offer college students pursuing STEM degrees the opportunity to apply their classroom knowledge in solving real-world challenges. The program is designed to expand a pool of talent to support Minnesota companies commercializing new technology, products, and processes.

MHTA, through the SciTechsperience program, has placed 380 students in internships from since 2012. More than 900 students applied for internships in the last program year.

“SciTechsperience” is an internship program that connects college students studying science, technology, engineering and math (STEM) disciplines to paid internships in small to mid-sized Minnesota companies.

About the Minnesota High Tech Association

MHTA is an innovation and technology association united in fueling Minnesota’s prosperity and making Minnesota a top-five technology state. It helps bring together the people of Minnesota’s technology ecosystem and leads the charge in directing technology issues to Minnesota’s state capitol. MHTA is the only membership organization that represents Minnesota’s entire technology-based economy. MHTA members include organizations of every size − involved in virtually every aspect of technology creation, production, application, and education in Minnesota. Find out more online at MHTA.org. or follow MHTA on Twitter @MHTA.

Mac Startups Is Back! Demo Day Sept 10th

August 26, 2015 By Graeme Thickins

Startups are popping up all over, and St. Paul’s Macalester College is no exception. It’s doing its part to support entrepreneurial students in its student body. The Mac Startups program is back for a second year after a successful pilot program in 2014.

Another group of motivated students has spent this summer learning about entrepreneurship and developing their startup ideas into real products and businesses. The college says the program is similar to the fellowship model it uses for academic research projects. It provides the selected teams of students with coworking space, housing, funding, and resources. But, essentially, it’s a student-run entrepreneurship incubator.

Here’s how the program works: the teams identify problems in the Twin Cities community (and beyond) and develop creative products and services to solve these problems. Their projects range from a mobile app for group decision making, to a platform for sharing homecooked meals, to a home composting pickup service.

While working on their ideas this summer, the Mac Startups students have also been engaging with the entrepreneurial community in the Twin Cities by attending meetings and hosting events on campus, as well as by holding workshops. Each team was paired with an alumni mentor with expertise relevant to their project.

On September 10th, from 12:30 to 2:00 pm, the teams will be showcasing their work at a “Demo Day” event on the beautiful Macalester campus. The event will feature short pitches from each of the Mac Startups teams, as well as a light lunch and some great networking with members of the startup community, faculty and student leaders, and some notable Mac alumni, including Seth Levine of the Boulder, CO-based VC firm Foundry Group. This year’s Demo Day is an official event of Twin Cities Startup Week.

Get ready to see some great demos from this year’s batch: ArtDefy, NÜDL, Plannd, Unanimus, VendFresh, CoArt Designs, and Hop In.

I attended last year, and I was honestly blown away by the energy and smarts of the highly motivated Mac students who presented! And their startup concepts were very well thought out. I’m betting this year will be even better.

I encourage you to attend. For details and to register, just go the Eventbrite page. See you there!

TrackIf, Led By Doug Berg, Raises $5M Series A

August 18, 2015 By Graeme Thickins

Three-time Minnesota entrepreneur Doug Berg announced today that his latest startup, TrackIf, has raised a $5 million Series A financing round, co-led by Origin Ventures and Grotech Ventures. Existing investor Chicago Ventures also participated.

TrackIf has developed a technology that allows transactional sites and mobile apps to add white-labeled product tracking, which captures future purchase intent and converts it into revenue using personalized email alerts. The company says several of the largest online retailers in the world already rely on TrackIf to maximize revenue per customer. The company is headquartered in Minneapolis, MN with key executives in both San Francisco and New York.

Origin Ventures is an early-stage venture capital firm founded in 1999. It is based in Chicago and composed entirely of former operators and engineers. The firm invests in emerging software, marketplace, and content companies capable of exponential growth. Previous investments include Grubhub (NYSE:GRUB), DialogTech, Ahalogy, and Windsor Circle. CrunchBase says it has made 32 investments in 20 companies, and is currently investing out of its third fund. Its exits include one IPO and one acquisition.

Grotech Ventures is a early investor in high-potential technology companies. Founded in 1984, it’s headquartered in Vienna, VA. It seeks innovative, early-stage investments across the IT landscape and continues to invest and add value throughout the life cycle of each portfolio company. The firm has a strong combination of financial backing, industry relationships, and deep domain and operational expertise to accelerate growth. With more than $1.3 billion in committed capital, Grotech supports early-stage companies through investments starting at $500,000. CrunchBase reports it has made 77 investments in 54 companies, and its exits include one IPO and nine acquisitions.

The news release follows:

TrackIf Raises $5 Million To Fuel Its Growing Customer Centric Marketing & E-Commerce Solutions

MINNEAPOLIS, MN – TrackIf, a leader in online tracking and intelligent alerting for future purchase intent, today announced it has raised a $5 million Series A financing round, co-led by Origin Ventures and Grotech Ventures. Existing investor Chicago Ventures also participated.

TrackIf is an embeddable technology in leading e-commerce sites and mobile apps that, for the first time, gives shoppers options when they cannot or will not buy on their first visit to a site. With TrackIf’s white label technology, e-commerce companies can capture future consumer purchase intent and convert it into newfound revenue by sending personalized email alerts on changes such as price drops, new items and items coming back in stock.

TrackIf’s initial retail customers have seen tremendous results, with some capturing as much as $1 million in future purchase intent per day from their online visitors. TrackIf has sent over 65 million personalized emails to date, with nearly 50x better open rates and 20x greater conversion rates– results rarely seen with even the best retargeting campaigns.

TrackIf’s customers include several of the top 25 Internet retailers (including the largest home improvement retailer), Neiman Marcus (Last Call), Build.com, Cost Plus World Market, Joie, and many others.

Trackif integrates easily into e-commerce sites by installing a simple script which gives shoppers the ability to opt-in to get alerts on specific products, categories, or areas of any site. This means even the largest sites can deploy this capability quickly with very little integration and provide Pinterest-like capabilities that are branded to any site.

Among the tracking and alerting capabilities that TrackIf retail customers have deployed are:

Price Drops (on customer-specified products)
Product Availability (in/out of stock + limited quantities)
New Products Added (by category, brand, size, color, other)
New Reviews Added
Gift Registry Tracking (wedding, baby, graduate)
Favorite Products (Pinterest-like wish list with alerting)
Wish List Alerting (On existing wish lists within any site)

“We’re in a Pinterest economy now, where consumers want to pick and choose the products they want, from the sites they want, at the prices they want. Shopping sites that embed this type of experience into their sites will not only delight their customers, but can multiply their results,” said Doug Berg, CEO and Founder of TrackIf.

When successfully deployed, the TrackIf solution enhances retailers’ CRM systems, which traditionally are limited to only tracking what consumers have purchased in the past. TrackIf adds the capability to compile and act on data that signals what large groups of shoppers are going to buy in the future. Many TrackIf customers have altered their fulfillment and reordering processes as a result of the new demand intelligence they get from TrackIf’s products.

“TrackIf has impressive growth in this new category of customer-centric marketing. Many of the world’s most respected online retailers are getting instant results with measurable ROI,” said Jason Heltzer, Partner at Origin Ventures. “We believe this new category of marketing will be a must-have capability for any transactional site or mobile app that wants to personalize the consumer experience and maximize revenue-per-customer.”

As a part of the financing, Jason Heltzer from Origin Ventures and Lawson DeVries from Grotech Ventures will join the Board of Directors at TrackIf.

About Trackif

TrackIf is the leader in online tracking and intelligent alerting. Its technology empowers transactional sites and mobile apps to add white-labeled product tracking that captures future purchase intent and converts it into revenue using personalized email alerts. Several of the largest online retailers in the world rely on TrackIf to maximize revenue per customer. To date, TrackIf has sent over 65 million personalized emails, with nearly 50x better open rates and 20x greater conversion rates– results rarely seen with even the best retargeting campaigns. TrackIf is headquartered in Minneapolis, MN with key executives in both San Francisco, CA, and New York, NY.

About Origin Ventures

Origin Ventures is an early-stage venture capital firm founded in 1999, based in Chicago and composed entirely of former operators and engineers. The firm invests in emerging software, marketplace, and content companies capable of exponential growth. Previous investments include Grubhub (NYSE:GRUB), DialogTech, Ahalogy, and Windsor Circle.

About Grotech Ventures

Founded in 1984, Grotech Ventures is a leading early investor in high-potential technology companies. Grotech seeks innovative, early-stage investments across the IT landscape and continues to invest and add value throughout the life cycle of each portfolio company. The firm has a strong combination of financial backing, industry relationships, and deep domain and operational expertise to accelerate growth. With more than $1.3 billion in committed capital, Grotech supports early-stage companies through investments starting at $500,000.

… [Read More…]

Sofia Fund II Closes at Oversubscribed $5.5M

July 29, 2015 By Graeme Thickins

Minnesota likes women entrepreneurs, and here’s more proof. The Sofia Fund, led by a team of five women angel investors, has announced the closing of its Fund II at a higher than expected $5.5 million. The team will invest the fund in “early stage, growth oriented, gender diverse entrepreneurial companies that have women leaders on the management team and who own equity in the business.” (We wrote about the fund in April soon after it announced its first investment from the new fund.)

The Sofia team members, pictured below, are experienced executives and entrepreneurs who have been angel investing for many years. (To read their bios, click on “Our Team” at the Sofia Fund web site.)

Left to right: Cathy Connett, Lisa Crump, Joy Lindsay, Barbara Stinnett, Dee Thibodeau.

Here’s the press release:

Sofia Angel II Fund Surpasses Investor Goals, Raising $5.5 M

Today marks a significant achievement in bringing new monies into early-stage companies. The Sofia Fund, which invests in women-led growth companies and is led by a group of experienced investors, has tapped into an investor community passionate about Sofia’s mission. Investors have responded positively and voted with their dollars to be a part of the fund. Sofia Fund II is now closed to investors, oversubscribed, with a total of $5.5M.

“Angel investing is usually a long-term commitment with an opportunity to positively impact an early-stage company’s growth. We are pleased to see the Sofia Fund launched in support of Minnesota and the region’s innovative women entrepreneurs and the growth and jobs they bring to our economy. Having an experienced fund management team that is serving a segment we are passionate about and stimulating innovation, led us to invest in the Sofia Fund”, said Ed and Val Spencer, long time early stage investors in their community.

The fund’s management team includes Cathy Connett, Lisa Crump, Joy Lindsay, Barb Stinnett, and Dee Thibodeau. All have been angel investors for decades, and are completely committed in unique and individual ways in the early-stage company market space: as board members, mentors, connectors, leaders, and investors throughout the U.S.

Brigid Bonner, VP of Customer Experience and Marketing at CaringBridge commented, “Great ideas come from everywhere and the world has not fully benefited from innovation stemming from women-based businesses. The Sofia Fund is a leader in changing that. I believe this is a unique investment opportunity and an excellent way to experience angel investing.”

Sofia has already made its first investment in April 2015 in a women-led firm based in Minneapolis, Kidizen, which has experienced explosive growth during the past year. The Sofia Fund has invested financially and also holds a seat on Kidizen’s board, working with its management team to advise on growth and scale.

”It was a quick yes for me to invest with the Sofia Fund, as I have worked with this dynamic team in the past”, said Mary Blegen, an executive at US Bank. “Thanks to the Sofia leadership team I have learned about angel investing and have the opportunity to link my passion for helping women succeed with diversifying my portfolio.”

For further information or for companies interested in being considered for investment, www.sofiafund.com.

SPS Commerce Says Retail Industry Is In Denial

April 30, 2015 By Graeme Thickins

Retailers still don’t appear to be facing the profound changes their industry is undergoing, according to Peter Zaballos, VP of marketing and product at Minneapolis’ SPS Commerce, in a keynote he gave yesterday at the company’s annual “omnichannel” conference, called In:fluence15.

“It’s not just about ‘the Amazon effect’,” he said. “It’s about digital engagement.” He noted that, although ecommerce today totals $300 billion, a 10% slice of the overall $3 trillion of retail spending, that’s far from the whole picture. “The real story is that 50% of total retail purchases are influenced by the web.” He said retailers need to be creating digital experiences that bring consumers into the store. “Digital influence is $1.4 trillion of retailing!” Zaballos declared.

He cited other surprising findings published in the company’s 2015 Retail Insights Report. (Some shown below in one of my photos from the event.) The one stat that really amazed him, however, was that 52% of those surveyed gave “Other” as their reason for not making progress in omnichannel strategies. “Are you kidding me — what is that?” Zaballos asked, questioning where retailers priorities should be. He concludes that “Other” must really be about distractions. One fact he feels contributes to that is a need for better technology practices. For example, “the retail industry is still relying on spreadsheets, a 30-year old technology” — one prone to inaccuracies, of course, with so many people often working on a given file.

Some other surprising facts Zaballos cited from recent research findings:
• Consumers spend 76% more in store when they’re engaged on mobile.
• And 49% of online purchases today begin on Pinterest.

Nearing the end of his keynote, Zaballos spoke about “item-centric architecture,” a key focus for SPS Commerce. (More on that here.) “The item is the new foundation,” he said. “We’re reinventing everything in retail around that,” noting that it’s been three years since SPS Commerce began this initiative.

He challenged the audience of retailers by saying they need to:
• Prioritize and focus on omnichannel strategies.
• Collaborate with partners. “Ask yourself, who can help me with this?”
• And just get started, “when you find that thing that is most broken.”

Zaballos closed his keynote by saying, “We’re at the beginning of a 10-year transformation. This is the year the industry goes beyond ‘Other’.”

Concurrent with the conference, SPS Commerce made two news announcements. In the first, the company unveiled the SPS Commerce Platform, a cloud-based offering that offers a more agile and collaborative foundation for critical omnichannel solutions, including analytics, assortment, fulfillment, and sourcing. More than 400 global partners have teamed with SPS to deliver value-added solutions using the SPS Commerce Platform. In the second announcement, it introduced an offering called Collaboration Analytics, which delivers accessible, responsive, and intuitive analytics powering the collaborative decision-making required to meet consumers’ expectations.

Minnesota SaaS Company Agrees There’s a New Sheriff in Town: Software WITH a Service #SwaS

April 28, 2015 By Graeme Thickins

So, we know you’ve been sitting around wondering… what’s the next big wave in B2B software? Well, so have a bunch of Silicon Valley VCs, according to the author of a recent TechCrunch guest post, “Why ‘Do It For Me’ Is The Next Big Thing.”

The author is Anthony P. Lee, a general partner at Altos Ventures, and he makes an excellent argument about how SaaS is no longer enough — specifically, for companies in the ginormous space we call Small Business.

What’s the latest trend he and his firm are seeing?

“We call it the Do-It-For-Me Revolution, or ‘DIFM’ for short. DIFM is more than software. DIFM combines technology automation with specialized labor to deliver a complete solution to a business problem. It’s as much about people-powered customer service as it is about code-powered efficiency. DIFM is sweeping the consumer world and will do the same for the business world. A generation of consumers that has grown accustomed to relying on high-touch, people-powered services for everything from groceries to dating will take those same habits into the workplace.“

Wasn’t SaaS supposed to relieve the burden of expensive software implementations for large companies, and therefore shouldn’t it be a good thing for small business, too? Well yeah, maybe in theory — but the reality, according to this argument, is that this isn’t enough. Savings in upfront capital expenditures is okay, but who has time to learn all this software, all these interfaces? These business owners lives do not revolve around using software all day long — they’re busy running the business! All aspects of the business.

The TechCrunch post continues:

” …to most end users, SaaS software requires just as much effort to learn and operate as the old PC and client-server analogs. Salesforce’s once innovative customer relationship management system has itself become a complex data-entry monster whose user interface has barely changed in more than a decade. But besides Salesforce, there are now tens of thousands of software companies vying for corporate attention — and wallets. One analyst recently catalogued nearly 2,000 marketing software companies alone. Many CMOs are now running 50-60 distinct software tools just to manage the marketing function. To many business end-users, all that software has become a DIY burden. DIFM makes things simpler.”

Can you imagine a small business marketing person — or a small business owner, who is very often the one who has to do the marketing, too — having the time to choose between 2,000 SaaS software marketing solutions? Or, as the author says, using 50-60 distinct software tools himself — as “many CMOs” do in large companies?

Hello! This just isn’t gonna happen in any small business I know of.

That’s why “Do It for Me” (DIFM) — which is Software WITH a Service — is such a natural trend. It’s definitely starting to happen, and certainly needs to happen broadly in the world of small business.

But I know what you’re thinking… is anyone really doing this yet in a meaningful way for small businesses? Well, how about one good example of this happening right here in Minnesota? I have just such a company to tell you about. It’s called Buzz360, and I LOVE the way this startup has taken to describing itself lately, which fits right into this trend:

“Marketing Automation for the Fortune Five Million”

That’s right, Buzz360 doesn’t give a hoot about the Fortune 500… 1000… 2000. Such companies have access to all the marketing software they could ever want (and the budgets to pay for it). It’s the vast millions of small businesses — the real engine of our economy — where marketing help is so direly needed. And that doesn’t mean just software, but high-touch services to go along with it.

I talked to Lisa Schneegans, Buzz360’s CEO and cofounder, who sold her last small-business software startup to giant SAP. “We’ve always been passionate about small business,” she said. “It became very obvious to us quite some time ago that most small businesses do not have the time or expertise to keep up with marketing trends and best practices — yet these were becoming increasingly important for their very survival.”

Lisa said that’s why she and her team created Buzz360 as a ”Software WITH a Service.” The Buzz360 marketing platform automates things like nurturing emails, postings to Facebook, web site development, and requesting reviews and referrals. “And we supplement our automated tools with small business SEO, SEM, and content creation, while providing interfaces to QuickBooks.”

Lisa continued: “Because we understand that many small businesses cannot afford expensive software and consultants, this notion of ’Do It For Me’ — DIFM — is really the driving force behind our product, our services, and our company. We currently have a ‘Do It For Me’ and ‘Do It With Me’ model, depending on the customer.”

Buzz360 was founded in 2013 and has more than $1 million in capital invested to date. The company is currently raising an additional round of funding to expand its team and its marketing and sales programs. It is marketing its brandable, white-label platform to media firms and franchisors, who are its partners in reaching significant sectors of the gigantic U.S. small business market. The company has revenues from multiple customers, and, says CEO Lisa Schneegans, is finding excellent acceptance of its platform and its model in the marketplace.

[Note: This post first appeared April 24, 2015, in Graeme Thickins On Tech™. Full disclosure, I’m proud to say that I’ve previously provided advisory and communications services to Buzz360.]

Minnesota ‘Mompreneur’ Launches Parent App and Crowdfunding Campaign

April 22, 2015 By Graeme Thickins

Karla Lemmon has done it. She’s left a successful corporate career as a product manager to pursue her dream of becoming a tech entrepreneur and marketing her own app — an app for which she’s convinced there’s a big need.

Little Peanut on the Go is a personal-assistant mobile app for parents to help them stay organized and connected when they or their children are away from home. It lets parents create packing lists and to-do lists, build care schedules to share with caregivers, and connect with their children while they’re away with updates and photos. Little Peanut on the Go just became available this month, first in the Google Play App Store for Android devices. It’s expected to be available very soon in the iOS App Store. (UPDATE: it’s there!)

This month was also Karla’s official start date for taking the reins of her own firm, Karimack Productions LLC, on a fulltime basis — and beginning the process of marketing her new app. She says she’s had several business ideas over the years, “but Little Peanut on the Go is the idea that gave me the passion to actually pursue entrepreneurship.” Read more about Karla’s story in her own words on her blog.

Previously, Karla was employed by Honeywell for a dozen years in a variety of progressively responsible positions. Most recently, she was a program manager, where she managed all aspects of a SaaS communications application, including product design and development, marketing, pricing, usability and quality testing, and deployment. Karla has a mechanical engineering degree and also holds an MBA from the University of Saint Thomas. Read more about her background on her LinkedIn profile.

I first learned about Karla’s new venture last fall when I attended and reported on the 2014 “MobCon” mobile conference in Minneapolis. In my recap of the event, I wrote about how she took first prize in the startup pitch competition — going up against some pretty smart guys! — winning $25,000 in cash and services in the process. As I said at the time, I was pretty blown away with the quality of her pitch and her app.

While Karla was self-funding the development and testing of her app, she realized she’d need to raise some funds to begin the marketing process once the app was available for download. But how? After considering various options, she chose to do a crowdfunding campaign — but not on Kickstarter or IndieGoGo, where it can be hard to get noticed. Rather, Karla decided to use a site designed specifically for women entrepreneurs: Plum Alley. Her campaign to raise just a modest $7500 is underway there, and it’s doing well in the short time it’s been live. Read about Karla’s decision to go with Plum Alley in a recent blog post she wrote.

So, tell your mommy friends — and grandparents, too! Have them download the app. And, let’s see if we can help Karla reach her funding goal. You can support her project right here on Plum Alley. Creative, smart, hard-working Minnesota women entrepreneurs like Karla deserve our support!

Also, be sure to follow Little Peanut On the Go on Twitter, and Like the app here on Facebook.

« Previous Page