Emerging MN Companies

SPS Commerce’ Omnichannel – A Big Vision

May 7, 2014 By Steve Borsch

SPS Commerce, Inc. (SPSC) is a Minneapolis-based supply chain company that has, remarkably, been able to achieve 53 consecutive quarters of revenue growth. Good, solid, organic growth that has been slow and steady, though anything but exciting.

That is about to change.

This week SPS Commerce held their Omnichannel 14 event at the Marriott in downtown Minneapolis (recap here). The morning kickoff session on Monday was standing room only, much better attended than even the SPS team obviously planned for in advance.

Why so much interest in supply chain infrastructure software and services, especially from a company that did just over $104M in revenue in 2013? (2013 annual report PDF) Because of the huge challenges facing retailers as they try to compete with the accelerating changes caused by internet connectedness: ecommerce; social influence; supply chain efficiencies; and an constantly increasing level of expectation on the part of the consumer. A consumer who increasingly can get what they want, when they want it, at the best possible price, and it better come from a retailer that “gets it”.

Retailers have to make certain they can satisfy that consumer and also stock (or have instant access to) the products to back it up. If they don’t, the consumer is a click or touch away from buying elsewhere.

We’ve also been wondering why a serial entrepreneur who could go anywhere, Jamie Thingelstad (seen walking down the aisle in the photo above), would end up as the CTO at this small supply chain company. After hearing about their big vision at this event and talking with Jamie, it became clear that the enormity of the opportunity, and SPS’ position in the marketplace, makes this company a great place to work!

SETTING THE STAGE

SPS COO, Jim Frome, set the stage for the entire event with his kickoff presentation. He went through the historical view of omnichannel retail (previously dubbed “multichannel”) and what happened to lead us to the present day. A day where continued economic uncertainty is still negatively impacting retail and ecommerce is no longer a bolt-on: it must be an integrated experience. A day when the channels and ways in which consumers can buy are exploding and products are coming to market so fast that keeping up with item demand is incredibly difficult.

Jim Frome

Frome went on to lay out how social media has become a dominant way people participate online (240m Twitter users and 1.23b Facebook users) which is driving purchase behavior, something traditional supply chain companies rarely even think about let alone bake in to their strategies.

He also laid out how the ubiquity of mobile is another key factor that is making it very hard for retailers to always be at the point of purchase when the customer is ready to buy. With 180m tablets & 1B smartphones in use there is an obvious and absolute requirement to have a digital presence but it’s more than that. The key is to be available to engage with the always on, always connected mobile user regardless of where they happen to be at the moment and whether or not that are even actively interacting with the retailer.

Competitive pressures are huge and accelerating too. From same day delivery to the growing mandate to significantly increase the items available in a retailer’s assortment, make the challenges facing retailers enormous.

Don’t think retailers have many challenges?
Look at this representation from Deloitte’s Global Powers of Retailing 2014 report (PDF)

Many of us not directly involved in retail probably have little clue about all the moving parts in the supply chain that leads up to the retailer and, in turn, to the consumer.

Several of my colleagues think “the big retailer challenge” boils down to showrooming and Amazon. Even though competing with Amazon is something many retailers contend with (both bricks-and-mortar and ecommerce ones), the challenges go far beyond that company in Seattle!

What do retailers think are their top issues? Deloitte report Global Powers of Retailing 2014 (PDF) had the graphic above which gives you, at a glance, at least an idea of the sorts of pressures retailers are facing. The sheer number of variables are overwhelming which is the primary reason why retailers are increasingly seeking strategic solutions, like those from SPS Commerce, to deal with the onslaught.

The Fourth Annual State of the Retail Supply Chain Report (PDF) by Auburn University and Retail Industry Leaders Association, is another good read. This report laid out the critical issues weighing on the minds of the 75 supply chain executives surveyed (from top retailers around the United States) but the top four hot button issues are key to understanding what is driving top retailers…as well as the concerns of leaders at smaller regional chains or individual stores:

1) Managing network growth (i.e., store and geographic expansion)
2) Serving omnichannel demand
3) Optimizing resource utilization
4) Navigating regulatory environment

Yep. Omnichannel is #2. So what would a smart strategy and big vision be for a retail supply chain company like SPS Commerce to execute on for 2014 and beyond?

THE BIG VISION

SPS is already well along the way toward having a critical mass to execute on a big vision: They have 50,000 in-network partners; source 1.3 million products from 7,000 companies (the largest in the world); have 35 million UPCs managed; support all fulfillment models; are deployed in 300,000 retail locations; and have a great reputation.

One way to see that in action is this press release that came out right after NetSuite’s CEO, Zach Nelson, talked about it on stage Monday afternoon: NetSuite And SPS Commerce Deepen Product Integration To Deliver Intelligent Commerce Collaboration. It describes how and why an alliance between NetSuite and SPS Commerce happened, why it makes sense, and what it will do.

Not only will SPS Commerce be able to tap in to NetSuite’s 20,000 customer base, NetSuite can integrate SPS’ supply chain capabilities and software into their platform. A classic win-win partnership and I’ll bet the first of many, especially as SPS’ vision becomes more well known.

Jim Frome & the big vision
(photo by @thingles)

SPS Commerce describes themselves as having “...the industry’s most broadly adopted, retail cloud services platform” and as “… a leader in cloud-based supply chain management solutions“. What I didn’t know was the extent to which SPS “...provides numerous prewired, proven integrations and comprehensive retail performance analytics to thousands of customers worldwide. With a singular focus on the retail marketplace, we revolutionized traditional EDI systems by developing a platform that enables highly cost-effective and reliable trading partner collaboration.” (my emphasis in bold)

There is that word “platform.” One we all hope to hear and read about when we look at how a company might scale, create an ecosystem, accelerate customer acquisition, and potentially grow like mad.

Without going in to great detail, just know that SPS has an already solid and growing customer base, partners in place and an already vibrant and emerging ecosystem. If they keep growing it at the pace they’ve been at, it will be interesting. If their ecosystem leaps forward like many suspect (and we are in that camp), then SPS Commerce is poised to become the dominant player in the omnichannel space.

SPS Commerce can do so because they have all the right pieces and parts already (and need to add more), don’t have to deal with enormous legacy software and major customer implementations stretching back to years before the internet, and can move quickly to execute on their vision for a smart, capable, scalable and ubiquitous supply chain. One that has partner extensions that will extend it in ways we cannot yet predict.

With a CTO like Jamie Thingelstad on board—someone who intuitively understands scalability, ecosystems, platforms, the web, social media, and all the ways in which these are impacting retailers and the supply chain itself—SPS has a bright future when it comes to the technology to drive their platform.

Resources

Accenture: Retail Technology Vision 2014 (PDF)

Global Retail in 2014 – Omni-channel, Service Innovation & the IT Balancing Act (PDF)

Forrester: Customer Desires vs. Retailer Capabilities: Minding the Omni-Channel Commerce Gap (PDF)

Omnichannel Retail on Pinterest

Software Firm 8thBridge Sold But Plans Expansion

April 8, 2014 By Steve Borsch

Software Firm 8thBridge Sold But Plans Expansion

8thBridge’s CEO said he plans to bring on more employees now that the company is part of San Francisco-based e-commerce firm Fluid.

Minneapolis-based software firm 8thBridge, Inc., has been sold to digital shopping software and services company Fluid, Inc. for an undisclosed sum. Read more here.

What’s DoApp Been Doing? Quietly Building a Powerhouse Mobile Business

August 16, 2013 By Graeme Thickins

DoApp Inc., a Minnesota-based mobile app development firm (www.DoApps.com), has come a long way since its founding five years ago. I had a chance to sit down with the management team last week in the company’s offices in Rochester, Minnesota, where most of its employees are based. (Disclosure: I have a small equity position in the company, as I helped it launch in 2008. So, go ahead, call me biased!) It was the first chance I’d had in a while to catch the management team together in one place (left to right in the photo below): Wade Beavers, CEO: Joe Sriver, Founder; and Dave Borrillo, COO. Wade and Dave call Rochester home, while Joe is based in the Twin Cities. (They met when they all worked for IBM-Rochester, before Joe moved West to join Google in early 2001.) DoApp now boasts 19 employees, with a handful located virtually, one as far away as Vancouver. A core group of employees has been with the firm since 2008. This company has had amazingly little turnover, which says a lot in today’s environment. See more about DoApp’s talented team here.

Wade Beavers, Joe Sriver and Dave Borillo

What do I mean by “come a long way”? Well, ever since the company launched its first apps right when Apple opened the App Store in early 2008 (I was there — it was a wild time!), it has been one amazing run for these guys. Here’s how DoApp describes itself on its web site: “Great design and enterprise-level code comprise the core of DoApp. We’ve built over 1500 apps for all major mobile platforms. After millions upon millions of downloads, our mobile strength has been tested. We are a pioneer in mobile app development. We are a leader in mobile app experience.” (Note: about 400 of those 1500 apps are iPad apps.) “We are obsessed with mobile: continually developing new ideas, user experiences, and methods of engagement. This is what we love to do.” That is about the most you’ll ever hear DoApp brag. There isn’t even much detail on its web site. These guys don’t talk a lot about themselves; they just keep executing, signing customers, and building their business. That’s why I had to make my trip to Rochester, to find out more…

So, what did I learn? Well, these guys have way too much fun together — but I seriously believe a sense of humor is mandatory for any startup. And I’m sure that has something to do with how tight-knit the team is. I also gleaned some pretty impressive stats (below). And I learned the company has been profitable for some time, and that applies to both its major businesses: publishing and real estate. The company has had no outside investment, by the way — it was self-funded initially by founder Joe Sriver, and started booking revenues immediately after launch. So, DoApp has been quite a home-grown Minnesota startup success story — even if it has been a bit more low-profile than many. So, about some of those stats…

DoApp’s Publishing and Advertising Business:

The company has customers in 110 local markets across 34 states, and those include 176 TV stations, 58 radio stations, and 110 newspapers. Just search “DoApp Inc.” on the iTunes App Store or on Google Play to see the huge number of apps it has developed for these broadcasters and publishers.

DoApp’s Real Estate Business:

The company also has been building its real estate app business for several years. Recently, it formed a partnership with CoreLogic, a leader in the real-estate market that has an estimated 70% of the Multiple Listing Service (MLS) market in the U.S. DoApp powers all of CoreLogic’s “GoMLS” app offering. The GoMLS app (see the iOS version here) can only be used by real estate agents, brokers, or other affiliated professionals that already have an active MLS subscription for this service. It gives agents a time saving, easy-to-use, data-rich mobile app for access to listing data and more, directly from Apple or Android devices. It integrates with other systems and CoreLogic products to allow professionals to access saved searches and contacts, and edit key fields on-the-go. CoreLogic is a publicly traded firm (NYSE: CLGX) headquartered in California that provides property information, analytics, and services in seven countries.

Separately, DoApp serves as the mobile provider for the MLS organizations in Chicago, San Diego, Tulsa, Georgia, Birmingham, and more. These relationships, along with the CoreLogic partnership, make DoApp the largest provider in the U.S. of mobile real estate solutions for MLS organizations.

In addition, DoApp has 17 of its own branded apps covering sports, weather, news, and tech, which together now boast more than 8 million unique users. Here are a few:

myWeather app (iOS, Android)

Headlines app (iOS, Android)

Sports Tap App (iOS, Android)

Congratulations to the DoApp team for all they’ve accomplished to date! I’ll make sure to follow along and keep you up to date on their fortunes.

(Note: This post also appeared on my personal blog, Graeme Thickins On Tech™.)

A Minnesota Startup Returns from Silicon Valley, Wiser and Richer

September 7, 2012 By Graeme Thickins

Well, let’s say nicely funded, anyway — a fully subscribed seed round that fulfills their near-term capital needs. I wanted to write a post to report the latest update on this amazing Minnesota tech startup: Kidblog. You’ve seen me write about these guys before: earlier this summer … and almost a year ago when I posted an update from the EduTech Minnesota conference, when the company hit a million users. We also had one of the Kidblog cofounders as our guest on the podcast about that same time: Minnov8 Gang 97: R U Kidding about Kidblog?

The company launched a new website and identity in August. But here’s the biggest update of all: it just reported its user count has shot past 1.8 million! Kidblog is a safe blogging platform designed for K-12 teachers, students, and schools — and it stands head-and-shoulders above other solutions out there. It’s an amazing “Grown in Minnesota” story that is a testament to the Internet innovation that happens here in our state!

I’ve known the cofounders, Matt Hardy (left, with admirer) and Dan Flies, for at least three years, and have been closely monitoring their progress. So, I’m especially excited about the success they’re achieving. They’ve now received validation from some very savvy investors, not to speak of even more from their market: the teachers who have loved them for a long time, and continue to support the product with gushing testimonials and positive reviews.

The $400K seed round Kidblog opened in the spring was completed in June, with California investors Scott Banister, 500 Startups, and Maneesh Arora participating, joined by Minnesota angels Peter Schleider (RKB Capital) and Scott Burns (founder of GovDelivery).

Matt and Dan, who met as college buddies at U of M-Morris, have worked really hard to build something great. Kidblog began as a passion for them, and very much continues to be. It’s only within the past year that they didn’t have to maintain days jobs, too! Matt was a primary school teacher in Eden Prairie for many years, and Dan has worked in IT, most recently at Lawson Software.

Here’s how they describe their creation: “Kidblog is built by teachers, for teachers, so students can get the most out of the writing process. Our mission is to empower teachers to embrace the benefits of the coming digital revolution in education. As students become creators – not just consumers – of information, we recognize the crucial role of teachers as discussion moderators and content curators in the classroom. With Kidblog, teachers monitor and control all activity within their classroom blogging community.”

See the video interview below for more on their summer in the Valley. The duo participated in a large edutech event in San Diego in late June, where Matt said “they received a lot of love” from educators, and were the envy of other edutech startups that exhibited. The two wrote about that experience in this blog post.

During their last month in Mountain View, on August 20, Kidblog released a massive update to its platform. “We’ve listened to our users and made the world’s best student-publishing platform even better with a plethora of new features for teachers and students,” they declared on this blog post: 14 New Kidblog Features You’re Guaranteed to Love.

Stay in touch with Kidblog at its company blog here. Get more great updates at their Facebook page (including posts about their summer in CA). And follow the company on Twitter @KidblogDotOrg.

Here’s the eight-minute interview I recorded before we had lunch on Wednesday:

I asked a few followup questions of Matt. Here’s that exchange:

Graeme: What’s your stance now on Minnesota vs. California as far as a base of operations?

Matt Hardy: We deliberated carefully about these two locales. Silicon Valley is the heart of the startup universe and access to capital is unparalleled. Minneapolis has its own burgeoning startup culture, and there is developer talent here equal to the Bay Area. Cost of operations in Minnesota will be significantly lower. We can fly to San Francisco four times a month with the cash we save by not paying rent there.

Graeme: Did any existing or potential investors in California tell you they thought you should, or would eventually have to, relocate to the Bay Area?

Matt Hardy: None of our current investors has given us an ultimatum. It was suggested that it will be harder to raise funds with a pre-revenue, consumer web, growth model outside of Silicon Valley. We agree, but we also know that savvy investors can identify great companies anywhere. Dave McClure of 500 Startups has indicated that some VCs in the Valley can miss opportunities by limiting investments to their own backyard. (Here’s a great recent post Dave wrote that touched on that point — it’s long, but filled with insights for startup founders and investors.)

Graeme: What was the attitude of your 500 Startups peers to this question, assuming the vast majority of them are based in the Bay Area?

Matt Hardy: Many founders in the Bay Area are gravitating toward San Francisco specifically. As Google and Facebook absorb talent at the southern end of the Peninsula, the hot place to be is the city. The sheer density of startups and investors creates a climate that drives everyone to build products better, bigger, faster. You definitely feel pushed to keep up with other teams doing awesome things. On the other hand, you can also get so caught up in the “cool kid” scene, attending trendy events and worshiping certain entrepreneurial icons, that you forget to put your head down and build something great that people want. We’ve spent the last three months in Mountain View working 16-hour days to build just that — the world’s best student-publishing platform, beloved by teachers around the world.

Best of luck to Matt and Dan as they grow their business! This is a company I have no doubt will continue to make Minnesota proud.

Minnesota: A Great Place to Be for SaaS Companies

April 23, 2012 By Graeme Thickins

I had the pleasure of attending a workshop event held this past Saturday at the awesome CoCo coworking space at the Minneapolis Grain Exchange. It was called SaaSCamp 2012. Note the year is part of that title, because it fully intends to be a recurring event. If you’re part of an early-stage software-as-a-service business, or planning one, and you missed this workshop — well, you missed a great one, and I would make sure you get to the next one when it happens!

The event was conceived and conducted completely by Lief Larson, CEO and founder of Workface Inc., with assistance from a couple of his team members. Workface is a growing startup in Minneapolis that itself developed a SaaS offering it now markets widely, which it calls a “customer engagement platform.” I was extremely impressed with the breadth and depth of the content Lief pulled together for this event. It included a extensive look at market data for SaaS in the U.S. and globally, monetization strategies and practices, selling to the enterprise, negotiating contracts, increasing adoption and retention of your app, marketing your app, creating a channel to sell your app, financing and funding a SaaS business, training your SaaS customer, and ongoing monitoring of your SaaS business. On top of all this, Lief related some really excellent stories throughout the workshop about his journey in funding and building Workface.

I had a chance to follow up with Lief afterwards to get some further perspective on the story behind SaaSCamp…

Q: Lief, why did you decide to do the event?

Lief: I’ve had a great group of mentors who have helped me during my entrepreneurial journey and I try to pay it forward by helping other young businesses and entrepreneurs to find success. A few of my “mentees” are building applications that are software-as-a-service (SaaS) offerings and asked that I consider putting on an event. That’s why I created SaaSCamp 2012 — to bring together like-minded people working on SaaS. I think the event is already bigger than me, and I’m hoping the community will take it and run with it. … [Read More…]

Magnet 360 Acquires Reside, Rebrands as ‘Social Enterprise Agency’

April 4, 2012 By Graeme Thickins

Magnet 360, a Minneapolis-based marketing and technology consultancy, today announced it has acquired Reside, a Minneapolis-based cloud solutions firm, to establish a single entity that will provide a comprehensive set of social business services. The new business will operate under the name Magnet 360, with a Minneapolis headquarters and an office in New York City.

“We’re coming into this space early, and already we are seeing amazing traction,” said Scott
Litman, Magnet 360 founder and managing partner (photo), in the company’s news release. “Our clients – executive leaders – are recognizing that social is the next big thing that will transform the way we do business and engage with customers and other audiences. They are looking to us to help build and manage programs that will deliver meaningful and measurable outcomes.”

The news release said the new entity’s offerings will include CRM, social, mobile, user experience, agile application development, insights and analytics, marketing automation, and channel marketing – “all key components of an enterprise social strategy.”

The company said its social focus, paired with its deep technical capabilities, is “what will make Magnet 360 unique among agencies.” It quoted Jim Schroer, Magnet 360 investor and former EVP Global Sales, Marketing, and Service for Chrysler: “The demand for this kind of integrated offering is huge. Companies need to embrace social to stay competitive. That doesn’t mean that existing marketing programs go away – but it does mean that they need to integrate to an overall social strategy. Today’s big agencies were built for a TV-centric marketing world; Magnet 360 is shaping itself around the new integrated, social world.”

The company said the combined forces of Magnet 360 and Reside are already working with several leading brands to plan and implement social business programs. Active clients include General Mills, Ecolab, Medtronic, 3M, Honeywell, Toro, AMC Theaters, and Carnival Cruise Lines. It said the new Magnet 360 organization is planning for market expansion and rapid growth.

“We’ve worked with hundreds of clients to help them implement cloud solutions with social elements,” said Matt Meents (photo), Reside founder and now Magnet 360 Managing Partner, in the news announcement. “But that was just the tip of the iceberg. This combination allows us to enable the social business holistically, with total integration between marketing and IT and with exponentially greater bandwidth. It’s a very opportunistic time for our clients – both B2B and B2C – and we’re excited to help them gain huge competitive advantage in this space.”

Update 4/5/12: The “new” Magnet 360 has more than 60 employees in total, the majority in Minneapolis. It also has a New York office. The company said “all Reside and Magnet 360 employees have been retained in this transaction.” It also stated it is currently on a $15M annual run rate, with plans to grow revenue to $20M total in 2012.

Cloud Providers Spread Their Reach Across Minnesota

November 1, 2011 By Graeme Thickins

And what better place to start than, uh, St. Cloud? Actually, the company I’m about to alert you to, Vaultas, is a data center company that’s based in nearby Alexandria, Minnesota. But it just announced plans to expand into the much larger St. Cloud market, increasing its footprint in Central Minnesota. Vaultas develops, owns, and operates vendor-neutral data centers and business continuity/disaster recovery complexes. It has built a secure, high-speed fiber optic network along 1-94 from Minneapolis to Fargo, and plans to build multiple locations along that route. It’s all part of an overall growth strategy, they say, “to empower the state’s business community with affordable, collaborative cloud computing solutions and data center collocation services. ” The company recently completed its Alexandria, Minnesota data center.

Companies of all sizes are increasing choosing to have their IT systems hosted elsewhere on dedicated servers, or in private or hybrid clouds. So, it’s not surprising to see new data centers popping up in out-state Minnesota. Several well established data center firms in the Twin Cities area have offered a variety of managed IT services and cloud services for years — including Atomic Data, Visi.com, ipHouse, and others — and these firms also serve many out-state customers. But there will always be companies that prefer working with data centers closer to their own locations.

Here’s the press release on the latest announcement from Vaultas: … [Read More…]

#Minnedemo Turns Up the Heat in Downtown Minneapolis

October 7, 2011 By Graeme Thickins

Several hundred tech lovers crammed into Schulze Hall at the University of St. Thomas last night and challenged the air conditioning on another day of near-record highs in the state, for the latest edition of the quasi-quarterly Minnedemo event. Luckily, there was plenty of cold beer — thank you, sponsors — and a damn nice appetizer buffet as well. Nothing brings out a crowd more than free beer and food… oh, and a chance to sit in a large, crowded auditorium and listen to startup pitches for half the evening, while you overhear others in the lobby having fun and drinking beer. I decided to join the outliers after only one demo, exiting the auditorium for what I thought would be a just a while — but then I never made it back in. Oh, well, I’d heard enough startup pitches in recent days and weeks to make my head explode, anyway (including some of those on the evening’s agenda), so opting for schmoozing in the lobby seemed like the sane thing to do.

And it did prove to be a better bet for me, and for several of the folks I did said schmoozing with. Wow, there were so many great conversations and introductions brokered, my head was spinning. Or was that the beer? No matter, a good tech time was had by all. And you can read all about those startups that pitched in the auditorium here. A brief stop at the after-party (on the outdoor patio on the second-floor of nearby Brit’s Pub) put a nice capper for me on a very pleasant — warm! — evening, blabbing with so many of the key players in our awesome Minnesota startup community. Thank you, Minnedemo organizers and sponsors, for another great get-together!

Scalable B2B Platform through Rocware

October 3, 2011 By Kurt Roots

The Minnesota-based SaaS company Rocware has recently released an enhanced B2B platform offering, which allows businesses to create, connect, and intuitively maintain their expansive online product catalogs. This platform allows businesses to seamlessly connect to existing and prospective customers through private invitation, technology features found in traditional social media.

This interconnectivity creates an instant conduit for information, which allows businesses to rapidly share updated product images, descriptions, customer specific pricing, purchase order details, and more all in a secured environment. Perhaps more interestingly, these small and midsized businesses can easily exchange messages and fully engage in purchase order and invoice transactions between businesses, without EDI.

The three-member team behind Rocware brings a unique combination of personal experience running product-based businesses, the vision and technical expertise to build a novel solution, and the business knowledge necessary to bring this solution to market. Together their talents represent a complimentary skillset at Rocware. … [Read More…]