Archive for the ‘Accelerators/Incubators’ Category

New Material Technologies Spur Growth in San Marcos, Texas Region

Thursday, June 21st, 2018

During my visit to San Marcos in March, I visited a diverse group of manufacturers both as to products and size of company.  The first company I visited, Urban Mining Company, is still in Austin waiting to relocate to San Marcos when their 100,000-square-foot building is ready later this year.

Right after being picked up from the airport by my hosts, we met with Scott Dunn, who is the CEO of Urban Mining Company. Dunn said that he had attended the United States Naval Academy and then received a degree from the University of Southern California. He said, “I started the company in late 2015, and we moved into our first space in January 2016.

We sought major investors from around the county because we wanted to be able to commercialize our technology very quickly. Out of 90-100 investor groups, there were only a few that fit our bill.  We spent a lot of time and money protecting our Intellectual Property with patents. We knew that we had original technology and had to be able to protect it. In June 2016, we secured $25M Series A Funding for to build our recycled rare earth magnet manufacturing facility.  After careful consideration, we chose San Marcos because it offers the skilled workforce and infrastructure needed to support our fast-growing operation. Once the facility is complete, we will be adding more than 100 manufacturing and technology jobs to the region.”

He explained, “I spent a lot of time in China to build relationships and skills to be able to buy down time from factory owners in China that had over capacity. Because of where we are right now, we are able to get a supply of components to use for recycling the rare earth materials. We are the only company producing Neodymium Iron Boron (Nd-Fe-B) rare earth permanent magnets in the United States. Our company’s patented Magnet-to-Magnet process repurposes domestic source materials from end-of-life products, such as hard disks or motors, to manufacture high-performance Nd-Fe-B magnets, using zero chemical inputs and wastewater. The magnets are then used to support the development of technology applications across the consumer, medicine, defense, aerospace, clean energy, and industrial sectors.

He added, “Most people don’t understand the ubiquity of magnets. The only rare earth mine and production facility in the U. S., MolyCorp Inc., went into bankruptcy in 2010, and the assets were bought by Chinalco’s subsidiary, Shenghe Resources in 2011.  The equipment was dismantled and moved China.  It’s critical that we develop this technology because China has the goal of controlling the supply of rare earth products by 2025.  If they succeed, then they could control the world. “

He concluded, “We are working with Tesla, GM, Ford, and many other OEMs like Raytheon, Northrop Grumman, and Boeing to develop products for the commercial and military/defense industries. I believe that reusing rare magnets is critical to a cleaner future, and we have created a closed loop supply chain to upcycle these materials into products that can have a positive impact.”

When we visited Texas State University’s incubator, STAR Park, we met with Dr. John C. Carrano, founder and CEO of Paratus Diagnostics, a firm that specializes in medical devices for point-of-care diagnostics.

 I asked Dr. Carrano how long he has been in the incubator. He responded, “We have been here just over two and a half years, but I actually founded the company in 2012. We are well past the startup phase and are about 18 months away from being cash positive. It’s a long and complex product development cycle for medical devices. Medical diagnostics is not viewed by investors as a get-rich-quick kind of venture, but it is going to be a $10 billion industry in the future. “

I asked him about his background that led him to start the company, and he said, “I retired from the Army in 2005 after 24 years. I am originally from Long Island, NY, but obtained my B.S. from West Point and my Ph.D. in Electrical Engineering from the University of Texas at Austin. I was recruited to teach at the United States Military Academy at West Point in the Department of Electrical Engineering and Computer Science. Then, I was recruited to be a program manager at DARPA where I led several major Defense Department programs related to bio-sensing after the Anthrax attacks occurred in Washington, D. C.  Prior to founding Paratus, I was Vice President of Research and Development at Luminex Corporation., a medical device company, and developed an implantable device to diagnose a medical threat.

He explained, “Our goal as Paratus Diagnostics is to develop point-of-care diagnostic solutions to make healthcare more accessible and affordable. Our hand-held Paratus PreparedNow® System and the ParatusSDS® Cartridge, allows clinicians to make decisions during a patient visit – resolving issues associated with lengthy delays waiting on lab results and improving patient outcomes. There is a big need to diagnose periodontal gum disease because of the serious health consequences if it goes untreated, so our first diagnostic test will be a periodontal test as there is zero competition in this market. Our device tests for the six highest risk periodontal pathogens and two key cytokines using saliva.  The results are provided in 20 minutes and displayed on a smart phone by color bar graphs.

We have 26 full-time employees and will probably be up to 37 by year end.  We have raised $5 million in private equity from angel investors. We also have grants and plan to launch the product into the marketplace in about 18 months.”

At the STAR Park incubator, we also met with Tim Burbey, President of Blueshift Materials.

He said, “Dr. Garrett Poe and I founded the company in 2013 with the mission to commercialize Polymer Aerogels. In July 2014, we became a member of the FLEXcon Holdings family of companies. In 2015, we officially launched our AeroZero® line of products, which consisted of rolled film and monoliths. This was the first commercially available Polyimide Aerogel in the world. Its creation derived from customer demand for a clean, lightweight, small footprint insulation material that can easily be incorporated into composites. We wanted to be ale to make the material in a continuous way as it had always been done in a batch process. We call the products aerogels because they are similar to a foam and are 85% air.  It starts out as a polyimide resin and through a proprietary process, it is transformed into the various aerogel products.”

He said, we moved into the STAR Park incubator in the fall of 2016 and also have an applications engineering lab facility in New Braunfels, TX (about 20 miles southwest). We also polymerize our own materials from polyimide at our facility in San Antonio, TX. We have a good relationship with the Materials Science, Engineering, and Commercialization (MSEC) program at Texas State University and have hired graduates.”

He showed me several different shapes and styles of the products they can make now, from blocks to film to powder. It had good properties for thermal management. Since it is 100% plastic, it is very good for incorporating into composites.

He explained, “Our product designs have applications across the aerospace, cryogenic, membrane separation, radio frequency, electronics, and automotive industries. We make a film for a Formula One race car by adding it to Kapton.  We work with a lot of electronics and RF product companies. Our materials have RF transparency, so will allow signals to go through, but they also provide thermal management.  Our polymer aerogels can withstand extremes of temperature from as hot as 300 degrees C down to as cold as -200 degrees C. Our polymer aerogel has a high strength to weight ratio, especially when bonded to other materials and as a composite core. Our new process for make aerogel film will only take minutes to make vs. weeks, which will greatly reduce cost and open new markets.”

He added, “We are developing new products by teaming with a research company in Palo Alto to look at using different polymers besides polyimide. In June 2016, we got a $3 million Department of Energy DOE grant to develop transparent and thermally insulating Aerogel for single pane windows as part of a project to restore historic windows in the Northeast.”

On the second day of my trip I also met with Paul Brown, President of Bautex Systems LLC, which is focused on transforming the building industry by providing builders and architects with smarter, stronger, more versatile building materials and solutions. He is a serial entrepreneur, who earned his undergraduate degree from the Plan II honors program at The University of Texas at Austin and his MBA at Duke University’s Fuqua School of Business. He has enjoyed a diverse career working in industries ranging from technology and telecommunications to construction products.

He said, “I had moved back to Austin, TX during the dot.com bust and was involved in a VOIP company. I love to build and started building houses.  I found a technology very similar to the Bautex technology,” and he invested in the company. But, he wanted to do manufacturing in the right way, and that company needed a better manufacturing process. “Oliver Lee is my business partner, and we did the original research in 2007.

We found the right machine in Europe, so in 2008, we had some custom molds made and took them over to Europe. We rented factory time for two weeks and replaced the wood filler with polystyrene to make blocks. We mixed the ingredients together and poured it into the mold.  It was an expensive and slow process. We added sand to the blocks and reduced cycle time to 30 seconds to make four 32 X 16-inch blocks in the mold. We had a goal of a weight of less than 50 lbs.

We spent a couple of years doing R & D before we moved to San Marcos, TX. We started shipping products in 2013 and now have six plants along the I-35 corridor.”

He explained, “The Bautex Wall System, comprised of a proprietary cement mixture and expanded polystyrene (EPS), is used to build interior and exterior walls for commercial and residential construction. The benefits to the contractor is that it is complete system that simplifies construction by combining structure, enclosure, continuous insulation, and air and moisture protection in a single, integrated assembly. With the Bautex Wall System, architects can specify an integrated solution that can be installed by a single contractor, saving time, effort and cost.  We are two and a half times what the new building energy codes started requiring in 2016.  Our system provides 26% more energy savings.”

He said, “We need a new paradigm for construction in this country. The process of building has to be better. When you analyze building construction, 90% of the work to build a house is non-value-added.  We need to reduce the costs of construction, and the buildings need to perform better. We had five buildings that were within five miles of Hurricane Harvey, and they did well.”

He added, “Six of the ten fastest growing counties are in Texas, but the access to labor for the construction industry is not here. There is a shortage of masons in Texas. Panelization in construction is appealing to a new generation of contractors.  His concern with panelization is that the industry has stayed with the same old technology. In 2020, a new building code will take effect, and each code changes pushes the bar higher.

We are now building one- to three-story buildings, and we can build faster than traditional construction methods using our Bautex Wall System. We have been nearly 99% commercial, but now we are going after residential work.“

Notice that three of the four companies we visited have developed products using new materials for diverse applications. These companies are examples of the spillover of research in technologies related to the MSEC program at Texas State University.

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Innovation Spurs Growth in Piedmont Triad Region of North Carolina

Tuesday, December 5th, 2017

My last day in North Carolina began with a visit to The Forge Greensboro, a Makerspace that also functions as an accelerator for startup businesses. My hosts, Brent Christiansen, President and CEO of the Greensboro Chamber of Commerce, Loren Hill, President of the neighboring High Point Economic Development Corporation, Mary Wilson from the Economic Development Partnership of North Carolina, and I with Joe Rotondi, Executive Director, and he gave us a tour. He said, “The Forge was started in 2014 by Andy Zimmerman as an entirely volunteer-run organization in a 3,400-square-foot space building down the street. It was only open three nights a week and was completely volunteer run. As membership quickly grew beyond the capacity of the building, we moved to this 8,000-square-foot space in the fall 2016, and I was hired as the full-time executive director. We are the largest and most comprehensive of the community-type makerspaces in North Carolina. Other larger makerspaces are affiliated with universities”

He explained, “We are a non-profit and have about 190 members. We have about a dozen people who teach classes and help maintain the equipment. Our space is split up into office space, a conference room, and manufacturing space. Most of the equipment has been donated, and all members are given affordable access to machinery for woodworking, machining, welding, sewing, 3D printing, laser engraving, electronics and ceramics.”

We met two members of The Forge during the tour: Marc Pinckney and Sam Rouse. Marc is using the equipment to build custom entertainment centers, and Sam is building custom furniture. Sam said that he moved to Greensboro to start Sam Rouse Furniture specifically because of the woodworking equipment available at The Forge. He has been able to launch his company faster and get new clients. I was pleased to learn that he is even making some wood furniture for BuzziSpace that I visited on my first day.

When I checked out the website to write this article, I learned that The Forge Greensboro launched a “Forge Ahead” fundraising campaign last week on October 11th. “The Forge is an amazing outlet for creative people, as well as a resource for employers looking to hire skilled workers,” said Executive Director Joe Rotondi. “The “Forge Ahead” campaign will equip our makers with the tools they need to actualize their ideas, as well as expand our mentor and career development programs.”

Our next stop was Winston-Salem, one of the three major cities in the Piedmont Triad region. We met Robert Leak, Jr., President of Winston-Salem Business Inc., at Whitaker Park to tour of one of the buildings on the 125-acre, 1.7 million sq. ft. campus that was donated by the R. J. Reynolds Tobacco Company in April 2017. The recipient was the Whitaker Park Development Authority Inc., a nonprofit corporation created in 2011 by Winston-Salem Business Inc., the Winston-Salem Alliance and Wake Forest University.

Bob Leak and Loren Hill commented that the building we toured was the tobacco plant that hosted tours for elementary school children when they were young. Although the building has been closed for a few years, it had been maintained R.J. Reynolds, and the utilities were now being paid for by Winston-Salem Business Inc.  It was mind boggling to walk through this enormous 850,000 sq. ft. building and imagine the millions of cigarettes that had been produced in this plant. Fortunately, the layout will facilitate the building being redeveloped into space for seven to eight different companies as there are several entrances/exits and roll-up doors for deliveries around the perimeter of the building.  They already have five companies interested in the space already.

This set the stage for our drive into the heart of Winston-Salem where we drove by several much older buildings that were previously owned by R.J. Reynolds when tobacco production was in the heart of the city. The largest building was sold to the Wake Forest Baptist Medical Center in 1986, and the rest of the downtown plants’ land and buildings were donated at the same time to the City of Winston-Salem because R.J. Reynolds was moving to a modern manufacturing center 15 miles north of the city.

We had a brief tour and lunch at one of these former tobacco plant buildings that has been re-purposed as the Wake Forest Innovation Quarter by “a partnership between the city and state, Wake Forest Baptist Medical Center, Wake Forest University and Wexford Science and Technology, a Baltimore-based primary developer.

At lunch, we met Allen Joines, Mayor of Winston-Salem and Eric Tomlinson, PhD, who wears three “hats”— President of Wake Forest Innovation Center, Chief Innovation Officer of the Wake Forest Baptist Medical Center, and Professor of Physiology and Pharmacology at the Wake Forest School of Medicine.

Mayor Jones said, “Winston-Salem began the course to become a knowledge-based economy in 1995. We started to focus on innovation, and there was strong collaboration in the city. The Wake Forest Innovation Quarter is becoming an economic engine for the state. A lot of the companies in the center were the relocation of companies already in Winston-Salem, but we are starting to see businesses forming around the research center. The Innovation Quarter has become a great place to Work, Live, Learn and Play because of the repurposing of some buildings as residential apartments.”

Dr. Tomlinson said, “We are the fastest growing innovation center in the U.S. by size and number of people employed. We are the new hub for innovation in biomedical science, information technology, digital media, clinical services and advanced materials. We have 1.9 Million sq. ft. of space covering 337 total acres, and currently, we have 3,453 people working here, 152 companies, five academic institutions with 1,395 students enrolled this fall. We have 619 research units, and the 78 service companies generate $4.8 million in revenue. Every high-tech job creates several support jobs. People like working at the center, and they have access to about 270 different events monthly. We celebrate Juneteenth, a yoga event, and a bicycle race.”

According to the website, the five academic institutions are:  Wake Forest University, Winston-Salem State University, Salem College, the University of North Carolina School of the Arts and Forsyth Technical Community College. It also features the following highlights of the center:

  • ” Patented university technologies available for licensing
  • Cost-effective scientific services
  • An advanced telecommunications structure, with a fiber optic ring running throughout
  • Venture capital opportunities, with many top venture capital firms in North Carolina within a 75-mile radius
  • Business incubation, capacity planning, entrepreneurial counseling and training”

Dr. Tomlinson said, “We have weekly meeting of entrepreneurs in our center every Tuesday evening. We have program topics that benefit entrepreneurs.  Flywheel co-working innovation space located at the Center for Design Innovation was our first incubator, where people can come together to work on the fly, learn and share knowledge.  In January, we will add a Maker Space and “Tinker” shop with manufacturing equipment.”

Our last stop of day before going to the airport to return home was Thomas Built Buses, Inc. in High Point, where we met with Caley Edgerly, President/CEO.  Mr. Edgerly said, “Thomas Built buses is the largest bus manufacturer in North America.  “We built our Saf-T-Liner C2 plant in 2004, which was a state of the art $100MM investment by our parent company, Daimler. We produce thousands of vehicles each year across our two main manufacturing facilities in High Point, and we have approximately 1,900 employees at these locations.”

He explained, “The company was founded in 1916 by Perley A. Thomas to build streetcars. In just a few years after the company’s founding, Thomas streetcars were carrying passengers in many of North America’s largest cities —notably in New Orleans on the line that was the inspiration for “A Streetcar Named Desire,” the famous play written by American playwright Tennessee Williams. The company switched to building school buses in 1936. In 1998, Thomas Built Buses became a wholly-owned subsidiary of Freightliner LLC, and Daimler purchased Freightliner in 2000. Freightliner is now known as Daimler Trucks North America LLC, the largest heavy-duty truck manufacturer in North America. The chasses they use come from the Daimler Trucks plant in South Carolina.”

Then, Mr. Edgerly gave me a tour of the plant where I first watched six robots weld the front end of the bus and one robot stack the assembly.  The paint booth is large enough to fit their 30-ft. bus, and three robots do all of the painting. I got to watch a bus being matched and attached to a chassis.

I asked when they had transformed into a lean company, and he said that the plant was set up in a lean way, so this plant gave birth to the Lean Way for the company.   Now they operate under the Daimler TOS (Truck Operating System).

I asked what are the advantages of being in High Point, and he said, “Continuation of the heritage of the company, ability to have long-term employees, and good supply of new workers in the region.  When we had to hire 50 new workers, we had 1,000 applicants. We are also close to the center of our manufacturing suppliers, and we are located in the middle of the population centers on the East Coast. The traditions of manufacturing are passed down from generation to generation.”

As I ended my trip to North Carolina, I felt good about the potential for future growth of the more diverse manufacturing sectors that are now in the region.  With low tax rates, a favorable business climate, programs for apprenticeships and employee training, Maker Spaces, incubators, and innovation hubs such as the Wake Forest Innovation Quarter, North Carolina is poised for a manufacturing boom in the future.

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North Dakota Manufacturers Ride Innovation to Rapid Growth

Tuesday, June 13th, 2017

On the second day of my visit to Fargo, North Dakota, we went to see Andy Dalman, President/CEO of Advanced Bone Technology, which is developing SimuBone, a product that replicates a human bone. SimuBone is the first product to combine internal and external geometrical precision with mechanical properties adaptable to customer specifications, providing the look, feel, and performance desired in a clean, biohazard free, consumable product.

Andy said, “We are only a three-person team now, working out of our own apartments because we are all still students at North Dakota State University. I was part of a professor/student team that performed the initial research starting in 2012, and I was the student. But, I am in my final semester. We have a patent pending, and the University owns a portion of the patent. The standard for device, therapy, and procedure development is human cadaver or animal testing. My goal is to reduce the need for cadavers in medical research, medical device design, surgical training, public safety testing and more. SimuBone has no biological components and can be manufactured on-demand at a fraction of the cost of alternatives.”

He explained, “We make artificial bone out of composite materials using additive manufacturing (3D printing). We can replicate many different bone parts for use in education. We can produce a model based on a CT scan, which can be interpreted into a 3D model in liquid silicone. We own all of our own equipment and have been buying standard equipment that we modify. We use some modified Foam Labs equipment now because we don’t need to go to very high temperatures.”

I asked, “What other opportunities exist? Andy responded, “We have the opportunity to revolutionize medical training by providing realistic feedback without using a cadaver. Right now, medical training uses plastic models – plastic melts or burns. However, orthopedic and dental are two of the slowest industries for adopting new innovation.”

He added, “Our vision is to determine what it would take to become an in body implant company. We have a feeder grant through the North Dakota Department of Commerce. We are “boot strapping our company and have raised $140,000, but our total investment has been $200,000 to date. Of this amount, $120,000 has come from North Dakota, and another $25,000 has come from a grant from VentureWell as one of their E-team members.”

When I asked how they are marketing, he answered, “We are still figuring that out, but we are reaching out to more innovative dentists and doctors. We are currently marketing for dental applications and allowing students to give feedback. The properties of the material are bio compatible, but we are currently working on out of body applications because it is a long approval process for implant parts. We spoke to orthopedic doctors before we were ready. We do know that our market will be high dollar and low volume.

Our next stop was Appareo, which designs, develops and manufactures innovative electronic and software solutions for original equipment manufacturers, as well as direct-to-market.

We met with COO David Batcheller and Brenda Wyland, Director of Marketing. Appareo has established itself as a recognized leader in the custom design, development and manufacture of innovative electronic and software solutions within the industries of aerospace and agriculture.

Batcheller said, “Appareo was founded in 2003 and moved into the NDSU Technology Incubator when it opened in 2007. We started designing and manufacturing flight data recorders for airplanes and helicopters. Once we employed 50 people, we built our current building near the incubator in the Research Park and moved into it 2010. In 2013, we expanded our manufacturing facility to accommodate a second production line, but we quickly outgrew our space and purchased the adjacent manufacturing facility in 2014.”

He said, “Appareo’s proximity to the NDSU campus played an important role in the company’s growth. We have access to the product of NDSU, which produces some of the finest minds in the nation. ”

He explained. “Through the creative application of cutting-edge technologies, we create complex end-to-end solutions that include both mobile and cloud-based components. We are an accredited FAA Parts Manufacturing facility and are ISO 9001:2008 certified. All of our products are designed, developed, built, and supported in the USA. While our engineering and manufacturing expansion takes place in Fargo, we continue to expand our engineering capabilities with teams based in Tempe, Arizona and Paris, France. Having Appareo offices in Paris and Tempe is critical for building upon our global presence, but we have an unwavering commitment to Fargo as our home base. We’re fortunate to have access to a rare talent pool here; some of the most passionate, brightest high-tech engineering minds in the nation.”

He added, “Contributing to the growth of our agricultural business is a joint venture with AGCO Corporation, the world’s largest OEM dedicated solely to agriculture. Under the joint venture, called Intelligent Ag Solutions, we develop innovative electromechanical devices and systems, as well as technology for advanced machine control systems. We are the only company controlling agricultural products by WIFI. We work with agricultural equipment manufacturers to infuse these technologies into their equipment.

We have developed another new family of products under the Stratus brand to meet the aviation needs to comply with the FAA mandate that requires all aircraft operating in airspace that currently requires a  Mode-C transponder to be equipped with ADS-B Out before 2020. This family of products, a portable receiver, transponder, and TSO charging port, provides real-time weather and traffic information directly to pilots in the cockpit.”

His concluding remarks after we toured the shop floor were: “We have established a trajectory of rapid growth, averaging a compounded annual growth rate of more than 45%.”

Then, we drove 40- miles south of Fargo to Wahpeton to visit two companies, Giant Snacks, Inc. and ComDel. At Giant Snacks, we met with General Manager Lucy Spikermeir. Giant Snacks is a manufacturer of large sunflower seeds, pumpkin seeds, and most recently, pistachios.

Lucy said, “The President, Jay Schuler, took over his father’s business. We came out on our own to be only the second company to specialize in large seeds. We select sunflower farmers with proven excellence for growing large sunflower seeds. We work with each farmer during the growing process and monitor the seeds as they are processed, cleaned, seasoned, and roasted to perfection. We had the roaster custom built for us. We are using more and more robotics and automation in our plant.”

When she gave us a plant tour, I was quite impressed with the size of the tanks for the processing and cleaning of the seeds. They are huge – possibly 10-12 ft. in diameter and 12 – 15 ft. high. Their roaster is nearly as big, and everything from the transfer of seeds from one stage to another as well as the filling of the individual bags is all automated. There were actually only about 15 people working on the shop floor to do everything from processing the incoming seeds to packing the bags into shipping boxes. They design their own boxes so they can be used on their automated line.

Lucy told us, “For many years, Frito Lay was the official snack for all of the pro baseball teams except for Minnesota teams. The players really liked the larger size of our sunflower seeds and the variety of the seasonings. The Minnesota teams must have shared their snacks with other teams because we were called by the new snack manager of the dugouts asking if we could provide seeds for more teams. Now all but one of the major league dugouts uses our seeds.”

She explained, “We get out pumpkin seeds and pistachios from California, but our sunflower seeds are grown locally. In the upper Midwest, we have a 70 percent market share. We are experiencing big growth in Texas and the West, but nationwide, we only have a 15 percent market share. About 80 percent of our sales are in gas stations and convenience stores, but we are getting into more chain stores. We own the land, so we could triple the size of our building. We have 35 employees, but it is still a very seasonal business. January through March is slow for sunflower seeds. This is why we added pistachio seeds to our line. We are growing double digits every year, and we will continue to add new products and new seasonings.”

I really hadn’t eaten sunflower seeds since childhood, so had no idea of the variety of seasonings:  Dill Pickle, Toasted Coconut, BBQ Ranch, Spicy Garlic, etc. Lucy gave me my choice of flavorings for bags of sunflower seeds, pumpkin seeds, and pistachios, and my family enjoyed them all when I returned home.

Our last stop was ComDel Innovation, where we met with President Jim Albrecht, CFO Bruce Weeda, and General Manager Art Nelson. ComDel Innovation is a precision manufacturer that supports their customer’s commercialization process, integrating all aspects of product development under one roof. ComDel Innovation’s contract manufacturing services include injection molding, assembly operations, precision machining, fabrication of tooling and stamping dies, metal stamping & forming, thread rolling and metal finishing.

Jim said, “Our site was founded in the mid 1970s as a 3M manufacturing location, which was spun off to Imation in 1996. ComDel Innovation was formed when Imation decided to exit manufacturing in 2007. Many of our initial employees worked for 3M and Imation, providing a tremendous nucleus to form a company around. About four years ago, ComDel Innovation created an ESOP as a way to recognize the employees for their contribution to the success of the business. The name ComDel Innovation represents our commitment to deliver innovation and results for our customers. The value offered is in support of customer’s product development needs and providing high quality products. We operate in two buildings totaling 260,000 sq. ft., running 24 hours a day and 360 days a year. ComDel Innovation started with 60 people in 2007 and is currently at 275 employees. Much of our business is the result of working with customers in the U.S. Over the past few years we have seen opportunities to work with business that are reshoring products from other regions of the world.”

I asked if they are a Lean manufacturer, and Jim said. “We had great heritage, as part of 3M and Imation, where lean principles and the continuous improvement tools were taught and implemented throughout the organization. ComDel Innovation carries those tools and practices forward in support of our customers. We also utilize a Total Quality Management Program to manage the quality of materials we purchase. High-end computer-aided engineering software is integrated into our design process for custom assembly equipment, molds, tooling, and fixtures. CAD/CAM software is leveraged for our precision machining and grinding operations.

During the plant tour, I could see why ComDel Innovation is successfully capturing business and why businesses would consider them for reshoring product to the U.S.I saw considerable automation being used in their plastic injection molding, machining, and metal forming departments. ComDel Innovation utilizes assembly cells for low to high volume production. They use robots for removing parts from machines in the injection molding, machining, and metal forming departments. They have a Materials Laboratory to perform complete thermal and mechanical testing for thermoplastic resins and conduct failure/defect analysis. It is apparent they have invested a considerable amount of money in utilizing state-of-the art equipment and systems. This is the path that American manufacturers need to take to be competitive in the global marketplace.

As I ended my trip to North Dakota, I can envision the North Dakota Department of Commerce realizing its goal of expanding its manufacturing base by fostering emerging companies and supporting the growth of existing companies. With its very favorable business climate, North Dakota maybe able to attract companies from other upper Midwest states like Michigan, Wisconsin, and Minnesota.

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NDSU Research & Technology Park Leads Region in Job Creation

Wednesday, May 31st, 2017

On the first day of my visit to Fargo, North Dakota, I met with Chuck Hoge, Executive Director of the North Dakota State University Research & Technology Park (RTP), which is “dedicated to enhancing the investments in North Dakota State University by the citizens of North Dakota. The development of facilities and research centers conducive to cutting-edge research is also part of the NDSU Research and Technology Park.” The Research Park operates a 50,000 sq. ft. technology incubator, which offers space, facilities, and services to technology-based entrepreneurs and businesses.

Mr. Hoge also serves on the Fargo Moorhead Growth Initiative Fund Board. Prior to the Research Park, he was president of the Ottertail Corporation Manufacturing Platform for six years, and before that, he was president and CEO of Bobcat Corporation.

Mr. Hoge said, “I was on the board of directors of the Park before I became Interim Director in 2013 and the Executive Director in 2016. The Research Park is a 501 (c3) corporation with its own Board of Directors. The Park is home to two NDSU research buildings, the John Deere Electronic Solutions building, and two buildings occupied by Appareo, one of our Incubator graduates.”

Explaining the purpose of the research park, he said, “The Park’s goals mirror those of the State of North Dakota. Our shared mission is to diversify the economy through high-tech STEM jobs, develop the workforce and provide valuable, in-state career opportunities for North Dakota students. In the past, many of NDSU’s 15,000 students were seeking well-paid, high-tech positions out of state, so we made it our goal to create those opportunities for them in-state. The Research Park has created 1,339 direct jobs, of which 52% are held by graduates of North Dakota colleges and universities.”

“In the Incubator, our mission is to help companies succeed faster, which is why we have two of our partner organizations in the Incubator; the Small Business Development Center (SBDC) and the Bank of North Dakota. The SBDC helps startups with anything from business plans to financial modeling and because the Bank of North Dakota is the only state-owned bank in the country, they have many programs aimed at helping startup companies.”

When I asked for information about the founding of the Research Park and incubator, he said, “The Research Park was founded in 1999 and the incubator in 2007. Our funding sources were a combination of private donations, a State Centers of Excellence grant and an EDA grant.”

Hoge, said, “The Bank of North Dakota isn’t the only state entity creating programs for local startups. The Department of Commerce’s Innovate North Dakota program provides up to $32,500 in startup funds to companies in four phases ? $2,500, $5,000, $10,000, and $15,000. In the last couple years, we had over 50 companies in the Fargo area use the program to kick start their companies with a great success rate. The program doesn’t only provide monetary support; the company founders attend entrepreneur training boot camps to network with fellow founders and learn from world-renown entrepreneur, Dr. Jeffery Stamp of Bold Thinking, LLC.”

He told me that the incubator has 12 current incubator clients and has graduated five companies:  Appareo, Fargo 3D Printing, Intelligent InSites, Myriad Mobile, and Pedigree Technologies.

“In addition to programs designed to target local entrepreneurs, we also have a student competition called Innovation Challenge, where $27,000 is awarded to teams of NDSU students with the most innovative ideas. Through three rounds of judging by industry professionals, the students are challenged to pitch their innovations through a written proposal, a trade show scenario and a mock fundraising pitch. We want to inspire students to think about entrepreneurship as a career path and we use innovation as the gateway to entrepreneurship. We had three companies get their start in Innovation Challenge last year and we are hoping for more this year. The program is financially supported by a combination of a University Center EDA grant, state matching funds and contributions from local businesses and organizations.

The Incubator Manager, John Cosgriff, has a background in venture funds, and he assists companies with intellectual property, human resources and raising capital. We have monthly founder meetings where the entrepreneurs advise each other and ‘Lunch and Learn’ events where founders learn from and network with industry experts.”

After I returned home, I was emailed an Economic Impact Study released November, 2016, and a few highlights are:

  • Its companies support an estimated 1,300 indirect jobs in the Fargo-Moorhead area.
  • Its companies employ 489 graduates of NDSU (37% of total RTP employment)
  • Another 202 are graduates of other North Dakota University System schools.
  • 107 student interns are employed by the RTP companies.

While at the Incubator, we met with Chad Ulven and Corey Kratcha, who are the co-founders and CTO and CEO, respectively, of one of the incubator tenants, c2renew, which “uses proprietary biocomposite formulations to design materials, compounds, and parts that satisfy demanding engineering specifications.” With this technology, it is possible to take advantage of lower-cost, renewable resources while meeting, maintaining, and even improving upon the mechanical properties required for a product.

Dr. Ulven said, “I was trained in advanced composite materials when I was in graduate school and at the Aberdeen Proving Grounds Army Research Laboratory. Then I became faculty at NDSU researching agricultural products for use as fillers for composites. I wanted to use a variety of materials and built several predictive models based on biomass constituent make up. I met Corey by chance, and we decided to take the technology out of the lab and spin it off to make products. We started working with big companies like Bobcat and John Deere, but the time to market was too long.”

He explained, “We decided to target companies that are focused on new products and started working with EarthKind to develop consumer market products using a PLA based resin along with flax fiber.”

They showed us some of the products where their materials are used:

EarthKind Pouch Pod – All natural repellent holder that uses flax sourced from North Dakota farms as the filler to the resin.

Bogobrush – An eco-friendly toothbrush where materials, production, and shipping all take place in North Dakota and the surrounding area. The company gives a toothbrush away for everyone bought.

Corey said, “In a partnership with 3DomFuel, we have developed a collection of bio-based 3D printing filaments called c2composites. Our expertise in biocomposite formulation matched with the expertise 3DomFuel has in producing filament means that anyone with a 3D printer capable of printing PLA can print with the following custom filaments:

Wound Up – a coffee plant fiber waste filled filament

Buzzed – made from byproducts of beer production

Entwined – made from industrial hemp

LandFilament – made from upcycled municipal solid waste

We have created many different biocomposites for various customers, but we had never created anything that was 100 percent done for us. So we thought about ways to take one of our favorite things, coffee, and use it in a new and innovative design. We developed the c2cup by creating a new biocomposite formulation that is a hybridization of a bio-based resin and coffee plant fiber. We then used this biocomposite to make 3D printer filament and printed the first coffee cup. The biomass resources we use are taking the waste off the hands of the producer to be utilized in a rapidly renewable manner. We use carbon rich byproducts that also have high lignin content that improves a material’s UVA resistance. We look at how we can meet performance specifications by finding a solution that is bio-based, renewable, and sustainable.

We have a 9,500 sq. ft. production facility in a nearby industrial space. We have at least two interns from NDSU at any one time that we meet through the Incubator and other meetings.

We now have experience working with a wide variety of thermoplastics including: PP, PE, PLA, ABS, ABS/PC, and PA, and a wide variety of agricultural inputs are possible as fillers:

  • flax fiber
  • wood flour
  • hemp fiber
  • sunflower hull
  • dried distiller grains with solubles
  • soybean hull
  • oat hull
  • sugar beet pulp

Our formulations are more environmentally responsible since the petroleum feedstock can be replaced with agricultural byproducts which would otherwise be left to decay in the soil or be sent to the landfill.”

Chad told me about the collaboration they are doing with NDSU researchers to spin out c2sensor, as a result of the “development of a micro-sensor made from biocomposites and non-bioaccumulating metals. He said, “The Sensing Earth Environment Directly (SEED) Sensor can be placed during planting for in-situ measurement of soil conditions, as opposed to current methods which often require a combination of direct (i.e. soil sampling) and indirect measurements (i.e. remote sensing).

Biodegradable materials used in SEED Sensors allow them to degrade after use where planted without adding toxins to the soil. Since wireless communication with the sensor is based on passive radio-frequency identification (RFID) technology, batteries are not required for operation. This technology has been tested in lab and in field trials.”

Chad said, “The SEED Sensors provide:

  • Salinity levels for allowing adjustments as needed
  • Nutrient levels for variable rate fertilizer applications
  • Moisture levels to have more focused irrigation
  • pH levels to more proactively manage inputs
  • Real time soil analysis for end of year fieldwork
  • couple with aerial mapping via UAVs or satellite imager”

At the end of our visit, Chad said, “We also provide engineering services to help design, analyze, and develop plastic and plastic-composite parts for virtually any application. While we specialize in utilizing natural and recycled materials in place of virgin polymers, we also produce solutions with more tradition materials like fiberglass and carbon fiber.”

If c2renew is an example of the cutting edge technology of the startup companies in the Incubator, North Dakota will certainly be able to reach its goal of accelerating the growth of startup and emerging companies to expand their manufacturing base and keep college graduates from leaving the state. The Park’s website describes the success to date: “The NDSU Research & Technology (RTP) Park and its companies have seen tremendous growth over the last five years according to a survey conducted by EMSI in 2010 and repeated by the RTP in 2015. As of December 2015, there were 1,105 jobs at companies located in the park and 234 jobs at RTP incubator graduate companies located around the Fargo-Moorhead area. This is a 50 percent increase over the number of jobs at the end of 2010.”

It would have been great to be able to visit with more Incubator tenants, but we had other more established companies to visit the rest of the day that I will discuss in my next article.

 

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North Dakota Focuses on Accelerating Growth of Emerging Companies

Wednesday, May 24th, 2017

The last week of April, I visited the Fargo, North Dakota region as the guest of the North Dakota Department of Commerce’s Economic Development & Finance Division, which is charged with coordinating the state’s economic development resources to attract, retain and expand wealth. My host was Paul Lucy, former director of the Economic Development & Finance Division, and we visited several companies and met with heads of organizations working to accelerate the growth of emerging companies and retain successful existing companies.

For many people, the only impression they have of Fargo is based on the movie and subsequent TV series of the same name. I never saw the movie and haven’t watched the TV series, but have a cousin in Fargo who is always bragging about what is happening, especially what celerity is coming to perform. I learned that the Red River is the boundary between North Dakota and Minnesota, and about 230,000 people live in the greater Fargo/Moorhead region. It has one private and two public four-year universities, along with several community, technical, and business schools. With nearly 30,000 college students, it is a college town that rivals any in the nation.

As we began our first day of appointments, Paul said, “There are development projects in motion that have  a vision of making downtown Fargo a more vibrant place to live and work, which could lessen urban sprawl and result in more efficient investment in city infrastructure and services. An added bonus would be the preservation of more of North Dakota’s fertile farmland for agriculture production.”

Our first appointment was a breakfast meeting at Emerging Prairie, a co-working space in downtown Fargo. We met with Greg Tehven, Executive Director of Emerging Prairie. He said he grew up on a farm and is a 5th generation North Dakotan. When he was attending the University of Minnesota, he remembers that one of his professors recommended that North Dakota be turned back to the prairie because from 1930 – 2000 there was a “brain drain,” when the best and brightest left the state.

Greg said, “I never intended to go back to North Dakota when I graduated, but while I was an undergrad at the Carlson School of Management at the University of Minnesota in 2003, I co-founded Students Today, Leaders Forever. After graduating, I joined the Kilbourne Group and worked on a variety of projects to stimulate growth and entrepreneurship in downtown Fargo.

He explained, “I burned out and worked my way around the world in 2010. I had a Rotary Ambassador scholarship and got accepted to the University of Manchester to study social change in 2011. I had a year before I started school, so I worked for Doug Burgum for a year and discovered “urbanism.” When I gave a TEDx Talk in Minneapolis, I made a conscious choice that instead of studying social change, I wanted to practice social change.”

He said, “Three of my friends and I founded Emerging Prairie in 2013 to turn Fargo into a vibrant startup community. Our mission is to connect and celebrate the entrepreneurial ecosystem in Fargo-Moorhead. We do so by operating a wide variety of events and initiatives, such as the Drone Focus Monthly, the Prairie Den co-working and event space Hackathon, Meetup groups, and the Intern Experience. We have TEDx Fargo, an independently organized TED event, and 1 Million Cups Fargo, the largest and most active 1 Million Cups program in the country.

We support tech-based entrepreneurs. We are not very involved with manufacturing – most of our entrepreneurs are in software. We provide entrepreneurs: (1) a founders-only retreat (2) a platform to share their work and investment opportunities, and (3) access to consultants. I believe in transfer of information, but not a formal mentor relationship. We have to make it a “cool” climate for college students. We host midnight brunches and do a lot of weird and strange things. We have 144 members of our co-working space, modeled like a student union. We have no desire to maximize profits, but to maximize impact. Millennials are wired to maximize impact rather than maximize profits.”

He expanded, “We host the Ted Ex Fargo and will have about 2,000 people at the event this summer where the CEO of the Kauffman Foundation will speak. We host an Ecommerce conference in Moorhead. We support the drone industry and run a drone conference that started two years ago with 240 attendees the first year and 330 the second year. We expect about 600 people this year on May 31st. We host different other events and also operate an online publication that highlights the regions entrepreneurs and innovators that are turning Fargo into a flourishing tech hub. In 2016, we became a 501(c) 3 non-profit.”

Our next visit put what Greg has said into perspective. We visited the Greater Fargo Moorhead Economic Development Corporation (GFMEDC) where we met with James Gartin, President, Mark Vaux, Executive V.P, Business Development, and Lisa Gulland Nelson, V. P., Marketing and Public Relations. Mr. Gartin said, “Our goal is to be a key catalyst for business growth and prosperity for the region. As far back as five years ago, we felt that we had a difficult situation because of our workforce and ability to attract new companies with our extremely low unemployment rate that is currently3.4%. Every time we get a RFQ, the first thing we get asked is:  Do you have enough employees? We made a commitment early on that we weren’t going to take away employees from our existing employers. While we still work to attract companies to our region, we realized that if we need to work with our two universities to change the philosophy from ‘research for papers’ to ‘research for commercialization’ to facilitate start-up companies.”

He explained, “We have funded Emerging Prairie since its inception and are helping them to support entrepreneurism. We attend and support 1 Million Cups, where the entrepreneurial community meets with K-12 superintendants, organizes manufacturing tours for high schoolers, and recruits companies to our community.

He added, “Governor Doug Burgum’s son, Joe Burgum, is committed to making Fargo the best place on earth to live. He founded Folkways that is a community-building collective dedicated to supporting the region’s culture creators. He created the Red River Market,  successfully lobbied to bring the ride-sharing service Uber to North Dakota, and puts on a course to help entrepreneurs launch local businesses.”

He said, “At North Dakota State University’s Research and Technology Park, there is great collaboration to make it a leader in developing Intellectual Property. Entrepreneur magazine ranked Fargo in the top 10 for entrepreneurism. We have a number of ‘0-60’ speed companies in operation, and a lot more that are on the cusp. The most important thing is that our senior leaders are seeing a difference in the growth of business. We modeled our approach after Brad Feld’s book, Startup Communities: Building an Entrepreneurial Ecosystem in Your City, based on Boulder, Colorado. The start-up phase is ten years, and we are only 4-5 years into the program. Cities can’t push entrepreneurism. You can’t make people start companies, but you can help to build the ecosystem.”

The supplemental material I was provided revealed that the costs of doing business in North Dakota are around 15 percent less than the national average because of the following:

* Research and development tax credits

* Corporate income tax exemption

* Property tax exemptions for new or improved buildings

* No personal property or gross receipts taxes

* No sales tax on eligible services, manufacturing or computer/ telecommunications equipment

* Seed and angel capital investment tax credits

* Early-stage financing resources

* State-sponsored workforce training grants

The GFMEDC website states, “Some of our largest employers include divisional, regional, national and global headquarters & facilities for Microsoft Business Solutions, Bobcat Co., John Deere Electronic Solutions, Border States Electric Supply, RDO Equipment Co., Tech Mahindra, Titan Machinery, Nokia HERE and American Crystal Sugar.” The Microsoft campus came about when Great Plains Software, Inc. was acquired in 2001. There doesn’t seem to be a dominant manufacturing industry in Fargo, as the list of top manufacturers includes farm and construction equipment, power equipment, windows/doors, metal fabrication, steel, and composites.

We also discussed the challenges of solving the skills gap and attracting the next generation of manufacturing workers. Mr. Gartin said, “Tip Strategies out of Austin, TX did an economic development strategy study for us on how to grow economy and our workforce. We have funded the plan and are implementing it. We have some of the most unique workforce strategies in the country. Industry and education mesh. We have a very robust manufacturing Day that we handle. We have funded a Maker Space in Moorhead and helped NDSU create a Maker Space, job shadowing and internships. We have a Tri-College University consortium. Students can take classes and get credit at any of the colleges and pay the same rate. Last year, the two-year technical schools collaborated so that students can take classes at any one for the same rate.”

Tri-College University is a unique consortium that allows students enrolled at any one of its five member institutions to take courses at the others at no extra charge, and to apply the credits toward graduation requirements at the home campus. The five member colleges are:

  • Concordia College – Moorhead
  • Minnesota State University Moorhead
  • North Dakota State University – Fargo
  • Minnesota State Community & Technical College – Moorhead
  • North Dakota State College of Science – Wahpeton & Fargo

When I mentioned The Playbook for Teens program I have written about that mentors middle school girls to get them interested in STEM careers, he said, “We think it needs to start in elementary school in the second or third grade when students are starting to learn math. At NDSU, there is an Engineers in the Classroom program where engineering students work in classrooms to teach math. They matched first and second graders with an engineering student to work with them on project based learning. It was tested in an 8-week program, and every student jumped up two levels. This year, there is an engineering student in every classroom, and the students are about to be tested. This could be the opportunity to show that this works, so that we can apply for a Pew grant to fund the program.”

Mark Vaux said, “Our business development program is based on attraction, business retention, and expansion. We visit at least 150 companies on an annual basis looking for opportunities and challenges, so we can help them through the challenges and barriers to growth and recommend actions to take. If companies are buying new equipment or adding workers, there are state programs that will help them.”

Lisa Gulland Nelson described some of the Workforce programs they have:

  • Operation Intern – primary sector business are eligible for matching funds of up to $30,000 per legislative biennium or $3,000 per intern for hiring North Dakota college students or high school juniors or seniors.
  • New Jobs Training Program – matching grants to assist qualified North Dakota employers in training or upgrading their employees’ skills.

Overall, I was impressed with North Dakota’s policies to provide a favorable business climate for its businesses and wish that California would adopt some of these same policies. The Fargo region is smart to focus on emerging businesses to retain their college graduates and keep them from going to other states for jobs. My next article will cover the incubator at the NDSU Research & Technology Park.

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CONNECT’S MIP Awards range from Pure Fun to Life-Saving

Tuesday, December 13th, 2016

On December 1st, the winners of the 2016 CONNECT Most Innovative New Product Awards were announced at the 29th annual dinner event held at the Hyatt Regency Aventine in La Jolla.

CONNECT is a premier innovation company accelerator in San Diego that helps start up entrepreneurial teams become great companies in the technology and life sciences sectors by providing access to the people, capital, and technology resources they need to succeed. CONNECT has assisted in the formation and development of more than 3,000 companies since 1985. Lead sponsors for the event were Cubic Corporation, and JP Morgan Chase & Company.  Tom West, San Diego Executive Director & Regional Manager of JP Morgan Chase, presented CEO Greg McKee with a check for $200,000 to support CONNECT.

CONNECT CEO Greg McKee said in part, “This event gives us an occasion to celebrate what we do best in San Diego ? innovate. From genomics to robotics, Bluetech to biotech, and data analytics to medical devices the breadth of our innovation economy is staggering. In fact, it’s a quarter of our GDP. You, as innovators, matter. And, I would bet, that many of the products we see here tonight will have an equally profound impact. For over thirty years CONNECT has been, and continues to be, an organization driven by discovery, innovation, economic empowerment, and the opportunity to change the world. But, changing the world isn’t always about a single sweeping gesture or one grand moment, it’s hard work, it’s a blend of small insights and little steps forward, it’s about sharing discoveries and thriving on others’ inspiration.”

There were a record 111 entrants this year across the ten categories listed below. To be eligible, the product must have been first introduced after January 1, 2014, never been selected as a MIP finalist, and generated revenue from sales (except for free mobile apps and companies submitting for the Life Science Products – Clinical Stage category). Each semi-finalist demonstrated their products in front of an expert judging panel in early October, from which 30 were selected as finalists. The winners and other finalists were:

Bluetech:  Water Pigeon – a fast, simple, secure way to deliver automated metering infrastructure (AMI) capability without replacing existing water meters or building wireless networks. Water Pigeon is a graduate of CONNECT’s Springboard program and a resident of EvoNexus.

After winning the award, CEO/CoFounder Clay Melugin said, “The MIP award from Connect is an outstanding honor to win. With so many great startup companies in San Diego in all categories, being recognized for Innovation delivers a boost to our team as we continue to push forward on goals that improve the world. Innovation is clearly not dead in the US and we want the world to see how innovation emboldens a supportive city like San Diego.

The outreach from others after the award has been amazing. It is very inspiring when people take time to understand our mission and offer to help us continue the journey both as investors and people who simple want to help. This only happens in a vibrant technology community like San Diego where startups encourage and help each other move forward towards success.”

Other Finalists:

Diver6 – a life-saving diver tracking system used to wireless supervise divers position and monitor their vital information provides services and technology for government and industry with extensive experience and capabilities supporting complex scientific and maritime operations.

Planck Aerosystems – its flagship drone brings high performance, autonomous unmanned aerial systems to moving vessels previously only possible from manned helicopters.

Cleantech, Sustainability, and Energy:  Camston Wrather LLC – recovers gold, precious metals, and polymers from electronic waste using proprietary patents and green chemistry.

Other Finalists:

  • Measurabl – an all-in-one commercial real estate energy and sustainability management software.
  • SDG&E – a regulated public utility that invented the Renewable Meter Adapter (RMA) as an alternative for private solar rooftop customers to avoid costly panel upgrades.

Defense, Transportation, and Cybersecurity:  Cubic Corporation – designs, integrates and operates systems, products and services that increase situational awareness for customers in the transportation and defense industries.

Mike Twyman, President of Cubic Mission Solutions, said, “Cubic is honored to receive the Most Innovative Product (MIP) award from CONNECT in the Defense, Transportation and Cybersecurity category for our inflatable satellite communication system. Cubic GATR’s industry-leading inflatable satellite antenna is changing the satellite communications industry and receiving innovation awards, such as the MIP from CONNECT, validates the push for innovation at Cubic. We look forward to continuing our support of CONNECT and fostering innovation in San Diego region.”

Other Finalists:

  • B&B Technologies LP – developer of the DAMPS advanced magnetic suspension/propulsion shock mitigation technology R&D for the military, medical and professional/commercial markets.
  • Space Micro – the Micro-STAR-200M is a space qualified sensor observing start and delivering precision pointing information to its host spacecraft.

Information Communications Technologies: Aira – develops remote assistive technology and services that bring greater mobility and independence to blind and low-vision people in daily living by connecting them to a network of certified remote agents via the blind user’s wearable smart device.

“The impact of winning the CONNECT Most Innovative Product (MIP) Award certainly marks an important milestone at Aira, including our place as a recognized technological innovator in the San Diego region” said CEO Suman Kanuganti. “We believe that San Diego, because of its supportive and engaging technological environment, is truly the best community for startups like Aira, and we thank CONNECT for the work they do to grow the region, and of our peers who continue to inspire and challenge us to be more competitive, smarter, and committed to thrive and succeed here in San Diego. Equally important, Aira’s winning of the MIP Award allows further light to be shed on the often-forgotten challenges that people with vision loss face on a daily basis in functioning in a sighted world, and how the power of technology and innovation can play a major role in alleviating these challenges.”

Other Finalists:

  • Creative Electron – the TruView Cube is an innovative x-ray machine used to count the number of semiconductors without the need to open protective cases.
  • Qualcomm Technologies, Inc. – The SnapdragonTM 820 processor represents a rare feet in the engineering and design of semiconductors, in which every major IP block in the system is a new and custom design.

Life Science Diagnostics and Research Tools:  Echo Laboratories Inc. – developed the Revolve, a new hybrid microscope that easily transforms between upright and inverted configurations, merging the capabilities of two instruments into one. Echo Laboratories graduated from CONNECT’s Springboard program two years ago.

CEO/Founder Eugene Cho said, “Winning the event was a big achievement for us. Just two years ago we were at the same event, sitting in the audience as Springboard graduates. It was incredible validation to our team of how far we’ve come since then.”

Other Finalists:

  • DermTech – a non-invasive gene expression platform that works with samples collected using DermTech’s Adhesive Skin Biopsy Kit to facilitate the diagnosis and treatment of psoriasis and other inflammatory skin conditions.
  • NanoCellect Biomedical– the WOLF Cell Sorter is the new benchmark for access and performance to make flow cytometry and cell sorting technology more affordable and accessible for life science researchers to perform cellular analysis, develop molecular diagnostics, and improve personalized medicine.

Medical Devices:  Onciomed, Inc. – the Gastric Vest System™ (GVS) is a revolutionary, minimally invasive implantable device to treat obesity and diabetes.

Other Finalists:

  • Innovative Trauma Care – created the ITClamp Hemorrhage Control System which is designed to address massive hemorrhage – a leading cause of death in traumatic injury – by controlling critical bleeding in seconds.
  • 11Health – a connected medical device company, where all patented devices use Bluetooth® wireless technology to send secure real-time data to mobile devices, including smart phones, tablets and watches.

Pharmaceutical Drugs and Biologic Therapies:  ACADIA Pharmaceuticals, Inc. – NUPLAZID is the first FDA-approved treatment for hallucinations and delusions associated with Parkinson’s disease psychosis.

Bob Mischler, Senior Vice President, Strategy and Business Development said, “We’re honored that NUPLAZID was chosen as the winner of the Pharmaceutical Drugs and Biologic Therapies category. Even more importantly, we are gratified that this innovative treatment offers renewed hope to patients with Parkinson’s disease psychosis, a debilitating condition that affects around 40 percent of people with Parkinson’s disease, and the loved ones who care for them.”

Other Finalists:

  • Ardea Biosciences– Zurampic is the first new oral medication for treatment of gout approved by the FDA in 60 years.
  • GlyConMedics LLC – Pre-biotic (OZ101) tables advance the treatment for type 2 diabetes by providing an affordable and effective long-term ADD-ON treatment to existing SU therapies to improve glucose control, educe hypoglycemia and weight gain.

Robotics and Unmanned Vehicles:  Clever Pet – a connected game console that intelligently trains and engages dogs using their normal daily food automatically, whether their humans are home or not. CleverPet is a resident of EvoNexus.

“We were honored to receive CONNECT’s Most Innovative Product award in our category,” commented Co-founder Leo Trottier. “We could not have built CleverPet without the support of the San Diego community and organizations like Connect. We see this award as validating a business and idea that when we started felt at best a pipe dream.”

Other Finalists:

  • NXT Robotics – provides service robots to support increased security monitoring and alerting requirements.
  • Robolink – aims to make STEM education accessible, engaging and fun for children and hobbyists by producing robotics educations kits and providing educational lessons that teach core principles of engineering and programming.

Software, Digital Media, and Mobile Apps:  Guru – an app that features beacon-enabled technology that interacts with smartphones to create digital experiences for museums, aquariums and zoos. Guru is also a CONNECT Springboard graduate and a resident of EvoNexus.

Hilary Srole, Project Manager said, “Entrepreneurship is hard, so receiving recognition like this from CONNECT is awesome. Winning gave us a great sense of validation. Not only for us, but for the San Diego Museum of Art for taking a chance with us. It really feels good to show that their faith in us wasn’t misplaced. This whole process has been rewarding. Springboard’s mentorship has helped us avoid some of the pitfalls commonly associated with start-ups and has helped us to move in the right direction faster.”

Other Finalists:

  • Nanome, Inc. – developed the world’s first immersive and scientifically accurate molecular modeling tool in Virtual Reality.
  • South Doctors, Inc. – the leading platform that connects patients from around the world with the best doctors and facilities in Mexico.

Sport and Active Lifestyle Technologies:  Bixpy LLC – the world’s first portable and modular personal water propulsion device that runs on lithium batteries for snorkelers and scuba divers, with attachments available to motorize kayaks and standup paddle boards.

Founder/CEO Houman Nikmanesh, said, “We were absolutely humbled by our selection as a finalist for the MIP Awards by Connect. We were among some brilliant people, amazing products, and innovative ideas. So when we won, we were absolutely beyond ourselves. It has taken us more than two years to develop the Bixpy Jets and we have worked tirelessly on a project that at times seemed like a pipe dream. Winning such a prestigious award validates our vision and paves the way forward for us. We’re proud and attribute much of our success in our product development to being in San Diego. Aside from being the perfect hub for an outdoor lifestyle company, the San Diego startup and innovation community has been instrumental to our drive and success.”

Other Finalists:

  • ElliptiGO Inc. – the world’s first elliptical bicycle, combining the best of running, cycling, and the Elliptical trainer for a fun and effective way to exercise outdoors.
  • FlyDive – the X-BOARD connects to a personal watercraft for hydro jet propulsion, empowering riders to hover and fly above the water. It is the most advanced hydro flight system designed and engineered to support both beginners and professional riders.

It was a very exciting night for me because I had been one of Bixpy’s mentors in the CONNECT Springboard program this year. Bixpy graduated in July, and in only four short months, they conducted a successful Indiegogo crowdfunding campaign, were selected as a finalist, and won this prestigious award.

CONNECT has a built an unbeatable roster of over 500 highly-qualified individuals to serve as Springboard Entrepreneurs-In-Residence and Mentors who volunteer their time as mentors to help entrepreneurs develop successful companies. I look forward to mentoring more companies in the future.

 

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Cincinnati’s Cintrifuse Connects Entrepreneurs, Big Companies and Tech Funds

Monday, December 12th, 2016

During my visit to Cincinnati earlier this month, I had to pleasure of meeting key people from Cintrifuse and a few of the regional accelerators. The website says Cintrifuse is “Where Dreamers, Disruptors and Doers Connect” because “the world needs innovation. Entrepreneurs, BigCos and Tech Funds need each other. An active network ensures they can connect. And at the heart of that network is Cintrifuse.”

At Cintrifuse, I met with Wendy Lea, who has been CEO since 2014, and Eric Weissmann, Director of Marketing. Ms. Lea is “an accomplished Silicon Valley executive with deep experience in marketing, sales, and customer experience.” Ms. Lea serves on several boards, including Corporate Visions (San Francisco) and Xyleme (Boulder) as well as still being the executive chair of Get Satisfaction (San Francisco.)

Ms. Lea said, “Cintrifuse was born to answer this question: What will it take to create a thriving startup ecosystem in Cincinnati? Cintrifuse is a not-for-profit public/private partnership that exists to build a sustainable tech-based economy for the Greater Cincinnati region. Our purpose is to advocate for entrepreneurs leading high-growth tech startups– attracting, inspiring, and supporting them on their journey. The goal of Cintrifuse is to lower starting costs of business, especially businesses with the potential for high growth and that are disruptive technology. The Cincinnati Business Committee wanted to see how they could be relevant and formed Cintrifuse in partnership with the City of Cincinnati and EY. They wanted their kids to be able to come back to Cincinnati. The Cintrifuse Syndicate Fund is at $57 million and invests in VC firms outside of the region with the understanding they (VCs) create a regional engagement plan. There’s no stipulation that they invest in Cincinnati startups, but just be involved in the ecosystem. This includes reviewing deals, participating in events, and meeting our Limited Partners (LPs) most of whom they would love to meet with anyway – Procter & Gamble, Kroger, the University of Cincinnati, etc.”

She said, “We own and manage a 38,000 sq. ft. building in the economic area known as “Over the Rhine.” We got the building mortgage free, but put $17 million into improving the building. We opened in 2012. We provide services to 285 members companies – advisory services (such as mentoring and office hours), connections to talent, funding, and customers, as well as operating co-working space in downtown Cincinnati. We are part accelerator, part incubator, and part co-working space to move a company to the next ‘Lily pad’.

Ms. Lea added, ” The ‘headroom’ at Cintrifuse is wide. There is a strong appetite for new technology, new ideas, and disruption. Cintrifuse is a census taker – 300 startups are on our database across industries. We have brought is $160 million into the region for their startups, and we give them lots of exposure to VCs. One of our success stories is Everything But the House, which started in Cincinnati. They just raised $41 million, and Cintrifuse made the introduction to their investors.”

She explained, “Cincinnati has more Fortune 500 companies than anywhere else outside of San Francisco Bay area, so we created a Customer Connections program to share information between large companies and small companies. Our Customer connections program is taking 15 startups to Israel to present “innovation briefs.”

She would like to see Cintrifuse expand all over the world similar to TechStars in Boulder, CO with which she was involved when she lived in Boulder. She said, “Tech Star is the largest global network in the world with 28 centers, and their graduates have created 800 companies. Cintrifuse hosted their   reunion of graduates called FounderCon in the fall of 2016.”

The next day, I met Jordan Vogel, now V. P. of Talent Initiatives with the Cincinnati Chamber of Commerce, who worked for Cintrifuse for three years as director of the entrepreneurial ecosystem., He gave me more background information on Cintrifuse, saying, “It was created by Cincinnati Business Committee, composed of the top 30 CEOs in region and  the Cincinnati Regional Business Committee, composed of about 100 CEOs of somewhat smaller companies. When Chiquita left, the leaders became concerned and asked “What does the future look like? What should it be? They decided they needed to promote the next P&Gs of the world. Entrepreneurship was the key. They commissioned McKinsey & Company to conduct a comprehensive study on what would make the Greater Cincinnati region more attractive to startup entrepreneurs and outside investment. The study revealed the region’s strengths and gaps. Cintrifuse was formed to leverage the strengths and fill in the gaps. There are four universities in the region, but there was no path to commercializing technologies being developed”.

He added, “Funding was needed, so they created a fund of funds. They raised $78 of which $57 million went into a syndicate fund. To be part of the syndicate, Venture Capitalists had to commit to take a look at startups and be committed to engage with two to four trips per year to the region to meet with entrepreneurs. The purpose was to create a food chain.”

According to its StartupCincy Resources page, “Cincinnati lays claim to one of the most vibrant startup ecosystems between the coasts.” Home to The Brandery, one of the nation’s Top 10 accelerators; HCDC, the #1 incubator in the State of Ohio; CincyTech, one of the Midwest’s leading seed-stage investors; Queen City Angels, a private, seed-stage venture capital investor ranked #2 in the nation; four universities committed to innovation; and now the country’s only faith-based accelerator – there is a ton of innovation activity in this town!”

The Cintrifuse webpage lists the following accelerators as collaborative partners:

  • ArtWorks CO.STARTERS (formerly SpringBoard) “is a nine-week business development program that helps aspiring and seasoned entrepreneurs examine assumptions and turn business ideas into action.”
  • Bad Girl Ventures “is an educational and micro-finance organization dedicated to inspiring and supporting women entrepreneurs in all the key elements of their business.”
  • The Brandery “is a seed stage startup accelerator ranked as one of the top programs in the United States. It runs a 4-month program in Cincinnati, Ohio, focused on turning your great idea into a successful brand driven startup.”
  • First Batch ”It is a five-month accelerator that is the first business accelerator in the nation to focus on scaling physical product companies using local manufacturing. Cincinnati’s long history as a center for consumer products, branding, and manufacturing make it THE place for growing a business creating and selling tangible goods.”
  • MORTAR was started by three minority community members in the downtown area called “Over the Rhine.” “It is called ‘Mortar’ because people are the mortar between the bricks of the buildings and the founders believe that the neighborhood’s residents have the potential to create booming enterprises – just footsteps from their homes.”
  • Minority Business Accelerator – “its mission is to help accelerate the development of sizable minority business enterprises and to strengthen and expand the regional minority entrepreneurial community. It works with companies under $1 million in revenue to connect them with large companies who want to diversify their supply chain.”
  • Ocean is a faith-based “accelerator for startup growth by focusing on the purpose that drives founders…and their companies.”
  • UpTech “is designed to attract and accelerate entrepreneurs who have the next big idea to make the world a better place. Its mission is to create an informatics industry in Northern Kentucky. It is especially well suited to support entrepreneurs who benefit from our partnership with the NKU College of Informatics.”

It lists the following incubators in the Cincinnati region, which also collaborate with Cintrifuse:

  • bioLOGIC is a life sciences incubator.
  • Hamilton Mill “is a Southwestern Ohio small business incubator for green, clean, water, digital and advanced manufacturing technologies. Conveniently located between Cincinnati and Dayton in the original pioneer town of Hamilton, OH.”
  • Hamilton County Development Center (HCDC) “is a nationally recognized startup incubator in Southwest Ohio that helps entrepreneurs launch successful innovative businesses. It just spun off an accelerator called Pipeline for water product development.”
  • The Northern Kentucky ezone (NKY ezone) – “It works collaboratively with several organizations that provide funding assistance to fast-growth, high-tech companies. Its team will work with you in assembling the necessary information, plans, and presentations to apply for these opportunities.”

Over dinner at Cintrifuse, I met with the heads of three of the accelerators, Matt Anthony and John Spencer with First Batch and JB Woodruff with Uptech. Two entrepreneurs also joined us for dinner, Konrad Billetz, CEO of Frameri, and Paul Powers, CEO of Zoozler LLC and Physna LLC. Frameri makes the world’s first interchangeable prescription frame and lens system. Mr. Billetz was previously part of the Brandery four month accelerator program in 2013. He said, “We got $20,000 as part of the program, and then we did an Indiegogo crowdfunding and got about $100K to get into full production. We were on Shark Tank in 2015, but we turned down the deal we were offered. We found a lens manufacturer in Dallas, TX, but still do some production in-house.

Mr. Powers said, “Physna is a member of Cintrifuse. I started Physna in December 2015, and we are developing software that will lead the revolution in 3D printing. I am also the CEO of Zoozler LLC that is about two years old. Zoozler is a tech development company (including websites, apps, digital marketing and media) and has an initiative for local startups requiring help in tech development.”

I connected with Matt Anthony by phone after I returned from my trip to find out more about First Batch. Mr. Anthony said, “I founded the accelerator in 2013 to overcome the gap between a well made early prototype and being able to make the first batch of product at manufacturing scale. Over the next four years we grew the program to educate and connect entrepreneurs to overcome the additional hurdles to scale, including legal, marketing, distribution, and more. We’re unique nationally in that we’ve focused on utilizing the strength of our local manufacturers, which tied with the heritage in physical consumer products and branding make for a perfect set of resources to grow new physical product companies. We operate out of a 10,000 sq. ft. maker space on the 4th floor of a former brewery, located in the “Over the Rhine” area. The program itself is five months of rigorous learning from regional experts, product testing, development, one-on-one mentorship, and $10,000 in funding to get into actual production. Companies must all come in with a working prototype and an understanding of their business to really get the most of the five short months. Some of our companies have been making their product for years and are looking to expand their production beyond themselves. The goal of the program is to get the companies into the first stage of production and actually selling products in order to set them up for future growth and funding.”

For example, one of their companies, Textile House, used the funding to make a couple hundred garments for their fall fashion line. They already raised an additional round of funding through a Kiva micro loan to bring their spring line to market in early 2017.

 

He added, “We started out with two companies in 2013, four in 2014, five in 2015, and six this year. We started this year in June and our 2016 class just culminated in a Demo Day on November 9th. We try to check in with graduates to continue to ensure growth, and about half of the companies each year choose to stay on as members of the maker space.”

When I asked him to describe how their program works, he said, “After an open application, our companies are selected through a series of interviews that end in a final juried selection. Once the program starts our cohort meets as a group twice a week, and one-on-one at least once, often with speakers, manufacturer visits, branding support, and other individual consultation sprinkled in between. We start the week on Monday mornings reviewing business concepts and readings, ranging from learning more about the types of entrepreneurial personalities via E-Myth, and later how to start prototyping and quickly testing product ideas via Lean Startup and marketing channels via Traction. We are primarily funded through grants and donations of time and materials, and don’t currently take an equity position in our companies. We look to help grow companies by connecting to resources down the line from ECDI, Queen City Angels, Cintrifuse, even other accelerators.”

With so many accelerators and incubator programs to nurture startup companies, Cincinnati is off to a good start to achieve its goal of re-industrializing the Cincinnati region. Other cities in the United States that were formerly major industrial centers would do well to follow the example of Cincinnati in setting a goal of re-industrializing their city to create more higher paying jobs and restore prosperity.

 

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