Driven by the seemingly boundless energy of local creatives, community leaders and entrepreneurs, Minneapolis-St. Paul’s burgeoning startup culture shows no signs of slowing down. Last year’s Twin Cities Startup Week attracted more than 125 entrepreneurs. More are expected for this year’s events. Steve Case, a former COE of AOL, is bringing his Rise of the Rest pitchfest to the Varsity Theater on Oct. 7. The University of Minnesota recently announced an ambitious funding program for startups, Discovery Capital, which will encourage its star researchers to commercialize their ideas.
Several forces are conspiring to make the Twin Cities a hotbed of startup activity. The most dominant factor may be the U of M, one of the nation’s top generators of new business concepts. Another is a deep reserve of research talent and medical innovation, established by such local companies as 3M, Medtronic and Cargill. Support for local entrepreneurs is also growing. The Treehousehealthcare business incubator supports novel technology firms; the Minnesota Cup offers mentoring and financial incentives for a diversity of new companies; and our rapidly developing co-working infrastructure — led by CoCo, Joule and others — is easing the way for “solopreneurs” and lean startups to get off the ground in a hurry.
Here are 10 particularly compelling startups that could change your life and career for the better. All of them are headquartered in the Twin Cities, have innovated a unique thesis or solution to a pressing problem, and have the potential to change their industry’s competitive landscape. You’re hearing about them here first. But they’ll soon be making waves far from Minneapolis-St. Paul — if they’re not already.
Health and wellness
Offers: Cloud-based diagnosis and treatment for routine medical issues
Location: Downtown Minneapolis
The costs of health insurance and basic medical care have been in the news a lot these past few years. What if a local startup had a partial answer to the country’s health care crisis? Zipnosis might. Merging the convenience of WebMD with the competence of your primary care provider, the company’s smart-phone app offers “24/7 online diagnosis and treatment service for common medical conditions,” according to its website, at $25 a pop.
To use it, just sign up and download the app. Each consultation consists of three easy steps:
- A five-minute initial interview in which you answer basic questions about your condition. Like computerized testing software, the app uses each answer to generate follow-up questions that zero in on what’s wrong. After the interview is complete, you pay.
- A response and diagnosis from a local clinician. Zipnosis’ clinicians are active between 7 a.m. and 11 p.m. If you complete your interview during that window, you’ll receive a response within an hour. If you interview overnight, your response will come early the next morning.
- A recommendation for treatment. Based on your diagnosis, your clinician may give you detailed instructions or prescribe medication. If you do get a prescription, you’ll be directed to your preferred pharmacy, which you can indicate in the app’s preferences section.
Zipnosis can help you identify a respiratory infection, re-up on birth control or allergy medication, get a prescription-strength smoking cessation aid and perform other straightforward types of medical care. But for complex, serious or acute conditions, Zipnosis isn’t a substitute for a visit to the hospital or urgent care clinic. And its clinicians don’t prescribe narcotics, so don’t even try.
Offers: An engaging wellness app that encourages healthy (and fun) living
Location: Downtown Minneapolis
Like Zipnosis, PerkHealth makes an app that could dramatically change how we get our health care. Founded by Zach McGill and Doug DeBold, PerkHealth markets its app to small- and medium-size companies that want to motivate their employees to make healthier decisions. The app has three main components, which may be tweaked as more firms and users adopt it:
- Small cash incentives that motivate employees to get on the treadmill, bike or Stairmaster, along with a goal-setting tool that breaks each task down.
- A social component that lets users compare their exercise habits — along with their successes and failures — with friends and coworkers.
- A virtual “coach” that assesses your personality and provides tailored guidance and encouragement.
“[PerkHealth] grew out of a desire to build something meaningful,” says McGill. “Small to midsize employers [less than 3,000 employees] have a lot fewer options in the marketplace, and our virtual solution has the ability to engage a much larger portion of their population with a cost structure that works for them.”
If the app’s use results in healthier habits for significant numbers of a company’s employees, the thinking goes, the firm reaps significant financial benefits: lower insurance costs, reduced absenteeism and better productivity at work.
PerkHealth recently closed on several hundred thousand dollars in financing and is in the process of compiling “preliminary data showing the positive effect we’re having on people’s healthy habits,” says McGill. If you don’t want to wait for proof that it works, just ask your boss to give PerkHealth a test drive.
3. Zepto Life Technology
Offers: Equipment and software that can detect cancer and other illnesses well before currently existing diagnostic tests
Location: U of M/Dinkytown Minneapolis
Zepto Life Technology’s cutting-edge biomedical technology could give medical professionals, researchers and technicians a powerful new weapon in the fight against cancer and external infections. According to Drs. Jiaoming Qiu and Jian-Ping Wang, Zepto “is working on innovative biomedical solutions to make a better health care system for the US and also the world.”
Jiaoming and Jian-Ping, a McKnight Professor at the University of Minnesota, aren’t shy about where they hope their efforts will lead. “Our technology will make a big difference in the clinical diagnosis industry,” says Jiaoming.
How? Zepto is currently working on a suite of diagnostic tools called concentration analysis devices and assays (tests) that utilize a technology called giant magnetoresistance (GMR). GMR allows detection equipment to map the contents of laboratory samples in the absence of visible light. Far more sensitive than currently available alternatives, which use light instead of magnetism, GMR tests can detect minute quantities of viruses, bacteria, cancer cells and other potential pathogens in a laboratory or “point-of-care setting” (such as a hospital).
The sample size required for each test is extremely small, potentially reducing the need to draw large amounts of blood or fluid from already fragile patients. And unlike many labor-intensive diagnostic tests, Zepto’s solutions are heavily automated: In some cases, the company says, “users may only need to spend as [little] as five minutes with the device.”
Although Zepto’s first clients will probably be research laboratories, its technology’s most exciting application has little to do with lab work. Using modified GMR devices or assays, the company may one day market at-home tests directly to laypeople, doing for cancer and virus detection what genetic-testing companies have done for ancestry studies.
Offers: Big improvements to the cell preservation process
Location: U of M/Dinkytown Minneapolis
Like Zepto Life Technologies, Meso-Flow is the product of the University of Minnesota’s world-class life sciences ecosystem. Founded by Dr. Allison Hubel, director of the U of M’s Biopreservation Core Resource, the early-stage company is working on a solution to a straightforward but vexing charge: maximizing the viability of artificially preserved cells in clinical and laboratory settings.
Sound like science fiction? It’s already common practice. To facilitate procedures like blood transfusions and bone marrow transplants, tissues and body fluids are regularly frozen to prolong their usefulness.
The first problem: Human cells are mostly water and frozen water expands. In the absence of preservative chemicals, samples wouldn’t survive the freezing and thawing process. The second problem: These preservative chemicals are toxic—“we call it antifreeze, though it’s more complicated than that,” says Meso-Flow CEO Kai Kroll—so they need to be removed before the preserved cells can be used.
Current removal techniques are sloppy in several important ways. First, they come with an uncomfortably high failure rate: many cells are lost during the process. They’re also very time-consuming, requiring hands-on work by trained lab techs. And they don’t always perform as advertised. According to Hubel, bone marrow recipients are especially vulnerable, as many transfusions contain improperly treated cells that still contain toxic, pain-inducing chemicals.
Meso-Flow’s solution is a hands-off system: It runs thawing cells through a washing system that removes detectable amounts of toxic chemicals. According to Hubel and Kroll, up to 20 percent more cells survive the process, making a huge difference for prospective recipients. Within a year, they hope to be taking orders from laboratories (assuming they get regulatory approval from the FDA, which they’re confident of), with other types of clients to follow.
Longer-term, Hubel and Kroll see a huge opportunity in blood banking. The FDA is weighing whether to reduce the maximum refrigeration time for stored blood from six weeks to three, a move that could create a huge blood shortage in the absence of better long-term preservation techniques. (Kroll says that frozen blood is viable for up to 10 years.) If it’s ready in time, Meso-Flow’s solution could alleviate said shortage—and tap a market worth hundreds of millions of dollars.
Lifestyle and consumer products
5. Efficient Windows Collaborative
Offers: A one-stop portal for homeowners seeking sustainable home retrofits
Location: U of M/Dinkytown Minneapolis
The Efficient Windows Collaborative (EWC) can’t help you with your medical issues, but its information-rich online platform can definitely help you retrofit, renovate or build a sustainable home. An offshoot of the U of M’s Center for Sustainable Building Research, the EWC bills itself as a “nonprofit, 501(c)3 organization that partners with window, roof, skylight, and component manufacturers, research organizations, federal, state and local government agencies, and others interested in expanding the market for high-efficiency fenestration products.”
Though it got off the ground with a grant from the U.S. Department of Energy’s Windows and Glazing Research Program, EWC is now a fully independent, member-funded nonprofit organization. Members include window manufacturers, distributors/suppliers and organizations with a vested interest in sustainable building, like trade associations and utility companies.
EWC’s primary “product” is a comprehensive website that educates consumers about windows. For instance, its Understanding Windows section lists the benefits of efficient windows (lower HVAC costs, reduced condensation and so on), offers tips on choosing the right window design and explains exhaustively how to measure window performance. It also discusses new construction windows and replacement windows in detail, pointing laypeople and contractors alike to the right products.
Offers: A ridesharing (and, eventually, courier) service for female-identified customers
Location: Uptown Minneapolis
From the lab to the streets! You’ve heard of Uber and Lyft, but what about RideSqirl?
The brainchild of Karissa Stotts, Jen Arzayus and Anna Bottila (who recently left her active role at the company, but remains an enthusiastic supporter), RideSqirl is the nation’s only ridesharing app exclusively for female and female-identified riders. Development is ongoing, and the team hasn’t yet announced when the app will be live. But once activated, RideSqirl will add a third homegrown ridesharing option, particularly for female riders.
RideSqirl aims to make point-to-point transportation safer and more empowering for Twin Cities’ women. Stotts and company also want to inject an alternative perspective into an industry that’s “inherently exclusive in that males currently dominate the cab-driving profession,” says Stotts.
In the early 2000s, for instance, Arzayus drove a cab in Philadelphia, where she was just one of two female drivers in the entire city. She was also the youngest, “which made for a challenging work environment,” she says.
Among existing options, Uber in particular has received negative press for perceived safety risks. “Rideshare apps are somewhat safer [than taxis] because the app tracks exactly which drivers and riders are connecting,” says Stotts. But there’s still “no way to identify a perpetrator until something happens and it gets reported.
While “the majority of men are respectful of women,” Stotts continues, “we have…heard too many stories of women being sexually assaulted by an unknown man driving them in a cab or their personal vehicle.” All three RideSqirl founders have personally experienced sexual harassment as cab or rideshare passengers. And while they still use these services, RideSqirl’s founders tell drivers to drop them off at a public place close to their homes, rather than reveal where they live. By limiting ridership and drivership to female-identified individuals, RideSqirl takes this worry out of the equation.
The app itself will be similar to Uber and Lyft, with drivers using their own cars and the app automatically charging drivers’ stored payment cards. But aside from the female-only aspect, there will be a few key differences.
RideSqirl displays each ride’s final price — not an estimate — before it begins. Riders can also choose between the three closest drivers, whereas Uber and Lyft automatically pair them with the absolute closest. And all RideSqirl drivers — Sqirls — must undergo domestic violence and rape crisis training, as the founders will offer free or discounted rides to women in crisis.
Longer-term, RideSqirl plans to leapfrog its competitors and set up a local courier service for women who need staples and supplies but don’t have the means or inclination to leave their homes. Clients would prepay for anything their Sqirl delivered and for the Sqirl’s time. Stotts also talks hopefully about a “national and international focus” that involves women well beyond the Twin Cities.
“Driving is a very male-dominated profession globally,” she says, “so our secondary vision is to help women enter and excel in the driving marketplace.”
7. Bard’s Tale Beer
Offers: High-quality, gluten-free beer locally and nationally
Location: Calhoun-Isles/Uptown Minneapolis
Bard’s Tale Beer doesn’t offer a cutting-edge medical treatment or revolutionary technical process. But it deserves a place on this list because, really, who doesn’t like beer? And why should gluten-sensitive beer lovers be left out of the fun?
Bard’s has a new take on the centuries-old process of brewing beer, as it makes “the original malted sorghum beer,” a gluten-free elixir that looks and tastes like barley-based beer. While headquartered here, with its signature beer available at liquor stores around the Twin Cities, Bard’s is also an under-the-radar global phenomenon: Bard’s Tale can be found in 44 states, several Canadian provinces and parts of Latin America. If the company can find a willing distributor, says CEO Brian Kovalcuk, the U.K. and continental Europe may be next.
Kovalcuk is a good choice to lead an ambitious brewing concern. As the former CEO of Pabst Brewing Company, he took the firm from near-bankruptcy to hipster-chic. In 2006, an industry contact introduced him to Bard’s two founders, Craig Belser and Kevin Seplowitz, whom he immediately took a liking to.
At the time, the gluten-free concept was still novel. The group quickly realized that “we can’t just be a local company,” says Kovalchuk. Canada was an enticing expansion target, he says, because “they’re much more advanced when it comes to gluten issues.”
Though it’s nearly a decade old, Bard’s Tale retains the ethos of a startup: an irreverent branding campaign, accessible employees and one killer product (a moderately hopped lager). A gluten-free ale might be in the works, but “that would have to meet our strict standards,” says Kovalchuk.
Since Bard’s Tale hit the scene, gluten-free beer has come a long way. In Burning Brothers, the Twin Cities has another homegrown brewery devoted to the cause. But there’s nothing like being first—especially when you bear a huge responsibility for starting a global movement that continues to accelerate.
Offers: An accessible, non-technical repository of cutting-edge research in architecture, design and related fields
Location: U of M St. Paul and Minneapolis
Like the Efficient Windows Collaborative, InformeDesign isn’t your typical tech startup. But it does offer a novel approach to the often inaccessible world of peer-reviewed research. Launched by Drs. Denise Guerin and Caren Martin, who both worked in the U of M’s Department of Design, Housing and Apparel, the initiative was originally funded by a multi-year grant from the American Society of Interior Designers.
The goal was, and still is, to create a repository of knowledge for anyone — professionals, academics, contractors and DIYers — interested in architecture, interior design, urban planning and related fields. It’s tied together by a commitment to the principles of Evidence-Based Design (EBD), which applies rigorous, scientific criteria to a discipline that’s often unfairly pegged as subjective.
The heart of the project is a growing collection of research summaries. These are 800 to 1,000 word “translations” of academic papers — “gobbledygook,” Martin says politely — that laypeople and non-academic design practitioners can easily understand. The summaries need to be written by trained professionals, Martin included, to ensure they’re faithful to the principles of EBD. According to Martin, the database’s user population is about 70 percent practitioners and 30 percent college students, mostly kids at smaller institutions that don’t have access to design journals.
InformeDesign is structured as an LLC and remains self-funded, though a transition to nonprofit status may be in its future. To ensure its survival, Martin and Guerin are seeking “cornerstone partners,” institutions willing to invest significant sums of money in exchange for access and other benefits. They’re also exploring advertising and other means of monetizing the site. And for $20 a pop, students and practitioners can use the “PIY” — Publish It Yourself — feature to post CVs, dissertations and other material.
No matter how InformeDesign earns its keep, it’s taking a novel approach to academic literature. Martin struggles to think of a comparable resource in another discipline, but InformeDesign is paving the way.
9. 400 Doors
Offers: A cloud-based app with fresh real estate listings
Location: Downtown Minneapolis
400 Doors could solve a problem you never knew you had. The company’s app streamlines the early stages of the real estate sales process by connecting real estate agents with fresh listings that haven’t yet gone public in MLS (the Master Listing Service, a comprehensive repository of on-the-market properties).
“We’re bringing offline networking online” and making it more efficient, says co-founder Robert Nelson. Buyer representatives who post a “Buyer Need” with the app can see hot properties before non-users, alerting them to suitable properties before they’re snapped up. Selling agents can use it “like sending out a ‘Save the Date’ or a party invite,” according to 400 Doors’ website, drumming up buyer interest as soon as their client is ready to list.
But unlike “pocket listings,” a common practice in which new listings are kept out of MLS for the benefit of a particular real estate agent or firm, 400 Doors’ advance listings are available to everyone. “Postings on 400 Doors are searchable by all members (agents) on the site regardless of their brokerage,” the company’s website says. “Following all MLS and local Realtor Association guidelines is a requirement of 400 Doors membership.” This is an important ethical backstop in a competitive industry.
Why is 400 Doors useful for non-real estate professionals? According to Nelson, the app reduces the average time a home sits on the market by connecting serious buyers with willing sellers before the free-for-all begins. In turn, sellers may get a better asking price, buyers may get a speedier move-in and agents can be assured of a smooth sales process.
Offers: A better way to reimburse employees for work-related expenses
Location: Southwest Minneapolis
Hands up if you like filling out expense reports! Thought so. If you don’t have a corporate credit card, keeping track of work-related expenses can be tedious and time-consuming. As Apruve founder Michael Noble puts it, “Why should buying stuff for your job be any different than buying for yourself?”
An intuitive app, Apruve eliminates the need to keep track of receipts and fill out redundant forms for online purchases. Instead, users just click a special “Apruve” button at checkout, fill out a brief explanation of why the purchase is necessary, and send the request along to the person responsible for approving purchases at your company. Once they sign off, the vendor receives compensation and delivers the goods — a process that can take minutes if everyone is on their game.
According to Noble, Apruve is sorely needed. Expense fraud is rampant, with as much as 14 percent of all corporate purchasing activity occurring “outside of company protocols” or in a “straight up fraudulent” manner, he says. He’s seen the repercussions: When he worked at Limewire, a file-sharing startup, one of his colleagues got the ax for expense fraud.
At the moment, Apruve is concentrating on marketing to two types of companies: online merchants that handle large volumes of relatively small business-to-business orders, and software/service companies that market highly technical products and services to engineers and IT professionals.
In 2013, online B2B sales were nearly $540 billion. But there’s plenty of room for growth. And according to Noble, “The next one to two years will be about making Apruve a real option for users at checkout.”
This article is reprinted in partnership with The Line, an online chronicle of Twin Cities creativity in entrepreneurship, culture, retail, placemaking, the arts, and other elements of the new creative economy. Brian Martucci is The Line’s Innovation and Jobs Editor.