[Due to health and safety considerations during the COVID-19 pandemic, we are canceling this year’s in-person conference. We will keep our community updated via our newsletter on any changes, as we explore virtual event options.]

Great North Labs’s Startup Summit 2020 will be on August 27th at St. Cloud State University. Every year, Great North Labs gathers stakeholders together in late summer for an annual event aimed at supporting startups in our portfolio and the startup ecosystem in general.

Sometimes there are boat rides, other times there are distinguished speakers and panels. There is always networking. And food, and fun, and new connections. Every year, without fail, people ask, “What are we doing next year?”.

And every year, I say to at least one of them, “demolition derby at the Brainerd Speedway”. It is never true, but it keeps them guessing and excited, and that is just good marketing.

Well, the cat is out of the bag early this year.

Mark your calendars for August 27th. Great North Labs’s Startup Summit 2020 will be at St. Cloud State University in the Atwood Ballroom from 1-5pm. (Investors- save the date starting at 10:30am. Details will follow.)

There will be industry-specific breakout sessions and startup ecosystem speakers, plus plenty of networking. No helmets required.

Further details and an event sign-up link will follow. Keep an eye on our newsletter to stay up-to-date!

[Due to health and safety considerations during the COVID-19 pandemic, we are canceling this year’s in-person conference. We will keep our community updated via our newsletter on any changes, as we explore virtual event options.]

And every year, I say to at least one of them, “demolition derby at the Brainerd Speedway”. It is never true, but it keeps them guessing and excited, and that is just good marketing.

Well, the cat is out of the bag early this year.

There will be industry-specific breakout sessions and startup ecosystem speakers, plus plenty of networking. No helmets required.

Further details and an event sign-up link will follow. Keep an eye on our newsletter to stay up-to-date!

Great North Labs will be participating in a couple of events at the World Economic Forum this year, where we have been invited to talk about our work investing in early-stage companies in the Upper Midwest. The Forum (WEF) is an annual gathering in Davos, Switzerland, of business, political, academic, and other leaders.

The purpose of the forum is to engage with leaders, and to help inform and shape global, regional, and industry agendas. According to WEF:

“The Forum strives in all its efforts to demonstrate entrepreneurship in the global public interest while upholding the highest standards of governance. Moral and intellectual integrity is at the heart of everything it does.”

Great North Labs Partner Pradip Madan will be speaking about investing in the Upper Midwest, supporting and growing the ecosystem with initiatives like the Startup School, and of course, the promise of the Upper Midwest region.

Like Steve Case said at the Greenwich Economic Forum in November, there is a tremendous opportunity for venture capital within the coasts.

“To me, it feels a little like the Internet 35 years ago when nobody, other than a few…believed in the idea of the internet. And people, when I was talking about it, were skeptical.”
“Over time, I think you’ll see venture capital shift. The coastal investors will need to have regional investment strategies.”
-Steve Case, Chairman and CEO of Revolution, and founder of Revolution’s Rise of the Rest Seed Fund

Here are the events where Great North Labs will be speaking.

1. Global Citizen Panel sponsored by Pink Lion

TIME: Wednesday, Jan. 22, 5-7pm.

LOCATION: Promenade 52, 7270 Davos Platz, Switzerland.

TOPIC: “Going Off Road Innovation in Tech: Leveraging unexplored areas and geographies to increase scale and innovation in the public and private sector.”

Attend this panel to understand methods and ways you can leverage untapped resources that are sitting available to you all around the globe. We will look at how this works from the startup innovation perspective, through funding and the venture firm perspective, and out to the large corporate entity with innovation and human capital that is an underutilized resource in many geographies. We will highlight this example specifically in how it is successful in the US and Minnesota and demonstrate and answer questions on how it applies to your specific use case.

This panel has plenty of Minnesota representation with Pradip Madan of Great North Labs, Jennifer Bonine and Dean Costakis of Minneapolis’s PinkLion.AI, Patricia Simmons who is on the Mayo Clinic Board of Trustees, and Maria Dayton who is the Ambassador of SingularityU Minneapolis-St. Paul.

2. The Digital Economist Night in partnership with The Caspian Week

TIME: Thursday, Jan. 23, 7:30p-midnight.

LOCATION: Promenade 61, 7270 Davos Platz, Switzerland.

TOPIC: Business models and strategies that will hallmark the next phase of global economic transformation.

Distilling the cutting edge tools from economic science, with hands-on industry experience, The Digital Economist roundtable series convenes enterprises, startups and innovators to explore, discuss and steward the business models and strategies that will hallmark the next phase of global economic transformation.

Pradip Madan will be hosting a roundtable for this, the inaugural summit for The Digital Economist, in conjunction with the 50th anniversary of the World Economic Forum in Davos.

Great North Labs portfolio companies Dispatch and 2ndKitchen have claimed titles in American Inno’s 2019 Tech Madness competition. The annual competition is a tech startup, voting-based version of March Madness. And yes, it’s better than the actual thing, because if the NCAA tournament worked the same way, Duke would have won and everyone would be happy, right?

Well, maybe it’s not a perfect metaphor, but it’s all in good fun.

With over 6,000 votes cast, Dispatch took the title at Minne Inno, beating out Sezzle in the finals. Sezzle has been on fire recently, but they cooled in the contest with the scrappy last-mile delivery squad.

To make it to the title game, Dispatch had to dispatch another Great North Labs company in their Final Four matchup, Structural. It was solid basketball by both teams but after a grueling four quarters, costly injuries, and some questionable calls, it all came down to Dispatch getting more votes.

Meanwhile, in Chicago, 2ndKitchen was unstoppable. They pulled off upset after upset, until after 5 upsets, 2ndKitchen upset Chowly in the championship game. As the number 16 seed (seeds?!), every victory came against a higher-ranked opponent. Over 133,000 votes were cast in the tournament, which ended with the two high-powered food service startups in a duel for the ages. Other commentators may say it was the votes, but I’m going to say it was strong basketball fundamentals that carried this one for 2ndKitchen.

In all seriousness, this was a fun tournament, and a great way to showcase local startups. And while they may not be carrying a trophy around U.S. Bank stadium, we are still excited to see the traction demonstrated by our portfolio companies.

Congratulations to Dispatch, 2ndKitchen, and Structural!

Tweet @jdallke to find out how they determine seeds for the Tech Madness tournament, and tag @greatnorthlabs #boomgoesthedynamite if you do. If you’re looking for work, check out the hiring pages at these great companies: Dispatch, 2ndKitchen, and Structural.

Healthcare Today

Some of the smartest minds work in healthcare, life sciences and biopharma. Yet the healthcare sector struggles to bring innovation into its ecosystem. The pace of innovation adoption has been much greater in other sectors, including in communication (Facebook, Skype), learning (Google, YouTube, Coursera), shopping (Amazon), personal finance (PayPal), and entertainment (Netflix).
This is not because of a lack of innovation in the pipeline. Healthcare sector innovators are hard at work on drugs and therapeutics, devices, and operational aspects of healthcare delivery. Breakthroughs have come in genomics-based precision drugs, machine-learning-based disease detection, EMRs, payment systems, patient adherence and education tools. In healthcare, the innovation tends to be evidence-based, with scientific papers that quantify results from well-designed experiments, and a highly-skilled academic research ecosystem at their source. That aspect is unique in the healthcare sector, and the sector has other ecosystem attributes not seen in other sectors. It’s this unique ecosystem that makes market insertion, growth and adoption at scale more complex, requiring specific insight and enablement.
The Upper Midwest has substantial healthcare anchors to promote a thriving ecosystem of clinical innovation and practice. Examples include the leading research, teaching and clinical centers of the Mayo Clinic and University of Minnesota; hospital systems like Minnesota Health System and CentraCare; device manufacturer Medtronic; software companies like Epic; payers such as United Healthcare; and the processors Optum and United. There are also hundreds of strong, related entities across the region. Healthcare investment is shifting from traditional hotspots like Boston, Houston, and Raleigh-Durham to Silicon Valley, and while the global ecosystem catches up, there is an opportunity to take advantage of this transition to strengthen the ecosystem in the Upper Midwest.
Strong healthcare research leads to breakthrough ideas which require mentorship and incubation to grow. Leading research institutions can organize ecosystem support, such as how the University of Minnesota encourages mentorship through their Venture Center’s Business Advisory Group which brings together entrepreneurs, funds (including Great North Capital Fund), and industry leaders to drive the successful commercialization of its academic research. This is big business, and the U of MN now generates roughly $1B per year from such efforts (two-thirds life sciences and one-third software/IT).
Geographic and industry-themed startup accelerators have also begun to proliferate in the region. Startup accelerators support early-stage, growth-driven companies through education, mentorship, and financing for a fixed period of time, among an admitted cohort of companies. The multi-city startup accelerator, Gener8tor, is managing a new Twin Cities med-tech accelerator backed by Boston Scientific, the University of Minnesota, and the Mayo Clinic. Venture studios and incubators are other forms of early-stage support available in the region. Minneapolis-based Invenshure has successfully launched multiple healthcare startups.
The region’s healthcare system is also significant on the demand side. For example, the cost drivers of healthcare in Minnesota reflect those in the US at large. Yet, while challenges in patient care are also similar to those of other regions, Minnesota’s efficiency is better. Healthcare spending accounts for over 16% of the US economy but is only about 13% of the Minnesota economy. So not only are Minnesota-based insights relevant, they are valuable. Innovations can be developed and piloted in Minnesota, then applied in other states. Startups developed here can be scaled nationally and, with adaptation, internationally.

Figure 1: Health Care Cost Drivers: Spending and Shares of Growth by Service, 2011 to 2013.
(Source: Minnesota Department of Health).

Change is Accelerating

Each decade brings its own set of innovations that transform industries. The healthcare industry will undergo vast changes in the next 10-20 years. The growing spate of investments and partnerships among tech innovators is signaling an increasing rate of change in this sector. The most visible examples of these innovators include Amazon, Apple, Google, Qualcomm, and Walmart. Google Ventures alone did 27 healthcare deals in 2017, up from 9 in 2013.
These companies you wouldn’t normally think of as bastions of healthcare innovation, yet they are all allocating large talent pools and budgets in the industry. Until Tesla, who would have thought that the next innovation in cars would come from Silicon Valley? More than their balance sheets, the noteworthy attributes of these companies are their culture of observing ecosystems, and their practice of inserting innovation in a stepwise and sustained manner to upend markets.
When you combine such entities with those like Berkshire Hathaway and Goldman Sachs (both of whom are partnering with Amazon in healthcare), and the financial and corporate venture groups that work with them, a disruptive landscape begins to take shape in which other innovators and incumbents alike can find new opportunities. For innovators, it means aligning their innovations with insertion points with high economic value and low resistance. For incumbents, at minimum, it means awareness and being prepared; more proactively, it means proactive engagement with capital (e.g., investments through VC firms), pilots, and adoption. For example, the Mayo Clinic has partnered with Google on leveraging its Knowledge Graph smart search algorithm for patient education, and Optum’s venture arm (based in Boston and Silicon Valley) has allocated $250M to venture investments
The range of innovations in the pipeline is equally stunning. Early examples include smartphones coupled with wearables for clinical-grade data. Today’s pipeline includes voice assistants (trained Alexa-like products) for health-related questions, machine vision for detecting physical anomalies (in skin, bones, retinae, or genes) or even bacteria in food. There are AI and visualization-enabled robotic surgery tools for doctors (e.g., Verb Surgical); machine learning in patient-specific onset detection for things like allergies and COPD; big data in early cancer detection (e.g., Freenome) and other diseases like multiple sclerosis, Parkinson’s and autism. The Mayo Clinic and AliveCor have shown that an AI can be trained to identify people at risk for arrhythmia and sudden cardiac arrest despite normal EKG results. There is also analytics-optimized underwriting for individuals and small businesses (e.g., Oscar), Medicaid (Clover) and self-insured populations (Collective Health).

Enabling the Innovation

Applying capital to create, enable and grow innovation platforms, align disruption with practical value in startups, and engage institutions for initial adoption, deployment at scale, and sustained growth requires a deep understanding of the ecosystem and cross-disciplinary skills to navigate it. This is especially true in healthcare given the ecosystem’s unique attributes and complexity, the importance of human health, government regulation, and the depth of incumbency among some players.
Startups benefit from focused enablement of resources including mentors, partners, lab space, hardware/software development expertise, and communication and data analysis platforms. Healthcare enterprises benefit from investment partners who understand their service goals and the need to balance innovation within financial constraints and with operational realities such as the need for patient privacy and the limitations of government regulations.
At Great North Labs, we focus on bringing such forces together to apply capital and expertise effectively and efficiently. We study ecosystems and leverage experts as advisors. We bring people together at events and entrepreneur training, through referrals, and with investment, mentorship and thought leadership by our team. We apply our capital and resources locally, with a deep connection to innovation hubs nationally, and with the goal of scaling globally.