Last month we wrote about the history of local startups that were formed during a recession and went on to success, including local unicorn Jamf. The conversation quickly turned to what that means for founders and investors.
Starting Up in a Downturn
The idea is that while many startups are beat down by strong headwinds, those that are resilient and adapt to stay aloft are better-positioned to take off post-recession. The local, successful startups that have come out of downturns offer compelling evidence to support this idea proposed by Rob Weber.
Lee Schafer delved into the topic in his Star Tribune article, “Can a downturn actually be the right time to start a business?” and spoke with Scott Burns, CEO of Structural and former CEO of GovDelivery.

Scott agrees that it’s probably true that “what doesn’t kill you makes you stronger”, but he doesn’t think that it’s better to start in a recession. Specifically, he laments the opportunities lost that he didn’t pursue when they presented themselves.
“When CEO of GovDelivery during trying times, he said, ‘we were so beat up we lost our ability to move fast when the opportunities did arrive.’”
Investing During a Downturn
Few people would disagree with Scott that running a startup during a recession is a difficult position. Being a startup founder is incredibly tough even in easy times. But if founders can run lean and stay agile, they might come out of the pressure cooker with a proven, capital-efficient business.
In the Midwest, capital efficiency is already a necessity for startups. We have 10% of US venture-backed startups, but only 5% of funding. For investors, this can mean attractive returns on investments. Specifically, a 5.17x median MOIC (Multiple on Invested Capital).
There is opportunity to be found in a recession. The next GovDelivery, NativeX, and Jamf could be out there right now.
The trick is to keep yourself willing and able to move on those opportunities when they arrive.
Events
Here are some interesting upcoming events. They are all virtual.
- Sept. 7-25th is Twin Cities Startup Week (TCSW). The biggest annual tech startup event in Minnesota is spread over a month with sessions, networking, and education for founders, investors, and innovation-minded professionals.This is a can’t-miss!
- Sept. 12th- Nov. 17th is Course 03: The Lean Startup. This is Course 3 in the Startup School offering from Great North Labs, ILT Studios, LaunchMN, and Red Wing Ignite. MN Founders, apply by Sept. 2nd to the Southeast MN cohort or the Central MN cohort.
- Sept. 16th is BETA Showcase. The Showcase is a highlight of Twin Cities Startup Week, featuring tech startups from the Fall BETA Cohort as well as Greater Minnesota.
- Sept. 23rd is BETA Backers. Part of Twin Cities Startup Week, BETA Backers is a matchmaking event between Minnesota based startups that are currently fundraising and investors that are looking for companies to invest in.
- Sept. 24th is the Minnesota Startup Awards. Capping off Twin Cities Startup Week is the Minnesota Startup Awards ceremony, co-hosted by TCSW and Tech.MN.
- Oct. 1st, Flyover Tech Fest. This is a Midwest-centric event for tech startups seeking support, development, and funding.
Portfolio News
Allergy Amulet is new to the Great North Labs portfolio! Allergy Amulet is a fast & portable food allergen & ingredient sensor. The wearable device is paired with test strips, and is the world’s smallest & fastest consumer food allergen sensor. Read more at Crunchbase.
“Indeed acquires recruiting process automation platform ZapInfo”. Jobs site Indeed has acquired ZapInfo!
“Misty the robot graces Fierce AI Week in engineering”. Misty demonstrated it’s use as a temperature screening assistant for COVID-19.
“PrintWithMe Announces National Partnership With RangeWater Real Estate”. PrinWithMe has partnered with a manager of 50,000+ multifamily housing units.
“Pitchly completes $2.5 million investment round”. Pitchly has completed a $2.5M capital raise.
Job Board
Dispatch is hiring a Business Development Representative, Data Engineer, and Quality Assurance Engineer in Bloomington, MN; a remote Ruby Developer. They are also hiring Territory Sales Managers in Albuquerque,NM; Denver, CO; Phoenix, AZ; Portland, OR; Salt Lake City, UT; Seattle, WA; and Tucson, AZ.
FactoryFix is hiring a Team Lead – Full Stack Developer, Full Stack Developer, and Infrastructure Developer- DevOps in Madison, WI; and a Sales Development Representative in Chicago, IL, Indianapolis, IN, or Madison, WI.
PrintWithMe is hiring a Regional Sales Director on the East Coast; AR/AP Specialist, Inside Sales Executive in Chicago, IL; Customer Service Representative, Marketing Director, and a Fall 2020 Strategy Intern (MBA) for Remote work.
Parallax is hiring a Growth/Experienced Business Development Representative in Minneapolis, MN; Experienced Product Designer, and Head of Customer Success & Product Ownership in Edina, MN.
Branch is hiring a Data Platform Manager, Senior Backend Engineer, Senior Software Engineer, Customer Success Manager, Customer Support Rep, and Fraud Agent in Minneapolis, MN.
Inhabitr is hiring a Chief Growth Officer/Head of B2C Growth, and a Sales and Customer Experience Associate in Chicago, IL.
Clinician Nexus is hiring for Customer Support I in Minneapolis, MN.
NoiseAware is hiring a COO, VP of Global Sales & Account Management, Embedded Developer, QA Technician (independent contractor), Account Manager, and a Customer Advocate in Dallas, TX.
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.
Welcome to Silicon Lakes!
The legacy of cornfields and flyover states taints the national perception of the modern Midwest. It’s led the area to be overlooked and under-capitalized by investors who paper the coasts with venture dollars.
While the name “Silicon Prairie” attempts to characterize the tech innovation occurring in America’s heartland, it’s a broad swath including an 8-state region (the name can also refer to two other regions, one in Texas, and one in Illinois).
The upper Midwest, near the Great Lakes, has a more dense collection of innovation hubs built around legacy industrial centers including Chicago, Minneapolis, Grand Forks, Des Moines, and Madison.
As investors like Revolution’s Rise of the Rest Seed Fund are turning towards the interior, bringing much-needed capital to the area, our own Pradip Madan breaks down the common characteristics of innovation hubs the world over and evaluates the upper Midwest’s potential to become “Silicon Lakes”.
Events
July 25th, Minneapolis. Ryan Weber has been instrumental in organizing the Digital Transformation Summit for Digerati. This is an exclusive, small-crowd event for local leaders to learn and network. Speakers include Weber, Managing Partner of Great North Labs; Mark Ritchie, former MN Secretary of State; and Gene Munster, formerly of Piper Jaffray and head of Loup Ventures. Keep an eye on the site as more speakers are added, and visit the link to request an invitation!
August 16th-23rd, Madison. Forward Fest is an 8-day tech and entrepreneurship festival, the largest such event in Wisconsin. Ryan Weber will be there, so reach out if you’re in Madison and want to meet up!
August 20-22nd, Grand Forks. UAS Summit & Expo. What is UAS? Unmanned Aerial Systems: drones, their controllers and operators. This summit is in its twelfth year!
Portfolio action
FactoryFix is a new addition to the GNL portfolio. It is a labor marketplace for manufacturing businesses to find and contract skilled talent. The team is based out of Chicago and includes founder Patrick O’Rahilly, co-founder of Compass Automation.
New advisors
Great North Labs welcomed four new advisors in the past month:
Alex Ryan- Founder of Bitmatter; Co-Founder/CTO of Starting 11
Julie Novack-CEO/Co-Founder PartySlate
Jackie Schneider-CRO, Field Nation; Formerly Global Vice President of Sales at Proto Labs
Shannon Wiger-VP, Spring Hill Capital; Director of Business Development at Moss and Barnett
Job Board
FactoryFix is hiring a Business Development/Sales intern
Dispatch is hiring for sales, business development, driving and software engineering
Structural is hiring a back-end software engineer, and a customer success specialist

June Newsletter

Demystifying Startup HR

Head of Finance & Fund Administration- Venture Capital Firm (Remote)

Demystifying Startup HR

3 Portfolio Companies Make Inc. 5000 + Quicklly & Instacart Expand

3 Portfolio Companies Ranked on The Inc. 5000 List

iraLogix closes $22M + Branch expands with Uber

iraLogix closes $22M Series C

Flywheel lands Gates Foundation grant

Venture Capital Analyst

Orazio Buzza, Founder and CEO of Fooda – on Episode 13, “Execution is King”

$40M Fund II Raised!

Eric Martell, Founder of Pear Commerce: Episode 13, Execution is King

Great North Ventures Raises $40 Million Fund II

Investment Thesis: Fund II Strategy

Investment Theme: Community-Driven Applications

Investment Theme: Digital Transformation Through AI

Investment Theme: Solving Labor Problems

Trends in the Gig Economy + Work in the Metaverse

Portfolio raises $125M + talking fundraising with Branch CEO

Omnia Fishing closes $4M round, joins Great North portfolio!

Atif Siddiqi, Founder/CEO of Branch: Episode 11, Execution is King

Michael Martocci, CEO and Founder of SwagUp: Episode 10, Execution is King

Yardstik new to portfolio, closes $8M Series A

First venture studio startup comes out of stealth!

Insights for founders from a data guru, + FactoryFix raises a Series A!

Una Fox: Episode 9, Execution is King

Start With a Mobile App, Not a Website

2ndKitchen acquired by SoftBank-backed REEF + advice from an early Googler

Joe Sriver, 4giving: Episode 8, Execution is King

2ndKitchen Acquired by REEF

Venture studio startup jobs + advice for founders from founders

Best Advice from the Great North Annual Event: Episode 7, Execution is King

Newsletter: Do you fit our investing themes?

Jonathan Treble, PrintWithMe: Episode 6, Execution is King

Anna Mason, Revolution: Episode 5, Execution is King

Mynul Khan, FieldNation: Episode 4, Execution is King

Nick Moran, New Stack Ventures: Episode 3, Execution is King

Molly Pyle, Center on Rural Innovation (CORI): Episode 2, Execution is King

Justin Kaufenberg, Rally Ventures: Execution is King Episode 1

Newsletter: “Podcast Launched: Execution is King!”

“Execution is King” – the Great North Ventures Podcast

Newsletter: Fund II is open for business!

Unlocking the Potential of Anonymized Commercial Real Estate (CRE) Data

Fund II is open for Business!

Mike Schulte Promoted to Venture Partner

New Name + New Venture Studio

Great North Launches Startup Studio

We Don’t Need No [full-time MBA] Education

How the University of Minnesota is Embracing Startup Culture

Top Stories of 2020, iraLogix, and LaunchMN Calls for Mentors

Building Capacity for Innovation

Seizing Opportunity in a Recession, Allergy Amulet, and Twin Cities Startup Week

Recessionary times, a record-setting IPO, and Minnesota’s Resilient Startups

Minnesota's Resilient Startups

July 4th, Equitable American Dream-ing, and Robots Diagnosing COVID

Jumpstart, the Startup School, and Branch Wins a Webby!

COVID-19 Trends, the Great North response, and our Founders Survey

Giving in the Time of Coronavirus

COVID-19 Resources for Startups, State-by-State

COVID-19, the CARES Act, and startups stepping up

New Business Preservation Act

Digital Future Boardroom, PartySlate, and The Lean Startup School

Great North Labs’s Startup Summit 2020

Great North Labs's Startup Summit 2020

World Economic Forum, NoiseAware, and the Startup School reboot

Great North Labs at the World Economic Forum 2020 in Davos

Top 5 Stories of 2019

Taking the Founders Pledge, Inhabitr, and gBETA Pitch Night

Founders Pledge: Support the Organizations that Support You

BETA Showcase, Greater MN, and Launch MN comes to St. Cloud

7 Places to Spot Us at Startup Week

The Greater MN Meetup, Parallax, and Exponential Medicine

Greater MN at the big show, Neela Mollgaard heads Launch MN, and Misty’s roadtrip.

Talking VC, tech kids, and Forge North’s Horizon

June: Great North Labs’s first fund raised!

May: Innovation Ecosystems, SingularityU Kickoff, and PrintWithMe

April: Minnebar Recap, ZenLord Pro, and Supporting Entrepreneurs

MinneBar 14 Recap

Dispatch and 2ndKitchen claim Tech Madness titles

Minnesota Innovation Collaborative

March: Minnebar, Hockey + Hustlers, and Innovation Workshops

Great North Labs at CES

Dec.-Jan.: Top Posts from 2018, pepr, Glowe, and Misty Robotics

Carried Interest: Top Posts from 2018

Oct.-Nov.: Singularity University, Exponential Tech, and the State of Innovation

July: Pitchly, ForwardFest, and Where to Invest in the Midwest

Digital Transformation Summit, July 25th in Minneapolis

June: Silicon Lakes, FactoryFix, and the Digital Transformation Summit

Putting the “Silicon” in Silicon Lakes

Digital Manufacturing and Logistics

May: Team Genius, IoT, and the Future of Everything

IoT 3.0

Healthcare Innovation

March: Exponential Tech, the “Goldilocks Zone”, and Minnebar 13

February: Team Expansion, Dispatch, and Startup School Events

Great North Labs Newsletter – December 2017

A Letter To My Younger Self

Great North Labs Newsletter

Great North Labs Featured on Tech.mn

Great North Labs Featured in St Cloud Times

Great North Labs – Featured on BizJournals.com
