INNOVATE WISCONSIN 2021 ISSUE
INNOVATION
THE FUTURE OF THE OFFICE 32
VERSITI ADVANCES BLOOD-RELATED DISCOVERIES IN FIGHT AGAINST COVID-19 40
EXACT SCIENCES GROWING BEYOND COLOGUARD 42
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FROMTHEPUBLISHER
TO IN N OVAT E W IS CO NSIN 2 0 21 For more than a year now, we’ve all wanted to return to normalcy following the COVID-19 pandemic, but what that normal will look like has never been entirely clear. In this Innovate Wisconsin issue of BizTimes Milwaukee, our team set out to explore how the economy is changing and the challenges and opportunities those changes create for businesses. These aren’t stories of pandemic pivots; rather these are the stories of trends accelerated or altered by a year that saw stay-at-home orders, a massive shift to remote work, changing consumer behaviors, growing awareness of racial inequities and more. Take our cover story on Milwaukee Tool. Like many businesses, Milwaukee Tool’s leadership paused when the pandemic first hit, but they quickly realized the markets they serve would likely come back stronger. Instead of laying people off, they took the opportunity to invest and grow their workforce. In turn, that led to biztimes.com
a need for more office space, including plans to renovate a downtown Milwaukee building and bring at least 1,200 jobs to the city. Associate editor Arthur Thomas’s story, however, goes beyond these headlines to look at how Milwaukee Tool has used innovation, a consistent focus on users and a desire for disruption to fuel its growth. Innovate Wisconsin also isn’t just about new ideas and breakthrough products. True to the mission of BizTimes Media, this issue will help readers do the work of growing their own companies. The Q&A with Rockwell’s David Vasko highlights new technologies shaping the manufacturing world. Toppers’ CEO Scott Gittrich shares how tech investments help the Wisconsin-based chain keep up with consumer expectations. Office tenant broker David Pudlosky of JLL discusses what clients are looking for in office space. Mike Anderes of Inception Health describes how some technological necessities of health care will shape the industry going forward. You will also find stories about startups solving supply chain challenges, fast-growing companies like Exact Sciences and Fetch Rewards, new efforts to bring venture capital dollars to Wisconsin, and ideas for how developing
a more diverse workforce can fuel innovative thinking for companies. Wisconsin’s economy has a lot going for it. We have great mature and established companies, a growing ecosystem of startups and entrepreneurs, and a workforce that is routinely praised for its work ethic and capabilities. As companies like Milwaukee Tool and others have shown, it is possible for the talent in this state to fuel staggering growth through innovation. These companies are now looking to bring others to the state to continue their growth, which can only help the state’s economy. Innovation is a crucial part of Wisconsin maintaining the strengths it has developed over the years. We cannot rest on our laurels and expect to grow, especially in a world where technology is always racing ahead and the COVID-19 pandemic only accelerated many existing trends. We hope you enjoy this issue of Innovate Wisconsin and finish it with a little inspiration to create some disruptive change in your industry.
DAN MEYER Publisher, BizTimes Media INNOVATEWI.COM / 3
TABLEOFCONTENTS
RETAIL Letter from the publisher......................... 3
Digital and e-commerce trends continue to shape retail......................... 20 Q&A with Scott Gittrich of Toppers Pizza..................................... 21 Company profiles................................... 22 Wisconsin’s ‘unicorn’.............................. 24
VOLUME 27, NUMBER 5 | JUN 7, 2021 126 N. Jefferson St., Suite 403, Milwaukee, WI 53202-6120 PHONE: 414-277-8181 FAX: 414-277-8191 WEBSITE: www.biztimes.com CIRCULATION: 414-336-7100 | circulation@biztimes.com ADVERTISING: 414-336-7112 | advertising@biztimes.com EDITORIAL: 414-336-7120 | andrew.weiland@biztimes.com
WORK CULTURE The role of the office in the wake of COVID-19........................ 26 How companies create inclusive workplaces.............................. 28 Startups to watch...................................30 Q&A with David Pudlosky of JLL........... 32
6
COMMUNITY ENGAGEMENT / OWNER Kate Meyer kate.meyer@biztimes.com
EDITORIAL EDITOR Andrew Weiland andrew.weiland@biztimes.com
Startups to watch................................... 36
INNOVATE WISCONSIN PROJECT EDITOR Arthur Thomas arthur.thomas@biztimes.com
Q&A with Mike Maschek, Ben LeFort and Jeremy Fojut of Fund Milwaukee................................. 38
HEALTH CARE
Innovation powers Milwaukee Tool’s growth......................... 6
Versiti advances bloodrelated discoveries in fight against COVID-19...................................40
MANUFACTURING
Exact Sciences growing beyond Cologuard................................. 42
Q&A with David Vasko of Rockwell Automation......................... 18
DIRECTOR OF OPERATIONS Mary Ernst mary.ernst@biztimes.com
NVNG looks to help companies innovate through venture capital..........34
Startups to watch................................... 39
Company profiles................................... 16
PUBLISHER / OWNER Dan Meyer dan.meyer@biztimes.com
FINANCE
COVER STORY
Wisconsin startups innovate to solve supply chain problems................. 14
REPRINTS: 414-336-7100 | reprints@biztimes.com
ASSOCIATE EDITOR Lauren Anderson lauren.anderson@biztimes.com REPORTER Brandon Anderegg brandon.anderegg@biztimes.com REPORTER Maredithe Meyer maredithe.meyer@biztimes.com REPORTER Alex Zank alex.zank@biztimes.com
CONTENT SOLUTIONS MANAGER Maggie Pinnt maggie.pinnt@biztimes.com ACCOUNT EXECUTIVE Paddy Kieckhefer paddy.kieckhefer@biztimes.com ACCOUNT EXECUTIVE Christie Ubl christie.ubl@biztimes.com ACCOUNT EXECUTIVE Dylan Dobson dylan.dobson@biztimes.com SALES ADMIN Gracie Schneble gracie.schneble@biztimes.com
ADMINISTRATION ADMINISTRATIVE COORDINATOR Sue Herzog sue.herzog@biztimes.com
PRODUCTION & DESIGN GRAPHIC DESIGNER Alex Schneider alex.schneider@biztimes.com
FREELANCE ART DIRECTOR Meredith Jensen meredith.m.jensen@gmail.com
Independent & Locally Owned
4 / BizTimes Milwaukee – INNOVATE WISCONSIN | JUNE 7, 2021
DIRECTOR OF SALES Linda Crawford linda.crawford@biztimes.com
ART DIRECTOR Shelly Tabor shelly.tabor@biztimes.com
Q&A with Mike Anderes of Inception Health................................44
FROM THE EDITOR..........................46
SALES & MARKETING
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BizTimes Milwaukee (ISSN 1095-936X & USPS # 017813) Volume 27, Number 5, June 7, 2021 – June 20, 2021. BizTimes Milwaukee is published bi-weekly, except monthly in January, February, July, August and December by BizTimes Media LLC at 126 N. Jefferson St., Suite 403, Milwaukee, WI 53202-6120, USA. Basic annual subscription rate is $96. Single copy price is $5. Back issues are $8 each. Periodicals postage paid at Milwaukee, WI and additional mailing offices. POSTMASTER: Send all UAA to CFS. NON-POSTAL AND MILITARY FACILITIES: Send address corrections to BizTimes Milwaukee, 126 N. Jefferson St., Suite 403, Milwaukee, WI 53202-6120. Entire contents copyright 2021 by BizTimes Media LLC. All rights reserved.
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EVOLVINGINDUSTRY COVER
STORY
6 / BizTimes Milwaukee – INNOVATE WISCONSIN | JUNE 7, 2021
INNOVATION POWERS MILWAUKEE TOOL’S GROWTH By Arthur Thomas, staff writer
As
STEVE RICHMAN DESCRIBES IT, CHANGING THE FOCUS OF MILWAUKEE TOOL WAS THE EASY PART. In the mid-2000s, when Richman and other new leaders arrived not long after the Brookfield-based company was acquired by Hong Kong-based Techtronic Industries, Milwaukee Electric Tool Corp., as it was known, was often focused on making “me too” versions of new products. “If you think about that, we didn’t really have a choice. It was innovate or die at that point in time,” said Richman, president of Milwaukee Tool. “It was easy for the teams to start adopting it, because we were this little player out in the marketplace that had rested on our laurels with this brand that meant something in the ‘50s that really didn’t mean anything to many users anymore.”
Milwaukee Tool had a history of innovation with products like Sawzall, but its revenue was measured in the hundreds of millions, it had just a few hundred employees in Brookfield and its local manufacturing had been moved to Mississippi in the early 2000s. Meanwhile, the company’s competitors were global and measured their sales in multiple billions of dollars. What Richman and his team discovered was no competitor was singularly focused on users in the professional trades. “They really didn’t understand what the user did and what the pain points of the users were,” Richman said. “It provided an opportunity for us to disrupt.” Focusing on users in the professional trades has translated to a lot of disruption – with more than 1,000 patents issued to Milwaukee Tool since 2007 – and growth. The company now has 3,100 embiztimes.com
ployees in Wisconsin and expansion projects in the works in Menomonee Falls, West Bend and downtown Milwaukee. Its annual revenue first crossed $2 billion in 2015 and has continually grown at more than 20% per year. Revenues were at least $5.6 billion in 2020. Transitioning from corded to cordless tools; continual innovations in batteries, electronics and motors; new features to address user needs and expansion into new product categories have fueled the growth. By the end of 2020, the company had 216 products on its M18 battery platform, 130 on its subcompact M12 platform and another 10 on its MX Fuel platform, which is designed to compete with light equipment usually powered by gas engines. And the company seems to have no intention of slowing down. When it reported results in March, TTI chief INNOVATEWI.COM / 7
EVOLVINGINDUSTRY COVER
STORY
executive officer Joe Galli said the company planned to “continue to seize control of the global tool market” over the next five to 10 years, and Milwaukee Tool would continue to grow at least 20% annually. “We intend to do that the right way by bringing the market a continuous stream of innovative, technologically advanced, demonstrably better products versus the competitive set that exists out there today,” Galli said. “We have so much new product on the way that if I told you everything that’s coming, first of all, I would need two days to do this review and, secondly, you would accuse me of exaggerating. We are investing like crazy in new product development.” Richman said the challenge now isn’t having the dollars to invest, it is finding the right people. As of mid-May, the company had more open positions than ever before, he said. Those openings come even after Milwaukee continued to grow its workforce during the pandemic. After an initial pause in March 2020, the company quickly decided to continue making investments, allowing it to meet elevated current demand, go after new areas and fill gaps in the business. “One of the things we clearly found out was we had recruited all and talked to all of the tal-
The MX Fuel backpack concrete vibrator
ent that was in Wisconsin for a lot of the jobs, especially engineering and development, and we had to go outside of Wisconsin to be able to help accomplish that objective,” Richman said. EXPANDING INTO NEW AREAS The MX Fuel system is an example of Milwaukee Tool’s efforts to push into new areas. The system’s tools include a concrete breaker, saws and drills that cut through reinforced concrete, a light tower, power supply and a concrete vibra-
An M18 circular saw
8 / BizTimes Milwaukee – INNOVATE WISCONSIN | JUNE 7, 2021
tor. The project’s origins date back a handful of years to a time just after the company had essentially doubled the capacity of its M18 batteries with the launch of a new model. A stronger battery meant more room for teams to develop products on that platform. A team was assembled to address an important question: What’s next for Milwaukee Tool? The team landed on the light equipment space after identifying hundreds of different issues on gas, air and hydraulic products, said Kevin Gee, director of project management for MX Fuel, noting many were related to indoor use, emissions and maintenance. The new system launched in 2019, but only after thousands of hours of testing and research across 2,400 job sites globally. “Developing any new system is incredibly challenging,” Gee said. “It is something that’s fluid and as you continue to work through one problem, something else presents itself.” Gee pointed out that developing battery-powered tools that are traditionally powered by gasoline presents a remarkable challenge. “Gas is highly inefficient, but super potent with the power it can put out there,” he said. “We would go back and forth and debate with the engineering teams what success looked like and challenge each other to understand what the user needed and what we could deliver.” Ryan Jipp, vice president of engineering for power tool technology, said simultaneously developing a battery, a charger and a suite of tools only added to the challenge and having many project teams working together required a focus on keeping everyone aligned. Richman said if Milwaukee Tool were looking
The MX Fuel concrete breaker
only for a short-term return on its investments, products like MX Fuel or some of its other innovations wouldn’t get made. “But if you believe the entire equipment business will eventually go cordless, then you say, this is what’s going to make the company $2 billion in five years, 10 years, 15 years, 20 years down the road. … It’s not a question of if, it’s just a question of when are we going to double down and invest in those areas,” he said. “If you’re not willing to invest in where technology is going, then you’re going to be disrupted by somebody else,” he added. “If you’re playing the short-term game of ‘I’m going to drive revenue through lower cost items that are there today and I’m going to be very excited that my SG&A is low and my development costs are low and I’m not investing because I can drive some short-term sales’ … but you’re not looking at what’s needed for the future and how you’re debiztimes.com
veloping people and recruiting people that can make that happen, then you’re going to lose.” PEOPLE AND CULTURE Having the capability to deliver on a challenge like MX Fuel is a result of the culture the company has developed over more than a decade. Kris Ropella, dean of the Opus College of Engineering at Marquette University, said Milwaukee Tool has recognized that innovation is about people and culture, adding the company attracts people with an innovation mindset. “People who have great curiosity and people who are hungry for making change that creates value,” she said. Marquette and Milwaukee Tool have worked together over the years, with students completing internships and co-ops at the company, leaders and engineers serving as guest speakers in classes, and contributing equipment and
expertise to engineering labs. “I think they’re creating a culture where people can be innovative, they’re safe to be innovative. I think they have a culture where people are comfortable to experiment and fail and to do so in a smart way,” Ropella said. “Many places don’t necessarily do that.” Switching the focus of the company to innovation may have been the easy part, but developing and sustaining the right culture has been anything but, Richman said. He is excited to get his teams together in the coming months to celebrate the company’s success despite the COVID-19 pandemic, but company culture comes from more than having a beer together. Richman pointed to recruiting the right people, onboarding well, empowering people, communicating, getting candid feedback, focusing on users and distribution partners, and mentoring and growing people as some of the required INNOVATEWI.COM / 9
EVOLVINGINDUSTRY STORY COVER
An M18 grinder
culture work. “Everybody wants to make all this simplistic,” Richman said. “There’s not an easy button that you can hit and all of the sudden it turns on and the culture is going great. If you’re not paranoid as hell, you’re going to have some dropoffs in the culture.” He acknowledged parts of the organization’s culture have suffered during the pandemic and the company is working to rebuild those. “Our growth has been off the charts and keeping up with that growth is not easy,” he said. “It’s stressful for a lot of people, but the people that want to be part of it, it’s a great thing for them and for their careers and the opportunities to move forward.” SOLVING USER PROBLEMS Both Gee and Jipp have been with Milwaukee Tool for more than a decade and have had chances to work around the world for the company. Their work covers two parts of the innovation process that has fueled the company’s growth in recent years. The process starts with the work of Gee’s team and other ones like it. They are on the marketing side of the equation and are tasked with understanding the needs or challenges of the user and then communicating them to engineering teams like Jipp’s. Gee said the marketing teams will identify what qualities a product needs to have and identify which ones are most important for a user. “Then we get the fun, challenging part of making sure we can deliver it and making sure 10 / BizTimes Milwaukee – INNOVATE WISCONSIN | JUNE 7, 2021
that we can do it on the right schedule, the right cost, hitting the right performance,” Gee said as Jipp started to smile. “That’s where we start to get to the good level of healthy tension between marketing and engineering and making sure we’re delivering the best-in-class product.” Jipp said marketing teams are good about providing reasonable specifications that are
The MX Fuel cut off saw
achievable while also pushing engineering teams to think outside the box. “We don’t just want to make something in red,” Jipp said. “We want to make something that’s better and provides a more productive experience, a safer experience for our user.” When marketing teams showed engineers videos of workers being thrown from ladders when traditional core drills seized up, Jipp and his colleagues knew it was something they needed to address as they worked on an MX Fuel powered drill. The result is an auto stop feature that helps keep users safe. Of course, taking the time and resources to invest in smart electronics or other features that take a product to a new level could drive the price of the product up. It would seem there is a natural tension between adding innovation and maintaining a competitively priced product. “We value driving safety and productivity over a price point,” Gee said. “We know that if we can create something that is going to be the right solution, we can leverage that into the future and ultimately get to the right price point and the right cost position overall.” He pointed to the auto stop technology on the core drill as an example. “It was complicated to develop, it was expensive to develop, but over time, that’s going to pay itself off and that’s what’s going to set us apart from the competitors in the industry,” Gee said.
The teams working on products at Milwaukee Tool are generally cross-functional and team members are working on focused, fast projects, Jipp said. A team might have a project leader and representatives from marketing, mechanical and electrical engineering, motors, industrial design and safety. “As an engineer, you’re actually pretty empowered to control your own destiny,” Jipp said. “If you look at a car company, you have hundreds of engineers working on one product. Here, we have really small, tight-knit teams that are really close working together and really focused on that one end goal of making a really good product.” The actual process of developing the product can also be quite iterative, Jipp said, with engineers creating prototypes, handing them over to marketing to get feedback from the field and repeating the cycle to make the product better. “Having those multiple touch points back and forth is really powerful for us,” Jipp said, noting sometimes the ideas engineers have are not actually close to what a user needs. Once the product is in a good place, Milwaukee Tool’s manufacturing teams get involved and the teams work toward producing a small volume of the new tool. Then the testing really begins as the products get pushed to the brink to identify potential points of failure. When the company was developing the MX Fuel concrete breaker, the teams went through three warehouses’ worth of concrete testing the product. “We literally would just go through entire buildings of concrete,” Jipp said, later adding that one of the challenges is that issues don’t always pop up with every tool in a test. “You test maybe 20 tools and one of them failed and you don’t understand why, so it’s really trying to repeat that to figure out what’s happening,” Jipp said. At the end of a project, the engineering team steps back and hands the work off to a quality team that double checks what engineering has done and performs more reliability testing. “They’re the ultimate gatekeepers to make sure we make a robust and quality product at the end of the day,” Jipp said. WILLINGNESS TO FAIL Sometimes an idea must wait for the technology to catch up. That was the case for the backpack concrete vibrator that launched on the MX Fuel system. Gee said the idea was shelved when it was originally developed because Milwaukee’s battery systems couldn’t deliver the needed run time or performance until MX biztimes.com
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The MX Fuel power supply
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Fuel was developed. “We look at things and dream big and come back and sometimes scare engineering with some grandiose ideas, but ultimately that is what’s going to set us apart from our competitors is looking to the future and not looking at the here and now,” Gee said. Jipp pointed out that the cost of components typically comes down over time and things that seemed impossible become industry standards. That was the case with the brushless motors in many of Milwaukee Tool’s products; the company couldn’t find a partner to work with so it pushed ahead on its own. “The nice thing about having that fearless ambition is we’re able to get there first, we’re able to get the IP around different areas of it, we’re there to provide the productive benefits, which gives us market share and ultimately a better solution for the user at the end of the day,” Jipp said. Innovation doesn’t just happen on its own. It takes investment in facilities and people, and while it seems those could be limited resources, Gee and Jipp said the answer from management is typically “yes, tell me what you need and how can we go faster.” Richman said the company’s approach is to first deliver results and then use those funds to invest in new innovations. For some products or processes, the idea might be first to do a small test and then act according to the results, which is what happened in Milwaukee’s hand tool business. The category grew from a small test to a larger group to the point where the company is now building a dedicated facility in West Bend.
In other areas like motors, electronics, batteries or artificial intelligence, there isn’t even a question of whether the company will invest, Richman said. “We’re going to spend whatever money we need to spend to become at the forefront of the world in terms of technology,” he added. “We understand where the priorities are, where the focus is, where the new business opportunities are, to be able to invest and take enough calculated risk.” Gee pointed to the concrete vibrator as a case where leadership challenged him to justify it. When he first presented it, the product had nothing to do with Milwaukee’s core trades of mechanical, electrical and plumbing, but the project helped the company get an understanding of new user groups like self-performing general contractors and concrete contractors. “It’s about having the foresight, with the leadership team,” Gee said. “They’re going to challenge us at every turn to justify what we’re doing, and luckily we hit more home runs than foul balls, but we learn from everything that we do.” He also said the company benefits from a culture focused on achieving first-to-world innovation and a willingness to be candid about what worked and what didn’t. It is also OK if not every idea works out, Jipp added. “If everything we do is successful, we’re not trying hard enough,” he said. “We should be failing, we should take really wild swings, try to get these pretty complicated, futuristic, innovative features to throw into our tools, and really try to push those paradigms.” v
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EVOLVINGINDUSTRY
Breakthrough’s Network Intelligence system, brought to life through the Felix dashboard’ enables shippers to make smarter transportation and logistics decisions.
WISCONSIN STARTUPS INNOVATE
TO SOLVE SUPPLY CHAIN PROBLEMS By Brandon Anderegg, staff writer EMERGING COMPANIES in Wisconsin are stabilizing supply chains with new technologies that are shaping how companies view transportation ecosystems now and in the post-COVID-19 pandemic world. Products offered by these companies involve advanced transportation network mapping, end-to-end visibility on shipments and an e-commerce platform that digitizes supply and demand. The frequency at which supply chains are now disrupted has companies searching for agile transportation and logistics solutions. The fragile and complex nature of global supply chains was also exposed during the pandemic, underscoring the value that companies place on supply chain visibility and transparency. One company leading innovation in the logistics space is Breakthrough, a transportation and energy management company based in Green Bay. Breakthrough was named one of the “10 Most Innovative Logistics Companies of 2021” by Fast Company for its technology that migrates old trucking contracts onto a new digital and data-driven platform. The needs of transportation professionals are evolving, and products that allow business14 / BizTimes Milwaukee – INNOVATE WISCONSIN | JUNE 7, 2021
es to keep pace with how quickly transportation ecosystems are changing must be tech-enabled, said Heather Mueller, chief operating officer at Breakthrough. Events that were previously expected to occur once in a career are now happening with more frequency, said Mueller, who pointed to the Colonial Pipeline hack and the coronavirus pandemic as examples. These events created volatility in freight rates and also brought uncertainty to fuel prices, she added. “The need for solutions that really can be nimble has increased dramatically and that’s created some focus on our solution,” Mueller said. In 2020, Breakthrough launched its Network Intelligence system, which allows shippers to engage their contract carriers to add or drop partners as needed. During the pandemic, Breakthrough’s solution helped shift trucks from slowed businesses to carriers that experienced a pandemic demand surge. The company’s Felix dashboard contains thousands of data points about trucking companies, enabling clients to choose potential partners based on cost, speed and quantity. Network Intelligence also provides carriers with artificial intelligence recommendations based on their priorities.
“This data can be aggregated to show shippers what supply and demand patterns of trucks look like and where freight is having peaks and valleys,” Mueller said. Shippers are familiar with large carriers like Schneider National and Werner Enterprise. But shippers don’t have insight on the thousands of carriers in the country with much smaller fleets, Mueller said. “The Felix platform is able to understand where those regional carrier partners are, what their operations look like and serve them up as potential partners and good solutions for shippers,” Mueller said. Unlike other platforms, Breakthrough connects shippers and carriers to make their own direct relationship rather than serving as the “middleman,” providing a level of transparency that shippers haven’t experienced before, Mueller said. “It creates more sustainable relationships between shipper and carrier partners, leverages data of the overall transportation ecosystem both around capacity and price to make these solutions possible,” Mueller said. How consumers have behaved during the pandemic has also impacted the transportation ecosystem. Online grocery shopping, for example, is a trend that requires a different strategy for transportation, particularly for the last mile. Consumers have enjoyed the convenience of online shopping, so Mueller expects this trend to remain. However, big-box retail seasonal patterns for goods like paper, food or back-toschool products have changed, and it is not clear how they will look post-pandemic, Mueller said. Regardless of how consumer behavior evolves, Mueller expects elevated levels of transportation for the foreseeable future and that companies will need innovative solutions to keep up. “We’re still not in a period of what I would consider ‘new normal,’ we’re still having some impact from what the pandemic lifestyle looked like,” Mueller said. “Certainly, I think there will be a settling out.” Breakthrough isn’t the only company in northern Wisconsin bringing stability to supply chains. Los Angeles-based e-commerce startup ChemDirect recently moved its headquarters to Green Bay following an investment from Titletown Tech, a venture fund and tech hub in Green Bay. ChemDirect is an early-stage company that developed an online marketplace for the chemical industry. The platform enables companies to buy and sell chemicals like methanol and acetonitrile and other products including hand sanitizer, disinfectant wipes and personal protective equipment. ChemDirect offers valuable information about its products including the purity, grade,
form and information about suppliers so buyers can make more informed decisions. The startup also manages transactions by collecting payment from buyers and paying suppliers after product delivery, ensuring security and transparency for all parties. ChemDirect chief executive officer and founder Tyler Ellison launched the company in 2019 to solve supply chain problems in the specialty chemical industry. Ellison, the former CEO of specialty chemical manufacturer Nova Molecular Technologies, says the industry had two major issues – manufacturers did not own their customer data and customers were forced to buy chemicals blindly from distributors. Ellison says he developed ChemDirect because the $5 trillion specialty chemical industry lacked transparency, impacting both supply and demand. The company says a once 20-week supply chain is now reduced to one week with ChemDirect’s e-commerce platform. “Solving big problems leads to large value creation,” Ellison said in a statement. “Digitizing supply and demand will usher in a new era
of transparency, resulting in informed decisions, better economics and optionality for both manufacturers and buyers.” In Milwaukee, smart packaging startup PAXAFE is gaining momentum and recently raised $2.25 million in a seed funding round led by Palo Alto-based VC firm Ubiquity Ventures. PAXAFE offers a software and hardware platform that enables predictive routing, time of arrival and adverse event prediction for B2B shipments. The company said it will use the capital to accelerate the rollout of its commercial platform to more customers and strengthen its AI-driven prediction models. Using the platform, a shipper locks its high-value item into its package, and an online portal linked to a barcode on the package includes the shipment information. The receiver can track the package location and see whether it has been dropped using the portal. Although other solutions on the market alert stakeholders when something goes wrong with their shipment, PAXEFE’s platform informs parties of the “how” and why” of the problem. “Without a precise and automated diagnosis,
B2B shippers find it virtually impossible to build accurate and consistent prediction models that enable supply chain risk mitigation across future shipments,” the company said. PAXAFE co-founders Ilya Preston and Ashok Seetharam combined their experience – Preston’s in supply chain and Seetharam’s in hardware – to launch the company in 2018. They moved the company headquarters from Minnesota to Milwaukee in 2019 after completing gener8tor’s accelerator program. Over the past six months, PAXAFE said it has launched a series of paid pilots with enterprises in various industries, including health care, perishables, oil and gas, logistics, manufacturing, jewelry and insurance. The company has also recently launched its commercial version of its platform, converting some of its pilot customers to commercial partners. “Supply chain visibility brought us here today, but contextualization is the future,” Preston said in a statement. “This new funding will allow us to expand our team with people who are passionate about our mission to redefine supply chain risk management.” v
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EVOLVINGINDUSTRY
GLW Technologies mechanical engineer Mitch Dyrdahl and co-founder Andy Klinge prepare the X6-02 drone for indoor flight inside the Janesville Innovation Center.
DRONE STARTUP AIMS HIGH By Brandon Anderegg, staff writer
Fantm co-founders Ezra Boley and Finn Kuusisto have combined experience in embedded software engineering, regenerative biology and bioinformatics.
MADISON STARTUP TAKES ON FACEBOOK WITH OPEN-SOURCE TECH PLATFORM By Brandon Anderegg, staff writer 16 / BizTimes Milwaukee – INNOVATE WISCONSIN | JUNE 7, 2021
THE SKY IS NO LONGER the limit for GLW Technologies, a startup building a drone to traverse lunar impact craters and hardened lava flows on the surface of the moon. GLW Technologies recently submitted a proposal for a lunar drone to NASA’s Innovative Advanced Concepts program, and although much of that project is under wraps, the Janesville-based startup’s founder Nicholas Shepherd did share a few details. “With our drone systems, we can move experiments around or deploy rovers in those areas,” Shepherd said of the moon’s variable surface. “We see this as being a game changer in how we explore the lunar surface moving forward.” The moon’s atmosphere is much different than Earth’s, so GLW’s drone relies on cold gas thrusters to “fly.” Beyond that, drone technologies used on Earth can be adapted to a space environment with relative ease, Shepherd said. This wouldn’t be the startup’s first lunar endeavor either. GLW partnered with Colorado-based startup Lunar Outpost to design wheel suspension components for a lunar rover. If all goes as planned, Lunar Outpost’s rover could land on the moon under contract with NASA to
collect soil samples in 2023. While GLW’s lunar projects are intriguing, its accomplishments on Earth are just as remarkable. The startup’s flagship product, “Persephone,” is the first fully modular commercial-grade drone that is 3D printed, Shepherd said. The fully modular drone can fly in swarms of up to 100 and has the ability to equip a variety of components depending on its mission. For example, a drone could be equipped with a hyperspectral sensor that could provide a farmer an analysis of crop health. That same drone could then be equipped with a spot sprayer to individually treat unhealthy plants, Shepherd said. Other components enable Persephone to make 30-kilometer medical supply deliveries during a natural disaster, or for the military, Shepherd added. In fact, Shepherd put his technologies to the test at Camp Roberts in California in May to see if he could 3D print a drone and deliver medical supplies in a 24-hour period. “That’s unheard of anywhere in our industry,” Shepherd said. “It’s another way we’re showing how transformative 3D printing and additive manufacturing can be.” v
IMAGINE MANIPULATING a smart TV with gestures similar to how people use handheld devices. A swipe and a drag here, a little pinch there and just like that, a show on Netflix starts – no screen to touch, no buttons to press, a minimal amount of effort. It may seem futuristic, and it is, but it’s one of many long-term goals for Madison-based Fantm, a startup developing non-invasive wearable technology to interact and control other electronic devices. Fantm founders Ezra Boley and Finn Kuusisto are captivated by what’s possible with electromyography or EMG, which is the recording of electrical activity produced by muscle tissue. This science is at the core of Fantm’s wearable device technology. Despite EMG’s alluring capabilities, the founders discovered a major roadblock – Facebook purchased much of the advanced intellectual property around EMG technology within the past two years. Bear in mind, EMG dates back to the 1800s, and within the past century has been used in medical applications like diagnosing neuromuscular disorders. Today’s researchers are using EMG technology to control robotic prosthetic arms. Meanwhile, futurists see EMG’s potential to include manip-
ulating exoskeletons for manufacturing and the military, or tele-operating a robotic surgeon in a combat zone while on U.S. soil. So, in a “screw that” moment, Boley and Kuusisto decided to take on Facebook and develop their own EMG software and hardware, and they’re building an open-source platform that allows researchers and hobbyists to leverage Fantm’s technology to develop their own EMG control systems too. “We didn’t just want to let Facebook control the research and development around this kind of technology,” Kuusisto said. Although there are EMG sensors on the market, medical-grade sensors cost tens of thousands of dollars while hobbyist-grade sensors lack software support, Kuusisto said. Fantm is launching its first product called “DEVLPR,” an Arduino shield that enables people to read EMG and translate signals into gesture-based controls. The startup will operate its first large manufacturing run of DEVLPR as a Kickstarter campaign in the third quarter of 2021, Kuusisto said. “The goal is to break technology and IP barriers and make it far easier for anyone interested in EMG controls to get started,” Kuusisto said. “That’s our vision.” v
Hydrite launched a new AR (assisted-reality) program, RITE-Sight, which leverages XpertEye, a solution developed by AMA to support customers and field service personnel, which leverages XpertEye, a solution developed by AMA.
HYDRITE LEVERAGES ASSISTED-REALITY DEVICES FOR REMOTE TECHNICAL SUPPORT By Brandon Anderegg, staff writer
HYDRITE LAUNCHED a new AR (assisted-reality) program, RITE-Sight, which leverages XpertEye, a solution developed by AMA, to support customers and field service personnel. The modern-day field technician is no longer sporting just a hardhat; they’re wearing assisted-reality devices capable of relaying critical information in real time. Chemical distributor and manufacturer Hydrite recently equipped staff in its Food Group business with AR technology to support customers and field service personnel from anywhere in the world. The Brookfield-based company collaborated with AMA to roll out RITE-Sight, a web-based solution that allows Hydrite technicians to service, troubleshoot and provide emergency support to customers remotely. Using a smart glass device like RealWare’s HMT-1, field technicians can use AMA’s software called XpertEye to relay what they see in real-time. As Hydrite receives the live feed virtually, a remote team of technicians can help on-site staff problem solve. AMA’s software is hardware agnostic,
designed for wearable devices, and able to connect to multiple video sources including thermal cameras and microscopes. All data is transmitted using a secure connection with end-to-end encryption, which is crucial for Hydrite’s customers, said Mitch Fay, Hydrite technical director. “A lot of these customers have proprietary processes,” Fay said. “These food plants, they’re very secretive in terms of how they manufacture their end product.” Hydrite first explored AR technology during the COVID-19 pandemic at a time when its customers were limiting in-person contact, Fay said. But as the world returns to normal, Hydrite continues to reap the benefits of AR technology. Since using XpertEye, Hydrite has generated cost savings through reduced travel – the technology also allows the company to service more customers by spreading the expertise of its technician team to multiple geographies. “We’re nation wide, so I can have one technical support guy virtually in New York and Texas all in the same day,” Fay said. v
MMAC’s 2021 Focus on the Future Awards program recognizes the very best of small business, start-ups, nonprofits and diverse businesses across Southeastern Wisconsin and honors their contributions to strengthen our economy.
TELL US YOUR INSPIRATIONAL BUSINESS STORY! Apply now and tell us your unique accomplishments to be considered for one of our five Focus on the Future Awards categories:
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EVOLVINGINDUSTRY David Vasko
HIGH TECH INNOVATIONS CREATE OPPORTUNITIES FOR MANUFACTURERS WHAT ARE A FEW OF THE MOST EXCITING TECHNOLOGIES IN MANUFACTURING AND WHAT DO THEY ALLOW COMPANIES TO ACHIEVE? VIRTUAL REALITY VASKO: “What we’re actually able to do with virtual reality – and people may not realize this – we’re able to create a complete model of a factory before it’s ever built. You put a headset on and you’re able to see it and simulate the operation before it’s ever built. We can actually ensure we’re able to produce product at the speed we want to produce that product when it starts up. We can train operators on how to use it before it ever starts up. They’re actually going through different scenarios and training exercises. Sometimes things may be hazardous, and you can train people in this environment before they get there. “There’s many times a factory is built and (you discover) there’s not enough room for the worker, or ergonomic problems. You can test out those things ahead of time. We have a software package … which allows us to create those environments. Those environments have the visual aspect, but you can actually back them with the control and operational aspects. You can add machine learning or AI onto that for flow optimization. It sounds weird, but in some systems, you need to slow things down to speed things up or you have a bottleneck. Only these tools can help you see that.”
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anufacturers have been implementing Industry 4.0 technologies such as artificial intelligence, Internet of Things and virtual and augmented reality over the past 10 years. But now these technologies are evolving, becoming more integrated with one another, and are being adopted at an accelerated pace – in part because of the COVID-19 pandemic, but also because of changing consumer behaviors. BizTimes Milwaukee reporter Brandon Anderegg recently spoke with David Vasko, director of advanced technology for Rockwell Automation, about how these technologies are expanding what humans can accomplish in manufacturing. 18 / BizTimes Milwaukee – INNOVATE WISCONSIN | JUNE 7, 2021
AUGMENTED REALITY “With AR, you still see through the device, but your world is augmented with virtual reality pieces. If I walk up to a piece of equipment, I can see the equipment, use artificial intelligence that recognizes the equipment, and if you’re troubleshooting it, it will actually provide troubleshooting instructions. Maybe someone has done this 100 times and they just need a checklist to go through. Or maybe it’s the first time, and now we’re pushing video training of how to do this repair. Or maybe the person feels more comfortable having someone walk them through it and now they have an expert that is able to (virtually) see the equipment and (virtually) draw on the equipment (to explain) what or how to do things. That’s technology that’s really driving down cost and increasing productivity and uptime for equipment.”
“Manufacturing companies have always had large data sets. We have a customer who has 20 petabytes of data. If you were to turn that into an Mp3, one petabyte would be 2,000 years of listening to music – an absolutely huge amount of data. Data has always been there in manufacturing, but really what our customers are looking for now is more of the contextualization. Actionable information. Looking at what’s actually happening, what is that going to tell me? Is my motor going to fail? Can I run my plant faster? People are realizing that the analysis needs to be done in different places. In the cloud, or on the premises.” INTEGRATING TECHNOLOGY “I’m more excited about the mashups. If I have 5G or WiFi, now I can take my wireless headsets, be it AR or VR, and connect them together more. I can have access to computers in the cloud that give me significant processing power. I can add machine learning or AI to help identify things through pattern matching and help me solve things. People are fantastic problems solvers, but if I can give them more information, more context and more experience about what’s happened in the past, they’re all the more productive.” IT’S ONE THING FOR LARGE MANUFACTURERS TO IMPLEMENT NEW TECHNOLOGY, BUT HOW CAN SMALL AND MEDIUM-SIZED COMPANIES TAKE ADVANTAGE OF THEM? “With our supply chains, every large manufacturer relies on a lot of medium and small manufacturers to help fill the supply chain. It’s important to push these technologies to those organizations and help them out. There are some good programs. The Wisconsin Center for Manufacturing & Productivity: They take best practices, and they help small and medium manufacturers to adopt these practices. Manufacturers actually pay to be part of it, but the return on investment there is absolutely huge. There are so many technologies out there and they want to know what (they) should be using today. This provides them with the information they need, how to apply it and best practices. Part of it is seeing how (technologies) have been applied. Look for applications that are similar to the problems you’re trying to solve and go from there. If you’re not sure, I really encourage people to seek outside advice.” v
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2:00-2:30pm – Registration | 2:30-6:30pm – Program followed by cocktails & hors d’oeuvres In Person - Brookfield Conference Center
The M&A Market is White Hot – Are you a Seller or a Buyer? Join us (in person) along with many of the region’s business buyers and sellers, for BizTimes’ annual M&A Forum and learn about best practices and the latest in what’s trending as it relates to mergers and acquisitions. For business owners who weathered the last twelve months, now is the perfect time to buy or sell. You’ll hear from a buy-side panel and a sell-side panel filled with local executives who have just gone through the merger or acquisition process and walk away with insightful and actionable information to guiding future financial decisions. Panel Discussions: • Selling Your Business: From Strategy to Execution - You’ll hear from company owners who have gone through the sale process and learn what advice they have if you’re considering selling. • Bringing it All Together: Integration and Value Creation Post-Deal - This session will focus on finding the right acquisition target, managing the transition, aligning cultures and leveraging synergies needed to achieve sustainable growth and post-deal value creation. Panelists: • Rob Dillon, Executive Vice President, OwnersEdge (1) • Al Orr, CEO & Shareholder, Reinhart Boerner Van Deuren (2) • Sequoya Borgman, CEO, Borgman Capital (3) • Karen Hung, CEO, Silver Rock Consulting (4) • Terry Schneider, President, Welcome Dairy Holdings, LLC/Gamay Food Ingredients, LLC (5)
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Stay for concurrent breakout sessions followed by networking and a cocktail reception. Breakout session Topics: • Key Factors Driving Company Value - Understanding what impacts purchase price is essential to maximize your company’s value - You’ll gain insight into the levers you can pull to drive value in your business before you start the sale process. • Funding Your Transaction – A Candid Conversation on the Capital Stack - This session will dive into the nuances of financing a transaction. • “Tax & Deal Structure Insights” - This session will provide an overview of tax and deal structuring considerations that should be analyzed in all transactions, including the tax structure of the transaction.
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CHANGINGCONSUMERS
Left: Employees operating technology at a Kroger customer fulfillment center. Above: Bots on a grid at one of Kroger’s new automated customer fulfillment centers.
DIGITAL AND E-COMMERCE TRENDS CONTINUE TO SHAPE RETAIL Maredithe Meyer, staff writer THINK OF ANY RETAIL industry trend on the rise prior to 2020, and it was more than likely accelerated by the COVID-19 pandemic. The rise of e-commerce and digitization is perhaps the most obvious. A preferred mode of consumption for many shoppers, it suddenly became the only mode as non-essential retailers were forced to temporarily close their doors. Consumer-facing businesses, ranging from mom-and-pop restaurants to big-box chains had to rely on digital engagement and online sales through e-commerce sites, mobile apps and social media platforms. Many companies have invested heavily in digital tools and new store technology to meet consumer expectations that prioritize convenience, health and safety. To that end, new fulfillment options such as curbside pick-up have become the norm for most retailers and are expected to stick around. Industry-wide digital acceleration has also set the tone for businesses gearing up to 20 / BizTimes Milwaukee – INNOVATE WISCONSIN | JUNE 7, 2021
launch in a post-pandemic environment. New brick-and-mortar concepts aren’t entering the market with in-store business as their sole revenue stream, even if they could be profitable under that model. Retailers need to have their e-commerce game figured out from the jump. 2A Wine Merchants, a new wine shop and tasting room opening soon in Milwaukee’s Historic Third Ward, is an example of this trend in action. Its e-commerce site will allow customers to place orders for in-store and curbside pickup. Owner Rob Levin said it was a necessity for his business based on how accustomed people have become to the ease of ordering at the click of a button. E-commerce also allowed retailers such as Milwaukee-based Purple Door Ice Cream and Waukesha-based Pat’s Ribs Place to begin shipping pints of ice cream and jars of barbecue sauce across the country during the pandemic. However, digitization has also put pressure on retailers to offer an experience in-store that
shoppers can’t find online. That’s what New Berlin-based Burghardt Sporting Goods has aimed to do with its new sports performance center that opened earlier this year for local sports leagues. The company expanded its business model because operating as a retail store, selling hard goods that shoppers can easily order online, didn’t seem viable in the long run, said owner Brian Burghardt. National retailers aren’t immune to competitive pressure, largely driven by e-commerce giant Amazon. Menomonee Falls-based Kohl’s Corp. has made massive investments in technology and digitization to keep up. The company recently opened its sixth fulfillment center, in Etna, Ohio. The 1.2 million-squarefoot, next-generation facility was built in an effort to meet growing online sales demand. With automation and technology, the operation was designed to be three times more productive than Kohl’s traditional e-commerce fulfillment centers. Kohl’s has seen digital sales increase over the past decade from 4% in 2010 to 40% of total business in 2020. Amid the COVID-19 pandemic last year, digital sales jumped 16% over 2019. The Kroger Co., the parent company of Milwaukee grocery store operator Roundy’s Inc., is also moving toward a smarter supply chain. The Cincinnati-based grocery chain is building an automated customer fulfillment center in Pleasant Prairie. It is one of 20 facilities Kroger will open in the U.S., in partnership with U.K.based online supermarket company Ocado. The building will rely on robotic and manual processes to select products for delivery. Products will be stored, selected and delivered to residences with vans headed straight from the fulfillment center. v
CONTRIBUTED
Scott Gittrich
W
hile many restaurants stand on shaky ground after 15 months of revenue losses, Toppers Pizza is coming out of the COVID-19 pandemic strong. The Whitewater-based quick-service pizza chain, with 65 corporate- and franchise-owned locations in 12 states, has seen double-digit sales growth for the past four consecutive quarters and expects that momentum to continue into 2022. Founder and chief executive officer Scott Gittrich says investments in technology and menu additions, such as gluten-free and vegan options, have primed the company to keep up with evolving consumer expectations. BizTimes reporter Maredithe Meyer caught up with Gittrich to talk about Toppers’ recent success. biztimes.com
INVESTMENTS IN TECHNOLOGY HELP TOPPERS PIZZA GROW WHAT DOES INVESTING IN TECHNOLOGY LOOK LIKE FOR TOPPERS? “In the past five years, we’ve spent several million dollars to build our own point-of-sale, e-commerce, cloud-data system and completed rolling that out to the entire store footprint in the middle of 2020. We built this thing to scale using incredible architecture and technology. We can pull and change the e-commerce solution down to the store and down to even the individual customer. What that means is individual stores can set pricing or whatever, and it will populate directly to Toppers’ e-commerce site for the customers in their area, so it’s extremely powerful. “We’ve continued to commit resources to technology by increasing our technology team (at the corporate headquarters) by about 30% in the last six months – just to pour it on, essentially. There’s no end to what kind of solutions we can bring to our customers and to our franchisees through these investments. “In 2020, it was a lot about serving the customer in very specific ways relative to the COVID environment and just taking friction out of the system in every way that we possibly could. Today, a lot of our commitment has to do with our mobile platform and loyalty, and data for our franchise owners – so, being as efficient as we possibly can. And we’ve seen just incredible numbers. We look at ‘sales per person hour’ as a way to measure the impact of our technology. We’ve increased that efficiency – the sales that can be done per person in our restaurant – by 15 to 20% in the last year and a half. What’s happened during that time period is that all of our service metrics, or service times, have improved. Our Google scores have improved across the board. Our customers are saying, ‘Your service is better. We like everything better. We can see that you’re delivering faster.’ And we’re actually using fewer people in the restaurant to do that.” WHAT’S SO IMPORTANT ABOUT EFFICIENCY? “It impacts both (customers and team members). The customer is served better. It’s easier for team members. Our retention is up, our turnover is down, and our team member satisfaction is up because we’ve taken pieces out
of the hands of team members executing those things manually and we’ve automated it – and it’s made their jobs easier. They get to focus on the customer more. Their jobs are more satisfying and less chaotic, the training is easier. It just pays off over and over.” DOES THAT PUT TOPPERS AT AN ADVANTAGE AMID INDUSTRY-WIDE HIRING CHALLENGES? “The number of applications that we get in our restaurants is at an all-time low. … A year ago, in our 21 company-owned stores, we had close to 500 hourly team members. Last week, it was 429 team members. However, our delivery time, which is our key service metric, was better last week than it was a year ago, and our sales are up by a lot. That just shows that we can do what we do with fewer people. “Still, you have to keep your people. And Toppers Pizza has been recognized as a culture business. Our core values lead the way. I believe that we’re better set up to retain team members because we have great leadership, training, good franchise systems, but mostly we run our business with our core values. … We pay well, we have good benefits. Our average hourly rate is higher than it’s ever been in history, but we’re happy to do it because we want to have the best people.” WHAT’S ONE KEY FOCUS FOR THE COMING MONTHS? “Now, we’re really ramping up our investment in store development. We’ve opened four restaurants in the past five or six months and plan to open several more this year, 10 to 14 next year, and 20 to 26 in 2023. So, a big place we’re focused on is taking this opportunity to grow the Toppers Pizza brand over the next few years. “We’ve been rebuilding and innovating against our menu in some really fun ways in the past two years, and we’re committed to continue to do that. We’ve partnered with Madison-based Chocolate Shoppe Ice Cream Company to create three unique Toppers flavors of frozen custard and those are going to be tested at the end of May in four restaurants in Milwaukee, and we expect that to be rolled out company-wide by mid-summer.” v INNOVATEWI.COM / 21
CHANGINGCONSUMERS
Erin Juzenas, owner of Shop Privy, at the company’s new storefront in Wauwatosa.
SHOPPRIVY By Maredithe Meyer, staff writer
StickerPrice mobile app.
STICKERPRICE By Maredithe Meyer, staff writer
22 / BizTimes Milwaukee – INNOVATE WISCONSIN | JUNE 7, 2021
AFTER WORKING AS A BUYER at Kohl’s Corp. for 10 years, Erin Juzenas was ready for a career shift that would allow her more time to be a mom while continuing to pursue her passion for women’s apparel. She considered various direct sales companies, like Cabi, but decided she could source and sell trendier clothing at more affordable price points under a more personalized, convenient business model. “What if I just started an in-home business, and it was kind of like opening a boutique, but instead of having a brick-and-mortar store we just take the store to women? They host parties, we bring the inventory and set it up, and anything they buy they take home with them,” said Juzenas. Three years later, ShopPrivy has grown to eight stylists – each with their own curated assortment of clothing and accessories – based largely in the Milwaukee area, in addition to Indiana and Texas. When home parties were put on hold amid the COVID-19 pandemic, the traveling boutique moved all business online. ShopPrivy broadened its customer reach using social media tools like Facebook Live to auction
off limited inventory. The business also rebuilt its e-commerce site to seamlessly track inventory and process orders. Still, Juzenas learned that shoppers wanted the experience of working with a stylist face-to-face. Some said they wanted a place to pop in to browse and try on new arrivals. In May, ShopPrivy opened a 1,300-squarefoot storefront in the Wauwatosa Village area, giving customers another way to shop as well as a venue to host styling parties. Juzenas expects sales to increase by at least 50% because of the new foot traffic and visibility. The space allows order fulfillment capabilities to expand beyond the confines of Juzenas’s dining room. For instance, Milwaukee-area customers now have the option of free, in-store pick-up within 24 hours of their order. As a modern-day retailer and small business, the key is to accommodate the customer however they prefer to shop, she said. “The way people are shopping is changing. … Companies as small as mine and as big as Kohl’s really have to re-evaluate how they operate and make sure that they’re giving their shoppers the experience they want,” she said. “If what they’re doing isn’t working, then we have to evolve.” v
A NEW POINT-OF-SALE system coming out of Green Bay aims to change the game for small and mobile retailers, using nothing but a smart phone. Expected to hit the market in October, StickerPrice is a mobile app that can be used to complete transactions, track sales data and manage inventory. Sellers – such as farmers, craft makers, boutiques, estate sale operators, and the like – mark their assortment with custom designed QR code stickers. At checkout, they scan the items into the app and process payments via credit card or electronic platforms like Venmo, Apple Pay and PayPal. “Imagine a place like Door County, where there’s all these shops that are here today, gone tomorrow – they don’t have a whole lot of money to invest in a system that’s expensive and has a lot of components,” said co-founder Jeff Minzlaff. “What we’re trying to be is that onestop solution, where you can do everything simply on your phone.” Minzlaff and founding partner Garrett Moody have spent the past three years building what started as an idea for a rummage sale management system, while balancing full-time jobs at Green Bay-based Schreiber Foods Inc. Minzlaff and his wife’s first rummage sale had been a headache. Long lines of customers with armfuls of home goods were no match for their
pen-and-paper checkout method. Determined to find a better way, Minzlaff, a graphic designer, brought the idea to Moody, a software developer. The two had been working together on a different project at the time, but this one had greater potential. “After we started developing these ideas, we realized a lot of small businesses could use this same exact technology,” said Moody. From there, they pitched a prototype to Titletown Tech, the $25 million venture capital fund led by the Green Bay Packers and Microsoft. Today, StickerPrice is one of 20 companies in Titletown Tech’s portfolio. The partnership includes startup money and access to an advisor, who encouraged them to save their capital and write their own code, even if it took longer to get to market. But more time has allowed the startup to track shifts in consumer behavior and implement real-time adjustments, such as purely contactless payments. And based on the spike in entrepreneurship following the 2008 market crash, said Moody, StickerPrice is arriving right on time. “What we’re thinking is people are going to start their own businesses. They got laid off and they have a special hobby or craft that they want to turn into a small business,” he said. “This is going to be the time to introduce something that will help those super small businesses do that.” v
ReinventRV’s user interface
REINVENTRV By Maredithe Meyer, staff writer
ONE CONSUMER TREND that arose from the COVID-19 pandemic has only picked up steam as life gradually returns to normal: demand for RVs. According to March data from the RV Industry Association, 148,507 wholesale RV units were shipped to dealerships across North America in the first quarter of 2021. That’s a record high for total shipments in a single quarter, shattering the previous record set in Q1 of 2018 by nearly 10%. What’s more, the group’s recent survey of leisure travelers in the U.S. found that 31% are planning to go RVing this summer – and not for reasons related to the pandemic. As demand soars, dealerships struggle to source inventory, a process that had already been challenging enough prior to the pandemic, said Todd Wilkins. He’s the co-founder of Milwaukee-based ReinventRV, a new online platform, under parent brand ReinventAuctions Inc., where dealers can trade, sell and purchase vehicles without the hassle of going to auction or discussing payments over the phone. It connects dealerships across the U.S. through their dealer
management systems for real-time transactions. Since launching last November, ReinventRV has grown to 121 users and more than 18,000 RV units. By the end of September, the company expects to have 1,100 dealers and more than 100,000 RVs. Buyers and sellers pay a transaction fee but joining and listing inventory is free during the platform’s first year. “We’re a solution right now that’s really covering a pain point for all dealers,” said Wilkins, who started his decades-long career as an auto dealer and now heads a marketing agency specializing in the RV, marine and powersports industries. “Acquiring wholesale units and selling off aged units has always been a common thread for all the dealers I’ve worked with,” he said. “It’s what got us driving to create the platform and solution to improve the industry.” Also at the helm of ReinventAuctions is Dean Stojka and former Harley-Davidson exec Paul Jones, now vice president for university relations and general counsel at Marquette. Wilkins and Jones met playing college football at the University of Wisconsin-Whitewater. v
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CHANGINGCONSUMERS
WISCONSIN’S ‘UNICORN’ Maredithe Meyer, staff writer WHEN INVESTOR John Philosophos first met Wes Schroll, the now-founder and chief executive officer of Madison-based Fetch Rewards Inc., he was a young undergrad at the University of Wisconsin-Madison. The two struck up a conversation during an entrepreneur networking event. Philosophos, a partner and advisor at New York-based Great Oaks Venture Capital, remembers Schroll sharing some rough ideas for a few different business concepts, including one that sought to disrupt the grocery shopping experience. “He wanted to know what I thought his next steps should be,” said Philosophos. “So, I gave him a little checklist of things and never thought I’d see or hear from him again.” Schroll showed up the following month with a completed checklist, asking Philosophos for more suggestions. First: find access to capital. Fast forward about nine years, Schroll sits at the helm of a fast-growing startup, now known as Wisconsin’s “unicorn” – a status held by about 600 privately held startup companies around the world that have cleared the $1 billion valuation threshold. Great Oaks was one of Fetch Rewards’ first institutional investors, providing about $750,000 in early capital. It was a high-risk move, but the firm had its money on the founder. “(Schroll) had what we perceived to be the makings of all the right stuff for a founder of an early-stage company. …,” Philosophos said. “Early stage is all about the founding talent. You rarely start with the right vision, but if you’ve got the right founder, you’ll iterate to it.” 24 / BizTimes Milwaukee – INNOVATE WISCONSIN | JUNE 7, 2021
Fetch Rewards launched its consumer-loyalty and retail-rewards mobile app in 2017. Users scan any paper or electronic receipt in exchange for points that can be redeemed for free rewards, such as digital gift cards for retailers and restaurants, donations to charity, sweepstake entries, and other discounts. Fetch has partnered with more than 500 national brands like PepsiCo and General Mills that reward users with additional points for every dollar spent on their products. Essentially, those brands bid on exclusivity to incentivize shoppers to choose their brand over competitors’. “We don’t get people to magically just buy more products and stuff that they don’t need,” said Schroll. “All we’re trying to do is help (shoppers) on areas where they’re flip-flopping and don’t necessarily have huge amounts of loyalty to one brand or another to start to centralize on the brand that’s willing to reward them and prove that the brand is loyal to you as a consumer.” The idea of consumer loyalty was the spark that ignited Schroll’s vision in the first place. A young college student learning to shop for his own groceries, Schroll was put off by the hoops he had to jump through to be rewarded for his existing spending habits (think coupons and multiple loyalty programs). “I thought that was fundamentally backwards,” he said. “If a brand or retailer really cared about me, and cared about proving that, then they should jump through the hoops and prove that they’re loyal to me as the consumer.” Fetch Rewards has amassed more than 7 million monthly active users and has processed nearly one billion receipts, delivering more than $120 million in savings to shoppers. Receipts provide insight into new buying trends and where consumers are looking to be rewarded, and Fetch leverages that data to onboard additional brand partners, said Schroll. The company is currently working to add more restaurant chains after seeing an influx of restaurant receipts now that consumers are becoming more comfortable dining out. Fetch experienced a growth spurt during the COVID-19 pandemic as consumer behavior shifted – shoppers made fewer but larger grocery trips, stocked up on essentials, and attempted to save money. Once early supply chain disruptions settled, Fetch’s brand partners stepped up and rewarded shoppers with more points – both as a thank you and to help customers save more. “That really helped us,” said Schroll. “It helped accelerate the user growth, it helped
accelerate how much people could earn on the program.” And ultimately, it fueled the startup’s momentum to raise $80 million in November from existing shareholders ICONIQ and DST, followed by an additional $210 million in April from SoftBank Vision Fund 2, with participation from ICONIQ and DST. These days, Fetch is focused on three main opportunities: expanding rewards categories beyond grocery, reaching more U.S. households, and eventually, introducing the brand to international markets. That all requires growing the team, said Schroll. Currently, the company has 460 employees in 36 states, with plans to aggressively hire in the second half of the year. Fetch currently occupies one physical office space in Chicago. Use of its Madison office was donated to Girl Scouts of Badgerland Wisconsin. In response to recent employee interest, Fetch plans to one day open physical office space in many of its hub cities. Despite its national scale, Fetch’s roots are planted in Wisconsin, which shows the ground is just as fertile as it is on the East and West coasts. To that end, Fetch stands on the frontlines of Wisconsin’s startup ecosystem as a point of reference for both entrepreneurs and venture capital firms looking to grow and invest here – to show that it can be done, said Schroll. “We still have a long way to go to keep raising the bar, and then hopefully that space underneath is what can be filled with all the other great companies and entrepreneurs looking to start something,” he said. Now with a “unicorn” here, Wisconsin is poised to catch the eye of more outside investors, said Tom Still, president of the Wisconsin Technology Council. That’s important for an ecosystem that continues to rely heavily on outof-state money due to a lack of large-scale VC companies. Schroll, himself, secured most of Fetch’s early funding by traveling across the U.S. to participate in various pitch competitions. At the time, said Still, the young entrepreneur’s vision probably didn’t resonate with most Wisconsin investors who simply weren’t familiar with the retail-rewards space. But that didn’t deter him from tapping Wisconsin’s talent pipeline and business landscape. “Like any company that grows, (Fetch) wants to be doing business in other states and other countries … but at the same time, it’s kept the core of the operation here, and that’s a strong message for Wisconsin,” said Still. v
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WORKPLACEOFTHEFUTURE
THE ROLE OF THE OFFICE IN WAKE OF COVID-19 By Alex Zank, staff writer AT THE ONSET of the COVID-19 pandemic, about 80% of the 2,300 employees working for WEC Energy Group-owned utilities Wisconsin Public Service and We Energies started working remotely. “In Green Bay (and) Milwaukee, in the space of about five days we moved from being office-based to being remote,” said Tom Metcalfe, president of We Energies and WPS. He added that not just office workers, but field employees such as line mechanics and gas utility workers, also became primarily remote. Many of the employees will be called back to the office in the near future. “We just informed our employees that we’re targeting Sept. 7, so we should, following Labor Day, have the majority of our remote workers return to the workplace,” Metcalfe said. Companies like WEC Energy Group had to adapt quickly to the pandemic. Now that it’s seemingly in its waning days, the companies are faced with questions surrounding hybrid work, office space utilization and workplace culture. The consensus seems that most workers will return to the office, at least for part of the time. Employers quickly sent employees home for a year or more because there was no safe solution to keep them in the office, said Chris Richards, managing director of Colliers International | Wisconsin’s Madison office. The COVID-19 vaccines 26 / BizTimes Milwaukee – INNOVATE WISCONSIN | JUNE 7, 2021
are changing that. “Now that there appears to be a level of safety with returning – given the fact most people, certainly in Dane County, are getting vaccinated – I believe employers want people back in the office,” he said. “It is going to look different, it’s certainly not going to be an 8-to-5 situation, Monday through Friday.” Richards said larger companies might consider adding more private spaces than they had before. Cubicles may also be more spaced out. He added there will likely be a lot more “hoteling,” meaning workstations that are not assigned to anyone but can be used by workers as they come into the office. But since construction costs are high, the idea of retrofitting an office may not be appealing to some, he said. The pandemic has caused organizations to reassess their office environments and their adaptability, said Brian Nelson, senior associate at Milwaukee-based Zimmerman Architectural Studios Inc. They will consider such things as their ability to either expand or retract in their space if a similar event happened in the future. “In terms of flexibility, I think that’s the biggest thing,” he said. The pandemic also sped up trends that office users were slowly adopting, Nelson said. For instance, people discovered while working from
home they can work in different places and remain efficient. “If they got tired of the view, they just moved to a different room in the house,” Nelson said. The result for many office spaces may be fewer cubicles and more casual seating. There could also be more collaborative or task-driven areas, Nelson said. Not everything at WPS and We Energies will be as it was before the pandemic come September. In fact, WPS has already adopted major changes in Green Bay. WPS last year permanently closed its downtown Green Bay office, where nearly 500 employees worked before COVID-19 hit. Metcalfe said the majority of the employees who were in that office will remain working remotely. Some will move into what WPS calls a service center annex in Ashwaubenon. This is in contrast to Milwaukee-based WEC Energy Group as a whole, which is calling back a majority of workers to the office. Metcalfe said Green Bay is the exception because its existing office space was larger than what WPS needed. The utility was using less than half of the building even before the pandemic. “It really didn’t make sense to continue to operate that large space, and we’ve shown we can be effective working remotely,” he said. “We have the space down in the Green Bay service center annex, we configured that space so we can accommodate more of our employees.” The Ashwaubenon space will have ample space for hoteling, group work and meetings. This is because remote workers will be expected to come into the office for work on occasion. WEC Energy Group sees a need for a physical office for purposes of creating connections and bringing new employees into the fold. The company has made recent upgrades to its office spaces. “For a time, it’s been effective to work remotely, but as the company moves on and we start to hire new employees, I think it’s important we have that face-to-face connection,” he said. Richards said employees working entirely remotely aren’t making as strong of connections with their fellow employees or their company. This makes it easier for other companies to recruit them, because then it comes down to pay. “I think the fight for talent is on right now, and I don’t see that getting any better in terms of employers being able to find talented people,” he said. “I think we’re going to harken back to the days of pre-COVID, where people were going to the (central business districts) because they want the walkability and the coolness factor of being downtown. I don’t think that’s going to go away.” v
NOTABLES 2021 Keep up with BizTimes’ 2021 roundup of the leaders making a difference throughout southeast Wisconsin. At companies across southeast Wisconsin, notable executives are running businesses, navigating company restructurings, serving on boards, running marketing departments, and investing in growth throughout the region. The notable individuals profiled in these categories are nominated by their peers at work and in the community.
NOTABLE WOMEN IN EDUCATION
Profiling leaders who are developing our next generation of leaders. In this inaugural list, we honor outstanding women in the metro Milwaukee area who lead local educational institutions, including universities, colleges, technical schools, and primary (K-12) schools. They motivate excellence, educate and inspire the next generation, and manage their diverse teams through new challenges every year. Extended Deadline: Friday, June 11, 2021 | Issue Date: July 19, 2021
Notable Marketing Executives Profiling accomplished women steering the marketing functions of their companies and nonprofits, while serving as leaders and role models in their workplaces and community. Nomination deadline: July 2, 2021 | Issue date: August 16, 2021 Notable Women in Insurance The executives on this list are shaping their own organizations as well as the path forward for other women in the industry. Nomination deadline: September 10, 2021 | Issue date: October 25, 2021 Notable Commercial Real Estate Leaders The brokers, directors, investors, developers and finance professionals on this list are among those shaping high-profile commercial real estate in Chicago. Many have brokered deals for and developed the city’s most recognizable properties. Others are helping to steer industry groups that are fostering the next generation of leadership in commercial real estate. Nomination deadline: September 24, 2021 | Issue date: November 8, 2021 Notable Food & Beverage Executives The executives on this list are shaping their own organizations as well as the path forward for others in the food and beverage manufacturing industry, while mentoring the next wave of professionals and finding ways to give back to their communities. Nomination deadline: October 29, 2021 | Issue date: December 13, 2021
To view this year’s winners and nominate, visit biztimes.com/notable
WORKPLACEOFTHEFUTURE
HOW COMPANIES CREATE INCLUSIVE WORKPLACES By Alex Zank, staff writer BINNU PALTA HILL can identify which work environments are inclusive through clues that may go unnoticed by others. “When you walk into a place, you feel the difference,” said Palta Hill, who is assistant dean for diversity and inclusion of the Wisconsin School of Business at the University of Wisconsin-Madison. “For example, one of the first things I notice is how open are people about asking questions? I remember one time, at an organization I worked with, a person asked me very quietly almost like a secret, ‘I don’t know if I should be saying African American or Black.’ And I thought, ‘Well just ask the person you’re talking to: Do you want me to refer to you as Black or do you want me to 28 / BizTimes Milwaukee – INNOVATE WISCONSIN | JUNE 7, 2021
refer to you as African American?’” Diversity and social justice issues were again thrust into the national spotlight just over a year ago, when the death of George Floyd at the hands of a Minneapolis police officer ignited demonstrations and unrest in communities across the country, including massive marches in Milwaukee and Madison. Every corner of society is affected by these issues, including the business realm. Many companies have been thinking about how to create diverse, equitable and inclusive workplaces for some time, even before the events of the past year. Such initiatives are often referred to as D&I (diversity and inclusion), DEI (diversity,
equity and inclusion) or DE&I for short. Yasir Kamal, inclusive excellence vice president of Madison-based American Family Insurance, said these efforts are part of the company’s DNA, and their benefits to companies and workers are clear. “What we know is diverse teams are more productive and innovative in an inclusive environment,” he said. “Our goal is not only to have a diverse workforce that reflects the demographics of our customers, but we want to create an inclusive environment where employees feel like they can be their authentic self, and they can be in a place of belonging.” But creating such an environment in the
workplace requires more than a generic promise by company leaders. Businesses and organizations need to be intentional and honest, say experts on workplace diversity. Palta Hill’s example of the way people Yasir Kamal talk is just one quality she looks for. Another is if leaders make themselves visible in a company’s DEI efforts and whether they’re open to feedback. Both are tied to removing fear of making mistakes. “I think there’s an openness to having real assessments of the company culture, which makes your leadership vulnerable. It makes them examine their own behaviors,” she said. “There’s more openness, however, there’s a lot of fear too. So, I think that’s where, in order to move forward, we have to create safety to make mistakes.” Another sign that companies are committed to inclusive workplaces is that their DEI efforts are woven into their operational structure. Green Bay-based Associated Bank started its DEI efforts about 10 years ago and has worked to make those efforts a part of the company identity. “When we launched this back in 2011 it was very much an HR initiative,” said Angie DeWitt, executive vice president and chief human resources officer. “That’s how these things get started a lot of times. And (what) we’re evolving to, at least within the last year or two, is making it not just an HR initiative. And that’s why we start to see more people within the business lines and the footprint that are involved. I think that’s how we do this. Otherwise, it just feels like HR is pushing this. It really needs to be across the business line.” Associated has several colleague resource groups, which are made up of Associated employees and focus on specific areas of diversity and inclusion, DeWitt said. The CRGs come together to form a DE&I Council, which is co-led by Associated’s chief executive officer and its director of diversity, equity and inclusion. The company measures its workforce demographics and sets specific goals. DeWitt said 65% of Associated employees are female, nearly 16% are people of color (an improvement since 2011), 1.9% are protected veterans and nearly 12% are people with disabilities. The goals it set 10 years ago have been raised as Associated meets or exceeds them. For inbiztimes.com
stance, the bank initially set a goal that women make up at least 30% of its senior vice president roles. Last year, it raised the goal to 40%. American Family, for its part, has an Inclusive Excellence division that is tied to Angie DeWitt the chief of staff and president and CEO. It also has an Office of Community and Social Impact, which focuses on closing equity gaps in the community and investing in startups. “When you have your CEO, your president and CEO-elect, your board of directors and your leaders who are committed to diversity, equity and inclusion, you are taking those intentional actions with accountabilities around what this means to the long-term success of our enterprise,” Kamal said. “This is very intentional in a way that we created this multi-year structural and cultural journey on how we want to operate as a company.” And instead of CRGs, it has business resource groups. The name is different, but the makeup and objectives are similar to that of Associated Bank. American Family started those in the late 2000s, Kamal said. They are led by employees and sponsored by executives and aim to “create space for our people,” he said. Palta Hill emphasized the inclusion aspect. Without it, a company’s DEI initiative may not be more than looking at worker demographics on paper. This doesn’t work, she said, because diversity alone can cause conflict in the workplace. “I think where a lot of organizations have a challenge, is they start to just count heads,” she said. “If you just start counting … and you don’t measure inclusion, that becomes problematic. Because even though you’re bringing in diversity, you’re giving them the message either they assimilate or they leave.” One of the biggest challenges companies face in DEI efforts is that discussions around race and gender have become “super-charged and hard to navigate,” said Bill Korinko, a women’s and gender studies professor at St. Norbert College and director of its Cassandra Voss Center. The Cassandra Voss Center explores questions of identity and inequality, Korinko said. It also helps businesses, especially those in the Green Bay area, coordinate internal education on issues of diversity and inclusion. “We try to do work that’s scholarship driven, welcoming, innovative and fun,” he said. “From
a content perspective, we tailor it to the specific needs of an organization, but in terms of our methodologic approach to it, we’re always tied to those four core values.” Associated has put a special emphasis on diverse hiring efforts in the Milwaukee market the past few years, DeWitt said. To achieve those efforts, Associated recruiters work with local colleges and other organizations to build the pipeline of applicants. “We do look at some of our major metro markets within our footprint, with Milwaukee being one of them, where we’re focused on the diversity makeup in that community, and then we really focus our hiring and recruitment efforts to try to mirror our colleague base to be very close to the demographics in those communities,” she said. Companies may also consider making their boards of directors more diverse. Korinko participated in a board diversity working group for the Greater Green Bay Chamber, which created a list of suggestions to help organizations increase board diversity. The suggestions include widening recruitment reach, creating a support network for new board members and establishing opportunities for board skill development, among others. “At any level of leadership, it’s important that organizations reflect the communities they serve,” Korinko said. It is also important that colleagues can openly share perspectives, rather than put each other down for having different opinions or making mistakes, Palta Hill said. Scientific research has shown that people respond much better when they can engage and share ideas with others, she said. “When we engage in curiosity, we know there are chemicals in the brain, like dopamine, that are released,” she said. “That literally makes us feel good. And so, this whole exchange, it’s almost like manipulating our physiology. There’s a lot of evidence that that creates connection. What it does is in exchange, it evokes the person to be more vulnerable, which in turn evokes more empathy. When we’re talking about inclusive cultures we’re talking about compassionate, empathetic cultures.” Kamal encouraged other companies in and outside of Wisconsin to find ways to cultivate an inclusive work environment. “At the end of the day, this is not only good for the community, it’s good for our business,” he said. “That’s what we want to look at as a competitive advantage, and I think we’re really doing a great job in positioning our employees to continue to thrive and bring our authentic self to work.” v INNOVATEWI.COM / 29
WORKPLACEOFTHEFUTURE
Ideawake co-founders Coby Skonord and Trae Tessmann
WORKPLACE STARTUPS TO WATCH IN WISCONSIN By Alex Zank, staff writer
A
s employers across the region craft post-pandemic plans around how, where and when their employees will work, there are several emerging companies looking to shape what that future looks like. The following are Wisconsin startups providing a range of services for workplaces, including comprehensive technology protection, accessible data science technology, business communication tools and more.
CASTLE ONE Madison-based Castle One provides cybersecurity technologies, helping businesses protect passwords, email and electronic devices. Password protection services allow an organization to store all passwords in a secure vault that is accessible anywhere. To fight phishing, the most common cyberattack for small businesses, Castle One implements and oversees self-learning phishing detection and prevention technology. For example, impersonation banners are embedded on emails where a person’s name does not match the address you’ve previously used to communicate with them. Castle One also provisions devices with device-native security features enabled, while providing malware and ransomware protection. The company was founded last year in response to a cybercrime wave stemming from the COVID-19 outbreak. Because of the global pandemic, more people than ever were working from home and relying on technology, creating ripe conditions for cyberattacks. 30 / BizTimes Milwaukee – INNOVATE WISCONSIN | JUNE 7, 2021
DATACHAT DataChat brings conversational intelligence to businesses. Conversational intelligence is a way for people to collaborate with machines. Humans bring their intuition, and the machine uncovers interesting patterns through data. “Thus, humans and machines play to their strengths and collaborate to discover hidden gems in data,” according to Madison-based DataChat. This offering allows people to carry out an array of data analytics functions, such as exploratory data analysis, predictive analytics, structured querying, free search querying, visualization and data wrangling, in a single platform. People can also take the “recipes” they create in DataChat and share them with others. DataChat was born from two questions: What if the idea that everyone should learn to code is unnecessary, and what if anyone could carry out data science functions without learning to code? The company aims to make analytics accessible and approachable to anyone.
FIELDCAST Companies looking to develop or improve their own series of secure, private podcasts might want to check out Milwaukee-based FieldCast. It has created the first purpose-built professional audio communication ecosystem for business users. FieldCast was launched with the belief that private internal podcasts are a revolutionary tool in business communication. A subscription to FieldCast includes a secure, customized player app; the FieldCast studio, which allows users to script, record and edit podcasts from their desktop; reporting and analytics to track audience engagement; and secure remote recording. The premium service includes strategy and planning sessions, a proprietary podcast strategy workshop, and production services that include hosting, scripting and recording. The FieldCast team has more than 20 years of experience in developing marketing and communications platforms for corporations. SPEAKFULLY Many people may still be working from home, but that hasn’t eliminated all workplace-related mistreatment. Eau Claire-based Speakfully aims to mitigate those issues by providing a way for employees to anonymously address and report workplace concerns, such as harassment, bullying, cultural toxicity and bias. Speakfully puts the spotlight on corporate culture by providing real-time insights and analytics on trends taking place within organizations, with the goal of creating a safer and more transparent workforce. It also offers built-in support resources, such as guidance on navigating uncomfortable experiences in and out of the office. The company was founded by chief executive officer and co-founder Jana Morrin as a direct result of workplace mistreatment that she experienced. IDEAWAKE Milwaukee-based Ideawake provides an innovation platform combined with programs, services and expertise that support organizations’ innovation programs, from idea collection to measured results. Its objective is to provide companies with tools to turn employees into innovators. It does this in a number of ways, including idea management, which captures and tracks the return on investment of concepts in a company’s innovation pipeline. It also helps employees to identify, prioritize and forecast ROI on waste and inefficiencies. Ideawake’s software is also designed to help companies streamline their next Shark Tank-style pitch competitions. It is used by businesses ranging from startups to Fortune 500 companies. v
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WORKPLACEOFTHEFUTURE David Pudlosky
THE FUTURE OF THE OFFICE WHAT HAS THE MILWAUKEE OFFICE REAL ESTATE MARKET BEEN LIKE IN RECENT MONTHS? “Probably the last five to six months, we have definitely experienced an uptick in just overall curiosity – my business in particular. I’m a tenant rep broker on the office side, so all I do is represent tenants and occupiers of space. Our activity has been relatively consistent throughout this whole pandemic because occupiers of space have been looking to myself, my team and JLL to provide guidance as to how do we work remote and how do we come back to the office. So, we’ve been relatively consistent, but I would say the last five or six months, it feels like activity has picked up and curiosity has elevated. People are really excited and anxious to get back to the office and understand how the workplace is going to look and feel.”
A
s the nation emerges from the COVID-19 pandemic, some employers have announced they will make remote work a permanent arrangement for their employees, while others are finding ways to incentivize their workers to return to the office as soon as possible. As managing director of brokerage for JLL’s Milwaukee office, David Pudlosky represents office users, meaning he has a firsthand account of how companies have weathered the pandemic and how they’re thinking about their office environments moving forward. BizTimes reporter Alex Zank recently caught up with Pudlosky to discuss what’s happening in the office real estate market and JLL’s new effort to help companies implement a hybrid work strategy in a post-pandemic world. 32 / BizTimes Milwaukee – INNOVATE WISCONSIN | JUNE 7, 2021
WHAT ARE SOME RECENT INDICATORS THAT THINGS ARE IMPROVING? “My team and I, we’re in a very unique position representing the occupiers, so we’re sort of in the boardroom, if you will. We’re on the strategy side of the transaction. … My team and I have access pretty early to what leaders are thinking. My optimism comes from the fact that these conversations are now happening with more of our clients (and) more of our prospects. We are having more in-person meetings, which I think shows you that people are more comfortable now getting back to the office, having in-person meetings. And the frequency of these meetings has increased where us being so early on the strategy side, leaders are now saying to us, ‘OK, JLL, let’s have a meeting to talk about our re-entry.’” WHAT HAVE OFFICE USERS BEEN TALKING ABOUT IN RECENT MONTHS? “I think the emphasis on space utilization and not having dead space, if you will, is becoming much more critical. I also think, everyone talks about amenities, and they talk about amenities from fitness centers, conference rooms (and) training facilities. What does the building have to offer? And I think the
traditional amenities are still part of that combination, but I’ve had more conversations with real estate leaders about HVAC systems, operable windows, rooftop outdoor access. I think the amenities are being elevated. I think the visibility into really understanding their space utilization is part of the conversation. “The buzzword is flexibility, who’s coming into the office, how often are they coming into the office, are they in a private office, are they in a workstation, is there hoteling? The flexibility piece is part of the combination, and the theme across the board, most real estate decision-makers are saying they want most of their employees in the office most of the time.” WHAT WILL THE FUTURE OF OFFICE SPACE LOOK LIKE WHEN THINKING ABOUT THE IMPACT OF COVID-19? “I think you’re going to see a massaging of what we had before, just in different break outs. What I mean by that is, we had individual spaces before, we are going to have individual spaces going forward. I just think there’s going to be less of it. I think the collaboration space will increase, because I think what you’ll see is when people are in the office, they’re in the office for a specific reason, which is probably tied a lot to culture and collaboration. So, I think you’ll see spaces that are designed to bring people into the office to work together.” JLL RECENTLY LAUNCHED AN OFFERING (EXPERIENCE / ANYWHERE) TO HELP COMPANIES SIMPLIFY THEIR HYBRID WORK STRATEGIES. HOW DOES THAT HELP COMPANIES IN A WORLD AFFECTED BY THE PANDEMIC? “I think JLL’s place in all of this is to help companies understand where they are most productive and efficient to work. Sometimes it’s in the office, and sometimes it’s not. And we’re making sure we’re allowing the real estate decision makers to give the companies the tools and resources, and give them the data and the information, so they can make informed decisions on how people can be more nimble in a post-COVID world.” v
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FUNDINGINNOVATION
NVNG LOOKS TO HELP COMPANIES INNOVATE
THROUGH VENTURE CAPITAL By Arthur Thomas, staff writer WHETHER OR NOT the $100 million venture capital fund Gov. Tony Evers proposed in his budget actually becomes reality, it appears there will be a new set of venture funds taking a closer look at Wisconsin startups in the near future. Madison-based NVNG Investment Advisors plans to close on $40 million to $50 million in funding from Wisconsin corporations and other entities in the state in June. Once it closes on the fund, NVNG, which stands for “nothing ventured, nothing gained,” will in turn invest in venture capital funds from around the country in a fund of funds model. “This is about helping to develop the Wisconsin ecosystem, this is about helping drive economic growth,” said Carrie Thome, chief executive officer and managing director of NVNG. “Innovation is the lifeblood of growth and we 34 / BizTimes Milwaukee – INNOVATE WISCONSIN | JUNE 7, 2021
have to find a way to support innovation here.” NVNG is targeting $100 million in total funds to disburse and hopes to have a second closing before the end of the year. After the first closing it will begin investing with a range of funds, from seed to later stages and across industries; however, the funds will not be required to invest in Wisconsin. “The venture firms that we target have an interest in better connecting into Wisconsin’s startup ecosystem,” said Grady Buchanan, managing director of NVNG. “We intend to highlight our state’s startups and innovators for these outside firms, offering that initial point of contact, drawing their capital to us.” Thome, formerly the chief investment officer at the Wisconsin Alumni Research Foundation, said that even if the goal is to help the state, ven-
ture capital is ultimately an investment and the best way to make the approach work is if the focus is on the investment return. With Wisconsin entities and companies as limited partners, the returns will ultimately end up benefiting the state, but financial benefits aren’t the only benefits to the approach NVNG is taking. It is a model based on what Renaissance Venture Capital has done in Michigan for more than a decade. When Chris Rizik started Renaissance in 2008, Michigan was a state with great university research and a high concentration of engineers and talent, but it fell short in terms of entrepreneurship, including a lack of access to capital. “If this is an area that has all this great research and there’s not enough capital, there’s real opportunity for successful investing,” Rizik said. Renaissance uses a fund of funds model to help the investor money go further. Rizik said the original $45 million fund could have perhaps invested in 10 companies. Investing in 10 funds that each invest in 15 to 20 companies extends the reach. “You just have a lot more shots on goal to make an impact,” Rizik said. The first Renaissance fund ultimately attracted $1 billion to the state, Rizik said, far outpacing its $300 million goal. Three additional funds have since been raised. Beyond bringing in investment, Renaissance also sought to address a problem that was just emerging when Rizik was raising the first fund: Major corporations increasingly needed to look externally for innovation. The idea is that corporations invest in the fund, which then distributes the money to other venture capital funds that in turn invest in Michigan’s startups. The startups are then able to grow and scale. The corporations then have access to the new companies as suppliers, partners or windows into the future vision of technology. Rizik said the willingness of corporations to be customers to the startups was one very useful element in attracting outside venture funds. So far, there have been at least 140 pilot programs or contracts between corporate partners and startups in the Renaissance portfolio. “Even in situations where it didn’t lead to that, the knowledge base that comes from one of our corporations meeting with eight cybersecurity companies in the portfolio just gives them a sense of what’s going on in the market that’s valuable to them,” Rizik said. As NVNG is planning to do, Renaissance hasn’t forced the venture funds it invests in to invest in Michigan companies. “We just really require them to engage,” Rizik said, noting Renaissance does a lot of leg work to
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SOURCE: PITCHBOOK
help the funds meet with startups. “We’re pretty comfortable that if funds engage here, on the merits, they’re going to find things.” Forcing funds to invest in a particular state comes with two problems, Rizik said. For starters, adding strings may make it more difficult to distribute the money. “Great venture funds, especially now, have no problems raising money, so they don’t need money that comes with strings,” Rizik said. The other issue is that limiting where the money can be invested could harm the financial returns of the fund, which hurts the original corporate investors and other partners. Rizik said those corporate partners originally invested “almost exclusively” because FIVE-YEAR AVERAGE: $88.8M $161.2M $257.9M they wanted to help the region. As time has gone on, Renaissance has been able to lean on its track record of financial returns and strategic underserved for venture capital,” Rizik said. Buchanan said. benefit to help raise funds. While NVNG is hoping to bring more venBudding entrepreneurs need to see more exAttracting venture capital funds to look at ture capital to Wisconsin, its focus is on the amples of companies that grow and scale in the the state required a reliance on its reputation for state’s startups. state to see that path as a possibility for themgreat research institutions like the University of “We’re not about developing the venture in- selves, he said. Michigan, Rizik said. He noted those institutions dustry,” Thome said. “We focus on how do we “It’s not so much that companies get started across the Midwest give the region an advantage, get capital to the state’s startups.” and moved out of here,” Thome said. “It’s that along with a more loyal workforce, a strong exWisconsin’s challenges in the startup world people have chosen to just go elsewhere to start isting customer base of major corporations and have generally been on two fronts, the availabil- their company instead of being here.” a generally less expensive environment to start ity of capital and the availability of companies to She added the state needs a greater densiand grow a company compared to the coasts. invest the capital in. ty of capital that knows how to grow and scale “Capital around the country is more willing Efforts like NVNG’s, the proposed $100 mil- companies. to look in the Midwest than it was 13 years ago,” lion state fund, the Badger Fund of Funds, which “It’s a fair question,” Thome said of whether Rizik said. “If anything, I guess the value proposi- has nearly $66.7 million across five funds, and the state has enough startups. “I’d have to say tion of the model is just clearer now.” others are changing the state’s status for the we’ve been on the bubble of that for a really long So, can the same model work in Wisconsin? availability of capital. time, but I think we’re about ready to go down “The basic elements that we had here, you Meanwhile, companies like Fetch Rewards, the other side.” have there, almost identically,” Rizik said. Eat Street, Frontdesk and Fiveable and programs When it comes to innovation and venture He said that on a relative basis, Wisconsin is like gener8tor and Titletown Tech are changing capital, Wisconsin corporations are at a variety probably about at the same place it was when Re- the narrative around the state’s entrepreneurs. of different stages. Some have their own venture naissance started its work in Michigan. “We have a very long runway,” said Buchan- funds, some have executives with a little experiFrom 2006 to 2010, Wisconsin averaged $88.8 an, a former investment analyst at WARF. “We’re ence in venture investing and others are just getmillion in venture capital deals annually, a figure certainly on a good path here.” ting started. that increased to $161.2 million from 2011 to 2015 He said there still is a challenge as investors Just like the Renaissance fund in Michigan, and to $257.9 million from 2016 to 2020. Howev- look to areas like Chicago, Minneapolis, St. Louis NVNG could bring companies financial returns, er, the state’s average rank in each of those three or Iowa, but also pointed to the state’s universi- the strategic ability to see potential disruptions periods was essentially 27th, according to Pitch- ties as a potential pool of future entrepreneurs. to their industry and an opportunity to build the book data. It’s ranking in annual deal volume slid “By definition, we have an insane amount of startup ecosystem in the state. two spots to 26th from the late 2000s to the sec- entrepreneurial talent. It’s like, how do we grow “If we do this, this will impact the state and ond half of the 2010s. it and how do we keep it here long enough improve its visibility, it will improve visibility to at“A place like Wisconsin is still tremendously where they actually establish a presence?” tract talent,” Thome said. v
FUNDINGINNOVATION topher Kardatzke. The company gathers alternative stock data from sources across the internet, including corporate lobbying, stock trading by members of Congress and discussion on WallStreetBets, and then pulls the information together into a free dashboard online. The goal is to help bridge the gap in information between Wall Street and retail investors. The Spring Greenbased company raised a $525,000 seed round led by the Idea Fund of La Crosse. DEBTLE Debtle, based in Kohler, aims to help companies and individuals negotiate and settle overdue invoices and bad debt through a cloud-based platform. The company won the NEW Launch Alliance HATCH Event, which was sponsored by New North, last year and this year was selected for the summer 2021 cohort of gener8tor’s gBETA Milwaukee program.
FINTECH STARTUPS
TO WATCH IN WISCONSIN By Arthur Thomas, staff writer
L
ike many industries, the past year has brought plenty of disruption to the financial services sector. Banks were forced to quickly adapt to providing loans under the Paycheck Protection Program, which meant dealing with ever changing guidelines and customers desperate for clarity and a lifeline in a time of turmoil. The COVID-19 pandemic also forced the closure of branches, so banks had to increasingly rely on digital services, accelerating an already existing trend. More recently, users on Reddit and easy access to trading sent some company stocks like GameStop and Koss Corp. on wild rides this winter. Cryptocurrencies and other digital assets have also seen a continued rise in interest, creating wealth for some along with new business opportunities. Wisconsin may be better known for its manufacturing or agriculture, but the state is also home to companies like Fiserv, Northwestern Mutual and American Family, all of which have a strong presence in the financial and insur36 / BizTimes Milwaukee – INNOVATE WISCONSIN | JUNE 7, 2021
ance technology areas. There are also a growing number of startups working in those areas. Here are a few to watch in the coming years: SEQUOIR Based in Green Bay, Sequoir was founded in 2018 by Justin Seidl. It has grown into a blockchain-built exchange to buy and sell digital assets. The company has grown to support the exchange of a number of assets including Bitcoin, Dogecoin and Vertcoin, which was part of its initial focus. Sequoir emphasizes its non-custodial approach and support for the growth of digital asset communities. COINIGY Milwaukee-based Coinigy was launched in 2016. It is a professional cryptocurrency trading platform that gives users control of their exchange accounts in a single interface. It now enables trading on more than 40 cryptocurrency exchanges. QUIVER QUANTITATIVE Quiver Quantitative was started in February 2020 by UW-Madison students James and Chris-
PERCEPTFORM Led by entrepreneur Christopher Perceptions, Milwaukee-based PerceptForm aims to provide cryptocurrency education and services to minority populations. The company is planning to launch PerceptPay, a marketplace that allows users to pay for goods and services with bitcoin, along with PerceptForm, a crypto debit card. Perceptions received $5,000 and free mentorship from the Lubar Entrepreneurship Center on “Project Pitch It” this season. LUCENDITY Founder Tanya Ferrell is drawing on her experience at banks, insurance companies and the Consumer Financial Protection Bureau to develop Milwaukee-based Lucendity into a loan comparison shopping tool. The service makes lender recommendations based on customer values like community impact, ease of digital process or ability to connect with customer service. Lucendity has launched multiple iterations of its project and was part of gener8tor’s Milwaukee Accelerator Studio. VYFLOW Vyflow is a portfolio management platform to help ease communication between startups and investors. The company’s features include an ability for a startup to see which investors are engaging with updates, when and for how long. Investors are able to track portfolio companies, get view-only access to bank info, receive due diligence information and more. Vyflow says it already has startups, accelerators and investors using its platform. The company was part of gener8tor’s Beloit Accelerator Studio. v
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FUNDINGINNOVATION FUND MILWAUKEE RAISES CAPITAL FOR LOCAL BUSINESSES
Jeremy Fojut
Mike Maschek
Ben LeFort
F
und Milwaukee has backed some of the city’s most iconic community projects, and a recent partnership will provide the organization with the means to support small businesses in a new way. Through pitch events, Fund Milwaukee connects the local investor ecosystem with Main Street businesses that need capital. The organization’s investor network has funded projects like Sherman Phoenix and Bublr Bikes and businesses like Purple Door Ice Cream and the National Bobblehead Hall of Fame and Museum. Since 2012, Fund Milwaukee’s investor network has raised $3.9 million across 381 investors and completed eight equity deals 38 / BizTimes Milwaukee – INNOVATE WISCONSIN | JUNE 7, 2021
totaling $2.8 million. The investor network has also produced 201 individual equity deals and 180 individual loan deals with an average loan size of $37,000. Earlier this month, Fund Milwaukee partnered with Honeycomb Credit, a Pittsburgh-based crowdfunding platform that allows small businesses to source capital. BizTimes reporter Brandon Anderegg recently caught up with Fund Milwaukee board members Mike Maschek, Ben LeFort and Jeremy Fojut. The interview has been edited for length. WHO IS INVOLVED IN FUND MILWAUKEE AND HOW DOES IT WORK? MASCHEK: “It can be anyone, and that’s what’s interesting about it. It’s set up as a friends-and-family (investment) model. It’s just Milwaukeeans who get together and are interested in supporting Main Street businesses. We’re providing a venue for businesses to pitch and for investors to hear pitches. The transaction is really between the investor and the business.” LEFORT: “Our mission all along has been to make investing more accessible to people who love Milwaukee and love the businesses they’re connecting with. We don’t endorse deals or endorse businesses; we’re just a platform for connecting. But in that process, it creates community and additional buzz and support for the businesses.” WHAT’S THE ADVANTAGE OF FUND MILWAUKEE’S INVESTMENT MODEL? MASCHEK: “Most people will invest in a 401(k) or fixed stocks, but it almost doesn’t seem real because you can’t really see it. With Fund Milwaukee investments, we’re generating returns. It’s not philanthropy, but you can also go down the street, visit the Sherman Phoenix and see what your dollars are doing. To me, that’s a lot more powerful than looking at a bank or investment statement and seeing a 5% return. You can see the dollars circulating in your community and the impact it has on the investors but also the businesses that are able to hire people. To me that’s the really powerful thing about Fund Milwaukee.” FOJUT: “Investing locally is all about equity.
It’s part of a city’s culture, the urban fabric, and part of what makes you want to live in a city. It’s beyond the ROI, it’s ROC – return on community – and that’s really what I think it’s all about.” LEFORT: “The real advantage is having a community of investors that are supporting a local business. There’s often, especially for new investors coming to a pitch meeting, they get to hear the kinds of questions that other more experienced investors are asking of the business. There’s a lot of investor education that goes on naturally.” WHAT DOES THE HONEYCOMB PARTNERSHIP MEAN FOR FUND MILWAUKEE? MASCHEK: “They have a modern platform and the ability to provide infrastructure for businesses to receive funds and pay out funds to investors. It’s a way for Fund Milwaukee to bring that sort of platform to Main Street businesses in Milwaukee. The Honeycomb model provides us the ability to scale the friends-and-family model in a way that would be more challenging to do without it.” FOJUT: “I think it’s about the capital stack too. You get $37,000 on average here but you need $100,000 to hit your fundraising goal. (Honeycomb) is another tool in your toolbox to get to your goal.” WHAT ROLE COULD FUND MILWAUKEE PLAY IN SMALL BUSINESS GROWTH AS WE EXIT THE COVID-19 PANDEMIC? MASCHEK: “We’re doing a lot, but there’s so much more potential for this model. It’s about getting this concept in front of people and when you do it, people are interested. How do we touch more people with this idea?” FOJUT: “This can be that first steppingstone for people. We need to scale the amount of awareness of Fund Milwaukee and the amount of investors in it. I think that would be the future goal, continue to grow this and know it’s a place to start and that you can make it here.” LEFORT: “What a way to build more Milwaukee icons. We can do this together. It’s a vision that I think younger generations are into, they get it, they love local businesses, and this is a way to keep money, jobs, investments and interest payments local and build up the whole ecosystem.” v
HEALINGBETTER
HEALTH CARE STARTUPS
TO WATCH IN WISCONSIN
Valley Angels Investment Network. The company said it plans to continue its market expansion with the infusion of capital.
As
health care workers have been on the front lines of battling the COVID-19 pandemic, emerging and innovative companies in Wisconsin have doubled down on their efforts to change the way care is delivered, pioneer new treatments and streamline payment systems. Here are just a handful of Wisconsin startup companies making notable advancements related to health care that are poised to grow in the coming years:
Raymond Seaver, Jr., founder and chief executive officer of Milwaukee-based zizzl LLC.
ZIZZL LLC Milwaukee-based zizzl LLC is focused on streamlining payroll services and employee benefits administration for small and mid-sized companies in southeastern Wisconsin. The five-yearold company was founded by serial entrepreneur Raymond Seaver, Jr., who previously helped build another startup, Chicago-based bswift, which was acquired by Aetna for $400 million. Last year, after raising $630,000 during its first round of funding, zizzl launched a new health care benefits platform aimed at helping businesses with fewer than 100 employees. The zizzl Health platform makes use of the newly available Individual Coverage Health Reimbursement Arrangement (ICHRA), which allows employees to purchase a health insurance plan that they want and receive reimbursement from their employer for a portion or all of the premium. The upshot is employers can give their employees pre-tax money to purchase the plan of their choosing, rather than buying it for them. KIIO Fitchburg-based Kiio introduced its appbased therapy program for people with muscubiztimes.com
loskeletal issues in 2017, several years ahead of when the COVID-19 pandemic would accelerate the widespread adoption of digital therapeutics. Kiio has partnered with WEA Trust since 2017, when the Madison-based provider of health insurance plans for public employers invested $1 million in the startup along with contracting its services for WEA Trust members. For patients, Kiio’s platform offers screening to determine the type of back pain they have and suggests exercises to mitigate it. For health insurance companies and employers, the platform can help reduce unnecessary medication and procedures, driving down costs. In May, the company announced it has expanded its lower back pain management program to also include programs for knee, neck and hip pain. Madison-based Kiio developed an app-based program for people with musculoskeletal issues that includes on-demand exercise therapy and interactive coaching.
SMARTCARE SOFTWARE Eau Claire-based SMARTcare Software developed a platform for homecare management that helps track new clients, manage homecare operations and ensure compliance and care quality. The software is used by both agencies and caregivers. As the demand for homecare continues to swell and caregiver retention remains a challenge for the industry, SMARTcare is positioned to grow. In 2020, the company announced the completion of a funding round led by the Idea Fund and Rock River Capital with participation from Pablo Capital, MUKC Fund I and the Chippewa
JAKE HILL PHOTOGRAPHY
By Lauren Anderson, staff writer
Milwaukee-based Healthfuse’s leadership team includes Nick Fricano, Jon Myhre, Kelly Welch and Nick Corrao.
HEALTHFUSE Milwaukee-based Healthfuse provides revenue cycle vendor management services to hospitals and health systems. In an increasingly complex health care reimbursement and revenue cycle environment, the company works to help health care organizations reduce costs while increasing collection performance of vendors. Healthfuse doesn’t charge a fee upfront, but rather retains about one-third of the overall savings it identifies for clients. The company, which was founded in 2011, hit its stride in 2019, growing by 40% year-over-year and adding 53 hospitals to its portfolio, for a total of 153. And in late 2020, it attracted an undisclosed investment from Birmingham, Alabama-based private equity and venture capital firm New Capital Partners. AIQ SOLUTIONS Born out of the University of Wisconsin Translational Imaging Research Program, Madison-based AIQ Solutions developed medical software technology that provides early intelligence about how well oncology treatments are working. The platform analyzes medical imaging data to identify patients’ legions and produces intelligence to inform their treatment decisions. For six years, two of AIQ’s co-founders leveraged $8 million in funding to develop the methodology underlying AIQ’s products before the company incorporated in January 2015. Today, the information generated by AIQ is used by pharmaceutical companies for drug development and by hospitals to optimize therapies. With one product now commercialized, AIQ has a pipeline of new products for various diseases that could position it for future growth. v INNOVATEWI.COM / 39
HEALINGBETTER
VERSITI ADVANCES BLOODRELATED DISCOVERIES
IN FIGHT AGAINST COVID-19 By Lauren Anderson, staff writer THE INCREDIBLE SPEED with which scientists developed vaccines against COVID-19 – from uncovering the viral sequence of SARS-CoV-2 in January 2020 to getting shots in the arms of frontline workers in December – has been a widely celebrated breakthrough with global impact. More locally – and more quietly – researchers with Milwaukee-based Versiti Inc. have worked at a similarly expedited pace, redirecting their attention from other blood-related projects to advancing discoveries related to COVID and vaccine complications throughout the pandemic. “Normally, we think of research as taking years to go from point A to point B,” said Dr. Roy Silverstein, senior investigator and interim director of the Blood Research Institute at Versiti BloodCenter of Wisconsin. “With some of these (COVID-related) discoveries, we were able to go from A to B to C in months – in some cases even weeks – rather than years. That’s really a testament to the quality of the science here in Milwaukee and innovative spirit of the investigators at 40 / BizTimes Milwaukee – INNOVATE WISCONSIN | JUNE 7, 2021
Versiti who were able to take the knowledge they had gained from years of research and immediately apply that to the world of COVID.” At the pandemic’s onset, Versiti initiated a convalescent plasma program for what at the time was an investigational therapy to treat patients severely affected by the virus. The plasma treatment, which involves transferring the antibodies from recovered patients to critically ill patients, had previously been used to treat Spanish flu and Ebola virus patients, but its effectiveness for treating COVID-19 was unknown at the time. Versiti – which includes the BloodCenter of Wisconsin in Milwaukee and blood centers in Illinois, Indiana, Michigan and Ohio – was among the first in the country to begin receiving plasma donations and led a large clinical trial with Froedtert & the Medical College of Wisconsin to determine its effectiveness. That program received a visibility boost when a Children’s Wisconsin pediatric surgeon,
who tested positive in mid-March 2020 for COVID, donated his blood to Versiti for treatment. Silverstein attributed Versiti’s existing partnerships with Froedtert & MCW and Children’s with that program being able to take shape so quickly. “It actually happens all the time in Milwaukee – the partnership between the research community and the clinical community, they’re led through the Medical College, and it’s really what drives our innovation,” said Silverstein, who is also the Linda and John Mellowes Professor and Chair of the Department of Medicine at MCW. In the end, the plasma treatment showed some benefit to select patients, but the benefits weren’t as widespread as hoped for. However, the effort provided lots of blood and DNA samples for Versiti to continue researching the body’s immune response to COVID, Silverstein said. As the virus continued to spread, hospitals globally observed a trend of increased blood clotting among hospitalized COVID patients. But it was unclear whether increased doses of blood thinners would be safe and effective for patients. Versiti was granted three multi-center research contracts from the National Institutes of Health totaling $5 million to coordinate nationwide clinical trials aimed at determining the best treatment plans for preventing blood clots in COVID patients. The studies included hospitalized COVID patients, those in outpatient settings and those who have been discharged. Results from the trials showed that full-dose blood thinner treatments for hospitalized patients outside of the ICU reduced how many people required vital organ support. “In less than a year, the entire protocols have been written, funded, studies completed and manuscripts completed,” said Dr. Lisa Baumann Kreuziger, medical director of hematology for Versiti and the research director for the project. The findings from the studies could be applied to future infectious diseases with similar patterns, as well as other, more common health conditions, Baumann Kreuziger said. “The focus is on COVID-19 for now because it’s the most pressing public health issue that we have,” she said. “But 600,000 to 900,000 Americans every year get blood clots, and that’s outside the pandemic, so we are trying to figure out how to care for all of those patients better.” Meanwhile, Versiti researchers were alerted in March by colleagues in Europe, where the AstraZeneca COVID-19 vaccine was widely distributed, that a small number of patients were presenting with blood clotting and low platelet counts after receiving the vaccine. Later, blood
clots were also discovered among a very small number of patients who received the Johnson & Johnson vaccine in the U.S. Versiti researchers found that the condition – called vaccine-induced immune t h ro m b ot ic -t h ro m Roy Silverstein bocytopenia (VITT) – was similar to another familiar disease, called Heparin Induced Thrombocytopenia. “We know how to treat (HIT), we know there is a special class of blood thinners, called direct acting anticoagulants, so we immediately were able to educate physicians around the world that when you see a patient with the syndrome that you should not treat them with heparin. Instead, you should be treating them with these newer classes of blood thinners,” Silverstein said. “And that was really a dramatic discovery.” Versiti quickly developed a diagnostic test-
ing menu for those suspected to have VITT that determines the presence of platelet-activating antibodies in patients’ blood, with the goal of helping clinicians accurately diagnose patients and provide them the correct therapies. Ruchika Sharma “We all know that vaccination is the key to controlling this pandemic but the goal is still to increase awareness and educate our clinicians so we can aid in prompt and accurate diagnosis and treatment of this very rare side effect – but a serious side effect – that we’re seeing,” said Dr. Ruchika Sharma, assistant investigator with the Versiti Blood Research Institute and associate medical director of the Platelet and Neutrophil Immunology/Hemostasis Reference Laboratories at the BloodCenter of Wisconsin. Versiti researchers say the past 15 months underscore the importance of continually funding
research – the basic science that underpins discoveries in times of crisis – before the crisis presents itself. “It really speaks to the need to fund infrastructure prior to understanding it’s going to be required,” Baumann Kreuziger said. Lisa Baumann “No one expected Kreuziger there to be a pandemic in 2020, but because we had decades of investment to all of these (research) infrastructures, we were ready to move quickly,” Silverstein said. He said each of the recent discoveries makes clinicians more effective at responding to the ongoing COVID crisis and vaccine rollout, while also preparing the medical community for the next wave of the pandemic – or a new virus altogether. “With what we’ve learned from this one, we’ll be much more prepared to deal with the next one,” Silverstein said. v
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With Cologuard, Madison-based Exact Sciences analyzes fecal samples for strands of cancerous or precancerous DNA.
EXACT SCIENCES GROWING BEYOND COLOGUARD By Lauren Anderson, staff writer EXACT SCIENCES has long been synonymous with its non-invasive colon cancer screening test Cologuard, but it could soon be known for a broader array of cancer diagnostic technology that’s in the pipeline at the Madison-based company. The biotech company has made a series of acquisitions in the past two years, staking a claim in more corners of the cancer diagnostics market and widening its scope to include screening for more types of cancer, identifying the right course of therapy for cancer patients and monitoring cancer’s recurrence. Exact Sciences first introduced Cologuard – an at-home screening test that uses protein and DNA biomarkers to detect the presence of colon cancer in stool samples – after receiving U.S. Food and Drug Administration approval in 2014. The company has seen massive growth since 42 / BizTimes Milwaukee – INNOVATE WISCONSIN | JUNE 7, 2021
then, thanks to growing demand for the test and expanding insurance coverage for it. In November 2019, Exact made a $2.8 billion acquisition of California-based Genomic Health, which expanded its diagnostics into breast cancer with Genomic’s Oncotype DX test. Brian Weinstein, an analyst with investment firm William Blair & Co, points to the Genomic acquisition as a “lightbulb moment” that signaled Exact leadership’s larger, long-term vision of “not just being the Cologuard company but being the leader in all cancer diagnostics.” Exact has doubled down since then on a series of acquisitions to build out its testing technology capabilities. In spring 2020, it acquired two Phoenix-based diagnostic companies, Paradigm Diagnostics, Inc. and Viomics, Inc. Those were followed by another acquisition later that year of England-based epigenetics company
Base Genomics for $410 million. “The takeaway on those other deals is that this is a company that is willing to bring in any technology that they think they need to in order to solve the problem at hand,” Weinstein said. Late last year, Exact took what chief executive officer Kevin Conroy described as a “giant leap” toward its goal of commercializing a blood-based multi-cancer screening test when it announced its acquisition of Massachusetts-based Thrive Earlier Detection Corp. in an eye-popping $2.15 billion cash-and-stock deal. Thrive developed a liquid biopsy test, called CancerSEEK, which – in a 10,000-patient prospective study – showed promising results in detecting 10 types of early-stage cancer before symptoms occur. Exact Sciences has been working for years with the Mayo Clinic to identify and validate biomarkers across various types of cancers with the goal of bringing more blood-based cancer screening tests to market. Conroy has said he expects blood-based, multi-cancer screening to be as routine as a common blood test for other health conditions a decade from now. “One of the greatest opportunities to eradicate cancer is through a multi-cancer screening test,” he said. Exact has closed on two more acquisitions since the beginning of the year: Ashion Analytics, LLC, a sequencing lab in Phoenix Arizona, and PFS Genomics, a company that has developed a mechanism for identifying which women with early-stage invasive breast cancer need radiation therapy. Driving Exact’s acquisition strategy, Conroy said, is the question of whether the new test or technology will significantly impact patient care. “That’s where everything starts,” Conroy said during a May earnings call. “The PFS deal is an example of that. We believe it’s going to dramatically change how certain patients with breast cancer are treated.” The vision, Conroy said, is to create a “flywheel effect” by building a suite of tests that can help patients detect cancer earlier and better inform their treatments. “We have a responsibility now to bring more and better tests and services and data and data insights and artificial intelligence to the physicians that treat patients and the patients who desperately need new ways to be treated,” he said. That vision will take some time, however, as the success of new testing products are dependent on factors like FDA approval, Medicare reimbursement and broad commercial insurance coverage, and inclusion in U.S. Prevention
Services Task Force guidelines. For example, while preliminary data has been promising for its liquid biopsy multi-cancer screening test, the company expects clinical trials – which could involve as many as 100,000 patients – to take a few years before it would seek FDA approval for the product, Conroy told investors. Meanwhile, Exact continues to see growth in its flagship product. Despite the national decline in in-person doctor visits, revenues from Cologuard and Exact’s Biomatrica products were up 10% in the first quarter compared to a year ago. There’s also more growth potential for the Cologuard product on the horizon. New guidelines released last month by the USPSTF lowered the recommended age for beginning colon cancer screenings, from 50 to 45. That decision widens Exact’s potential customer base by roughly 19 million people. In 2019, the FDA approved Cologuard for average-risk individuals beginning at age 45, and the task force included Cologuard among the recommended screening test options when it issued its new guidance. Since first being included in the USPSTF recommendation in 2016, Cologuard has been used
to screen more than 5 million patients in the U.S. Exact’s revenue has grown year over year, from $266 million in 2017 to just under $1.5 billion in 2020. The screening segment of the business, which includes Cologuard, brought in roughly $815 million last year. The company is projecting total revenues of roughly $1.7 billion at year’s end. However, Exact Sciences is still not profitable, though its net losses did narrow from $134.6 million, or 91 cents per share, in the first quarter of 2020 to $31.2 million, or 18 cents per share, in the first quarter of this year. That kind of financial picture is typical for precision oncology companies, Weinstein said, pointing to competitors Guardant Health, Invitae Corp. and Natera, Inc. He noted the company isn’t expected to be profitable in the near-term as it continues to invest in its infrastructure, R&D and clinical trials. “There is a massive amount of investment that is going on to not just support product development, which of course is critical and is the foundation, but to also support infrastructure buildout in the sense of having laboratory operations, health care IT systems that are linked in, a salesforce
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that’s built out,” he said. “There’s a lot of things that go into the development of these products that extend beyond ‘do they work or not?’” That’s not to mention the cost of bringing in leaders who can steer a company with big aspirations like Exact. “World-class individuals aren’t cheap,” Weinstein said. Profitability will likely depend on the outcomes of future clinical trials and potential insurance coverage for its new products. When it comes to competitors, Weinstein said Exact is in a favorable position of being able to build off its existing, successful Cologuard infrastructure for the growth of other testing products. “A lot of these other guys don’t really have that kind of core product in the space to sort of use as a jumping off point,” he said. Exact isn’t likely to rest on its laurels, however, as the “arms race” in the precision oncology market ramps up, Weinstein said. “Knowing Kevin (Conroy), he’s not going to stop,” he said. “He’s going to keep putting the pedal down and is going to keep spending and investing.” v
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HEALINGBETTER Mike Anderes
PANDEMIC DROVE DIGITAL TRANSFORMATION IN HEALTH CARE INDUSTRY president and chief executive officer Mike Anderes said video visits and remote patient monitoring were more than a stopgap measure – they have permanently changed health care delivery going forward.
F
ive years ago, Froedtert & the Medical College of Wisconsin launched Inception Health LLC, an innovation arm focused on solving health care problems and improving the patient experience. Housed within the digital health hub, Inception’s staff vet and implement new innovations, remotely monitor its digital solutions, and identify other promising companies to invest in. The groundwork Inception had been laying for years to help Froedtert & MCW adopt more digital health tools proved useful when the health system had to quickly switch wholesale to virtual appointments last spring. In a recent interview with BizTimes Milwaukee associate editor Lauren Anderson, Inception 44 / BizTimes Milwaukee – INNOVATE WISCONSIN | JUNE 7, 2021
WHAT HAS INCEPTION’S ROLE BEEN IN RESPONDING TO THE COVID-19 PANDEMIC? “The pandemic probably drove more digital transformation of our industry – and not just ours, but others – than the last five years combined. … The work (we’ve been doing) paid off; when we had to immediately move to a virtual model of care, we were able to do it in about a week-and-a-half period of time. So, it was fast. We moved from almost 100% in-person care to 75% virtual care in that one-week period of time. And so that meant every single provider that we have was getting trained or dusting off their old learnings about how to do virtual visits, telephone visits, other means of connecting with patients without having to come in. That made it so within a few weeks, we were almost seeing the same number of patients as pre-pandemic because we were able to turn that service on so fast.” “But we just layered on a whole bunch of additional digital capabilities to help people get COVID tested, to get a COVID care kit to their house, monitor them digitally during their disease journey. And if they had any problems, 24/7, we were able to help them remotely.” INCEPTION WAS ALREADY DOING SOME REMOTE MONITORING OF PATIENTS BEFORE COVID. HOW HAS THAT EVOLVED? “What we have now is a digital therapeutic formulary. So just as you have a drug formulary, we have the ability to prescribe digital tools for people that might have diabetes or depression or are pregnant. Every one of these tools engages with that individual around their condition on a daily basis in their home. It could be something where they’re entering data to let the care team know how they’re doing. If you’re pregnant, you might be getting on a scale to check your weight and doing blood pressure to make sure your blood pressure is in range. And then that data is coming back to the care team. … We have
something like 35 or 36 different conditions we prescribe digital prescriptions for. “That changes what was a visit-based structure – where you go in to see your doctor for a visit and then maybe 3 months later you go back in to see your doctor and everything that happened in between is an unknown – to something where we are actually able to help people every day of the year with their conditions.” HOW DO YOU EXPECT UTILIZATION OF THOSE SERVICES TO CHANGE? “It will continue to grow. The idea that you can sort of have your care team in your pocket, or with you whenever you’re dealing with your condition, not only when you go in to see them for a visit, that’s a change we’re not going to come back from. … Because the reality is people have medical conditions every minute of their day, and to try to manage them for 15 minutes once every month or every few months is not adequate.” THERE’S BEEN SO MUCH CHANGE AND DISRUPTION IN THE HEALTH CARE INDUSTRY THIS PAST YEAR. DO YOU THINK THE PACE OF CHANGE WILL CONTINUE MOVING FORWARD, OR WILL PEOPLE BE ABLE TO CATCH THEIR BREATH FOR A BIT? “The people who work in the industry, I think, would love to take a few deep breaths but I don’t know if that’s going to be possible. One of the things we’ve seen is that when health care becomes more digital, it really expands the number of people or types of organizations that start to try to participate in health care. We see that with big companies, the retailers, the Walmarts and Walgreens. Those organizations saw a lot of growth in this period of time in their health care services – I don’t see that slowing down – which really means everyone in the industry has to put their foot on the accelerator in order to be successful. … On a national scale, the people who are digital leaders, they’re going to keep making more leaps and bounds, whereas those that are digital laggards are going to be far behind. Over the next few years, you’ll see the separation for those with really good digital expertise that are able to meet the demands of the consumer.” v
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ANDREW WEILAND
W
isconsin has an incredible history of innovation. In the early 1900s the state’s largest city, Milwaukee, was known as the “Machine Shop of the World,” where craftsmen, inventors and tinkerers created new products and launched companies, including some that remain household names today. Of course, one of Wisconsin’s most iconic companies is Harley-Davidson, founded by William Harley and Arthur, Walter and William Davidson making motorcycles in a small shed behind the Davidson family’s Milwaukee home in the early 1900s. There’s a good chance the hot water in your home is heated by an A.O. Smith water heater. The Milwaukee-based Fortune 1000 company has a long history of innovation. In 1899, A.O. Smith developed a lightweight steel car 46 / BizTimes Milwaukee – INNOVATE WISCONSIN | JUNE 7, 2021
INNOVATION DRIVES WISCONSIN’S ECONOMY frame, supplied them to major automakers and in 1921 the company created the first automated frame production line. The company developed a wide range of products including the pressure vessel for oil refining and glass-lined beer kegs, brewery tanks and residential water tanks. Glass-lined water heaters remain the industry standard to this day. Water heaters are the main business today for A.O. Smith. That wasn’t the only Wisconsin innovation that has made our homes more comfortable. Johnson Controls founder Warren Johnson invented the first thermostat and patented it in 1883. That led to the launch of a company that today has worldwide annual sales of more than $22 billion and maintains its operational headquarters in Glendale. During the harsh Wisconsin winters, many of us endure chapped lips. Seeking a solution to that problem, Alfred Woelbing started making lip balm by hand in 1937, pouring the medicated lip balm into jars in his kitchen, in an attempt to remedy cold sores. He started selling it to pharmacies, visiting them one by one. Now known as Carmex, the Franklin-based company continues to thrive and expand. Summer weather in Wisconsin has also inspired innovation. After rowing a boat across Okauchee Lake on a hot summer day, Ole Evinrude was motivated to invent the first outboard motor in 1907. He formed Evinrude Outboard Motors, which was eventually acquired by Bombardier Recreational Products. BRP retired the Evinrude brand in 2020. I could go on, I’m sure you get the point. Innovation was critical to Milwaukee and Wisconsin’s economic heyday as an industrial powerhouse. In recent decades, Wisconsin’s economy has evolved and become more diversified. Manufacturing remains important here but is a smaller slice of the state’s economic pie. The state’s economic image has suffered, with Wisconsin perceived by some as a Rust Belt state with a modest amount of startup activity, innovation and venture capital, especially compared to the East and West coasts. But amazing innovations are happening in the Badger State and innovation must continue
to be fostered here for the state’s economy to remain healthy and to grow. Wisconsin’s most exciting and important companies right now are its most innovative. Two in particular: Epic Systems and Milwaukee Tool. In 1979, after getting her master’s degree in computer science from the University of Wisconsin-Madison, Judy Faulkner co-founded Human Services Computing, with a $70,000 investment from friends and family. Now known as Epic Systems, the medical records company is a giant in its field, and Faulkner is a billionaire. Based in Verona on a sprawling 1,100-acre campus, the company has 10,700 employees and had more than $3.3 billion in revenue in 2020, according to Forbes. Power tools might seem a lot different than electronic medical records, but high-tech innovation has also led to tremendous growth in recent years for Brookfield-based Milwaukee Tool. The cover story of this publication delves into the innovative culture and methods of Milwaukee Tool. That commitment to innovation, especially in the use of lithium-ion batteries, has led to an explosion in the company’s Wisconsin footprint. The company, which is owned by Hong Kong-based Techtronic Industries Co. Ltd., will likely top $6 billion in revenue this year and has consistently grown sales more than 20% annually. It has expanded its Brookfield campus twice and now plans to add a second corporate campus in Menomonee Falls, a plant in West Bend and an office in downtown Milwaukee with up to 2,000 employees. The company also continues to grow its Imperial Blades subsidiary in Sun Prairie and its Empire Level subsidiary in Mukwonago. This special Innovate Wisconsin issue of BizTimes Milwaukee is full of many other stories of exciting, innovative Wisconsin companies. Our state’s economy needs them and many other innovative minds, businesses, educators and investors to grow and prosper to create a brighter future for our communities and families. v
ANDREW WEILAND Editor, BizTimes Milwaukee
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