REGION’S BUSINESS 17 OCTOBER 2013
INNOVATOR OF THE YEAR On Nov. 14, the inaugural MARCUM INNOVATOR OF THE YEAR awards will recognize companies that have made great strides in innovation in tech, healthcare, energy and business management. And the nominees are...
for leading by example.
PNC is proud to support the 2013 Marcum Innovator of the Year Awards.
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StreamTV Networks & Nooch
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BizEquity & Legal Science Partners iPipeline Rajant Nemours/A.I. duPont Globus Medical Continuum Health
INNOVATOR OF THE YEAR
4 Striving For Innovation Is
Never A Wasted Effort
23 #PhillyStartups: Please
Follow The Money 20 Judge Profiles
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Griesing Law
TriState HVAC, StratIS EMS, Lucidity Health & HealthQX
We are proud to support the inaugural
Marcum Innovator of the Year Awards and salute the honorees for their work in pioneering new advancements in the fields of health/biotech, technology, business management, and energy.
inspire
www.morganlewis.com Š2013 Morgan, Lewis & Bockius LLP
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IDEAS VISIONS
Striving For Innovation Is Never A Wasted Effort
David Glusman, CPA, DABFA, CFS, Cr.FA, CFF is Partner-in-Charge of Marcum LLP’s Philadelphia office.
CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.
Innovation is defined as the application of better solutions that meet new requirements, inarticulate needs, or existing market needs. That’s what Wikipedia says. When looking at businesses, innovation is really taking an idea or thought about how to improve a process, product, way of life or otherwise make things better than they are today, while achieving profitability and sustaining growth. In our business working with emerging and middle market companies, we observe innovation in many different forms. For example, one client was able to double their profit margin from 10% to over 20% by refining the application of engineering technology to certain aspects of their manufacturing process. Another client, a software provider to the banking industry, was able to look forward in time and see additional applications for their software. They recruited expensive talent with specialized computer programming capabilities, invested several million dollars in software upgrades and began realizing 40 percent-plus gross profits as well as substantially increased sales. This all stemmed from a visionary leader willing to provide capital and allow the technical leadership enough time to provide a state-of-the-art enhanced product. One healthcare professional I advise has virtually built an empire by constantly innovating new ways to connect with his patients. His ingenuity, creativity and talent has won him national acclaim, but at the heart of his enterprise is the genuine desire to leave the world a better place than when he entered it. That passion is the driving motivator behind his continued success in a very competitive marketplace. Also on the healthcare front are those medical entrepreneurs who have embraced changes in technology, the advent of the Affordable Care Act, the economic realities of the managed care system to transform aspects of healthcare in order to provide more cost-effective, improved patient outcomes. These led to the creation of new organizations providing specialized areas of healthcare service and the advent of increased efficiency between physicians and hospitals utilizing co-management agreements and other forms of appropriate cost-saving sharing arrangements. What all of these innovators have in
common is vision and passion. This hasn’t changed much since the earliest days of the Industrial Revolution. Many innovations come from simple dreams. Others come from contemplating a problem in daily life and wishing for a solution. Often innovation is a response to an initial impression that something is impossible. Many people claim that the impossible simply hasn’t yet been contemplated properly.
TO THOSE WHO CONSIDER FAILED ATTEMPTS AT INNOVATION TO BE WASTED TIME, I CAN ONLY SAY THAT YOU NEVER GET TO 20 PERCENT WITHOUT ATTEMPTING 100 PERCENT.’ —DAVID GLUSMAN
ÉGhmabg` bl fhk^ bffbg^gm maZg ma^ impossible . . . what we must always foresee is the unforeseen.” — Victor Hugo, Les Miserables ÉHk]bgZkr i^hie^ [^eb^o^ hger bg ma^ possible. Extraordinary people visualize not what is possible or probable, but rather what is impossible. And by visualizing the impossible, they begin to see it as possible” — Cherie Carter-Scott É:ee mabg`l Zk^ ihllb[e^ ngmbe ma^r Zk^ proved impossible and even the impossible may only be so, as of now.” — Pearl S. Buck Those who innovate simply don’t believe in the impossible. Innovation has driven so much of our economic and social advance that it’s hard for us to imagine our world without significant innovation and improvement. Even negative innovation creates more
positive innovation. When the sinister mind figures out how to counterfeit money, the innovation begins to determine the methods for countering the counterfeit. Even the most sophisticated circumstances of computer hacking, which attempts to disrupt not only normal commerce but also government and healthcare, lead to innovation of more detailed encryption methodologies and further safeguarding of crucial data. Innovation does not come without cost. Much of the business world refers to the 80/20 rule, accepting that a 20 percent success rate on ingenuity is a profitable return. We also recognize this means that 80 percent of the time spent on innovation is effectively wasted. To those who consider failed attempts at innovation to be wasted time, I can only say that you never get to 20 percent without attempting 100 percent. For every invention Thomas Edison created successfully — the telegraph, the light bulb, the original phonograph, movie camera and the mimeograph machine — he had many failures. A^ bl h_m^g jnhm^] Zl lZrbg` ÉB aZo^ ghm failed. I’ve just found 10,000 ways that won’t work.” On the continuum between failure and success, we don’t always know precisely where we stand. Again, quoting Edison, ÉFZgr h_ eb_^Ìl _Zbenk^l Zk^ i^hie^ pah ]b] ghm realize how close they were to success when they gave up.” Some of our best and brightest minds set out on paths that most of us believe will go nowhere. The role of leadership in the entrepreneurial process of innovation is to provide the freedom and the resources for those who truly have the ability to create and then stand back and let them do so. The vast majority of biomedical research ends up in failure. The few successes that emerge from the many failures dramatically change our lives. Salk, Sabine, Pasteur and thousands of others spent thousands of hours at a lab bench testing a theory that failed. Each failure brought them closer to ultimate success. Their names are so well known because they didn’t give up, believing that the next idea would be the one that would work. Innovation is good for business, it’s good for our society, it’s good for our lifestyle and it’s what makes our world a better place today than it was yesterday.
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INNOVATOR OF THE YEAR
Stream TV Brings 3D Viewing To The Masses as when color replaced black and white television displays, and believes its technolBY ROSELLA ELEANOR LAFEVRE ogy means the eventual Television in 3D is still new enough that the technol- demise of strictly-2D ogy is fairly expensive in the general consumer market, video because the 3D and it’s fairly limited in that it requires viewers to wear animation is fully adjustspecial glasses for only select programming that’s avail- able — meaning the viewer can customize the able in the 3D format. Philadelphia-based Stream TV Networks, Inc. has level of 3D to their liking. And the price of the designed and launched 3D viewing technology that converts all programming into a 3D format in real technology will be only time that does not require the use of special glasses. incrementally higher than This technology is called Ultra-D and is the new standard 2D. On the consumer side, media company’s most innovative product in the form of a auto-converter box that users can plug the Ultra-D technoltheir cable, satellite, Blu-ray or DVD boxes or play- ogy can be used with PCs, ers directly into for constant 3D streaming without electronic picture frames, Android- and Windowsthe use of glasses. Stream TV calls this innovation as revolutionary based tablets, TVs and other displays, and set top boxes with browsers for connecting TV to the web. The technology isn’t just useful for consumers; it has applications in medical, military and industrial fields. With a staff that has many years of experience in 3D without glasses technology development, Stream TV is leading the way in a field that large companies have known would be the future of television for years.
Category: Tech (small)
The company says its innovation is several years ahead of the schedule other companies had for the development of such technology. Major companies such as Qualcomm, Pegatron and Hisense have publicly announced adoption of the technology.
Nooch Eliminates The ‘IOU’ With Mobile Tech Category: Tech (small) BY BRANDON BAKER Nooch is a product that finds strength in simplicity. First crafted in 2011 by Cliff Canan and a team of fellow graduates from Duke University, Nooch is a three-step, person-to-person payment app that aims to completely throw out the concept of “IOUs.” “I started the company for two reasons: One, is that I paid ATM fees more than I wanted to, because my bank was in the north and I was down south; and two, a lot of friends borrowed money and never paid it back,” Mr. Canan said. “The whole point is to be mobile: to pay someone anytime, anywhere.” Users first set up an account through the iPhone app, then proceed to link the iPhone app with a checking account and find friends through connectivity with Facebook. The possibilities for the tool are endless: repaying friends for cab fare, picked-up bar tabs, etc. The tool has yet to officially launch, but Mr. Canan initiated a pilot program with Drexel University earlier
this year to work out kinks. “We were strict about who participated in the pilot, and the reason for that is that regulatory compliance is by far the biggest challenge to our business,” Mr. Canan said. “It’s not technology or marketing, it’s the compliance. There are so many hoops — federal laws and state laws. Each state has different laws for money transfers, which is what we are. They’re designed for big banks, the laws were written decades ago and they require a lot of money upfront to even enter the market. It’s taken us two years just to get where we are now.” Nooch, a predominately bootstrapped venture managed by a team of three out of Drexel University’s incubator space, will launch a second pilot program by the end of the year.
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INNOVATOR OF THE YEAR
BizEquity
business owner needs to know is
Category: Business Manage- what’s their business worth. So, we use the internet and cloud computing ment BY CAIT O’DRISCOLL Created for small business owners, BizEquity democratizes essential business valuation and performance information. Their mission is to provide affordable and accessible business valuation information for small companies to help them and their advisors understand their company’s full potential. BizEquity estimates that 80% of small business owners don’t know the value of their company, and that 7.7 million businesses will change hands in the next ten years. Their goal is to help small businesses, whether they are looking to grow, sell, buy, or protect. “The number one question every
to find the better, faster, cheaper way to do it, and put it up online for business owners so that they can afford it,” president, founder and CEO, Michael C. Carter said. Mr. Carter founded the company in 2012. BizEquity is the leading business valuation system of its kind; the company has valued over 12 million businesses to date and has three patents making it the only patented online business valuation company. “What’s cool is we’re a local company based in Wayne, Pennsylvania solving a global problem with a world-class board of directors,” Carter said. The company’s board of directors includes, among others, Michael Abbot, former VP of Engineering at Twitter and Warren “Pete” Musser, Founding investor of Comcast, Novell, CTP and QVC.
Legal Science Partners Category: Tech (small) BY DARRY COGGSHALL Legal Science Partners is a private company with a public mission: to improve access to robust data on policy differences across geography and time, in order to support meaningful analysis of the intersection of policy and outcomes. Scott Burris, a Temple Law Professor and Heidi Grunwald, Deputy Director of Temple’s Public Health Law Research Program founded Legal Science Partners to “bring law into the world of big data.” Licensed by Temple, LSP brings to market LawAtlas technology. LawAtlas is an online platform developed to be the central, authoritative place for the systematic collection, measurement and display of key laws related to health. The LawAtlas
system is used by state and local health departments, the Centers for Disease Control and Prevention, and researchers from around the country. Mr. Burris said, “tracking trends in and characteristics of laws is important. For people at all levels involved in policy-making, knowing what the law is and where it has an impact promotes accountability and helps define policy momentum. Researchers, too, need data about the state of the law to build an evidence base for what works and what does not.” LawAtlas has two main components: LawAtlas.org, which publically displays the law and legal datasets through reports and interactive maps; and the WorkBench, the content management system used to produce the datasets. WorkBench is the only software system designed especially for collecting, coding and displaying legal data.
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INNOVATOR OF THE YEAR
iPipeline Revolutionizing Insurance Industry Category: Technology (Large) BY DARRY COGGSHALL iPipeline identified a problem within the insurance and financial services markets and created a solution through its on-demand service. The iPipeline Customer Network, provides a clean technology as an all-in-one software suite, enabling the insurance industry to market, sell, and process faster. iPipeline’s channel solutions for carriers, distributors and producers automate activities for quoting, forms processing, illustrations development, requirements ordering, contracting, and content distribution. The company provides the process automation and seamless integration needed to make a sale by aggregating over 125 carriers, 850 distributors and 400,000 agents in a single, Web-based environment — the iPipeline Network. The network generated over $3 billion in premiums in 2008. iPipeline’s system integrates directly with 850
Web sites including the industry’s largest banks, broker-dealers and insurance distributors via a Software as a Service (SaaS)-based model. This integrated approach enables insurance companies to automate sales distribution, eliminates point-ofsale mistakes, and streamlines the issuance of insurance policies. iPipeline provides an integrated SaaS platform to the Life and Annuities industries on a global basis. The platform includes CRM, Quotes and Illustrations, Forms, iGO e-Application, Data Services, Policy Delivery and Policy Services. All deployments are supported by iPipeline’s Professional Services, Training, Customer Success, and Support organizations. Several solutions are patented. The iPipeline management team brings vast industry knowledge and experience. The iPipeline Network effect enables carriers to compete for business via their quote engine, and its integrated platform and experience.
In 2012, iPipeline’s platform ran 120 million quotes. iPipeline’s management team has worked with the nation’s most respected brands including: Accenture, Ariba, Arthur Anderson, CSC, Internet Capital Group, Lockheed, MTV, Napster, Pricewaterhouse Coopers, SAP, Siemens, Xerox, and Zurich. The company has earned a well-respected reputation in the insurance industry by winning key industry-leading awards including winner of the 2009 Windows in Financial Services Innovator Award for business transformation and the 2009 ACORD Award for infrastructure platform. They have recently been named winner of the 2013 PACT Enterprise Award and 2013 Voltage Award and listed for the 6th consecutive year with the Inc. 500/5000. iPipeline’s CEO, Tim Wallace, is ensuring continued success “by focusing on our customers and exceeding their expectations.”
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Rajant Provides Communication In Extreme Environments Category: Tech (large)
InstaMesh, the core routing software, creates practically immediate connections to traveling nodes, which generates a sturdy, high-bandwidth network. BY CAIT O’DRISCOLL InstaMesh is an exclusive data-logging algorithm that Established in 2001 by founders Robert Schena and facilitates uninterrupted and immediate routing of both Paul Hellhake, Rajant has developed the world’s most wired and wireless connections. It can locate the best route between two positions dependable, accessible, and readily deployed Kinetic even when they are in perpetual motion, which Mesh network technology. “Rajant provides wireless solutions that enable secure enables fault tolerance, high throughput, and low communications through a reliable network that can rap- latency. InstaMesh also creates a genuine peer-toidly reconfigure and adapt in real-time. These networks peer network where every node is autonomous and are used for military, mining, oil, gas, homeland security, fully routable. Rajant Kinetic Mesh Networks automatically first responders;and public safety in the most extreme route data over the superlative obtainable freconditions,” Mr. Schena said. Rajant has installations providing constant com- quency. Every network node is constantly working munications in some of the most challenging environ- to survey the environment in order to take evaments such as military, mining, oil & gas, railroads, and sive action the second it senses any weaknesses or automotive. obstructions. Rajant’s networks currently improve efficiency and This allows for adaptability in terms of physical envisafety of some of the world’s largest mines. ronment and network availability. At any given moment, The Rajant BreadCrumb solution is an extremely a Rajant network can be spanning 145 square miles mobile wireless network node that creates a wireless with over 200 multi-radio nodes that are in perpetual mesh with neighboring fixed and mobile BreadCrumb motion. nodes. And, it can do this while running a large number of
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operational applications simultaneously on this same network. In addition, these networks, unlike others, also become stronger as more nodes are added. Rajant Technology also offers full voice communications, with a specialized Voice over IP (VoIP) application, even in isolated areas. Rajant’s partners include Northrop Grumman, L-3 Ruggedized Command & Control Solutions, and Lockheed Martin.
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Nemours, A.I. duPont Improving Patient Care Category: Healthcare (large) BY ROSELLA ELEANOR LAFEVRE The traditional model for care before, during and after elective surgery at Nemours/A.I. duPont Hospital for Children in Wilmington, DE, used to involve care provided exclusively by the operating surgeon. The operating surgeon might call upon a general pediatrician or other specialist as needed, but these other physicians would make recommendations that the operating surgeon could choose to execute or not. “That didn’t work well for this group of patients,” said Dr. David Pressel, who created the Medically Complex Surgical Comanagement Program, which targets highrisk patients with medical co-morbidities who have been admitted for elective surgery, after recognizing that a more comprehensive care model was needed. Within the Medically Complex Surgical Comanagement Program, those high-risk patients are identified before the operation by either the pre-surgical care center or the surgeon. Pre-surgical care includes a case review by an anesthesiologist and an advanced practice nurse. A general
pediatrician evaluates these patients post-surgery, and a full care team, composed of the surgeon, pediatrician and nurse, visits the patient daily. Issues of care are discussed with the family at the patient’s bedside. If other concerns arise after these rounds and while a surgeon is occupied in the operating room or clinic, they are addressed by the pediatrician who will provide immediate care. In operation since 2006, the program allows for better care of the patients because both the surgeon and the pediatrician “own the patient’s medical issues,” said Dr. Pressel. He has presented the structure and outcomes of this program at national medical meetings, and it was recently written about in the July 2013 issue of Hospital Pediatrics. The improvements to patient care provided for by the implementation of the program include shorter lengths
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of stay in the hospital, fewer unnecessary laboratory tests or unplanned radiologic studies, improved nutrition, and lower mean total hospital costs. A study of the program did not find that the program had any adverse effects, such as unanticipated return to the operating room or readmission to the hospital.
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INNOVATOR OF THE YEAR
Globus Leading The Way For Spinal Implants Category: Healthcare (large) BY ROSELLA ELEANOR LAFEVRE The spine is one of the most important parts of the human body, providing it with structure, support, stability and flexibility while protecting the spinal cord. Damage to the spine can be painful and inhibiting. At Globus Medical, Inc., specialists design, test and launch innovative spinal implants. Globus was established in 2003 and is currently a leading manufacturer of spinal implants driving significant technological advancements across a complete suite of spinal products. Globus inspires the development of cutting-edge technology through its “Spinal Innovation Engine,” which is staffed by more than 100 people. The innovation developed therein includes a whole range of solutions including one that integrates advanced biomechanics with less anatomically disruptive implant designs and a new instrument designed and built to speed a routine procedure. At Globus, engineer-machinist teams develop, test, evaluate and manufacture products utilizing clinical
insight from the company’s surgeons. The product development process is accelerated using state-ofthe-art fabrication and testing facilities that enable these development teams to quickly produce prototypes that are further refined. This allows surgeons to continuously test new solutions so that Globus can quickly release quality products, keeping Globus ahead of the curve. Within the last year, Globus has added several products to its portfolio, which features more than 100 devices. The most recognized advancements in the last year came in the form of the SECURE-C Cervical Artificial Disc and LATIS, a lumbar interbody fusion spacer. The former development is a device designed to be implanted into the patient’s neck, allowing the patient to experience limited motion from front to back, side to side and turning their head side to side. Offered in different sizes, the device will fit a wide array of patients. The SECURE-C Cervical Artificial Disc offers an alternative to anterior cervical disectomy and fusion, the current standard of care for the surgical treatment of disease in the cervical discs of the neck. Fusion uses surgical techniques to perma-
nently fuse two or more vertebrae so that they function as a single vertebrae. While fusion lessens pain and other symptoms, it can lead to loss of flexibility and motion. SECURE-C allows for a greater range of motion. In a traditional fusion procedure, the bad vertebrae is removed and replaced with either a bone graft or a synthetic spacer and then stabilized with a cervical plate screwed into the two adjoining vertebrae. Globus’ LATIS is a lumbar interbody fusion spacer that expands to reduce surface motion, or subsidence, and creates a substantial single graft changer allowing for a large fusion mass. Its expansion cabailities and slotted tooth pattern help the device resist implant migration.
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INNOVATOR OF THE YEAR
Continuum Health Simplifies Physician Care Category: Business Management BY CAIT O’DRISCOLL Founded in 2005 by Chairman and CEO Dr. John M. Tedeschi, the company’s sole undertaking then was to provide full management services for physicians and their practices. The original idea of the company was to allow doctors to be doctors by providing a service that took care of every other aspect of a physician’s practice, such as IT, revenue cycle management, billing, financial services, hiring, etc. This aspect of Continuum’s work allows physicians to focus exclusively on caring for patients. Since then, the company has expanded to include more than just practice management services; Continuum Health now has an additional focus on population health management. Today, Continuum’s clients include over 1,000 primary care physicians, specialists and nurse practitioners in private practice and hospital-associated locations. Advocare Walgreen’s Well Network is Continuum’s preliminary Population Health Management system.
Continuum is working with Blue Cross Blue Shield on a program to lower hospital admissions. In addiThe program utilizes Continuum’s management sys- tion, with this year’s appointment of Dr. Christotems along with their IT knowledge to proactively pher Olivia in the newly created President position, identify at-risk patients and decrease expensive Continuum will also be mounting more widespread emergency room visits. ancillary and ambulatory services. Olivia wants to Continuum’s Population Health Management incorporate more ancillary and ambulatory care, such system directly correlates with upcoming changes as diagnostic lab work, infusion centers, urgent care, in legislation like the Affordable Health Care Act. and surgery centers, “The only way we are going to In the next few years, all health care providers will improve quality and lower costs is to switch the venue be changing from the fee-to-fee service model we of care and increasingly do more things, that are safe use now, to a model where service providers will be to do medically, in an ambulatory setting.� rewarded for keeping patients healthy. Continuum’s Continuum Health Alliance was created for doctors system will help physicians and hospitals prepare for by doctors. Their mission remains the same today: to these upcoming changes. be “physician driven and patient-centric.�
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Griesing Law Focuses On Collaborative Approach Category: Business Management BY DARRY COGGSHALL Four years ago, Francine Griesing, Kathryn Goldstein Legge, and Jessica Mazzeo left the BigLaw firm with the idea to create an environment where everyone could reach their full potential professionally while sustaining a fulfilling life outside the workplace. Griesing explained her desire for change at a recent conference: “At every stage, I faced incredible obstacles that my male peers did not face.” In 2010, with a combined 40 years of legal experience, these three women launched Griesing Law, LLC, a WBENC-certified woman owned firm, and continue to be committed to recruiting, retaining and advancing women. With their out-of-the-box thinking, Griesing Law, both locally and nationally, focuses on a collaborative team approach, discourages internal competition that interferes with client service, provides support to other women-owned businesses, and offers free professional and career counseling to women seeking to advance or to secure new positions.
The firm has grown to a team of 11 and has also hosted six college and law school interns. All but one of their lawyers are parents and the firm is flexible with busy personal schedules and responsibilities creating the perfect work/life balance. Whether working remotely or on-site, their team approach assures that they seamlessly cover for one another when necessary. As a result of this flexible model, they have been profiled in the ABA Book, The Road to Independence — 101 Women who Started Their Own Firms and in numerous articles sharing their guidance to other women-owned firms. Griesing is a women-owned certified business through the Women’s Business Enterprise National Council and is also a member of the National Association of Minority and Women Owned Law Firms (NAMWOLF). The firm is extremely active in the organization as members and committee co-chairs and has led a successful effort to bring NAMWOLF’s 2014 Annual Conference to Philadelphia and will cochair the organizational efforts.
Additionally, the firm will be honored with NAMWOLF’s 2013 Law Firm of the Year Award for its continued contributions to the organization and further promoting its mission. The recipient of this award is selected by a group of in-house attorneys from Fortune 500 corporations which support NAMWOLF. Griesing Law has grown from an initial handful of clients to a roster that is rapidly approaching 100 clients including Fortune 500 companies. Griesing’s lawyers have received numerous accolades including Pennsylvania SuperLawyers (including two Rising Stars) and Greising, herself, has been recognized by Best Lawyers, Chambers and Partners, and SmartCEO Brava and Brava Hall of Fame. Their lawyers hold leadership positions and board seats in multiple professional and community organizations, and they are often sought after for speaking engagements for their expertise in advancement for women.
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INNOVATOR OF THE YEAR
TriState HVAC Category: Energy BY ROSELLA ELEANOR LAFEVRE Based in West Conshohocken, TriState HVAC Equipment LLP is a leading representative and integrator of commercial HVAC mechanical systems and related equipment in Pennsylvania, Delaware and New Jersey, and one of the largest energy management firms in the mid-Atlantic region. The company has grown more than two times faster than the industry average growth rate in the past decade. It represents McQuay Air Conditioning as well as more than 35 other manufacturers of HVAC-related equipment, and operates as an authorized service center for many of its manufacturers.
TriState offers complete and comprehensive resources and 24-hour emergency service. TriState was once in last place in industry rankings and is now in first place. The company has grown its annual revenue from $8 million to $25 million. The company’s success is the result of a combination of factors, including: the development and nurturing of top-notch management; focus on excellence in design, engineering, sales and customer service; the use of a proprietary software platform that allows managers to streamline and improve services based on scientific analytics; and their development of a proprietary building automation and monitoring software that they say dramatically improves energy efficiency in large buildings.
Lucidity Health
Category: Healthcare (small) BY BRANDON BAKER
After successfully earning the faith of DreamIt Ventures and Independence Blue Cross in the past year, Lucidity is ready to step up its game and launch a comprehensive and locally standardized data information system for health providers and insurers. “We figured out, during about an eight-month period, that one of the biggest problems facing providers and insurance companies is data. There are key pieces missing from doctors’ workflow, and missing from insurance databases, and that [data] could be beneficial to everybody,” said Jake Halpert, founder and CEO of Lucidity. That coordination will come in the form of Lucidity’s in-development system architecture that will effectively notify both health providers and insurers when a patient has been admitted to another healthcare facility. Presently, providers only have access to in-house records without the aid of insurers. “There’s a lack of sharing, and an opportunity to connect the dots with something that is critical for doc-
tors who are taking on risk now,” Mr. Halpert said. “With the Affordable Care Act, if their patient doesn’t do well, they don’t get paid. They get a penalty if they’re readmitted within 30 days of their visit … We’re able to tell health systems faster when a patient has been [readmitted] post-discharge. Even with mortality, they don’t know if patients are dying. By next summer, the company is targeting $1 million in revenues and an expansion to six facilities in Greater Philadelphia. Because it is partnering with Independence Blue Cross, it anticipates 70 percent of incoming patients will be impacted by the information system, with a potential escalation to 85 or 90 percent if the company can bring companies like Aetna on board to share information. Though Mr. Halpert originally came as a temporary transplant from New York City, he expressed his intention to stay in Philadelphia now that his run with DreamIt’s accelerator program has come to an end — if not because of his funders, then because of his growing list of Philadelphia mentors. Lucidity will permanently locate to University City later this fall.
StratIS EMS Category: Energy BY ROSELLA ELEANOR LAFEVRE With rising energy costs, building portfolio managers need a customizable system that would allow them to manage how energy is used down to the outlet. BuLogics, based at 4200 Ridge Avenue in Philadelphia, has designed and developed wireless automation solutions for markets such as industrial, commercial and hospitality since 2003. The company’s solution for energy management, StratIS Energy Management System, draws on BuLogics’ years in wireless technology to provide building portfolio managers with the power
to control energy usage while experiencing a return on investment within 18 months. The StratIS Energy Management System is a wireless mesh network technology customized for each building, floor or single unit built from a portfolio of more than 800 interoperable, third-party devices, including HVAC controls and programmable thermostats, light and temperature sensors, door locks and plug load controllers. Installation can be achieved in less than an hour by utilizing existing staff and electricians, and the system can be used to manage multiple units and multiple properties from a single, remote web-based, graphical interface accessible from anywhere in the world.
HealthQX
Category: Healthcare (small) BY DARRY COGSHALL
HealthQX CEO, Mark McAdoo, brings over 20 years of entrepreneurial experience building ventures, commercializing healthcare solutions and driving sales and client/partner relationships. After the successful sale of IntelliSource Healthcare Solutions, of which he was co-founder, McAdoo used his extensive experience in the healthcare software industry and building and operating successful companies, to lead HealthQX. HealthQx, LLC is a Pennsylvania based data analytics and software company that offers solutions for transparency into quality and cost efficiency of the healthcare system. The Company’s mission is to make Americans more informed consumers of healthcare services. Their first solution to supporting their customers is the CareQx platform. CareQx is a subscription-based, Software as a Service (SaaS) application. It is a decision support software that delivers quality and cost ratings of physicians and hospitals. It gives physicians, care managers and advocates the ability to search for providers based on treatment,
conditions and other criteria to refer the most appropriate, effective and efficient physicians and hospitals. Using one of the largest medical claims databases (120 million patients nationwide) as well as the CMS provided data, it also helps their customers understand the performance of provider networks in each market based on delivery of quality and cost efficiency of care with comparisons to benchmarks and peers. McAdoo states that “we believe that there is potential for better quality of care at affordable price. Physicians and care coordinators that make referrals to specialists and hospitals need tools to make timely and more informed referrals. Consumers need information to make informed purchase decisions. Criteria used today is outdated and a new approach is needed to direct care to high quality, affordable and appropriate providers.” HealthQX is successfully providing comprehensive information and analysis available today about the cost and quality of healthcare, allowing everyone in the healthcare chain to save money and improve care by identifying the best doctors and the best clinical settings at the best price
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17 OCTOBER 2013
INNOVATOR OF THE YEAR: JUDGES
RoseAnn B. Rosenthal, President, CEO and member of the Board of Directors of Ben Franklin since 1996, has over forty years of experience in business investment, regional planning, and economic development. Rosenthal has piloted Ben Franklin into a national model for technology innovation, investing in innovative enterprises and creating commercialization pathways and partnerships throughout the region. Rosenthal is an inaugural member of the National Advisory Council on Innovation and Entrepreneurship. She serves on public, private and non-profit boards including Fox Chase Bank and the Philadelphia Alliance for Capital and Technology.
REGIONSBUSINESS.COM
James McDonald is President and Publisher of Region’s Business, a business and public policy newspaper and web site he launched in 2012. Previously Mr. McDonald has been involved with launching other media properties including: The Washington Examiner, BreakingNews.com and the Weekender. He has also served as publisher of Metro-Philadelphia the free daily newspaper and has run other publications in NYC, Washington DC and Philadelphia.
Christopher Wink is the cofounder and editor of Technical.ly, a network of local technology news sites and events, featuring its flagship Technically Philly and sister publications in Brooklyn and Baltimore. In that capacity, he is a lead organizer of Philly Tech Week and Baltimore Innovation Week, among other events that bring smart people together. Previously, he worked for a homeless advocacy nonprofit and was a freelance reporter. He writes frequently about media and entrepreneurship on his personal blog christopherwink.com and tweets @christopherwink. The Temple University alumnus is a bicycle commuter and resident of the Fishtown neighborhood of Philadelphia.
DeAr Tried to Squeeze It All Into One VIsIt, Rookie MistAke.
/visitphilly
@visitphilly
17 OCTOBER 2013
INNOVATOR OF THE YEAR: JUDGES
REGIONSBUSINESS.COM
David A. Price is a Partner in Marcum LLP’s Assurance Services division in the Philadelphia office. He has extensive experience providing accounting, auditing and business advisory services to middlemarket private and publicly-held companies as well as not-for-profit entities. He specializes in employee benefit plan audits (EBPA) and heads the Philadelphia office’s EBPA practice as well as its professional services practice.
Kathleen Lens is a Partner at Marcum LLP with nearly 30 years experience overseeing audits and providing tax and business advisory services to closely-held entrepreneurial businesses and their owners. Her client base spans a variety of industries including manufacturing, distribution and service. She successfully advises the management team of closely-held and family-owned businesses with day-to-day operations, succession matters, exit strategies, financial growth and estate and personal financial planning.
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Salvatore J. Patti is Senior Vice President and Commercial Banking Group Leader at PNC Bank. In 2004 he was selected to be Chairmen of PNC’s Bipartisan Public Affairs Committee and in doing so has fully revitalized PNC’s involvement in the political process. He has cultivated a regional reputation of being thorough and knowledgeable in all aspect of finance, business and politics. He is also a recent graduate of Leadership Philadelphia’s Core 2012 Class.
17 OCTOBER 2013
REGIONSBUSINESS.COM
OPINION
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#PhillyStartups: Please Follow The Money
Stephen J. Andriole is the Thomas G. Labrecque professor of business technology at Villanova University’s School of Business
CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.
Someone — Deep Throat in All the President’s Men — said a long, long time ago, “follow the money.” He kept saying it over and over again. After a while, it became Woodward and Bernstein’s investigative marching orders as they dismantled the Nixon presidency. The advice is still sound whenever we try to explain social, economic and political events — including technology startup activity. When we look at technology startups in our region, the best way to understand the past or predict the future is to follow the money. The correlations are empirical and meaningful: When there’s lots of seed and early stage money available to entrepreneurs, there’s lots of startups; when there’s relatively little money, or the money has the wrong color or smell, there are relatively few startups. There’s a shortage of startup investment dollars in our region. Many of the private equity venture funds abandoned seed and early stage companies over a decade ago when their funds’ internal rates of returns collapsed after the dot.com bubble burst. As many of us recall, if you had an idea for a company in 1997 that had “eBusiness” in the business plan, you got funded. The “irrational exuberance” of the 1990s is now legendary — and the effects of that era on seed and early stage investing persists, especially in the Philadelphia region. There’s very little money available for entrepreneurs with ideas for companies that have yet to prove themselves in the marketplace. Part of the rationale around the shortage of seed and early stage investment dollars is real. Data suggests that the majority of startups fail — and investors of course know this. The safe bet, especially if you’re an investor with a limited understanding of technology, technology trends, or market drivers is to avoid what you don’t understand — and where risk is the highest. Since many professional investors do not really understand emerging technology, technology trends, or disruptive market drivers, they sit on the sidelines until a proven entrepreneur demonstrates how to make money. While this is the safe play, it also denies them, and their investors, the high payoff outcomes that startups can generate. Because of this investment protocol, regional entrepreneurs seek seed and early-stage funding from other sources, namely Angels, a few funds and some government organizations. And while there are Angels in the Philadelphia
region, there’s not enough of them to fund a portfolio of startups or to keep the money flowing when the startups inevitably hit tough times. So the entrepreneurs self-fund — if they can — and often even leave the region for greener pastures. Our region is not known as a technology accelerator. While there have been some significant successes, compared to Boston, New York, Los Angeles, Austin and Silicon Valley, our credentials are weak. When I look at these areas — as those who formally research venture capital often do — I see startup infrastructures comprised of Angels, institutional investors, universities, talent, corporate partners — and attitude. There’s no equivalent to MIT’s Media Lab in the region. Kleiner, Perkins, Caufield & Byers has a better investment track record than our regional firms. Stanford University has more educational programs that generate technology-driven startups than our universities. Assessed a little differently, the Philadelphia region is a solid “B” startup player: we have fine universities, numerous private equity venture funds, Angel investors, serial entrepreneurs and centers of entrepreneurial excellence. But we also have startup problems. Hamish McKenzie writing in pandodaily last August noted that: “Philly has a problem: It struggles to keep good startups in the city. AdMob, Milo, Invite Media, Warby Parker, Venmo – they all started in Philadelphia. And they all left.” Josh Kopelman, quoted in the pandodaily piece says: Philadelphia doesn’t have an issue with attracting companies, it just has a problem retaining them. “Just like all great actors aren’t born in Hollywood, all great startups aren’t born in Silicon Valley,” he says. But the city tends to lose startups when it comes time to look for capital, or find specialist and experienced talent to add to the teams. So how do we get the “A”? We need to affirm a startup strategy to advance to the next level. We need to identify a set of objectives and then aggressively invest in them — and imitation is still the most sincere form of flattery. The Media Lab (http://media.mit.edu/) should be the role model for universitybased Centers of Excellence. Stanford (www.stanford.edu/academics) should be the role model for entrepreneurial academic programs. Kleiner, Perkins, Caufield & Byers (www.kpcb.com) should be the role model for our regional venture
firms. Silicon Valley’s Band of Angels (www. bandangels.com) is the role model for seed and early stage investors. (The group has seeded 254 companies which led to 10 IPOs and 54 acquisitions. There are now over 150 Angels in the Band’s network: they have invested nearly a quarter of a billion dollars in startups.) The real questions are not around what we should do – the steps are known to us — but how much we should invest in the right steps — and, ultimately, if we really want to take the steps. Building a startup infrastructure is hard work, expensive, takes a lot of time, and by no means guarantees outcomes. But at the end of the day, even if we build a startup infrastructure, if there’s little or no startup money, there will be few if any startups. Some might argue that the startup infrastructures in Boston, New York, Los Angeles, Austin and Silicon Valley are impossible to recreate, that they’re the result of decades of investment and networks of money and talent that cannot be developed from scratch. I’d be influenced by that argument if there weren’t startup cities – like Wilmington – earning A’s in just a few years (see the Business Insider list of twenty hot startup cities published in September of this year (http:// www.businessinsider.com/hottest-startupcities-2013/). Brad Feld’s, Startup Communities: Building an Entrepreneurial Ecosystem in Your City (John Wiley, 2012) identifies the drivers of regional startup success. There’s lots of advice there and much of it involves investments in pieces of a startup community. But he also discusses culture and attitude — a much, much tougher change to implement. Can Philly become #PhillyStartup? Can we think and act like #PhillyStartup? Can we believe we’re a startup region? As I’ve said before, we need a porous infrastructure of companies, government agencies, funds, universities, entrepreneurs, Angels, talent and attitude. While we have a formidable one now, we need a wider and deeper innovation and entrepreneurialism infrastructure with a special, financial focus on startups. Everyone needs to help jumpstart this objective — politicians, university presidents, academic deans, professors, entrepreneurs, local and regional companies, Angels and our institutional venture capitalists. Investments specifically designed to encourage startups should be made across the board. We know who to imitate. We can get the A. Just follow the money.
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