Eric McDonald was 23 and fresh out of college when he started writing code for a software program to help health care providers better manage work flow in their clinics.
Fifteen years later, McDonald’s software is used in 700 urgent care centers across the country. What started in his basement is now one of Sioux Falls’ fastest-growing companies, employing about 170 people and planning to nearly double in size soon.
McDonald’s DocuTap is the kind of success story South Dakota would like to tell more often: creative entrepreneurs turning ideas into successful startup companies that have the potential to become high-growth businesses.
It’s also a type of entrepreneurship – driven by technology and innovation – that hasn’t been well supported by the state’s existing incentive programs, South Dakota’s top economic development official said.
“We’ve all started to realize this is an area that we’re lacking in the state,” said Pat Costello, the governor’s economic development commissioner.
That’s led to an ongoing conversation in the Governor’s Office of Economic Development about how the administration can broaden the state’s pool of venture capital, as well as more grassroots efforts to bolster the startup scene. Both are making plans this year that could change the landscape for South Dakota entrepreneurs.
As economic development officials consider ways to boost the amount of venture capital available in the state, angel investors with cash in the bank are trying to get the word out that they want to invest in South Dakota ideas and entrepreneurs. The Brookings-based Enterprise Institute on Feb. 3 announced the launch of its seventh South Dakota angel fund.
Muve was Minnesota’s “breakthrough business idea” of 2007. The obesity-fighting fitness device concept was the unanimous winner of that year’s Minnesota Cup contest, earning it prize money and piles of positive press. Not only that, the startup had a big-name partner behind it in the Mayo Clinic.
The small, wearable clip tracks how many calories users burn and vibrates when they’ve been inactive for too long. The concept was inspired by co-founder Dr. James Levine’s research at Mayo, which suggested people could lose or maintain weight by breaking up their day with periodic, light activity.
“We had a lot of momentum,” founding CEO John Montague recalled this week, three months after debtors shut down the company and claimed its assets. “I get asked every day: what happened? Why did it fail? How could that have possibly failed, when it had the Mayo Clinic involved and it was focused on obesity and it had every possible macro-economic trend working in its favor?
“The answer to that question is probably a little bit complicated.”
That’s an understatement, and the story took its latest twist this winter when seven Muve investors used the assets they repossessed from Muve to launch a new, strikingly similar company called Gruve. The move gives the Minnesota technology a second chance to make a splash in the market, but it’s also left vendors and other investors feeling burned and believing they’re still owed a piece.
It was a warm Saturday in late May, and instead of rolling out the dock up at the cabin or going for a jog around the chain of lakes, more than 600 people chose to spend their day inside Best Buy’s Richfield headquarters, attending an all-day series of workshops and discussions. Welcome to Minnebar, a geeky gathering that’s become a twice-a-year tradition for many in the Twin Cities tech and design communities.