Monthly Archives: January 2013

A Boost for Healthcare Funding

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CrowdfundingFor the duration of 2012 we saw many social media sites battle for status, innovation, and maintaining an audience. Facebook acquired Instagram, ultimately leading to Instagram being knocked off of Twitter’s API, followed by Twitter introducing photo filters, which allows users to take pictures and add some snazzy after effects.

In all the turmoil, many people were talking about an “Instagram for video.” This would allow people to create, edit, and share short moments in their lives. Last week, that idea came to fruition with Vine. The launch was less than perfect, but the enthusiasm and potential for the application has the masses buzzing.

With all this excitement and repetition in the national news cycle, it may have slipped by midwesterners in the startup scene that an innovative new crowdfunding site was announced. Minnesota-based LiifGroup, LLC announced the launch of Liifmed, which focuses on crowdfunding the world’s healthcare companies.

As you may recall, I mentioned previously the need for MN healthcare accelerators. While this is not an accelerator, it still allows for innovation in the healthcare marketplace. Better yet, your company won’t have to dig itself out of a financial hole.

One of the intriguing pulls of LiifGroup’s platform is the ability to receive all the funds people donate. Unlike Kickstarter and other crowdfunding sites, LiifGroup does not make you set a fundraising benchmark, and you don’t have to reach a certain goal to receive funds.

From the press release:

“Being in the heart of the medical device and healthcare center of Minnesota will allow us to provide options for upstart medical technologies that previously struggled to attract investment dollars,” Dr. Mark Connelly.

Minnesota has nearly 700 healthcare businesses and organizations. Headquartered in Savage, MN LiifGroup will have an opportunity to directly impact local companies. Having already received pledges, Liifmed is on track to accelerate a thriving industry that suffers from limited funding.

Best Buy Makes Promising Move on Dismal Week

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leap-motion-at-best-buyThe morning coffee is on, I have the day off work, and last week’s news cycle is still fresh in my mind’s eye. The major tech story last week revolved around Facebook, which recently experienced a surge in share prices due to an invite sent to tech journos asking them to “see what we’re building.” On Tuesday, Facebook Graph Search was introduced as a way to search within Facebook for activities, places and brands that your friends enjoyed. If FB’s search cannot help, you get to use Microsoft’s Bing. For all intents and purposes, this successfully saw FB’s stock drop down to $29.

EBay also announced it’s biggest quarter in company history, lending more nods to the direction of online shopping and what is to come for today’s brick-and-mortar establishments. With both Amazon and EBay seeing record years, it’s hard to see Minnesota’s own Best Buy going through such a slump, closing the week at $14.88.

However, if you look past the dwindling share price, Best Buy has actually made some great moves. It was announced through TechCrunch that Best Buy has teamed up with Leap Motion, makers of a highly accurate 3D motion controller, to be the exclusive retailer of their controller both online and offline. With Leap Motion themselves being the only other seller.

Leap Motion garnered a lot of attention in 2012 for its innovative approach towards motion control, which has been heralded as a dominant Kinect competitor. So far, the company has acquired $44.1 million in funding, just closing its Series B round for $30 million this month.

Not only is this a good move for Leap, which gets displays promoting the Leap Motion throughout Best Buy, but it’s a huge step for Best Buy. One of Best Buy’s problems was in their approach. People would come into the store, check out their devices, and buy them online through Amazon or EBay.

Now Best Buy has attracted an innovative company to give them exclusive rights. Capitalizing on what they were good at in displaying hardware, and pivoting to exclusive online sales. Depending on how this move turns out, we could see a lot more of these deals through Best Buy.

Getting attractive start-ups to exclusively display their products in your stores opens up a new demographic for Best Buy. One which has a cult following, but also has introduced itself in the mainstream. It also gives these companies another outlet for advertising. One in which their products are displayed nationally.

Pre-orders start in early February for the Leap Motion. Once some initial numbers come through it will be determined whether Best Buy made a good move or not, and it will also determine the future of the company.

2013 Investment and MN Health IT Accelerators

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Along with all the 2013 listicles hypothesizing what will happen in 2013 and how 2012 differed from 2011 we were greeted with articles warming our hearts on investment, and how 2012 was a big year for venture capital.

The Upstart Business Journal reported that from 2011 to 2012, VC funding grew nationally by 10 percent. From $18.7 billion to $20.6 billion. However, while the amount of investment went up, there were fewer venture-backed deals.

This typically shows that either excitement in the market grew, which could arguably be tied to Facebook’s pre-IPO months, or that more promising companies opened themselves up for funding in 2012.

Since Facebook went public on May 18, 2012, it has been a roller coaster ride, with most analysts calling it the worst IPO in market history. Starting off at $38.23 a share, prices quickly fell, with the lowest point coming in at $17.73 on September 4, 2012.

It’s hard to believe that Facebook, the most anticipated IPO in recent history, would have such dismal numbers, but it came from the lack of evidence they presented to turning a profit. Where were they going to make the money?

With this in mind, it’s hard to imagine 2012 was the best year for IPOs since 2000. Facebook lead the new wave of companies going public, and while they opened today at around $31, the beginning of the roller coaster ride was severely undervalued.

It was not just a year for VC and IPOs, however. Amazon chalked in a record setting year with its highest priced shares. In the last 12 months, Amazon has seen its shares rise nearly 50 percent. They also recorded their best holiday season to date.

So after all this data, and the ability to see that the market is doing pretty well, what does this have to do with Minnesota?

According to the BioEnterprise Midwest Healthcare Venture Investment Report, investment in Health IT/Healthcare companies in Minnesota was down 23 percent. In 2011, 24 companies received $223.3 million. Looking at 2012, 17 companies received $164.7 million. And here is the kicker, Minnesota received the second highest amount of money. Trailing behind Ohio, which raised a whopping $291.7 million.

So why the gap? And why, after a year of solid national investment, are we down 23 percent in healthcare companies when it is a hot market? The answer may lie in accelerators.

Minnesota is surprisingly lacking in the number of health accelerators. President Kaler of the University of Minnesota has started a new initiative. Over the course of 10 years, Kaler is offering $20 million in investment to promising University startups. However, this funding is only for U of M students.

Another promising peak at an accelerator is Inceptis LLC., which will specialize in Class II medical devices, which Minnesota has been a leading provider in. But again, having such a tight focus doesn’t necessarily allow for broad innovation.

If Minnesota wants to compete with the likes of Ohio, or even on a national scale with its promising healthcare companies, we need to have more accelerators both keeping the talent here and providing incentive.

Now, it seems, is a ripe time to start the debate. Investment is hot, Health IT is blossoming, and Minnesota has the means to secure a leading position in the field. The only real question is who will step up to the plate?

Weekly Content Distribution

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“Without continual growth and progress, such words as improvement, achievement, and success have no meaning.” – Benjamin Franklin

A new year has come and the opportunity for growth once again peaks its head. Since May 2011 I have been running this blog, and while my analytic tools show continual traffic growth month-to-month, trying new forms of content distribution sits on my resolution list.

As you may have noticed my posts are random in timing, but equal in premise. I have always maintained a beat in technology. Most recently, it has become more local to Minnesota as we continue to see increased funding in startups and more success stories in our ever growing technology landscape.

With that in mind I have decided to start a more structured form of blogging. Instead of random posts throughout the month, there will now be weekly posts every Monday at 12:00 pm CST. These posts will be longform, and I hope to make them more journalistic in nature rather than analytic.

I’m hoping this will lead to more routine, which in turn leads to more readers. If you have any suggestions I welcome them and will respond promptly. To everyone I haven’t personally said this to: happy new year. I look forward to what new insights the 2013 news cycle will lend.