Archive for the ‘Development’ category

Epic’s New Focus

November 5, 2014

Epic Systems, the electronic medical records pioneer, has put Dane County on the map. I sketch out four strategic moves by the reclusive giant in this Isthmus story.

Epic is the big winner in the federally subsidized effort to shift American medical care from paper to electronic records. As part of President Obama’s economic stimulus plan, Congress approved a $27 billion incentive program in 2009 that touched off a mad scramble to modernize health systems in the name of improved efficiency and better care.

These health systems, which involve hospital and physician networks, can be complicated contraptions, and no company was better situated to harmonize its knotty internal operations than the well-seasoned Epic, which was founded in 1979 in the shadow of UW-Madison by the charismatic computer wizard Judith Faulkner.

Epic cleaned up in that gold rush. Today, one out of two Americans have their medical records on Epic software, and revenues at the fast-growing privately held company hit $1.7 billion in 2013.

Famously insular and only occasionally open to nosey reporters, Epic declined to provide an executive to be interviewed about its recent strategic moves. But local Epic watchers, a few on the record and more speaking not for attribution (they’re reticent because Epic is feared as well as respected), see a new strategy taking hold.

To read about those moves, please go here.

Lots of other Epic stories can be found by using the search engine at the right

We Need A Generational Change In Leadership

September 23, 2014

I spent a lot of time in early 2014 researching and pondering how Wisconsin’s economy stagnated after rising to pre-eminence in the 1970s. Among other things, I found Wisconsin’s leadership was resolutely stuck in the past while the national economy had moved on.

[T]hose old fights define Wisconsin, economically and politically. It’s as though our leaders are historical reenactors at Old World Wisconsin. They fire their muskets and shout the old-time shibboleths. Most of this is just spectacle — not really connected to resolving Wisconsin’s precarious economic position in the 21st century. But old habits don’t easily die.

Looking back at old glories, Democrats embrace the unions. Indeed, nothing rallies the base like a pledge to repeal the union-gutting Act 10. But unions are a declining force and face a questionable future in an era when worker-filled assembly lines are disappearing. Nationally, only one in nine workers is a member. In Wisconsin, union membership plunged from 33.5% of the non-farm workforce in 1965 to 12.4% in 2013, according to the economists at the Unionstats.com website.

The future is not bright. The expanding IT field, with its mix of collaborative teams, creative work and 1099 workers, seems particularly ill-suited to old-school unionism.

Republicans, meanwhile, embrace big business, especially traditional manufacturing, and have decisively tilted the state’s tax, regulatory and development initiatives to its benefit. That’s a king-size problem. Manufacturing jobs may have led Wisconsin’s modest recovery from the Great Recession. And Wisconsin does rank with Indiana as one of the top two industrial states in the nation. But Wisconsin’s glory days of manufacturing have decisively passed.

In 1979, manufacturing and its high-paying unionized work accounted for 33% of the jobs in Wisconsin. By 2012, it was 18%, according to the Center on Wisconsin Strategy (COWS).

Reality is that Wisconsin never recovered economically from the crushing recession of 1981-82. The bloody harbinger of Rust Belt de-industrialization, it laid waste to the huge manufacturing base in the eastern half of the state that runs from the Fox River Valley through Milwaukee, Racine and Kenosha and out to Janesville and Beloit.

I make the case that we sorely need of a generational change in leadership. Both the techies and the Millennials are the sort of pragmatic idealists Wisconsin needs.  You can read a lot more here. Also, posted below is a related piece that ran in the same issue of Isthmus.

Who Speaks For Tech?

September 23, 2014

So if Wisconsin is trapped in yesteryear politics and economics, as I argue in the story posted above, the business group Wisconsin Manufacturers & Commerce is the exemplar of this thinking.  Here’s how I began this related piece, also in Isthmus:

This is a problem.

The state’s most powerful business voice has conspicuously little contact with Wisconsin’s rising technology industry.

Wisconsin Manufacturing & Commerce, which claims more than 3,500 businesses as members, brags that “the success of the WMC government relations team in projecting and accomplishing a proactive business agenda has been second to none.”

Well, yeah. On the surface, WMC has never been stronger. The support WMC has thrown to small-government, pro-business Republicans has paid off big time, to say the obvious.

Wisconsin has a Republican governor, a Republican Assembly, a Republican Senate, a Republican-favoring Supreme Court and a Republican-dominated congressional delegation.

But critics say that WMC’s success is mostly in pursuing a savvy political agenda — not a savvy growth agenda. And the group’s legislative wish list tilts heavily to helping Wisconsin’s legacy manufacturers. The problem: These venerable corporate citizens usually burnish their bottom lines by adopting strategies that emphasize tax avoidance, lessened regulatory costs and dampened labor costs.

Do they add new jobs to the payroll? Not so much.

To read more, including how the Greater Madison Chamber of Commerce has embraced the tech industry, please go here.

This Startup Could Be Big For Madison

May 22, 2014

MdotLabs, the fraud-fighting startup that detects faked page views of online advertising, captures a lot of what’s good about the Madison tech scene. Co-founder Timur Yarnall moved his internet company here from New York in 2005 because he liked the Madison action. His partner, Paul Barford, is a tenured professor in UW-Madison’s Computer Science program and the co-teacher of CS’s groundbreaking entrepreneur class. Their company, founded in mid-2013, has an office in Palo Alto, but expects to keep its main office  in Madison because the town is so deep with code-writing talent. What could be better?

Well, that MdotLabs strikes it big and becomes a major player in the Madison economy. It could happen, observers say.

 “Anytime someone can develop a heavy technology solution to a complex problem that has large market opportunities, that interests us, and that’s what these guys have done,” says John Philosophos, whose Great Oaks Venture Fund is one of the startup’s seed-stage investors.

Philosophos sees online ad sales fraud as “a massive problem,” but also puts his finger on MdotLabs’ challenge: The industry may not be ready for reform. For some, scammery is simply a cost of business. And paying for it might even seem easier and cheaper than subscribing for MdotLabs’ validated data. Besides, he muses, are the ad agencies prepared to tell their national brands how much money they’ve wasted paying for robot-generated page views?

….

Zach Brandon, president of the tech-minded Greater Madison Chamber of Commerce, says MdotLabs is a local startup to watch. He sees it as a game-changer in a lucrative industry. He compares MdotLabs’ potential to that of Exact Sciences, the local biotech company that is piloting a noninvasive test for colorectal cancer. He even compares its potential competitive position to Epic’s with electronic health records.

“I think MdotLabs could be not just a success story,” says the chamber chief, “but the creator of a new employment base in Dane County.”

To read more, please go here.

An Economy for the 21st Century

February 26, 2014

The past few years almost all of my writing has focused on documenting the rise of Dane County’s technology industry. This cover story for Isthmus begins:

This is the big question: How far can Dane County ride Epic’s success?

Done right, we’re talking about the foundation for Dane County’s 21st-century economy being built on the medical software industry: lots of good-paying information technology jobs that fuel an expanding housing market, a glittering downtown with hip restaurants and music clubs, a rising tax base to fund new community services and a lot more resources to deal with the serious problems of poverty.

Call it the “Epiconomy.” Madison advertising executive Andy Wallman, who coined the name, should trademark it. “Epiconomy” nails the fact that Epic now drives the Madison area’s prosperity.

Founded in 1979 by its mastermind Judith Faulkner, Epic Systems Corp.is the world leader in the burgeoning health-care software market. The privately owned Epic has 6,800 employees at its Disney-like headquarters in Verona and recorded $1.66 billion in sales in 2013. The company is renowned — notorious, say its critics — for hiring only the smartest young people and working them hard. Salaries for these twentysomethings range from an estimated $60,000 to $100,000 a year.

More are coming. Lots more.

“They could have as many as 10,000 employees by 2018,” says Madison planning chief Steven Cover, who was among top city officials briefed by Epic’s chief administrative officer Steve Dickmann in mid-January. (The media-shy company declined to be interviewed for this story.) Epic expects to add 800 positions a year for the next four or five years, Cover notes.

“They have an international operation that is growing very quickly. This will fuel their continued growth,” he says.

As heartening as that message is, the good news doesn’t stop there. Epic will continue to run its worldwide operation out of its nearly 1,000-acre Verona complex.

“There won’t be a European headquarters,” says Cover. “Their international operation will be staffed and operated from here.”

It’s big news that Epic will not decentralize its operation with regional headquarters. But for Dane County, the even larger payoff hinges on the answer to that opening question: Will Epic’s success give birth to an even larger health industry?

To read more, please go here.

I’ve written on Epic over the years.

For my 2002 story on how Epic wound up in Verona, please go here. You’ll see that back then the campus was valued at only $45  million.

Here’s another story from 2002 that describes how real estate speculators cashed in when they sold Epic the land for its new campus.

This cover  story from 2008 cited Epic as an example of “green sprawl”.

Here is a timeline up to 2008 that details Epic’s growth over the years.

This column from 2010 details how strikingly ignorant city leaders were when they lost Epic to Verona.

And here a mayoral candidate Paul Soglin talks about his Epic regret .

Hearing Out The Tech Center Skeptics

October 28, 2013

StartingBlock Madison, the proposed tech home for an incubator/maker space/etc. could prove crucial in growing the downtown startup scene. That is, if it’s built and financed smartly. In this Isthmus column I look at  the arguments made by skeptics who question the $15-20 million it might cost to build the complex at the old Mautz paint factory site.

[Tech leader Matt Younkle  says:] “When you look at this kind of money, you have to ask how many startups could you invest in for that? You really have to start asking questions about the profits and cost of that kind of capital. I think the community could do this on a leaner basis.”

Joe Boucher, a tech industry attorney who chairs the city’s Economic Development Committee, worries about StartingBlock’s proposed location, which is a mile from the Capitol Square. That’s too far away to catch the downtown buzz the tech crowd likes, he feels.

“These kids want to be within two or three blocks of the Capitol for practical matters,” says Boucher. The Mautz site “is just a little too far away for 25-years-olds. I know it sounds crazy, but they don’t want to go out eight or 10 blocks — a mile out on East Wash.”

He adds: “If they don’t hit the sweet spot on location, they better hit the sweet spot on everything else — the quality of the building, the cost of the rent. That has to be perfect.”

Craig Stanley, a commercial real estate broker with Broadwing Advisors, shares Boucher’s concern. He can’t see why tech companies would lease market-rate space on East Wash for $18 per square foot when they could pay the same rate for space one block off the Square and be moments away from five cool restaurants.

Stanley says he likes the concept of StartingBlock, but adds, “I don’t see the demand to fill the space.” The veteran broker describes a very soft downtown office market with high vacancy rates. Overall it’s at 17.2%, but even higher at 21.2% for the class B space StartingBlock would offer, he notes.

To read more, including the rebuttals from project advocates, pls go here: http://www.thedailypage.com/daily/article.php?article=41227

And for an  update over the Mautz site negotiations, pls go here: http://www.thedailypage.com/daily/article.php?article=41243

UW Startups Get a Boost

October 14, 2013

Yup, things are happening. A New York venture capital fund has pledged to invest $500,000 in student startups. The UW Research Park has made move some moves to help software startups as well. I write in Isthmus:

Great Oaks’ investment in student startups coincides with an uptick in entrepreneurial ferment on campus. Mark Bugher, who’s retiring on Nov. 1 after a long run as director of the University Research Park, noted several new moves in a recent wrap-up interview.

This includes the decision to redesign the Metro Innovation Center, the Research Park’s startup site at 1245 E. Washington Ave. Regarded as the park’s “stake in the ground” on the east side, the site has never taken off, despite occupying only 6,000 square feet in the old Gisholt factory complex. Just two of 10 suites are occupied. Bugher and his deputy Greg Hyer expect the space to be redesigned along a more open concept with cheaper rents than the current $700 to $800 a month.

The bigger news is the Research Park’s purchase (with funding from the Wisconsin Alumni Research Foundation) of the old Luther’s Blues building at 1401 University Ave. Hyer put the price at “more than $2 million.” Perhaps better known today as “that purple building,” the site is strategically placed for tech incubation — next to the Wisconsin Institutes for Discovery and near the computer science building.

“It has some real interesting entrepreneurial opportunities for the interaction of students, faculty and the private sector,” notes Hyer, adding that student coworking space will be installed.

To read more, please go here.

In a sidebar, I report that Bugher feels that the Legislature complicates the UW’s efforts to commercialize its biotech research.  Find it here.

Helen And Toni’s Excellent Tech Adventures

August 13, 2013

This edition of my Isthmus tech column hits several topics, including  web startups by former state Rep. Helen Kelda Roys and serial entrepreneur Toni Sikes. Here’s a chunk:

Roys’ passion and hard work (she knocked on more than 20,000 doors in her first election) are two of the reasons venture capitalist Troy Vosseller cites for his investor group, the well-regarded (and oddly spelled)gener8tor, backing Roys’ venture. OpenHomes offers a software platform that connects homebuyers and sellers in a way that promises to save big bucks for both.

Cofounder Scott Rouse, who worked at Shoutlet, StudyBlue and Asthmapolis, handles the tech end. Roys, who is an attorney and real estate agent, knows the business end.

“I started selling real estate at 19,” she says. “I was in college in New York City and had to earn money.”

Roys wound up graduating from New York University in three years (her major: drama, politics and cultural studies) and then attended law school at UW-Madison.

The OpenHomes game plan proved beguiling enough to attract a $20,000 gener8tor investment and three months of mentoring from the edgy investment group, which runs “accelerator” shops in Madison and Milwaukee for its portfolio of startups.

To read more, please  go here.

These are the other items:

A Young Man Of The Times

April 26, 2013

Nate Lustig is the prototype of the successful  young entrepreneur. His generation of  risk-takers is building the new Madison economy. I explain in an Isthmus column:

Lustig followed the familiar template of tech innovators. Even as a kid, he challenged convention.

By his own admission, Lustig was “a terror” in school. Hated homework. Rushed through his assignments. Refused to keep a work notebook. His parents, both lawyers, cut him slack…as long as he stayed on track to get into UW-Madison.

Lustig found his groove refereeing soccer. He says he became an independent contractor at 12 — booking games at his own choosing, biking to parks and making $15 or $20 per outing. He learned a lesson his very first game when a coach started swearing at him.

“I was the one with the whistle,” he says, which pretty much defines his outlook on life. “I got used to making money and not having a boss. I was running my own show.”

At UW-Madison, Lustig became expert at scoring football tickets. He’d charge a small fee for his friends and a larger fee for strangers. That led him to buy a rudimentary ticket website from a graduating senior. He and partners turned it into a seven-campus ticket marketplace that they sold “for the high six figures.” Entrustet [a company that devises digital wills] became his next project.

School was a drag. Lustig wound up a political science major on the five-year plan because he hated — that’s his word — business school classes. They “offered nothing that helped me as an entrepreneur,” he says. They were geared, instead, to advancing students whose ambitions were to land high-paying jobs in corporate America.

“They were very cutthroat because they needed a high rank in their class,” he says. Lustig, on the other hand, wanted to launch his own business, and he had that IT instinct for collaboration and reaching out to colleagues.

He was, in short, a catalyst. A guy who makes things happen.

“What Nate says, he does,” notes Joe Boucher, his lawyer and mentor.

“He’s very resourceful in bringing people together,” says Forrest Woolworth, cofounder of the PerBlue mobile gaming operation.

But Lustig, who remains a Madison booster, has moved to Chile to work.

Here’s the money question: Will he return home to do business?

To read more, please go here.

The Next Jobs? The Next Zuckerberg?

January 11, 2013

UW-Madison’s Computer Science program broke new ground this fall by offering its first class ever aimed at student software developers who want to start their own businesses. Profs Paul Barford and Remzi Arpaci-Dusseau are so committed to helping these kids that they  taught the class on top of their normal instructional load without added pay.

Here’s a chunk of what I wrote:

“These are really bright, really hardworking kids,” says Barford. “We heard some wonderful pitches, everything from social networking, to gaming, to educational solutions. Some were a little bit out there, but others have real possibility for commercialization if they’re given a little more guidance and the right environment to blossom.”

Underline that last point. UW-Madison is one of the world’s great research universities, and the computer science department, as one of the stars in the UW constellation, has its share of illustrious graduates. They include Epic’s Judith Faulkner, John Morgridge of networking giant Cisco Systems, Ramu Sunkara of Qik video sharing, and Carol Bartz of Yahoo.

But the surprise is that UW-Madison, despite bringing in more than $1 billion a year in research grants, hasn’t fared particularly well in spinning off businesses. A new report by the Association of University Technology Managers notes only four university-related startups in Wisconsin in 2011. In contrast, Illinois had 20, Michigan 11 and Minnesota nine.

This modest state of affairs has consequences for the shaky Madison and Wisconsin economies. The Capitol City hasn’t added any new jobs over the past year, while the stagnant state economy isn’t even close to recovering the jobs lost in the Great Recession.

Experts say that startup businesses are key to turning things around. But a 2011 report by the Federal Reserve Bank of Minneapolis had bad news on this front: All of the upper Midwest states have been hit with job losses in startup companies over the last 15 years and “none harder than Wisconsin, which has seen employment at startup establishments drop by almost 50% since 2000.”

Ouch!

To read more, please go here.


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