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Spring 2013

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BY KEVIN MOE

Giving Dogs the Four-Star Treatment

Two of John Sturgess’ passions are the hotel business and dogs. For more than 20 years in corporate America, this ’08 MBA’s entire career has been in what he calls the “human hotel business.” After enduring many years of traveling for work and having to bring his two golden retrievers to boarding facilities, Sturgess was struck with the idea of merging his love of pets with his knowledge of the lodging industry. From this, ADOGO Pet Hotel was born.

Located in Minnetonka, Minn., ADOGO Pet Hotel offers dog boarding as the name implies. But it also offers other amenities such as daycare, grooming, and training. “We are focused on the high-end segment in all services we provide,” Sturgess says. “Local news stations have called ADOGO the Westin of the dog hotel business.”

Sturgess knows that, like him, people love their pets and want them treated first-class—and he has the numbers to back him up. “The pet industry is the seventh largest industry in the United States,” he says. “It has grown from a $17 billion business in 1994 to over $53 billion in 2012. This growth has been two to three billion dollars per year since 2008. Thirty-seven percent of U.S. families own a dog, with over 80 million dogs in the U.S. More importantly, the segment I am focusing on is relatively new and will continue to capture market share as pet owners treat their dogs more like family members than pets.”

To get ADOGO up and running, the Carlson Executive MBA program (CEMBA) was an intregral part of his business plan, Sturgess says. “Several aspects of the CEMBA program assisted in giving me the tools and confidence to move forward with starting ADOGO,” he says. “First of all, the professors structured most classes from a consultative perspective in which we discussed solutions and outcomes as if we were decision-makers, not just students analyzing a specific problem.”

Another benefit he highlights is being with the same students during the entire two-year program. “We became our own critical sounding boards and consultants,” he says. “With such a broad range of experience and expertise, we held many internal—during class time—and external discussions.”

Sturgess also credits the program with strengthening his accounting acumen, building on his marketing knowledge, and helping him understand the role organizational behavior and business ethics play in decision-making and engagement. “Decisions we make at ADOGO have to be in balance with the following three issues in order to move forward: quality, market share, and profit,” he says. “We look to build sustainable cash flow, quality, and market share in balance with each other.”

Sturgess can even point to specific professors and their classes that helped him get ADOGO off the ground. “Ken Roering’s marketing class was effective in showing us how to grow business and the strength of a good plan,” he says. “George John’s analytical marketing class and Aks Zaheer’s management class focused on the bottom line. And Mary Zellmer-Bruhn’s organizational behavior class was a great opportunity to look at companies internally to see how they communicate and build corporate culture and employee engagement.” Ed Joyce and Charlie Caliendo’s accounting classes are also credited by Sturgess, as well as a statistics course taught by Christopher Nachtsheim. “Chris’ stats class opened my eyes and sometimes glazed them over, but when I did a regression analysis, I had the “a-ha” moment,” Sturgess said.

Although ADOGO keeps him busy, continuing a relationship with the Carlson School is important, as well as enjoyable, for Sturgess. “I have been on panel discussions, spoken in classes, and have been a mentor in Carlson’s mentor program the past two years,” he says. “Even though I am still in the early stages of building my business, I will continue to work with the Carlson School, from speaking, mentoring, and other roles that will benefit students and future entrepreneurs. I do believe I can be a valuable resource to students because they can watch ADOGO evolve in its early stages.”

As for being an entrepreneur, Sturgess has a simple credo: “It is a journey that will be successful if you are engaged and committed to it! And I am!”


Aderinkomi Photo

Making Healthcare More Affordable

Thompson Aderinkomi, ’11 MBA, says there is one and only one problem with healthcare in the United States today—price. He saw this first-hand after his son, Enoch, was born in December 2010. Like most kids, Enoch gets sick. Aderinkomi and his wife had a high-deductible health insurance policy, and each time Enoch went to the doctor, they were billed $144. In one month, Aderinkomi brought his son to the doctor twice, only to be told that he would recover naturally from his illness; on the third visit Enoch was diagnosed with pneumonia.

Aderinkomi’s misadventures with the healthcare industry led him to conceive of RetraceHealth. “My mission is to make healthcare dirt cheap while maintaining quality,” he says. “I want even the lowest-income households to be able to pay for high-quality primary care without the need for health insurance. When everyone can afford healthcare, our nation will be healthier physically and economically—this is what I want more than anything.”

Originally, RetraceHealth was to be a technology and marketing firm that would enable traditional primary care clinics to leave the health insurance world and join the direct-pay world. “In order to get things started, I partnered with one of the largest independent clinics in the metro area to develop the technology and processes and investigate the economics of the value proposition,” Aderinkomi says.

However, after several months, the clinic pulled out of the collaboration to build its own direct-pay primary care platform. “My mission and their mission, although related, were somewhat misaligned,” he says. “My focus is on making access to a doctor as affordable as possible. This requires major changes to the primary care clinic business model.”

After wallowing in despair for a month and consulting with his advisors, Aderinkomi resolved to solve the healthcare price problem for the average American. “I decided that the only way I was going to do this was by opening clinics of my own with a new business model,” he says. “This is how the current version of RetraceHealth came to be. We have reengineered the business model for primary care so that unlimited primary care, with no copays, can be had for $1 per day. Any day the member is sick, they get a refund. Members are paying for wellness, not sickness. Whenever possible, the visit is conducted via video chat or phone with a real clinician within driving distance. If the clinician cannot resolve the issue virtually, she will go to the patient’s house to collect lab samples or conduct an exam.” RetraceHealth will conduct a pilot with 150 members starting in May 2013 for two months in order to fine-tune the model. In exchange for paying to take part in a pilot that is sure to have a few bumps, the 150 pilot customers will all become lifetime members of RetraceHealth.

Aderinkomi credits the networking opportunities he had at the Carlson School to get him so far in his entrepreneurial efforts. “One of my most valuable advisors is Kyle Rolfing [’94 MBA and founder and president of RedBrick Health],” he says. “He has been advising me since 2009. If I had not met Kyle, I would not have had many of the opportunities that I have had over the last three years.”

Aderinkomi still maintains close ties with the Carlson School. “I am in regular contact with Toby Nord, Steve Parente, and other key people,” he says. “I cannot count how many prospective students I have spoken with. Most recently, I was on the Final Case Competition judging panel for the class of 2013.”

In the future, he hopes to run a program or teach a course where students start real businesses in the MBA program. “If I am so lucky to become successful enough to make it onto the Carlson Hall of Fame—I am shooting for the 2018 slot—I would certainly like to fund as many scholarships to the full-time program as I can,” he says.


Jones Quote

Better Living Through Microbes

In 2011, Lee Jones, a 1995 graduate of the Minnesota Executive Program through Executive Education at the Carlson School, was a CEO-in-Residence at the University’s Office of Technology Commercialization. She was helping to look at technologies that could be potential spin-out businesses for the U when she became intrigued with a new technology.

The new technology entails using microbes to treat gastrointestinal disease. More specifically, microbes from healthy people’s fecal material are taken and transplanted into sick people to cure their illness. “I volunteered to help evaluate the business with the researchers who were investigating the technology,” she says.

Fecal transplants have been used clinically on humans for more than 50 years to treat patients, yielding amazing results. “The procedure is very simple: fecal matter is collected from healthy individuals, mixed up with some liquid so the solution is runny, and then the resulting product is instilled into a sick person’s intestinal tract,” Jones says. Transplants of a healthy gut microbe population, or rebiotic therapy, work by correcting the imbalance of the sick patient’s microbiome and naturally suppressing the overgrowth of undesirable microbes.

The main problem with fecal transplants is that they are time-consuming and messy. “The doctor who wants to do this procedure has to get a donor, screen him or her for diseases, secure the stool sample, mix it up, and apply it to the patient,” Jones says. “They do not get paid for this by insurance, and the patient typically pays out of pocket. At Rebiotix, we have taken the manufacturing process out of the hands of the physician and are making available a product that can be delivered when it is prescribed for the patient.”

Jones has made a career in the biotechnology industry, armed with both her Carlson School degree and an undergraduate degree in chemical engineering. She worked for 14 years at Medtronic and for nine years was president and CEO of Inlet Medical, Inc., a manufacturer of laparoscopic surgery procedure kits. She also was the chief administration officer at the Schulze Diabetes Institute at the University for two years.

In regards to this new technology, Jones knew it was promising. “Unfortunately, the scientists decided to work with someone else, but I decided that the business was worth pursuing and started it on my own,” she says. “I found some partners, we founded the business, raised our money, and got going.”

Rebiotix, Inc., located in Roseville, Minn., is about to begin clinical studies to gain FDA approval for the therapy. “The true potential of rebiotic therapy has yet to be seen, but early work indicates that it may have a place in the treatment of other conditions such as ulcerative colitis, Crohn’s disease, or even obesity,” Jones says. “We are very excited to be on the forefront of this new wave of medicine.” The technique has received a lot of attention in the press in recent months, and Jones says Rebiotix is happy the therapy is getting validation.

She adds that she appreciates all the support she has received through her connection with the Carlson School. “Several groups helped me, particularly students from the Ventures Enterprise under the leadership of Toby Nord and Connie Rutledge, and students from the Medical Industry Leadership Institute under the leadership of Steve Parente,” she says. “I have worked with students from these groups in several of my endeavors and can’t say enough good things about them.”

Jones also likes to give back, as she has a particular interest in seeing women succeed in business. Besides being a mentor to students and Minnesota Cup participants over the years, she also has participated in several classes at the Carlson School and devoted much time to the entrepreneurship program. “I am a big supporter of the University and the Carlson School and plan to stay involved,” she says.


Johnson quoteTo Serve the Underserved

In many urban areas, small neighborhood businesses are often the largest private employers in the immediate community. As they provide jobs to residents and inject money into the local economy, their success brings stability to the area. At the same time, if these businesses fail, their loss can be felt beyond their immediate walls.

“The burgeoning unemployment rate in our country is fueling a more severe economic depression in urban America,” says current MBA student Duane Johnson. “This is placing a burden on taxpayers and diminishing our country’s economic competitiveness.”

As a bulwark against this crisis, Johnson and his business partner, Sean Armstrong, co-founded Tuloko, an online platform that markets underserved urban businesses across the country through its B2C website and smartphone app. “Tuloko is driving customers and capital to these small, underserved businesses,” Johnson says. “In turn, there will be an increase in demand for their products and services. Consequently, they will create more jobs.” The company’s motto is “Make Every Day Black Friday,” as its goal is to create a shopping frenzy at these businesses year-round.

Using Tuloko, consumers can obtain specific details about a small business in their community, read and write reviews, and share their Tuloko experience with friends through social media outlets such as Facebook and Twitter. “The people in our target market are the largest users of smartphones and social media and they have a $1 trillion buying power,” Johnson says. “Tuloko is leveraging this buying power with technology.” Since its founding, Tuloko has been profiled in the Star Tribune, Twin Cities Business Magazine, and TECHdotMN. The company has grown to include a web developer, designer, videographer, and three interns. It is currently seeking corporate partners and sponsors.

An asset to his business, Johnson says, has been the Carlson School. “The school, in particular the Holmes Center, has given me an abundance of resources to take our business from an idea to a ‘lemonade stand’ to a minimum viable product to winning the Social Entrepreneur Division of the 2012 Minnesota Cup,” he says. “John Stavig and Toby Nord have been my biggest supporters. These guys are always accessible, and they challenge every new idea or strategy I share with them. This way, I know when to pivot or persevere.”

Johnson adds that he has been able to take away a new tool or concept from every class that he has taken in the MBA program and apply it to his business. “The Carlson School has a great mixture of scholars and practitioners training us to be future business leaders,” he says. “In the future, I would like to mentor a student entrepreneur and be a benefactor to the school. I’ve benefited tremendously from Carlson, so I would be remiss not to give back.”


On The Road to Success Photo

 

Prodality Logo

Parag Shah, ’09 BSB, has a passion for building technology companies. His first company, Lunchbox—a menu technology platform for the restaurant industry, was developed while he was attending the Carlson School. With this company, he was named as a finalist in the 2009 Global Student Entrepreneur Awards. He has since launched Prodality, LLC, a technology services company that specializes in web-based companies. Prodality partners with entrepreneurs who have idea concepts that solve a core problem and brings them to market through strategic business solutions. Through Prodality, Shah has created and launched three other companies: BookBottles, WaitMaster, and Foodsby.

“Prodality has grown tremendously since its inception,” Shah says. “The vision is to continuously identify and solve core problems in various industries while exiting out of existing companies within three to five years of their launch.”

Visit Prodality at prodality.com.


Naiku Logo

Armed with a PhD in psychology from Carnegie Mellon University and an MBA, ’10, from the Carlson School, Adisack Nhouyvanisvong is an expert in computer-based and computer-adaptive testing. Because of his passion for improving education, he co-founded Naiku in 2010 with MBA classmate Corey Thompson. Naiku, which means “teacher” in Lao, is a learning and assessment platform for teachers and students. Students engaging with Naiku get continuous and specific feedback on their responses, which helps internalize the concepts being taught. Teachers are shown immediately their students’ strengths and challenges so they can adjust their lesson accordingly. Naiku won the 2011 Minnesota Cup High Tech division and the 2012 and 2013 eSchool Media Reader’s Choice Awards.

“2013 is an exciting year for Naiku,” Nhouyvanisvong says. “We’ve been at this for two years now and we’ve established ourselves in the upper Midwest. This year, we look to continue our aggressive growth and establish ourselves as a national player in this exciting educational technology market.”

Visit Naiku at naiku.net.


Rock Your Block Logo

Since she was a child, Sarah Young, ’10 BSB, had a strong work ethic. From dog walking to babysitting, she was always on the lookout for another odd job or two or three. When she later discovered job posting websites liked Monster and LinkedIn, she was struck that there was not a similar service for young teens wanting to earn a few extra dollars. She ended up filling this void with Rock Your Block, a mobile application that provides a safe and simple way for teens to find jobs in their neighborhood, part-time work, and internship opportunities.

“We have a quickly growing user base here in the Twin Cities, and we are currently preparing to bring our services to other major cities in the next few months,” Young says. “We have new job opportunities being added every day—everything from individual neighbors looking to hire a babysitter to youth organizations looking to recruit for their summer programs.”

Visit Rock Your Block at rockyourblock.com.


Fulton LogoFulton Beer got its start in a South Minneapolis one-car garage in 2006. That’s where Ryan Petz, ’10 MBA, and three of his friends had set up their home brewing equipment. Three years later, they decided to try and make their hobby into a career and launched Fulton Beer. Petz, serving as president of Fulton Beer, has seen his company grow from a modest operation into a 6,000-square-foot brewery. Its taproom opened in March 2012.

Visit Fulton Beer at fultonbeer.com.


Hot Wok Logo

Vuthy Taing, with a 2013 dual degree in applied business from the Carlson School and in communication studies, cut his teeth in several different restaurants, working as a host, waiter, and manager. From that experience and by examining the marketplace, he discovered that there were no franchisors of Asian delivery food. Seeing a niche, he recruited two of his friends to launch their first restaurant, HotWokDelivery, in Coon Rapids, Minn. The outlet ended up generating $600,000 in revenue in its first year and expanded to another location in Buffalo.

“One of the keys to business success is asking yourself, what is your customer hiring you to do? Yes, HotWokDelivery is a fast-casual Asian restaurant and we offer delicious and healthy meals, but what we really do is provide convenience,” he says. “By ordering from our restaurant, our customers save time. If you can provide a solution to your customers’ problem, you will have a successful business.”

Visit HotWokDelivery at hotwokdelivery.com.

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