Innovation. Drive. Purpose. Conversations with the leaders who make business work in Minnesota.
Innovation. Drive. Purpose. Conversations with the leaders who make business work in Minnesota.
Episode 39 - Matchstick Ventures Partner Ryan Broshar
Growing up on an Iowa farm taught Ryan Broshar about taking risks and working hard. And it made him realize at an early age that he’d rather sell the corn than harvest it. His first startup, a university-based publication business called University Guide, grew out of an entrepreneurship class assignment at the University of Minnesota. It became a profitable business that Broshar sold two years out of college. While pursuing an MBA at Colorado University-Boulder, he got involved in the emerging startup community and worked for an investment fund. It was 2008—“the economy was crashing, but (tech startups) weren’t going down; they were thinking forward.”
When he and his wife moved back to Minnesota to be closer to family, Broshar saw an opportunity to support the Twin Cities startup community. He co-founded BetaMN, a support system for founders that puts on a showcase-style event to connect founders with investors. Next, he co-founded Twin Cities Startup Week, which has become a national draw, attracting large companies and investment dollars to Minnesota. He was instrumental in bringing the Tech Stars Retail Accelerator program to Minnesota, and served as managing director for four years before leaving to concentrate on Matchstick Ventures, a seed stage firm focused on early stage tech companies in the Midwest and Rockies. In 2019, Matchstick raised $30 million in its second round. The fund has invested in 50 companies to date including Upsie and Inspectorio.
“What I really liked about my own startup was the start,” Broshar says. “I like the zero to one of building a company. One to 10, I get kind of bored and start thinking, what’s the next idea? When you’re investing, you’re always starting. It’s a great fit for me.”
Early stage investing appeals to Broshar because of the mentorship component. “You have to have empathy for the founder and understand there are going to be pivots. When you’re an early investor in an early stage company, it’s part financial support, part cheerleader, party psychologist. Being a founder is a lonely road and a lot of times, they look to investors as their strength.”
What do Broshar and his Matchstick partner look for in startups? “We like to support founders that are underdogs. That come from untraditional backgrounds. People who have the feeling they were put on Earth to solve this problem. They’re obsessed with what they’re doing.”
Being a venture capitalist isn’t for everyone. “You’ve got to love coffee,” Broshar says—only half jokingly, describing the significant amount of time he devotes to meeting potential founders, partners and investors. And you have to get comfortable saying no. “The Midwesterner in me wants to please everyone,” Broshar says. “It really comes down to: Is this a fit, is it a good use of my time. I’m trying to be very clear about the kind of stuff Matchstick likes to invest in. And if I can make connections, I'm happy to do that.”
As for the VC world in general: “Venture capital is insanely risky,” Broshar says. “It’s the only profession in the world where you can be wrong the majority of the time and still be the best at it.”
After our conversation with Broshar, we go back to the classroom with the University of St. Thomas Opus College of Business. Entrepreneurship professor John McVea points out that less than half of a percent of all startups get venture funding. Of them, less than 1 percent make it to $1 billion in value, but those “unicorns” as they’ve come to be known, generate the lion’s share of publicity.
While VC money is less prevalent than the media would have you believe, “Venture capital has had a huge cultural influence,” McVea says. “Along with the VC model came the idea of the lean startup: get a quick product out the door really fast, try it, measure and lea
Episode 38 - Branch founder and CEO Atif Siddiqi
Atif Siddiqi knew he wanted to build a business. When considering problems to solve, he harkened back to his high school sales job at a t-shirt shop, where there was no automated system for employees to trade or pick up available shifts. Years later, he discovered, not much had changed. He launched Branch in 2014 as a scheduling tool for hourly employees. It has since evolved into a mobile-first platform on a mission to “make the lives of hourly workers financially better.” Branch provides no-cost advances on earned wages. The app is used by hundreds of thousands of hourly employees at large companies including Life Time and Target. Along the way, Siddiqi has become an authority on the topics of employee satisfaction, financial wellness, and how employee engagement can help a company’s bottom line.
“What we hear is employees are looking for more predictability in their schedules as well as flexibility. Uber has made it possible to pick up a shift any time—that’s driving consumers to want that from their workplace,” Siddiqi says. “Unemployment is at all time low. Companies are having a tough time attracting talent. When they do, the vast majority are seeing 60 to 100 percent turnover annually. The average cost to hire a new employee is $2,500—that’s recruitment, on-boarding, training. Anything we can do to slow down churn goes a long way toward the bottom line. It’s investing in growth.”
Forty percent of Branch users have no money in the bank; 75 percent have less than $500. “An unexpected expense can really derail their personal and work lives,” Siddiqi says.
A California native, Siddiqi moved his company to Minnesota in its early days to participate in Target Tech Stars. The experience was critical to Branch’s success. “For an entrepreneur, working with a big organization is like a black box—you don’t know how decisions are made. It allowed us to peer inside the black box, understand how tech initiatives are implemented, how they’re deployed, how new tech interacts with all the existing tech already in place. It was really fundamental to us understanding how to deploy within an organization. One of the things we got really good at: reducing amount of friction to implement.”
By the time Branch completed Target Tech Stars in 2016, the company was growing and Siddiqi decided to make Minneapolis headquarters, and home. “The Twin Cities has a lot of great talent, especially around enterprise B-to-B software.”
Branch employs 65 (up from 45 when this interview was recorded just a few months ago), has raised more than $10 million, and is making money, Siddiqi says. “If we can help employees continue to grow their account balance over time after downloading the app, that’s success for our team—our North Star and what guides us.”
As far as advice for other entrepreneurs? “Start building,” Siddiqi says. “There’s no substitute for actually building product, learning from customers and hearing what they have to say.”
We dig into that strategy in Back to the Classroom with the University of St. Thomas Opus College of Business. John McVea, an associate professor at the Schulze School of Entrepreneurship, says there’s been a huge change in emphasis on entrepreneurial strategy from ready, aim, fire, to fire, ready aim. “We used to teach: think, research, plan, execute. Logical, not random. But when we talked to real life entrepreneurs, very few operate this way. They jump off a cliff and try. They make mistakes, pivot, learn, and keep going. Often they end up in a place that is different than we would have ever intended.”
The takeaway? “I’m not saying don’t plan,” McVea says. But he urges entrepreneurs to take a more outward focused approach. “Spend time making a product, making mistakes, and learning.”
Episode 37 - Mercury Mosaics Founder and CEO Mercedes Austin
From maker to manufacturer: Mercedes Austin started making ceramic tiles in her apartment 18 years ago, and today, her company, Mercury Mosaics, occupies a 15,000 square foot factory in Minneapolis that produces tile for Room & Board, lululemon, PF Chang, major hotel chains, and other large clients as well selling direct to consumer. In the next year, Mercury Mosaics will open a second manufacturing center in Wadena, Minn. and a third is already being planned—both with a focus on creating jobs in small towns.
It’s been a long and winding road for Austin, who stumbled into ceramics while studying psychology and took on apprenticeships to learn the trade while waiting tables to pay the bills.
“I didn’t start out with the greatest self-worth,” Austin says. “My mom didn’t give me money, so I always had to figure out a way. Becoming resourceful, not having anything handed to you—it always motivated me to do really well by any means necessary. I’m most proud that I didn’t turn out how everyone said I would.”
Ten years ago, as Mercury Mosaics gained momentum, Austin stopped making tiles so she could concentrate on growing the business. She shares stories of how she gave tile away to make connections with architects and how she changed her sales strategy seven times and eventually stopped paying commission to create a more cohesive team focused on growth.
“I’m not afraid to start things over,” Austin says. Since eliminating the commission structure, sales have grown by 25 percent. “We formed a team that is working together versus internal opponents.”
After our conversation with Austin, we go back to the classroom with University of St. Thomas Opus College of Business. Professor David Deeds, the Schulze Endowed Chair in Entrepreneurship. Deeds zeroes in on the key to Austin’s success. “She started with passion for art and craft. But her passion today is about managing this business. She’s really evolved. She’s been open to learning and picking up the skills she needed.” That transition is essential, he says, for a founder to become a successful CEO.
Episode 36 - Jonny Pops Co-Founder and CEO Erik Brust
Erik Brust was still a teenager when he came up with the idea for an all-natural popsicle—a fruit smoothie on a stick. He and some friends started making them in their dorm at St. Olaf College and by the time they graduated, Jonny Pops was a brand on the rise in the frozen foods industry. Eight years later, St. Louis Park, Minn.-based Jonny Pops is sold nationwide at Target, Costco, Sam’s Club and many other chains. In 2018, Brust and co-founder and chief financial officer Connor Wray were named to Forbes 30 under 30 list of young entrepreneurs. At 27, Brust is CEO of a fast-growing company with nearly 50 employees…most of whom are older than he is. “They love telling me I’m younger than their kids are,” he says.
Brust talks about how he got Jonny Pops off the ground (“I don’t see any other way to get a business going unless you commit 100 percent to it.”), the lonely process of raising money (“It’s very humbling to go out there and pitch your idea and hope that people are going to believe in you and then give you money to go live that out.”), and transitioning from founder to leader. “I’ve shifted from individual contributor–making pops, working farmers’ markets—to, how do I hire people who are better at this than I could ever be, and have a consistent culture.”
He shares his biggest mistake: being too slow to hire. “You realize how much stronger you are when you have amazing people working on the business.” And Brust discusses the opportunities ahead for Jonny Pops. “We’re in 12 to 15 percent of grocery stores. Now we’re setting our sights on 60 to 70 percent and thinking about how to kick off big advertising campaigns and innovate new, exciting flavors. All of those are fun for us right now.”
After our conversation with Brust, we go Back to the Classroom with the University of St. Thomas Opus College of Business. John McVea, an associate profession in the entrepreneurship department, talks about the different leadership styles require to take a company from startup through growth. “In the startup phase, you need someone with really clear vision. Almost autocratic. Never compromise. You also need a person who is charismatic,” McVea says. “You get to a certain point in growth when suddenly growth is not the singular objective. Consistency, efficiency, cost, management become important as well. This is when you see many serial entrepreneurs leave. They don’t find it fun, and don’t make it fun for anyone else.”
Episode 35 - Paul Douglas, meteorologist and entrepreneur
Throughout his career as a TV meteorologist, Paul Douglas has found ways to turn weather data into business. He's launched and sold more than one weather related startup and has several others up his sleeve.
"i love the intellectual challenge of launching new businesses," Douglas says. But he also loves telling weather stories, and finding ways to innovate.
During his time at NBC affiliate Kare 11 in the 1980s and early 90s, Douglas launched the “backyard” format, which is still used today by that station, and many others nationwide. He also became one of the first meteorologists in the country to use graphics in his report. He worked for a time at WBBM-TV in Chicago, where he made occasional appearances on the CBS Evening News with Dan Rather. Then he became Minnesota’s first certified broadcast meteorologist, and returned to Minnesota where he served as Chief Meteorologist for WCCO-TV from 1997 to 2008. Meanwhile, off camera, he started realizing the opportunity to pair his meteorological expertise with technology.
It started with creating better TV graphics. “I wanted to disrupt what had become boring,” Douglas says. He launched EarthWatch Communication, delivering weather graphics to hundreds of television stations in the United States and 20 other nations. And he founded Digital Cyclone, Inc. (DCI), which, in the pre-iPhone era, personalized the weather forecasting experience for consumers on the web, e-mail and cell phones. In 2007, he sold DCI to Garmin, Inc, for $45 million.
Douglas has three new companies that offer weather data to businesses, from farming to manufacturing to Netflix, which, he says, knows that viewing habits change based on the weather. “Weather directly impacts about one third of the GDP,” Douglas says. “Smart companies are pulling data in, they’re not just watching weather shows.”
His next venture: helping businesses estimate the impact of global warming and weather volatility on their supply chains and facilities. “Sustainability is not a fad; it’s a trend,” Douglas says. “I’ve been talking about climate change for 25 years. I’m a conservative, but the data is the data. We have to figure out how to keep the economy rolling along, keep people employed while putting a lighter footprint on God’s creation.”
Douglas talks about the challenges of being both entrepreneur and media personality. Today, he provides daily print and online weather services for Star Tribune in the Twin Cities, and co-hosts WCCO Radio’s afternoon show with Jordana Green. During extreme weather, you’re likely to find him on MSNBC or CNN.
After our conversation with Douglas, we go back to the classroom with the University of St. Thomas Opus College of Business Professor David Deeds, the Schulze Endowed Chair in Entrepreneurship, who shares his take on why Douglas has been so successful as an entrepreneur. “He leveraged a core skill and married it to different kinds of applications.” When you know the subject matter, Deeds says, it’s easier to understand the problems, and spot opportunities for disruption.
Episode 34 - Caribou Coffee President and CEO John Butcher
John Butcher held 15 jobs in 20 years with Target Corp. and it taught him to get comfortable with being uncomfortable. So when an executive recruiter called about a leadership role at Caribou Coffee, the Minneapolis-based premium coffee chain with nearly 700 locations worldwide, Butcher said yes to the interview, even though he knew very little about coffee or the restaurant business. “Any business that can strike an emotional chord is interesting to me,” he says.
Butcher joined Caribou as president in 2017, at a time when the company was “not reaching its potential,” Butcher says. “Ultimately, we weren’t being very guest focused." Butcher talks about how he listened, learned, and made purposeful changes that have resulted in improved sales, employee retention, and the best customer service feedback Caribou has ever received.
In 2019, Butcher was named CEO of Caribou, which is owned by Luxembourg-based JAB Holdings Co. but has its headquarters in a suburb of Minneapolis. He has since embarked on plans to redesign Caribou cafes, open smaller format stores, and move into canned beverages. He talks about coffee trends, shares leadership advice, and offers tips in shifting culture and adding purpose. Says Butcher, "It’s important to me to know the effort I’m putting forth every day is doing more than making money."
After our conversation with Butcher, we go back to the classroom with Gino Giovannelli, a digital marketing professor at the University of St. Thomas Opus College of Business, who points out some of the leadership decisions that have allowed Butcher to thrive as a newcomer to Caribou. “The answers come from within. But you have to be willing to ask, and not immediately try to fix.”