TECHdotMN: News about Minnesota Startups

By Camella Mendez (updated 1/21 with quote from Senator Klobuchar)

Yesterday’s ‘SOPA blackout’ was cause enough to close the curtains on major websites like Wikipedia, Reddit and Boing Boing for extended periods of time — up to 24 hours in some cases. Google, craigslist, Mozilla and many others leveraged their reach to inform the masses of congress’ radical plans to legislate, control and censor the global Internet in name of piracy.

But the heightened awareness – or lack thereof – failed to reach Minnesota’s own Senators Al Franken and Amy Klobuchar who are co-sponsoring SOPA’s sister bill, PIPA. Though SOPA has been halted in the House (for now), PIPA is still alive and has the ability to inflict a crippling blow to Minnesota’s startup community if passed on January 24th.

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By John Tedesco,

Many members of the Twin Cities tech community were  disappointed with an article in the Star Tribune on November 16 with the headline “Problems Hit Tech Accelerator.” The accelerator referenced is Project Skyway, co-founded – and 100% financed – by local tech entrepreneur Cem Erdem.

The article summarized the inaugural year of the program by focusing on a series of operational issues, including complaints about disorganization, unmet expectations and renegotiations of equity allocations.  I felt the reporting had a negative slant and was short-sighted, highlighting what are routine issues in early-stage ventures while de-emphasizing its accomplishments and ignoring the longer term goals of this type of organization.

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By Ryan Ruud

From analyst, to gamer, to entrepreneur — east coast native Chris Carlson has quietly built a multi-million dollar internet marketing network in the world of online poker.

In 2004, Carlson began supplementing his income by playing poker online, but his business acumen naturally led him to more.  “Managing statistics and transactions was a pain,” Carlson recalls, “So I created various software and marketing tools to manage and fund it all.”

His first product, RakeTracker (rake = house commission) proved a worthy proposition to a growing audience, essentially discounting the cost of play through reimbursement.

Over the next 7 years, Carlson launched multiple sites like affiliateEV.com & yourpokercash.com which all fall under the holding name FourCubed. The Northeast Minneapolis company now  has 19 employees, revenues topping $10m, and was recently named to the Inc. 500/5,000 fastest growing private companies list.

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By Ryan Ruud

Brendan McCarthy recalls one of his earliest entrepreneurial experiences, when at just nine-years old, young McCarthy spotted opportunity in the potato business.

While living in a small French farming town, the shipping trucks would inevitably miss a few potatoes during the annual harvest; his first transaction was found in gathering these left-behind spuds, only to turn around and sell them back to the townspeople through his ‘potato stand’.

“I think I only made one sale…although it was at a 100% profit margin,” he jokes.

Das Boot

One was all it took for his entrepreneurial spirit to take hold, carrying him from one scheme to another over the years.   Some time later, while completing his Masters Degree at the University of Wisconsin Madison, he took his first stab at e-commerce via eBay — seeking to emulate the successes of a friend and roommate.

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By Ryan Ruud

Reserving your own space at that nearby nightclub just became easier than ever before. Want to add some top shelf liquors to your table? Skip the line and spin records with the DJ?

Minnesota startup BookBottles launched this week to “bring the nightclub industry into the 21st century,” says CEO Adam Link.  The SaaS company manages customer logistics to let nightclub owners, managers and promoters do what they do best: create great customer experiences.

According to Link, the standard way of getting on a guest list and reserving tables has been a tedious process with plenty of room for error. “You make a phone call to a club, and if they pick up, they’ll take a reservation with a paper and pen. There’s all sorts of potential problems here.Who wants to take that type of risk when they’re arriving with friends or business associates at midnight?”

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By Lief Larson, Workface Inc.

If you’re an entrepreneur, there’s something wrong with you. You have a genetic predisposition for risking it all. Your DNA is programmed to follow a blurry vision. You’ll slave away during all hours of the day to bring that vision into focus and subject yourself to all the tortures that precipitate success. It is truly abnormal.

You are a masochist who is mentally prepared to run an ultra-marathon with an invisible finish line. Yet, you are confident in the pursuit of your destination.

While your ultimate goal is to succeed in crossing that line, the path can be a dance with death. On this journey, it’s about survival mode. It’s about performing a daily gut-check to see if you have what it takes to make it despite seemingly insurmountable odds. You learn what it means to become a relentless warrior.

With over a decade of tech entrepreneurship behind me and even more to come, I’ve learned a lot about entrepreneurial survival. I’ve gone into debt with a lot of zeros behind it and  magically turned it into profit.  I’ve taken pockets full of hard earned cash, put it all at risk again, because, like you, I believed in something.

Entrepreneurial survival takes incredible fortitude.  What works for me may not work for you. Take what you want and leave the rest; sometimes you get what you pay for. Here are ten entrepreneurial survival rules to live by:

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By Hayden Creque, Creque Law

According to a March 2011, Ponemon Institute post, the average breach notification incident costs $214 per compromised record and an average $7.2 million per data breach event. If your business — large or small — collects personal information, you are target.

Failure to take reasonable measures to protect your customer and employee information risks significant business losses, reputational damage, and the wrath of the courts and enforcement agencies. Especially vulnerable are startup companies whose resources can be wiped-out by even the slightest hack.

So…what to do?

This article outlines the legal requirements when an organization detects a security breach, gives an overview of incident response planning and provides tips for preventing and responding to security breaches.  Following are a few basic suggestions to mitigate the risk of a breach:
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By Hayden Creque, Creque Law

Last month I wrote about Senator Franken’s work to protect consumers’ geolocation information.  On June 15, just over a month after chairing hearings that questioned Apple and Google on their data collection practices, Senator Franken introduced a co-sponsored bill that seeks to protect smartphone location privacy.

The Location Privacy Protection Act of 2011 (S.1223) supplements current federal law and requires companies that obtain a customer’s mobile device location to get that customer’s prior express consent and get that customer’s permission before sharing location data with third parties. Furthermore, the bill requires a company who obtains the location information for more than 5,000 mobile devices to take reasonable steps to protect that information.  The bill also contains provisions that require disclosure of information collected on customer request and deletion of the information in some circumstances.

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Via News Release

“Navarre (Nasdaq: NAVR) announced today that Eric Paulson, 66, Chairman of the Board, will retire from his position as chairman and director after completing his current term. Paulson will not stand for re-election at the company’s annual meeting of shareholders in September 2011.

“Eric has been a pillar of the Navarre organization for nearly 30 years, and we are grateful for his vision, leadership and years of service as the founder of the company, former chief executive officer and chairman of the board,” said Keith Benson, board director. “We respect Eric’s desire to retire at this point in his life and enjoy some well-deserved leisure time. We wish him the best of luck in his future endeavors, and we are confident he will use his wisdom, background and entrepreneurial skills to counsel varied businesses and continue his great work in the community.”

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By Hayden Creque, Creque Law

In 2011, both of Minnesota’s Senators have called for change in mobile device practices. Following is a recap of their efforts along with best practices for Minnesota companies operating in the space.

The Timeline:

On February 8, Senator Amy Klobuchar sent a letter to the FTC, urging greater scrutiny of “in-app sales” where she called for transparency in the “billing practice that holds the potential for consumer confusion.” Her letter was on the heels of several critical media reports, including a notable Washington Post article. The issue was that Apple did not require reentry of a user password for fifteen minutes after an application was downloaded; in those fifteen minutes kids were making multiple in-app purchases, reportedly in some instances totaling as much as $1,400.

On March 9, Apple released an update to its mobile operating system that required password reentry after download for in-app purchases (but it maintained the 15 minute window). Thus, users can make purchases prior to a requirement of password reentry. In response, Senator Klobuchar released a statement on March 11, commending “this common sense safeguard” though she caveated her statement by saying “we can still do more to eliminate outrageous charges.”

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