What strikes Lisa Schlosser is how intertwined with high technology we are as consumers and businesses.

She’s the interim president and CEO of the Minnesota High Tech Association (MHTA). “We’re becoming more digitally mature, and our expectations are growing,” Schlosser says. “We get what we need instantly. What that brings is a lot of opportunities for businesses to meet those needs.”

Because of technology, businesses are increasingly adept at a variety of digital functions. “Think of a traditional retailer,” Schlosser notes. “They’re going to have a finance component.” In addition, retailers need to keep tabs on innovations in supply chain management and logistics. They’re using data analytics to glean deeper customer insights and patterns from enormous quantities of digital data, using emerging techniques in artificial intelligence and machine learning. And they need to create cybersecurity protocols to keep all that sensitive data safe.

Retailers combine these elements to meet consumers’ digital expectations, Schlosser adds. And it’s not only retailers that are making use of these elements. Digital consumers are both business-to-consumer and business-to-business. They have many of the same expectations.

Tech-industry experts frequently talk about “disruptive” and “transformative” technologies. What many companies want are emerging digital innovations that address real-world, real-time business challenges. Many new digital tools are being deployed, including some developed in Minnesota.

Talent search

“Finding and keeping talent is pretty much top of mind for all businesses,” says Reed Robinson, executive director of Beta.MN, a Minneapolis–based nonprofit. He says his organization “develops Minnesota’s next generation of business leaders by inspiring and educating first-time founders.”

Businesses need effective new ways to recruit. Several technology startups are creating ways to do just that. One is Edina–based deltPRO, whose software is designed to provide insights into job candidates that go beyond what’s listed on a resume, through what deltPRO calls a “work style assessment.”

It identifies a candidate’s talents, preferences, and approaches to work, using categories such as “inventor,” “influencer,” and “igniter.” The goal is to create stronger cultural fits, which might better predict the success of a hire than a simple set of skills. The company markets its assessment as helping to “put the right people in the right jobs,” because deltPRO is placing an emphasis on finding a good match between an employer and potential employee.

Other Twin Cities startups focused on making recruitment more effective include Jobiki, which also emphasizes cultural fit as well as skills and qualifications. “People care about the space they work in,” Robinson says. “They care about the amenities,” including benefits and office culture. Rather than just listing an open job, employers can use Jobiki to “sell” their company’s office spaces, team-building events, and get-togethers that might appeal to a talented hire, Robinson says.

“Employee experience [within a company] can unleash the potential of the workforce,” says Rob Weber, managing partner and co-founder of Great North Labs, a Minneapolis– and St. Cloud–based venture capital fund investing in early-stage tech startups in Minnesota and the Upper Midwest region. “And given how tight the labor market is, especially in areas like software engineering, product management, and others requiring innovation skills, [companies] really need to invest in employee experience.”

Another employer-employee connector is Invisible Network, whose anonymity-based listings are designed to reduce any kind of bias in the hiring process. One of its goals is helping companies increase the diversity of their workforces.

Meanwhile, many companies are finding that as their workforces grow, it’s becoming more challenging to keep track of all the talent they already have. That’s where St. Paul–based Structural wants to play a role. Officially launched in May 2017, Structural is a technology firm created to help businesses “use their ‘people data’ effectively inside of an organization,” says Chip House, COO and co-founder.

House knows he’s not breaking news when he notes that work is changing rapidly. That’s especially true in organizations where the headcount is becoming increasingly dispersed. In many industries, more employees are working remotely, at home, or in the field. At the same time, he says more mergers and acquisitions are occurring, which results in employees working in several locations. Acquirers often let employees merging into the company continue working in their original locations. House says Structural’s platform helps “disparate teams best find and connect with others across silos, and to collaborate more effectively.”

Structural is designed to make that type of people data searchable. “It’s almost like an employee directory, helping you find the right people at the right time,” House says. You can search by name, skill set, certification, and so on. Does a team leader or a client need an in-house expert in data analytics who’s also a Spanish speaker? Structural’s tool does the looking, regardless of how far-flung the location.

House says that Structural also helps companies find specialists for businesses for short- or long-term assignments, and that it makes those connections more effectively for all involved.

The platform helps “disparate teams best find and connect with others across silos.”
Chip House, COO and co-founder, Structural

Leveraging predictive analytics

A company doesn’t have to be in software development or another tech-talent-rich business to take advantage of digital innovation. Manufacturers have been using high-tech tools in production, process management, and back-office functions for years. And they’re likely to be using more technology in the future.

“It’s no small trick to be a successful manufacturer these days,” says James Seifert, head of the manufacturing practice group at Eden Prairie–based law firm Fafinski Mark & Johnson. One of the key ways that manufacturers can use high tech to boost their capabilities, Seifert says, is through predictive analytics.

By collecting customer data and then analyzing the patterns, manufacturers can make more accurate production schedules and keep customers happy. “There are huge cost savings to be had” by “spreading that throughout your whole supply chain,” Seifert notes. This can make estimating demand cycles much more accurate.

At the same time, how a company gathers, stores, and uses customer information touches on cutting-edge legal issues, Seifert says. That means, he notes, that cybersecurity will be a growth industry for tech suppliers to the manufacturing sector.

An emerging technology with manufacturing applications has been developed by Minneapolis–based Inspectorio. Its web- and mobile-based technology is designed to automate the product-inspection process. Besides generating inspection reports, Inspectorio manages purchase orders and provides factory risk assessments. Inspectorio, which is being used by Target, is focused on the retail product sector. But it could point to automated inspection and supply-chain verification systems that manufacturers could put to work.

A fundamental part of any supply chain, long or short, simple or complex, is delivery. Minneapolis–based Dispatch makes local deliveries more predictable, particularly for smaller businesses. Those deliveries can include either the company’s own products or supplies that a business needs to take care of a customer, such as repair parts.

Look for new delivery and logistics technologies to become more high-profile. In 2017, Eden Prairie–based C.H. Robinson Worldwide, one of the country’s largest logistics companies, introduced its Navisphere Vision supply chain technology, which provides global shippers and customers with a central platform for monitoring shipments. That same year, Target acquired Alabama–based same-day grocery delivery system Shipt for $550 million, with plans to expand it to more markets and other product lines.

Among emerging logistics-related companies is Minneapolis–based Foodsby, whose app drives delivery of restaurant food to office workers. This food space has a crowded marketplace. What makes Foodsby distinctive is its ability to provide a wider array of choices, largely by shifting the model from on-demand ordering to pre-ordering. That allows restaurants to better plan and organize meals for wheels, making delivery a more attractive and profitable revenue stream.

New ways to pay

Financial technology, or fintech, has become a hot space, locally and worldwide. The Minnesota Department of Employment and Economic Development describes fintech businesses as those “that develop financial products and services that are more user-friendly, efficient, transparent, and automated than in the past.” Online market research and business intelligence portal Statista reports that fintech firms amassed nearly $3.5 trillion in global transactions in 2017, estimating that figure will grow to $8 trillion by 2022.

Why? Fintech startups are filling small but crucial market niches that aren’t being addressed by many financial institutions. And they’re taking advantage of a mostly younger demographic that’s comfortable handling transactions digitally and uncomfortable with building up big credit-card balances.

A case in point is Minneapolis–based Sezzle, which has developed a free app that allows users to make a purchase, then pay for it in four installments over six weeks. The merchant doesn’t manage the installment plan, Sezzle does. What’s more, the consumer doesn’t pay any interest. If he or she defaults, there’s a $10 penalty that’s waived if the installment failure is corrected in two days. The consumer can’t use their Sezzle account if there’s a penalty on the account.

Sezzle CEO Charlie Youakim says that one of the inspirations behind his startup is that “millennials are using credit cards at a 22 percent lower rate than the generation before them.” Regulations have restricted credit card purveyors’ ability to market plastic to people under the age of 21. They also aren’t eager to ruin their credit scores with a lot of plastic-driven debt.

Sezzle makes its own money via merchant processing fees that typically are 6 percent. Merchants are paying those fees, Youakim says, “because we drive additional sales for them.” A person who sees a cool jacket in one store can buy it now, even if she doesn’t have quite enough cash in the bank. Otherwise, she might wait and buy a jacket elsewhere.

Other local fintech startups include Minneapolis–based ClickSWITCH, whose online tool simplifies the process of switching accounts from one financial institution to another. There’s also Red Wing–based Live.Give.Save., Inc., whose Spave app is intended to help people save, invest, and even make charitable donations each time they make a purchase. The company’s Spave app takes a small amount out of the user’s checking account each time he or she pays using a credit or debit card. That amount is then rolled into savings accounts and charitable organizations that the user has previously identified.

The Spave app is designed to benefit consumers, nonprofits, employers, and banks and credit unions, says company founder Susan Langer. It could be plugged into a bank’s existing mobile platform or an employee benefit program. Langer believes the social good aspect is what makes Spave unique among other personal finance apps such as Mint and Digit.

Though a great deal of fintech is available in retail and banking, “finnovation” could provide new digitally driven ways for any kind of business to help customers finance purchases. They also offer innovative ways to find funding.

One startup already at work in that space is Minneapolis–based Apruve, whose B2B crediting and invoice software integrates with enterprise resource planning (ERP) or a B2B e-commerce platform to manage customer orders placed on account. In defining its business niche, Apruve says on its website: “We extend credit to business buyers so their suppliers don’t have to.” In January, Apruve announced that it had raised $6 million in Series A financing.

Blockchain: Trust yet verify

Earlier this year, Forbes put together its “Blockchain 50,” a listing of the 50 largest companies worldwide that are exploring the use of this enigmatic transaction system. One Minnesota company, Wayzata–based Cargill, made the Forbes list. Though not on the list, Golden Valley–based General Mills also is researching business applications using blockchain.

So what is blockchain? It’s not so much a technology as a tech-driven platform for recording transactions. Much of the intrigue enveloping blockchain comes from its origins—as a distributed ledger system for cryptocurrencies Bitcoin and Ether. But more businesses see uses for blockchain technology outside of the cryptos. A distributed ledger allows all parties involved in complex business dealings, such as supply chains, verify each transaction in an online environment that is both secure and transparent.

Several companies, including some in Minnesota, are developing a new blockchain system called Hyperledger Grid that will track entire supply chains for all types of food products. Grid is an open-source blockchain platform project. Those involved in the project are building components to convey information such as contracts, representations of products, organization identities, and certifications, among others. “It’s all anchored in language that these businesses are already familiar with,” says James Mitchell, president of Minneapolis–based software development firm Bitwise IO, which is working with partners including Cargill, Intel, Target, and retail standards organization GS1 to “build” Hyperledger Grid.

Blockchain consists of exchanging blocks of data between peer nodes in a network. Blocks contain evidence of their history, Mitchell says. Containing a reference to the prior block identifier is what makes the blockchain a “chain.” The blocks are linked together. As parties add new blocks to the chain that contain transactions, “you’re building a longer and longer chain of evidence that is cryptographically secure,” he says.

In addition, “rather than having one centralized place where we’re hosting data, we actually have that data in multiple locations,” Mitchell says. “And we have certain guarantees that the software can provide around that data’s accuracy.”

Blockchain’s advantage as a distributed ledger system is it provides “distributed trust,” Mitchell says. Blockchain allows you to summarize all of the data in the database, providing an unalterable record of the transaction’s history—not solely monetary exchange. Even if a company has an adversarial relationship with the organization it’s transacting with—a competitor, perhaps—there’s an advantage in knowing that everyone is looking at the same copy of the data, and that no one can game that system. All parties in a transaction can be verified, and the data on that transaction can be verified. Every party involved can “perform the same set of checks,” he says. Parties can verify product descriptions, for instance, or the manufacturer or source of products.

Cargill has been testing Hyperledger Sawtooth blockchain platform as a way to track turkeys through the entire supply chain, from farm to supermarket. General Mills, meanwhile, has been using it to check suppliers for its Annie’s product line to verify that the grains they supply are truly organic. Other companies on the Forbes list are working to develop blockchain-based systems to boost the speed of financial transactions and create medical information exchanges among patients, insurers, and care providers.

Arun Ghosh, U.S. national blockchain leader for global tax, audit, and business consulting firm KPMG, believes that blockchain could have significant impact on whether one audits a balance sheet, builds out a supply chain, or develops security on a medical device. KPMG is looking into ways to use blockchain in its lines of business. It’s also working with clients in various industries, including high-value manufacturing such as aerospace, to see where it might create new efficiencies. For instance, Ghosh says, it could give companies a way to ascertain that a part was produced in a certain country or that production of a component complies with regulatory standards.

While it’s mostly larger enterprises that are exploring the use of blockchain, Ghosh sees increasing interest among small and midsize companies. In addition to supply-chain management and transaction record-keeping, another way smaller firms could use blockchain is as a conduit to more easily share customer information among departments.

“We’re seeing a lot of innovation in property technology, or proptech.”
Rob Weber, managing partner, Great North Labs

Emerging business tech trends

“We’re seeing a lot of innovation in property technology, or proptech,” Great North Labs’ Rob Weber says. Minneapolis–based HomeSpotter has assembled a collection of online property marketing tools for real estate brokers. These tools include Spacio, which helps brokers set up open houses and follow up on leads. Another Minneapolis–based startup, ZenLord Pro, has created a proptech software for landlords designed to make it easier for them to collect rent, market open spaces in their properties, and manage maintenance requests.

Some years ago, there was a great deal of buzz around the Internet of Things (IoT)—online remote monitoring and management of temperature control, security, production and communications equipment, and more.

The buzz is more like a hum these days. Still, enterprise-oriented IoT technology continues to be built for a variety of industries. Perhaps the largest Minnesota developer is Hopkins–based Digi International, which designs IoT systems for industrial, retail, energy, and medical customers. Among smaller firms, Burnsville–based 75F offers commercial building automation systems designed to reduce energy usage and predict maintenance needs. And St. Paul–based Lab651 is creating apps and remote mechanical monitoring systems for a range of businesses both large and small.

For Minnesota companies in 2019, the most useful emerging technologies aren’t disruptive—they’re making businesses more efficient and predictable. They’re not breaking things; instead, they’re seeking to strengthen connections among companies, customers, and vendors.

Gene Rebeck is TCB’s northern Minnesota correspondent.