Ones to Watch
A look at five diverse companies with at least one element in common: They’re healthy and primed for success, thanks to pioneering products, services, and approaches.
A Very Big Fish
Danville Signal Processing flourishes in the expanding DSP market.
BY BRIAN LIEB
Some companies seek competitive advantage through size. They have wide arrays of expertise and produce disparate products in order to compete in the vast ocean of global competition.
Others succeed in smaller bodies of water. Meet Cannon Falls-based Danville Signal Processing Inc., a very big fish in a small pond—the SHARC-embedded digital signal processing (DSP) board pond, to be precise.
What are SHARC-embedded DSP boards? DSP is the processing of digital signals—filtering them to improve signal quality or extract important information—and it is a core technology in cell phones, home theater systems, medical devices, audio equipment, and computers. SHARC DSP boards are specific floating point processors that are embedded in DSP-reliant products—cell phones, for example.
Danville develops and manufactures DSP products for markets worldwide, concentrating on digital audio—speech and telephony, tone suppression, and noise reduction. “We focus on a few core competencies and outsource everything else,” says company founder and CEO Al Clark. “And each year the pond gets a little larger and we get a little bigger.”
Clark founded Danville Signal Processing in 1998 with his wife, Lori Ann, who serves as the company’s chief operating officer. Their first major sale was for a tone-suppression system to the Anchorage, Alaska, air traffic control center. “Air traffic control communication systems are large and complex,” explains Clark. “Occasionally, technicians maintaining these systems make a mistake and inadvertently route a test signal directly to an air traffic controller’s headset.”
That’s where trouble can start. The signals can cause permanent hearing damage, leading to millions of dollars in missed work time and injury claims. Clark engineered a tone-suppression system—once the only system of its kind—that eliminated the loud test tones while allowing the passage of normal voice communications between pilots and air traffic controllers.
SHIFTING FOCUS
The company continues to sell air traffic control tone suppression systems, but its focus has shifted to engineering DSP boards and systems. Danville has partnered with one of the larger DSP chip manufacturers, Norwood, Mass.-based Analog Devices, to produce SHARC-embedded DSP boards that are used in high-performance audio systems and in a wide variety of other industrial applications. “In most cases, our customers are manufacturing products that are very specialized,” says Clark. “They may only sell 25 to 100 systems a year. This makes our boards attractive to these companies since it is cheaper—and safer—to use our boards than design and manufacture their own.”
In 2000 the Clarks moved to a hobby farm in rural Cannon Falls, and two years later relocated the company from a facility in Rosemount to a 5,000-square-foot building on the farm. The rationale for the move was simple. “One day, I got tired of five traffic lights where we once had one,” says Clark, noting how the area has grown rapidly in recent years.
The location isn’t far from the infrastructure of the Twin Cities—roughly 35 miles south of St. Paul—yet gives the Clarks the benefits of rural living. “We have a broadband Internet connection and UPS knows where to find us,” Clark says. “And Google is our friend.”
As the use of and need for DSP solutions continues to grow, the company looks poised for more success. “In the last few years, most of our products have been board level,” says Clark. “But many of our new products will be complete turnkey solutions. This will broaden our scope to sell to companies that may be software-only providers, or perhaps to companies that have only minimal electronic expertise.”
Still, the company will focus on a finite number of core competencies and outsource everything else. That strategy of honing a niche within the broad DSP market has helped Danville Signal Processing become a very big fish in a small pond. “All businesses need to be able to answer a simple question: ‘How do we add value?’” says Clark. “If you can’t answer this question, you probably don’t have a business.”
In Sickness and in Health
Ten years ago, Minneapolis-based Spanlink Communications gambled on an unproven but promising new telecommunications technology. Today the company is reaping the benefits.
BY SARA GILBERT
It was Aug. 8, 1988—8/8/88—when Brett Shockley and his partners officially filed the papers incorporating Spanlink Communications. When that date flashed across the screen during a presentation Shockley was making to the Chinese American Information Storage Association last summer, everyone in the room cheered.
“They told me that it was a very lucky number,” Shockley, the CEO of Spanlink, says. “I guess that’s a good sign.”
It’s taken more than luck to build Spanlink into one of the biggest players in the customer-interaction solutions arena, however. It’s taken an entrepreneurial spirit, a commitment to staying on the forefront of technology, and a vision for the future of communications.
THE GAMBLE
Staying a step ahead has been a hallmark of the company’s history. Spanlink began primarily as an early provider of interactive voice response (IVR) systems—programs that allowed customers to interact with businesses with the touch of a telephone button. The company’s first marquee client, the Minneapolis Star Tribune, hired Spanlink to develop a system that subscribers could call if they didn’t receive their paper.
Spanlink went public in 1996 and used the funding from its IPO to take its existing technology one step further and develop a “button” for Web sites that would link customers directly to a call center. Then, in 2000, thanks to a new partnership with communications giant Cisco Systems, Spanlink went private again to refocus on what was then a brand new technology: Voiceover Internet Protocol (VoIP), which allows voice, fax, and/or voice-messaging applications to be transported via the Internet, rather than over the public switched telephone network. “We really believed it was the right thing to do,” Shockley says. “We wanted to be on the forefront of it.”
Good decision. Not long after the company went private, the tech bubble and the stock market both deflated. Although Spanlink went through the same difficulties that many other technology companies faced, it came out on top. “We had to shrink a bit to get through, but now we’re growing,” Shockley says. “In the past year, we’ve added 150 people to our business; we’re up over 300 employees now.”
The company’s growth seems to be directly proportional to the evolution of VoIP, which has taken off in the last few years. By all estimates, the market for the technology is growing; one British research firm pegged the worldwide rate at 83 percent, noting that VoIP subscribers rose from 10.3 million to 18.7 million during 2005. “It allows you to put people anywhere,” Shockley explains. “It doesn’t matter where the people are or where the equipment is. It offers radically different ways for people to communicate with each other.”
With the market growing “by leaps and bounds,” as Shockley notes, Spanlink is poised to “reap the benefits of all the development work we did back before we were sure this was the direction the market would go. Now we’re sure; it’s happening everywhere now.”
Shockley says his tenure in the telecommunications industry—he was with Eden Prairie-based ADC Telecommunications for several years before starting Spanlink—paired with both his engineering and business backgrounds have helped him understand the marketplace and where it is heading. “It puts me in a position to know what may be possible, what may be hard, and what may be easy,” he says. “That can be valuable when you’re thinking about how to apply technology to solve business problems.”
Shockley believes that the VoIP solution can work for any business. “This is relevant to everybody,” he says. “It will make a difference for every business. It can improve your communications with your customers and is driving tens of millions of dollars in additional revenue for businesses.”
And if Shockley is lucky, it will become the future of the telecommunications industry. “Someday, every phone system in the world will be replaced by VoIP,” he says. “It is driving radical changes in the marketplace, and we’re building the software applications that will leverage that technology.”
Quick Change
Once in danger of being crippled by Asian competitors, Mankato-based Winland Electronics has fundamentally reshaped its operation over the last five years.
BY SARA GILBERT
Five years ago, Winland Electronics was fighting a losing battle.
Like many electronics manufacturers, the Mankato-based company was watching business go to cheaper Asian competitors in the late 1990s. In 2001, with revenues falling to $15 million, Winland (Amex: WEX) was losing money—the company posted a loss of $1 million. And, after 30 years of assembling circuit boards for mostly Minnesota customers, it was losing its focus.
These days, Winland is in the midst of a winning streak. Business has grown at a rate of 20 percent over the past three years. Net sales closed out just shy of $30 million in 2005; by June 2006, quarterly revenues were soaring into the $10 million range, suggesting that another year will end with record growth.
What happened? The difference is in the definition.
REENGINEERING
“We had to redefine and reinvent ourselves,” says Dale Nordquist, Winland’s senior vice president of sales and marketing who joined the company in 2001. “We had to change with the market.”
So instead of relying on low-complexity, mid- to high-volume circuit board assembly (much of which could be outsourced to Asia), Winland shifted its focus to low- to mid-volume manufacturing of more complex circuit boards. It also expanded its repertoire of offerings, adding more capabilities both on the front end (including product concept studies and product design) and at the back end, with complete box-build assembly available. And it extended its reach into new markets, particularly the medical industry.
“We looked at what could not be done over in Asia, and we tried to decide what we could do to involve ourselves in that,” Nordquist says. “Our challenge was becoming more of a chameleon and adapting a full breadth of services so that we could configure ourselves to what our customers needed.”
That new strategic plan has been so successful that when Minneapolis-based mattress supplier Select Comfort, which had long accounted for about half of Winland’s business, decided to send a significant portion of its work to another source, Winland was ready. “Four years ago, that would have been devastating to this company,” Nordquist says. “Now, we could withstand it.”
Part of that loss can be absorbed by Winland’s increasing market share within the medical industry. Just a few years ago, the company had no medical clients. Then, in 2004, it received the required ISO 13485 registration (a quality-management standard for medical devices). Since then, it has worked on products used in genetic testing equipment and in prostate therapy equipment. Its circuit boards have helped program cardiac defibrillators. The company even designed and manufactured a medical compounder that mixes, measures, and monitors various materials used in feeding tubes.
Part of it may also be mitigated by the potential for growth in Winland’s own proprietary products. Less than 15 percent of the company’s revenue currently comes from a series of critical environment sensors and alarms that it develops, designs, and builds. Nordquist hopes that those products, which include everything from temperature and moisture sensor systems to vehicle alerts for drive-up windows, can become a bigger part of Winland’s revenue.
An ongoing commitment to lean manufacturing will help too. For the better part of two years, Winland has worked with MTI to become actively engaged in value stream mapping many of its processes; last summer, when the company needed to shift its production lines to make better use of existing space, leaning the lines was an integral part of the process. “We were able to reduce time and motion throughout our manufacturing lines and gain additional floor space at the same time,” Nordquist reports.
But most important to the company’s continued success is the new, improved understanding of what Winland is and what it can do. In five short years, it has gone from being, in industry slang, “a circuit board stuffer,” to building entire products from start to finish. “Five years ago, this company was stagnant,” says Nordquist. “There was no recipe for growth. We needed a new focus, new strategies, a new plan that we all believed in. It has been just phenomenal to see that happen.”
Uncommon Sense
Apprise Technologies has parlayed its optical sensor technology expertise to move into some innovative new realms.
BY ANGELO GENTILE
Timing is indeed everything, but sometimes that timing can be good or bad.
Consider, for instance, the case of scientist turned entrepreneur Christopher Owen. In the late 1990s, Owen worked as a scientist in environmental research and analysis for the Natural Resources Research Institute (NRRI), which is connected to the University of Minnesota Duluth and focuses on applied research and economic development. He believed that a commercial market existed for sensor technologies that, at the time, were primarily used for telecom and data-storage applications.
Owen’s core idea was to use optical sensors to measure and collect air- and water-quality information and similar environmental data. He reasoned that the sensors, which could be placed in the field permanently to collect information in all elements, in all seasons, could gather more data than their human counterparts—i.e., a group of research technicians in a boat, for instance. “The cost per data point drops dramatically as opposed to people collecting data,” Owen says.
So, Owen hatched a deal with the university to head out on his own with the sensor technology, an unusual move for a scientist to shift to a business or entrepreneurial role. Typically, Owen says, most researchers or scientists prefer to work in a scholarly or research environment, but, as he says, this time he “went with the technology.”
At the same time—and here’s the upside of the timing— the NRRI had been visited by a small group of Ukrainian scientists who were looking at research and collaboration options. As optical physicists who had developed optical sensors for the Soviet space program, they were an ideal fit for Owen’s research and development team for his newly formed Apprise Technologies.
The downside of the timing? Funding was tough. In the late 1990s, Duluth-based Apprise was competing against, as Owen recalls, “the irrational exuberance of the dot-coms. Trying to raise money at that time was difficult because a high-tech, hard-goods manufacturer [like Apprise] was just simply out of vogue.”
Undaunted, Apprise launched in 1997, with first product sales occurring in 1998. To pay those early bills, the company first developed technology to collect data from other existing commercial sensors and then later further developed its own technology to produce and distribute its own optical sensors. Fast-forward to today. The company now produces optical sensors for an impressive array of industries, such as aerospace, biomedical, and food processing. It also provides sensors for original equipment manufacturers (OEMs) worldwide, and services everything from small startup enterprises to large Fortune 500 goliaths with revenues in excess of $5 billion. The sensors provide a wide variety of data collection, such as air- and water-quality analysis and gas monitoring.
The company also now has 26 employees, who include most of those Ukrainian physicists, along with electrical and software engineers, biologists, and manufacturing staff. While Owen declines to reveal sales figures, he says he feels good about the company’s prospects, particularly given the latest advancements in optical components and the progress in mass production of those components. These forces have “increased the number of applications for optical sensors and made them economically attractive to the market,” he notes. “We’re uniquely positioned to capitalize on these opportunities. We see significant growth opportunities for Apprise in the next several years and we are happy to be looked at as a successful model of high-tech business development in outstate Minnesota.”
Smart Medicine
Healthcare Academy offers an effective prescription for training of medical professionals: tailored online learning with a special focus on customer service.
BY ANGELO GENTILE
Healthcare Academy CEO Judy Hoff says she learned early on about the value of properly trained health care employees and the strong connection training has to patient care. “If you get people up to speed in an effective way, they’ll be better employees and provide better care,” she notes. “If your employees provide really good patient care, those patients won’t need to turn on their bedside call lights. So training is crucial.”
That view drives Hoff’s leadership of the Henderson-based operation, a five-year-old health care training and education firm that does about $1 million in business annually. A team of seven full-time health care professionals provides the academy’s specialized services to clinical and medical professionals globally via online education. That service delivery uses the latest in e-learning technology, but the high-tech comes with high-touch customer service, too. How so? “Lots of people do e-learning, but because we are all health care educators and professionals ourselves, we know medicine,” says Hoff, who is the former director of education at a regional medical center in Minnesota and also has worked for companies such as Pfizer.
“And, even though we are all about the technology, you can still call us and talk to a live person,” she adds, noting that the live customer service element is particularly crucial in the health care industry. “Health care people are not necessarily tech savvy—they like to [be able to] talk to a human being.”
Hoff says her organization “trains the trainers,” the people who are in charge of staff or employee education at hospitals, clinics, long-term care facilities, medical-device companies, and other health care-related organizations. These educators, in turn, train doctors, nurses, physicians’ assistants, certified nursing assistants, medical records staff, emergency medical technicians, and other professionals. “Anyone who touches a patient, we have programs for,” she notes, adding the programs can include customized training options as well as accredited continuing and mandatory/compliance medical education.
Beyond training clinicians, the academy also delivers tailored training to health care professionals who may not directly do patient care but are involved in medical- related work. For example, the academy works with a number of medical device companies, developing and delivering sales training specific to sales people who need to learn how to sell a particular product to physicians and other clinicians. It also boasts an international client list that includes major accounts such as Novartis, McKesson Corp., Medtronic, Ecolab, University of Chicago Hospitals, and the North Dakota Long Term Care Association.
One key to it all, according to Hoff, is that the online nature of the training allows the company to offer a combination of flexibility and convenience. The firm also boasts some impressive credentials—it has been approved as a provider of continuing education in nursing by the Wisconsin Nurses Association Continuing Education Program Committee, the Florida Board of Nursing, and the California Board of Nursing. In addition, American Academy of Continuing Medical Education accreditation is available through one of Healthcare Academy’s partners, and accreditation for other professionals can be arranged on a case-by-case basis. “We offer fun and interactive learning that is available to learners at their convenience, which helps companies give their workers a fast start,” says Hoff. “Our curriculum also is different from our competitors because we offer such a wide range of courses and programs: new employee orientation, continuing medical education, customized training, and more. Plus we have experienced educators presenting the information. This is an exciting time for this company. Interactive online learning is no longer a futuristic concept for health care learners. It is something that is available right now.”