on small business | Neal St. Anthony
Bjorn Stansvik, who studied disruptive technologies in college in Sweden, moved to Minnesota in 2000 to play his hand.
His MentorMate is a darling in the world of web strategy, design and mobile applications, with an expected revenue of $22 million and a profit this year.
MentorMate also is the force behind MobCon, a series of annual conferences that brings together hundreds of collaborators, customers and competitors. The MobCon Digital Health conference, another offshoot that next month will attract 500 IT and health professionals to Minneapolis, has added San Francisco and Nashville events this year.
But MentorMate wasn’t always on the upswing.
After working briefly for Hunt Technologies in Pequot Lakes, he moved to the Twin Cities with an idea for an education business centered on study-guide web applications for high school students taking college entrance examinations. The launch platform in 2001 was the Palm Pilot handheld device. Stansvik, visionary and personable, met and raised thousands of dollars from young business people and a veteran educator.
However, the futuristic “IQPakk” didn’t work very well on the Palm, recalled Tom Wilson, 15 years ago the tech-leaning principal at Eagan High School who tested it with high-achieving student volunteers in 2001 and 2002.
“One Saturday, I asked 33 of these students who’d had the Palm Pilots for about a month what they had learned,” recalled Wilson.
“One said he had learned to use it to change the classroom TV channel and that really got into the heads of teachers. Another said she and her boyfriend used them to send notes in fourth-hour French class,” Wilson said. “Bjorn sat there and listened stoically. That went on for about a year. We needed a new business model.”
Stansvik, determined but fearing starvation while living for free in a friend’s south Minneapolis basement, switched to Internet consulting, strategy and web design work to generate cash flow. And the investors eventually made out.
When the iPhone revolution hit, creating a flexible platform, Stansvik’s MentorMate was poised to apply mobile applications for customers already under contract for web strategy and design services.
“I’m not surprised that MentorMate worked,” said Chris Killingstad, CEO of Tennant Co., then a young executive who invested with Stansvik in 2001.
“He had the right idea with apps, but he just couldn’t deliver on that Palm platform. We didn’t hound him. And I forgave my investment,” he said. “Bjorn had vision and he was good at adjusting and adapting.”
MentorMate is coming off a profitable 2015 on revenue of $16.4 million from 75 customers, including 3M, Cargill, HelpSystems, Trane, Medtronic, Braun Intertech and Coloplast. It employs 52 in south Minneapolis and 300 in Sofia, Bulgaria.
It also worked out for those early investors who hung in with Stansvik.
MentorMate drew interest when it hit the Inc. 500 list of fast-growing small companies. Stansvik turned down a Chicago bidder. He approached Taylor Corp., which wanted to improve its web and mobile technology presence among its companies. In 2014, MentorMate’s shareholders sold the company for an undisclosed price to Taylor Corp. — owned by Glen Taylor, who also owns the Star Tribune and the Timberwolves.
Stansvik said MentorMate didn’t require growth capital but has benefited from Taylor Corp. connections.
“We have a good cash-flow model,” Stansvik said. “We don’t need a lot of capital. It’s people and software. Taylor has introduced us to a number of prospects and clients, but we operate autonomously. If Oracle had bought us, we’d be a rounding error. We have a bigger role with Taylor.”
MobCon, which includes an entrepreneur competition, also has proved to be an attention grabber and business generator.
“You meet the best and brightest at these conferences,” Stansvik said. “It’s our clients, our competition and we speak at this tech-community event. It starts conversations that lead to business opportunities.”
Killingstad said he might have expected that Stansvik, a driven but amiable man, would achieve success after the initial flop.
“Bjorn’s strength is an ability to see over the horizon and not get stuck on one idea,” Killingstad said. “He slept in a basement and worked from a laundry room and a coffee shop. He persevered. He’s good with people. Now Taylor Corp. is allowing him to continue what he does.”
Tapping Bulgarian talent
Then there’s the Bulgarian connection.
Stansvik in the early, cash-strapped days hired a couple of software engineers who did not fit. Another struggling technology entrepreneur Stansvik commiserated with at a Dunn Bros. coffee shop near his basement hovel recommended Stansvik contract with a Bulgarian computer scientist named Dimitar Dobrev. Today, Dobrev, 37, is MentorMate’s Minneapolis-based chief technology officer.
Bulgaria has a software-industry cluster around the capital of Sofia. MentorMate employs about 300 technologists there.
“They get stuff done,” Stansvik said. “They are critical thinkers and comfortable with ambiguity. Software changes so fast. Bulgarians, part of the European Union, can work anywhere and labor rates are closing with the U.S. And the Sofia offices are nicer than ours.”
Stansvik’s father is a Swedish financial executive who worked in the country’s health care system. His mother is a geriatrician. He grew up middle class in Gothenburg, five hours from Stockholm, and studied business and technology at the University of Gothenburg.
He long dreamed of being a U.S. tech entrepreneur in the Twin Cities, the Silicon Valley of the tundra.