For Minneapolis-based Modern Survey, 'no plan' leads to sale to Aon Hewitt

In 1993, Don MacPherson and Patrick Riley were temporary employees at what is now Ameriprise Financial, helping with employee surveys.

In 1999, with the blessing of Ameriprise, their first client, the two, joined by Dan Riley, Patrick's brother and an IT guy at UnitedHealth, started Modern Survey with $1,000 apiece in a then-ramshackle Sherwin-Williams building in the Warehouse District.

"It went from our idea to a business because the barriers to entry were so low," recalled Patrick Riley. "We paid $600 per month for a 600-square-foot space. We were one of the first software companies in that neighborhood."

They also had a fair measure of creativity, technology expertise and determination.

Patrick, 48, and Dan Riley, 46, were musicians before Modern Survey, working day jobs to finance their avocation. MacPherson, 47, was a small-college basketball player who had returned from a year playing in Germany and took a job with a temp service. They financed Modern Survey in the early years off credit cards and a second mortgage.

"We didn't have a plan," MacPherson said. "We wanted to do something cool and we didn't want regular jobs."

They weren't an overnight success. They did improvise and innovate to a record year in 2015 of $6 million-plus in revenue and employing 42 people serving customers nationally who wondered increasingly what their employees felt about their careers and the companies that employed them.

Aon Hewitt said Modern Survey strengthens its "suite of workforce analytics solutions."

Aon Hewitt is integrating Modern Survey's technology and employee-measuring tools into its employee recruitment and HR consulting operations. MacPherson said it was time to sell. The firm was challenged in the growing worker-feedback field by well-financed young firms backed by venture capital money, as well as competitors such as Towers Watson, IBM and Gallup. Modern Survey is adding workers.

The three partners also sold into the strong mergers-and-acquistions market in which large companies are paying premiums to buy growth. MacPherson and the Rileys, who got expanded responsibilities, expect to remain with Aon Hewitt for two to three years.

The Minnesota Cup entrepreneurial competition and Junior Achievement of Minnesota collaborated through Youth Entrepreneurship Day at the University of Minnesota's Carlson School of Management last month. Four high school teams emerged from dozens working on business plans throughout the state.

A team from Mounds View High School won the Junior Achievement of the Upper Midwest competition with their company, Leozarb. It breaks down language barriers that hinder worldwide communication and expression by empowering students to learn languages through reading comprehension and conversational fluency.

These teams, which presented their businesses to a panel of professionals, also are part of the Minnesota Cup youth division competition that includes a $20,000 prize at the cup's annual business-plan awards in September. The ongoing competition draws dozens of fledgling companies who work with advisers in pursuit of more than $400,000 in prizes, consulting services and recognition.

Neal St. Anthony has been a Star Tribune business columnist and reporter since 1984. He can be contacted at neal.st.anthony@startribune.com.