Jinger Schroeder, Author at Janesville Innovation Center

Janesville tech firm is on the move

JANESVILLE—Nate Ellsworth is picturing a day soon when he can remotely chat with employees at his Janesville tech company, N1 Critical Technologies, using a Segway scooter equipped with a video chat screen on top.

Spitballing on the idea, Ellsworth’s partners at N1 dubbed the roving scooter, which would feature Ellsworth’s disembodied face, “Segway Guy” or “Segway Nate.”

“At least, that’s what we’d call it to its face,” N1’s Chief Financial Officer David Farrell said.

In an interview Tuesday, Ellsworth, Farrell and N1 Critical Technologies Director of Operations Matt Hess came off as both jocular and excited, and they have reason to be.

The partners say their 2-year-old company has grown by leaps and bounds in recent months, with N1 absorbing more and more of the space available at its home, the Janesville Innovation Center on the city’s south side.

Now, N1 is eyeing a move out of the Innovation Center, a local business incubator that Ellsworth said has been instrumental and “amazing” in helping the company launch and grow.

The company is planning a new product launch that Ellsworth said would make the company a true 21st-century innovator, and it would do that in a new location: the vacant former Red Cross service center at 211 N. Parker Drive in downtown Janesville.

N1 bought the 9,000-square-foot building in August for about $250,000, Ellsworth said.

In tandem with buying the new building, N1 has worked with a Chinese partner to develop and ready for market a new series of uninterrupted power supply (UPS) systems that would run on lithium-ion batteries, Ellsworth said.

UPS systems are used to protect computer systems and large electronic data and telecommunications centers from power interruptions that can damage equipment or lead to massive data loss.

Ellsworth said N1 would be the first IT company he knows of to customize and sell such systems with lithium-ion battery technology.

He said lithium technology would simplify and improve the way UPS systems are powered and create a new class of systems that could run up to five times longer compared to systems that use standard, lead-acid batteries similar to traditional car batteries.

As he spoke, Ellsworth, 34, adjusted a Milwaukee Brewers ball cap that topped his attire, which included a sport coat; an untucked, button-down shirt; fashion jeans; and cowboy boots.

“We’re the only one out there doing this. I haven’t slept in months, and all I can say is that I’m excited,”

Ellsworth, a Westfield native, said he decided to take N1 on a plunge into lithium ion after a revelation he had that was based at least in part on the battery technology in his own car, an electric Tesla Model S P90D.

As N1 plans to get its new digs in downtown Janesville renovated and move-in ready—possibly by the end of 2017—Ellsworth and his partners are set to unveil a new product line, which includes new racking systems and connection components.

The company could begin to build the units in Janesville soon, and Ellsworth and Hess said their company is hunting for a third facility where it could ramp up building UPS systems and racking equipment and store the products.

N1’s projects that in the next three or four months, it could begin to build 1,000 of the new systems along with the traditional systems it continues to sell, install and service.

Eventually, Ellsworth said, the company could grow to build and sell several thousand units a month, although it’s not clear how soon the company might dive into full manufacturing of the products yet. Some of the systems it customizes are built by other tech firms.

Now, N1 has sales offices and operations in several suites inside the Janesville Innovation Center, and a move downtown would allow the company to do hiring it needs to tackle an expansion and new product launch.

Under N1’s own projections, it could need to grow its employee base from 20 people to 30 or 40 within a couple of years, Ellsworth and Farrell said.

That hiring would largely be to handle accounts the company expects to gain through its regular business and its entree into lithium-ion-powered products. Ellsworth said N1 already has a national sales presence that includes business with Raytheon and Google.

Ellsworth said N1 liked the location of its future downtown headquarters, and he says its two-floor layout would allow the company to set up open-air sales office space, along with an operations, data and customer support center, while having leftover space to add some Silicon Valley-style flourishes.

Some ideas to that end include an adult-sized slide that would span both the building’s floors, a kitchen, gym and locker rooms, and a chill-out area where employees could play video games, race drones and relax.

N1 is also working on turning the building into a technology-smart facility with copious videoconferencing setups and a lobby equipped with a giant touch tablet that would allow visitors to electronically summon N1 officials.

“Every employee is going to get a hoverboard. It will be like a Willy Wonka factory come to life,” Ellsworth said

Ellsworth and Farrell said N1 is now working with the city of Janesville on a potential tax-incentive deal they said could help with an exterior facelift as the company makes re-use of a building downtown that has sat vacant for more than a year.

A rehab of the building’s interior could cost N1 $300,000 to $400,000, Ellsworth said. He said the idea is to gear the building to be N1’s corporate headquarters, regardless of where growth might take the company.

Farrell said despite what could be a tricky renovation project and exterior re-design, N1 so far views the city as an “ally” in the company’s plans to grow downtown.

Two maintenance workers at the Garden Court Apartments, which is adjacent to the former Red Cross building, were curious Tuesday about recent activity they’ve seen next door.

One of the men, who did not identify himself by name, was surprised to hear it was a local IT firm moving into the former Red Cross.

“It’s good to have a tech influence in downtown,” the man said. “Something like that … that’s Janesville moving forward.”


Startup Week Beloit

A river city once forged in heavy industrial manufacturing, Beloit is reinventing itself as an entrepreneurial hub for young professionals and high-growth startup companies. With a convenient location on the Wisconsin-Illinois border, beautiful renovations to a historic downtown, and multi-million dollar industrial redevelopments, the city is an attractive location with a thriving entrepreneurial ecosystem. Wisconsin Startup Week will provide opportunities for engagement with the startup community and the chance to learn from a variety of local success stories, all of whom are contributing to the revitalization of this innovative community.

Event Calendar

Monday, November 6th

5pm: Beloit Startup Week Kick-Off & Happy Hour, Irontek

Tuesday, November 7th

8:30am: Beloit Startup Launch Conference, Irontek
12pm: So you want to be a Franchise Entrepreneur?, Concordia University Wisconsin @ Irontek
1:30pm: Fostering Business Growth in Rock County, Janesville Innovation Center
5pm: gBETA Beloit Meet & Greet, gener8tor

Wednesday, November 8th

8am: Breakfast with the Big Cheese, Beloit Rising Professionals
12pm: OpenBETA Lunch & Learn, gener8tor
2pm: Technology Trends in Downtown Janesville, City of Janesville
2pm: Entrepreneur Trivia, Blackhawk Technical College

Thursday, November 9th

8am: Innovative Entrepreneurship Training in High School, Hononegah High School
10am: The Champion’s Code with Ross Berstein, Express Employment Professionals
11:30am: Innovative Entrepreneurs in Rock County, Rock County Entrepreneurial Business Development Program (RCEBD)
4pm: Morality & Markets with Dr. Ginny Choi, Beloit College

Friday, November 10th

3:30pm: Veterans in Entrepreneurship: WI Startup Week and Bunker Labs, Bunker Labs


Janesville hopes to keep businesses local as Innovation Center expands

MADISON, Wis. (WMTV) —- Since opening in 2013, the Janesville Innovation Center has been successfully helping businesses grow and is now large enough to operate without city support.

The business incubator provides office, storage and manufacturing spaces at low rent costs, allowing small local businesses to get off the ground, Gale Price, Janesville economic development director, said. The center was able to provide low-cost space due to city support, but now has enough tenants to sustain itself independently.

“It really illustrates the entrepreneurship spirit we have here in Rock County, and we believe there is more to come that will continue to fill the space,” Price said.

Brian Garcia, co-founder of Copper Fire Tees, said working out of the Innovation Center has provided him with the space he needed to expand his business without spending a large amount on rent.

He said Copper Fire Tees has nearly double its profits from last year, and he now plans to make the T-shirt business his full-time job and to keep his growing business in Janesville.

“With their forward thinking of, ‘we’re going to give the little guys a place to start out, spread their wings,’ we’re not going anywhere,” Garcia said.

Price said the center hopes to see some of the businesses in the center expand to the point they have to find larger spaces and that they will continue to bring growth to Janesville.

With the success of the center, the city is looking to partner with a private developer to create another Innovation Center with even larger spaces, Price said.

Click on this link to watch the video story: http://www.nbc15.com/content/news/Janesvilles-Innovation-Center-Looks-to-Expand-396574771.html

Janesville Innovation Center seeks to solve space crunch

JANESVILLE—After three years of development, John Goepfert says his homegrown personal-care product company, Simply Solutions, is on the cusp of going national.

Goepfert said Simply Solutions has distribution deals unfolding with at least one national grocery store conglomerate. The deals would land the company’s patented line of all-natural LipLoob lip balm and other personal lubricants on the shelves of thousands of chain retail stores across the country.

But at home in Janesville, Goepfert faces a dilemma that could soon come to a boil. With Simply Solutions’ products on pace for major market demand, the company could need to scale up production and distribution in short order.

For that, it needs more space than the 8,000 square feet it now occupies at the Janesville Innovation Center.

More space, but where?

Local economic development experts say there is a slim supply of available small-scale industrial space in Janesville—specifically facilities that are outfitted for growing industries that need 5,000 to 25,000 square feet of production and office space.

Mike Mathews, the Innovation Center’s operations director, said his six tenants have grown to occupy 70 percent of office and manufacturing space at the 22,000-square-foot business incubator at 2949 Innovation Drive.

Meanwhile, Mathews said, the center has commitments from new industries that would sew up another 25 percent of space within a few months.

Mathews said it’s feasible that by the end of the year, the center will be “fully leased” for the first time since it opened in January 2013.

The Innovation Center is intended to operate as a temporary, flexible office and manufacturing space—along with business consulting support—to foster startup companies through the early phases of their businesses.

Amid a tight supply for small industrial properties, the Innovation Center’s board of directors is considering options for industrial space that would help the center’s fledgling companies move out of the center but continue to grow.

Mathews and Gale Price, Janesville’s economic development director and a member of the Innovation Center’s board, confirmed one option the board is discussing: building a new facility that would serve as a post-incubator for growing companies.

It could operate as a brood house of sorts that would provide smaller industrial spaces of 8,000 to 15,000 square feet for companies ready to graduate out of the incubator and expand.

Mathews said the board’s conversations are “preliminary,” but the board could approach the city council as early as October with plans for more space for maturing companies.

“We’re still in an exploration stage. We’re gathering our facts to get a better understanding of what our tenants’ needs look like going forward and the best way to assist in the growth of these companies within Janesville,” Mathews said.

Mathews said not all of the incubator’s current tenants are on the same pace and timetable to graduate out of the center, but it’s clear that some are on trajectories that would outpace the available space.

Price said based on preliminary discussions of demand, the board thinks it might need about 40,000 to 50,000 square feet of extra space to “graduate” maturing businesses out of the Innovation Center. That would open up space for new businesses seeking to enter the center.

Price said it’s too early to say how a development for incubator graduates could be funded or who would own and operate it. But he said the market gap in Janesville for smaller industrial facilities does exist, despite the fact that the Janesville area has seen at least 1 million square feet of industrial space built over the last year.

Much of that space has been built on speculation, but it’s been marketed and leased to large industries that use 50,000 square feet or more.

“Talking to local commercial real estate people, there is that gap in (industrial facilities) that are 5,000 to 25,000 square feet here, but it’s tricky,” Price said. “Most developers prefer not to divide to less than 25,000 square feet, so I don’t know if the (private) market will immediately address this gap.”

Price said a new facility for Innovation Center graduates likely would be presented as a public-private project. He suggested that if the city had a role, it might be through tax incentives to entice a private developer to build a facility that could hold smaller-than-average industrial spaces.

Goepfert, who has leased space for three years at the Innovation Center, said he’s poised to grow from about a dozen employees to as many as 20 to 25. He said that growth could happen overnight if a few sets of national grocery and pharmaceutical retailers he’s working with agree to place his products on their shelves permanently.

Goepfert believes his company’s competitive advantage lies in the products’ all-natural ingredients, as well as the federal Food and Drug Administration approval his products now have. He said many larger competitors do not have that designation even though they offer similar products.

FDA approval cost Simply Solutions $350,000, Goepfert said. In order to keep the FDA designation, the company has to work in approved, clean space and use processes that meet federal guidelines.

That cuts down on already slim options for space to expand locally. And if space were available, Goepfert said, it would come at a premium at a time when his business is financially burdened by early development costs.

“It would take a developer that would want to develop space that fits the needs of local, small companies like ours with brands that are ready to grow—but they’re going to have to carve up the space they have smaller than usual. And what? Charge less rent for it?” Goepfert said.

“Yeah, that’s risk. And even as I say it, it sounds like it’s asking a lot.”


City to stop subsidizing Janesville Innovation Center

JANESVILLE—The 4-year-old Janesville Innovation Center is outgrowing its need for a city subsidy, and its success has led to plans to create a second center.

Tax increment financing District 22 has helped fund the Janesville Innovation Center since it was created in January 2013. The city has poured an estimated $1 million into the center, about $200,000 of which has been for operations, said Gale Price, city economic development director and Innovation Center board member.

TIF district money for operational expenses have been diminishing each year. In its first year, the center got $100,000 in local money for operations, but it received only $20,000 this year, Price and city council President Sam Liebert said.

The plan has always been to annually reduce subsidies and eventually end them, they said.

That’s OK because the Innovation Center has been one of the more successful business incubators in Wisconsin, Price said.

“Things are falling into place. That’s the best part,” he said.

It’s expected the Innovation Center will reach capacity next year, which gives it the ability to operate without TIF district funds, Liebert said.

“We’re now generating rental income that covers our operating costs,” said Mike Mathews, center director.

The center is growing enough that the city is considering partnering with a private developer to create a second Janesville Innovation Center, or JIC2, nearby.

The second center would include bigger spaces to accommodate graduates of the existing center who want more room to operate their businesses. The second center would be close to the original center so tenants could still enjoy the services it provides, such as business consultation, Price said.

It could also include space for new businesses that aren’t part of the Innovation Center, Mathews said.

“We think it could be a real benefit to a development because they can operate a building, and we have tenants we can feed into the developer,” Price said.

The last thing the city wants is for Innovation Center businesses to outgrow the area.

“We want to keep them in Janesville,” Price said.

The center will give the city council an update on its status and plans at the council’s Monday meeting.

Though unlikely, it’s possible the council would want to continue funding the Innovation Center.

That would create problems because TIF District 22 is running out of money. Continuing to subsidize the center would likely require pulling money from the city’s general fund. In a year the city is facing a nearly $1 million shortfall, that would not be good, Liebert said.

The center’s success so far is evidence of the economy’s recovery. Innovation Center officials will give the council another update next year to show how it’s doing without local subsidies, Liebert said.

“We’re getting to the kind of … growth we were hoping we’d be able to accomplish through the Innovation Center and its programs,” Mathews said.