During his 15 years at the electronics company Logic PD, physicist Scott Nelson saw the venture grow from 10 entrepreneurs working out of converted warehouse space next to the future Minnesota Twins stadium into an innovation battalion spanning 100 employees.
As far as he’s concerned, “small company, fast growth” is his specialty, but some of his industry’s preferred venues are changing.
When his younger brother decided to pivot his own tech company, Tamarack Consulting, in a new direction this year, Dan Nelson felt their surroundings in the Minneapolis North Loop had grown too residential and lost some of its start-up luster, as well as its once-ample free parking.
But where to go? St. Paul.
While Scott Nelson hunted for new digs, Tamarack, the equipment financing software company Dan Nelson founded entering the economic downturn of 2001, spun off its SalesForce programmers and took its remaining 10-to-13 employees and contractors fully remote.
Then the pandemic hit, and remote work became a national buzzword.
But Scott Nelson’s thoughts kept returning to fly fishing, and one of his favorite haunts: Bob Mitchell’s Fly Shop, a small store in St. Paul’s Vandalia Tower whose owner, Robert Hawkins, holds the world record for a muskie caught on a fly rod.
The Nelsons, who grew up fishing in Rochester, Minn., and both graduated St. Olaf College in the ’80s, were sold. Flexible workspaces, natural light in top floor offices, plenty of surface parking, a brewery next door and room to expand helped cement their new five-year lease in St. Paul.
“I think the developers there correctly anticipated that might be the next North Loop-style renovation,” Scott Nelson said.
“The old parts of town are often really dynamic with start-ups and tech companies,” he added. “They kind of like the dichotomy of ‘I’m working on state-of-the-art technology, and I’m working in a building built 150 years ago with bricks and timber.’ ”
NEW SPACE, NEW FOCUS
The Tamarack leaders also liked having industry peers in Vandalia Tower in the form of Lab 651, which, like them, is focused on internet-connected devices, or the “internet of things.”
By Oct. 26, contractors had completed the build-out of Tamarack’s 1,800 square foot space on the third floor of 550 Vandalia St., the former King Koil mattress factory, which sits next to Lake Monster Brewing south of University Avenue and Vandalia Street. Employees will use the offices on a hybrid schedule and for client and staff meetings.
The building, acquired by First and First in 2012 for $3.3 million and redeveloped into office space for start-ups and creative talents, was sold to Chicago-based Baum Revision in January for $13.8 million.
Despite shrinking when it spun off its SalesForce team, Tamarack is already back up to 20 employees and still looking to grow through 2021.
Scott Nelson, who holds a doctorate in physics from Cornell University, had previously worked for Logic PD, Digi International, Skywater Technology, Honeywell, 3M and other industry stalwarts.
The longtime Tamarack adviser is now its Chief Digital Officer and main innovation strategist. He started working for his brother (Dan Nelson is three years younger) earlier this year as the company was splitting in two by design and jettisoning its sales front.
“We pivoted to be more about technology integration — the ‘internet of things,’ which is connecting everything, like the Alexa home products and smartwatches, or agricultural equipment,” Scott Nelson said. “It’s all connected to the internet at all times. We’re helping equipment finance take advantage of that integration.”
LEASE, DON’T BUY?
Among other things, that involves keeping tabs on data — lots and lots of data.
As industries continue to shift toward leasing rather than buying equipment, Tamarack aims to provide the software that “ends up in the middle of complex systems,” he said, including operational and managed systems that perform on a monthly basis.
“If there’s a piece of equipment that costs more than $5,000, someone out there will lease it instead of buying it, and that’s when we would touch it,” Scott Nelson said.
“Someone out there is going to be helping finance it,” he added. “We support the software systems. We help them customize their business flows to run more efficiently, and oftentimes help their customers.”
How stable is that line of work during a pandemic? From medical equipment that needs to change hands quickly to banks that need software support with their mortgage deferrals, the demand for finance technology has only stepped up, and Tamarack has had a hand in all that and more.
“I’m doing a talk next week, and I have a slide called ‘ownership is obsolete,’ ” Scott Nelson said. “From that point of view, equipment finance has a very significant role in a COVID and post-COVID economy.”
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