Start-up Alithias Inc. gets a boost from big business [Milwaukee Journal Sentinel]

Oct. 29--In the struggle for sales that is at the heart of every start-up, Alithias Inc. has been helped by a surprising number of much bigger companies.

At least seven established companies in Wisconsin have funded beta testing or become early customers of the Milwaukee maker of health care price and quality information software programs. As a result, Alithias has been able to develop its software more quickly, said Ross Bjella, the company's co-founder and chief executive officer.

"We got good input on product development, so we made fewer mistakes," Bjella said.

After three years in business, Bjella said Alithias is on track to register more than $200,000 in sales this year from a growing list of customers that includes Bemis Manufacturing, Menasha Corp., Sargento Food Inc. and Serigraph Inc.

To get the attention of big companies, Bjella has leveraged personal connections, made cold calls and told Alithias' story to as many people as possible.

Alithias' program allows employers, administrators and even providers to compare hospitals, clinics and others in the health care field. Health insurers offer similar tools, but they're often hidden on information-heavy websites, overbuilt or unwieldy, and many consumers don't trust them, Bjella said.

Alithias' first big break came from Serigraph, a privately held West Bend specialty printing company, said Bjella, who previously was chief executive of DDN, a division of Dohmen LLC.

Bjella approached John Torinus, Serigraph's chairman, after hearing him speak about his company's pioneering efforts to reduce health care costs. Torinus agreed to provide Serigraph's health plan data to help Alithias create software that would shed light on the company's health plan costs and quality.

Torinus had to fight with Serigraph's own insurance company to get it, but eventually he was able to provide Alithias with its first data set.

"If you can get a big company as a beta site customer that co-develops with you, you refine your business model to accommodate those early customers -- and guess what? Your business model gets better," Torinus said.

After an introduction to Michou Reichelsdorfer, president of Prairie States Enterprises Inc., Bjella persuaded the Sheboygan third-party health payment system administrator to provide some money for product development. Reichelsdorfer also helped get Bjella in front of the Sheboygan Employers Health Network, a coalition of five companies that work together to bring down health care costs.

Three of the five companies -- Bemis, Sargento and Sheboygan Paint Co. -- are now Alithias' customers, Bjella said. Having big customers like that helped validate the company's software and made it easier for Alithias to bring Menasha Corp. in as a customer, he said.

Risk vs. status quo

"It's fun to work with these small start-up entrepreneurs, and you can shape what they're doing," said Rick Fantini, vice president of human resources at Menasha. "They'll really work with you and put something together that meets your needs. They're not caught up in that cookie-cutter mentality."

There's no question a large company like Menasha, which has about 4,100 employees, is taking a risk by working with a start-up. "But it's also a risk to stay with the status quo," Fantini said.

The state's big companies and emerging companies "sometimes travel in different orbits," said Tom Still, president of the Wisconsin Technology Council. But both can benefit from collaborating on research and development, establishing sales and investment relationships, and other collaborations, Still said.

"It's a super additive model where big companies working with start-ups can drive value more significantly," said Greg Meier, an Alithias co-founder and board member.

Alithias raised $250,000 of angel funding in 2011 and is working to raise another $500,000, said Torinus, who is personally investing in the current round of funding.

The company has competition from health insurers and others but distinguishes itself with a "highly customizable" platform that uses actual customer data, includes all parts of an episode of care, and offers transparency, advocacy, analytics, and links to wellness and personal health information, Bjella said.

"In effect, we're creating a real marketplace," Meier said. "Because there's no marketplace unless people have information."

EARLY STAGE SYMPOSIUM

Alithias Inc. is one of 28 young companies that will make presentations to investors at the Wisconsin Early Stage Symposium in Madison on Nov. 5. The two-day symposium will also include a keynote address from Brad Feld, co-founder of the TechStars accelerators (via telepresence), and panel discussions about issues such as customer acquisition and financing.

For information, go to www.wisconsintechnologycouncil.com.

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