Ican medical Web site folds
Eric Wieffering
Star Tribune
Tuesday, July 17, 2001
By now the two-year arc for Internet start-ups, from a fanfare of news releases announcing a multimillion-dollar investment to a farewell letter quietly posted on a
Web site, has become all too familiar.
Last week, medical Web site Ican Inc. completed such a journey.
The Eden Prairie company has ceased operations and laid off its remaining 10 workers. A sale of the remaining assets to a medical publishing company is possible,
said CEO and co-founder Michael Moen, "but we no longer have any money to continue the service."
Minnesota may have paled next to Silicon Valley, Austin, Texas, and Boston when it came to the sheer number of dot-com start-ups, but that didn't protect the
state's Internet business community from what has turned out to be a lethal combination of investor wariness and a weak economy.
As little as 18 months ago, a half-dozen business "incubators" competed to house start-up technology firms. They all are gone, as are many of the firms they
originally backed.
Survivors, including the likes of Techies.com, Wam!
Net, Agiliti, SPS Commerce and Interelate, have laid off workers and scaled back growth plans in order to become profitable sooner. Others, such as Wwwrrr Inc.,
which shut down in January, and Shopforschool.com, which suspended operations recently while negotiating a sale, were not so fortunate.
Dot-com spin-offs or divisions of established companies generally fared no better. Check printer Deluxe Corp. of Shoreview shut down its PlaidMoon e-commerce
site after estimated losses of $20 million. Provell, formerly Damark International Inc. of Brooklyn Park, shut down ClickShip Direct, a unit that handles shipping for
online merchants, after failing to sell it and losing an estimated $30 million on the business. Stockwalk.com dropped the .com from its name and sold its online
trading division.
Founded in 1999, Ican was the brainchild of former state epidemiologist Michael Osterholm, who envisioned selling subscriptions to a news and information site for
people studying and fighting outbreaks of infectious diseases. The company's name was an acronym of what it hoped to become -- an infection control advisory
network.
Though he had little business experience, Osterholm's idea and his international reputation helped secure $5.5 million from Silicon Valley and Twin Cities investors
in late 1999, when Internet mania was at its peak.
The company grew rapidly, reaching more than 60 employees in less than six months. Osterholm was trying to raise an additional $10 million in April 2000 when
Internet stocks crashed and venture capitalists suddenly abandoned faith in Internet concerns that wouldn't be scoring profits soon.
Ican laid off workers, trimmed its growth plans, and eventually raised another $4 million, mostly from its original investors. While Ican's two sites had 10,000 loyal
users, Moen said the company was unable to sell enough subscriptions, at $20 per month, to cover its costs.
Last September, Osterholm stepped aside as CEO but retained the title of chairman. In June, Ican laid off 19 of its remaining 29 employees and hoped that the cuts
would allow the company to maintain its Web sites while it negotiated a sale.
Those negotiations continue, Moen said, and it's possible a buyer would re-start Ican's sites. "But I can't really speak for them," he said.
-- Eric Wieffering is at ewieffering@startribune.com .
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