Minneapolis branding firm uses its version of 'Shark Tank' for first incubator pick

Martin Davis may not be Mr. Wonderful, but the branding firm he leads has become a version of "Shark Tank."

Duffy, the design and technology firm where Davis is chief executive, has launched an incubator program called Duffy Ignite. With it, Duffy offers to provide a tech start-up with a team of developers and designers in exchange for an equity stake in the company. It's the kind of deal portrayed on ABC-TV's "Shark Tank" program.

Last week, Duffy selected its first company for the incubator program: 26 Letters, a Minneapolis start-up that helps organizations address diversity and inclusion within their workforces. It assists companies with recruiting and talent retention as well as provides workshops and road maps for diversity initiatives.

Duffy Ignite developers are going to help make survey-related software for 26 Letters to better assess client feedback and analyze where clients stand in workplace diversity.

"To have the weight of an agency like Duffy supporting you means so much to me," said Caroline Karanja, founder of 26 Letters.

Duffy Ignite is also helping the company revamp its online training that it uses to reinforce lessons on implicit bias and other topics.

Duffy solicited business ideas and fielded three finalists, who were invited to pitch their projects. Duffy Ignite is currently going through contract negotiations with 26 Letters, including how much equity will be shared.

Through Duffy Ignite, the individual employees of Duffy who work on the project will receive the equity stake, not Duffy itself. Davis said the program is designed partly to retain Duffy's tech talent.

"We have these rock star developers," Davis said. "We have these great designers. They want to be part of some product. … This gives them the opportunity to be part of Duffy and get that outlet. It's kind of the best of both worlds."

Davis said the company chose 26 Letters because the firm itself had made efforts to assure its own diversity and believed Karanja's work could help other businesses do the same. "We have a pretty diverse agency where we are 50-50 male and female," he said. "People were excited about encouraging that and making it part of the story."

Davis said staffers were also impressed that Karanja already had a working business.

About 10 Duffy staffers will help on the project. As it continues, Duffy Ignite will assist start-ups with business planning, product design, production and marketing. One idea will be chosen and after about 1,000 hours of work by the Duffy team, the start-up should have a business plan and a product prototype that it can showcase to investors.

"It's design and it's development and the marketing positioning," Davis said. "It takes all three things to launch a product."

Duffy has experience in all of these areas. It has worked with clients such as Baby Einstein, Jim Beam, Aveda and Mall of America on everything from digital strategy to branding and packaging.

Recently, Duffy teamed up with Good Chemistry, a Colorado marijuana grower and dispensary, which it helped brand and design its offices and website as it sought to counteract negative perceptions of cannabis. The firm used to be the design arm of the Fallon advertising agency before splitting off in 2004. Duffy now has about 40 people on its staff.

The inspiration for Duffy Ignite came when the firm's developers this spring worked on a colleague's idea for a mobile app. That showed company leaders that staffers enjoyed working on projects that were beyond the normal scope of a marketing firm.

Leaders at Duffy want to have a new idea chosen each year with different staffers participating each time.

Duffy is not the first to get into the start-up game. Fallon has a similar accelerator program. GoKart Labs has helped launch several start-ups of its own including BringMeTheNews.com.

Karanja, a 27-year-old web developer, started 26 Letters about a year ago.

"There is a real need for this. … I want to give people tools and ways to address [diversity] that are very action driven and results-driven," she said.

Her company has consulted, conducted workshops and created e-learning solutions for organizations such as Carleton College and Minnesota Public Radio. By the end of the partnership, Karanja hopes to have a really strong brand and product to be able "to reach out beyond where we are right now."

As the head of her company, she hasn't been able to focus as much as she wanted on the branding and identity of 26 Letters, which the Duffy Ignite team will also help her with. "I think in today's world, it's pretty hard to launch a product without decent marketing and branding," Karanja said.