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Duluth native operating successful email service

BY JANE BRISSETT NEWS TRIBUNE STAFF WRITER Duluth native Scott Burns and his long-time ski buddy, Zach Stebenow, founded and operate a growing, profitable multimillion-dollar company that has virtually no competition. And although they don't know...

BY JANE BRISSETT

NEWS TRIBUNE STAFF WRITER

Duluth native Scott Burns and his long-time ski buddy, Zach Stebenow, founded and operate a growing, profitable multimillion-dollar company that has virtually no competition.

And although they don't know it, many people in Duluth -- and elsewhere -- have had contact with their firm, GovDelivery Inc.

If you receive e-mail messages from the city of Duluth regarding new City Council agendas on the city Web site, for example, they were sent by GovDelivery. If you have signed up for newsletters from the Minnesota Department of Health, you receive an e-mail telling you when a new one is online from GovDelivery. If you register for Web site updates from the Centers for Disease Control about the avian flu, you'll get notification about new information from GovDelivery.

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The St. Paul company sends out more than 5 million e-mails a month to people who are interested in the workings of government or government services, from the local to the federal levels.

RISKING EVERYTHING

Burns graduated from Burke Mountain Academy in Vermont -- a high school that trains elite skiers -- after attending Duluth East High School for a year. He began Dartmouth College in New Hampshire with the idea that he would go into journalism. He ended up with a degree in economics and environmental studies in 1997, but politics captured his fancy. He worked after graduation for New Hampshire political candidates. After most of them lost, he returned to Minnesota to work at McKinsey & Co., a worldwide consulting firm.

"It turns out I was much more interested in business than I thought," Burns, now 31, said.

At that time, he and Stabenow, a skier from Hastings, Minn., who Burns got to know at competitions when they were teenagers, were roommates. "It was then that we started coming up with the idea of starting a business together," Stabenow said.

Today Burns is president and Stabenow, 34, is executive vice president of GovDelivery.

"Both of us were very passionate about how a lot of software companies build a good product but don't deliver it well," Burns said. They planned to be different.

The company started out in a different direction than it's headed today. Stabenow came up with the idea of making state and federal labor law posters more accessible at a Web site where they could be downloaded for $15 to $50 each. In February 2000, Burns helped launch the business, called GovDocs, in St. Paul. He and Stabenow each put in $7,000, risking everything they had. The Web site was an immediate success, Stabenow said.

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TWEAK IT

One feature of the Web site was automatic e-mail notification of law changes, so clients could stay current.

One day, St. Paul's director of economic development and e-government initiative visited GovDocs. After seeing the e-mail feature, Stabenow recalled, the official said, "'Hey, wait a minute. Couldn't you take this application and tweak it?'" The official thought it would be a way to keep citizens informed of city government matters, from snow emergencies to the availability of city council minutes.

GovDocs worked with the city and created a system to notify subscribers of new information on the city's Web site. It was what Stabenow termed an "instant success," with several thousand subscribers.

"It's mushroomed from there over the last six years," he said.

The company now employs 26 in St. Paul as well as consultants in Washington, D.C., and London. It is looking for nine more employees.

GovDelivery -- a name it adopted about a year ago -- has an impressive list of government clients that includes the FBI, the British Parliament and the U.S. Department of Labor as well as smaller entities such as the cities of Duluth and Maplewood, Minn.

From 2003 to 2005, GovDelivery's revenue more than doubled to $2.58 million and it is projected to have grown substantially when the numbers are in for 2006, according to Burns. GovDelivery was named one of the "Fast 50" -- one of the 50 fastest growing private companies in the Twin Cities area -- by the Minneapolis-St. Paul Business Journal in October.

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The company is marginally profitable, Burns said. The money it makes is usually reinvested to help it grow.

Burns' personality clearly has had an effect on the way the company is run.

Brian Sill, a friend of from childhood and a former employee, said Burns is confident, organized and thorough about the way he runs GovDelivery. "From the beginning, no details were missed, from the establishment of proper accounting systems and financial controls down to developing a detailed employee manual," Sill wrote in an e-mail to the News Tribune. "The company still had a very fun start-up atmosphere, but also was run with the utmost professionalism."

Friends and family describe Burns as driven to succeed. His father, Bill Burns of Duluth, remembers his son falling asleep late at night over his homework. "I can remember telling Scott not to study so much," he said, noting that it's usually not something a father says to a son. But the younger Burns was determined to do well in school. "He's always been his own judge of whether he was successful. ... He's his own harshest critic," Bill Burns said.

TRANSFORM COMMUNICATION

A major aim for the company goes back to Burns' interest in politics. He wants to transform the way governments communicate with citizens. That goal is shared by officials in many levels of government.

GovDelivery's services have led to greatly increased use of the Minnesota Department of Health's Web site, Communications Director John Stieger said. "We found it to be very effective," he said.

The department puts its newsletters on the Web -- no longer printing and mailing most of them -- and notifies readers via GovDelivery's e-mail service. That will produce an annual saving of 9 million pieces of paper by next year when compared with 2000, Stieger said.

In September 2005, after inking a deal with GovDelivery, Ramsey County began offering citizens the chance to sign up for e-mail notification on 57 topics, including County Board minutes to sheriff's newsletters and job openings. The Web site now has more than 10,000 subscribers. "It's been a tremendous thing for the county," county business analyst Cheryl Hernandez said.

"It's been quite a reduction in paper for us," she said. "Just not having to manage all those e-mail addresses has been a real timesaver for us."

Ditto for the city of Duluth, where the popular topic sign-ups include job postings and new books at the Duluth Public Library, management information systems manager Karla Culhane said. About 4,500 people subscribe to e-mail notifications. The city estimates that the system generated as many as 10,000 visits to its Web site in September and October, she said.

The city was one of GovDelivery's early clients in 2002. The relationship between the city and the company has been excellent and the staff has been easy to work with, Culhane said. "I can't say enough about it. It's really been a great tool for us," she said. "I think it has tremendous potential to use beyond what we're doing now."

Contract fees for cities are $500 to $5,000 per month and federal government contracts range as high as $15,000 per month, Burns said. Duluth pays about $1,100 a month.

Burns and Stabenow see many more years of growth ahead in the Twin Cities.

Despite the connections to Burns' hometown, his love of the area and the fact that GovDelivery is a cutting-edge technology business of the kind that Duluth has been trying to attract for years, it will remain and grow in St. Paul -- near an airport hub, their homes, investors and a higher number of high-tech workers, they said.

"The three-year plan is to continue to build out the scale and capabilities," Burns said. GovDelivery is in the enviable position of having no real private-sector competition.

It's easy to be the best when there's no one nipping at your heels, Burns said. But he would welcome other companies, Burns said.

"It would be nice to be the best among many," he said.

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