Tech
Head of Disney's Cambridge research lab departs
Marks tells me the East Cambridge facility will remain open. The Disney web site lists three employees and a consultant as working there (in addition to Marks, whose picture hasn't yet been removed.)
But one of those employees, Amber Brown, is joining Marks at his new venture, Upfront Analytics. The company will be based in Dublin, Ireland. It's in stealth mode, with no web site yet. (Marks, who ran a Mitsubishi R&D lab in Cambridge before joining Disney, grew up in Ireland, and he also set up a Disney research lab there.)
Among the projects Disney has been working on in Cambridge are 3-D printing of large objects; tracking mentions of Disney in the blogosphere; delivering "a Disney cinema experience to the developing world in a way that makes economic sense"; and supplying information via mobile devices to help theme park visitors steer clear of crowded areas.
I've contacted Disney by phone or e-mail to inquire about the future of the Cambridge facility, and whether a new chief has been chosen yet, but haven't heard back. When I visited the lab last Friday, no one answered the door.
Update: a Disney spokesperson informs me that Jessica Hodgins is now overseeing the Disney lab in Cambridge. Based in Pittsburgh, she also oversees Disney labs there and in California.
Update #2: Jonathan Yedidia informs me by e-mail that he's the only senior researcher currently working at the Cambridge lab, but that the staff includes "a junior researcher, three professor consultants who visit regularly, four post-docs (three hired and starting soon, one in the process of finishing the hire), and seven lab associates." (Lab associates are paid interns who usually stick around for anywhere from three months to a year. The professor consultants he mentions are Hanspeter Pfister of Harvard, Wojciech Matusik of MIT, and Marc Alexa of the Technical University of Berlin.)
Former SpeechWorks chief executive out raising money for Xtone, startup that wants to speech-enable mobile apps
Now, the former CEO of SpeechWorks, Stuart Patterson, is out talking to local venture capital firms to raise money for another speech-related business. Xtone, founded in Virginia in 2004, wants to help developers of mobile apps add a layer of "Siri-like" speech functionality to them. Patterson tells me that once he closes the company's next round, he'll be setting up shop in Boston and hiring staff up here; Xtone already has several consultants in the area — some of them former SpeechWorks employees.
"We're not in core speech technology," says Patterson, who became CEO of Xtone in January. "We're building a platform to help customers develop new services that use this new modality of speech with their mobile devices, which has been proven by the success of Siri." He says the Xtone platform will let app developers add speech functionality without having to develop it differently for different mobile operating systems, like Apple and Android: "It's a write once, run anywhere platform." (The simplicity of using Xtone's platform to script conversations that users can have with an app will make Xtone more appealing for developers, he asserts, than trying to work with different APIs to take advantage of the built-in speech recognition capabilities of different operating systems.)
Scenarios for 38 Studios going forward
I spoke with game industry executives and venture capitalists who've invested in other developers of massively-multiplayer games. Not everyone wanted to talk on the record, but here are some of the scenarios they sketched out for what happens next at 38. (I left a message today for 38 Studios seeking comment, but haven't heard back.)
FULL ENTRYNew mobile app, About Last Night, will chronicle mischief and triumphs after dark (and of course, offer deals)
Their iPhone app, developed in collaboration with Cambridge-based Mobinett Interactive, is "a social network especially for nightlife," says Darren (he's on the right in the photo). "It's about the party last night, the concert, or the date. It's very photo-centric, and you can follow people or locations like a bar or nightclub." The app is intended to help guide users to where the best action is on a given evening — venues and events can be rated by users of the app — or show them what mischief their friends were up to the night before. (Yes, you can keep certain things private so that only you can see them.)
Businesses can use the app to send out special offers to the people who follow them, such as two-for-one appetizers. And the most active users of the app can earn bronze, silver, and gold medals, which make them more visible to other users of the app.
"We're raising money now," says Derek. "When the kids come back to school in the fall, we think that'll be a huge factor in getting people to spread it around."
Derek Dodge tells me that he dropped out of University of New Hampshire to start another company, 1Mind, aimed at "helping you find people who are really awesome and whom you should know." The About Last Night app sprang from that business, and took only about three months to create, he says.
Their father, Don, is a developer advocate at Google. Aside from being a supportive parent, he says he has no official role with the company — though he is serving as an unpaid PR consultant to the pair, and introducing them to friends like MC Hammer.
Travel site Kayak buying tickets for IPO road show; take-off could be impacted by Facebook share price
Kayak CTO and co-founder Paul English told me that he couldn't comment on the company's IPO plans because of the "quiet period" mandated by the Securities & Exchange Commission. Interestingly, English owns a bigger percentage of Kayak than the company's CEO, Steve Hafner: 8.9 percent of the company, versus 6.9 percent for Hafner, formerly an executive at Orbitz. (And English recently also acquired the title "president," as of an SEC filing on May 8th.) General Catalyst, the Cambridge VC firm that incubated Kayak in its earliest days in 2004, owns the largest chunk of the company (30 percent). Kayak brought in $224 million in revenue last year.
Kayak's IPO has been delayed because of stock market "choppiness," says Boston investment banker Peter Falvey, but also because of the emergence of a potential new rival: Google Flights, the product of Google's 2010 acquisition of ITA Software, a Cambridge company.
Now, Kayak's IPO fortunes could hinge on the aftermath of the Facebook IPO last Friday. Falvey says that the social network's offering "has been the most anticipated IPO ever, and now its stock is trading down 11 percent from the offering price. We may all be reading too much into the Facebook tea leaves right now, but I suspect that will be deemed a negative" for other tech IPOs in the pipeline, like Kayak.
FULL ENTRY
On the eve of the IPO, some Facebook ancient history
So here are five links from (or about) Facebook's early days. Would you have bet on Facebook becoming the planet's dominant social network, back in 2004 or 2005? If you were a VC who met with co-founder Mark Zuckerberg, then a Harvard sophomore, in 2004, would you have invested — especially when he insisted that he was perfectly suited to keep on running the company?
- February 2004: "Hundreds register for new Facebook website," from the Harvard Crimson.
- April 2004: "Are we a match?", the first New York Times coverage of Facebook.
- September 2004: "Online adversaries: Rivalry between college-networking websites spawns lawsuit," from the Boston Globe (the paper's first coverage of Thefacebook.com.)
- September 2007: "Why Facebook went west," my column on Facebook's decision to leave Cambridge for Palo Alto.
- June 2009: "Where in the world is Eduardo Saverin?" from Boston venture capitalist Larry Cheng, who introduced Facebook's founders to the VC firm where he worked at the time, Battery Ventures.
Game startup Disruptor Beam collects funding to work on games tied to TV shows
Radoff didn't want to be specific about how much Disruptor Beam had raised in this seed round, but he did confirm it was less than $1 million.
"We're spending a lot of time thinking about the convergence of tablets, TV, and social gaming," Radoff says, adding that the company has plans to announce its first licensing deal with a television show in the next few weeks.
It sounds like the new funding will allow Disruptor Beam to go from a small firm building games for outside clients to one that creates products of its own. (Disruptor Beam worked with Waltham-based GSN Digital to build "50 Cent's Blackjack" recently, and had built another game for Ayeah Games, a startup that called it quits last year.) Radoff talks about making "story-oriented" games linked to popular TV shows and books, which will allow players to "interact with characters they know and like, and really live in those worlds."
When I spoke with him two years ago, Radoff mentioned that the studio was working on a social game called "Gods of Rock" that would invite players into the world of music superstars. That game never launched. "We never found good partners in the music industry," Radoff says.
Radoff co-founded Disruptor Beam with his wife, Angela. Investors in the seed round include CommonAngels; Harmonix CEO Alex Rigopoulos, CTO Eran Egozy, former COO Mike Dornbrook; and Wilcox. The company operates out of the WorkBar shared space in Boston's Leather District.
Heartland Robotics will unveil first product by January 2013 (if not before)
Why?
Amazon.com founder Jeff Bezos was the company's first investor. Rodney Brooks, founder of Heartland and previously a co-founder of iRobot, left a tenured faculty position at MIT to dedicate more time to the company. The team includes a CEO with experience at Dell, and other employees from Bose, NASA, 3M, and Dean Kamen's DEKA Research.
And the company has a big vision: "Robots will change the way we work," Heartland's web site proclaims. "They will have intelligence and awareness. They will be teachable, safe and affordable. They will make us productive in ways we never imagined."
Brooks has apparently told people that Heartland is working on the robotics industry's version of the iPhone — an affordable-enough device (their target price is about $5000) that will be intuitive to use, and that will spawn a community of app developers who write software for it. It'll be designed to perform a variety of packaging or light manufacturing tasks, sources have told me. The robot may also be capable of being "trained" to perform a certain repetitive task just by moving its arm and gripper. Heartland's product, according to those who've seen it demoed, could potentially put robots in lots of small and medium-sized business. (Here's my 2010 background report on what the company is up to.)
Now, it looks like Heartland is laying the groundwork for a launch, perhaps at the 2013 Automate trade show in Chicago, put on by the Association for Advancing Automation. Heartland CEO Scott Eckert (pictured at right) confirmed that the company will be an exhibitor at the show, but wouldn't say much else.
Heartland also recently hired Mitch Rosenberg to run marketing; he'd previously headed up marketing and product management at Kiva Systems, a maker of warehouse robots recently acquired by Amazon.
That makes it seem like the company could have something to announce fairly soon — perhaps even before next January.
FULL ENTRYFormer E Ink chief executive Russ Wilcox joins board at Harvest Automation, details angel investments
First, Wilcox took his family on a year-long trip around the world, which ended last July.
Now, Wilcox, who helped start E Ink back in 1997, is once again getting plugged in to Boston's startup scene. Harvest Automation is announcing today that Wilcox will join its board; Harvest makes robots that move potted plants around at nurseries. (I last wrote about the company in November, when Harvest raised $7.8 million from investors.) Harvest is "poised for an exciting product launch and sales growth," Wilcox writes via e-mail. "As a director I hope to actively share the operating lessons we learned at E Ink."
Wilcox tells me he's hoping to start a new venture in the energy sector, and he has also been making a string of angel investments. (You can find him on AngelList.) They include:
- PowerInbox, trying to make the inbox more interactive (I wrote about them here recently)
- Calimmune, working to "engineer immunity" to patients with HIV
- DriveFactor, collecting data about how you actually drive.
- Imprint Energy, working on flexible, low-cost, rechargeable "zinc poly" batteries.
- AmberWave, a materials company working on new solar cells, LEDs, and semiconductors.
- Gen9, building the first "fab" for synthetic biology, enabling low-cost production of custom genes.
That last one was co-founded by Joe Jacobson, an MIT Media Lab prof who was also a co-founder of E Ink with Wilcox.
Northeastern students create a shirt that knows when you're slacking off on your workout
A team of Northeastern students and profs have built a prototype that could point the way to the future of coaching and personal training for some elite athletes — and perhaps eventually hard-core gym rats, too. The Squid shirt is a tricked-out short-sleeve shirt from Under Armour that monitors how your delts, pecs, and lats are performing. (It also tracks your heart rate.) The shirt knows if you're hitting your exercise goals, and also if both sides of your body are doing equal amounts of work. It can relay that information via Bluetooth to a mobile phone or laptop, which would allow a coach or personal trainer to keep tabs on how you're doing. The shirt can also give you feedback via vibration if you're slacking off.
"It's a way for a trainer or coach to sign up an athlete for a workout, and collect data on how they do with it," says Adam Morgan, a senior majoring in mechanical engineering. "They can target different muscle areas that they might want to develop with an individual or a group of team members."
Trevor Lorden (pictured here) showed me how it worked, using a seated row machine. He said that it only takes him about two minutes to don the Squid shirt and affix the dozen disposable sensors. (The shirt can be washed in a machine, as long as it's dried on low heat.) Since the team is still developing the Bluetooth connection, he was connected to a laptop by a cable. Ali Aas, who helped develop the mobile app and web site, showed how the information about Lorden's workout could be viewed. You could see a calendar showing which days he'd worked out, and how his average intensity compared to the goal he'd set on various exercises. It also showed on a spectrum whether the exerciser is favoring one arm versus the other, or working out in perfect symmetry.
Faculty advisor Mark Sivak told me that they'll be testing the shirt with Northeastern athletes this summer. They see the initial market as college and professional sports teams. The Squiddoos may soon add additional sensors to monitor the biceps and abdominal muscles, and Constantinos Mavroidis, another faculty advisor to the project, said they've had some early conversations with a medical device company interested in the Squid shirt about tracking blood pressure and breathing.
FULL ENTRYTwo remaining employees of Play140 picked up by Oomba, new 'digital objects' startup from Atari's founder
Well, T.A.G.N.Q.B.O. (The Acronym Game Never Quite Broke Out.) Last August, the company's Twitter account and blog went quiet. Play140 employees — including two of the three founders — started finding other jobs. By this month, only chief executive Shawn Broderick (pictured at right) and CTO Michael Johnson were left.
Tonight, Broderick announced on the company's blog that the company was being acquired for an undisclosed amount by Oomba, a stealthy California startup. One of the company's founders is Nolan Bushnell, best known for creating Atari and Chuck E. Cheese, and also inventing the early videogame Pong. Broderick, now Oomba's president, tells me that the company will soon be headquartered in Massachusetts.
Oomba's profile page on AngelList describes the company this way:
Oomba is a Digital Object Trading™ platform that communicates with the virtual goods databases of online and mobile games through a secure, robust protocol. Working with the voluntary cooperation of game publishers, transactions can be initiated, escrowed and recorded by Oomba with complete accountability to the buyers and sellers.
(Broderick says Oomba has raised money from angels and a venture capital firm, but hasn't yet disclosed the details.)
FULL ENTRYAmbient Furniture and more, at this week's Media Lab member meeting [ Video ]
Giving one of the talks is Media Lab lecturer David Rose. He's a local entrepreneur who founded Ambient Devices and, more recently, Vitality, a Cambridge startup that created a line of smart pill bottles that could remind you to take your medicine — and notify a family member or doctor when you'd missed a dose.
Rose's latest work at the Media Lab focuses on household objects that have wireless connectivity, barcode scanners, and displays built in. Essentially, what if your coffee table could display your Facebook photo albums as you talked about a recent vacation? What if your trash can could scan empty packages and automatically re-order products from Amazon? What if your doorbell could chime when your kids were on the way home, using location info from Google Latitude?
The video overview is well worth a look... and if you want to follow the event's live webcast, it'll be here, starting Tuesday morning. You can also follow the Twitter hash tag MediaIO.
Ambient Furniture overview from David Rose on Vimeo.
Silver Lining Systems, working to demolish data center bottlenecks, raises $2 million
Silver Lining Systems doesn't divulge much on its web site, but it does have $2 million in initial funding from California-based Lightspeed Venture Partners, Cambridge's Founder Collective, the NYC Seed Fund, and several angel investors, including Endeca founder Steve Papa; Rob Soni, a special limited partner at Matrix; David Murphy of Blue Coat; and BladeLogic co-founder CEO Dev Ittycheria.
Silver Lining co-founder and chief executive Vishal Misra, a Columbia computer science prof, tells me the company wants to demolish some of the data center bottlenecks that can impair the performance of cloud-based applications and services. Dan Rubinstein, another Columbia prof, is another founder, as is Joshua Reich, a Columbia PhD who is now a fellow at Princeton.
"We're targeting data centers and virtualized environments, and trying to solve the performance problems with storage and networking," Misra says. When a company has hundreds or thousands of virtual machines running on servers in a data center, Misra explains, "if you think about it, every machine is running similar software, and that means the bits are almost identical on all those virtual machines. But the way storage and networking works is that those servers go and fetch the same bits again and again from the storage system. Our thinking is, if the same bits are traveling over a network to multiple CPUs, why not store them or cache them locally?" He says the idea springs from a new kind of networking architecture called "content-centric networking."
Cambridge's PowerInbox launches API to help users do more with e-mail than just read it
Today, PowerInbox is releasing its Connect API, which makes it easier for companies to deliver these more functional and interactive e-mails, and for users to see them in their inbox without having to download any special software. (That's assuming you use e-mail clients from Fuser, Unified Inbox, or Smak; others will still require a download.) It'll be interesting to see if larger e-mail companies, like Gmail or Outlook, decide to embrace the Connect API.
"We think that interactive e-mail can be as big of a trend as mobile and social are," says Matt Thazhmon, founder and CEO of PowerInbox. (He's pictured at right.) The company isn't yet focused on monetizing the product, but Thazhmon hints that it may eventually be able to up-sell certain services to marketers, in return for bringing more visitors to their web sites or making more purchases happen inside the inbox.
Already, PowerInbox makes it possible to see a live Groupon countdown without leaving your inbox; view a video from Boston-based Vsnap; or make a donation via Boston-based Fundraise.com.
Thazhmon says the eight-person startup is outgrowing its current Kendall Square space. PowerInbox has so far raised $1.9 million from venture capital firms like Founder Collective, Atlas Venture, and Egan Managed Capital, along with angel investors including Mike Dornbrook (ex-Harmonix COO), Russ Wilcox (former E Ink CEO), and Eric Groves (ex-Constant Contact SVP.)
FULL ENTRYBoundless Learning, Flat World Knowledge, and the future of textbooks
From the column:
In Boston, it can seem like most of the city’s population has either authored a textbook, assigned one for a course they teach, or purchased one recently.So that makes a recently filed lawsuit our city’s version of Viacom v. YouTube, or the Department of Justice v. Microsoft, one of those cases that everyone in our tech- and education-oriented town will follow. Three of the largest publishers of textbooks are suing Boundless Learning, a Boston start-up trying to popularize free, Web-based textbooks.
Techies and students may line up on the side of Boundless, which asserts that printed texts are too expensive - and often out of date by the time they hit bookstores. And isn’t it about time the placid textbook industry was shaken up by some disruptive innovation?
But textbook writers and some educators may find themselves sympathizing with the publishers suing Boundless for copyright infringement. They say the digital texts resemble their copyrighted works a bit too closely, which could over time chisel away at the economic rationale for writing and publishing high-quality, peer-reviewed texts.It’s one of those cases that pits content creators trying to earn a living in the digital age against consumers who would prefer to get everything for free.
Here's a bit of supplemental material worth reading...
• I wanted to talk a bit in the column about different models of offering texts for free, including one developed by Flat World Knowledge. They make new textbooks available online for free, but charge reasonable prices for the paperback, audio book, or e-book versions. And of course, the textbook authors get a decent chunk of that revenue. But as usual, I ran out of space in the column. So here's my correspondence with Boston College management professor John Gallaugher, who has published a text with Flat World.
• Here's the lawsuit filed against Boundless by Pearson, Cengage, and MacMillan:
• And here is Boundless' response to the lawsuit, posted on the company blog.
TalkTo raises $3 million for app that lets you text questions to businesses
So why can't you text message a business?
Making that happen is the goal of a new Cambridge start-up called TalkTo, which just released its iPhone app. (There's also a mobile web version.) "We wanted it to be incredibly simple to text any business in America just as easily as you text a friend," says co-founder and CEO Stuart Levinson. (He's pictured at right.) "The business doesn't have to install anything new to communicate with customers, or learn a new piece of software, but the consumer can send a text to do things like make a restaurant reservation or find out if a particular product is in stock."
To demonstrate, co-founder and CTO Riley Crane sent a message to the Whole Foods Market on River Street, asking whether they carried Nutella. Within a few minutes, he got a response: nope, but they do carry similar hazelnut and chocolate spreads.
You can use the TalkTo app to ask any question of a business, but it also streamlines the process of asking common ones. For example, confirming the operating hours of a business, making a reservation, or asking how much a particular product costs.
FULL ENTRYIntuit buys Boston-based AisleBuyer, startup developing check-out technology for mobile phones
AisleBuyer developed technology that allows consumers to scan a product's barcode in a store, see reviews and ratings, and, if they choose, pay for that product with a credit card without having to stand in line at a register. I test-drove the technology in 2010 at Magic Beans, a small local chain that sells kids products. Last year, AisleBuyer announced a partnership with Big Y Supermarkets, based in Springfield, but the startup hadn't announced any other users of its technology since then.
AisleBuyer chief executive Andrew Paradise tells me that the Intuit relationship began last October, when he spoke at a conference in Chicago immediately after Chris Hylen, who heads up the Payment Solutions business unit at Intuit. "We started talking afterwards," Paradise says. The companies began a very quiet pilot test earlier this year with a few Intuit customers, exploring how AisleBuyer's mobile check-out technology could be integrated with various Intuit software products.
"While we were pursuing the partnership path, we realized that there were a lot of things we could do together if we were more fully integrated as one organization," Paradise says. "The vision around creating a mobile point-of-sale offering for small businesses turned into acquisition talks."
AisleBuyer had 37 employees prior to the acquisition, and not everyone will join Intuit. A three-person team in Palo Alto will go to work at Intuit's Mountain View headquarters. The Boston employees who'd been working on AisleBuyer's small business product will stay where they are, and become Intuit employees. But a significant number of people who'd been working on an enterprise version of AisleBuyer's technology will lose their jobs; Paradise wouldn't be specific about the number.
AisleBuyer was a semi-finalist in the inaugural MassChallenge startup competition, in 2010. Intuit has long had a software development office in Waltham.
Crashlytics adds $5 million in funding, reveals early beta customers
"I started the company because I had the problem," says co-founder Jeff Seibert. "There weren't any good tools for gathering information about why crashes were happening." (Seibert is pictured at right, with co-founder Wayne Chang.) He tells me Crashlytics' software code is now incorporated in more than 1000 iPhone and iPad apps, including apps from Yammer, Path, Kibits, Hipstamatic, Delta Air Lines, and Domino's Pizza. The Crashlytics code works only with Apple's iOS operating system, and Seibert wouldn't comment on a timeline for supporting Android or other operating systems.
The new funding round is led by Flybridge Capital Partners of Boston. It also includes Baseline Ventures, which had a very big payday yesterday with Facebook's $1 billion acquisition of Instagram, a Baseline-backed startup.
David Aronoff of Flybridge says that after last fall's seed round, "Jeff and Wayne built their product better and faster than we had even hoped for," and that "customer adoption went viral and shattered the end goals for the seed within the first month of private beta."
"This is money for the next two years," Seibert says. "It lets us ramp up the team quite a bit, and the goal is to get the product to profitability." Right now, Crashlytics is still running a private beta test, and hasn't yet started charging customers.
Seibert says the company will primarily be adding engineers to its team, but may also hire a few marketing or public relations employees as well.
I profiled Crashyltics co-founder Wayne Chang last November.
GrabCAD collects more funding, plans office warming party with Estonian president
And next Wednesday, the president of Estonia, Toomas Henrik-Ilves, will be in town to help GrabCAD inaugurate its new offices at the American Twine Building in East Cambridge. (The company got started in Tallinn, Estonia. Locally, GrabCAD had previously been shacking up at the Kendall Square office of Matrix Partners.)
The company has built a site that brings together mechanical engineers who design products and components of products, in part by offering a free library of 3D CAD (computer-assisted design) models that they can use in their work. Engineers can also set up profiles on the site and showcase their work. Companies that want to crowdsource the design of a new product or part can run challenges on GrabCAD, and potentially get dozens or hundreds of engineers thinking about their particular problem. The companies award prize money for the best design, and may later continue working with an engineer to move the product forward. GrabCAD charges an administrative fee for each challenge.
Meybaum says the Cambridge office currently has four employees, and the Tallinn office has 12. Meybaum says he expects the company to add another four jobs in Cambridge over the next few months. He splits his time between the two sites.
GrabCAD was part of the 2011 TechStars Boston class, after winning the Seedcamp London program earlier that year.
Here's a screenshot from the GrabCAD site:
Aframe, British video startup that's setting up U.S. headquarters in Boston, raises $7 million
Aframe is a cloud-based service that helps customers like MTV and the BBC run their video production processes more efficiently. Basically, anyone working on a media company's production team who needs to access raw or edited video can get it, securely, through Aframe. The Aframe service frees media companies from the headache of having to manage their own storage infrastructure for video; all they need is an Internet connection and the editing software they normally use. Monthly pricing starts at $99.
Aframe has now raised $10 million in total, all from European venture capital firms. I asked chief executive David Peto (pictured at right) whether he'd had any any talks with Boston-area investors. He told me he'd met with a few, but all of them "wanted to see us with a proper presence in the U.S. first."
FULL ENTRYMy life as a micro-laborer: Exploring Mechanical Turk, Skyword, TaskRabbit, GrabCAD and more
Plus, I'm sharing a bit of additional perspective from MIT Sloan School of Management professor Ofer Sharone and Diane Hohen of Milford, NH, who runs errands for TaskRabbit. I'm also publishing my e-mail exchanges with TaskRabbit founder Leah Busque; Tom Gerace, the founder and CEO of Skyword; and Stephen Reed, an attorney at the Boston firm Beck Riden Reed.
(Update: This column led to an episode of NPR's "On Point" that aired April 3rd, 2012.)
Here's the column...
The "micro-labor" trend seems great for businesses and consumers, but a tough way to make a living for micro-laborers
A few weeks ago, tired of the niggling questions of editors and the constant press of deadlines, I decided to chuck it all and become a Turker.
What is a Turker? It’s someone who performs small tasks that can’t be automated. Once you sign up on the Mechanical Turk website, operated by Amazon.com, you can choose from an array of jobs that might take a few seconds or a few hours: you can translate documents from Tibetan to English, fill out surveys for academic researchers, or transcribe a 71-minute lecture about gastroenterology. How’s the pay? That last task offered $2.85 for work that would likely take several hours.
FULL ENTRYWith new mobile payment app, Cumberland Farms allows customers to buy gas with their phones
The app was developed by Cumberland Farms in collaboration with the Boston office of PayPal. (Last April, PayPal acquired Fig Card, a small Boston startup that was developing mobile payment technology.) It requires that you have an account with PayPal, the online payment service that is owned by eBay. In addition to the iPhone and Android versions, there's also a mobile web version for other phones.
My biggest qualm about trying the app was that I'd always been told that using your mobile phone at the gas pump would inevitably produce a Michael Bay-size fireball that would consume the surrounding neighborhood. But Dave Banks, the chief information officer of Cumberland Farms, said there were no known incidents of mobile phones sparking fires or explosions. (Static electricity is another matter.) And the company has had to get approvals from fire departments in each of the towns where it is deploying the SmartPay app.
FULL ENTRYVeterans of Cambridge Technology Partners getting the band back together...at Cloud Technology Partners
Greendale was a founder and head of sales and marketing at Cambridge Technology Partners, and he says about one-third of the team at Boston-based cloudTP has that other CTP on their résumés. Founded in 2010, cloudTP has 35 employees, and Greendale expects it to be at 75 by the end of the year. "Our biggest challenge right now is hiring people," he says.
CloudTP focuses on helping large enterprises take advantage of the lower costs and increased flexibility of cloud computing, whether that entails using a public cloud or software-as-a-service offering (think Salesforce.com or Amazon Web Services) or creating a more secure and manageable "private cloud" inside the corporate firewall. Greendale also talks about "community clouds," designed to be used by a company's business partners and customers.
"Our customers want advice about what hardware and software to use, and they need help migrating their legacy applications to the cloud," says Greendale. "We're also one of the few vendor-neutral options that they have, when it comes to selecting the right vendors for a particular situation."
FULL ENTRYTracelytics collects $5.2 million to help customers keep an eye on their web apps
Tracelytics is a software-as-a-service company that helps its customers monitor and improve the performance of their web applications: how quickly, for instance, did a web site respond to a visitor's query about the inventory level of a specific product, and where were there problems? Tracelytics aims to provide a single view of complex applications that may run on numerous different servers across the Internet. It's already used by sites like GitHub and SeatGeek. Pricing starts at $95 per month.
The company was founded by a trio of Brown University grads in 2010; it now has eight employees. Vigeant, who joined as CEO in January, says the plan is to double in size over the next three months, primarily adding salespeople and engineers. (Access to talent is one key reason for the move to Boston.)
Investing alongside Bain in this latest funding round are Flybridge Capital Partners, Google Ventures, and Battery Ventures, who supplied seed funding to Tracelytics last year.
After departing HP, ex-Vertica CEO Chris Lynch has plans to make 20 investments in burgeoning 'big data' sector
Vertica had been acquired by HP for $350 million the prior February, and while the employees didn't expect Lynch to stay forever, they were surprised when he told them that he'd be leaving in March. "I said, 'I love you guys. This office is my gift to you.'" Lynch told the rank and file that he believed that a revolution was brewing in Boston around "big data" — collecting and analyzing vast amounts of information in real-time — and he wanted to be part of that revolution as an angel investor. While HP CEO Meg Whitman and COO Ray Lane tried to persuade Lynch to stick around at the company, his last day was last Friday. (Ex-VC and Vertica executive Colin Mahony is now running the Cambridge office.)
Lynch says that the HP purchase of Vertica was the second-best payday of his career (the top was ArrowPoint Communications, which went public and then was acquired by Cisco for $5.7 billion). He's now positioning himself as an angel investor focused on big data startups, primarily in Boston. His plan is to make 20 investments in the near-term; already, he has put money into a handful of local startups, including Hopper, Kinvey, Mortar Data, Power Inbox, and Hadapt. He says he often shares dealflow with Antonio Rodriguez of Matrix Partners and Jeff Fagnan of Atlas Venture.
"I grew up in the tech industry in this area," Lynch says. "And it felt like for the last 10 or 15 years, we've been hibernating, and the West Coast is taking all the mojo. We've been at the front of waves of technology in the past, with minicomputers and then data networking. I want to help revitalize Boston. Big data is going to be to this region what networking was in the late 80s and early 90s."
"If you look at the way the web played out, at first people were creating discrete new businesses online, and then Main Street took it and integrated it into their existing businesses," Lynch continues. "Today, you have companies like Zynga and Groupon that have built their businesses on real-time analytics and big data, but the megatrend over the next year-and-a-half is that companies like Gillette and Fidelity are going to get on board. In a year or two, you'll be asking them about their analytics strategy, and how they're using data to gain competitive advantage. How are you using the information you have about customers to provide a better experience, and sell you more stuff? Big data is at the foundation of all of the megatrends that are happening today, from social to mobile to the cloud to gaming."
"I love people and a lot of how I invest is about stories," Lynch says. "I think about people and their mission, and I think if they're in the right market space, we'll figure it out."
Lynch's five investments so far are all in Boston, but he says he'll consider investing in other regions, too — just not Silicon Valley, which he regards as "over-invested" and "plastic."
In Boston, he says, "you have the best data scientists in the world here. You've had great companies created like Vertica, Netezza, and Endeca. I want to bring that mojo back that we had in the 80s and 90s."
With new 50 Cent Blackjack game, Waltham-based GSN Digital increases emphasis on Facebook games
But out along Route 128, there's another group hard at work on Facebook games: the Waltham office of GSN Digital, the game development arm of TV's Game Show Network. The 105-person office divides its time between developing web-based games for GSN.com, mobile games, and Facebook games — but lately, there has been a growing emphasis on the latter, according to Peter Blacklow, who runs the operation. (That's Blacklow at right, sporting a pair of the championship rings he has won playing fantasy sports.)
GSN Digital has just launched "50 Cent's Blackjack" on Facebook, a collaboration with the rap star. It has a 25-person social games studio in San Francisco, and last year hired two social games entrepreneurs in Washington, D.C., who'd formerly been working on a Bain Capital Ventures backed start-up called Join the Company. (Blacklow said he simply hired the founders, though Bain's website describes it as an acquisition.)
GSN Digital exists in Waltham because GSN acquired a local company that developed web-based games, Worldwinner. (Worldwinner allowed users to play games of skill and, if they were good enough, win cash.) Blacklow says that GSN.com is now the #3 games portal online, after Yahoo and Pogo. On Facebook, the GSN Games app is among the top 20 apps, and it includes games like "Wheel of Fortune," "Bingo Blitz," and "Deal or No Deal."
FULL ENTRYLifeables wants to help you sort through the social media chaff to save the most memorable stuff
Social media has evolved into an endless parade of significant moments, trifling snippets, and everything in between. A Boston start-up called Lifeables wants to help you cull the most important memories from that parade and stash them away in a digital scrapbook. Last week, the company started an open beta test of its service — which so far is entirely free.
Lifeables is focused at first on parents (and moms, more specifically.) You start it off with some basic profile information about your kids. Then, it lets you upload and organize photos and videos of your own, but more importantly, it lets you plug in to social networking services where you and your family already likely share pictures: Facebook, Twitter, and Instagram right now, with plans to support others (like YouTube and Flickr) in the future. The Lifeables software can look at the stream of content in your social networks and label it as "things we're pretty sure are about your kids" and "things we think are about your kids." You then tell it that you want to "collect" a photo or video or status update for your digital archive, or ignore it.
Once you've decided to stash something, you can give it a title and add additional details. You also collect the Facebook comments about that item, but Lifeables will also allow you to invite non-Facebook users in your family to add more.
"We don't think this displaces the act of posting pictures from your mobile phone to Facebook," says Lifeables CEO Karen Macumber. Instead, "we want to be the ultimate collector for you, pulling the content from the sources that are most relevant and important to you." In one sense, Lifeables offers you a way to "sequester" the content that matters most, storing it for posterity, but in another it lets you organize and annotate your family's content and then share it again on social networks.
FULL ENTRYAmazon buys warehouse robotics start-up Kiva Systems for $775 million
Kiva was founded in 2003, and the company had raised just $33 million in funding; its original backer was Bain Capital Ventures of Boston, where partner Ajay Agarwal made the investment and also helped broker an introduction to Staples, an important early customer. Last November, Kiva CEO Mick Mountz told CNN Money that the company's revenues had surpassed $100 million, and that Kiva had 240 employees.
This is Amazon's most significant acquisition of a Massachusetts company ever -- and its first since the late 1990s, when it bought a couple of Cambridge start-ups, including Exchange.com and PlanetAll. (The only bigger purchase Amazon has made in its corporate history was paying $1.2 billion for Zappos.com.)
I wrote last December about a management shake-up at Kiva, involving the quiet departures of five senior executives.
In 2010, I wondered when Amazon might become a Kiva customer, following its purchases of Diapers.com and Zappos.com. From that piece:
[CEO Mick] Mountz says that his company has been in discussions with Amazon for a while, and that "we're both interested in working with each other." As for the Zappos and Quidsi acquisitions, that "just accelerates the conversation with Amazon, if nothing else. Everywhere Amazon looks, they're buying a Kiva system."One individual close to the discussions between Kiva and Amazon says that the Seattle e-commerce pioneer may want to own a chunk of Kiva before agreeing to work with the company, or buy Kiva outright. Amazon is also apparently interested in having access to the software code that runs Kiva's system and its robots, to better integrate with its order fulfillment processes, which Kiva considers proprietary. (Amazon didn't return calls seeking comment.)
And in 2008, I wrote about Kiva as part of the growing robotics cluster in Massachusetts.
Here's some video I shot at the company's "demonstration warehouse" in 2008:
To build brand in home decor, Wayfair adds blog overseen by former Better Homes and Gardens editor
Back in October, Back Bay e-tailer Wayfair hired Kristine Kennedy, the former East Coast editor for Better Homes and Gardens, to oversee its new content strategy. The home goods site has always been at the top of its class when it comes to attracting searchers to its site, but has never maintained a design blog before.
Now, Wayfair is starting to promote Kennedy's new My Way Home blog, which features design ideas from about a dozen contributors that she calls the Wayfair Homemakers. There are subtle links at the bottom of each blog post for anyone interested in purchasing some of the items featured, like an Aalto vase.
In June of last year, Wayfair brought in its first outside capital — a ginormous $165 million round — and ditched its somewhat generic original name, CSN Stores.
I asked Kennedy a few questions via e-mail.
FULL ENTRYNew iPhone app Beerdog wants to create packs of social suds-lovers
The beer apps niche is as crowded as the Cask n' Flagon on a game day, with two successful apps, BrewGene and Pintley, developed in Boston. Both focus more on reviews, ratings, and making recommendations than Beerdog, and both have 4.5-star ratings in the iTunes Store. Like Beerdog, both are free. A third beer app built in Boston, RedPint, encouraged drinkers to share their favorite ales with friends, and was acquired last year in an all-stock transaction by Untapped, yet another company that makes a beer app.
Beerdog may have a leg up on competitors; its founding team includes CEO Kevin Bradshaw, a mobile gaming veteran, Devin Kelly, a former VP of marketing for AB Inbev (which makes Beck's, Budweiser, and Stella Artois), and Eric Spitz, the ex-CFO of Narragansett Brewing Company.
FULL ENTRYWho operates Boston's best mobile network? New data from SwayMarkets ranks AT&T, Sprint and Verizon
Nick Chory from the Cambridge start-up SwayMarkets sends along an interesting infographic about the best-performing 3G wireless carriers in Boston, based on factors like data speed and signal strength. And SwayMarkets monitors the experience of actual subscribers, as opposed to relying on marketing claims made by the carriers.
The top-line results? Verizon subscribers get the best signal strength, fastest data transfers, and least latency. (See the infographic below.)
SwayMarkets was founded by a trio of EnerNOC alumni, and their plan is to collect data about mobile carriers' performance in big cities that could then be sold to companies that, for instance, have a large sales force relying on 3G tablets and want to know what carrier to use in different cities to ensure solid coverage. The data could be valuable for consumers, too, Chory says: "If your subscription is up for renewal, wouldn't it be great to know what carrier is the best for you if you work downtown and live in Cambridge?"
SwayMarkets has already produced two free apps for iPhone users: DataMonitor, which keeps tabs on your monthly data usage so you don't incur extra fees, and NetSnaps, which tells you how the WiFi or wireless network is performing where you are.
"We've been collecting anonymous data with both of the apps and analyzing it," says Chory. "We're presenting it for Boston first, but we can do it in any geography." Though the data is collected only from iPhone users at present, the company asserts that it's valid no matter what sort of device you're using on the Sprint, AT&T or Verizon networks. (And SwayMarkets plans to soon start collecting data through other devices.)
Here's SwayMarket's infographic on the best cellular service in Boston:
FULL ENTRYQuattro veterans launch Adelphic with $2 million and visions of delivering more relevant mobile advertising
Most people have gotten pretty good at tuning out the ads that intrude on apps and mobile websites, in part because they're not well-matched to what you're doing. (Unlike, say, Google's textual ads that use your search terms to try to intuit what's on your mind.) A new Lexington start-up, Adelphic Mobile, hopes to try to grab your attention — and make mobile ads more valuable for publishers, marketers, and app developers — by delivering more relevant messages.
The company is coming out of stealth mode today with $2 million in funding from Waltham-based Matrix Partners, and a trio of veterans of Quattro Wireless on its team. That company was bought by Apple in 2010, and its product became Apple's iAd system, which delivers ads to many apps distributed through the iTunes Store.
"We're living through the hangover from the first generation of mobile advertising," says Jennifer Lum, Adelphic's co-founder and CEO. "The device is personal, and it's location-aware, but if you look at the click-through rates of mobile advertising and the performance stats, it's not where it needs to be." Lum's co-founder, Changfeng Wang, is also a Quattro veteran, and earlier in his career he worked for Enpocket, a mobile marketing start-up acquired by Nokia, and Engage, an Internet advertising company that was part of the CMGI empire in Andover. "What's missing in the mobile advertising space is so clear," Wang says. "Advertising is about sending the right message to the right audience at the right time, and that's not really happening in mobile." The third Quattro alum at Adelphic is Joe Grabmeier, the company's chief financial officer.
The company hopes to make mobile ad inventory more valuable for publishers and app developers, in part by better understanding the user's recent activity, the device they're using, where they are, and the content they're currently interacting with. "Right now, it's very hard to purchase advertising at scale that let's you reach, say, males carrying an iPhone 4S at 9 a.m. in the morning, in a major metro area," Lum says. Mobile advertising availability — what those in the industry call "inventory" — is growing at "explosive rates," Lum says. "But the agencies and marketers buying that inventory need to be able to do so in a way that makes sense."
FULL ENTRYA year after its launch, mobile app developer Mobiquity surpasses 100 employees
In the web boom era, Bill Seibel was running Zefer, a web development firm founded by Harvard Business School alums that raised $150 million, tried to go public twice, and went bankrupt in the aftermath of the dot-com bust, in 2001. At its peak, Zefer employed nearly 500 people.
These days, there's a similar need in corporate America for service providers who can quickly design and deliver mobile apps. And Seibel is once again at the helm of one of the fastest-growing in town: Wellesley-based Mobiquity. Launched last March with $5 million in funding from Sigma Partners and Longworth Venture Partners, Mobiquity has already surpassed 100 employees and set up three branch offices, Seibel tells me.
FULL ENTRYAmazon has landed (almost) in Kendall Square
I broke the news just before Christmas that Amazon was laying the groundwork for a Kendall Square office, and my understanding was that they hoped to open it in February. Things seem to have progressed a bit slower than Amazon might have liked on the real estate front, perhaps because there's no hotter (or pricier) neighborhood for tech and biotech employers than Kendall right now.
The number of Cambridge jobs listed on Amazon's HR site has been growing; today, I counted 32 open positions, from software engineers to technical recruiters to quality assurance testers who will work on products like the Kindle Fire and Amazon's Video on Demand service. Amazon is also hiring a few research scientists, presumably to work on blue-sky ideas rather than current offerings. Despite the job listings, the Seattle e-commerce company still hasn't made any public statements about its presence in Cambridge.
FULL ENTRYBoston-based Akili Interactive Labs developing therapeutic video games to enhance your cognitive functions
Akili is being incubated at PureTech Ventures, a Back Bay firm that seeds new life sciences start-ups, and its acting chief executive is PureTech founder Daphne Zohar. But Akili is pretty different from the typical PureTech project: the start-up has brought on board veterans of Lucas Digital Arts and Electronic Arts who have worked on games like "Star Wars: The Force Unleashed" and "Medal of Honor."
"This is a whole new way of delivering therapeutic benefit in the field of cognition," says Zohar. "What if a child with ADHD symptoms, instead of taking Ritalin, could play a game?" She says the company will likely focus on attention deficit hyperactivity disorder first, with plans to study how games might affect other conditions, including stress, depression, and anxiety.
Akili has been working first on games for iPhones and iPads, and testing them so far with about 50 healthy individuals, "to hone both the science and usability," Zohar says. The company is in the process of "setting up collaborations to run pilot tests in multiple patient indications with leading academic investigators," she adds.
iRobot re-org aims to enable company to dedicate more resources to emerging applications
The new structure "will allow us to pursue new opportunities more aggressively," says Angle. "Before, if you wanted to create a small business unit to pursue some new application, you had to beg for resources from a division that was designed to do something else. We think this will give us a more efficient, steerable organization that's able to put energy against these new market opportunities."
What, specifically? I asked Angle if the company was interested in the kinds of warehouse robots that companies like Kiva Systems and Symbotic (formerly CasePick) are selling. "We're less interested in that," he said. "We're active in healthcare, with our InTouch partnership that's working on remote presence technology for doctors, and we're interested in mobile, connected robots for security and retail." A retailbot, he said, "could interact with customers, help them find products they need, and serve up information. The shopper can have the best of both worlds: the kind of comparison of product features that you get online, with the instant gratification of taking home the product." All three of those new applications could take advantage of iRobot's Ava platform for mobile robots (pictured at right.) And all three areas, Angle added, "are multi-billion-dollar markets ripe for disruption with our technology."
Two local companies, StarStreet and DraftKings, prepare to launch new fantasy sports sites
"There are probably 15 or more players in the daily fantasy space," says Jeremy Levine, founder of Somerville-based StarStreet, mentioning sites like DraftStreet, FanDuel, and DraftDay.
StarStreet, which has up to now operated a fantasy stock market where traders use real money to buy shares in professional athletes, is launching its daily fantasy site Tuesday at noon. Levine says the company is focusing on basketball first, with plans to do baseball next. Users play head-to-head against other users, and they can do so for free, or by putting anywhere from $1 to $50 into a pool. "Let's say you want to put in $10," Levine says. "We add a 7 percent commission, so you're paying $10.70, but you have a chance to win $20." This kind of online wagering is legal because fantasy sports are considered a game that requires skill, rather than a game of chance.
FULL ENTRYFleye testing technology at New England ski resorts to create customized video highlight reels
Fleye sets up an array of HD cameras atop poles along the side of the slopes — especially around the terrain parks. The cameras run all the time, storing the video on computer hard drives in the base lodge. (It's eventually uploaded to Amazon's cloud storage infrastructure.) For $10, skiers or snowboarders can purchase an RFID tag that communicates with the cameras, letting them know when you're zooming past their field of view. That essentially creates a "label" on the few seconds of video that are relevant to you.
When you get home, the Fleye website can show you only the clips that you appear in, and give you a chance to delete certain clips (wipe-outs, perhaps), or rearrange the sequence. Eventually, there will be the option of adding music or other enhancements. The $10 fee includes access to one day's worth of video content; if you return to the mountain on another day with your tag, Fleye will let you access those clips for $7.50. In addition, Fleye can set up big-screen TVs in the base lodge that know when you're standing near them, thanks to that RFID tag hanging from your zipper pull, and can play the video clips that star you.
MIT prof who invented early e-mail system donating records to Smithsonian Museum
And today, Shiva, an MIT professor, is in Washington to donate the original code for his e-mail system to the Smithsonian's National Museum of American History. Shiva started building the e-mail system at Newark's University of Medicine and Dentistry when he was just 14, in 1978. He copyrighted the term "EMAIL" in 1982, shortly after he'd started attending MIT as an undergrad.
"There was no way to patent software then, so I submitted the first U.S. copyright on e-mail, and also the manual," Shiva says.
His e-mail system consisted of about 60,000 lines of code (see below), and it ran on an HP mainframe. Instead of using the @ symbol, e-mail addresses employed periods to separate the username from the location where they could be found. (For instance, kelly.rms would represent a user named Kelly at Rutgers Medical School.) The system had 80 or 90 users in the early days, a number that rose into the hundreds after Shiva headed off to college.
FULL ENTRYLawsuit alleges that Visible Measures yanked first employee's stock options after he left
Dean left the company last June to go work at Nanigans, a Boston start-up that helps its customers run ad campaigns on Facebook. Not too long after that, according to a lawsuit that Dean filed in December in Massachusetts Superior Court, his former employer decided to terminate stock options that are worth about $2 million. Visible Measures claimed that Dean had violated the terms of his non-compete agreement (Nanigans and Visible Measures are rivals in a broad sense, in that both sell services to marketers) and his non-solicitation agreement (even though Dean claims not to have solicited any Visible Measures employees or customers), as well as that he disclosed confidential information about Visible Measures. Dean (pictured at right) says none of that happened. Dean worked at Visible Measures for the company's first five years, and while Shin tried to persuade him to stay at the company, according to the suit, neither he nor anyone at Visible Measures expressed concern that Nanigans was a competitor.
Dean's lawsuit asserts that he was one of the largest holders of Visible Measures stock options at the time he left, and that Shin and the company's board "each will gain personally from the wrongful termination of Dean's stock options, because their stock or options will not be diluted through Dean's exercise of his stock options." You can read the full text of Dean's legal complaint here.
The Facebook & Brightcove IPOs, and what they tell us about Boston
One left, one stayed. One was founded by a first-time entrepreneur, the other by an entrepreneur who'd built a public company before. One wasn't able to raise money here, and one was. One focused on consumers, the other on solving a business problem.
Facebook's forthcoming IPO is expected to value the company at about $100 billion. Brightcove will be worth somewhere around $300 million when it goes public.
I asked Todd Dagres, founder of Spark Capital in Boston, for his take on why Boston can be so hospitable to start-ups like Brightcove while it gives fledgling companies like Facebook a cold shoulder.
Here's his take:
Without making waves, data start-up CargoMetrics is collecting info about what gets shipped where
When co-founder Scott Borgerson showed up at a VC mixer at Quincy Market last month, his name tag read just "Scott." No company affiliation. When I tried to confirm with him afterward that he'd been at the party, his response was: "Maybe."
His investors at the Boston office of Summerhill Venture Partners wouldn't tell me who made the investment in CargoMetrics, when it was made, or how much they invested. "It benefits the company to be in stealth mode right now," e-mailed Summerhill partner Will Kohler.
But the company has been hiring steadily in Boston, and LinkedIn currently lists a dozen employees, including co-founder Rockford Weitz. (Both Weitz and Borgerson are Fletcher School alums, and fellows at the Gloucester-based Institute for Global Maritime Studies.)
So what is the company up to? CargoMetrics is collecting data about the movement of commodities by ship, and selling that data to hedge funds. (Ships report on their location through tracking systems like AIS, but CargoMetrics seems to be combining that with information about what's on board.) According to a job posting, the company "has developed a groundbreaking analytics platform which offers comprehensive, dynamic information on the movement of the global supply of the world’s commodities." Useful if you're trying to make a profit buying or selling commodities futures.
Borgerson (pictured at right) is former Coast Guard officer, and was the founding director of the Coast Guard Academy's Institute for Leadership. He's also an expert on Arctic shipping.
The 10 most powerful women in Boston tech (plus 5 up-and-comers)
I considered three factors:
- Impact (how big of an organization do they oversee, how large of a fund do they manage, how much revenue does their company generate, etc.)
- Connectivity (how well-networked are they, and how much mentoring of younger executives/entrepreneurs do they do)
- Thought leadership (speaking, writing, and commenting in the media)
The top ten are followed by five rising stars. When individuals are active on Twitter, I've included their Twitter handles.
Leadership switch at the Harvard Square office of Zynga, social games company
The Cambridge office of Zynga launched its first game, "Adventure World," last September, and has grown to about 40 employees. "The office is still strong and growing," Hyatt writes via e-mail, "with a solid success with 'Adventure World' and some other projects underway." (The game became "Indiana Jones Adventure World" a few months after its debut.)
Zynga went public in December (the picture at right is from Hyatt's blog). Hyatt tells me he plans to announce his next move soon.
Conduit was funded by Charles River Ventures and Prism VentureWorks, and Hyatt helped start the weekly OpenCoffee meet-up in Cambridge with Bijan Sabet of Spark Capital.
Axio, Cambridge start-up working on a wearable device to enhance concentration, gets into new accelerator program in China
And not just by playing Parliament Funkadelic really loud?
A Cambridge start-up called Axio is working on just such a device, leveraging an auditory phenomenon called binaural beats. Essentially, the theory is that playing two tones of different frequencies in each ear can have a beneficial effect on the listener's brainwaves.
Axio founder Arye Barnehama isn't saying too much about the start-up's product. But he says that "focus is a huge problem, for athletes, programmers, students, and business executives. Our goal is to be a consumer health product. We're looking at a couple different form factors, but one is a headset that would integrate with a smart phone and a PC." The headset would include an EEG sensor for monitoring brain activity. And similar to the Zeo sleep monitor, Axio would be able to chart the ups and downs of your concentration level over the course of a day or week on a phone or PC screen.
Barnehama says Axio's headset would work in tandem with "cognitive training feedback software" that would help users "train their brain to maintain that optimized state."
The company has already raised a seed round from local angels, including Bill Warner, and has also won admission into Haxlr8r, a brand-new accelerator program especially for start-ups working on hardware. The program runs for fifteen weeks in Shenzhen, China, where it focuses on designing and testing a prototype, and then wraps up with investor presentations in Silicon Valley. "The idea is that you're close to the manufacturers who are going to make your device," Barnehama says, "and that lets you do faster iterations because you're right there."
Barnehama and co-founder Laura Berman are both students at Pomona College in southern California; they're both studying cognitive science and computer science. Barnehama is originally from western Massachusetts. "I started the company last summer, and for our college winter break, I sort of came home and stayed," he says. Ben Rubin, co-founder and CTO of Zeo, has signed on as an advisor to Axio.
"It's one of those companies that could end up back in Boston after three months in China — or not," Rubin writes in an e-mail. If it boomerangs back to Boston after Haxlr8r, it would be "part of the cluster we are building around consumer health technology," he says. The start-up is currently working out of the Cambridge Co-working Center in Kendall Square. Barnehama and Berman head to China later this month.
"Everyone knows those days when they felt amazing, whether it was on the golf course or in the library studying," Barnehama says. "You don't have them every day. But we believe we can use technology to make that possible."
Who wouldn't love that? I'm eager to try it out...especially since it took me much longer than it should have to write this post.
As Facebook heads toward an IPO, let's look at the company's Boston connections
Like Microsoft in the 1970s, Facebook was, in the first decade of the 2000s, gestated on the Harvard campus, and key moments of its early history took place in Harvard Square. Bill Gates and Paul Allen had been inspired by an issue of Popular Electronics they purchased at Out of Town News featuring an early personal computer, and Mark Zuckerberg and Eduardo Saverin had their first meeting with a venture capitalist at Henrietta's Table.
Both companies, of course, left Massachusetts, creating jobs and enormous wealth in Seattle and Palo Alto, respectively.
As Facebook's long-anticipated IPO approaches, I've been thinking both about the company's Cambridge roots, and also some local people and institutions who will make bags of money from the public offering.
The money first...
A Boston-area VC firm, Greylock Partners, one of the grand-daddies of the venture capital industry, led Facebook's second major round of funding in April 2006. The round gave Facebook $27 million in funding, and valued the company — which at the time had just seven million users — at roughly $500 million. (As of January 2012, the site had about 800 million users.)
"That was a way out-on-a-limb investment — a very controversial deal," one local venture capitalist told me this morning. "There were arguments within Greylock about why it could be a bad investment."
While the Greylock investment in Facebook's 2006 round was led by David Sze, a partner in the firm's Silicon Valley office, another Boston VC told me that Bill Helman, a Greylock partner in Waltham, did some key analysis that showed "that Facebook had a reasonable amount of revenue, and was growing like a weed. His position was, 'I can guarantee you 100 percent that we aren't going to lose money.' Of course, no one would've thought the up-side was going to turn out to be what it was." Greylock's 1.5 percent stake in Facebook could be worth a billion dollars or more after the IPO. (Helman didn't want to comment on his involvement in the Facebook investment.)
Who'll get a share of Greylock's winnings? Harvard's endowment, for one, which has been an investor in Greylock since the firm's founding in 1965. (Ironically, Harvard could've made much more: the university's money managers had been consistent supporters of Accel Partners, the Silicon Valley firm that led Facebook's very first round of venture capital funding in 2005, but decided not to participate in the Accel fund that made the Facebook deal. Accel owns 11 percent of Facebook, compared to Greylock's one percent and change.) Amos Hostetter, the Continental Cablevision founder, is another who'll benefit. Bill Kaiser and Bill Helman, the two investing partners in Greylock's Massachusetts office, will pocket handsome sums, as will Henry McCance, Greylock's chairman emeritus. (Helman sits on the board of the Harvard Management Company, which oversees Harvard's endowment.) In 2009, three years after making the Facebook investment, Greylock moved its headquarters from Massachusetts to Silicon Valley, and the firm's center of gravity is most definitely out west now.
How Supermechanical raised $550,000 for a new wireless device — without VCs or angel investors
For John Kestner and David Carr, who'd started a company called Supermechanical together, the answer turned out to be Kickstarter. The crowd-funding site enables anyone from filmmakers to artists to would-be entrepreneurs to raise money from individual supporters. But few have used it as effectively as Kestner and Carr.
They set out to raise about $35,000 so they could produce a few hundred of their Twine devices (pictured at right). Twine was designed to be what Kestner calls "a minimal Twittering object" — essentially, a wireless node that could send information via e-mail, texts, or Tweets about what was going on in its environs. Was there water seeping into a basement, a heating system failure, or a door being opened? Twine would report on it. And the two-inch square device could be programmed over the Web, using a simple, menu-based interface.
As students at the MIT Media Lab, and later as founders of Supermechanical, Kestner and Carr had been thinking about embedding intelligence and communications capability in everyday objects, like wallets and tables. But they realized that one key component needed to be created: "We found we were spending 80 percent of our time implementing the wireless technology that would make all these things work," Kestner says.
They narrowed down the features to the point where they thought they could sell the Twine devices for about $100. Then they created a video (see below) that encapsulated the concept.
They launched their Kickstarter campaign last November, early in the week of Thanksgiving. "We weren't expecting to raise a lot of money," Kestner says. "We just wanted market validation and enough momentum so that once we started making [the devices], we'd be able to sell them." A $99 pledge on Kickstarter promised you a single Twine device — batteries and shipping included — from the first production batch. For $125, you'd get Twine plus an external moisture sensor or magnetic switch. (Twine users can also plug in their own sensors to the device.) They promised delivery in March.
A post on the blog ReadWriteWeb called the project "amazing," and two days later Engadget noted that "Twine connects your whole world to the internet." "The blog coverage gave the project some initial rocket fuel," Kestner says.
Later that week, as Kestner and Carr were preparing their respective Thanksgiving dinners in Somerville and Cambridge, the project had blown past their $35,000 goal: "We were at $100,000, and it was like, 'Oh, boy.' We're ambitious people, but we weren't expecting this."
Symbotic, formerly known as CasePick Systems, de-stealths a bit with a demo of its warehouse robots
I've written about the company throughout the years, like when it was acquired by C&S Wholesale Grocers, a privately-held New Hampshire company, and when it named Jim Baum, formerly chief executive of the data warehousing firm Netezza, as its new leader. (Lert, the founder, moved on last year.)
But I didn't get a chance to see the bots in action until last Friday afternoon, when Baum (pictured at right) invited me over to the company's Wilmington headquarters to see a demo. He wanted to talk about the company's new name — it'll be known starting today as Symbotic — and also the hiring spree its on. (Baum mentioned they're about to outgrow the Wilmington facility, and are hunting for new space.)
Baum had just returned from a company event in Newburgh, New York, where Symbotic's first production system is deployed at a massive grocery warehouse owned by C&S. The warehouse assembles cases of merchandise onto wooden pallets, which are then trucked to Stop & Shop stores around New York. The Symbotic system only operates a portion of that warehouse, but it consists of 168 bots that move boxes at up to 25 miles per hour.
Symbotic's proposition is that bots are not only more efficient at moving product onto and off of warehouse shelves as needed, but that companies that purchase its technology can store more product in less warehouse space.
Baum didn't want me shooting any video of the bots in action — "we're still slightly paranoid," he said — but I did get to see them moving merch around a test track. (See the image below.) The bots followed white tape on the floor, and used finger-like metal rods that extended horizontally to pull boxes off of a shelf. They communicated wirelessly with a central computer that told them where to pick up and drop off the items, and also ensured that they'd avoid collisions which each other. They can also ride elevators to get from one level of a warehouse to another.
While C&S remains the majority owner of Symbotic, Baum says that he hopes the company will do its first non-C&S deployment sometime in 2012. "One reason we haven't had to talk much about what we're doing is we have an amazing pipeline of business," he says. "The connection to C&S has give us an opportunity to talk to very big, very risk-averse buyers."
How is Symbotic different from Kiva Systems, the better-known warehouse robotics company located just a few miles away in North Reading? Kiva's short, squat bots typically move big racks of open boxes to an order-picker who removes individual items and then packs them into a box that'll be sent to a customer. One example would be filling a box with three different pairs of shoes for a Zappos.com order. Symbotic, on the other hand, builds short, squat bots that grab closed boxes of merchandise and bring them to another robot (made by a third-party vendor) that puts them onto wooden pallets, at which point they're loaded onto a truck and sent to a retail store. Kiva's bots help to fill boxes full of items, and Symbotics' bots build pallets stacked with boxes.
Baum says the company will probably double in size this year, to 200 employees. As he has been setting up Symbotic as an independent company, he has also created a board of directors that includes Tony Affuso, chairman of Siemens PLM Software, and Jit Saxena, the founder of Netezza.
One last note: Baum tells me the robots are built primarily from locally-sourced components, and assembled in Wilmington.
Photo: Two Symbotic robots move boxes around a simulated warehouse; they navigate by following the white tape on the ground.
How does a small Boston start-up get to the Super Bowl? Connections.
Promoboxx founder Ben Carcio tells me that it was one of those phone calls he wasn't sure would be worth making. "Whenever you talk with mentors and investors, they're always trying to introduce you to other people in their networks, and you always wonder if the call will be worth the time," Carcio says. Dave Balter, founder of BzzAgent, suggested that Carcio get in touch with a media analyst and occasional investor in New York named Richard Greenfield, who in turn introduced Carcio to Avi Savar, a founder of the social media agency Big Fuel. The agency was working with Chevrolet on its Super Bowl XLVI campaign, and "they'd always tried to have a program that would better involve Chevrolet's dealers, but they could never execute it right," Carcio says. During their first meeting, Savar "was finishing my sentences."
So Big Fuel signed up Promoboxx to create co-branded pages for 3,000 Chevy dealers, who in turn help share the Super Bowl-related content (like the TV ad below) to their audiences on Facebook, Twitter, and other social channels. Carcio adds, "We also created a dealer scorecard, so each dealership can see how they rank among other dealers" in terms of generating Bowl-related buzz for Chevy.
Carcio says that the Big Fuel collaboration turned into the start-up's biggest project thus far; Promoboxx was founded in 2010, and participated in the TechStars Boston program last year. The company raised $565,000 in funding last month. Promoboxx's primary focus is helping brands customize promotional campaigns with their retailers or distributors.
"What I learned," Carcio says, "is that you've got to make every phone call, because you can never be sure what could happen."
Here's what the Promoboxx-created Facebook page looks like for one local Chevy dealer, Herb Chambers Chevrolet of Danvers:
And here's the ad Chevy will be running during next Sunday's Super Bowl. It's pretty funny:
Ambient Devices shifts focus from sports scores and weather forecasts to energy usage
Two of Ambient's three founders have gone on to other ventures — David Rose now runs Vitality, which makes intelligent prescription pill bottles, and Ben Resner was developing a new kind of information display for cars when I caught up with him last January. Former Ambient product development chief Nabeel Hyatt runs the Harvard Square office of Zynga, the social gaming company that went public last year. Carl Yankowski, the former Palm and Reebok CEO brought in in 2007 to lead the company, only stuck around for two years.
But the third founder, Pritesh Gandhi, is still there, running a slimmed-down Ambient that he says turned profitable last year. (The company has eight employees.) And this week, he's heading to San Antonio to announce a new focus for the company: digital displays for homes and businesses that will show how much energy they're using, and ideally encourage them to conserve. He'll be showing off new Ambient prototypes as part of the Distributech conference and tradeshow, which brings together utilities and vendors working on "smart grid" technology.
Here's how the new devices work: some utilities now charge consumers more at moments of peak energy demand — like a hot day in August — than days when there's less demand. It's called "time-of-use billing." Gandhi says that no major Massachusetts utilities have started doing it, but "utilities in states like California have realized that the most effective way to alleviate some of the stress on the grid and educate their customers about energy consumption is with variable pricing." When consumers have a display (see below) that shows them how much energy they're using and how much it costs, Gandhi says it can reduce their energy consumption by about 25 percent. And like previous Ambient products, the Energy Joule changes colors to get your attention. When prices are average, it's green. When they're above average, it's yellow. And when prices are at their highest, it's red.
"We think utilities would buy the devices and give them out to their users, or they'd be available at retail locations with a subsidy, not unlike what you see with compact flourescent bulbs today," Gandhi says.
The company has been working for about four years to deploy devices with Pacific Gas & Electric's business customers, Gandhi says, but the new push is about getting the devices into homes. The company has done some pilot consumer testing with Baltimore Gas & Electric, but is hoping to land a large-scale commitment this year.
What does your mobile phone usage say about your credit-worthiness?
Cignifi, a small Cambridge start-up with roots in the UK, believes it does. The company is out raising $2 million in funding to commercialize its technology this year, after a pilot test in Brazil in 2011.
"There's a vast market of consumers in countries like Brazil, China, India, and the Phillipines who want access to financial services like credit cards, loans, or insurance," says Jonathan Hakim, Cignifi's chief executive. "But while they may have jobs, and some have bank accounts, there really is no credit history for them." One thing they do have? Mobile phones.
Cignifi has developed sophisticated modeling software that can look at usage data from consumers' mobile phones and make predictions about who that person is and how they live. There's no single data point — like making lots of short calls between 2 and 5 a.m. every morning — that suggests that someone is a bad credit risk. But Hakim says, "The way you use your phone is a proxy for your lifestyle. It's not random. So we're looking at things like the length of calls, the time of day, and the location you make them from. Also things like whether you top up [a pre-paid SIM card] regularly. We want to see how stable the patterns are. When you look at that, you can create these behavioral clusters that give you information about users' appetite for new [financial] products, and their ability to repay a debt."
Cignifi plans to pitch the technology to financial services firms in Brazil first, and perhaps Mexico next. (The firms would obviously need to hash out a partnership with mobile operators to get access to usage data.) Last year's test in Brazil ran data for three million cell phone users through Cignifi's software, and produced a behavior-based score that resembles the FICO credit score many U.S. consumers are familiar with, which runs from 300 to 850 points. Then, the company compared its predictions about their credit-worthiness against actual credit card debt information for that same group.
"After that big lab experiment in Brazil, the next phase is to go and commercialize it," Hakim says. He describes the start-up as an "arms merchant," providing software that enables financial services companies to sell products profitably to consumers they couldn't previously reach.
FULL ENTRYConstant Contact acquires Boston-based CardStar to help small businesses run loyalty programs
First, Goodman had a drink with Miller at the MITX Innovation Awards last June. (She was there to pick up an "Innovation Hall of Fame" award for building the Waltham company into a major force in digital marketing for small businesses, with 900 employees; CardStar took home two awards, too.) Then, she was on a panel with Miller as part of FutureM week in September. What started out as vague discussions about how Constant Contact might partner with CardStar, which makes an app that lets consumers store their frequent-shopper card info on mobile phones, turned into conversations about how Constant Contact might acquire the small Boston start-up.
"The two teams started to get really excited about the potential as the weather got colder," says Goodman. By early December, they'd agreed on the terms — which aren't being disclosed. The purchase is being announced this morning. It is Constant Contact's third acquisition since 2010, as the company seeks to diversify beyond its core business of helping its customers conduct e-mail marketing campaigns.
FULL ENTRYSurvey On The Spot raises $750,000 to collect customer input via mobile devices
"Suddenly you had phones with cameras built in, and we started talking about taking pictures of the donut cases in our stores," Kimmel recalls. "You can tell a lot about how well-run the restaurant is if the donut case is well-stocked and beautiful."
The spit-balling didn't go anywhere... until 2009, when Palmer and Kimmel decided to start Survey On The Spot, a business that would use mobile phones as data collection devices. Their premise was that if businesses asked customers to use their own phones to fill out a survey, the feedback would be fresher, and the response rate higher than with traditional paper-based survey forms. The company, based in Newton, recently raised its first outside funding: $750,000 from Kepha Partners, a Waltham venture capital firm, Angel Street Capital in Providence, and Mike Sheehan, CEO of the Boston ad agency Hill Holliday.
Survey On The Spot offers a Web site for creating surveys, and both an iPhone app and mobile-friendly HTML5 Web site for collecting information from users. Subscription fees for using the service start a $40-per-month for each location a business operates. The company's customer list already includes chains like 7-11, The 99 Restaurants, Not Your Average Joe's, and Carrabba's Italian Grill. Most use it to gather information from customers, but some use the surveys as part of store inspections, or in the case of The 99, for gathering employee feedback on new menu items being developed internally. And not all businesses expect their customers to use their own mobile phone to fill out the survey: at Not Your Average Joe's, servers hand diners an iPod Touch with the survey on it, which can be filled out as the diner's credit card is being processed. (The Joe's set-up is pictured in the photo at right.)
"When you're collecting data quickly, as opposed to the next day or two days later, you have the ability to fix problems before they affect more customers," says Kimmel. "Certain kinds of complaints" — those related to under-cooked food, for instance — "can automatically go to the manager of the restaurant, and they can deal with that right away."
While the company's first customer was Finale Desserterie & Bakery, Survey On The Spot's technology has more recently been adopted by veterinary clinics, tire stores, hospitals, and even a Whole Foods Market in Scotland, Palmer says. The partners had self-funded the business until late December, when the seed investment round took place.
The new funding "gives us an opportunity to build a team," says Palmer, who was a co-founder of uLocate, a start-up that became Where Inc. and was acquired by PayPal last year. "Up to this point, it has been just the two of us, working with outside contractors." (That list includes Raizlabs of Brookline and OneStopTechnology of Holyoke.) He says Survey is now hiring in engineering, marketing, sales, and customer support.
PayPal in talks with state officials to expand Boston office
But last year, Thompson (pictured at right) was still the president of PayPal, the electronic payments division of eBay, and he was at the State House to talk with the state's top two officials about expanding PayPal's presence in Boston. Accompanying Thompson were two Boston-based executives — Walt Doyle and David Chang — who had joined PayPal after their company, Where Inc., was acquired last spring. The company currently employs just over 100 people at its office in the North End, which is evolving into a "center of excellence for mobile development and ad technology," in Doyle's words.
Doyle told me earlier this week that PayPal could be adding "several hundred people" in Boston over the coming years. (There are currently only three open jobs in Boston that I could find.) While Thompson has since moved on from PayPal, eBay's government relations staffers plan to pay another visit to Beacon Hill next week to continue the discussions.
In November, the governor and lieutenant governor "made the case for Massachusetts: the strong and growing industry cluster, the talent pool, etc.," explains Greg Bialecki, the state's secretary for housing and economic development, via e-mail. With companies headquartered elsewhere, he says that "we invite them to ask Microsoft, Google, Cisco, Novartis, Sanofi, etc. about how their decisions to take a major position here have been very good for them."
But in the November meeting, "there was not a discussion of financial incentives" to encourage eBay to grow its PayPal presence here, Bialecki says. While the topic of a tax break for adding jobs in the state could be discussed at future meetings, he says, "incentives often aren’t the primary issue for companies like this." (Presumably, being able to hire talented software developers is.) But last December, the state did OK a $3.4 million tax credit for open source software company Red Hat, which plans to add 181 jobs at its Westford engineering headquarters. (Red Hat also got almost a million dollar break on its property taxes from the town.)
Before its acquisition by eBay, Where had built the largest location-based advertising network, Doyle says, which enabled it to display ads as you used apps on your mobile phone that were relevant to where you were standing. Now, as PayPal seeks to be a payment system that consumers can use for bricks-and-mortar purchases, not just online ones, the Where group will be responsible for "demand generation," Doyle says. That means delivering ads and special offers to your mobile phone that might encourage you to buy some fresh flowers or try a new restaurant for lunch. (And eventually, pay using the PayPal "mobile wallet" app on your phone.)
"You might be listening to music on your Pandora app," Doyle says, "and you see an ad for a Dyson vacuum cleaner or a Sony Blu-ray player. Because of the information we have from eBay, we might know that you've been searching for those items, or maybe you lost an auction for something similar. We'll be able to show you those products available locally, and possibly deliver discounts that will get you to utilize your mobile wallet in a store."
Doyle says that while other mobile advertising start-ups, like Quattro Wireless and M-Qube, saw their Boston offices disintegrate following acquisitions, his goal is to keep the Boston office growing within PayPal. (A few weeks before PayPal acquired Where, it purchased a much smaller Boston company focused on mobile payment technology, Fig Card.)
Already, Doyle says he is in the market for expanded office space. He says the group will most likely stay in Boston, as opposed to moving to Cambridge or the suburbs.
Media Lab director Joi Ito talks about the Valley's weaknesses, open technologies, global opportunities, and whether the lab is 'selling itself too cheap'
This morning, Ito gave one of his first talks to the Boston tech community at the British Consulate in Kendall Square. (Ito is at left in the picture, with interviewer Larry Weber of Digital Influence Group.) Ito mentioned that he maintains three residences, in Dubai, Tokyo, and Boston, and travels around the world about twice a month. Only occasionally, he quipped, does he feel properly adjusted to the time zone he's in.
Video of the talk is below.
Some highlights (these are rough notes on Ito's comments, and not a complete transcript of the talk):
- On Silicon Valley's weaknesses
Silicon Valley is so good at what it does. But certain categories of venture don't get a lot of attention in Silicon Valley. It doesn't make sense for Reid Hoffman [founder of LinkedIn and an investor at Greylock Partners] to start spending time with hardware start-ups. Silicon Valley tends to hunt in packs. So there are big blind spots, areas that they're not interested in. Reid has these basic golden rules: don't work with start-ups that have to deal with big companies, or start-ups that work in heavily-regulated areas. The flip side of that is, those aren't the kind of companies that get funded there.
[On the east coast,] we're closer to regulators and big companies. With things like big data, you need to talk to government, work with big telcos, and understand privacy. The west coast guys don't care about policy, and they don't want to talk to Washington, D.C.
Hardware is another area [of opportunity.]
Entrepreneurs in Silicon Valley may be international, but they're not good at thinking globally. Silicon Valley has no culture. Have you ever tried to get food in Palo Alto? I don't think Silicon Valley spends a lot of energy on art, culture, and the humanities. When you're building 3Com and [data] switches, all you need is people who sit and focus on bits. But as we get to the World-Wide Web and think about how does social media impact politics, how does it affect fashion, how do we bring museums online — that is much more New York, Boston, and Washington, D.C. There are hopefully some regional advantages.
- On the future of the Media Lab
We may be selling ourselves too cheap. For $200,000, the price of hiring one engineer, you get access to 350 crazy ideas that may completely change your company, and access to all the intellectual property we generate. For the price of one person, you get a super-advanced research group.
I'm trying to change the Media Lab to be much more of a platform. Membership should be about companies working together, an ecosystem. When the Media Lab started, you had products like the Sony Walkman — a single product from a single company. The iPhone is an ecosystem. Ten companies will create the ecosystem. Can we convene the meetings, nurture a platform, and get those companies to hang out with each other. Not just a hub-and-spoke model where people come to the Media Lab with their clipboards and then bring ideas back to their companies.
I want it to be that we only bring companies in that contribute knowledge and wisdom and ideas and interesting things. I don't want to use the word "club," but it will be somewhat exclusive. You won't just get in because you have money. I want it to be a team of people.
[Ito told me afterward that the way he can have the biggest near-term impact on the lab's research focus is by bringing in new faculty. He mentioned that there's currently a search going on to fill two tenure-track faculty positions. When I asked about research gaps at the lab that he'd like to fill, the first two things Ito mentioned were "games and government," followed by "food."
- Advice for college students after graduation
I would spend time in Brazil, Russia, China, and India, and if you have an inclination, the Middle East. I would spend a year or two roaming around.
- On international expansion
Many companies end up doing international later. But in a lot of these really big markets, you can't go late. We don't have eBay in Japan because they were late.
- Quick thoughts on some of tech's big names
Apple: One of the few remaining companies surviving as a closed ecosystem.
Amazon: One of the few companies doing what they originally set out to do.
HP: I'm not sure, but lots of smart people.
LinkedIn: Interesting monopoly, with one of the few ethical people I know [executive chairman Reid Hoffman] in control.
Twitter: Tons of potential, but interested where it's going.
Oracle: Do people still use Oracle?
Stanford: We need to learn a lot from Stanford.
MIT: Tons of potential. Needs a kick in the butt.
(Photo above courtesy of MITX director Debi Kleiman.)
Former Lotus and Microsoft exec Ray Ozzie hiring for new start-up, Cocomo
Ozzie is perhaps best known as creator of the 1990s collaboration product Lotus Notes, and more recently as the person Bill Gates chose to succeed him as Microsoft's chief software architect, in 2006. Ozzie spent four years in that role, departing at the end of 2010.
Ozzie wrote that Cocomo is "being bootstrapped with a few folks that I've worked with before. In the short term, I probably won't be posting much more than 'they're recruiting,' because the team won't be ready to talk about what they're working on for some months."
When I asked more about whether Ozzie was an advisor to the new company or part of the founding team, he replied, "I'm devoting the vast majority of my attention right now in helping to get the project off the ground with the team, so yes, in that respect I founded it and am part of the founding team. That said, it's a really strong set of players who are quite capable of doing and growing this on their own; quite fun. I'm also doing some other advisory work but, on balance, I think focus is essential to get any new venture off the ground." It seems that former Microsoft executive Matt Pope is also a co-founder of Cocomo. Ransom Richardson, another ex-Microsoftie based in Boston, is also part of the team.
Cocomo's first public job posting seeks a lead user interface designer with extensive mobile experience. But it doesn't describe the company's focus in any detail, saying only that Cocomo is building "a new communications product for this new world. ...We aspire to deliver compelling tools for social interaction that people will use, value and love."
Ozzie wouldn't tell me whether the new company has raised any money yet. While it doesn't yet have office space, most of the team members are located in Boston. When I spoke this evening with a Boston-area individual who has worked with Ozzie in the past, he told me, "Ray is one of those guys who could raise a decent amount of money based on his reputation." Several people told me that they expected Ozzie to try to bring a core team of software developers he'd worked with at Microsoft and Groove Networks to Cocomo. (Groove was the collaboration platform Ozzie built after leaving Lotus, which Microsoft acquired.) "Ray is a very loyal guy," one person said.
Don Dodge, a Google executive who worked with Ozzie at Groove, said he'd recently run into Ozzie at an airport. Ozzie mentioned that his non-compete agreement with Microsoft expired at the end of 2011. Via e-mail, Dodge wrote, "I think times have changed significantly, but I'm not sure Ray has. Ray is a big thinker [who tends to work on] big ideas that take years to develop, and more years to sell and get to scale. That worked well for Lotus Notes and to some degree for Groove, but I don't see many recent examples of success using that model. Today everything is mobile, social, games, and small apps. Not exactly the sweet spot for Ray. But, he is one of the smartest guys I know, so he will probably come up with something interesting."
Asked whether the name Cocomo stands for "collaboration" and "mobile," Ozzie replied that "there are many other interesting/apropos words that begin with 'co,' such as communication, coordination, conversation, coherence." Or coconuts, I suppose.
Ozzie posted his first two tweets earlier today; his sparse personal Web site is here.
Next public company to move to Boston's Innovation District could be LogMeIn of Woburn
This January's real estate news may not be quite that big — only about 100,000 square feet — but it involves the headquarters of a similarly high-profile, publicly-traded company. LogMeIn, a Woburn company that sells products that enable users to remotely access files on their PCs, is close to signing a lease at 316-322 Summer Street. The buildings, originally built as wool and dry goods warehouses just over a century ago, are located within the zone that city officials like to call the Innovation District. But many people — myself included — still refer to this particular neighborhood as Fort Point Channel.
LogMeIn, currently headquartered in the Unicorn Park complex in Woburn (pictured at right), has signed a letter of intent on the new space, according to several neighborhood and real estate industry sources, who requested anonymity because they weren't authorized to talk about the deal. They also tell me that officials in Mayor Menino's office were involved in making the pitch to LogMeIn, contending that younger tech talent will be easier to access in a location just a few blocks away from South Station.
LogMeIn chief executive Michael Simon writes via e-mail, "We have not finalized anything yet regarding our future real estate plans and are looking at options both in the Innovation District and outside of Boston." Good hedge, if he's still negotiating deal terms with the landlord. I'll keep you apprised...
Data migration start-up AutoVirt doesn't live to see 2012
AutoVirt once had 40 employees, and raised just over $24 about $20 million from local venture capital firms Sigma Partners and Kepha Partners. (Landberg says the $24 million figure was overstated.) The start-up's CEO, Josh Klein, departed in November. Vice president of engineering Caesar Naples left around the same time.
The company developed software to assess and analyze the data stored on Windows-based file servers and network-attached storage hardware, and move it around as necessary. Files used regularly might sit on more expensive solid-state hard drives, while files accessed only occasionally could be shifted to less-expensive storage media. AutoVirt was founded in 2007, and it launched a reseller program last fall.
"Unfortunately, the company is unwinding," confirms Jo Tango, founder of Kepha Partners and a board member at AutoVirt. "They made some good progress, but the market didn't develop for them."
Storage industry analyst Steve Duplessie first mentioned AutoVirt's demise on Twitter earlier today. Duplessie explains that AutoVirt was "a classic example of a great solution to a non-problem — a nice-to-have versus a need-to-have. People spend money on need-to-have, not nice-to-have." Duplessie, founder of analyst firm Enterprise Strategy Group, says that most IT groups are content to shuffle data around manually, even if it is more time-consuming. Besides, he adds, "Windows IT administrators can't justify their jobs" if their company decided to purchase the AutoVirt software.
AutoVirt's phone system wasn't working when I tried to get in touch earlier today.
Why it makes sense for e-tailers to add sales tax to our shopping carts
The first person to comment on my blog post cautioned, "...If you get Amazon gift cards for Christmas, you might want to use them as quickly as possible." The taxman cometh!
The particulars of the Amazon situation still aren't clear, as the office hasn't opened, and the Massachusetts Department of Revenue hasn't yet shared its position on whether Amazon will need to start adding tax to the tally.
But the bottom line is that states sales tax could be added to all e-commerce transactions soon, for any company that chalks up more than $500,000 in out-of-state sales a year. A bi-partisan bill introduced in the Senate in November, the Marketplace Fairness Act, seeks to collect an estimated $23 billion in annual state and local tax revenue that today doesn't get collected. The bill leaves it up to each state whether or not to collect the taxes, and also attempts to simplify the process of ponying up for e-tailers.
No one likes paying more taxes, but here's why I'm in favor of allowing states to require e-commerce sites to collect sales tax.
New site and mobile app wants to link positive daily activities to charitable donations
That's the premise of a new Rockland-based start-up called 1Purpose.com; the company is trying to turn every day into a walkathon.
Users can set a challenge, like racking up 500 miles on a bike, and pick the non-profit they'd like to support. 1Purpose relies on Guidestar's database of over one million organizations, or you can direct the money into a college savings account. When you hit milestones along the way, you and others supporting you make automatic donations using a credit card on file. For instance, you or your friends might commit to donating $10 for every 50 miles you ride. (An employer might also choose to match your donations.) In addition to the Web site, 1Purpose also has mobile apps for iPhone, iPad, and Android devices that let you log your progress. Network for Good handles all of 1Purpose's payment processing, taking 4.75 percent of the money being donated.
"For non-profits, we think it can help them increase the amount of donations they receive, and turn donating into a daily thing, as opposed something you do once or twice a year because of some fundraising event," says Jason Skolnick, founder of 1Purpose. (I should disclose that Skolnick is a friend, and is married to another friend. But I'm writing about 1Purpose because it seems like a good idea.) So far, Skolnick has funded the start-up himself; he says the official launch will happen in early 2012. He's out now having partnership discussions with various Boston-area non-profits who might help promote the site — and use it as part of their fundraising strategies.
Amazon recruiting engineers and researchers for Cambridge office, slated to open in February
That strategy will change in 2012, when Amazon opens up its first outpost in the Boston area. The company has been communicating with software developers who've previously been reluctant to head west, informing them that a Boston office will be open in February. And Amazon has also posted four public job listings for PhD-level research scientists who will work on "a variety of technical initiatives" in Boston. The research positions are apparently under the umbrella of Amazon's a2z Development Center, a subsidiary that works on software to "enable great retailing experiences."
For Amazon, a Boston office actually means Cambridge: the company has been hunting for about 40,000 square feet in the Kendall Square area, according to two people with knowledge of the search, both of whom requested anonymity. That's enough space to ultimately house anywhere from 100 to 150 employees. Amazon has been trying to keep things quiet, asking to be described only as "confidential company" in dealings with prospective landlords.
Amazon seems to be on the fast-track to set up in Cambridge; while the target date for opening is February 1st, members of Amazon's engineering team will be in town the week of January 23rd to conduct interviews. On the software development side, Amazon is looking for engineering managers, software engineers, and quality assurance engineers who will work on Amazon's digital products team, which handles services like Amazon's MP3 store, online video delivery, Kindle e-books, and Amazon's Cloud Drive storage service.
In the late 1990s, Amazon acquired two Cambridge companies, PlanetAll and Exchange.com, but never set up a local office. More recently, it has recruited tech executives like Raju Matta from local companies — Matta had been a senior director of engineering at TripAdvisor — and moved them out to Amazon's headquarters.
"I'm intrigued by the idea of a Cambridge office," says Jim Savage, the former CEO of PlanetAll who now works as a venture capitalist at Longworth Venture Partners. "Google has quite a big presence here, but from a consumer perspective, there's no bigger brand than Amazon." Savage says the local outpost is likely a way for Amazon to hire people who want to stay on the east coast.
Jeffrey Bussgang, a VC with Flybridge Capital Partners who previously worked for e-commerce pioneer OpenMarket, says an Amazon office will "contribute heavily to the ecosystem. We continue to be a talent pool that big companies want to tap into. And those offices can help create relationships that can lead to acquisitions of local start-ups or business partnerships. They can also help train engineers and technical talent who may eventually go off and start their own companies."
But is Amazon now competing with Boston's home-grown tech companies for talent? Bussgang doesn't think so: "People have different points in their lives where they want to work on different things, and there are some technical people in particular that just want to work on big, hard problems. If Amazon lets them do that, I think it's terrific."
Why is Amazon opening a Massachusetts office now? It may have to do with sales tax. Ever since people started shopping on the Internet, online retailers have only been forced to collect sales tax in those states where they have "nexus," meaning significant numbers of employees, or a substantial business operation like a warehouse or call center. That kept online retailers from setting up offices in heavily-populated states like New York or Massachusetts or California, where suddenly they would have had to collect sales tax on all their transactions.
But federal legislation that would enable state and local governments to collect sales tax on Internet commerce is gaining steam in Washington, D.C. (It'd enable governments to collect about $23 billion annually in taxes that today are pretty much uncollectible: consumers are supposed to remit them on their own, which no one does.) If the proposed legislation takes effect, as many now assume it will, it would eliminate the "penalty" that online retailers used to pay for setting up outposts in other places around the country. Hence, Amazon Cambridge.
Amazon hasn't yet responded to my e-mails or phone calls today seeking comment.
What's next for Rue La La, fast-growing 'flash sale' specialist based in Boston?
One Filene's Basement, announced that it would close after 102 years in business.
And another, Rue La La, founded in 2008, was acquired into and then spun back out of eBay. Like the Basement, Rue La La's business is built on buying surplus high-end goods and selling them at a discount. But rather than owning brick-and-mortar stores, Rue connects with customers through its Web site, a daily e-mail, and apps that run on mobile devices. Most merchandise that appears on Rue is only available for two days, hence Rue is often described as a "flash sale" site.
Since the spin-out from eBay, Rue has been part of a newly-formed Pennsylvania holding company called Kynetic, though it is still run by Rue founder Ben Fischman. (eBay retained a 30 percent stake, and put $70 million in cash on Kynetic's balance sheet.) Rue has 400 employees. I caught up with Fischman last week to talk about what's next for the company, and the depressing end of the road for Filene's Basement.
On the Basement: "What was most unique about Filene's Basement was the brand that it built in Boston. There was so much emotion and passion, and they sourced merchandise so well for that Boston store. I just think they couldn't carry that to other markets. In Boston, they were an icon, but it just didn't matter in New York as much, or Chicago, or the west coast. I think their biggest mistake was making bad real estate decisions." Could someone acquire the Basement brand and revive it? Fischman says that former Filene's Basement CEO Sam Gerson — who died in 2003 — "isn't coming back, and I think it'd be tough sailing for anyone else."
On what works in brick-and-mortar retail today: "I was just in Chris Birch's new store, C Wonder, in New York. It's an incredible retail experience, with lots of proprietary product. That is the future of retail. It's people who develop their own shopping experience with their own unique product that can't just be copied by Wal-Mart and Amazon. It's great retail theater. Newbury Comics here in Boston is a great example of a cultural experience that is so rich and good, as is Brookline Booksmith. But I think Barnes & Noble goes away. Wegman's wins. Try walking into a Wegman's, and then walk into a Shaw's."
On phones and tablets: "Over 30 percent of our sales are being done through a mobile device, and more than half of that is being done through an iPad. By having this device tethered to your body, it creates a level of engagement that is driving incremental sales."
On offering free shipping during the holiday period: "What we're doing instead of offering blanket free shipping to everyone is a new approach to free shipping. When you make a purchase, and pay your $9.95 shipping, for the next 30 days you can buy anything on the site and get free shipping for that next purchase. It's driving tremendous incremental sales."
On the future for Rue La La and Kynetic: "When we were spun out, it was kind of a 'died and gone to heaven' scenario. We became a private company, with no institutional or venture investors or private equity. The company is owned by Michael Rubin [chairman of Kynetic], me, and the management team. I love the flexibility that we have. We can do with the business what we believe is most important. Public markets could be an interesting place for us in the not-too-distant future. And we think consolidation is really interesting. This is a hard business, with a low barrier to entry but a high barrier to success. We look forward to playing a role as a consolidator."
(Last fall, I wrote about Rue La La in the Globe, and also on this blog. An audio interview with Fischman, conducted in June 2010 by venture capitalist Lee Hower, is here.)
The Globe's first coverage of TripAdvisor, from 2000
I first wrote about the company back in July 2000. The company was five months old. Dot-coms everywhere were hitting the wall. And TripAdvisor's strategy was to collect user-generated reviews of hotels and attractions, and then license the content to portals. (Remember portals?) Here's that piece, which ran in my "@large column" on July 3, 2000.
Thriftiness is inRunning a frugal Net start-up seems to be the trendy thing this summer. Langley Steinert and Steven Kaufer, chairman and CEO, respectively, of Needham's TripAdvisor, are two adherents of this lower-profile mode of building a Web business.
TripAdvisor, a search service that collects and organizes information about travel destinations from trusted authorities (like Fodor's) as well as typical Net users, has just 12 employees. And most are software developers working on the product.
"Our burn rate is extremely low," says Steinert, who is also a partner at Boston's OneLiberty Ventures. Trip Advisor raised $1.3 million in February (most of it from OneLiberty), and sources say TripAdvisor could stretch that sum past the company's fall launch and into the middle of next year. Just to be safe, Steiner and Kaufer are signing term sheets on an additional $2 million, which should be announced any day now. The theory: Raise it before you need it.
TripAdvisor also won't make the mistake of trying to create its own destination site and then spending gobs of money attracting visitors.
"We want to provide informational services in the same way that Sabre provides transactional services," Steinert explains, "through partners like America Online, Expedia, Yahoo, and Travelocity." Smart.
That strategy didn't work out, and TripAdvisor — on the verge of running out of money — eventually decided to focus on its own Web site. The company now runs the most popular collection of travel sites on the Web, including Cruise Critic, Flipkey, Seatguru, and the anchor property, TripAdvisor.com, which attract more than 40 million visitors a month.
TripAdvisor, going public tomorrow after 11 years in business, seeks a higher profile in travel industry
Eleven years after it began life above Kosta's Pizza in Needham, and seven years after it was acquired by Barry Diller's InterActive Corp. for about $200 million, TripAdvisor is finally gaining a NASDAQ listing of its very own. The company starts trading tomorrow under the symbol TRIP, and it will also be included in the Standard & Poor's 500 index. (TripAdvisor is being spun out from Expedia, which itself was spun out of InterActive Corp. in 2005.) With 1,172 employees, and $486 million in 2010 revenue, TripAdvisor is by far the biggest consumer Internet company in Boston.
The company is throwing parties in New York tonight for advertisers, business partners, and even some of the site's most prolific reviewers, and tomorrow, TripAdvisor chief exec Steve Kaufer is giving a 90-second speech at NASDAQ headquarters, then ringing the exchange's opening bell.
Being public will give TripAdvisor a higher profile in the travel industry, and Kaufer says it could also help the company recruit. "We're hiring in every department across the board," he says — especially in engineering. The company operates TripAdvisor.com and 18 other travel sites, which collectively attract 40 million visitors a month. No one else runs a bigger network of travel sites.
Kaufer has no gripes about TripAdvisor's time under the IAC and Expedia umbrellas, but acknowledges that "our success was overshadowed to some extent," and having to adhere to corporate policies and rely on services from headquarters "reminded people that we were part of a larger entity."
TripAdvisor was one of the earliest Internet companies to build an empire upon user-generated content, by encouraging travelers to review hotels, restaurants, activities, and attractions. Relying mainly on advertising and referral fees from various travel booking services, TripAdvisor continues to grow at quite a clip: for the quarter ended in September, TripAdvisor revenue increased 30 percent, to $181 million; revenue at Expedia, by comparison, rose 14 percent. TripAdvisor also has heftier profit margins than Expedia.
"It's great to be a standalone company, and it's great to be the consumer brand in Boston," Kaufer says.
I asked Kaufer about the potential IPO of Kayak.com, the more transactionally-oriented travel site, which has its technology headquarters in Concord. "It's a good product, and they're a local success story," Kaufer said. He said he didn't think Kayak was vying for the same advertising and referral revenues as TripAdvisor — "our clients would happily spend more money with both sites if both sites had more traffic" — but he did acknowledge that "we are probably recruiting the exact same set of engineers."
At TripAdvisor, he said, "when we think about the thing that would most move our success needle in future years, hiring top tech talent is always at the top." In the Boston area, TripAdvisor maintains three separate locations, in Newton, Charlestown, and downtown Boston.
IAC chairman and CEO Barry Diller remains the controlling shareholder of TripAdvisor, and will serve as the company's chairman.
Starting Wednesday, TripAdvisor will be one of the highest-profile companies in the online travel industry, and certainly the biggest star in Boston's travel constellation, which includes Kayak, ITA Software (now owned by Google), and smaller start-ups like Hopper and WaySavvy.
Earlier this year, I had Kaufer on a panel. He and several other local entrepreneurs talked about the "Secrets to Success." Audio is here.
Management shake-up at Kiva Systems, maker of robotic warehouse workers
At least five senior executives have quietly been ousted in recent months at Kiva Systems, the maker of warehouse automation systems that use armies of squat orange robots to move merchandise. The executive shuffle follows Kiva's hiring of a new president and COO, Amy Villeneuve, last year. (That's Villeneuve at right, cutting the ribbon on the company's new headquarters building in North Reading earlier this year, next to founder and CEO Mick Mountz.)
Out are executives like Rob Stevens, a former vice president of sales and strategy at Kiva; he landed at Backupify, a digital archiving start-up. Mitch Rosenberg had led marketing and product management at Kiva until November. Mark Mastandrea, Kiva's former vice president of customer solutions, is now at Wayfair, the Boston home decor e-tailer. Kiva's ex-VP of manufacturing operations, Jim DeSisto, hasn't yet updated his LinkedIn profile, but former VP of business operations John Dugan is now chief executive of Trylby, a deals site in San Francisco.
One very interesting new recruit for Kiva is chief financial officer Keith Seidman, who joined back in March. Seidman was CFO at Acme Packet when that telecommunications company went public in 2006. Sources tell me that Kiva has already had some early conversations with investment bankers about a potential IPO, though the same can be said of lots of companies with significant revenues. (Among Kiva's customers are major retailers like Staples, Saks Fifth Avenue, Gap, and Toys R Us, who typically use Kiva's technology to help fulfill web orders efficiently.)
Former Kiva employees tell me that the shake-up had nothing to do with the company's financial situation; one said that Kiva's bookings have grown six-fold over the past four years. But the ex-Kiva-ites said that Villeneuve, the new COO, pushed out executives that didn't mesh with her strategy and style. Only one of Kiva's original crop of VPs, Benge Ambrogi, remains on the management team — and the former head of product development has been moved into a vague role overseeing "process excellence."
Kiva board member Ajay Agarwal of Bain Capital Ventures told me that "Amy's big charter was to get the company ready for the next stage of growth, and she has been executing on the organizational piece of that." Agarwal said Kiva is working to increase revenues "from nine figures to ten figures over the next five years" — that's a billion dollars — "and we looked to beef up the management team. Some people who were great contributors early on are still with the company, and others in a management role were not the right contributors to scale to the next level."
Kiva chief executive Mick Mountz didn't respond to phone calls, but sent an e-mail noting that Kiva had added 100 employees in the past year, and was in the process of opening a European office. "Things are great here," he wrote, adding that the new CFO and other executives had been brought in "to scale the business to $1b."
The year Jeff Bezos & I exchanged holiday gifts
I wanted to dig this story out of the archives, from November of 2001. The idea of online wish lists was still relatively new, and for this Globe feature, I got in touch with Amazon.com founder Jeff Bezos and used his site's wish list feature to swap gifts with him. (I got him a folding canvas camping chair, as I recall.) Bezos offered some advice on proper wish list etiquette.
[ Some updates... Swagbag.com, the Reading start-up mentioned, no longer exists. Tom Hopcroft is now head of the Massachusetts Tech Leadership Council. I think LLBean.com still doesn't have a wish list feature. And obviously, many more sites have launched wish lists features in the decade since this was written. ]
Making a List: For some, online gift registries take the mystery — and misery — out of holiday gift-givingFULL ENTRYBy Scott Kirsner
As the holidays approach, it seems the world subdivides into four categories.
Among gift-givers, there are the Michelangelos of the Mall, who view the act of shopping for friends and family as an act of creativity and personal expression, and the Uninspired Laggards, who have a hard time picking out presents for anyone on their lists and generally put off the chore until the last minute.
Among gift recipients, there are Bad Actors and Oscar Contenders. Bad Actors have a hard time exclaiming convincingly over the wonderfulness of the festive plaid vest they have just unwrapped. Oscar Contenders can make you believe they were on the verge of pawning a kidney for just such a vest.
A relatively new feature of many e-commerce sites, the wish list or online gift registry, proposes to vastly improve this time of year for the Uninspired Laggards and Bad Actors. Since I fall squarely into both categories, I decided to experiment with wish lists and registries on various Web sites.
A wish list and online registry are essentially synonymous. Both let visitors to an e-commerce site tag the items they'd like to receive as gifts and then save that list on the Web site, so that gift-givers can later find it and, ideally, purchase items from it. In most cases, gifts can either be shipped directly to the recipient or sent to the buyer for wrapping and in-person delivery.
For e-commerce sites, wish lists have the potential to increase revenues since they're a mechanism by which a loyal customer can ask his friends and family to buy him gifts from a specific store. They also have the potential to decrease returns, since people are presumably less likely to be unhappy with gifts they've picked out themselves.
BetaBait launches, seeking to connect entrepreneurs with early adopters
The goal, says co-founder Cody Barbierri, is to attract both users who will offer feedback on the early version of a product, and those who will spread the word about a product that's ready for prime-time. "We talk about those two groups as 'testers,' who want to give feedback and talk about new features and functions they'd like to see, and 'users,' who just want to use something in their daily lives," says Barbierri. (He's based in Bridgeport, CT, but his day job is as a social media manager for a Portsmouth, NH-based digital marketing agency called Piehead.) Barbierri's co-founder and CTO is Rory Thompson.
BetaBait plans to send out a daily e-mail listing new sites and apps in different categories, like "business" or "family." "You'll have a brief description of each, a URL to the Web site, and contact info for the developer," says Barbierri. Developers will have their products listed in the BetaBait e-mail for 30 days, he says.
While Barbierri is thinking about a variety of business models to support BetaBait (including advertising in the daily e-mails), it's a side project for now, and "everything is totally free," he says. "We want to build up users and start-ups and drive adoption and usage."
Gemvara nabs veteran of Rue La La and Kohl's as top technology exec
Customized jewelry retailer Gemvara just lured a technology executive from across the Fort Point Channel. Mobeen Syed started at the Boston company yesterday; he'd most recently worked a few blocks away, at "private sale" specialist Rue La La.
Syed will be Gemvara's top technology executive. He'd been at Rue La La for less than a year, but had previously worked for big-name retailers like Kohl's and Staples.
"We have been looking for someone to lead our technology organization for the last few months and we interviewed candidates nationwide," Gemvara chief executive Matt Lauzon writes in an e-mail. "[Syed's] main initiatives in the coming months will be to continue building out our engineering team, and he will focus a lot of time drastically enhancing site and rendering speed." (By rendering, Lauzon is referring to producing the site's images of jewelry, all of which are computer-generated based on a user's specifications.)
Lauzon says that the company has lately made offers to several prospective hires on the west coast that would relocate to Boston. Last month, the company brought on executives with experience at Zappos, VistaPrint, and Victoria's Secret.
Syed's bio says that he is a squash, badminton, and ping pong champion. That last skill will be key at Gemvara, where table tennis is a blood sport.
The 10 most popular mobile apps built in Boston
The ranking uses each app's total number of user ratings as a proxy for number of downloads (which the app stores don't disclose.) Most of these apps have ratings of at least four stars. When companies offer more than one app (like Kayak or SCVNGR), I included stats for only their most popular app.
1. LoseIt
Boston, MA
Weight-loss app that claims it has helped its users shed more than seven million pounds.
Total # of Ratings on iTunes & Android Market: 309,055
2. Where
Boston, MA (now owned by PayPal)
Discover restaurants, stores, and things to do near you, and access special offers.
Total Ratings: 98,457
3. Vlingo
Cambridge, MA
Update your Facebook status, send text messages, or search the web by speaking.
Total Ratings: 98,380
4. TripAdvisor
Newton, MA
Info and user reviews of hotels, restaurants, and activities in hundreds of cities.
Total Ratings: 77,093
5. Kayak
Headquartered in Stamford, CT, but mobile apps developed in Concord, MA
Searching for prices of airline tickets, hotel rooms, and rental cars.
Total Ratings: 57,929
6. MocoSpace
Boston, MA
Games and social networking for mobile phones.
Total Ratings: 41,574
7. HeyWire
Cambridge, MA
Free texting and photo messaging.
Total Ratings: 41,133
8. Springpad
Charlestown, MA
Note-making, organization, and reminders.
Total Ratings: 26,719
9. SCVNGR
Cambridge, MA
Game that encourages you to earn points (and discounts) by checking in or doing location-based challenges.
Total Ratings: 19,966
10. RunKeeper
Boston, MA
Keeping track of your runs, bike rides, or other exercise, and sharing stats with others.
Total Ratings: 19,467
Actifio pockets $33.5 million to help corporations cope with the data explosion
But Ash Ashutosh has. The founder of Waltham-based Actifio says that organizations sometimes keep anywhere from 15 to 120 copies of the same file. "In starting the company, we talked to 40-plus customers," Ashutosh says, "and everywhere we saw evidence of this data explosion, and the need to shrink the storage footprint." In other words, the amount of data most companies accumulate is increasing fast. But why should they be spending money to store so many copies of the same stuff?
Actifio is planning to announce today that it has raised $33.5 million in its third round of funding, led by Andreessen Horowitz of California. The company had previously raised $24 million from North Bridge Venture Partners, Advanced Technology Ventures, and Greylock Partners. The new money will go toward global expansion and a marketing push.
Actifio's pitch is that its software can supplant the various backup, compliance, and snapshot software that companies use to archive copies of important files, and make those files easily accessible to any application that needs them, whether it's a customer relationship management application or inventory management software. "We don't sell disk storage," Ashutosh says, "so our customers can use whatever storage vendor they like — IBM, HP, EMC, NetApp, and so on." The company is targeting medium and large-sized enterprises, service providers, and "people building cloud services or grappling with big data challenges," Ashutosh says.
Rather than stashing 15 or more copies of the same file, he says Actifio's magic number is 1.6. "You can keep more copies, if you want," Ashutosh says, "but that's the number of copies you need to make the file available everywhere."
"Every enterprise and every Web site has storage behind it, and lots of data being created," says Peter Levine, the general partner at Andreessen Horowitz who is joining Actifio's board. "The cost of storage itself has been going down, but the expense and the management overhead of keeping track of all those copies is huge."
Ashutosh was previously the founder of AppIQ, which was acquired by Hewlett-Packard in 2005 for an undisclosed amount; several other AppIQ veterans are part of the management team at Actifio. The company has about 50 employees in Waltham, and 50 elsewhere.
Qualcomm acquires Pixtronix, Andover company developing tech for low-power displays
Pixtronix and Qualcomm had been pursuing different approaches to low-power displays, according to this 2009 New York Times piece, but both incorporated MEMS (microelectro-mechanical system) technology; in Pixtronix's case, thousands of tiny shutters control the light emitted by LED bulbs.
Pixtronix had raised just north of $50 million in funding from investors like Atlas Venture of Cambridge and Silicon Valley based Kleiner Perkins. Neither Qualcomm nor Pixtronix would comment on the acquisition price, but sources close to the deal tell me it was in the neighborhood of $175 million to $200 million.
Pixtronix has 45 employees, and Mark Halfman, the company's senior director of business development, says they'll remain in Andover. "We'll continue to focus on developing and licensing our technology," Halfman says. The company's technology isn't yet in the market, Halfman says, but the company has announced joint development projects with companies like Hitachi Displays and Taiwan-based CMI. Halfman says that Pixtronix CEO Tony Zona plans to stick around. (One year is always a safe bet...)
Meet Autom, the robotic weight loss coach that lives on your kitchen counter
Last spring, I wrote about Autom, a "social robot" initially developed at the MIT Media Lab whose job is to help dieters achieve their weight loss goals.
Autom, who looks like she could be the boxier sibling of Eve from "Wall-E," just went on sale for $199; the first units will be delivered early next year. Buyers will also need to sign up for a $19.99 per month subscription for at least one year. Autom is being sold by Intuitive Automata, the company that spun out of MIT.
Here's a video overview of the product, which features an endorsement from Caroline Apovian, director of the nutrition and weight management clinic at Boston Medical Center, who endorses Autom as "the most effective weight loss technique we've tested." (Apovian began collaborating with Autom's builders when they were still at MIT; as an advisor to Intuitive Automata now, she holds a number of stock options in the company, founder Cory Kidd tells me.)
Autom asks you about what you're eating and how much you are exercising, and shows you how much progress you're making on your weight loss goals. She also dispenses encouragement.
What do you think: could a $199 countertop robot become the Weight Watchers of the 21st century?
RunKeeper chases down $10 million in new funding, to expand online fitness community
RunKeeper began life in 2008 as part of the first wave of fitness-focused apps for the iPhone, helping runners (or bikers or cross-country skiers) keep track of their pace and routes. But more recently, the company has been evolving into a Web site that lets you upload data from all sorts of devices — like a watch that measures your blood pressure, a wirelessly-connected scale, or a bedside sleep monitor — and share it with friends, if you choose. Just as Facebook created a "social graph" that lets you keep tabs on what's happening within your social network, RunKeeper wants to build the "health graph," by making it easy to store and share data about your epic workouts and dieting triumphs.
RunKeeper raised $1.1 million last November, but founder and CEO Jason Jacobs tells me that the company hasn't had to touch that money. The company's mobile apps are offered for free, but the more fully-featured RunKeeper Elite service costs $20 a year. (It allows you to broadcast your progress in a cycling race live to the Web, for example.)
"While our subscriber base is growing quickly, our focus in the short-term is less on monetization and more on improving the core product, user growth/engagement, and ecosystem development via the Health Graph API," Jacobs writes. (API is the application programming interface that allows other sites and devices to link up with RunKeeper.)
Jacobs says he expects the company to grow from 14 employees to 40 by the end of next year.
According to data the company published in September, RunKeeper has about 6.5 million users. Roughly 70 percent live outside the U.S. Fifty-six percent use it to track their running, 25 percent walking, and 13 percent cycling.
Spark Capital partner Bijan Sabet has been an active RunKeeper user for the past six months, and blogged about the company's competitive position relative to Nike last year. (Sabet is also an investor in fast-growing Web services like Twitter and Tumblr.)
Joining Spark and O'Reilly AlphaTech Ventures in the latest funding round is Revolution Ventures, the investment firm run by AOL founder Steve Case.
Here's Jacobs' blog post on "What's Next for RunKeeper," announcing the new funding round.
Harvest Automation raises $7.8 million more for plant-toting robots
Harvest Automation likes to say it is in the "automated material handling" business. The company's solution is "flexible and scalable," "fault tolerant," and "intuitive."
But it's a lot more descriptive to say that the Billerica company is breeding an army of robotic farmhands. The current generation are designed to lug around potted plants as they grow, but Harvest believes that as much as 40 percent of the manual labor performed in the agricultural industry today could be done by bots. And investors seem to be persuaded that it's time to modernize farms and nurseries: Harvest is planning to announce today that it has raised an additional $7.8 million in funding. The new round is being led by Entrée Capital of London and Tel Aviv. (I shot a video of the company's earliest prototypes in 2008, and wrote in 2010 about their initial round of funding, which totaled $5.3 million.)
Harvest chief executive Charlie Grinnell says that this summer, the company packed a van with three of their prototype bots and traveled to eleven nurseries and greenhouses around the country for, well, field trials. "All eleven growers gave us deposits on their first purchases, which was really encouraging," he says.
The new funding will help get Harvest's product launched sometime in 2012, Grinnell says. Harvest is targeting a price of between $25,000 and $50,000 per unit. The company has 30 employees, and is building a new indoor test facility for its robo-laborers near its Billerica headquarters.
Here's a recent Wired story on Harvest with the clever headline, "These May Be the Droids Farmers are Looking For." It includes the video below...
AdmitPad raises first round of funding from Greylock, to sell software to college admissions departments
Investors are putting several million dollars into a Cambridge start-up, AdmitPad, that had initially built an iPad app to help MIT admissions officers review student applications. The company's app was featured in the Wall Street Journal back in January, but AdmitPad didn't get mentioned by name.
With roughly $3 million in new funds from Greylock Partners and a west coast firm, I expect AdmitPad will broaden its focus, making a play to get involved in a bigger portion of the admissions process, from helping students assemble their applications to communicating with them once they've been accepted. (Several local investors who looked at the deal tell me they had concerns about the size of AdmitPad's initial market.) AdmitPad CEO Stephen Marcus wouldn't comment, beyond saying that the company will be announcing its funding, new customers, and a new name later this month.
AdmitPad's app lets admissions staffers manage the applications they're responsible for, assigning scores, highlighting parts of essays, and summarizing their thoughts. It can be used with or without Internet access, and it syncs with a university's existing systems for handling applicants.
Before starting AdmitPad, Marcus had spent three years as a venture partner at Cambridge-based New Atlantic Ventures. Scott Johnson of New Atlantic says of Marcus, "He's a proven entrepreneur, he's high energy, and he's great to work with. He's somebody who any of us would be thrilled to back." Despite that, New Atlantic wasn't an investor in AdmitPad's first round.
Another local VC who looked at the deal, but passed, said that Marcus was able to raise money "based on his track record and the quality of the product they've built, which is pretty slick." Earlier in his career, Marcus built and sold several companies in the wireless communications industry. He's also an investor in Okta (identity management) and Trefis (stock market research.)
The South Carolina-based design firm Squared Eye handled the information architecture and user interface for AdmitPad's app, and Squared Eye founder Matthew Smith told me that Marcus had tried to hire the design team and import them to Cambridge. But Smith and his crew decided to remain in South Carolina, where they now work for the local commerce start-up Zaarly.
Bill Kaiser of Greylock Partners wouldn't comment on AdmitPad's funding beyond confirming Greylock's involvement.
Can Workvibe's video profiles attract new talent to the start-up scene?
The duo's main mission is to try to pull new talent into the start-up scene.
Pierce writes via e-mail:
In looking at the local startup ecosystem and how we could improve it, we converged on a few related challenges: our best startups are having trouble hiring the talent they need to grow; much of the talent we do have in Boston — in schools, out on 128, in interactive agencies downtown, etc. — is either unaware of, disconnected from, or has misconceptions about startups; collectively, we could do a much better job of celebrating our successes and projecting a positive, entrepreneurial culture; and last but not least, we absolutely must do a better job of retaining the talent we do have, particularly in our schools.
Pierce and Patriquin started working on the project in September. While they hope it'll have a good run, they don't aim to turn it into a business of its own. (They did accept a "modest fee" from each company featured to help cover production costs, Pierce says.)
Patriquin adds, "We do see an acute need in the marketplace for an evolution of the ways that companies recruit and portray themselves to candidates. That said, we’re just treating this as a community project currently and have no plans to turn it into a real start-up."
Other companies that will be featured on the site include EverTrue, which helps schools communicate with their alumni, and GrabCAD, which operates a marketplace for product design services.
Pierce is best known as the founder of the late, lamented Betahouse co-working space in Central Square, and a founding trustee of The Awesome Foundation. Patriquin worked most recently for Performable and HubSpot.
Here's the first video, focusing on the Boston financial services start-up PerkStreet:
Shareholic, making it simpler to share content online, collects $2 million in funding
That was the case with Shareaholic, the small Cambridge company that creates tools for users and Web publishers that make it easy to share content — and analyze what visitors are sharing. Shareaholic founder Jay Meattle writes via e-mail, "We weren't even thinking about raising a round at the beginning of the summer, but our growth rate and traction started attracting a lot of inbound interest in the company." About two million people have downloaded Shareaholic's browser plug-in, which enables content sharing through services like Facebook, Twitter, Digg, Tumbler, or plain old e-mail. Through publishers that use Shareaholic's tools, the company says it reaches about 250 million unique users each month. Investors took notice.
Shareaholic's new backers include Dave McClure of 500 Startups; Jonathan Kraft of the Kraft Group; Chris Sheehan of CommonAngels; Rob Go of NextView; Brian Shin of Visible Measures; Dharmesh Shah and David Cancel of HubSpot; Larry Bohn of General Catalyst; and Nicole State of Boston Seed Capital.
"This round will enable us to lay a solid foundation for building the next big company in Boston, by scaling our team and resources to expand on our current traction and growth curve," Meattle writes. "We are hiring across the board with emphasis on engineering. We generate many terabytes worth of data, and are the very definition of a big data company." Shareaholic's basic services are free, but sites must subscribe to get access to more detailed reports about what users are sharing, and how.
Shareaholic had previously raised about $350,000 two years ago, Meattle says. The 7-person company is based at Polaris Ventures' Dogpatch Labs space in Kendall Square, and recently brought on two veterans of Oneforty. Meattle had previously been an employee of Compete and Lookery, and Shareaholic began life as a side project.
New CEO at CasePick Systems, company developing droids for the warehouse, comes from Netezza
Baum was running Netezza last September, when IBM purchased the company for $1.7 billion; Netezza made high-performance data warehousing appliances. Baum stuck around at Big Blue for exactly one year. Now, he's shifting from "big data" into the robotics sector, joining CasePick Systems in Wilmington as CEO. (CasePick founder John Lert also confirms that he left the company in January, "to move on to something even more interesting," he writes via e-mail.)
In almost five years of existence, CasePick has remained so quiet that it hasn't issued a single press release, or (as far as I know) publicly demonstrated the robots they're building; this blog post I wrote last December is the most detailed information out there about the company. CasePick seems to be designing robotic carts — they call them T3Vs, or "Track-guided Transfer and Transport Vehicles" — that can move through a warehouse, picking up and dropping off cases (usually cardboard boxes) full of merchandise, using a robotic arm. CasePick was acquired in 2009 by one of its early backers, NH-based C&S Wholesale Grocers.
As for the company's low-profile, Baum says, "I'm gonna change all that," alluding to a "meaningful launch" of the company in early 2012.
Baum says the company is exploring "lots of opportunities in the grocery industry and outside it. The strategy is not to keep the technology captive" within C&S, which is one of the country's largest grocery wholesalers.
The company has around 100 employees, Baum says, "and we'll go well beyond that in the next year."
Talking about his switch to robotics after a career of selling hardware and software to big companies, Baum says, "The whole robotics space is fascinating to me. Selling software is very much driven by volume, but robotics involves much bigger purchase prices, and a lot of effort to get the technology to work right in each customer deployment."
Baum says he isn't focused on raising additional capital for CasePick right now, but I wouldn't be surprised if the company brought in some new investors down the road; several Boston-area VCs have been following Baum's move from Netezza to CasePick closely.
USVP, Vahalla and General Catalyst invest in digital marketing start-up Shopximity
Simeonov isn't saying much about what Shopximity will do yet. "We want to provide a new model for value-based marketing, not just coupons or price discounts," he says. The company will be focused on Web and mobile advertising. "When users don't see things that are valuable to them, they teach themselves not to click on the ad, and that penalizes both advertisers and publishers," he says. "We think people not being engaged with ads is a massive missed opportunity to make the Web more useful."
The company will focus initially on the consumer packaged goods industry — think shampoo and shaving cream — "because those are things that people are in the market for all the time," says Simeonov. Ron Elwell, formerly CEO of Goal.com, is Shopximity's chief executive.
The company has offices at Alewife, and about five full-time employees. The software development consultancy Bocoup is helping Shopximity with product development. Simeonov says Shopximity will be more specific about what exactly it is doing — beyond just "making the Web suck less" — early next year.
Can projecting texts and playlists on your car's windshield make you a safer driver?
But could the same technology make commuting to work safer? Michael Amaru, a Hamilton entrepreneur and graphic designer, thinks so. And he has designed a prototype heads-up display that would work with any vehicle; with sufficient funding, he hopes to shift into production soon.
Here's the premise: even though texting while driving is illegal in Massachusetts, many of us still fumble with our phones to play music, navigate our way to an unfamiliar address, or read an urgent incoming text while at a stoplight (or not). All that would be much safer, Amaru says, if you could see the information without taking your eyes off the road, or your hands off the wheel.
His SmartHUD prototype includes a plastic mount that clips onto one of your air conditioning vents, and a MicroVision "pico projector" the size of a deck of cards, which uses a laser to splash an image onto your windshield. There's also a piece of see-through film that goes on the windshield to improve the brightness of the image, and a slot into which you can slip your Android mobile phone. Strapped to your steering wheel is a tiny touchpad, which lets you use a thumb to make selections on SmartHUD's simplified interface — like answering "yes" or "no" to an incoming next message, or choosing a song from your music library. (The two components are pictured at left.) Amaru is hopeful that in sufficient volume, the SmartHUD system could be sold for around $200.
SmartHUD wouldn't let you use any app on your phone — no playing Angry Birds while racing north on I-93, for instance — but rather it would let you hear incoming texts read aloud, select songs, use a GPS app, and make calls. "I think this will be a safer way to integrate the smartphone into a car," Amaru says, "since you're not holding it, or typing on it, or looking down to try to manipulate a Google map that shows you where you're going." (Amaru's demo of the smartphone software, in the works for the past seven months, is currently just a proof-of-concept slideshow, rather than a fully-built app.)
Two open questions:
1. Can a heads-up system like SmartHUD improve driver safety?
2. Will consumers adopt it, or will they prefer speech-driven systems like Apple's Siri, Vlingo's Virtual Assistant, or Nuance's Dragon apps for use in the car?
Amaru says he has invested about $8000 in developing the prototype while also working his day job; he's now hoping that additional funding will free him up to "hyper-focus" on the project.
The pictures below show what the SmartHUD prototype looks like from inside the vehicle and out.
What do you think — are you a potential user?
Tonian Systems, stealthy start-up working on storage software, adds $5 million in funding from Charles River and Cedar Fund
When I asked co-founder and business development chief Adam Kaplan about the problem that Tonian is trying to solve, and the customers it will target, I got one sentence back by e-mail: "Tonian is developing a unified storage solution that solves the misalignment that occurs within enterprises when combining innovative virtualization technology and traditional storage."
"There's a lot of complexity now to adding storage, and lots of different types of storage, including SSDs (solid-state drives) and the cloud," says Bruce Sachs of Charles River Ventures. "What Tonian aims to do is simplify the integration and use of all the different types of storage into a virtualized environment."
The company has five employees, according to LinkedIn, and offices in Cambridge and Herzliya Pituah, Israel (near Tel Aviv). According to the job listings on that site, it looks like most of the engineering and product development will be done in Israel, with sales and marketing taking place in Cambridge.
Data analytics start-up Hadapt raises $9.5 million; plans move from New Haven to Cambridge
A Connecticut start-up, Hadapt, plans to announce next week that it has raised $9.5 million from Bessemer Venture Partners and Norwest Venture Partners to bring to market its own needle-finding software. The 15-person company, hatched from Yale's computer science department, is also moving its headquarters from New Haven to Cambridge, hoping to tap into the area's deeper talent pool.
Hadapt is creating proprietary software that is designed to augment the Apache Hadoop open source platform that many companies use to manage databases that run across many different servers; Hadoop was originally inspired by software developed at Google to handle its vast index of Web pages, which is spread across lots of computing clusters.
"We're applying the same Hadoop open source technology that eBay and Google and Twitter use to handle their data, in a way that can benefit the rest of the IT market," says chief executive Justin Borgman, an Acton native who put his MBA studies on pause to start Hadapt with Yale prof Daniel Abadi.
Borgman says Hadapt enables users to search both structured data (like the record of a stock trade, which might include fields for time, price, and ticker symbol) and unstructured data (the text of a Facebook status update, for instance.) It can tie into business intelligence tools sold by companies like MicroStrategy and Tableau. And it gives users a SQL interface for conducting their queries, already familiar to many businesspeople. Borgman also boasts that Hadapt's software can improve query speed by 10 to 15 times over standard Hadoop implementations.
"Being able to work with a mix of structured and unstructured data addresses a big pain point," Borgman says. "You might have a list of part numbers in a structured database, and comments about their performance in an unstructured form, and we would help you correlate part #354 with a heat problem, where someone has reported that it tends to break at high temperatures."
Hadapt was founded in July 2010, and raised an angel round of $1 million in January. Borgman says Hadapt will shack up in Bessemer Venture Partners' Cambridge office while searching for space of its own.
"We're still in our product development and beta testing period," Borgman says, adding that they hope to start selling to customers before the end of the year. The company is looking to hire software developers and sales engineers.
BuyWithMe, coupon peddler based in Boston and New York, cuts half its workforce
An employee with whom I spoke this morning said there had been lay-offs earlier this month that affected New York more than Boston, and that the company would be "refocusing." "We aren't manufacturing money the way we used to," said this employee, who requested anonymity because he was not authorized to speak for the company. "Rather than frantic growth, we're going to be more about quality and less about quantity." BuyWithMe executives and investors weren't responding to calls or e-mails this morning.
TechCrunch reports that BuyWithMe is looking for a buyer. BetaBeat reports that the company had been trying to raise $100 million in fresh funding that would have valued the company at $500 million. DailyDealMedia first reported the lay-offs yesterday.
Chris Rohland, a former BuyWithMe executive who started at the company in late 2009, says, "We were once bigger than LivingSocial, and neck-and-neck with Groupon. [Founder] Andrew [Moss] wanted to run with the big dogs." Rohland left the company in January, and is now sales director for Boston.com's daily deals service, Boston Deals.
A venture capital industry source told me this morning that BuyWithMe "couldn't raise more money, and the insiders [current investors] didn't want to throw good after bad." This investor added that it will be interesting to see how BuyWithMe's troubles affect Groupon's planned IPO. Public market investors could be more skeptical about how challenging it is to compete in the daily deals arena — or they could see Groupon as the big winner, with rivals falling by the wayside.
BuyWithMe's venture capital backers installed two CEOs: Cheryl Rosner, an Expedia alum who left last December, and Jim Crowley, a videogame veteran who is still running the company.
"I think getting deals via e-mail is no longer a novelty, and companies have realized that they don't want to share half their revenue with a Groupon or BuyWithMe," says Wilson Kerr, an executive at Unbound Commerce who has followed the sector closely. "Companies would rather offer their own deals, without cutting Groupon in. They can maintain more control over pricing and the customer relationship that way."
Update: BuyWithMe CEO Jim Crowley released a statement confirming "a significant reduction in staffing this week," and asserting that the lay-offs happened "so the company is in the best position to serve its merchants and members."
Earlier this year, I wrote about BuyWithMe, Groupon, SCVNGR's LevelUp, and other discount services, asking, "...Could all this excitement about a new way of circulating coupons be an unsustainable blip?"
That's starting to look like the case...
Do you think BuyWithMe will survive?
Boston's AA cluster: Athletic analytics start-ups aim to improve performance for pros and amateurs
Here are four of the most interesting companies.
- UberSense made it this week into the final round of the MassChallenge start-up competition, and the company is already selling three apps in the iTunes Store. Among them are SwingReader Golf and SwingReader Baseball, which allow instructors and coaches to shoot videos and break down the mechanics of a swing. Co-founder Krishna Ramchandran says UberSense's apps have been installed 400,000 times. The company has four employees on the payroll, and is already sustaining itself from revenue. (Free versions of the apps are available, but a premium app with more features costs $2.99.) "We will be raising our first round of money in a few months to further expand our team," Ramchandran says. Here's a video demo of the SwingReader Golf app, produced by the company:
SwingReader Golf Preview Video from UberSense Inc. on Vimeo.
- Segterra offers two kinds of blood tests, with Web-based reporting of the results, to tell you whether your diet and exercise are putting you on the path to good health and peak athletic performance. "The way most people manage their health is sort of like driving a car without the speedometer," says chief executive Lee Gartley. "It's hard to know if the things you're doing are optimal."
For $169 or $249 — the higher price offers a more elaborate look at your body's chemistry — Segterra's "Inside Tracker" service gives you a laboratory slip that you can take into a clinic to have blood drawn. (In Massachusetts, the company will also send someone to your home or office to poke you.) Delivered within three days, the online test results "show you your levels on a set of biomarkers that we've identified as being important for overall health and fitness, like glucose, cholesterol, calcium, and vitamin D," says Gartley. Your levels of creatine kinase, for instance, can tell you whether you have muscle damage from biking too far or bench-pressing a few too many pounds. The report can also suggest foods that can counteract low levels of a particular vitamin or mineral, or ways to vary your exercise regimen for the best results.
Gartley says that Inside Tracker, an upgraded version of the company's first analytics service, will launch sometime this month. The company raised roughly $500,000 in funding this year from the state-backed Massachusetts Technology Development Corp., as well as "friends and family" of Segterra's founders.
- RestWise is working with university sports departments, professional teams, and individual athletes to help them understand how much recovery time they need in between games or workouts. Already, world champions and Olympic competitors in rowing, cycling, and triathlon have been using RestWise, as have the All-Blacks, New Zealand's national rugby team, and the Springboks of South Africa. RestWise co-founder Jeff Hunt says the company is working with an NBA team, too, but they haven't signed on as a customer yet.
RestWise sells a monthly subscription to its analytics software (and includes a free pulse oximeter, pictured at right, which tracks your pulse and the level of oxygen in your blood). The software runs on any Web-connected computer, as well as iPhone, Android, and BlackBerry mobile devices. It collects data about 11 different parameters, like your resting heart rate, how much and how well you slept, your mood state, and the tint of your urine.
"It's a combination of quantitative and qualitative measures, like how sore your muscles are," says Hunt. "The output is a score on a 1-100 scale. If you're below 40, you know you're pushing yourself too hard. A score of 100 would mean that your body is really well-positioned to absorb whatever workload you subject it to." The score, he says, is "really a measure of how much you can expect to benefit from the work you're doing." Serious athletes, after all, know that exercise isn't totally responsible for getting you in top shape, he says. "In order for the process to work, there's an optimal recovery time for each person, which depends on things going on in your life, like sleep, travel and stress."
Hunt says that when American marathoner Ryan Hall set a new record by running the Boston Marathon in 2:04:59 earlier this year, he'd used RestWise as part of his training regimen.
RestWise scraped together money to develop the product initially, and "started getting revenue in the door pretty quickly," Hunt says. The company raised about $300,000 in funding earlier this year from individual investors.
- Cambridge-based Neuroscouting hasn't said much about what they're doing, but I tried to collect what we know about the start-up in this post from last year. It seems they're using videogame-like software to evaluate — and ideally improve — the way baseball players' brains react to stimuli. "We basically create brain-training software for athletes," co-founder Wesley Clapp says in this video interview conducted by gaming entrepreneur Chris Allen. (NeuroScouting was part of the MassChallenge in both 2010 and 2011, but didn't make the final cut either year.)
The company's founders spoke at the MIT Sports Analytics conference earlier this year; here's some video.
Emerald City after the wizard
That, I suspect, was the feeling in Cupertino this week after the news arrived that Apple co-founder Steve Jobs had died.
Whenever I visited the headquarters in Silicon Valley, I found myself wondering: is Steve here? And if so, what is he doing? From friends who worked at Apple, I heard the stories about how his intense criticism of a product's design could reduce people to tears, spurring them to radically improve it (or causing them to seek work with a boss who was less involved and less demanding.) Every Steve Jobs keynote I ever witnessed in person was pervaded by a feeling of electric anticipation as the audience waited for Jobs to appear. What would the astonishing "one more thing" be today?
Apple in the second era of Jobs — when he returned as CEO in 1997, after a 12-year exile — was a company that, for journalists and the public, really only had five employees. Above all, there was Jobs. In his shadow were his understudy Tim Cook; chief financial officer Peter Oppenheimer; head designer Jonathan Ive; and marketing chief Phil Schiller. Basically, no one else took the stage at Apple's tightly-scripted product introductions, and no one else spoke to journalists. Whenever you requested an interview with any of the other denizens of the Emerald City, you didn't exactly need to wait by the phone for a call back.
So the big question about Apple's future isn't, to me, about continuing its string of hit products. It's about the people. No one at the company wants the vacuum Jobs has left to be filled right away. But as the company moves on, will it require another wizard — another visionary-in-chief — to succeed? (Disney drifted for almost two decades following Walt's death, before Michael Eisner appeared.) Or can it reorient itself as a team-driven company, where not every idea originates at the top, and people other than the upper echelon can be recognized for their contributions?
Can ReDigi, new marketplace for 'used' digital music, avoid lawsuits and prosper?
The founders of Cambridge-based ReDigi believe they're building it: an online marketplace that would allow consumers to buy and sell "used" digital songs (IE, songs they don't want to keep in their personal collections any more.) They're planning to open the site to the public next week. But its still unclear how record labels and music publishers will respond.
ReDigi users will first download a piece of client software, initially available for Mac and PC, and later for mobile phones and the Linux operating system. You tell ReDigi which songs you'd like to sell, and when you upload them, ReDigi deletes the files from your machine. The company says its Verification Engine ensures that only legally downloaded files — not, for instance, MP3s ripped from a compact disc — get uploaded. (And even if you make a copy of a song and change the name of the file, the company says its omniscient software will detect that.)
For every song that you upload, you get a coupon that entitles you to purchase someone else's "used" song for 57 cents (without the coupon, ReDigi downloads cost 77 cents.) But that twenty cent discount is just the incentive to get you started uploading to the service. When a song you uploaded sells, you get a "significant" portion of the sale price, according to the company, but it varies based on how hot that given song is. On the buying side, if a song you want isn't available through the service, you can "order" it, and get notified when another users uploads that song. (The service will also sell you a "new" copy of the song right away, but at full price of between 99 cents and $1.29.)
ReDigi was founded last year by Larry Rudolph, an MIT professor who has taken a leave of absence to work on the company. He asserts that "if you buy something legally, then you own it and it has value. If you can't sell it, then it doesn't have value." (The purchase button on iTunes, Rudolph adds, is labeled "Buy," not "Rent" or "License.")
The terms of use at Amazon.com's music service, for instance, specify that purchasers may not redistribute or sell the content they're buying. But in the physical world, a DVD or CD that you purchase is covered by the "first-sale doctrine," which allows you to sell, lend, or give the disc to a friend without having to pay anymore money to the copyright holder. Whether the first-sale doctrine covers digital goods like songs or movies is still an open legal question.
The company calls it "the world's first recycled digital music marketplace." But entrepreneur Alex Meshkin tried it three years ago, with a service called Bopaboo. It's now defunct. Meshkin told me that Bopaboo wasn't litigated out of business, but rather it couldn't make the economics of a used music exchange add up. To get record labels and music publishers to allow you to re-sell songs, Meshkin said, you need to cut them in on the revenue. "It's hard to make that work," he says, and the labels worry about cannibalizing sales of their 99 cent and $1.29 tracks on iTunes.
Like Bopaboo before it, ReDigi says it plans to cut recording artists and labels in on a portion of every sale — something they don't get from used CD or record sales, notes CEO John Ossenmacher. "We're working with big artist management agencies, and we've talked to all the major record labels," he says. "Everybody in this industry is looking for new sources of revenue, and they see music sold at lower prices as an opportunity to help reduce piracy." Ossenmacher says he's not too concerned about lawsuits, believing that the company's business is covered by the first-sale doctrine.
I called the Recording Industry Association of America yesterday, which represents the major record labels, but they declined to comment on ReDigi's resale concept. So did Sony Music. A Warner Music spokesperson with whom I spoke yesterday wasn't familiar with the service, but didn't have an immediate comment on it.
And the company not only has to worry about proving that the resale of digital goods will benefit artists, labels, and music publishers, but ReDigi also has to attract consumers. Will the inventory of songs that people no longer want be appealing? Will it lack most recent hits? How will ReDigi attract music lovers and convince them to fork over their credit cards, without much of a marketing budget or track record?
ReDigi raised $535,000 earlier this year, and Ossenmacher says they've since added funds that have taken them past the $1 million mark. The company has about a dozen employees, and is based at the Cambridge Innovation Center. Ossenmacher was previously CEO of Conserving America Corp., an energy efficiency business in Newport Beach, California.
Here's a video overview of how the service works (Ossenmacher says they've updated the pricing since this video was made):
Senate candidate in Rhode Island may be mobile payment pioneer
Barry Hinckley started the Boston-based recruiting software company Bullhorn in 1999, though he's no longer on the board or involved with day-to-day management. He's running for Senate as a Republican, noting that one of his ancestors commanded the Minutemen of Concord, firing shots across North Bridge. It'd be his first time holding elected office.
Hinckley's campaign has been using technology from Boston-based ROAM Data to enable campaign workers to collect contributions by using their mobile phones to swipe credit cards. The alternative would be to write the numbers on a paper form, or tote along laptops, which would require power outlets and a wireless link. The campaign brings the swipe-enabled phones to every event, whether country club receptions, coffee talks, or benefit movie screenings. ROAM believes it is the first use of mobile payment technology by a candidate running for national office.
Despite all the hype about San Francisco's Square, ROAM touts itself as the #1 supplier of mobile credit card readers, with more than 300,000 units shipped. (See update below.) While Square works directly with merchants, ROAM typically supplies technology through other payment processors, like First Data or Sage Payment Systems, says CEO Will Graylin. By using ROAM's technology with existing merchant accounts, Graylin says that businesses pay a transaction fee that can be as much as 1.25 percent lower than what they'd pay to use Square. ROAM's card readers also work with a wider range of devices, Graylin says, including Blackberries and PCs (Square connects only to iPhones, Android phones, and iPads.)
(Update: a Square spokesperson contacted me after this blog post was published, noting that Square has shipped "over 750,000 readers across the U.S." It's readers are free.)
Graylin explains that a ROAM salesperson knew some people working on Hinckley's campaign. "They carry around the ROAMpay solution on a smartphone and tablet to pretty much every speaking engagement," he says. "They've raised tens of thousands of dollars using this method." Because the card is getting swiped, the fees are lower than they would be if the number was simply written down on paper (known as a "card not present" transaction).
The flashy new technology may not exactly change the course of the race, though. Federal records show that Hinckley had raised $155,000 through June 30th of this year — well behind incumbent Senator Sheldon Whitehouse, who had pulled in $784,000.
ROAM is doing better than either candidate. Graylin told me his 60-person company has raised about $10 million in funding so far, including some from Ingenico, which makes point-of-sale systems. A new round of funding — "substantially higher" than what the company has banked so far — is in the works, he says. "Our investors are really thinking about how we can really scale ROAM Data as this de facto platform provider for mobile commerce, and how we go international," Graylin says.
Will those new investors forward funds to ROAM using an Android phone or an iPad? That'd be quite a first...
Yesware launches e-mail tracking product for salespeople, collects $1 million from Google Ventures and Foundry Group
Yesware is announcing its funding today, along with the availability of its product, which helps salespeople manage their e-mail interactions with prospects and customers.
Bellows explains that while Yesware is targeting salespeople, it can be useful for anyone who sends a lot of e-mails. "We offer e-mail templates for the kinds of e-mails you send frequently, and there's also tracking that can tell you when a message was opened, how many times, and whether it was read on a desktop machine or a mobile device," he says. "We can even look up the IP address to see what city they were in when they opened it, so you know if they were in the office or on the road." Yesware is built to work with Gmail (an Outlook version is on the drawing boards), and data about interactions with would-be customers can be saved to widely-used customer relationship management systems like Salesforce.com, SugarCRM, and Landslide CRM, Bellows says.
Yesware is free for individuals to use, but once sales managers decide to start organizing teams of salespeople who use the system — and getting reports on their activity — Yesware will start charging $20 per user, per month, Bellows says.
The three-person company is in hiring mode, Bellows says. They've been operating out of the free Dogpatch Labs shared offices in Kendall Square, which is underwritten by Polaris Venture Partners. Rich Miner made the Yesware investment for Google, and Brad Feld for Foundry Group.
Bellows tells me that about 500 people have been using Yesware since its beta test began in June. None are paying customers — yet.
Now, it's time for Yesware to prove its own sales mettle.
New Bedford's Aquabotix preparing to launch underwater bot for wanna-be Bob Ballards
A New Bedford start-up, Aquabotix, thinks it has the answer to your dilemma. This fall, the company will start shipping the HydroView, an eight-pound underwater robot with twin props, a top speed of three knots, a high-def camera, and LED illumination. You control the $2995 Hydroview with your mobile phone or iPad (you can also use a boring old laptop, too.) Tilt the device forward or to the right, and the Hydroview swims in that direction. You can also upload photos and videos of your journeys to Facebook or YouTube. If Captain Nemo had lived in the social media era, this is the Nautilus he would've designed.
Aquabotix founder Durval Tavares, a former employee of both Fidelity Investments and the Naval Undersea Warfare Center, says that the HydroView isn't just for boaters who want to hunt for shipwrecks or buried treasure. "A friend of mine had gone around the world on a sailboat, and he said he never had a restful night's sleep. He was always worried about whether his anchor was well set," Tavares says. "Boaters also worry about whether their propeller or the bottom of the boat has hit something. So we started thinking, what if you had a device that would let you do a safety check on the bottom of your boat?"
In addition to the HydroView, Aquabotix is developing the Aqualens (pictured at left), an underwater video camera that can be maneuvered using pole. (Aqualens has no propulsion system of its own.) It streams live video to an included 3.5-inch LCD screen, as opposed to your own device. But it is less expensive than HydroView, at $795. And while HydroView won't ship until November, Tavares says the Aqualens will be available early next month. The company first showed the two products earlier this month at the Newport International Boat Show in Rhode Island.
"Recreational marine is the primary market," says Tavares. "But people have been talking to us about other uses, like boat inspections for insurance companies or companies that do underwater construction. It can be a lot cheaper than having a diver go down into the water, and it's a much more appealing option when the water is freezing. We've also had some marinas ask us about renting it out to people, maybe just for having some fun looking at sealife."
The petite HydroView is just 19 inches long and 14 inches wide. It can run for two hours on its batteries. A cable sends commands to the underwater craft, and an optional extended wire will give it a range of up to 300 feet. (A 50-foot cable comes with the product.) It can operate at depths of up to 75 feet.
Amazingly, Tavares started the company in March, and plans to ship Aquabotix's first product just seven months later. The company's only outside funding came in the form of a $400,000 loan from the Fall River Office of Economic Development.
Tavares says the company will assemble both products in Massachusetts. "Some of our electronics are being built in New Hampshire, and the injection molding is being done in Worcester. We're trying to use local infrastructure when we can."
Mariners, what do you think: pricey toys or useful tools?
Sleep measurement company Zeo announces new mobile product and Best Buy distribution deal
As part of the Health 2.0 conference starting today in San Francisco, Zeo co-founder Ben Rubin will be unveiling the $99 Zeo Mobile (pictured at right), a headband worn at night that communicates wirelessly with an iPhone, iPad, or Android phone. Upon waking, you can view charts of how much time you spent in light, deep, or REM sleep — or awake. Zeo Mobile will be available at Best Buy stores in November, as well as Apple Stores throughout Europe, and the company is dropping the price of its all-in-one Zeo Bedside system from $199 to $149.
Zeo's systems both contain an EEG sensor — which measures brainwaves, muscle tone, and eye movement as you sleep — and assess the quality and quantity of your sleep whenever you don the headband. The new mobile system also includes an accelerometer, which gauges your position throughout the night, and can tell whether you slept on your back, side or stomach. That data won't be used right away, says Rubin, but will be integrated soon.
"We want to price the product more aggressively," Rubin told me last week, "and increase our revenues from sleep management." That additional "sleep management" revenue could come from persuading you to download a separate mobile app to help you adjust to new time zones; selling you a sleep mask; or pointing you to a service like RunKeeper or Weight Watchers, and garnering a referral fee.
Rubin says the 25-person company doesn't sell its hardware at a loss; "we're just not raking it in." Service- and referral-oriented revenues could help that, though Rubin says that monthly subscriptions aren't part of the company's current plans. "People hate subscriptions," he observes.
The new Zeo Mobile product and the company's price cuts can be seen as a reaction to newer sleep measurement companies like Lark ($99) and Wakemate ($59), both of which communicate with a mobile phone, and both of which use only motion (not EEG data) to tell whether you've gotten a good night's rest. (I wrote about the slumbertech space last month.) Zeo's Bedside device, its first product, requires you to tote an SD memory card over to the PC if you want to store or analyze your sleep data.
The company raised $12.3 million earlier this year, some of it from Best Buy Capital and Johnson & Johnson Development Corp., the venture capital arms of those two companies.
Microsoft shakes up 'blue sky ' development team in Cambridge
The crack team was first brought together by Ozzie, best known as the creator of Lotus Notes, to work fast, developing prototypes that could eventually point the way to new Microsoft features and products. They worked on Bing's Twitter search capabilities; Twitter mapping on Bing; Docs, a way to create and share Word, Excel, and PowerPoint files on Facebook; the TeamCrossword game; and recently, a way to use Microsoft's Kinect motion-detection system to enable videogame playersinteract with ads.
Some of the team has been offered jobs in Redmond, I'm told, but not everyone will go. The end result will be less "blue sky" conceptual work happening in Cambridge, sources say, and that location focusing more on basic research and integrating acquisitions that Microsoft makes in Massachusetts. A key Ozzie goal while at Microsoft had been to help Microsoft do early-stage product development work in a more distributed way — not just at headquarters. (Much of the software work taking place in Cambridge now focuses on improving existing Microsoft products like Office 365, Lync, and Sharepoint, not cooking up new stuff.)
Asked about the changes in Cambridge, Microsoft spokesperson Catherine Collins only said, "I can't comment on personnel matters."
I've written several times before about re-orgs at Microsoft NERD.
Newton's BigBelly Solar is building an Internet of trash cans
Now, perhaps realizing that recurring revenues are better than one time sales, the company is repositioning itself as a software-as-a-service company that also happens to sell hardware. BigBelly is integrating GSM wireless connectivity into its trash and recycling cans, which allow them to report their status to a Web-based software system. The company has dubbed it a "smart grid for waste and recycling," and by sending crews out to empty only the receptacles that need it, BigBelly thinks it can eliminate at least 7 of every 10 pick-up trips that trash vehicles make today.
"I come out of the networking world, so for me, these devices are nodes in a network," says chief executive Barry Fougere. (He was CEO of Colubris Networks, a wireless start-up acquired by HP.) "Our customers at BigBelly are not used to having information. Are my guys doing their job? Where do we have problems with cans that are overfull, and trash is blowing everywhere? We give them that." They call the software CLEAN Wireless (see a screenshot below.) CLEAN stands for Collection Logistics Efficiency and Notification.
Looking at real-time data for the city of Philadelphia — BigBelly's largest customer — Fougere shows that 29 of the city's 893 networked compactors are red (meaning they should be emptied immediately), and 145 are yellow (meaning they're approaching full). BigBelly's software also shows if a door to the receptacle has been left open, or if there's maintenance that needs to be performed. It can also spit out a list of all of the locations of the cans that need to be emptied.
"The goal," Fougere explains, "is to take capacity out of their system — meaning trucks and crews — without negatively impacting service levels." In Philly, for instance, the sanitation department used to swing by some trash cans 17 times a week; now, the average is 2.5 times a week. Chicago had been collecting trash at most downtown locations twice a day, and now that number is only twice a week, according to Fougere.
The technology seems perfectly designed for politicians — not just sanitation managers. "It's an early win that elected officials can take credit for in their renewables portfolio," says Fougere. Engineering vice president Michael Feldman adds, "Having the data is great, because it proves how much gas and emissions they're saving." It also cuts down on the number of citizens who call into the Mayor's office to complain about unkempt trash cans in city parks, Feldman says.
The technology isn't cheap: leasing 10 systems that include a trash compactor and recycling container is about $1000 a month, Fougere says, and purchasing them outright would be about $60,000 (including a 5-year software license.) But they say most users will see a payback within two years from the savings on labor and truck operating costs. Customers who have already bought the BigBelly compactors that don't have wireless integrated will have the choice of paying for an upgrade — or not.
The company has deployed close to 1000 BigBelly cans around eastern Massachusetts, but most haven't yet been linked to the wireless network for reporting. (From here on out, the company plans to only sell the receptacles with a subscription to its software.)
BigBelly has been funded by angel investors and publicly-traded Waste Management. Fougere said BigBelly achieved profitability last year, and isn't currently out raising additional funding.
New site Tasted Menu wants you to rate every dish when you dine out
By inviting users to rate, review, and share pictures of individual restaurant dishes — whether they're worth ordering or not — Tasted Menu wants to help answer two questions, says founder Alex Rosenfeld. "People want to know what's good to eat at a particular place, and where can I find the best pad thai or chicken soup," says Rosenfeld, who started the site in the summer of 2009, after finishing Harvard Business School. Sites like Yelp, Zagat, and Chowhound can be useful in helping people find good places to eat, Rosenfeld says, but they don't help you navigate the menu once you get there.
Wednesday is the beta launch of the site. "We're sending out invitations to over 1000 people, focusing on the online food community," Rosenfeld says. (But if you don't get one, you can request an invitation to participate in the site's beta.) "Then, we're targeting late September or early October for our public launch." The site already contains reviews of more than 5000 dishes at about 1250 Boston restaurants, Rosenfeld says.
Tasted Menu will wind up competing with other sites that aim to direct diners to the best dishes, including Foodspotting, Nosh, and Forkly. (Goodplates, another Boston start-up that started off with a strategy quite similar to Tasted Menu, recently adopted a new name and focus.) Rosenfeld claims the start-up has built one of the most comprehensive collections of menu information from Boston restaurants, and says that the company "plans to aggressively expand nationally" following its Boston launch. "We have our next 12 or 13 markets laid out," Rosenfeld says, declining to reveal the cities on the list.
Tasted Menu has five employees in Coolidge Corner, and has raised about $350,000 in funding from 11 angel investors, Rosenfeld says. He adds that the company may attempt to raise a larger Series A round later this year. They're working on a Tasted Menu iPhone app, which would help the site gather more reviews and photos from diners who may not always tote their SLR camera along to supper.
Some screenshots below:
Tasted Menu page for the BLT sandwich at Flour Bakery and Café
Tasted Menu ranking of the best maguro (tuna) sushi in town
Tasted Menu page for Boloco
First look: Lilliputian Systems' pocket-sized fuel cell for recharging portable electronics
For the past decade, a Wilmington company called Lilliputian Systems has been working on what it believes is the solution: a pocket-sized generator that turns butane — lighter fuel — into power for your gadgets. (I first met with co-founder Sam Schaevitz in 2001, as he was spinning the business out of MIT's Microsystems Technology Lab.)
The company, which has raised a bit more than $100 million in funding, hopes to have a product on the market "really soon," according to vice president of business development Mouli Ramani. They haven't yet announced where you'll be able to buy a Lilliputian Mobile Power System — or whether other, brand-name electronics companies will market them as charging accessories — but Ramani did tell me that the device will cost between $150 and $200, with the price dropping as production volume increases. Fuel cartridges will cost between $2 and $5, depending on the size: a small one might be capable of recharging your smartphone's completely depleted battery 10 times, while a large would give you 20 recharges.
Last month, I put Lilliputian on my list of "12 Companies to Track," since the product seems so promising for road warriors who simply can't stay tethered to an outlet in an airport, rental car, or hotel room for very long. Yesterday, Ramani invited me to Lilliputian to see the company's prototype in action — and yes, get a little juice for my half-full iPhone.
The device is taller and thicker than your mobile phone; it resembles a cigarette pack that has grown an inch or so on the top. Inside is a chip that contains a solid oxide fuel cell, which converts the hydrogen and oxygen in butane into electricity, at very high heats (around 750 degrees Celsius, or 1380 degrees Fahrenheit.) But Lilliputian's fuel cell is insulated well enough that you can touch the hottest part of its case, and it's still cooler than a typical laptop that has been running for a few minutes. On the prototype (pictured above), indicator lights glow green to show that the Mobile Power System is charging your device; blue to show that you've clipped in a new butane cartridge (the cartridge is that metallic rectangle on top), and red to show you that you're low on fuel. The device has a standard USB output port (on the right side) that can deliver about 3 watts of power — enough to recharge a GPS, digital camera, or mobile phone, but not enough for a laptop or tablet. (The cable coming from the left side of the MPS prototype in the picture is for diagnostic purposes.)
The butane cartridges aren't refillable, Ramani told me, but they will be recyclable when empty. Many early users of the Mobile Power System may opt to get butane cartridges delivered on a subscription basis, he said. That could create a nice razor-and-blades business model for Lilliputian.
The fuel cell's only exhaust is a tiny amount of CO2 and water vapor, Ramani said — it emits about 1/20th the content of what a human exhales in a single breath, over the course of one mobile phone charging cycle. Lilliputian and other fuel cell makers have already successfully lobbied the FAA to allow consumers to use the devices — not just carry them — on airplanes, and Ramani said that the company believes a cigarette lighter (which produces a flame) or a can of hairspray (which can explode when punctured) are more potentially dangerous.
In a test lab, Lilliputian systems engineer Souren Lefian plugged a white iPhone charging cable into the Mobile Power System prototype and forwarded a few watts to my phone. There wasn't much that was thrilling about the process, aside from knowing that I can now claim to have gassed up my iPhone. Then, Lefian (pictured at left) switched cables and charged up his Android phone. On Lefian's computer screen, a graphic showed how much fuel was left in the MPS' tank, as well as how many watts it was sending to the phone, and how full the phone's battery was. (See picture below.)
It's an open question whether consumers will cotton to carrying along an accessory — and, perhaps, a spare butane cartridge — to keep their small electronics charged up. (A fuel cell that would also rejuvenate laptops and tablets would be much more useful.) But Ramani says Lilliputian will target business travelers, outdoorsmen who rely on GPS devices, and families that travel with a collection of electronics. "We think the Mobile Power System will change people's relationship with power," he says, eradicating the worry of running out at a crucial moment.
Ramani said that rolling out the Mobile Power System will be Lilliputian's primary focus for the next few years, but that the company also has plans to develop more powerful fuel cells that will be able to recharge laptops and tablets, and also integrate its fuel cells into those devices when they're manufactured. (Pictured below are several non-working mock-ups of current and future Lilliputian devices.) While Lilliputian is producing small numbers of its fuel cell chips in Wilmington, the company has an agreement with Intel to crank out larger volumes at the chipmaker's plant in Hudson.
Over the next year or two, it'll be fascinating to watch how Lilliputian rolls out the Mobile Power System; the partners it chooses; and how consumers react to it.
Above: Diagnostics screen illustrating how the prototype Lilliputian Mobile Power System is performing.
Above: Mock-ups of the current MPS and its fuel cartridges, at the bottom of the picture, and future design concepts, at the top.
Candidate screening service Take the Interview lands $775,000 in funding
Job-seekers may soon need to develop a new skill to secure their next gig: projecting confidence and competence in front of a Webcam. Cambridge-based Take the Interview, currently conducting a beta test with nearly 200 companies, wants to persuade employers to make more use of video screening as a way to find the gems amidst a pile of promising résumés. And the company has just raised $775,000 in new funds to begin marketing the service more widely.
Founder Danielle Weinblatt started working on the concept during her first year at Harvard Business School, and decided to take a leave after the spring semester to focus on Take the Interview full-time.
"We took the Eric Ries, lean start-up approach," she says. "I went and talked to customers first, and started getting letters-of-intent to use this product I hadn't built yet."
The idea is that companies post a handful questions for certain candidates to answer via video, on their own time. (The videos aren't conducted live.) The site also offers a "question bank" of questions related to job categories like sales or accounting. Two examples: "How have you established priorities to implement a new vision or directive?" and "What is the last book that you read and why did you chose to read it?" Hiring managers can then view the responses, and share them within the organization.
"You might know that someone is a 'no' within the first few minutes of an in-person interview, but you end up spending 30 or 60 minutes talking to them because that's what scheduled," Weinblatt says. "We think that asynchronous video interviewing is a great way for people to save time." Take the Interview's initial focus is on small- and mid-sized businesses who may only be looking to fill 3 or 4 positions at any given time. Pricing starts at $45, which covers filling just one job, but there are monthly plans as well.
Weinblatt participated in the Dreamit Ventures accelerator program in New York over the summer, but the company's six employees are now back in Cambridge, using space at Dogpatch Labs.
The new funding comes entirely from angel investors, though Dreamit Ventures invested alongside them. Weinblatt says she didn't pursue VC investment, since she wasn't sure she wanted to commit to the exit size and timetable that they expect.
"I promised my employees to get them on payroll in September," she says, "and I'm glad we managed to do that." The money will also go toward building a sales and marketing team, attending conferences, creating new features for the site, and developing a mobile app, Weinblatt says.
The TableTech rundown: Boston start-ups trying to upgrade the restaurant experience
- TotalTab. View your bill at a bar or restaurant, and pay it using your mobile phone. Self-funded so far. Founder Nick Reuter says the company will look to raise money early next year, when it has a beta version operating in a local restaurant.
- Tasted Menu. Founded in 2009 by a recent Harvard Business School grad, the company is still in stealth mode, but seems to want to tap your social network to recommend specific dishes at restaurants. Has raised an unspecified amount of angel funding. Founder Alex Rosenfeld says coyly, "We're a new entrant in the restaurant social recommendation space. We'll be complementary to some existing players, competitive with others, but most importantly I think we're bringing something proprietary, unique, and (most importantly) useful to the table, no pun intended."
- Locu (formerly Goodplates). When I first wrote about Goodplates back in May, the MIT-spawned start-up was hoping to persuade diners to use their mobile phones to take photos of their food at restaurants, and upload ratings and reviews to a Web site. But as founder Rene Reinsberg began to demo the service publicly, and pitch investors, he started to notice how crowded the resto-tech space was. Over the summer, Goodplates changed its name — the company is now known as Locu (pronounced "low-koo") — and began focusing on using humans and intelligent software to digitize and categorize information from restaurant menus. They plan to help restaurants share menu information with lots of Web sites and mobile apps that would like to deliver it to their users, and create an API that will give developers access to the info. Pricing isn't yet set, but they hope to generate revenue from both parties. Raised $600,000 this month from a group of angel investors. (That's the Locu team pictured at right.)
- Leaf. Cambridge company trying to render extinct that faux-leather bill presenter that's dropped at your table at the end of the meal. What if instead, your waiter handed you a small tablet computer that allowed you to review what you'd eaten, split the check, figure out the tip, rate each individual dish and beverage, and swipe your credit card to pay?
- AisleBuyer. mDine service, announced last month, will allow you to use your mobile phone to choose what you'd like to eat and pay using your mobile phone. Company hasn't yet announced any café or restaurant partners. AisleBuyer has raised $11.5 million
- Textaurant. Brookline start-up that enables restaurants to manage their wait-lists with a PC, and buzz diners when they're ready via their mobile phones (instead of those expensive coaster-shaped pagers.) In use at Fire & Ice in Boston, Finale in Cambridge, and Jerry Remy's at Fenway (only on game days). Hoping to raise a seed round in the next quarter. (I covered them here last fall.)
- Objective Logistics. Trying to motivate servers — and increase restaurant revenues — by ranking performance on a leaderboard. In use at several local Not Your Average Joe's locations.
- Crave Labs. Helping restaurants expand their customer base using social media and mobile devices.
- GoodEatsFor.Me. Similar to Crave Labs, helping restaurants use social media to see what diners are saying, and distribute special offers.
- Survey on the Spot. Newton company assists restaurants with designing feedback surveys that customers can fill out on smartphones or tablet computers. In use at restaurants like British Beer Company and The Ninety Nine.
(Last year, I wrote about E La Carte, another TableTech company that was born in Boston, but is now based in Palo Alto.)
Know of others? Post a comment or drop me a line.
Zynga gears up for debut of 'Adventure World,' first game developed by Cambridge studio
Zynga acquired two Boston-area start-ups in 2010 and 2011: Conduit Labs and Floodgate Entertainment. The result was a 35-person studio that Zynga dubbed Zynga Boston, even though it is located in Cambridge's Central Square. (They'll soon move to Harvard Square, where their new offices will have room for another 40 or so employees.)
The team at Conduit pitched the concept for "Adventure World" to their new overlords at Zynga about a year ago, immediately after the acquisition. "We had a couple ideas, and they liked several of them," says Nabeel Hyatt, the Conduit founder who now serves as general manager of Zynga Boston. "It was a question of, 'Which one do you really believe in?'"
Hyatt, pictured at left, says "Adventure World" is a game, like "Zelda" before it, that is about "exploration, discovery, and problem-solving." Your goal as a player is to find the lost city of El Dorado — and its treasures. You are sent off on quests by Professor Allen, a member of the Adventurer's Society, which take you to volcanoes, temples, jungles, and caverns. As with most Zynga games, you can earn (or just buy, using real money) currency, tools, and gadgets that can help you progress. Some of the tools can help you circumvent an especially tough puzzle.
Like most Zynga games, you can invite friends to play "Adventure World." But you can also join friends on each others' game boards. Perhaps you need some brush-clearing help from a friend who owns a machete, or want to offer to dispatch some difficult rams on behalf of a friend. The game has more than 200 separate quests across 30 different maps or environments, and the team at Zynga Boston believes it will take most players a few months to finish it (that's before they expand the game with new content). "Adventure World" is so elaborately-designed that it is infested by four distinct kinds of spiders. Zynga is launching the game in eight different languages.
All of the characters in "Adventure World" are animated in three dimensions — similar to a Pixar or DreamWorks movie — which enables them to move more realistically. "It gets us away from the 'paper doll' look you see in most social games, where the characters look a little flat," says Hyatt. Zynga Boston also developed its own rendering engine, the software that paints the picture you see on screen, to enable you to move fluidly through such a vast game universe. They dubbed it the BRO Engine, which stands for Boston Rendering Optimization, and work on it began well before Conduit was acquired by Zynga. Zynga Boston also built many of their own custom development tools that enabled them "to create lots of content in a short amount of time, without reinventing the wheel," according to Paul Neurath, Zynga Boston's creative director, and formerly the CEO of Floodgate. (Pictured at right are Jesse Kurlancheek, principal game designer, and Seth Sivak, lead game designer.)
Hyatt says the Boston studio will spend most of its energy over the next year or so expanding "Adventure World," and that they haven't yet begun developing a second game. "The goal initially is to create a franchise with 'Adventure World' that will last a long time," he says.
As for the timing of releasing a new Zynga game just as the company preps for its IPO, Hyatt admits, "It's a lot of responsibility."
Some screenshots from "Adventure World" below...
From the MIT Media Lab: LuminAR, a 'lamp' that turns your desktop into an iPad
Instead of screwing a lightbulb into a spring-armed desk lamp, Linder designed a device that combines a camera, digital projector, and wireless node. LuminAR (the AR stands for "augmented reality") works on the same 110 volts that would have powered the lightbulb. The result is one of the coolest demos I've seen in a long time: a personal projector that can turn any flat surface into a rough approximation of an iPad.
"People work with objects all day long, like the stuff on our desk — not just things in the digital world," Linder says. "So we think that objects and surfaces should also become interactive, offering you relevant information." The goal of the LuminAR project, he says, was "to build a new form factor for a computer that wasn't screen-centric or keyboard-based."
Imagine having a second screen on your desk that could let you scroll through last month's invoices as you sought the answer to a customer's question, or a "sales assistant" at an electronics store that could identify the mobile phone you've placed on the counter, and show you information about its features.
LuminAR communicates wirelessly to a computer tucked away beneath the desk. The camera and built-in depth sensor allow it to see hand gestures and objects, and the display splashes a full-color image onto any surface. Linder has built robotic versions of Luminar that can rotate and "zoom in" on their own, making the projected image larger, as well as versions that you move manually.
"You might want to do a Skype videoconference on the table, without worrying about booting up your computer or finding a headset," Linder says. "That's the way computation should be — more like using the microwave in your kitchen, and less like using a computer."
So far, Linder has built six LuminAR prototypes using a pico projector from Microvision; one was shown at the National Retail Federation Convention earlier this year, as part of Intel's "Connected Store" concept display. "We showed a way to bring the online shopping experience to the counter of a store like Best Buy," Linder says. "You might want to videoconference with an expert to ask questions about a particular product, or see the batteries and SIM cards and printers that are compatible with the product you're looking at."
Linder, who previously worked in R&D at Samsung and was an entrepreneur-in-residence at Jerusalem Venture Partners, says he doesn't have any immediate plans to try to commercialize LuminAR. (He's focused on finishing his thesis.) But there has been a lot of interest from big companies, he says. "Banks are very interested, as a way to show their customers what the teller is doing on that screen behind the glass," Linder says.
Linder believes that after the mobile and tablet computing waves, we'll see more interfaces built into our environments. As he puts it, "the world is next."
Here are two videos that show different LuminAR prototypes.
Verizon buys CloudSwitch, Burlington start-up that set out to make cloud services safe for big companies
CloudSwitch will be part of Verizon's Terremark business unit; Verizon bought the IT services provider earlier this year for $1.4 billion.
Terremark and CloudSwitch had already been partners. CloudSwitch CEO John McEleney tells me that the deal was sealed just after Fourth of July, when he met with Verizon EVP John Diercksen at the Red Barn in Westport, CT. McEleney says that CloudSwitch had been planning to raise a third round of venture capital this fall, but Verizon's offer presumably was more appealing than running that gauntlet.
But the deal wasn't without hiccups. "As the final things were happening, you had the US almost defaulting, the stock market going down, and the Verizon strike," says McEleney. "I was like, 'My god, can we get some tailwinds here?'"
As part of the deal, McEleney says that CloudSwitch's roughly 30 employees — including the senior management — will stick around in Burlington. "This will be Terremark's hub of software development for the cloud," he says.
McEleney says that Terremark and Verizon are "respectful of what Amazon Web Services has done, capturing the hearts and minds of the developer community. But we think there's still a huge opportunity to provide enterprise cloud services, with support and service level agreements."
As for the acquisition price, McEleney claims that "the investors and employees and senior management are very, very happy with the deal."
That's two "verys," for those keeping score at home.
Entrepreneur laying groundwork for a videogame-focused venture firm in Boston
There's no single firm in Massachusetts that regularly invests in gaming start-ups. (However Polaris Venture Partners and Highland Capital Partners did both invest in Turbine Entertainment, a developer of massively-multiplayer games like "Lord of the Rings Online" which is now owned by Warner Bros., and also Hangout Industries, a developer of virtual worlds and Facebook games that is now out of business.) "There's a void here in New England," Mahajan says. "We have a great talent pool in gaming, but the rest of the ecosystem isn't at the same level."
Mahajan's vision is for a $30 million to $50 million fund that would make $200,000 or $300,000 initial investments. One possibility, he says, would be helping to fund gaming and digital media companies that had already graduated from accelerator programs like TechStars, Y Combinator, and MassChallenge, "and putting them together with people who have lots of industry experience."
Mahajan, previously a founder of Motus Games, doesn't yet have a working name for the firm, and says that he hasn't begun talking with potential investors. "I've spent the past six months running around to gaming CEOs and young start-ups, trying to talk myself out of the idea," he says. "But people think it's actually a good idea." (Of course, what entrepreneur would argue against making more money available to entrepreneurs?) Among those he has spoken to is Mike Dornbrook, the former chief operating officer of Harmonix Music Systems, who has made several angel investments recently in local gaming start-ups.
"I'm willing to help if it gets off the ground," Dornbrook writes in an e-mail, adding that he thinks the likelihood of raising $50 million is "miniscule." Mahajan himself acknowledges that fundraising is tough for any new venture firm.
Mahajan's prior project had been Motus Games, a Cambridge company that was developing a videogame controller for PCs that it touted as more sophisticated as the Nintendo Wii. (Motus also developed a motion sensor called the iClub, which attached to golf clubs to provide feedback on the player's swing.) It's not clear what happened to that company. Mahajan's co-founders left for other jobs last year. The company's phone has been disconnected, and its name is no longer listed in the lobby of its onetime Central Square headquarters. Mahajan said he couldn't comment on the status of Motus. "Good things are happening," he says, "but I'm in a quiet period, so I really can't tell you."
Raizlabs launches AppBlade, to simplify testing and deployment of mobile apps
"We've been using it with our clients for a while," Raiz says, "and we're starting to roll it out to other developers now." AppBlade can monitor who within a company has installed an app and who hasn't; trigger auto-upgrades of apps to make sure everyone has the latest version; provide reports on app usage and clues as to why an app may be crashing; and can nuke an app remotely if, for instance, a salesperson quits and you no longer want her to have access to your customer info. AppBlade is useful primarily for apps that haven't yet been released through Apple's online store, and also those internal corporate apps that aren't intended to be released to the public.
Raiz says the firm started to develop AppBlade late last year, and has been using it with clients like Rue La La, Sermo, and uTest. He describes AppBlade as "a start-up within our own company," funded by Raizlabs' revenues.
AppBlade's biggest competitor out of the gate will be TestFlight, which offers a free version of an app distribution-and-testing service. "We're trying to be a premium offering, and provide a lot of value," he says. AppBlade will be cost $49 a month for app developers (which will cover up to 10 apps), and $49 per year, per user for corporate customers.
Raizlabs helped develop the original RunKeeper fitness app, and has also worked with clients like Benjamin Moore, Intuit, Bank of America, and Hallmark.
HubSpot tries to encourage software developers at big companies to make a 'prison break'
Dharmesh Shah, chief technology officer of HubSpot, thinks so. The Cambridge digital marketing start-up is launching a new recruitment campaign this week, "Prison Break," that attempts to persuade experienced engineers to escape from their bureaucratic Bastilles. It offers a signing bonus that escalates by $1,000 for every year that a new HubSpot hire has worked at a big company. A 15-year IBM employee who worked at Digital Equipment for five years prior to joining Big Blue, for instance, would get a $20,000 signing bonus.
"The challenge we face in recruiting," says Shah, "is finding people with a lot of flight hours, who have deployed big systems. And that tends to be people who've spent five, ten, or fifteen years at bigger companies." Shah also thinks that many start-ups wind up competing directly with other start-ups for the software developers who know they want to work at a start-up. By focusing on employees working at larger companies — which he defines as having 1,000-plus employees — Shah believes that "we can bring new blood into the start-up community, without having to fight other start-ups for the best people."
What about people who believe that big company jobs are inherently more secure than working at a start-up? Shah says, "I think we're about as safe as working at a Cisco or a Borders." (Last month, Cisco announced it would cut 6500 jobs, and Borders said it would lay off all of its employees as part of its liquidation.) HubSpot has raised about $65 million in venture capital funding; the company focuses on helping businesses "get found" on the Internet by prospective customers, using social media like blogs and strategies that increase visibility on search engines.
I was also curious whether the Prison Break campaign might bring HubSpot the employees least likely to succeed as a start-up: comfy old-timers used to their reserved parking spots and days that end at five. "We think we can filter those people out," says Shah. "I think there are gems to be found — people who are tired of working on projects that don't get released, or are frustrated by the bureaucracy they have to deal with."
Shah said he'd consider the program a "big win" if it brought his company just four or five senior engineers. HubSpot has about 265 employees.
And HubSpot isn't the only local company developing attention-getting recruiting programs. FlipKey is a division of the Newton-based travel site TripAdvisor that enables people to rent vacation homes and condos. Founder T.J. Mahony tells me that any new junior or senior engineer hired by the company will get a week's free stay in the home of their choice — anything listed on the site, including the Hawaiian home that President Obama has stayed in, or a "Hobbit"-inspired hut in Montana.
FlipKey's culture — an independent team inside a fast-growing company, with a kegerator in its kitchen — "used to attract great hires," Mahony writes via e-mail, "but that doesn't seem to be enough anymore."
Travel site Hopper, with backing from Atlas Venture, aims to take vacation planning back to the '70s
The arrival of Web sites like Expedia, Priceline, and TripAdvisor have put a lot of power into your hands when it comes to vacation-planning (and put a lot of travel agents out of business.) But they've also made the process more time-consuming, and you're never quite sure that you're seeing all of the best options of things to do, places to stay, and ways to get there.
A Montreal start-up called Hopper is working on that problem, with a vision of becoming the Google of travel. Beyond just searching for the cheapest flight or hotel room, Hopper wants to let you say, "Scuba-diving in the Caribbean," and find a ranking of the best islands for doing that, based on the Web's consensus opinion. (There's also a way to book flights.) The start-up is in the process of closing a funding round in the neighborhood of $8 million, led by Cambridge-based Atlas Venture, and has been hunting for office space — and software development talent — in Cambridge (the company will continue to operate in Montreal as well.) Hopper earlier raised $2 million from Canada's Brightspark Ventures.
"Travel sites are mainly good at informational stuff, like giving you airfares or hotel prices when you give them specific airport codes or cities you want to visit," says Hopper founder Frederic Lalonde, a former vice president at Expedia. "We're interested in adding inspirational stuff, like the best restaurants to try for a particular kind of food, the best places to golf in the Mediterranean, or to see the running of the bulls." Lalonde says the start-up is building its own index of travel-related information on the Web, from tour operators, restaurant review blogs, and magazines, for instance. "We're building the largest database of structured travel data," Lalonde says, noting that they've already indexed about 100 million Web pages related to various destinations.
Hopper's demo shows how the site will work with information about Spain, and Lalonde says that an international version of the site will launch "within weeks," followed by a U.S. version.
Lalonde notes that between Kayak (Concord), ITA Software (Cambridge), Goby (Boston), and TripAdvisor (Newton), the Boston area has a strong cluster of travel-related companies. He says that at least one of Hopper's three founders will move to Cambridge from Montreal. (The others founders are Joost Ouwerkerk and Sebastien Rainville.) They've been working on Hopper since 2007.
Here's an interview with Lalonde from earlier this year, from the Web site NextMontreal, and a recent news release announcing that travel industry analyst Philip Wolf has joined Hopper's board.
Background briefing: Demandware, peddling e-commerce functionality on demand, files to go public
The latest Massachusetts company to start down the IPO chute is Demandware, which helps companies operate e-commerce sites. North Bridge Venture Partners and General Catalyst each own a third of Demandware; the company has raised $66 million in venture capital thus far. Demandware hopes to raise about $100 million in the public offering. The company is very much in the vein of other local ventures, like OpenMarket and ATG, that have built big businesses around helping customers sell successfully on the Internet.
Here's Demandware's S-1 filing.
The company started life in the Harvard Square offices of General Catalyst, where founder Stephan Schambach was an entrepreneur-in-residence in 2004. Schaumbach was a big believer that all sorts of software would shift to being delivered on a pay-as-you-go, or software-as-a-service, model. But the investors at General Catalyst weren't initially convinced that companies would trust something as important as e-commerce sales to a third-party vendor. But once Schambach convinced the legendary New York delicatessen Zabar's to sign on as a first customer, the investors committed. (Here's a video that talks about the Zabar's/Demandware relationship.)
Now, the company can boast that it powers the Web sites of Barney's New York, Columbia Sportswear, Puma, Panasonic, and Callaway Golf, among others.
Demandware had a net loss of $10.4 million in 2009, but eked out a $309,000 profit last year, on revenues of $36.7 million. Thomas Ebling joined the company last February as CEO; he'd previously led ProfitLogic, a merchandizing optimization start-up that was acquired by Oracle.
According to the IPO documents, Schambach, a German-born entrepreneur who took his last company public on the Frankfurt Stock Exchange, has managed to hold onto 20 percent of Demandware.
(I am grateful to the sources who suggested to me earlier this year that Demandware was a likely candidate for either an IPO or acquisition in 2011.)
Sociometric Solutions deploying digital 'dog tags' to track employee interactions
Would you wear it?
The digital dog tag, which Watertown-based Sociometric Solutions calls the "sociometric badge," has a built-in microphone that can gauge how much you talk (versus how much you listen); an accelerometer that can tell how much you sit versus how much you move around; and an infrared sensor that can tell when you're facing other people wearing the badges.
"When a consultant comes into a company, they look at org charts and do interviews," says Ben Waber (pictured at right), CEO of Sociometric Solutions and a senior researcher at Harvard Business School. "But our approach is to use these sensors to see how people really interact, over a period of a month or two." They're especially useful, Waber says, for tracking informal communications that people might not report in an interview — like a conversation in a cafeteria line. "Surveys and interviews are just bad at getting information about sporadic interactions," he says. And human interaction is a big factor in all sorts of organizational change initiatives; new product development endeavors; and mergers.
The device, developed at the MIT Media Lab, was used in 2009 by a Bank of America call center in Rhode Island. They found that call center workers who interacted more with their colleagues felt less stressed, handled calls more quickly, but had equivalent customer approval ratings to those who didn't interact as much. Writing about the experiment, Forbes Magazine observed, "Informally talking out problems and solutions, it seemed, produced better results than following the employee handbook or obeying managers' e-mailed instructions." As a result, the bank scheduled employees' breaks so that they could talk more often with one another, rather than less. (Previously, their breaks had been staggered.)
Combined with information about who e-mails with whom (see illustration below), data the badges generate about interpersonal interaction can highlight who spreads information within a company, and who the experts are about given topics. It's also a way to show management which departments don't tend to communicate with which other departments, Waber says. Working with a bank in Germany, the company noticed that people didn't talk face-to-face very often with the customer service staffers — until a new product ran into problems after it was launched.
Waber says that when Sociometric Solutions works with a client company, wearing the badges is entirely voluntary — but more than 90 percent of employees usually participate. The devices need to be recharged daily. (It is fun to imagine the hijinks that would ensue if two employees surreptitiously switch badges, or if an employee attempted to make herself seem more important by walking around the company talking to people from every department — but asking something inane, like where the nearest soda machine is.)
Sociometric Solutions has five employees, Waber says, and is hiring more. It hasn't raised outside funding: "We've been boot-strapping on revenue, and we're very profitable," says Waber. He says they've already produced about 1000 of the badges; in addition to using them on Sociometric's own consulting assignments, they also sell them to academic researchers for about $500 a pop. MIT professor Sandy Pentland serves as the company's chairman.
Bullhorn monitors social media to help recruiters and companies find candidates — before they're on the market
Bullhorn, which makes software used by recruiters and human resources executives, thinks so. The Boston company has created a feature called Radar, part of a new, free software offering, that tries to identify talent before that talent is actively out looking for a new gig.
"It's career suicide if your boss catches you putting your résumé on a job site," says Art Papas, Bullhorn's CEO and co-founder. Radar aims to help recruiters and HR execs find people who haven't yet taken that step. It starts by examining the first- and second-degree connections that a recruiter has on Facebook, LinkedIn, and Twitter (IE, people in their networks, and people in their friend's networks — but not friends of friends).
Has someone updated their LinkedIn profile, added endorsements from former colleagues, and connected with a recruiter or two? Odds are they're dipping a toe in the water, says Papas. Same thing if they've added information to their Facebook profile about places they've worked. Papas says Radar also notices if you start untagging yourself — removing your name — on potentially-embarrassing photos on Facebook. "That's an indicator of a potential move," Papas says, "especially if you haven't changed your relationship status." In other words, if you're dissociating yourself from photos but haven't recently ditched a significant other, you're probably thinking about changing jobs.
The next step for Radar, Papas says, will be trying to extract information from people's Facebook status messages. "You see complaints about work, or people writing that they're excited that Friday is almost here," Papas says. "If we can crack that, it will be really powerful. But it's hard to know if you're just excited about something happening this weekend, or truly tired of your job."
Within Bullhorn's new software, Bullhorn Reach, the Radar feature creates a list for recruiters and HR execs that shows them individuals who may be looking for a job. It gives them the option of contacting the potential job hunters through one of those social networks. Papas explains, "A recruiter will usually get in touch to say, 'Hey, I'm just checking in to see what's going on. We're always looking for great people. Do you know of anybody?' It's a very low-pressure line to get a conversation going." If a recruiter dings an individual twice, indicating that they're not actually interested in a new job, Radar learns from that. "Clearly we did something wrong, and we put that into the algorithm to make it smarter," Papas says.
Yes, Radar sounds a bit stalk-y. But for job seekers, the benefit is being able to get found by new employers, without having to openly wave a flag and declare that they're in the market. Papas says, "There hasn't been a good avenue for folks who are gainfully employed and want to keep it that way, but also want to poke their heads out and see what might be available."
Bullhorn launched an early version of Bullhorn Reach last October. Next week marks the official launch. The company, funded by Highland Capital Partners and General Catalyst, has 165 employees.
Once again, Curt Schilling pitches investors on 38 Studios, his Rhode Island videogame start-up
So far, the Rhode Island loan — which lured the company to the Ocean State from Massachuetts, and which could total $52.5 million if 38 Studios hits certain business milestones — has been 38 Studios' largest outside funding. Through a publishing arrangement with Electronic Arts, that big California game company is likely funding most of the development costs for the first 38 Studios game, "Kingdoms of Amalur: Reckoning," due out in 2012. But the company's most dedicated backer thus far has been founder and chairman Curt Schilling himself: a 2010 Harvard Business School case study on the start-up noted that he'd poured nearly $20 million of his own money into 38 Studios between 2006 and 2008. The case study also detailed Schilling's inability to agree to terms with an array of prospective investors. (Schilling, in case you've forgotten, was the pitching ace who helped the Red Sox win the 2004 and 2007 World Series — and he's also a die-hard gamer.)
The investment overview that UBS has been e-mailing around says that 38 Studios' first game, the single-player role-playing game "Reckoning," will be out in the first quarter of next year, and its second game, "Copernicus," a massively-multiplayer online game (MMO) similar to "World of Warcraft," will be released in the fourth quarter. (Company-supplied concept art from "Copernicus" appears at right.)
It notes that "Reckoning" was previewed last month at the E3 gaming conference, winning several awards from industry publications and blogs. "Success at E3, considered the preeminent gaming conference," the UBS bankers write, "has been a major indicator of eventual commercial success for game releases historically, and the Company intends to build on this positive momentum with further media events leading up to the game’s launch."
The second game, "Copernicus," will be set in the same universe as "Reckoning," but during a different era. The pitch compares this universe to what George Lucas created with the "Star Wars" series and J.R.R. Tolkien's Middle-earth.
"With Reckoning and Copernicus launching in 2012, 38 Studios expects to achieve over $100mm in revenue in 2012," the bankers write, adding that the company expects to be "extremely profitable" by 2013. The document stresses the experience of the 38 Studios team, which includes comic book artist Todd McFarlane, author R.A. Salvatore, and game designer Ken Rolston. It also includes nine screenshots from the two games, and notes that their success could also create opportunities for toys, collectibles, movies, and comic books.
"38 Studios has established itself as the rising star to watch over the next several years in the RPG and MMO space," the UBS bankers write.
Two big questions I have: how much is 38 Studios seeking to raise, and does it need the money to finish its Copernicus game? Unfortunately, CEO Jen MacLean didn't return calls or e-mails, and a company PR rep told me the company had no comment on the fundraising document.
Would you invest?
Tonian Systems, Israel-Massachusetts start-up working on virtualization software, attracts seed funding
- Tonian's co-founders are Sharon Azulai and Adam Kaplan. Danit Segev, Tonian's recently-hired vice president of R&D, previously ran R&D for NetApp in Israel.
- Kaplan says the company intends to remain in stealth mode for a while. But "I can tell you that we are developing software in the enterprise infrastructure and virtualization space," he writes via e-mail.
- The small team is split between Charles River's Waltham office and Israel. LinkedIn lists four employees, but Kaplan suggests there are more, without being specific.
- The company plans to set up its engineering team in Israel, but have key management and marketing executives in Massachusetts.
- Bruce Sachs led the investment for Charles River; Motti Vaknin for Cedar.
- Kaplan says that Tonian took its name from the Tonian era, a geologic period that lasted for about 150 million years. "We plan to be around for a long time and create a new Tonian era," Kaplan writes.
Know any more? Post a comment, if you would.
Can Kenneth Weiss, founder of Security Dynamics, become a key player in mobile payments?
1. Our mobile phones will soon do the job of all of those rectangular pieces of plastic that crowd our wallets, whether Charlie Cards or AmEx cards.
2. Securing our phones, and protecting the wireless transactions they engage in, will require a high grade of authentication — a way for you to prove that it's really you using your Blackberry to buy that diamond engagement ring at Tiffany.
Mobile phone makers are racing to add so-called NFC (near-field communication) chips to their handsets, which would enable phones to communicate directly with cash registers. Credit card issuers like Visa are keenly interested in mobile payments, and several wireless carriers got together last November to form ISIS, a joint venture focused on developing "mobile wallet" technology. Earlier this year, PayPal acquired Fig Card, a small Boston company that had been developing its own mobile payment solution linking phones with cash registers.
I had lunch last week with Weiss to talk about his approach to the opportunity. Weiss was the founder and long-time CEO of Security Dynamics, the company that developed the SecurID token that millions of employees use to access their company's computer networks. Security Dynamics acquired RSA Security, adopted that name, and eventually was gobbled up by EMC. (Weiss was chairman and CTO of Security Dynamics when the company went public in 1994, but he left in 1996, a decade before the EMC acquisition and well before SecurID's recent security problems.)
"Identification is at the core of most of what we do today," Weiss says, "whether we're buying something at a store or traveling through an airport." He says the authentication system designed by his company, Universal Secure Registry, will offer a higher level of security on a mobile phone than you get today from a traditional credit card or passport.
First, Weiss says that none of your sensitive information — like a credit card account number or social security number — should be stored on your phone or transmitted via Bluetooth, WiFi, or any other wireless protocol over the ether. All of that, in the USR system, remains on a secure server inside a data center.
Instead, your phone would have three ways to identify that you are you. The first is a pin code that you would punch in. The second is a randomly-generated number that would appear only on your phone (similar to the way SecurID tokens work). The third is your voiceprint: the way you sound when speaking a number or phrase into the phone. Once you've successfully cleared those three hurdles, the phone would communicate with the distant server, saying, essentially, "This phone's owner is using her phone." Then, the server would communicate with the cash register to approve the transaction; it would also display a photo of the phone's owner on the register's screen, to offer one last layer of security.
Once you'd "signed in" to use your phone, you could set it to allow you to make purchases for any period of time: an hour, three hours, twelve hours. If your phone was stolen, with a single phone call you could render it unusable for payments.
You might also use your mobile phone's authentication system to grant you access to computer. "If you're sitting near it with your phone in your pocket, you'd get access, and if you walked away, the computer would become inaccessible to others," Weiss says.
It sounds swell. Weiss has been working on the idea since 2000, and has three already-issued U.S. patents, with others pending. But he's not planning to start a company to actually build the system, and even the demo he shows on his iPhone is a series of still images, not a functioning prototype. Instead, his approach is to try to license the system design to credit card issuers, mobile phone makers, the ISIS joint venture, and others interested in deploying mobile payment technology.
"I think it'd be foolish to try to compete against the giants," he says. "What I want to do is license it to them for a relatively menial amount." I asked why he wouldn't hire a team to at least build a proof-of-concept and roll it out with a few retailers. "I've been there, done that," Weiss says, referring to building his own company. "I think the curve will be faster by licensing it."
We'll see how that goes. Weiss says he hasn't managed to arouse much interest by writing to tech giants like Apple and Google. But USR plans to issue a press release today announcing that its electronic wallet technology is now available for licensing. The release calls it "the only mobile transaction technology that does not transmit sensitive information from or store exploitable information in the mobile device."
PowerInbox, looking to upgrade the e-mail experience, raises $1 million from Atlas Venture, Longworth and Correlation Ventures
"I'd met them through AngelList," Fagnan recalls. "And after we talked for a while, I asked them, 'Why are you locating in California? You're kind of an outsider here.' Matt said he thought it was the place to be, and I said, 'I think there's a good argument for you guys locating in Boston.'"
To help make the case, Fagnan connected Thazhmon with Boston entrepreneurs like Steve Kane of LuckyLabs; Vertica CEO Chris Lynch; and Brian Halligan of HubSpot. Fagnan made the case that the company would find it easier to assemble a team in Boston, far from the Valley's recruiting madness. "Boston is just a better place to build things right now," he says.
But money talks, and with Atlas (based in Cambridge) and Longworth Venture Partners (based in Waltham) joining Correlation Ventures (California) in a $1 million seed round for PowerInbox, the team is in Boston this week scouting for office space.
Part of the PowerInbox crew hails from the videogame-maker Electronic Arts, where they worked on the Madden NFL Football series. Fagnan says, "They have this whole idea of bringing 'gamification' to your inbox, trying to make it more interesting, more engaging." But rather than giving you points or badges for responding to messages quickly, it looks like the PowerInbox app, built in HTML5, primarily wants to weave services you use regularly into your existing e-mail account, allowing you to post on someone's Facebook wall, buy a Groupon, track a package, or tend your crops on Farmville. "They're trying to keep it so you never have to leave your inbox to do things," Fagnan says. PowerInbox is running an invitation-only beta now, but Fagnan says they'll have something available to the public by July.
Atlas seems to be operating a kind of "Come to Massachusetts" campaign that would make any economic development agency envious. Aside from PowerInbox, the company has also been assisting a Montreal travel search start-up, Hopper, in moving about two-thirds of its team to Boston. And last week, the firm announced that it was funding two TechStars Boston companies that came here from elsewhere: GrabCAD (Estonia) and Kinvey (whose founders met in Austin). Both plan to set up shop in the Boston area.
TNW wrote about PowerInbox in March, and here's a video that the blogger Robert Scoble shot with PowerInbox founder Matt Thazhmon back in February:
Savored.com, offering discounts for discerning diners, launches in Boston
A New York start-up called Savored, one of the newer entrants in the increasingly crowded business of offering deals on meals, says it has created just such a thing. The company launches in Boston this week, with offers at local eateries like Petit Robert Bistro, Sibling Rivalry, Sandrine's, and Central Kitchen. (Prior to today, Savored was known as VillageVines.)
I caught up with co-founder Ben McKean, a Concord native, last week to find out how it works.
Most people are by now familiar with Groupon, which offers half-off discounts at restaurants — $50 worth of food for $25, for instance, as long as you're willing to pay in advance. Those offers, McKean says, may bring in hordes of new diners, but there's little incentive to consumer more than $50 worth of food, and they can overwhelm a restaurant at already busy times, like Friday and Saturday nights. (Not to mention the two or three days before the Groupon coupon expires at a given restaurant.)
With Savored, you pay $10 for a restaurant reservation at a specific time. (Say, 7 PM on a Sunday night.) That gets you a 40 percent discount on your entire bill (not including booze, which cannot legally be discounted in Massachusetts.) "You can save a huge amount of money if you want to splurge," McKean says. "We had someone save $1300 at Delmonico's in New York." And the discount is linked to your reservation, so there's no coupon to cough up at the end of the meal. "With coupons," McKean says, "the people at the next table feel slighted because they didn't know about the discount, and it definitely sends a certain impression if you're at a business dinner or lunch." (In other cities, Savored offers a 30 percent discount, but that applies to the bar tab, too.)
Savored pockets the $10 reservation fee, and the restaurants with which it works are happy, McKean contends, to fill tables that would've otherwise sat empty. "Ninety percent of the restaurants we work with have never put offers on a deals site" like Groupon or LivingSocial, McKean says. Most give Savored between 6 and 10 reservations a night. He estimates that the company will help restaurants generate as much as $25 million in additional revenue this year.
Among the venture capital firms that invested $3 million in Savored earlier this year was Grand Banks Capital in Wellesley.
In addition to Boston, Savored operates in Atlanta, Chicago, Denver, Los Angeles, Miami, New York, Philadelphia, San Francisco, and Washington, D.C.
(Note: I corrected this blog post, which earlier had included bad info about booze being covered by the discount — which is illegal in our fine state.)
Kibits Corp., developing app for mobile collaboration, raises $1 million
Kibits CEO Matt Cutler isn't yet talking about the company, but the Kibits Web site says the company is "working on some new approaches to real-time mobile collaboration," adding, "We expect to come up for air later this year." Cutler was the chief marketing officer at Boston-based Visible Measures, an online video analytics firm, until February; he worked together with his Kibits co-founder and CTO David Greenstein in the mid-1990s, at net.Genesis. (General Catalyst partner Larry Bohn, who oversaw the Kibits investment for that firm, was once CEO at net.Genesis, an Internet analytics company that went public before being acquired by SPSS in 2001.) The third Kibits employee is designer Jason Robb.
One local venture capitalist who is familiar with the company — but who ultimately did not invest — tells me that Kibits will support "insta-grouping," forming groups on a mobile device while you are sitting with colleagues in a conference room, or attending a little league game with other parents. Then, you'll be able to share content and otherwise interact with members of the group using the Kibits app. Some groups might last for months or years, but others might be short-lived (imagine a group of people trying to coordinate to-dos and events around a wedding weekend, for instance.)
Cutler declined to comment on the app's functionality, and I'm sure it will have evolved quite a bit by the time the start-up unveils its product.
Gazelle bounds into Boston's Fort Point Channel; outsources logistics to Texas firm
Ganot says the company is moving about 80 of its 100 full-time employees into 22,000 square feet of space on Thomson Place. As part of the move, Gazelle is shifting all of its operational activities — like receiving, inspecting, photographing, and shipping the used items — to Dallas, Texas. That facility will be run by Teleplan, a logistics firm that Gazelle contracts with, but about a half-dozen Gazelle employees will relocate to Texas, or split their time between Texas and Boston, Ganot says.
To prepare for that change, Ganot says the company has been reducing the size of its internal operations staff through attrition, and dialing down its use of contract and temporary employees. He adds via e-mail, "Many other full-time employees are in the midst of transitioning into new roles in our growing Boston team, including customer care, eCommerce, and customer experience. As many of our operations employees are also local students, some will also be moving into internship and mentorship programs this summer, mostly in our marketing department."
As for the move to Fort Point Channel — a neighborhood included in the City of Boston's Innovation District initiative — Ganot writes, "Locating the new office near public transit was key in our decision to move, but the option to be near like-minded companies and be a part of rejuvenating that area, along with the boost we felt it would give us in local brand awareness (both in terms of our service and recruiting), all combined to make it the most attractive option."
He says the company plans to add about ten more employees at the new Boston office by the end of 2011.
Ganot says Gazelle has engaged the Boston non-profit Artists for Humanity to create some artwork for Gazelle's new headquarters — using all recycled materials.
Apptegic, deciphering how customers interact with Web-based apps, attracts angel funding from Netezza founder Jit Saxena
And the company has attracted about $250,000 in angel funding from Netezza founder Jit Saxena; his publicly-held data warehousing company was acquired by IBM last year for $1.7 billion.
"The big vision is that we think most businesses' relationships with their customers and partners is mediated through software," says co-founder and CEO Karl Wirth. "That is true today, and it's only getting more true." While IT staffers are responsible for making sure those customer-facing applications are up and running, executives in marketing or product management don't have much insight into what customers are actually doing with them. Wirth says, "If you imagine a SaaS application, you want to know what features people are using; who's uploading documents and how often; who's sharing stuff; what problems people are having. You can start exploring ways to improve customers' experience, and do things like figure out who might be good candidates for an up-sell."
He says Apptegic has about a dozen companies participating in its beta test, including one Fortune 100 company. "We've talked to more than 70 SaaS companies since November, and they all get the importance of what we call 'application usage analytics,' but a lot of them have been trying to solve it themselves. So you have the engineers who are busy building the SaaS application also trying to solve this problem. We are working on a way for them to buy the solution, rather than build it," Wirth says.
Apptegic co-founders Karl Wirth and Greg Hinkle met while working for RedHat, the open source biggie, in Westford; Wirth had earlier been at RSA Security, and Hinkle at JBoss. The four-person company doesn't yet have an office, and Wirth says they're currently out trying to raise additional funding.
Longworth and Fairhaven back VeloBit, start-up seeking to spur adoption of solid-state disk drives for storage
"There's a big wave toward using solid-state disks, but there are two issues gating adoption," says VeloBit chief executive Duncan McCallum. "The first is that solid-state drives are good for reading information, but comparatively slow for writing it. Today, the incumbents address the speed problem with a lot of expensive technology, and you end up with devices that cost $10 to $40 per gigabyte. The second problem is the complexity of managing solid-state drives along with all kinds of other storage, from tape to RAM to disk drives."
McCallum says VeloBit's software will allow companies to get better performance with inexpensive solid-state drives made by companies like Intel. He says the company's solution will compete with players like Fusion-io, a Utah storage company currently gunning for an initial public offering.
"We're coming at this problem with an all-software solution," McCallum says, "which means we think we can do a lot of our selling via the Internet, supported by telesales reps, rather than taking lots of executives to dinner in New York."
VeloBit's funding comes from Fairhaven Capital in Cambridge and Longworth Venture Partners in Waltham. McCallum says that for competitive reasons, the company isn't disclosing the amount it has raised, though he calls it "a fairly typical A round" in the single-digit millions. VeloBit has fewer than ten employees at its Boxborough offices.
Fairhaven managing director Rick Grinnell says that VeloBit caught his interest because it promises to offer "better performance without having to pay up for expensive hardware."
VeloBit's technical founder is Qing Yang, director of the High Performance Computing Lab at the University of Rhode Island. The third co-founder, Bruno Alterescu, served as a senior advisor to former EMC chief executive Michael Ruettgers.
Founded last fall, VeloBit was originally known as Phast Data Inc. McCallum's last start-up, Cilk Arts, was acquired for an undisclosed amount by Intel in 2009.
Groupon CEO Andrew Mason's letter to potential stockholders, from company's IPO filing
But first, a few data points: Groupon said that it had revenues of $644 million in the first quarter of this year... 83 million subscribers who receive the company's daily e-mails offering discounts with local merchants...and 7,107 employees. (The fast-growing company still racked up a net loss of $146 million in the first quarter of the year, and $456 million last year.) Groupon hopes to raise as much as $750 million in its initial public offering.
In Boston, the second-oldest market that Groupon operates in (after Chicago), the company counted 778,000 subscribers to its e-mails at the end of March. In the first quarter of 2011, it sold 388,000 Groupon coupons, bringing in $9.3 million in revenue.
Here's Mason's letter in its entirety.
Dear Potential Stockholders,
On the day of this writing, Groupon's over 7,000 employees offered more than 1,000 daily deals to 83 million subscribers across 43 countries and have sold to date over 70 million Groupons. Reaching this scale in about 30 months required a great deal of operating flexibility, dating back to Groupon's founding.
Before Groupon, there was The Point—a website launched in November 2007 after my former employer and one of my co-founders, Eric Lefkofsky, asked me to leave graduate school so we could start a business. The Point is a social action platform that lets anyone organize a campaign asking others to give money or take action as a group, but only once a "tipping point" of people agree to participate.
I started The Point to empower the little guy and solve the world's unsolvable problems. A year later, I started Groupon to get Eric to stop bugging me to find a business model. Groupon, which started as a side project in November 2008, applied The Point's technology to group buying. By January 2009, its popularity soaring, we had fully shifted our attention to Groupon.
I'm writing this letter to provide some insight into how we run Groupon. While we're looking forward to being a public company, we intend to continue operating according to the long-term focused principles that have gotten us to this point. These include:
We aggressively invest in growth.
We spend a lot of money acquiring new subscribers because we can measure the return and believe in the long-term value of the marketplace we're creating. In the past, we've made investments in growth that turned a healthy forecasted quarterly profit into a sizable loss. When we see opportunities to invest in long-term growth, expect that we will pursue them regardless of certain short-term consequences.
FULL ENTRYDivoty launches, teeing up discounts for New England golfers
The reality — so far, at least — is a bit less dazzling. Divoty is offering a round at the Glen Ellen Country Club in Millis for a foursome, including carts, for $200 (a 33 percent discount, according to the company). Soon, they'll sell 18 holes with a cart for one golfer at the Gardner Municipal Golf Course for $40 (20 percent off the typical $50 weekend rate, or 11 percent off the weekday price, by my calculation), and a few one-hour lessons with Boston College head golf coach Trevor Drum for $80 (a 43 percent discount, Divoty says.)
"Our mission is to secure any deals that can get people playing more, or playing better," says co-founder Brian Krause. "In the summer months, we're hoping to see a lot of greens fee deals, but also some deals for golf product and golf retailers too, if they make sense. And there is a lot of interest from the golf pro community to do deals on lessons, either stand-alone, or as a package to 'learn & play' their course."
Divoty has forged a partnership with the New England PGA, which, Krause explains, means that "we've agreed that we will only work with facilities that have a PGA pro affiliated with them, to help them increase membership and deliver added value to their existing member base of pros. "
Krause says his Divoty co-founder, Kevin O'Brien, is a former golf pro at the Cohasset Golf Club and Myopia Hunt Club. They've bootstrapped the company so far, and plan to present a new deal to Divoty subscribers every three days at the start.
Divoty isn't the only "daily deal" site designed for duffers, of course. But competitors like 14 Stix and CaddiesBag are focused more on golf apparel, equipment, and accessories — as opposed to regionally-relevant lessons and greens fees.
Executive shuffle at Heartland Robotics: Paula Long out, Elaine Chen in as head of product development
Long had been a co-founder of EqualLogic, a New Hampshire data storage company acquired by Dell in 2007 for $1.4 billion, just as the company was about to launch its IPO.
Long is being replaced at Heartland Robotics by Elaine Chen, a veteran of start-ups like Zeo, Zeemote, and Sensable Technologies. Chen started work at Heartland this week.
Heartland is high on my list of stealthy Boston start-ups I'm eager to hear more from. The company is working on a low-cost (~$5000), easily-trainable robot designed for light manufacturing and packaging tasks, I'm told, and it has raised $32 million in funding so far — some of it from Bezos Expeditions, the personal investment firm of Amazon.com founder Jeff Bezos.
Eckert says that Heartland has about 35 employees, and is still hiring, primarily for engineers.
From an earlier blog post I wrote about Heartland:
If the robot truly costs $5,000, one visitor to Heartland told me, then companies that haven't previously considered deploying robots in their business would be able to purchase one, see how it contributed, and then either buy more or simply write it off as an inexpensive experiment. "We've seen robots that are expensive and require a lot of customization," said this person. "Those are like mainframes and minicomputers. Heartland believes they're developing the PC of the robotics world."
We'll see...
Grubwithus, gathering strangers around restaurant tables, launches in Boston next week
Here's how the service works: you buy your meal in advance, getting a 20 or 30 percent discount on a restaurant's normal rate. (Taxes and gratuity are also paid in advance.) Most dinner groups consist of eight people, and you can invite friends along or go solo. The meals are served family-style, which gives you a chance to try several appetizers, entrees, and sides. People who reserve a spot at the table first pay a little less than those who commit later; the price of the meal increases 50 cents with each person who signs on. On the site, you can see photos and profiles of the other people who'll be joining you, including info about where they work and their hobbies.
Among the Boston restaurants that have signed on to participate so far are Maurizio's in the North End; Masa Southwest Bar & Grill in the South End; and Hana Sushi in Cambridge.
"Generally, the meals are all about being social," says founder Eddy Lu. "But there's always a group of people who want to eat with a purpose, so some meals have tags that tell you they're for people interested in start-ups or the real estate industry, for example." Among those that Grubwithus appeals to, Lu says, are "consultants who travel a lot, and of course, people who are single. We think there are girls who would never use a dating site, but would definitely go out to dinner when they thought they'd have a chance to meet a few interesting people, as opposed to a single blind date." The site got its start, Lu says, "when my co-founder and I moved to Chicago from LA for work, and we didn't know anyone."
Grubwithus launched last summer in Chicago, and also operates in New York, Washington, San Francisco, and Los Angeles.
Grubwithus tends to organize dinners on Sunday through Thursday nights, when restaurants aren't as busy as they are on weekends. And unlike "daily deal" discount services like Groupon or Living Social, Lu says Grubwithus doesn't ask restaurants to cut prices in half, and then hand half of the remaining revenue over to the discount service. Lu says Grubwithus generally takes a commission of 20 percent from the price users pay for a meal.
Grubwithus raised $1.6 million from a group of venture capital firms and angel investors earlier this month. (The angels included actor Ashton Kutcher. Perhaps he and Demi will participate in some Grubwithus meals in LA?)
I'll give Grubwithus a whirl once it's live, and let you know how it goes...
Cambridge's Crimson Hexagon pulls in $5 million more, for social media monitoring service
Cambridge-based Crimson Hexagon is announcing a $5 million funding round today from Charles F. Dolan, founder and chairman of Cablevision Systems Corp. Crimson's current CEO, Patricia Gottesman, joined the company last year; she'd spent nearly three decades working for Dolan at Cablevision. With the new funding, Crimson has raised nearly $10 million.
The company, a spin-out from Harvard's Institute for Quantitative Social Science, helps clients understand what consumers are saying about their products online — whether on blogs, Twitter, or Facebook. They call it "near real-time market research."
Gottesman says the company will use the new funding to add to its staff of 14. "We want to expand our account management and client services teams, and also add a new product or two, which will involve increasing the size of our engineering team," she says. The company will likely hire in Cambridge — where it is outgrowing its current office space — as well as New York, Los Angeles, and London, Gottesman says.
As for the company's strategic focus, Gottesman says, "We're aggressively marketing to media clients. They want to understand how to best position their content, whether it's online video or traditional TV, and they have a keen interest in advertising as a vital component of the digital business model." She says the company is also expanding in banking and financial services.
"Hot spaces take time to form," Gottesman says, referring to the business of monitoring and analyzing what people say in the social media arena. "We think this will be a formative two-year period."
UK retailer Tesco acquires BzzAgent, digital 'word-of-mouth' pioneer
BzzAgent created a network of 800,000 agents who test new products and services — and then "buzz" about them to others, both online and off. The company has 60 full-time employees, and it raised about $14 million from local venture capital firms General Catalyst and Flybridge, as well as angel investors Shikhar Ghosh and Guli Arshad. BzzAgent will become part of Dunnhumby, a marketing data firm that Tesco owns.
One thing Dunnhumby does is operate Tesco's loyalty card programs, which involve about 200 million consumers. "We can take loyal customers and make them advocates for a product or a retailer," Balter says. "And we can explore ways to connect social media to shopper behavior," which could involve better understanding why consumers become attached to certain products, or offering in-store discounts if they're willing to try a new brand.
Dunnhumby CEO Simon Hay says in the press release announcing the deal that BzzAgent's ability to measure the return-on-investment of social media activity was also appealing to his company. Simply put, marketers want to be able to know whether all that social activity online results in purchases, Balter says: "We’re confident that connecting the dots between social and shopper marketing is going to present some tremendously powerful opportunities for marketers, and help further establish the value of social marketing spends."
Balter says that BzzAgent will stay in Boston, and that the company will become Dunnhumby's social marketing division. Balter says the terms of the acquisition don't require him to stick around for a specified period of time, but adds, "There's a big vision here that I'm really excited to put into play." (Not to mention that the acquisition jackpot, which I'm told is in the neighborhood of $60 million, only pays off in full if BzzAgent hits certain business targets.) Dunnhumby has a U.S. operation in Cincinnati, with about 400 people.
John Simon, the partner at General Catalyst who invested in BzzAgent, writes via e-mail that while the acquisition will put the BzzAgent deal "in the 'gain/win' column" for his firm, "it won't be among the highest returning investment gains we'll have or anywhere close to that, but will be a win for everyone, I think and hope."
"We've had several companies interested in acquiring BzzAgent over the years and this combination clearly makes the most strategic sense," says Jeffrey Glass, an entrepreneur-turned-VC who serves on BzzAgent's board. (Glass' current employer, Bain Capital Ventures, wasn't an investor in the company.)
BzzAgent was founded in 2001, and has worked with brands including Dunkin' Donuts, Wrigley, and Philips Sonicare.
This is the second significant social media acquisition in Boston this year, following Omnicom's $100 million purchase of Communispace back in January.
Braintree-based Elerts wants to make better use of smartphones, in case of emergency
That's the concept behind Elerts, a new angel-funded start-up in Braintree that'll be exhibiting next week at the TechCrunch Disrupt conference in New York.
"When there's an emergency and officials need to tell people, sending a text message to a smart phone is just silly," says chief executive Ed English. But that's about the best that government agencies — or universities — can do today. It's one-way communication, limited to about 100 characters, with no links to more detailed information on the Web.
Elerts, says English, "can send information about shelters near you in the case of a hurricane, or evacuation route maps. But the most powerful thing we have going is crowd-sourcing. People can snap pictures of what they're seeing around them, and send them in to officials who may not know exactly what's happening where." (At right is a sample photo report of a bus crash that a citizen might send in.)
Elerts plans to launch its app for iPhone and Android next month; they'll be free. But, English says, "the ideal situation for us would be to be pre-loaded on brand new phones, and we've seen some interest from the wireless operators." The business model involves selling software that will manage outgoing alerts and incoming citizen reports to city, state, and federal government agencies, as well as schools and airlines. (Pricing isn't set yet, but English says it'll start at about $995 a year for smaller users.) Eventually, in later releases, the Elerts control panel will also help them monitor social media information related to an emergency. After all, English observes, "in Japan, the tweets coming out were really one of the major sources for real-time news, as that event unfolded."
Text messages, English acknowledges, work on just about every mobile phone. "But why not provide better service to smartphones?" he asks. That raises the worrisome possibility that in the event of a natural disaster or terrorist attack, those who own pricey smartphones could have better survival odds. ("Survival of the richest?")
English says he started the company last July, and is now trying to raise venture capital for it. In 2005, he sold his start-up InterMute, which battled spyware, to Trend Micro in Japan.
Working alongside English at Elerts is Chris Russo, a deputy fire chief in Hull. English's brother Paul, a co-founder of the travel search site Kayak, serves on the company's board.
New dining site Goodplates hopes you'll snap pictures of your meal
CEO Rene Reinsberg gave me an explainer of how the site will work last week, over lunch at Henrietta's Table. (Goodplates is still in invitation-only beta mode.) You'll use a mobile app to snap pictures of what you order and send it to Goodplates. You can rate the dishes, and add your comments. Other Goodplates users (or your friends, imported from other services like Facebook or Twitter) can follow you to see what you're recommending, and even choose just to see your recommendations in a particular cuisine, like French or Indian.
"Our belief is that restaurant recommendations are broken," says Reinsberg, who is graduating from MIT's Sloan School of Management this spring. "People may rely on their friends or family or a restaurant critic, or they may look at Yelp, where users tend to review the restaurant as a whole. That's why we're focusing on the dish level."
Some neat features: the site includes a full menu for more than 700 restaurants in Boston and Cambridge, with Goodplates users' recommended dishes displayed at the top. You can filter recommendations to see those of only people you've chosen to follow; also see the recommendations of people they follow; or see everyone's recommendations. When you spot a particularly tasty dish on Goodplates, you can add that to a "wish list" of stuff you'd like to try.
A big question for the site is how comfortable diners will feel whipping out their smartphones to immortalize an entreé. (And whether they'll get in the habit of using Goodplates' mobile app.) "We think there's a younger demographic that takes a picture of everything," Reinsberg says. The popular foodie community Foodspotting also encourages culinary portraiture, with the emphasis more on sharing tantalizing photos than writing reviews or ratings. (Another site, Austin, Texas based Dishola, also invites users to share photos and reviews of what they're eating, similar to Goodplates.)
How will Goodplates earn money? Reinsberg says that once Goodplates has a big enough audience, it could prove an effective new marketing channel for restaurants. He also says the start-up has "some innovative ideas to increase restaurant revenues and profits."
Collaborating with Reinsberg on Goodplates is MIT computer science researcher Marek Olszewski, who was awarded a Facebook Fellowship last month.
Reinsberg says only about 100 people have been participating in the site's beta test, but says he'll let more in over the next few weeks. So if you're a frequent diner who doesn't mind snapping pictures of your meal, request an invite.
Gamesville founder Steve Kane raising money for new game start-up, LuckyLabs
LuckyLabs' clever motto is, "If you're going to squander your life, please, do it with us."
"For the vast majority of the last 17 years, I've been in digital games," Kane says. "I'm kind of a one-trick pony, but it's a pretty good trick." After selling Gamesville to Lycos for $207 million in 1999, Kane started GameLogic, which built casino-style online games intended to help generate revenue for casino operators. It was acquired for an undisclosed sum last year, by Scientific Games, after raising north of $26 million in venture capital funding.
Kane's co-founder at LuckyLabs is Noah Jessop, formerly an associate at the Cambridge venture capital firm IncTANK Ventures. The start-up has just two other employees.
Kane says the company is set up to develop multiple games, with various business models. "We're business model agnostic," he says. "Virtual goods, advertising, database marketing — they're all interesting." The company will develop games for mobile phones, tablets, and the Web, but will stay away from console games. "We want to make bite-sized entertainment, not games that require a big time investment," Kane says. "You need to look at it and start playing it immediately, or we've failed."
Among the games Kane says he has been enjoying lately: Angry Birds, Zynga Poker, Words With Friends, and GSN's Games app on Facebook.
LuckyLabs' Web site suggests that the company's first game will be called "Poke Roulette," for the iPhone. The description: "Missing the good old days of the poke wars? Wish you could poke anywhere anytime? Love the thrill of interacting with random strangers? Try PokeRoulette."
Kane is on Twitter as @stevenkane.
The Carbonite file: Boston-based backup company plans initial public offering
The company, founded in 2005, had revenues of $38.6 million in 2010, but lost $25.8 million that year because Carbonite continues "to invest heavily in customer acquisition, principally through advertising," as the S-1 form says. The company plans to begin selling its backup service in Europe and China over the course of the next year, and also plans to launch a backup service for tablet computers and smartphones.
Carbonite hopes to raise $100 million in the offering, but some analysts express skepticism that the company will be able to turn a profit, and one predicts that the stock market will have a "tepid" reaction to Carbonite's IPO.
The biggest shareholder in Carbonite is California venture capital firm Menlo Ventures. But the company's co-founders, David Friend and Jeff Flowers, still own 9.7 percent and 8.3 percent, respectively. The company has raised $67 million in venture capital, some of it from the Lexington-based angel group CommonAngels.
Some background on the company:
- In 2009, I wrote about the competition between Carbonite and Mozy, a division of EMC that sells a comparable service. (That story includes some audio from an interview I conducted with Carbonite CEO David Friend.) Talking about Carbonite's marketing strategy, Friend said at the time: "We found that the only thing that sells our product is fear."
- In March, I moderated a panel called "Secrets to Success: Inside Stories on Growth" that included Carbonite CEO David Friend. The audio is here.
- Inc. Magazine last year named Carbonite the fastest-growing IT services company in the U.S.
- Here's a recent video interview with Friend, talking about how the company attracted one million paying customers.
- I use Carbonite to back up my laptop, and when I first signed up, I wasn't thrilled with the customer service (Carbonite has since moved its customer care center from India to Maine.) Last year, I wrote this post, "A Carbonite customer confronts the CEO."
- David Friend was part of a panel discussion at the Nantucket Conference last spring (I'm on of the organizers), telling some funny stories about how the company advertises its service. Here's the MP3 audio of that panel. His story about writing a $1 million check to Rush Limbaugh for an on-air endorsement is, well, priceless.
PerkStreet Financial, promoting debit cards with cash-back rewards, adds $9 million to its coffers
Globespan partner Andy Goldfarb is joining PerkStreet's board. "Debit cards are riding a major wave of consumer demand," especially as Americans seek to shed the credit card debt they accumulated in boom times, Goldfarb says. "PerkStreet is capitalizing on that trend."
The company has now raised just over $15 million. PerkStreet CEO Dan O'Malley writes via e-mail that the new funding will be used for "two main purposes: building additional products and technology that allow customers to save even more cash, and expanding the channels we use to market our products." Additional products could include a PerkStreet mobile app and a savings account (PerkStreet currently offers only a checking account.)
PerkStreet gives its customers even more than two percent back on purchases they make with select merchants each month (this month, for instance, customers get five percent back on anything they spend with Groupon, Living Social, or Zulily). PerkStreet says it is now returning about $1 million a year in cash-back rewards to customers.
About 12 people work for PerkStreet in Boston, and another 13 work on the PerkStreet offering at the company's banking partner in Delaware, Bancorp Bank. He expects headcount to grow by about 20 percent over the rest of the year.
New iPhone app for drivers, RoadAhead, organizes the world by exit
The free app, which just appeared in the iTunes Store today, is like an expanded and annotated version of those highway signs that tell you what restaurants, hotels, and gas stations you can find at the next exit. What if you could compare the gas prices of the stations at the next exit, versus those 30 miles down the road? What if you could make sure you never drove past another doughnut shop with a five-star rating on Yelp? RoadAhead can help.
As you speed down the highway, you can ask your passenger to open up the RoadAhead app. (You should never use it while driving, of course.) It relies on the phone's internal GPS to figure out what highway you're on, and in which direction you're traveling. The app then generates a list of the upcoming exits. You can ask it to display just businesses in certain categories (pharmacies or ATMs, for instance), and to limit what it shows by proximity (leaving out stuff that's further than a mile from the exit.)
Some backstory on the business model and the company...
RoadAhead founder Jeffrey Beir says he expects the app will remain free for consumers. To generate revenue, he'll charge businesses to promote discounts — and ideally rope in new customers — with the app. "We know that at some point in the future, the user is looking for gas, food, or lodging, and that's somewhat unique," he says. "When you look at all of the sites promoting special offers and deals, they're all focused on major metro areas." By contrast, RoadAhead is focusing on the rest of the country. "The only way for these businesses to make themselves known to a traveler has been to pay to get their name on that physical sign on the side of the road," Beir says.
The app works across the U.S. (even in Alaska and Hawaii.) Beir says he hopes to add in information about local events and activities in a future release.
Beir says that he and Bob Rainis, a fellow Lotus alum, have been working on the app with a team of contractors since last Christmas. They've raised "a couple hundred thousand dollars" from Beir and "a few other former venture guys," Beir says. (He left North Bridge Venture Partners in late 2009.) "It started as a hobby kind of project," he says. "It wasn't clear that it could be a real product or company. But it sucked me in."
In addition to developing the app, Beir says he has been making a few investments of his own through an entity he calls Between Novels. So far, the firm has invested in Krush, OpenExchange Communications, and a third company that Beir wouldn't name. "I think it fits in between angel investing and large venture capital," Beir says. "The model will be around these mid-cap opportunities, companies that may need $3 million to $5 million to prove their revenue and business model, and break even, while preserving good exit opportunities."
Beir says that Between Novels will typically write a $500,000 initial check to help a company "get to a specific milestone," and then add another half-million or million to "prove the next metric." He hopes to use a handful of his own personal investments as proof points, and then put together a $50 million to $75 million fund, though he acknowledges that these are "challenging times" in which to raise a new venture fund.
Notable apps, from last night's Mobile Monday event
Here's what I found notable (some apps are available now, while others are still in development):
- Jnctns wants to overlay your social media activity, like checking into a bar with Foursquare or snapping a picture in a park, onto a map. You'd be able to view your path through a city, and also see where you intersected with friends.
- Available for iPhone and Android, Park.me helps you avoid parking tickets by explaining the rules of a given parking spot, and reminding you to move your car when the time on your meter runs out.
- I love the idea of being able to select a song on my iPhone, pay a small amount, and hear the song played on a café's or restaurant's sound system. (Even better? If you could bump the phone with your elbow, Fonz-like, to get a song for free.) Disruptive Apps is working on just that with iJukebox.
- Once you've rated a few beers with the iPhone app Brewgene, it can help guide you to other beers that you're likely to enjoy.
- Developed by a team of Olin College students, Spot lets you use an Android phone or tablet to view documents related to the place you're in. A museum might make available photos of artwork that isn't currently on display, or offer a map. A trade show might offer product detail sheets for all of its exhibitors. Even more fun: see all the photos being taken at a party.
- KangoGift lets you send digital coupons redeemable for actual gifts, like an ice cream cone or a gift basket from Lush, via text to someone's mobile phone. (Especially great if you don't know someone's address, or just don't want to pay all those extra shipping charges to send an online gift.)
- Tapwalk helps you find your way around an indoor space, like a mall or airport, that isn't well mapped by services like Google Maps. In Terminal C and jonesing for a Cinnabon? Tapwalk will lead you there.
- Ever wanted to use your Android phone to land a giant tuna? You can, with Rocketmind's Big Sport Fishing 3-D. Casting is fun; the phone vibrates in your hand. As with real fishing, you'll feel the sting of disappointment as your hook comes up empty.
- If you crossed Foursquare with Monopoly, you'd end up with something like TapCity, a location-based game for iPhones.
- TweetsByPhone will ring you up and read an important tweet to you. You'll pay about 10 cents per phone call. Is there such a thing as an important tweet (other than every tweet you've ever written)? I'm not convinced.
Custom jewelry merchant Gemvara heads for Boston's financial district
Four years later, the company, which sells customized jewelry, has raised more than $25 million, grown to 50 employees ... and is finally getting ready to move into office space of its own, across from South Station in downtown Boston.
CEO Matt Lauzon confirms that Gemvara has just signed a lease for 15,000 square feet of space on the eighth floor of One Financial Center. (The company's current space in Lexington is about 5,000 square feet, Lauzon says.) Gemvara hopes to move in next month.
Lauzon scouted locations for Gemvara in Boston and Cambridge. "We want to be the top choice for people who want to join a consumer Web company here, and to do that, we felt Boston was the best choice," he says. T3 Advisors helped Lauzon with the search.
Lauzon says that even rumors that the company was about to relocate to the city has helped recruiting. "I've talked to CEOs who've told me, 'I know someone great you should talk to, if it's true that you guys are moving to Boston,'" he says. "Most of our last five hires probably wouldn't have considered working for us in Lexington."
Gemvara has about 30 positions open, and Lauzon says the total headcount will likely hit 100 sometime in 2012.
The company has previously maintained a small office in Downtown Crossing where it handled order fulfillment; that work will soon shift south to New York, where Gemvara plans to open up a 10- or 12-person office in the Diamond District.
Lauzon is one of the co-hosts of next week's Ruby Riot party, geared to making connections among entrepreneurs and people who can help them grow their companies. That event was originally planned as a celebration to mark Gemvara's move to Boston, but has since expanded into a community gathering with sponsors and an expected 500 attendees. Lauzon says Gemvara now plans to hold a separate office-warming shindig next month.
(I first wrote about Gemvara in 2008, when the company was known as Paragon Lake.)
HappyCloud launches, aiming to help gamers achieve almost-instant gratification
That's the premise behind HappyCloud, a new start-up with operations in Cambridge and Israel that's starting a beta test today. Using a special piece of client software that downloads game content from a far-off server as it is needed, HappyCloud says it can cut today's typical game download times by more than 85 percent. (The HappyCloud client is a two megabyte download.) Unlike rival game-delivery technology from start-ups like OnLive or Gaikai, the company says it isn't actually running the game on a server and streaming the video output to your computer; that helps eliminate any lag-time, they say, and it enables them to display the game's imagery without any loss in resolution. (It also reduces HappyCloud's bandwidth and server costs.)
HappyCloud's co-founders are the brothers Jacob and David Guedalia (Jacob works in Cambridge, David in Beit Shemesh, Israel); just last fall, they sold their mobile software start-up iSkoot to Qualcomm for a price tag reported to be in the $60 million to $80 million range. (The company had raised $32 million in venture capital.)
"We've virtualized the game," Jacob Guedalia explains. "The game is executed on your PC, but all of the game content is hosted in the cloud. So there's no latency, because the game is being executed locally. Once you get the initial content buffered, it'll behave exactly as if you've installed the game on your personal computer. As you play, the server is compressing the next pieces of content you'll need and sending them, and your computer is decompressing them."
HappyCloud is using cloud services from Amazon and Akamai to host and deliver the game content. Guedalia says that game developers don't need to make any changes in order for their game to be delivered via HappyCloud. "We can literally just take the game off the DVD," Guedalia says. The company is already working with several game publishers: Warner Brothers Interactive Entertainment, Paradox Interactive, Frictional Games, and Take-Two Interactive. HappyCloud plans to take a percentage of the sale price of each game. "We can also support rental and subscription models," Guedalia says, "but we're not doing that right now." The service currently works only on PCs.
Guedalia says HappyCloud has been in the works for the past two years. "Compared to music and movies, the time it takes to download a game has been a huge bottleneck for people," he says. "The goal is to enable the one last remaining piece of media to be accessed on demand." Eventually, he envisions being able to deliver games to inexpensive set-top boxes connected to TVs, obviating the need for dedicated game consoles in the living room.
HappyCloud has about 10 employees, including general manager Eric Gastfriend, and has raised about $1 million from many of the same seed investors who backed iSkoot, including Jesselson Capital and Miles Gilburne, a former AOL executive.
Game over for Hangout and Ayeah, two Boston companies developing Facebook games
But two Boston companies have discovered that actually getting people to play your game in large numbers is extremely challenging. Hangout Industries has shut down after raising $12 million from local VC firms Highland Capital and Polaris Venture Partners, and Ayeah Games has switched off its sole game, FanSwarm, as the company evaluates its options. Ayeah had raised $530,000 from LaunchCapital, CommonAngels, and several individual investors.
Hangout had initially tried to build a virtual world akin to SecondLife, but one in which players would furnish their rooms with branded products. The intention was to use the virtual world to build affinity with stuff players would later go buy. But jumping into Hangout's 3-D universe required a software download that didn't always work well on clunkier computers. Later, the company started creating Facebook games like Fashion City, geared at young women who would organize virtual fashion shows in which models could wear digital clothing from real-world designers. (They could purchase some items using real money, to attain status in the game.) As with most Facebook games, the hope was that players would invite their networks of friends to play along with them.
The layoffs at Hangout began in 2008, and Hangout moved most of its team from Boston to California in 2009. The company last raised money — $2 million — in March of 2010, and had hoped to raise more. But Hangout's phone is now disconnected, its Web site gone, and founder Pano Anthos indicates on LinkedIn that his tenure at the company ended back in January. (Highland Capital's Bob Davis says he left the board of Hangout in 2010, adding that he'd "be really surprised if there have been any employees of the company beyond early fall 2010.") Anthos hasn't returned a phone call seeking comment, nor has Mike Hirshland, the Polaris partner who oversaw the Hangout investment.
Ayeah launched its Facebook game, FanSwarm, last Halloween; the game was touted as the first "social reality" game. By trying to predict the career trajectories of real-world celebrities, players could rise to the rank of "super-agent" or "studio mogul."
"Whether an actor scores a major role or freaks out in a hotel, it doesn't much matter, because players are scoring points whenever news is generated," the Hollywood Reporter explained. Players could also purchase virtual goods to decorate their pages on FanSwarm.
FanSwarm was the first game built by the Boston game development shop Disruptor Beam, which had a contract with Ayeah. (I covered that company's launch last March, and Disruptor Beam co-founder Jon Radoff recently published the book "Game On: Energize Your Business With Social Media Games.")
Ayeah founder Doug Levin confirmed today that he had taken FanSwarm offline. "We're trying to figure out what to do with it. There were significant challenges getting the game's monetization to meet our customer acquisition cost."
Levin said the game had some technical issues when first launched that required attention, and that it was hard to tell if players simply didn't come back (and didn't spread the word to others) after encountering problems, or simply didn't like the concept. FanSwarm attracted about 35,000 players, he said.
He says that it also proved challenging trying to introduce a new game genre — social reality — to Facebook.
Levin added that "there have been discussions about selling the assets."
Both Anthos and Levin have backgrounds in enterprise technology, not videogames. Levin was a longtime Microsoft executive who founded Black Duck Software, which helps companies manage their use of open source software code, and Anthos' last company, Pantero, was a "leading provider of semantic data integration software for Service Oriented Architectures." It was acquired by Progress Software in 2006.
eBay buys mobile payments start-up Fig Card, second Boston acquisition in April
Fig Card co-founder Max Metral wouldn't comment today on the acquisition price. When I asked whether the deal was really an "acq-hire," when the purchasing company is really seeking talent rather than a product, Metral said, "It's a bit of a hybrid, because obviously we were small. But I do think the technology is pretty important for solving the 'last inch' problem," of sending credit card information from a phone to a cash register to consummate a transaction.
I had a chance to demo Fig's wireless payment technology using my iPhone last November, at a Boston bakery.
Metral called me from the North End offices of Where Inc., but he said it isn't yet clear whether he and the rest of the Fig Card team will work from there, or move to California. (He said he just happened to be visiting today.)
Asked how the deal happened, Metral said that Hollywood power player Mike Ovitz, an acquaintance of his, introduced him to eBay chief executive John Donahoe. Metral says that the Fig team will report to Peter Chu, senior director of new ventures at PayPal.
In the PayPal blog post about the acquisition, Chu writes:
We loved their approach to point-of-sale, particularly because it was driven by the same vision that we have at PayPal – in the future, transactions can be as smart as a computer and not as dumb as paper. We won’t need our physical wallets. We’ll be able to pay any way we want, from any device, anywhere in the world with both flexibility and privacy.
Basic advice for businesses on using Facebook to connect with customers
From the column:
Does your business have a likability problem?More than a half-billion people worldwide use Facebook, and while the social network was initially about staying in touch with college pals and making sure your old flames weren’t dating someone more attractive than you, it is evolving into something else: a way for companies to communicate with current and prospective customers.
Just as you can “friend’’ someone on Facebook, you can “like’’ a business. And being liked by enough Facebook users can have a powerful impact, helping build awareness without spending anything on marketing.
“Every demographic is moving onto Facebook, so every business should have a Facebook page,’’ says Michelle McCormack, founder of Boston-based digital strategy firm LoveTheCool.
And here are a few other blog posts that collect useful advice:
- The Facebook Marketing Minimum Protocol, from Mike Troiano at Holland-Mark
- The 8 Success Criteria for Facebook Page Marketing, a slide presentation from Altimeter Group analyst Jeremiah Owyang
- How to Add the Facebook 'Like' Button to Web Pages, from Duct Tape Marketing
- Designing a Facebook Fan Page, from Smashing Magazine
- 5 Ways to Promote Your Facebook Fan Page, from Social Media Examiner
PayPal shells out $135 million for Boston's Where Inc., to foster local buying on mobile phones
I was told by an individual close to the deal that the purchase price was roughly $135 million in cash, and that's what other outlets have been reporting today. (The company had raised about $20 million in venture capital since being founded as uLocate in 2004.) Where Inc. executives say that the company will maintain an office in Boston, and will likely add to its current employee count of 120. Doyle says the company grew from 30 employees to 120 over the past 18 months.
Where Inc. had originally tried to sell a service that would enable family members to get information about one another's location using their mobile devices; more recently, it has been focused on operating an advertising network that reaches mobile phone users, and promoting its own mobile app to help consumers find relevant businesses around them (and also potentially delivering discounts.) Doyle is the company's third CEO.
"This is a very strategic acquisition by eBay," says Charley Lax, managing partner at Grand Banks Capital in Wellesley, which originally incubated the start-up in its offices. "This is a company that was at the dance with a lot of people over the years," Lax says, suggesting that several other players had made attempts to acquire the company. Lax told me that the $135 million purchase figure was wrong, but he wouldn't say whether it was high or low.
"We just don't disclose any terms of the deal," says eBay spokesperson Kathy Chui.
PayPal executive Amanda Pines explained the acquisition this way in a blog post this morning:
Local commerce companies like WHERE are blurring the lines between in-store and online shopping. By giving people hyper-local, relevant retailer information and deals on their mobile phones, we see a huge opportunity for local merchants to reach more buyers, and for consumers to get more choice and value when they shop.
Where CEO Doyle says that the company will be focused going forward on using its mobile app to "drive foot traffic to merchants," and presumably using PayPal to consummate transactions. "It's about frictionless and contextual commerce for the consumer," Doyle says. He says he'll remain in Boston, rather than moving to PayPal's San Jose headquarters: "This is all about Boston. I lived out west for eight years. I did my Valley time."
Boston has seen a string of five major mobile acquisitions over the past few years, Doyle notes, including Apple buying Quattro Wireless for $275 million and VeriSign buying m-Qube for $250 million. "Boston is a tremendous hub for mobile development," Doyle says. (I'd ask: is "hub" the right term, or "shopping mall for big tech players"?)
Here's PayPal's blog post on the deal, along with coverage from Mass High Tech, TechCrunch, and BostInnovation.
eBay's most recent prior purchase in the Boston area took place in 2003, when the company bought the assets of the publicly-traded auction site FairMarket for $4.5 million in cash; that company's Web site no longer exists, and the phone number no longer works.
eBay also picked up Boston-based "flash sale" site Rue La La last month, as part of an acquisition of GSI Commerce, but eBay plans to spin that company out again.
EveryScape launches UScapeIt, do-it-yourself app for creating panoramic pics
Wouldn't it be sweet if you could share panoramic images from your Venetian vacation with your Facebook friends? Or e-mail a 360-degree apartment photo to a would-be roommate?
Ever since the days of QuickTime VR, fans of immersive imagery have been certain that more of it will be coming to the Web. That hasn't quite happened, but a new mobile app from Newton-based EveryScape could start to open the floodgates. UScapeIt makes it easy to produce and share panoramas using an iPhone, iPod Touch, or iPad 2 — and it's free.
To create a panorama using UScapeIt, you just switch the device into video capture mode, hold your arm out, and walk slowly in a circle, keeping the device at the center. Once the video is uploaded to the Web, it is transformed into a panorama by the UScapeIt servers, and you can then view it on your phone, or share it via Facebook or e-mail.
Here's a fun video showing how it works, starring EveryScape employee Brian Townsend. The company is launching the app at the Where 2.0 conference in Silicon Valley later today.
EveryScape's primary business model is selling local businesses (especially restaurants and hotels) on the idea that they'll attract more customers if they offer a way to "step inside" before actually visiting, via immersive imagery.
"We have always dreamed of the day when anyone who is experiencing someplace or some event that is meaningful to them could capture that experience for themselves and share it with friends, family, or the world," says EveryScape CEO Jim Schoonmaker. "As our professionally-produced content will continue to offer a richer and more immersive experience than our free app, UScapeit and EveryScape can work together to support a freemium-type business model."
Last year, EveryScape raised $6 million in funding and also announced a partnership with Bing, Microsoft's search engine.
$3 million for CampusLive, connecting marketers with college students
A Boston start-up called CampusLive, born three years ago in a dorm room at UMass-Amherst, dangles free Ray-Bans, Reeboks, and vacations. The trade? Students must fill out surveys, "like" a given brand on Facebook, or play an online game to be eligible to win prizes. And only a certain number of students can participate in each giveaway, which imbues the contests with a sense of urgency and exclusivity.
This week, CampusLive is collecting a prize of its own: $3.1 million in new funding, from Boston-area venture capital firms Highland Capital Partners and Charles River Ventures, along with several individual investors. Highland's Bob Davis and Jon Auerbach of Charles River will join CampusLive's board.
I last wrote about CampusLive in February 2010, when they'd raised a first round of $340,000. (Highland apparently supplied some of that cash, and the round wound up being slightly larger than I reported last year.) Back then, the company was building Web portals for individual universities, collecting info and links of interest to students, and trying to sell advertising on the pages — mainly to local eateries that would deliver to campus.
CEO Boris Revsin, 24, moved the company from Amherst to Boston last summer, and the company began to shift its strategy soon after.
"When we did an analysis, the stuff that generated the most excitement for students was a widget on the site that promoted certain things in exchange for prizes and rewards," Revsin says. So that became the main component of CampusLive, though you can still find information like TV listings and restaurant menus.
The site calls its contests "challenges," and recently ran one for Foxwoods. Everyone who participated — the goal was to drive students 21 years old and over to Foxwoods — got $10 in free slots play and $10 in food at Foxwoods, and one winner received free lodging at the Connecticut casino, plus a steak dinner. The company has also worked with the grocery chain Big Y, Peter Pan Bus Lines, and Ace Ticket. CampusLive gets paid for each successful "engagement" between a marketer and a student — for instance, if a student completes a challenge by checking in to the marketer's event on campus. A challenge could aim to reach 5,000 students...50,000... or, eventually, a few million. (Revsin says there are nearly 20 million students in the U.S. at any given time.)
"We think it's going to change advertising," says Revsin. "It's not a disruptive banner ad. Students come to us to engage with brands that they love" — and, of course, try to snag free stuff.
Right now, CampusLive has built sites for 292 schools; they do the best they can to verify that everyone who signs up is actually a student. (When I signed in using Facebook connect, though, the site didn't block me... though according to CampusLive's contest rules I'd be ineligible to actually win a prize.) Revsin expects to have sites for "almost every school in the U.S." by the end of this year — about 4,300, by his count.
Revsin says that CampusLive has 11 employees in Boston, and is hiring a sales team to chase national brands.
This is the third recent investment for Highland Capital in a company founded by a college drop-out or recent grad (Revsin left UMass-Amherst before graduating, initially to work on Mitt Romney's Presidential campaign); the others are mobile game developer SCVNGR and Gemvara, which sells custom jewelry online.
Sampling SaneBox, a service that prioritizes your incoming e-mail
Have you ever heard someone complain that they get too few e-mails? Me either.
Yesterday, I got 252 e-mails (not including stuff that was automatically dumped into my spam folder.) So I was eager to check out SaneBox, a service developed by Boston entrepreneur Stuart Roseman that aims to separate your urgent e-mails from messages that can wait. While it originally launched last year for Gmail users only, it was just last month that SaneBox began supporting people who use a wide range of other e-mail services, including AOL, Yahoo, MobileMe, and Microsoft Exchange. (The expansion was a strategic necessity, after Google introduced its own free e-mail filtering service, Priority Inbox, last year.) SaneBox costs $4.95 a month, but offers a one-month free trial.
I was initially reluctant to let some unknown piece of software handle my precious incoming e-mail — who knew what it might do? — but I overcame that reticence and have been testing SaneBox for several weeks now on my primary e-mail account (which uses Gmail.)
First, the pros. SaneBox is incredibly easy to set up, and kick-starting the service's free, 30-day trial takes less than five minutes. You tell it your e-mail address, and if you want, you give it permission to see who your friends and contacts are on services like Facebook, Twitter, or LinkedIn. (It then assumes you want to see e-mail from all these folks.) SaneBox is extremely good at keeping non-essential e-mails out of your inbox. Just about everything that lands there is a message from an actual human being whom you know — no e-mail newsletters, spam, or enticing discount offers from e-commerce sites. That means that everything in your inbox either needs a quick read, or some action on your part. E-mail that SaneBox determines doesn't require your immediate attention gets put into a separate mail folder called "SaneLater."
SaneBox sorts your e-mail by looking at your relationships — like whether you've corresponded with someone before, or whether they're a Facebook friend — as opposed to reading the content of the message. (The software does try to make some judgments about incoming e-mails from their subject lines, though.) If SaneBox makes a mistake, and directs a message from an important sender into your SaneLater folder, you can quickly train it by simply moving that message into your inbox. Problem solved forever.
I also love SaneBox's special "SaneBlackHole" box. If you receive e-mails from people or companies that don't include an "unsubscribe" option, rather than writing them a message and hoping they take you off their list, you just put one of their messages into the SaneBlackHole, and you'll never see a message from them again. You can also also route non-urgent messages to boxes called SaneTomorrow, or SaneNextWeek, and they will return to your inbox a day or a week later. (I don't really defer stuff that way, so I didn't use that feature.)
SaneBox also works with any e-mail program that you may use, either on your main computer, a phone, or a tablet computer. I didn't have to do anything special to get the SaneBox folders to appear on my iPhone.
Finally, it's also a good thing that the service is easy to switch off if you don't like it. I killed it once after a few days, and then re-started it, with no lost messages or other mishaps.
Now, the cons. We all develop habits around dealing with e-mail that are tough to drop. Like a Forty-Niner panning for gold, I'm used to scouring the subject lines in my inbox for sparkly stuff worthy of my attention — even if it's a first introduction from an entrepreneur I've never met, or a news item sent by a public relations person I've never dealt with before. With SaneBox on, those messages wind up in the SaneLater folder, since the service is primarily focused on your established relationships with people. As a result, instead of looking at one inbox, you have to occasionally consult SaneLater to see if there are messages from "unknown senders" that might still need your attention. For some people, consulting SaneLater once or twice a day might be sufficient. (You can also wait until the service sends you a daily e-mail "digest" of all the mail that it has corralled into the SaneLater box.) But if you're dealing with e-mails from prospective customers, or, in my case, news that may be breaking in the next hour or two, you'll probably want to look at SaneLater more often.
I didn't like having to think about incoming messages being funneled into two different inboxes, and so I turned SaneBox off after just a few days. I got a message shortly after from SaneBox's founder asking me why I'd quit. When I told him, he created some new digest options, like the ability to get the digest sent three times a day instead of just once. Still, scouring those digests three times a day to find the message or two that require a response to me feels like just as much work as keeping an eye on my old, pre-SaneBox inbox. (I already feel it's too much work to monitor my spam folder for important stuff that gets stranded there.)
So I'm not yet feeling like a more streamlined, productive human being since switching SaneBox on. (Right now, I'm thinking that I'll stop using the service once my free trial ends, rather than pay the $5-a-month subscription.) While my inbox is certainly tidier, I don't feel as though an extra half-hour has been injected into my day.
But SaneBox could prove really helpful if you primarily communicate with the same cluster of people, and if the occasional e-mail from a random person doesn't tend to be time-sensitive.
Roseman, SaneBox's founder, told me that while the service is designed for people who get a lot of e-mail, it doesn't work well for control freaks who insist on seeing every e-mail as soon as it lands. I guess that must describe me. To quote from one of Aerosmith's worst songs, I don't want to miss a thing.
MIT Sloan picks 10 enterprise tech companies to demo at the 2011 CIO Symposium
Each year, the organizers of MIT's CIO Symposium select a set of fledgling companies to demo their wares for the IT execs in attendance. The companies must be start-ups with less than $10 million in 2010 revenues, focused on selling to corporate customers.
The ten companies selected this year include a bunch from New England. (The company descriptions below were provided by the event organizers.)
- Apperian / Boston, MA
Apperian, the leading Mobile Application Management (MAM) company, takes enterprise apps to a new level of productivity
- CloudBees / Lewes, DE
CloudBees is the first Platform as a Service that lets companies build, test and deploy Java web applications in the cloud. (Waltham-based Matrix Partners led a funding round last November for CloudBees.)
- Hadapt / New Haven, CT
Hadapt offers an adaptive analytical platform for performing complex analytics on structured and unstructured data, all in one cloud-optimized system
- Modo Labs / Cambridge, MA
Modo Labs makes class leading mobile software and empowers others to do the same
- Opscode / Cambridge, MA
Opscode, the leader in cloud infrastructure automation through the Opscode Platform, is a widely used hosted service for configuration management and infrastructure automation
- Performable / Cambridge, MA
Performable, a marketing software provider, is ideal for professional marketers who need to measure activity across all channels, take action based on real behavior, and optimize for the entire customer lifecycle
- Rypple / Toronto, ON
Rypple, a web-based software company, provides a social interface for employees to ask for feedback, set goals, meet one-on-one and share thanks
- Unidesk / Marlborough, MA
Unidesk is a new software that creates user-customizable, easy-to-update, and storage- efficient virtual desktops
- Virtual Bridges / Austin, TX
Virtual Bridges combines online, offline and remote branch VDI solutions to offer anytime, anywhere access to virtual desktops
- xPeerient / Natick, MA
xPeerient is changing the way enterprise technology is bought and sold to make it more efficient, more trust-based, and more effective for all the parties involved
The event takes place May 18th.
Paul English's rules of hiring: How Kayak chases superstar talent
English is like a baseball scout with an incredible network of tipsters, willing to fly anywhere at a moment’s notice to see a hot prospect. “The difference between an A player and an A-plus player,’’ he has said, “is the difference between a million in revenue and a billion in revenue.’’ And yet his approach to hiring is unorthodox in the extreme.With more than 100 employees in Concord and Norwalk, Conn., Kayak does not have a human resources department. The “jobs’’ page on its website not only doesn’t list open positions, but it doesn’t include an e-mail address, fax number, or mailing address where one might send a resume.
Some supplemental info:
- English's excellent blog post on "Hiring Religion." He writes, "If you are looking to build a company, your most important skill is hiring. If you do not get excited about this, and do not always think about networking and hiring, it means you need an equal partner who does, and who is world class at it."
- MP3 audio: Venture capitalist Larry Bohn interviews English at the 2010 Nantucket Conference; a good chunk of the conversation focuses on hiring and team. (Note: I'm on the advisory board of this event.)
- English on Kayak's philosophy of hiring (and customer service): "The Way I Work," from Inc. Magazine.
- Video interview with English on hiring, by Gabriel Weinberg.
- MP3 Audio: Venture capitalist Jeffrey Bussgang interviews English in March 2011, talking a bit about hiring —and firing, too.
- English answers a question on Quora: "What should you do if you receive a job offer that expires within a week (exploding offer), but you need more time to decide?"
Zixi brings in $4 million in first venture round, to market new technology for high-def video delivery
Zixi is selling software to broadcasters and manufacturers of television set-top boxes that delivers video more reliably — especially high-definition video. The Internet, observes Zixi CEO Israel Drori (pictured at right), wasn't designed to deliver video. That's one reason we all spend so much time waiting while video "buffers," or watching pixilated movies because Netflix has determined that our connection isn't fast enough.The new transmission protocol and server-to-client synchronization system Zixi has developed makes more efficient use of the available bandwidth, Drori says.
Zixi's approach, he explains, delivers video without getting tripped up if a chunk of data here or there gets lost or delayed (which is inevitable on the Net.) And the demo is pretty dazzling. The company has mounted two side-by-side flat-screen TVs on the wall of a conference room; the left one shows video delivered normally over the Internet, and the right one shows it using Zixi's software. Whether watching pre-recorded content, or a live stream of CNN, the screen on the right always started playing three or four seconds sooner than the non-Zixi screen, and it was never subject to freezing or stuttering.
Key to Zixi's technology is a way to use more of the available bandwidth for video delivery, and less for acknowledging that certain chunks (or packets) of video data were received, or recovering packets that got lost or waylaid.
Drori says that he and chief technologist Uri Avni bootstrapped the company for the first five years. "We knew that longer-form video was coming, that quality would be important since people were buying these big flat-screens, and that TVs and set-top boxes would have Internet connections," Drori says.
The funding round took place in late 2010, just before New Year's. It includes Boston-based Schooner Capital, as well as individuals like Sidney Topol, former CEO of the set-top box maker Scientific Atlanta, and Maurice Schonfeld, a former top exec at CNN and the Food Network.
"At the first meeting, I was extremely skeptical," says Ted Henderson, managing director at Schooner. "I talked to every one of their customers. But at the end of the process, we said, 'This is off the normal radar screen,' but we like things like that. We also felt that the timing of what Zixi is trying to do was finally right."
The company now has nine employees in Waltham, and another eight in Tel Aviv, Israel. Since the funding, Zixi has hired sales and marketing executives from Samsung and Netgear. Now, the company's focus is on selling its technology to media companies and set-top box manufacturers. They're marketing it both as a way to deliver video among a network of partners (for instance, a cable channel getting its content to a cable system in Australia, without paying for satellite delivery), and also directly to the consumer.
Zixi's customers include Thomson Reuters and 20th Century Fox, and its software was integrated into a Netgear set-top box last fall.
Alleged Bentley laptop thief, made infamous on YouTube, heads to court Tuesday
Laptops get stolen all the time, but what makes this case different is that Fantauzzi, the alleged thief, is also purportedly the star of a YouTube video that has been seen more than 1.5 million times since it was first uploaded on March 19th. In the video, allegedly made on the laptop stolen from Bao, a man dances to the rap song "Make It Rain" by Tyga.
How'd the video surface? After the laptop was stolen, Bao remembered that he'd subscribed to a back-up service called Backblaze, which enabled him to go online from another computer and view the files from his laptop that were automatically being saved on Backblaze's servers. Among them, Bao says, were files created by the new "owner" of his laptop, including the "Dancing with the Stars" audition clip. Bao asked his 10,000 Twitter followers if they thought he should post the video, and they (of course) egged him on.
The story of the tech-savvy teen who figured out how to recover his own laptop spread like crazy around the Web last month, attracting coverage on tech blogs and mainstream media like Boston's Channel 7. Bao later posted a message he said he received from the thief, begging him to take the video down.
The story sounded so, well, engineered for viral Internet circulation that some people started speculating that the whole thing was a hoax, perhaps designed to generate publicity for Backblaze. (I have to confess I had my doubts, too.)
But the court documents related to Bao's case make it clear that the theft and recovery did, in fact, occur. Bao told Bentley police that the laptop was stolen just before 5 a.m. on February 6th. As you might expect, the police didn't exactly launch a campus-wide inquiry, and simply wrote on their report that there were "no suspects at this time." But Bao went back to the Bentley police on March 21st, showing them the videos he'd found, as well as an e-mail address and a Facebook page that he believed belonged to the alleged thief. (The Facebook page has since been deleted.) The next day, Fantauzzi (who isn't a Bentley student) returned to campus with the missing laptop, according to Bentley police. Fantauzzi waived his right to have counsel present, according to the police report, and told them he'd been to a party on campus the night of the theft, "consumed a large amount of alcohol," seen Bao's laptop in a study lounge, and decided to swipe it.
In a written statement given to the Bentley police, Fantauzzi said he'd heard the campus police were looking for him, and that he'd decided to turn himself in. "I know I did wrong and I'm here to own up to my mistakes," he wrote.
You can read some of the Bentley Police reports on the case here.
Reached for comment yesterday afternoon on his mobile phone, Fantauzzi said he wasn't aware of the upcoming court hearing. But, he told me, "I'm not going to lie and say I didn't do it."
What do you think? Could this case discourage future laptop poachers? Or is Web-wide embarrassment plus criminal prosecution plus possible jail time a bit excessive for a 21-year-old who has apparently admitted to wrong-doing?
$8.5 million in new funding for txteagle, Boston firm that fields mobile phone surveys in developing countries
Boston-based txteagle is feathering its nest this morning with $8.5 million in new funds, in a round led by Spark Capital; the company had raised just over $1 million last year.
Founded in 2009 by alums from MIT's Media Lab and Harvard's statistics department, txteagle helps companies and non-profits reach mobile users in emerging markets. The company has amassed a contact database of 2.1 billion consumers; earned revenue in 49 countries so far; and developed its own approach for enabling consumers to send and receive messages that don't rack up additional charges (with the consent, of course, of mobile operators.)
The company wants to help companies and organizations like the United Nations (already a customer) gather information from and communicate with consumers in less-developed countries. "The current way of getting an understanding of what's happening in these markets," says co-founder and CEO Nathan Eagle, "is to fly in a team of people and drive to all kinds of remote places — what we call the 'Land Rover methodology.' It's very expensive to get any kind of insight that way."
Txteagle aims to make it easy to use mobile phones to conduct market research (and also do marketing once a product or service is available). Consumers qualified to participate in a given survey are compensated with free airtime: in Kenya, it might be 25 cents worth, in Brazil about $2. "The core focus of the company is on providing global brands with better insight into their next billion consumers in emerging markets, and we're trying to use the mobile phone as a mechanism to illuminate these emerging markets," Eagle says. By the end of 2011, the company expects to be generating revenue in about 100 different countries.
Txteagle has just under 10 employees, according to Eagle, and expects to employ close to 20 by the end of the year. While the company is based in the Back Bay, co-founder and CTO Ben Olding works from San Francisco.
As a result of the new funding, Todd Dagres of Spark Capital will join txteagle's board.
Here's some background on txteagle from MobileActive.org, focusing on how their service has been used in disaster preparedness.
Smarterer, seeking to validate your skills with online tests, raises $1.25 million
But for most of us, there's no test that shows we excel in our field — especially if it involves emerging technologies like Twitter, Google Web site analytics, or Python programming. So if you're in the job market, or looking for work as a consultant, how do you show that you're a superstar, rather than just marginally competent?
Smarterer, a new Boston start-up, is out to solve that problem, providing an "authentic benchmark" of your skills compared to those of the mediocre masses, in the words of co-founder Dave Balter. "We're out to fix the 'skills' box on everyone's resume," says Balter, who is also the CEO of BzzAgent, a word-of-mouth marketing agency located in the same South End office space as Smarterer. "It's the most important resume element, but what does it mean when you say you're 'proficient' at Excel?' We're going to be the gold standard of scoring skills."
The company just closed its first funding round, raising $1.25 million from True Ventures; another major VC firm that Balter wouldn't name (Update Smarterer disclosed in June 2011 that this was Google Ventures); and local angel investors including Dharmesh Shah of HubSpot, Bantam Group's Joe Caruso, and Shikhar Ghosh, former CEO of OpenMarket.
With ten questions about a specific topic, answered in 60 seconds or less, Smarterer aims to supply an initial score that suggests how well you know the topic. The company is experimenting with star ratings, percentages, and also the Glicko rating system used in competitive chess, developed by a Boston University math professor. The company's founders imagine that people might post their scores on LinkedIn profiles, share them on Twitter, or include them in their resumes, and while they insist they are not focused on generating revenues in the short-term (test-taking will be free), eventually they say an industrial strength version of the tests might prove valuable to human resources executives and recruiters.
"There's a human hunger for recognition and validation," says Balter. "So we're building a tool to say empirically, 'this is what I know, and this is what I'm good at.'"
I tried two of the Smarterer tests at the company's offices last week. First, I took the Twitter skills test — something I thought I'd be reasonably good at — and got a 68 percent. (I had to quickly come up with answers about hash tags, and who will see a message that begins with another user's Twitter username, like @JohnSmith.) After answering another set of questions, my score had risen to 77 percent.
Then, I tried a topic I know nothing about: Ruby on Rails. I simply clicked on the most plausible-sounding of the four multiple choice answers, before the allotted time elapsed. My initial score was 65 percent — not much worse than Twitter — but when I answered another few questions, it slid to 61 percent.
Jennifer Fremont-Smith, Smarterer's co-founder and CEO, says that users will be able to add their own questions, and even create new tests of their own — like how well a prospective waiter knows a cash register system, for instance. "The only way to get to the very top ranking is to add questions to the site," she says. Better questions will get you more points. And test-taker's scores will degrade over time, and so users will need to come back and answer new questions to prove that they're still up-to-date on a certain area of expertise.
People will inevitably try to game the system, Fremont-Smith acknowledges. "We're thinking about ways to solve that," she says. The timer is one way to prevent test-takers from looking up answers online or in a book, but the site will also need to create a vast collection of questions on each topic.
The tests felt pretty addictive; I wanted to keep improving my scores, and so, Balter says, did an analyst at a venture capital firm the company met with recently. "He took the test for Excel on the screen in front of several partners in the conference room, and throughout the meeting, he kept trying to improve it," Balter says.
Right now, users need an invitation to try out the tests (Fremont-Smith says they're giving some out now to early testers), but Smarterer will begin a more open beta test this summer.
The company's blog shares a bit more about Smarterer's strategy. The third Smarterer founder, chief technology officer Michael Kowalchik, is a former EMC engineer who was also on the founding team of Grazr.
Daily deal services: How many can possibly survive, and what do merchants really think about them?
Mainly, I look at how merchants view the services; whether consumers will keep paying attention (and scarfing up the pre-paid coupons); and how many of the services can survive.
Some bonus material:
- Philip Greenspun, the chief helicopter flight instructor at East Coast Aero Club, wrote two great blog posts about his business' experience with Groupon. In 2010, the school sold 2600 $69 introductory lessons in a single day. He offered a slightly higher-priced deal ($99) this year, and sold 800.
- Scott Walker, co-owner of Greenward, a Cambridge shop that sells "eco-friendly" stuff, sent me this e-mail about two recent experiences offering daily deals.
New mobile site helps guide you to green spaces around Boston (because it may be spring one day...)
The team of volunteers that built Boston Green, a new mobile-optimized Web site, want to make that a reality (the park finding, at least — the beautiful spring days seem to be beyond anyone's control). The team, led by Holly St. Clair of the Metropolitan Area Planning Council, won one of two grand prizes at February's Boston Hack Day, a weekend-long "code in." The competition, organized by Boston.com and the Boston Globe, brought together small teams to create sites and apps that would make city life better.
The newest version of the Boston Green site went live this week, and the team, which includes Patrick Robertson of the Somerville Web development agency Velir, says that Android and iPhone versions are in the works. They built it using data from the state's Department of Conservation and Recreation and Office of Geographic Information Systems, but they're hoping to collect data from users, too. (The site could really use your help, as many of the listings are pretty sparse.)
"We look at this as giving users a framework to start contributing information," says St. Clair. She says she has been talking with the non-profit Boston Park Advocates to get that group involved, too.
Already, the app includes listings for 17,000 open spaces and parks in more than 36 neighborhoods and cities, and the goal is for it to direct you to amenities like tennis courts, soccer fields, urban gardens, or public art installations, as well as serving as a guide to special events like concerts and festivals.
Investors back Mobiquity and Apperian, Boston companies that support mobile app development in the enterprise
Investors are putting almost $15 million into two different Boston start-ups today, and while the companies are different, the investment thesis is the same: that we're still in the early days of companies developing their own mobile and tablet applications, geared both to employees and customers.
Mobiquity is just launching this week, with a focus on selling consulting services to companies that need to craft mobile strategies and then create applications that tie in to their existing systems. Mobiquity's chief executive is Bill Seibel, an executive who did tours at the consulting firms Cambridge Technology Partners (acquired by Novell in 2001) and Zefer (filed for bankruptcy, also in 2001).
Seibel says that Mobiquity has raised a $5 million first round of funding from Sigma Partners and Longworth Venture Partners, and he expects to have about 22 employees by the end of April. In the short term, the company will operate out of Marlborough, Providence, and Philadelphia. Seibel says Mobiquity is already working with three early clients, in the retail, airline, and financial services sectors — though he isn't yet ready to name them.
"I think what sets us apart from a lot of people is that we don't think that mobile is just a stand-alone app that you can buy and download from iTunes," Seibel says. "You need to really take advantage of the new capabilities of mobile to drive changes in your business model." (Seibel compares it to the early days of the Web, when companies initially published online versions of their brochures, with little utility.) He says that bigger IT services firms aren't yet going after mobile projects aggressively, since "they tend not to enter in a serious way until there are $10 million or $12 million projects. Until then, we think we can build a track record and a roster of clients that will be the backbone of the company."
Working alongside Seibel is chief creative officer Andrew Hiser, who was previously a director at Cambridge-based Tank Design; Scott Snyder, a Wharton School senior fellow and author of the book "The New World of Wireless"; Joel Evans, founder of the Providence mobile development firm Cronk Software; and Jonathan Stark, author of two recent books on building Android and iPhone apps.
The other start-up announcing new funding today is Apperian, which focuses less on selling consulting services, and more on providing tools and templates that help companies develop and deploy their own iPhone apps. (The company's own buzzword-ese describes it as "a cloud-based platform for enterprise mobile application development and management.")
Apperian, which had previously raised just over $1 million, has just added $9.5 million to its bank account, from North Bridge Venture Partners, Bessemer Venture Partners, and Kleiner Perkins' iFund, which invests specifically in "market-changing ideas and products that build upon the iPhone, iPod Touch, and iPad." CommonAngels and LaunchCapital, the local firms that supplied Apperian's seed funding, also participated in this latest round.
Boston-based Apperian counts as clients Intuit, Cisco Systems, the American Automobile Association, Dupont, and Procter & Gamble. The company has 25 employees, and expects to be at about 50 by year-end.
David Patrick, an exec who'd previously worked at Novell and The Learning Company, joined Apperian as CEO last September, when founder Chuck Goldman took on the role of chief strategy officer.
TechStars Boston 2011: Who Got In
A dozen start-ups moved into the new TechStars Boston digs in Kendall Square last week — which feel a bit starchy and corporate for a program that aims to churn out radical new businesses. They'll spend the next three months developing products and services that they'll present to a roomful of prospective investors on June 15th. The teams that participate receive an $18,000 stipend, plus free office space and mentorship from local entrepreneur and venture capitalists; in return, TechStars takes a six percent stake in each company.
This is the first year that Katie Rae, a former executive at Microsoft Cambridge and Lycos, has run the program in Boston.
A dozen companies made it into this year's class. (Last year's included ten.) About half are from New England, and two are from outside the U.S. I had a chance to meet with the founders earlier this week, and here's a quick run-down of what they're up to (note that their strategies can change radically over 90 days — as can company names). Only one company, a real estate-related venture, for some reason doesn't want to disclose that they're part of the TechStars program (even though they have a live Web site), so they're not included on this list.
- EverTrue. Developing mobile and tablet-based applications to help colleges and prep schools stay in touch with alums, and help alums find each other. One feature is a location-based alumni directory: what if someone living on the next block in Manhattan was also a graduate of your alma mater, and worked for a company where you'd just booked a job interview? What if you could share photos you'd taken at a Northeastern hockey game with fellow alums? I covered these guys last June, as they were first getting off the ground.
- Ginger.io. A spin-out from the MIT Media Lab that wants to gather data from your cell phone — like how often you place phone calls or whether you stay at home all day — to assess your health. (Going nowhere and talking to no one, for instance, might mean you're knocked flat with the flu.) The company might also be able to collect data about how your behavior, health, and activity level changes after you start taking a new prescription drug — info that may be hard for pharmaceutical companies to gather using traditional survey methods. Ginger.io grew out of the Social Evolution Project at the Media Lab. The company's service will be called DailyData.
- GrabCad. Founder Hardi Meybaum says his start-up has already raised about $400,000 and begun booking revenue. The company, founded in Tallinn, Estonia, connects a community of mechanical engineers with small and medium-sized companies that need help designing new products. The engineers can do everything from come up with a quick 3-D product rendering for use in a brochure to designing the detailed CAD models necessary to get a product into high-volume production.
- HelpScout. Entrepreneurs from Nashville who previously built Feed My Inbox, a freemium service that converts RSS feeds into e-mail. HelpScout will help teams access a single e-mail inbox, to deal with customer complaints, for instance, or new business inquiries. They plan to launch the service during the TechStars program, and have about 40 beta customers using it already.
- Kinvey. Kinvey's three founders met at the University of Texas. They want to make developing mobile and tablet applications easier by helping developers connect to an array of cloud-based services, like transaction processing or storage.
- Memrise. Using insights into how memory works to make language learning fast and fun. Co-founded by Ed Cooke, the British memory coach who helped Joshua Foer win the US Memory Championships. Foer's book "Moonwalking with Einstein" was recently published.
- Promoboxx. Helps Web sites build and run online contests, giveaways, and other promotions, for a $100 fee. Massachusetts and New Hampshire-based team.
- SircleIT. Israeli team that ran a question-and-answer site, but is now cooking up a new business helping companies figure out who is an expert on what topics within their walls, by using natural language processing to analyze questions posed in an e-mail. The new service will be called Senexx.
- Scout EP/Strohl Medical Devices. Heather Strohl has licensed IP from Tufts to develop a device that emergency rooms would use to evaluate patients who may have had a stroke. Strohl says she hopes to submit a 510k application to the FDA, required for the device to be sold, sometime this year.
- Spill. Creating an anonymous, peer-to-peer support system for college students. Ten schools are already using it. The founders suggest that students will more readily talk about difficult issues — whether drug use or loneliness — if they don't have to go to a counseling center in person. Team is from Madison, Wisconsin, and plans to sell the service to universities as a way to better understand the mental health and environmental stresses students are dealing with.
- The Tap Lab. Boston University alums developing and promoting a mobile game called TapCity. Your goal? To capture and defend your favorite hang-outs, whether its a floor of your dormitory or your favorite pub. Focused on cultivating a cluster of users in Boston first, then expanding to other cities.
It'll be interesting to see the progress (and pivots) they make between now and June...
Collegiate entrepreneur Jon Fischer attends his first trade show...where he'll be exhibiting and demoing his new mobile app
Lunenberg native Jon Fischer is in Orlando this week for his first-ever trade show, the annual International CTIA Wireless convention. But Fischer, a senior at Champlain College in Vermont, isn't there as one of the 39,000 attendees. His start-up, WirelessESP, is exhibiting on the show floor, and he'll also have the chance to give a five-minute on-stage demo of the mobile app he has developed, Speedbump.
Installed on an Android phone, Speedbump allows parents to set speed limits for their teens to obey when they get behind the wheel — or when they ride in someone else's car. Once you've established guidelines for how fast your teen can drive on a highway or a surface road, the app will fire off a text message or e-mail when those speeds are exceeded. The app also has a "check-in" feature, so that a teen can let Mom or Dad know she has arrived safely at soccer practice or a friend's house, Fischer explains. The app itself is free, but customers pay WirelessESP a $10 per month subscription.
"Since I'm so young, I come at this with a different perspective than all of the competition," Fischer says. "A lot of what's out there is about constant tracking — being able to locate your kid at all times. But what differentiates our app is that it only gives info about the user's location and speed if they're breaking a rule. I think that teens should be able to be trusted. If you don't want your parents to know where you are, you need to be driving safe." What happens, I wondered, if a devious teen simply turns the phone off for an hour of drag racing? "The app sends out a message and tells the parent where you are if the phone goes off and then gets turned on later," Fischer says.
Fischer has enlisted his father, Richard Fischer, a veteran tech exec, to help with the start-up, and the duo recruited a family friend to develop the app. Fischer says that the company hopes to create versions soon for the iPhone and Blackberry.
So far, the company has been boot-strapped, the younger Fischer says. In 2007, when he was a senior at Lunenberg High School, he won $20,000 in cash and services from a business plan competition at Mount Wachusett Community College. "That paid for our patent application, our incorporation, and some other legal fees," he says. And since he won a substantial scholarship to attend Champlain College, his parents have invested some of the money they would've ordinarily spent on tuition in their son's start-up.
Now, Fischer says, "we're starting to actively look for angel funding or venture capital of about $1 million, so we can be on all phones and platforms as soon as we can, and really give a strong marketing push. We also want to take on some salesmen for channel development." After graduation this spring, he's not yet sure if the company will set up an office in Burlington, Vermont or somewhere in Massachusetts.
As for attending his first trade show, Fischer says, "I'm really excited."
(The Globe covered Fischer in 2009, when the product was hardware-based, rather than an app that runs on a smartphone.)
Test-driving SCVNGR's new LevelUp app for local discounts
I downloaded the iPhone app yesterday morning, entered my profile and credit card info while walking to the T, and purchased my first deal before boarding the train. Since I often eat $8 or $10 lunches at Boloco, I bought a LevelUp digital coupon for $5 that offered me $10 worth of food at the burrito chain.
LevelUp encourages you to tell your Facebook or Twitter network about a deal you've just bought, and the incentive is that if one of your friends also buys the deal, yours is free. I tweeted about the Boloco offer, and a few minutes later the company had sent an e-mail informing me that I'd just gotten the mythical free lunch.
When I showed up at Copley Square Boloco yesterday to redeem my coupon, I ordered a teriyaki chicken wrap, cookie, and Vitamin Water drink, which totaled a little over $10. When I showed the cashier my phone, he wrote down my name and a transaction ID number on a piece of paper, and told me I was all set. What about paying the additional 45 cents that I owed? The cashier just pointed me toward the pick-up station. He also didn't click the button on my phone's screen that says "Redeem Deal," which left me wondering if a less ethical person than I might be able to use the coupon a second time.
Because I'd purchased Boloco's "Level 1" deal, the app presented me with a "Level 2" deal from Boloco: pay $10 and get $25 worth of food. Unfortunately, the terms of that coupon specify that it must be used on one visit, and when I eat at Boloco I'm usually by myself, grabbing food to be eaten at my desk or on the run. Twenty-five bucks worth of burritos and smoothies sounded like a bit of a binge to me, and even if I brought a friend, getting the tab up to $25 might be a challenge.
Since my account had $5 in credit — the reward for my sharing details of the Boloco deal on Twitter — this morning I bought another Level 1 deal, shelling out $4 for a trio of cupcakes from Kicka** Cupcakes in Davis Square. The next level of that deal? A half-dozen cupcakes for $9. (On Twitter, venture capitalist Alex Taussig joked that LevelUp should offer half-off deals at local gyms, too... but the closest thing I could find was $15 for a week of unlimited yoga at the Karma Yoga studios in Boston.)
LevelUp assumes that after you've bought the Level 3 deal, you'll be a loyal customer and it won't take further discounts to keep you coming back. (LevelUp gives all the revenue from the first level deal to the merchant, but takes 25 percent of the money from levels two and three.)
I love a good bargain — who doesn't? — but for me, LevelUp and Groupon haven't really gotten me in the door of businesses that I haven't patronized before. Instead, the deals have either saved me money at places I go regularly (like my free, social-media-sponsored lunch at Boloco) or gotten me to return to places that aren't on my usual rounds (like Kicka** Cupcakes.) Still, I'm sure that the cupcake bakery is probably not losing money charging me $1.33 for each cupcake... and there's always the chance that I'll buy a glass of milk while I'm there.
Update: When I showed up at the cupcake shop, picked out three cupcakes, and showed the clerk the LevelUp coupon on my phone, she pulled out a special LevelUp-supplied notepad and wrote down the transaction ID and my name. (Again, I wondered how the bakery would prevent me from showing up again in a few days and using the same coupon, since she didn't click the button on the screen that says "Coupon Redeemed.") Then, the clerk asked me for $4. I explained that I'd already paid for the cupcakes via LevelUp. She explained that they'd just started offering this particular deal, and that she wasn't yet sure how it worked. I left, feeling a bit like a con artist.
We'll see how well LevelUp's salespeople do at convincing more local businesses to offer deals through its app, and how many users it can attract quickly so that it can really drive new customers in significant volume to a business. That's what you call a chicken-and-egg problem — one that Groupon has already solved.
Since LevelUp can't count on your opening up its mobile app every day to check for new deals, it also offers a daily e-mail summarizing what's available. Not sure about you, but I'm signed up for so many of those that I've stopped paying close attention to their contents.
LevelUp is currently live in Boston and Philadelphia.
Sequoia, Google Ventures, and Salesforce.com send money east, leading $32 million investment round in HubSpot
HubSpot coined the term "inbound marketing" (and its founders, Brian Halligan and Dharmesh Shah, published a book with that title.) Essentially, inbound marketing is the opposite of traditional "shotgun-style" broadcast marketing. Inbound marketing involves publishing informational content on Web sites, blogs, Twitter, and other social media platforms that helps prospective customers learn about your product or service. Then, HubSpot helps track the leads that come through those various channels, to see what's most effective at turning prospects into paying customers. HubSpot sells a subscription to its Web-based software, starting at $3,000 a year for the smallest businesses.
It's not commonplace for Sequoia Capital — which has funded Google, Oracle, Atari, and Apple, among others — to make an investment in Boston. Shah told me last night that he knew of only four other relatively recent tech investments the firm has made here: A123 Systems (public), Kayak (going public), ITA Software (perhaps getting acquired by Google), and Netezza (public, then acquired by IBM). (He missed one: Jeff Taylor's social network for baby boomers, Eons, which laid off most of its employees last year and has lately been trying to sell off its component pieces.)
HubSpot's current headcount is 192, and the company had expected to hire about 90 people this year — but that was before closing this latest funding round. Shah, the company's chief technology officer, says that "we generally have an 'open budget' on product people (engineers, quality assurance, designers). As we come across great people, we always try to hire them." (Shah joked that these days, his CTO title more accurately stands for "chief talent officer.")
Raising this much money, said HubSpot board member Larry Bohn of General Catalyst, means that Shah and Halligan are "swinging for the fences," trying to build a substantial company in Cambridge. (They've apparently had some acquisition talks, which haven't gone very far.) "The two strategic investors that really matter for them are Google and Salesforce, and they got both of them to invest together for the first time ever in this round," Bohn says.
Apparently, this latest funding round also helps the two founders cash out some of their stock in HubSpot — a transaction that many investors see as key to building a company for the long-term, since it reduces the appeal for the founders of selling to achieve a quick payday.
Shah tells me that the initial introduction to Sequoia happened through David Skok of Matrix, who introduced CEO Brian Halligan to Sequoia's Jim Goetz. Shah explains: "Brian coordinated doing an informal meeting during a West Coast trip he made right before Christmas. The second sentence from Jim (after the introductory hello) was, 'what's it going to take for us to own a piece of HubSpot?' They had been following the company for a while..."
At Google Ventures, Cambridge-based partner Rich Miner oversaw the HubSpot investment.
Highland's Matt Nichols moves downstairs to Gemvara
I was curious about this tweet from Gemvara chief executive Matt Lauzon last week: "What VC just left his venture role to join full time as a Gemvarian?"
My hunch was that someone from Lexington's Highland Capital Partners, Gemvara's earliest investor, had moved downstairs, where the custom jewelry site sublets space on the first floor of Highland's building.
Turns out I was right. Though his bio is still up on the Highland site, principal Matt Nichols (pictured at right) joined Gemvara earlier this month as executive vice president of operations. Nichols had worked with Highland partner Bob Davis to conduct due diligence on Gemvara (originally known as Paragon Lake) and make the investment, and he has been helping the company out on an informal basis since December. In his new role at Gemvara, he'll be responsible for managing the company's relationship with jewelry-makers.
In 2009, Highland raised its latest fund, which at $400 million was half the size of its predecessor. That often leads to a contraction in the number of partners, principals, and associates working at a firm. But Nichols' jump may also be a comment on Gemvara's potential...
Before joining Highland, Nichols worked on Google's corporate development team, sourcing acquisitions and investments in digital media.
Xtranormal, the populist Pixar, plans expansion to Facebook, YouTube and the iPhone
Or this conversation between a Tea Partier and an "average American."
Or this collection of "stupid questions VCs ask."
I hadn't realized that while Xtranormal's development team is split between Montreal and San Francisco, its lone investor so far is Cambridge-based Fairhaven Capital, and its current CEO, Graham Sharp, who joined last spring, is based in Marblehead.
Fairhaven partner Dan Keshian tells me that the firm initially invested in 2007, when the company was building a tool that professional content producers might use as part of their storyboarding process, or even for creating inexpensive and quick finished animations for the Web or broadcast television.
But by the time Sharp took over from founder Richard Szalwinski last year, Sharp says, "The fact that they'd created this brilliantly simple user interface to allow you to create animation was sort of its downfall. The professionals thought it was too simplistic. You had libraries of characters and backgrounds, and the libraries were never quite enough to cover what a professional animator of moviemaker wanted to do."
So last year, the company began to focus on enabling amateurs to create their own online animations. More than ten million have been produced so far. The new business model is all about selling virtual assets — namely, access to certain sets and characters.
"We're acutely aware that we don't want to be a fad," says Sharp, "so we have to constantly refresh the content, and make the technology more accessible."
On that front, Sharp says the company is working on ways to integrate its animation-generation console into sites like YouTube and Facebook. As on Xtranormal's site, that'll allow users to simply pick a location, select characters, and start typing their script.
"We're also beta-testing an iPhone app that we're going to launch sometime in March," Sharp says.
As Xtranormal is used to produce more videos that turn into viral hits, Sharp says that maintaining the infrastructure to support the site's success may prove a challenge. As a result, he says the company may raise more funding soon — an he expects to bring in a firm other than Fairhaven.
I asked Sharp whether his discussions with prospective investors ever get uncomfortable, given the popularity of the "stupid questions VCs ask" video above. "I've had several VC meetings where I've used that video to open the meeting," he says, "and to a man, every VC I've shown it to takes it in the spirit it was meant, and thinks it's hilarious — because of course it doesn't apply to them." (Asked whether he'd ever asked any of the questions, Keshian said, "Never.")
Xtranormal has about 30 employees. Aside from Sharp, the only other employee based in the Boston area is Bruno Langlais, who is responsible for marketing and business development.
(An aside: Sharp formerly was a vice president at Tewksbury-based Avid Technology, which sells hardware and software for producing audio and video. He said that while at Avid, the company had briefly considered buying Xtranormal.)
Offering price analysis for used cars, CarGurus finds its way to profitability
As CarGurus CEO Langley Steinert puts it, "What you start out doing is not always what you end up doing."
As an early investor in TripAdvisor, and later an executive at the company, Steinert was close to the action as the start-up nearly ran out of money trying to license the travel content it had accumulated to various Internet portals. Eventually, TripAdvisor decided to develop its own destination site, which has since grown into the biggest online travel community in the world, with more than 50 million monthly visitors.
He left TripAdvisor after it was sold, and in 2006 started CarGurus. "Initially, we said, `let's take the learnings from TripAdvisor around user reviews and community,'" Steinert says, with the goal of building a site where consumers would review and discuss cars and car-related services.
That didn't exactly take CarGurus from 0 to 60 at the speed of a McLaren. The community features, Steinert says, weren't "a complete failure, but we haven't exactly buried Edmunds.com."
So, Steinert says, "two years ago, we were thinking, `Wouldn't it be cool to develop a price comparison engine for used cars, kind of like Kayak does for airfare or Zillow does for real estate?' So we had a couple engineers who started skunk-working it." The project became "DealFinder," now the most prominent feature on CarGurus' home page. It collects and analyzes information about two million used vehicles every day, looking at things like option packages and mileage, and comparing the way similar vehicles are priced. (DealFinder looks not just at cars on the market today, but those listed over the past three months.) It then supplies an opinion about whether a used car's price is "great," "good," "fair," "poor," or blatantly "overpriced." (A 1986 Porsche 911 with 91,000 miles is overpriced at $29,995, but a 1991 Porsche 911 convertible with just 77,000 miles, not surprisingly, is a great deal at $23,995.)
While having their inventory branded as a bad deal can anger some used car dealers (notoriously an honorable and upright bunch), Steinert says that many are happy with the site. When they're selling a vehicle at a good price, CarGurus sends them a steady stream of prospects, Steinert says, and in return, it earns about $10 for every lead. CarGuru's analysis, he says, means that "the consumer is already pre-disposed to think that they are getting a good deal."
CarGurus also provides information about how many days a given vehicle has been on the market, which gives savvy buyers a little more negotiating leverage.
Steinert tells me that CarGurus was profitable for all of 2010, with 230 percent revenue growth (and 739 percent traffic growth) over the prior year.
The company, headquartered in Harvard Square, hasn't raised any venture capital financing. (Steinert says he raised "a small amount of capital" from his friends, family, and "the TripAdvisor mafia.") CarGurus has 17 employees. On its board are TripAdvisor CEO Stephen Kaufer and Simon Rothman, formerly general manager of eBay Motors.
OnChip Power, aiming a shrink ray at bulky transformer 'bricks,' raises $1.8 million from Venrock
Last week, MIT Sloan student and OnChip Power CEO Vanessa Green was signing the papers on her company's first round of funding: $1.8 million from Venrock and Arunas Chesonis, chairman of PAETEC Holding and an MIT alumnus.
OnChip is commercializing new power electronics technology developed at MIT's Laboratory for Electromagnetic and Electronics Systems. Essentially, it aims to reduce the size of the transformer "brick" required by many high-tech devices to convert alternating current to direct current, and ramp down the voltage from the 120 volts that spills from a standard wall outlet. Green says the company will likely focus on LED lighting applications first, where the transformer must be integrated into the bulb itself.
"Our core innovation applies across consumer electronics segments — anywhere you have a power supply," Green says. "It lets you get similar efficiencies to conventional power supplies, but much smaller form factors. Initially, we're focusing on LED applications, particularly the A19, which is your standard, 'Edison' form factor bulb."
Green's co-founders at OnChip are (from left) George Hwang (who earned his PhD from MIT last year), Anthony Sagneri (still working on his doctoral dissertation), and Justin Burkhart (Master's last year). MIT prof David Perreault is serving as an advisor to the company.
The Venrock partner leading the deal, Matt Trevithick, earned his undergrad degree and MBA at MIT, where he says he spent some time in the LEES Lab where OnChip's technology gestated.
"People have been focused on LED emitters [the chips that convert electricity into light in an LED bulb]," Trevithick says. "So much money and talent has been invested there that we have some really good emitters. But we think the focus of innovation needs to be on what some people would consider the more pedestrian side, which is the power supply." Trevithick says that if OnChip can produce a power supply that is smaller and less expensive than what exists today, it'll leave room in the bulb for other features — such as an ambient light sensor that would adjust the lamp's output based on how dark or light it is in the room. Also, he says, "driving down the cost will increase the size of the market for LED lighting." (Home Depot sells a standard-sized LED bulb for $18, but says that it says can last up to 46 years.)
Trevithick says OnChip will focus first on power supplies integrated into LED lighting: "It's a great place for a start-up to be, because there aren't a lot of entrenched incumbents. LED illumination will grow into a very large market, and people are looking for new solutions." But eventually, OnChip could move into power supplies for laptops, printers, and mobile phones. Among the smallest transformers around is the cube-shaped, 1-inch by 1-inch plug that accompanies the Apple iPhone. "OnChip thinks they could do the same thing, but it'd be about the thickness of three quarters," Trevithick says. That could lead to transformers being integrated into more devices, rather than sitting around under your desk, or hogging up three outlets on a power strip.
Green says OnChip will likely develop a few early products on its own, "because there's enough design work that needs to be done on our end that is specific to the product," but the company may also license its technology to partners focused on certain markets.
OnChip is currently based in Polaris Ventures' rent-free Dogpatch Labs space in Kendall Square, but Green says that may change as the company uses the new funding to bring on a few additional employees, and set up an electronics lab. "We're working toward a number of technical milestones that will continue to be our focus over the next year," she says.
OnChip won second prize last year in the national Cleantech Open business plan competition.
In addition to raising money for OnChip, Green has been keeping busy as the managing director of MIT's annual energy conference, taking place next month.
Pixability pulls in $1 million, to help small businesses add video to their marketing toolkit
It never hurts to highlight the parallels between your nascent start-up and a more successful and established company. The comparison that Pixability founder Bettina Hein likes to draw is between her 10-person Cambridge firm and Constant Contact, the publicly-traded Waltham company with more than 600 employees. Just as Constant Contact made it easier for small and mid-sized businesses to send out e-mail newsletters and marketing messages to their customers without being considered spammers, Pixability wants to help businesses make better use of online video.
"Creating video is really a hurdle for most smaller companies," says Hein. "They may not have a camera, they may not know who to hire, and they don't know where the video needs to be once it's finished — like YouTube and Facebook." (Hein is second from the left in the picture. The other members of the Pixability team shown are, from left, Andreas Goeldi, CTO, Yelena Kadeykina, marketing director, and Apollo Sinkevicius, operations director.)
Pixability helps its clients produce videos for as little as $895, which can be added to their corporate Web sites and also uploaded to video-sharing sites where prospective customers might find them. (YouTube, Hein points out, is now the #2 search engine people use to find information online, after Google.) For that entry-level price, the company ships out a hand-held Flip video camera, and asks you to shoot up to 30 minutes of raw footage. Once you upload the footage you've shot to a private "online project area," Pixability then handles the editing, integrating imagery like logos, PowerPoint slides, photos, or Web site screenshots. (They also add music.) The whole project gets done within two weeks from the time you upload the footage. One key to Pixability's speed is that the videos are edited by a network of several dozen freelance editors around the country, rather than Pixability staffers.
The company was founded in 2008 to help consumers edit video footage of birthday parties and summer vacations. "That didn't fly," Hein says. In the fall of 2009, she decided to concentrate exclusively on video for businesses, and raised a small seed round from angel investors.
This latest $1 million funding round came together after Hein spoke at a meeting of the Angel Capital Association in Worcester last October. The focus was deal syndication: how the groups could collaborate better when making investments. Now, Pixability will become a kind of poster child for syndication among angel groups. Its latest round includes money from nine different angel groups, including Maine Angels, the eCoast Angel Network in New Hampshire, North Country Angels in Vermont, and Boston Harbor Angels and Launchpad Angel Group in Boston.
Hein says the largest single investor in Pixability is IKEA chairman Göran Grosskopf; he was also an investor and board member at Hein's last start-up, a speech recognition company in Zurich, Switzerland called SVOX AG.
Hein says that only about 15 percent of Pixability's customers so far have been from the Boston area, but that group includes companies like CloudSwitch, High Start Group, MIT, and Houghton Mifflin.
Several of Pixability's board members and board observers, interestingly, have ties to Constant Contact: two were early investors in the e-mail marketing company, and one, Janet Muto, once served as Constant Contact's chief marketing officer.
Hein is also the founder of a networking group for about 100 female leaders called the "She-EOs," which convenes once a month for a meal. (There is no Web site yet.)
(The Globe covered Pixability in greater detail last May.)
Ten years ago this month: The most valuable Massachusetts companies of February 2001
It wasn't a good month for CMGI stock...networking equipment makers Sonus Networks and Sycamore were among the top five...You could buy shares of StorageNetworks for $20 (it'd liquidate in 2003)...companies like Netegrity, Digitas, Keane, Acterna, and RSA Security had yet to be acquired...and telecom gear maker Avici Systems was starting to slide (it finally went out of business in 2009.)
EMC, incidentally, has grown by nearly 20,000 employees since 2001...
Name checks and pics: Tonight's Performable office-warming party
But Peformable co-founders David Cancel, Joshua Porter and Elias Torres — all of whom are well-known on the start-up scene thanks to copious blogging, tweeting, and prior entrepreneurial activity — packed their new high-ceilinged Central Square space with people on a frigid February evening.
Performable, founded in 2009 and previously based in Newburyport, aims to help companies turn more of the visitors to their Web sites into paying customers.
The party featured three elements essential to a great gathering: live music, free-flowing dark beer from a keg, and insufficient food. Here's who I ran into...
MITX board member and poet Don Bulens (who worked with Cancel at Compete) and Shareaholic founder Jay Meattle... Oneforty CEO Laura Fitton... TechStars Boston director Katie Rae... Blueleaf CEO John Prendergast (whose online financial management start-up shares space with Performable)... Tourfilter founder Chris Marstall and Brian Del Vecchio of Digital Lumens (pictured at left)...Svpply founder Ben Pieratt...Greg Raiz of Raizlabs...Chase Garbarino of BostInnovation...Reed Sturtevant of Project 11 Ventures...MassChallenge Chief Mentoring Officer Karl Büttner...Wendy Troupe of Terametric...Tom Summit of TalentGraphz and CSN Stores...Jules and Desmond Pieri...new Performable employee Alex Patriquin...and FitnessKeeper founder Jason Jacobs.
Greg Bialecki, Massachusetts Secretary of Housing and Economy Development, with David Cancel.
Compete president Scott Ernst, Bill Schnoor of Goodwin Procter, and Ted Dintersmith, once a Waltham venture capitalist, now a gentleman farmer residing in the Commonwealth of Virginia.
Serial entrepreneur Wayne Chang with Cort Johnson of DartBoston; Johnson recently left SCVGNR and is cooking up something new at the Dogpatch Labs space in Cambridge.
Onetime Harvard roomies Hugo Van Vuuren and Andrew Bialecki of Performable.
CloudSwitch co-founder Ellen Rubin and Izhar Armony of Charles River Ventures...
Stealthy start-up CloudTree wants to help wireless carriers introduce new cloud-based services
But CloudTree is a cloud-y start-up that's tough to ignore: its management team hails from local companies like EqualLogic, Ellacoya Networks, Arbor Networks, Virtual Iron, and Whaleback Systems. And they've had no trouble, apparently, raising north of $1 million in start-up funds from angel investors.
I had lunch yesterday with co-founders Kurt Dobbins and Phil Bedard (pictured at right) to talk about the business. They both left security specialist Arbor Networks in November 2009, and incorporated CloudTree in early 2010. Working on the start-up are a team of about 11 full-time employees and contractors. Most work off-site, but CloudTree also has an office in Waltham.
The entire company, Dobbins says, is itself built upon cloud technology, meaning that they didn't have to buy a single server to do software development. The company's objective is to build new cloud-based applications for wireless carriers, geared to helping them retain subscribers for the long-term. (Can you say "Verizon iPhone"?) They say they're in discussions with several carriers about starting initial tests soon.
Bedard says, "We want to help the carriers accelerate deployment of new features and applications, so they see lower attrition. Just look at what has been happening to Sprint's subscriber base. We want to create stickiness for them."
A first application, which they call "Social Connect," wants to render the address book obsolete on your mobile phone, and replace it with your lists of friends and connections on various social networks. It'd enable you to pull up a friend's name, and communicate with them through whatever channel is convenient for each of you: you could send a text message from your mobile phone that would appear on Twitter or Skype or AIM, for instance. Or you could place a phone call that reaches them on a desktop voice-calling client like Google Chat. "Essentially, phone numbers go away," Dobbins says. "It becomes all about identities." They say the service would also make it possible to send texts to groups of contacts, and eventually to initiate video chats. And their goal is for "Social Connect" to work on any kind of phone — not just the latest smartphone.
CloudTree also acquired a small maker of desktop conferencing and communication software called Yakkle, and hired its creator, Tom Hazel. That, they suggest, could enable their wireless carrier customers to distribute a branded desktop application that would interact with Social Connect.
CloudTree's founders say they aren't yet in a position where they need to be talking to venture capital firms, but they don't discount the possibility of raising a VC round at some point in the future. The last company that Dobbins co-founded, New Hampshire-based Ellacoya Networks, raised an astounding $145 million before being sold to Arbor Networks, another venture-backed company (for an undisclosed sum.)
DEC founder Ken Olsen: Obituaries, reminiscences and video
- Boston Globe obituary: "Mr. Olsen launched Digital in 1957 in a defunct woolen mill in Maynard with $70,000 in venture capital. For a time, Mr. Olsen, his partner, Harlan Anderson, and his brother Stanley Olsen were the company’s only employees. With innovation after innovation, Mr. Olsen and Digital helped create the computer industry. At one point, the company was valued at about $14 billion."
"...Adjusting for inflation, Fortune [Magazine] said, Digital was bigger than Ford Motor Co. at the death of its founder, Henry Ford, and also larger than US Steel when Andrew Carnegie sold his company or Standard Oil when John D. Rockefeller stepped aside."
- New York Times obituary, written by Glenn Rifkin (who also co-wrote a biography of Olsen, "The Ultimate Entrepreneur"):
In a tribute to him in 2006, Bill Gates, the Microsoft co-founder, called Mr. Olsen “one of the true pioneers of computing,” adding, “He was also a major influence on my life.”Mr. Gates traced his interest in software to his first use of a DEC computer as a 13-year-old. He and Microsoft’s other founder, Paul Allen, created their first personal computer software on a DEC PDP-10 computer.
In the 1960s, Digital built small, powerful and elegantly designed “minicomputers,” which formed the basis of a lucrative new segment of the computer marketplace. Though hardly “mini” by today’s standards, the computer became a favorite alternative to the giant, multimillion-dollar mainframe computers sold by I.B.M. to large corporate customers.
- Gordon College's "About Ken Olsen" page (Olsen was a long-time trustee and supporter of the Christian college, in Wenham)
- Gordon College also produced this video, "The Legacy of Ken Olsen," which includes reminiscences from several former DEC employees:
- WBUR obituary, from tech reporter Curt Nickisch
- Photos from a Ken Olsen tribute held at Gordon College in 2006
- Olsen's profile in the National Inventor's Hall of Fame
- James Connolly of Mass High Tech reminisces about a long-ago Ken Olsen photo shoot at the Mill in Maynard.
- The Digital Alumni Bulletin Board
- Video: Commemorating 40 years of Digital
LA's richest man buys Cambridge start-up that sells intelligent pill packaging
The richest man in Los Angeles, Patrick Soon-Shiong, just bought a tiny Cambridge start-up that sells smart pill packaging, Vitality Inc. Terms of the purchase weren't disclosed, but Soon-Shiong had already been the biggest investor in Vitality, which also attracted funding from MIT Media Lab founder Nicholas Negroponte and other Boston-area angels.
Vitality's first product, the GlowCap, fits on the top of a standard plastic prescription pill bottle. Its job is to remind you to take an important medication daily, getting your attention when you open the medicine cabinet with a blinking light — or an assortment of increasingly loud chimes. The GlowCap can text a family member if you forget to take the medication, and it can also send its data over the Internet to create a monthly report of how closely you adhered to your medication regimen. It's up to you whether you want to share the information with your doctor. The GlowCap talks directly to a small wireless base station plugged into an electrical outlet — no computer or WiFi network required. (The base station, pictured at right on the desk of Vitality CEO David Rose, gets its Internet access from AT&T's wireless network.) GlowCaps can also send text messages or make phone calls to remind you that it's almost time for a refill. Vitality makes the case that most American's don't take medications as prescribed — skipping them, for instance, if they happen to feel good one morning — which can cause a disease to worsen, resulting in higher healthcare costs.
Soon-Shiong earned his fortune in the pharmaceutical industry (he helped develop a breast cancer drug called Abraxane), and he's apparently interested in technologies that can radically reengineer the country's healthcare system (on Twitter, his username is "Solvehealthcare.") In 2010, the Los Angeles Business Journal estimated his net worth at $7 billion.
Soon-Shiong is also a minority owner of the Los Angeles Lakers, and the deal to acquire Vitality was hashed out in his courtside seats in late December, says Vitality CEO David Rose. Rose adds that sitting next to them at the game were Zynga CEO Mark Pincus and DreamWorks Animation CEO Jeffrey Katzenberg. The transaction closed in January.
Rose and Vitality president Josh Wachman say they'll stay on, and that they're focused on developing new products, like a colorful and cute wireless pedometer for kids. "Our roadmap," says Wachman, "is to create more things that help people make better decisions every day. We think about things like tracking vitamins and pills, the food you eat, your stress level, or your sleep quality. We're really in the behavior-change business." (Wachman is pictured at left, holding a GlowCap.) The company has a knack for publicity; the GlowCap has already been featured on the "Today Show," mocked by Stephen Colbert, and demonstrated by Dr. Mehmet Oz on "Good Morning America."
Rose says that once a consumer has installed the wireless base station (he refers to it as "the night light," since it emits a gentle glow), it creates an opportunity for Vitality to introduce other wellness-related devices that can take advantage of the same Internet link.
The company first raised money in 2007, and Rose says early investors will see about a 10x return on their money. (A 2009 Information Week article said the company had raised $4 million.)
Shouldn't your Saab be able to social network? Boston's VroomGreen developing new device to make it so
One of the cooler prototypes I've seen recently comes from a fledgling start-up called VroomGreen, which is so new it doesn't yet have a Web site. Developed by Ben Resner, the technical founder of Ambient Devices, the prototype device enables your car to start social networking.
Why would your wheels want to be on the Web?
First, a little about how the device works. It plugs into a data port called the OBD II, which enables mechanics to diagnose problems, and which exists in every car made since 1996. That connection, plus an on-board GPS chip, tells the device things like where the car has been driven, how fast, and how much gas you've used getting there. When you park in your garage or driveway at home, the device looks for your home wifi network and uploads the data to the Internet, where you can either use it for your own purposes, or share it with others via Facebook or Twitter. (Resner says he built the prototype device using ready-made components from Arduino, and he has a smaller and more polished version of it than the one pictured above.)
One use for the VroomGreen device might be keeping tabs on the trips you make for work, and compiling reports for reimbursement. (Smartphone apps exist to do this — if you can remember to click a button at the start and end of every trip.) It could also be used to help split gas costs between a group of colleagues who regularly carpool, or to calculate just how much it costs when you drive to Newbury Street, rather than hopping the T.
Within a household, too, parents might be able to reward kids for safe driving (not exceeding 65 miles per hour, or avoiding NASCAR-style starts when a red light turns green). Family members might even compete to see who can get the best gas mileage in a given car, or who drives the least.
With gas prices on the rise, Resner notes that "cost-effective driving and green driving are actually the same thing."
Resner also thinks VroomGreen drivers might want to share their cars' stats more widely. "You might be getting the best mileage of any 2009 Subaru Forester driver in Boston, or the country, and this would let you share that — sort of like being a FourSquare mayor," he says. (Resner says he doesn't like the idea of, say, hyper-competitive twenty-something male drivers using the device to see who can get from Boston to Killington the fastest on a snowy Saturday.)
Resner is currently working as a hardware consultant to several clients, but he says VroomGreen is more than just a side project; he's pretty sure it can evolve into a company. He plans to make about twenty of the devices within the next few months, and distribute them to beta testers locally. He says he believes the device can be sold for between $100 and $150, and might even be provided free by a company with whom you'd share the data. (Think Liberty Mutual or Allstate supplying it in exchange for the right to monitor your driving.)
One of Resner's slide presentations about VroomGreen is available on SlideShare. Resner says that while he has had a few preliminary conversations with prospective investors, he isn't in fundraising mode yet, but rather is looking to build a business team around the concept first.
"What other object are people so passionate about, aside from cars? Just think about all the love songs that have been written about cars," says Resner, who drives a 2001 Subaru Legacy. He also notes that most households spend more annually on gas than they do on electricity.
(I should note that the photo of Resner above is actually a composite of two iPhone photos, made to mitigate some classic iPhone blurriness issues.)
An open e-mail to Ray Ozzie: Welcome back! (And some 'to dos' for you)
Ray Ozzie
Former Chief Software Architect, Microsoft
Founder, Groove Networks
Developer, Lotus Notes
Dear Ray:
Speaking for all of us here in Boston, we're kind of glad that you didn't become a Microsoft lifer. When you announced your plans to leave last October, to be honest, no one was surprised that the cultural Super Glue hadn't set. Bill Gates had once described you as one of the top five programmers in the world... you parachuted into a 90,000 person company, knighted as Gates' successor...and then you talked about how the company needed to act more like a start-up. Ha ha, that was funny.
I'm not sure when you changed the LinkedIn description of what you did at Microsoft, but the current explanation is pretty funny: "Overhead." I'm sure that's how many Microsofties viewed you, despite your tireless efforts to nudge the company's strategy in the right direction, and build prototypes that would get people there thinking about cloud-based services and the future of social interactions online.
I'm told that you've wrapped up your involvement at Microsoft, and that there's not much reason for you to stick around Redmond anymore. I hope that means you'll be spending more time here in Massachusetts, at your humble single-family abode in Manchester-By-the-Sea.
(I'm a bit worried about the fate of the Cambridge office of Microsoft, known as the NERD Center, which you helped build up. What'll happen without your sponsorship? Who knows. The new "executive sponsor" of NERD is Qi Lu, someone without strong ties to the Boston area, and several other key players at NERD have departed recently.)
I've heard that you're informally advising at least one local CEO of a software-as-a-service start-up, but no one I spoke to seems to have any idea what you're thinking about doing next. (Most of the technical all-stars you'd recruit if you were already laying the groundwork for a new company are still working at Microsoft, I'm told.)
My bet is that you'll compile some of your thoughts on the future of technology into a book, maybe make some angel investments or join some boards, and then perhaps start your next company. I'm sure any of our fine engineering schools locally would love to have you as an adjunct faculty member, but I'm not sure that'd be up your alley. And while it's always an alluring economic possibility, I can't really imagine you becoming a venture capitalist.
But here are a few areas where you could help out the community locally, with your experience in software development, start-ups, bigger tech companies, cloud computing, and online collaboration. Call it a to-do list for your re-entry. I know you've never been especially big on public speaking or schmoozing (aside from participating in the annual, invite-only Foo Camp East gathering, I am not sure you spoke at one Boston event during your entire Microsoft tenure), but it'd be nice to see you get plugged back in to Boston. A lot has happened since you joined Microsoft in 2005.
- Perhaps you'll consider serving as a mentor with TechStars Boston or MassChallenge, two great programs that serve as petri dishes for promising new start-ups.
- Since you live up north, I know the North Shore Web Geeks would be thrilled to have you drop by one of their monthly meet-ups in Newburyport. In Cambridge, OpenCoffee brings entrepreneurs to Voltage Coffee in Kendall Square each Wednesday morning. It was started by venture capitalist Bijan Sabet (who serves on the board of Twitter and Boxee) and Nabeel Hyatt, now running the Boston office of Zynga.
- I heard that you were at Microsoft Research's Social Computing Symposium in New York last week (listing your company affiliation as "none.") Though you were one of the first CEOs in the Boston area to blog regularly (while you were running Groove Networks), you've been pretty quiet on the social media front lately. You jump-started your blog only as you were on the way out at Microsoft. Though you have an account on Twitter, your messages are "protected," meaning someone (me, for instance) needs permission to see what you're tweeting. Maybe you could share what you're thinking a little more frequently, and openly?
- Boston is home to lots of unconferences, but two really stand out: BarCamp Boston (happening April 9th and 10th) and the Mass TLC's Innovation Unconference, in October. I know people would be eager to have you lead a session — or just be part of the mix.
- I consider the quarterly Web Innovators Group shindigs "must go" events, at least twice a year. The demos from not-yet-funded (and some angel-funded) start-ups are interesting, and the schmoozing is even better. There's a cash bar, but I'll buy the first one.
Whatever you choose to do, it'll be swell to have you contributing once again to the innovation economy here — as opposed to trying to nudge the rudder at the S.S. Microsoft by a degree or two.
Cloud archiving start-up Sonian deposits another $9 million, some from Amazon.com
Everyone's favorite e-tailer, Amazon.com, is making a rare strategic investment in a Massachusetts start-up this week. The Seattle company is participating in a $9 million round of funding for Needham-based Sonian.
Sonian helps more than 5,000 business customers archive their e-mails and other digital communication (like instant messages and Tweets) to comply with various federal record-keeping regulations. The company mainly stashes the information in data centers run by Amazon, which sells storage by the terabyte through its Amazon Web Services division. But Sonian won't exclusively rely on Amazon's "cloud"-based storage service forever, Sonian vice president of engineering Joe Kinsella says: it'll eventually offer customers a choice of various cloud storage offerings.
Also participating in Sonian's second round of funding are Webroot Software, a Colorado-based Internet security company; Summerhill Venture Partners, a Toronto and Boston-based venture capital firm; and Prism VentureWorks of Needham.
Amazon's investment was made by Jeff Blackburn, senior vice president of business development at the company.
Sonian says its archiving service helps customers deal with the endless accumulation of e-mail and other electronic corporate communications in a cost-effective way. The company says it'll use the new funds for continued R&D and "business expansion." Sonian has raised about $15 million in total. CEO Jeff Dickerson joined the company last November.
Behind FedEx's new site, a tiny Cambridge design firm
Here's a sneak preview of the Web site FedEx will be launching over the weekend, designed by the hotshots over at Tank, a tiny 30-person firm located in the shadow of MIT.
FedEx executive Charlie Ciaramitaro tells me this is about the sixth time the heavily-trafficked site has been redesigned since it originally launched in 1994; those of you with a little gray hair will remember that the very first FedEx site included one of the first functional, form-based applications the Web had seen: you could enter a tracking number and actually find out where your package was. It was so miraculous for the time, I'm pretty sure people sent packages just to see it in action. These days, the site gets about 30 million visitors a month, and eight million packages are tracked on it daily. (The record this past holiday season was 14 million packages tracked on a single day.)
As FedEx bought and integrated companies like Kinko's and Parcel Direct (the business that became FedEx Ground), the Web site started to seem a little confusing, Ciaramitaro says. "We reorganized the site based on what customers want to do with us, rather than which of our companies they wanted to work with," he says. "There's now quick access to getting a rate or scheduling a pick-up." There are also prominent links to FedEx's profiles on Facebook, YouTube, and Twitter.
Coincidentally, Tank was founded in 1994, but didn't start working with FedEx until around 2001. Another local agency, Boston-based Digitas, had been handling most of FedEx's work in the late 1990s and early 2000s. But when a few Digitas employees moved over to Tank, they soon began doing small projects for FedEx. The relationship grew over time, to the point where Ciaramitaro now describes Tank as essentially the company's "agency of record" for its Web site. (Tank also does print work for FedEx, too.) The Memphis-based shipping giant is now Tank's biggest customer, though the firm has also worked with well-known brands like Sony, RueLaLa, Puma, and Cole Haan.
Cartera and Vesdia, which offer discounts to card-carrying consumers, merge
Two companies that specialize in dangling discounts in front of consumers who carry a particular credit card are merging this month. Lexington-based Cartera Commerce (formerly known as Mall Networks) and Atlanta-based Vesdia say that once combined, the two companies will work with four of the top five credit card issuers, and three of the four largest U.S. airlines. Both companies are privately-held, and this was an all-stock transaction; terms weren’t disclosed.
The business essentially involves collecting tantalizing offers and discounts that can be presented to consumers who carry a certain credit card, debit card or frequent flier card. If you’re enticed to, say, get 500 airline miles by having your carpets cleaned or get 5 percent cash back when shopping at Bluefly.com, the merchant pays for that reward in return for landing you as a new customer. And as a reward, you receive either airline miles, or cash back on your monthly credit card or debit card bill.
Cartera chief executive Tom Beecher will be CEO of the combined company, which will retain the Cartera Commerce name. He says that the combined company will have 150 employees (about half from Vesdia, and half from Cartera), and that he doesn’t anticipate any layoffs, or the closure of Vedia’s Atlanta facility.
“We think of this as a growth merger,” Beecher says. “Our plan is to continue growing in both locations.” (He says that in Lexington, the company is currently hiring in the technology and sales departments.) Vesdia CEO Jim Douglass will also stick around in an executive vice president role, and also as a board member.
“We looked at this as a way to combine the two biggest players to create a clear leader,” Beecher says. With mergers between private companies, it's always hard to tell whether they'll produce a real powerhouse, or whether you end up with the equivalent of two drunks holding on to each other and trying to walk a straight line.
ComVest, the private equity firm that acquired Vesdia in 2009, is the largest single shareholder in the new, combined entity. Pete Kight, a ComVest managing partner, is also joining Cartera’s board as a result of the merger. Kight also serves on the board of Cambridge-based Akamai Technologies.
Among Cartera's investors are Flybridge Capital Partners, DACE Ventures, and the Venture Capital Fund of New England.
MIT spin-out iWalk, bringing to market prosthetic foot, raises $15 million from General Catalyst and Sigma Partners
iWalk, a Cambridge start-up that has spent the past five years working on an advanced prosthetic foot, raised an additional $15 million last month; the new funding should be announced later this week.
Participating in the company's third funding round are Boston-based Sigma Partners, General Catalyst Partners of Cambridge, and New York City-based WFD Ventures. Paul Flanagan of Sigma is iWalk's newest board member.
In total, iWalk has now raised nearly $40 million.
The company was founded by Hugh Herr, an MIT Media Lab professor who is himself a double amputee; as iWalk has developed successive iterations of its "PowerFoot" device, few people have worn it as long as Herr.
As an individual wearing the PowerFoot walks, the device reacts to the environment, whether that's stairs or a ramp or level ground. The built-in sensors and microprocessors enable the PowerFoot to mimic the natural way that the foot, ankle, Achilles tendon, and calf muscle work together, storing and releasing energy (using an actuator and spring assembly.) Inside the PowerFoot is a lithium polymer battery that needs to be recharged daily. The PowerFoot weighs just 4.5 pounds, which the company says is equal in weight to the one you were born with (or a little lighter), assuming you weigh between 170 and 250 pounds.
iWalk CEO Tim McCarthy says the company will deliver its first five "commercial" PowerFoot devices (PowerFeet?) to the Walter Reed Army Medical Center in Washington, D.C. later this week. McCarthy moved to Boston in December 2009 to join iWalk; he'd previously headed sales and marketing for the American division of a big prosthetics maker, Ossur, in southern California.
Earlier in his career, Herr developed a prosthetic knee for Ossur, which is headquartered in Iceland.
Here's a company-produced video featuring retired Army staff sergeant Justin Lynn, a veteran of the Iraq war, talking about the iWalk's natural feel; it includes some amazing shots of Lynn walking up stairs at a construction site and playing golf.
You'll find more company videos here.
"We typically stay away from things that require FDA approval," says Flanagan of Sigma, "and their product has an exemption from that. So that put it into the playing field for Sigma. I talked to twenty soldiers and other people who've used the device, and the feedback on the product every single time was amazing." Flanagan says Sigma's investment rationale was based, unfortunately, on the number of amputations that take place in the U.S. annually (many are veterans injured in the line of duty, or patients who lose a leg and foot to diabetes.) But iWalk will likely offer other prosthetic devices in the future, and perhaps also wearable exoskeletons for those who today rely on leg braces.
Ken Moore, Cambridge-based Microsoft exec, splits for Oracle
Another notable Microsoft executive with long ties to the Boston tech community has left the company. Ken Moore, who had been the general manager of the SharePoint Workspace product at Microsoft, took a VP job last month at Oracle, and will be moving from Massachusetts to California.
Moore had been part of the early team at Groove Networks, a company that aimed to foster better online collaboration, working alongside founder Ray Ozzie there. (The two also worked together at Iris Associates, the company that spawned Lotus Notes, a pioneer in digital collaboration.) Moore joined Microsoft along with most of the Groove team when Microsoft acquired the Beverly-based start-up in 2005, and had been supervising aspects of the SharePoint product since then. While Ozzie shipped out to Redmond, and eventually assumed Bill Gates' old mantle of chief software architect, Moore remained in Massachusetts. His team was relocated from Beverly to Cambridge last year.
Several other ex-Groove team members remain at Microsoft, including Ozzie's brother Jack; hot shot programmers Eric Patey and Brian Lambert; and PR executive Richard Eckel. When Ozzie announced he was leaving Microsoft last October, he said he'd continue to advise the company for a bit. I'm told that activity has pretty much wound down.
Earlier in his career, Moore worked at Digital Equipment Corp., Progress Software, and IBM. Moore left Microsoft in late December, and starts at Oracle this month. I'm told he'll initially commute to Silicon Valley, with plans to relocate later in 2011. Moore hasn't yet updated his LinkedIn profile to reflect the new gig.
Oracle's PR folks haven't yet returned e-mails or phone calls to confirm the hire.
$12 million more for LifeImage, Newton start-up seeking to make medical images readily accessible
LifeImage has wrapped up its second round of funding at $12 million, bringing the total the three-year-old company has raised to $17 million.
It's nice to see a company focused on something that's an actual problem in the actual world in which we live: trying to slash the number of unnecessary X-rays, CT scans, and MRI tests done in the U.S. each year. From the patient's perspective, it means being jammed into a narrow tube less often — and being exposed to less radiation. And from an overall healthcare system perspective, our country spends about $30 billion on pointless medical imaging, according to LifeImage founder and CEO Hamid Tabatabaie.
Of that $30 billion, LifeImage is focused primarily on what Tabatabaie believes is $15 billion of exams that are done because a doc doesn't have access to an exam you've already had done. "Let's say you sprain your ankle playing basketball, and you get some imaging done," he says. "Three days later, your ankle is still bothering you, so you go to a different hospital. They do it all over again because they can't easily see the ultrasound or X-ray that you had done the first time around." Hospitals, doctors, and even individual patients can use LifeImage's Web site to get access to medical images — securely and with permission, of course. An image of a CT scan, Tabatabaie says, can be bigger than a gigabyte. (Last November, the company announced a partnership with Microsoft HealthVault to help a doctor share images with a patient who might want to get a second opinion, for instance.)
The business model is to eventually charge $1 per exam to make the image available to anyone who needs it, Tabatabaie explains. "There are about a billion imaging exams done each year, so that's a billion-dollar business for us" — though he believes the company will save the healthcare system far more.
The company, Tabatabaie's fourth start-up, has 42 employees. Already, around Boston, hospitals like MassGeneral, the Lahey Clinic, Tufts Medical Center, and Children's Hospital Boston are using LifeImage's software.
Leading the company's latest round of funding are Cardinal Partners of New Jersey and Galen Partners, in Stamford, Connecticut.
A web tool for cheapskates: Boston-based DealGator collects digital coupon offers in one place
Only the most compulsive bargain hounds have been keeping tabs on every new digital delivery mechanism for deals in Boston: there's Gilt City, Tippr, LivingSocial, GetSugar, and BuyWithMe, among others.
Earlier this month, Google reportedly tried to buy one of the more successful peddlers of online discounts, Chicago-based Groupon, for $6 billion. Groupon walked away from the offer, betting that it'll be worth more in the long run. Also in December, Amazon invested $175 million in Washington, DC-based LivingSocial.
Clearly, there's a sense that the sites are changing the way some of us buy products and services locally, from restaurant meals to hair coloring to Pilates classes to prescription glasses. Most invite you to purchase a certificate good for a product or service in advance, at a steeply-discounted price ($28 for a complete dental exam and cleaning, for instance). The offers are only available for a day or so, and they're often only for customers who haven't patronized the business before.
A new start-up based in Boston, DealGator, aims to make it easier to sift through all of the local deals in a city, and to manage the coupons you've purchased so they don't expire before you use them. The company lets you see all the deals being offered at a given moment — there were nearly 70 on the site yesterday for Bostonians — and eliminate categories of deals that you're not interested in, like spa/beauty if you are a non-waxing male. DealGator also displays each business' Yelp rating, since you might not want to patronize a restaurant no one likes, even if it is offering two filet mignons for $10. The site also sends out a daily e-mail digest of deals.
DealGator was launched earlier this month by two brothers, Casey and Jesse Rankin, and it currently serves 21 cities in the U.S. and Canada. The Rankins, who grew up in Worcester, also run Newbury-St.com, South-End-Boston.com, and several other business directory sites.
Casey Rankin tells me that none of the daily deal services have asked to be removed from DealGator's listings, and in fact, new services contact him regularly to ask to be included. As for DealGator's business model, many of the coupon sites offer an affiliate fee to anyone who refers customers to them, which can range from 2 percent to 10 percent of the eventual purchase amount. And while there's no advertising on DealGator's site or its e-mails, that's a possibility in the future.
DealGator plans to add another 50 cities to its service in early 2011. It's in competition with other sites that aggregate deals, including Yipit, Urban Spoils, and Dealery.
Cloud storage start-up Nasuni collects $15 million in second round funding
Natick-based Nasuni, which helps companies gain more flexibility as their data storage needs grow, has collected another $15 million in funding. Flybridge Capital Partners is leading this second round of funding; Nasuni has now raised $23 million in total.
The company's first product is called Nasuni Filer. It's a free software gateway that makes off-site, "cloud-based" storage look just like local storage. Customers pay the company a monthly fee based on the storage capacity they're using.
"It's like having your home directory extended by the cloud," says Nasuni CEO Andres Rodriguez. "You have access to the files whenever you need it, and it never fills up." Nasuni doesn't actually run the data center where files are stored; instead, customers choose whether to use cloud storage services from Amazon, Microsoft, Iron Mountain, Rackspace, or others. Nasuni charges fifteen cents per month, per gigabyte stored, and it bundles that cost and the cloud providers' storage costs into one monthly bill.
Rodriguez says it wasn't tough to raise the company's B round, given all of the mergers and acquisition activity in data storage. "It started with Data Domain [acquired by EMC], then 3PAR [acquired by HP], and then Isilon [acquired by EMC]. All three were modular designs that let you scale storage needs cheaper and more smoothly," Rodriguez says. "The cloud is the ultimate scalable system. It's designed for nothing if not very smooth scaling." In 2007, Rodriguez sold his last start-up, Archivas, to Hitachi Data Systems for about $120 million.
In talking to investors about the company's second round (North Bridge and Sigma put the initial money into Nasuni), Rodriguez says he was impressed by Flybridge partner Chip Hazard's ability to pinpoint the strategic challenges that Nasuni would face. "Flybridge wasn't at the top of my list," Rodriguez says. "But Chip came back on a red-eye, and he'd done an analysis on us that was surprisingly accurate. And then he presented it in such a humble, straight-forward way. He won me on brains."
The company has about 30 employees, Rodriguez says, and is hiring for sales and marketing roles.
Low-key CasePick systems developing robotic systems for warehouses, in collaboration with NH-based grocery distributor
I first met CasePick Systems founder John Lert more than three years ago, when we was just one guy in a shared start-up space in Cambridge. His vision was to use mobile robots to make warehouses operate much more efficiently. Since then, CasePick has grown into a company with nearly 50 employees, and it's still on a hiring spree, with about a dozen open engineering jobs.
And sometime in 2009, Wilmington-based CasePick was acquired by one of its early backers, C&S Wholesale Grocers, a privately-held New Hampshire company that describes itself as the country's biggest wholesale grocery distributor.
But throughout, CasePick has been extremely quiet — they've never issued a single press release — unlike Kiva Systems, the better-known Massachusetts company developing new "material handling" systems for warehouses that incorporate robots.
Just about everything that's public about CasePick's technology is described in a single patent that was issued to CasePick last fall, but filed back in 2004. It decribes a network of pathways in a warehouse that are traveled by autonomous vehicles. The vehicles are able to load or unload an item using a "transfer arm" that can pull a cardboard box, for instance, off of a shelf where its stored. Merchandise would be stored on multiple levels in the warehouse, with the mobile robots able to travel up and down ramps. (One source tells me that in the current instantiation of the system, there are elevators for the bots to ride.) CasePick calls its bots T3Vs, for "Track-guided Transfer and Transport Vehicles," and the company was issued a trademark earlier this year for the term T3V, covering "automated transport vehicles for use in moving and carrying items in warehouses, order fulfillment centers and other storage facilities."
A spokesman for Kiva Systems said that the Woburn company hasn't been running into CasePick much as a competitor, as it pursues new customers. That could be because CasePick is focusing on rolling out its technology first in facilities owned by C&S. The grocery distributor is currently hiring employees who will be responsible for running CasePick systems in at least one of its facilities in New York.
The CasePick system sounds like it requires a whole lot of bolted-down infrastructure, like ramps, pathways, elevators, and special racks to hold product. That means a big up-front investment for potential users — though it isn't clear at this point whether C&S wants to sell the technology to others, or simply use it internally for C&S' own competitive advantage.
Several employees who were part of the original CasePick team have left the company following the C&S acquisition, and many of the current top executives, including president Robert Sullivan, joined CasePick from Brooks Automation in Chelmsford.
Executives at C&S declined to be interviewed. Founder John Lert wouldn't comment, beyond writing in an e-mail, "Yes, I have to admit that the technology is very cool. It’s quite awesome to watch."
Asked about CasePick, which has hired away at least one iRobot engineer, iRobot CEO Colin Angle said via e-mail that he didn't know too much about CasePick, "beyond the fact [that] they seem to be a Kiva competitor. At 700 Bedford employees, [it's] not surprising there is some human capital mobility from iRobot to start-ups. [That's] one of the benefits of having an industry anchor company in a geographic location. :)"
Know more? Post a comment if you would...
Lights out at Allurent; chairman and CEO off to new ventures
Sounds like the lights have been turned out at Allurent, a Cambridge e-commerce software provider founded by alumni from ATG. I'm told the shut-down happened sometime within the last month, and that Allurent had been in discussions with a potential acquirer up 'till the very end.
[ UPDATE: In January, Boston-based Jenzabar, which makes software for educational institutions, acquired Allurent's assets and said it would try to hire former Allurent employees to continue running the business. ]
Allurent had focused on helping big retailers like Reebok, Borders, Sears, and Sports Authority add more sophisticated shopping features to their sites. Various Allurent "widgets" would allow retailers to show current inventory availability, or let customers rate and review products. The company's primary pitch was increasing the likelihood customers would make a purchase, and increasing the average purchase size.
Allurent had about 40 employees at peak, and had raised almost $14 million in funding, mostly from Waltham-based Polaris Venture Partners, though angel investors like One Laptop Per Child founder Nicholas Negroponte and the late Alex d'Arbeloff, co-founder of Teradyne, also participated. Pennsylvania-based GSI Commerce, a publicly-traded company that owns RueLaLa in Boston, was also an investor. The company's most recent round of funding, totaling $2 million, took place this past spring.
Allurent co-founder and executive chairman Joe Chung confirmed the shut-down in an e-mail this morning. Of the acquisition that didn't happen, he writes, "I can't say much, but let's just say it should be (maybe will be?) a [Harvard Business School] case study on what happens when an acquisition goes sideways. The weird thing is that the acquirer couldn't/wouldn't tell us why they had to bail out out, other than to say that it wasn't anything they found in due diligence..." Chung added that the purchase price wasn't the issue. He didn't name the would-be acquirer. My guess is that it could've been someone like Adobe, Oracle, or IBM.
Chung is working on a new project with ATG co-founder Jeet Singh called Redstar Ventures, which sounds like it plans to launch multiple new start-up companies. Graeme Grant, formerly Allurent's CEO, is working on a new Cambridge start-up called CQuotient, which says it has attracted venture capital funding. Ex-Allurent vice president of product management Doug McIver is now working at a Los Angeles company, Magento.
My calls to a half-dozen Allurent executives haven't been returned, and Jon Flint, the Polaris co-founder who served on Allurent's board, also didn't return a call. Allurent is no longer listed on the Polaris site as one of the company's investments, nor does it appear on Flint's profile page.
Polaris' Cambridge start-up space, Dogpatch Labs, is based in East Cambridge office space that Allurent didn't need, and it expanded earlier this year as Allurent shrank. (Several former Allurent employees report being part of company-wide lay-offs in September.)
While Dogpatch Cambridge endures, Allurent doesn't.
Your comments?
ODIN Technologies, Virginia company focused on RFID deployments, acquires Reva Systems for undisclosed sum
Remember RFID tags? They were gonna be on everything?
Radio-frequency identification was one of the biggest areas of promise — and hype — in the post-dot com era. MIT's Auto-ID Center was formed to proselytize about the "Internet of things," the notion that products ought to be trackable and readily identifiable as they zoomed around the global supply chain, and that RFID tags would replace the stodgy old UPC code.
The arrival of RFID, like every other hotly-heralded revolution, has been happening more slowly than everyone expected. And some of the more promising start-ups (including two spun out of MIT's early research in RFID) have been gobbled up by larger players for undisclosed amounts. ThingMagic raised about $30 million and was acquired in October by Trimble. OATSystems raised about $25 million and was bought by CheckPoint Systems two years ago, for who knows how much. (Alien Technologies, a California maker of RFID tags and readers, filed for an IPO but never got public.)
And just today, another acquisition closed: Virginia-based ODIN Technologies, a small firm that sells RFID-related software and services, is buying Westford-based Reva Systems — once more, for an undisclosed sum. Reva had raised about $35 million in funding, much of it from North Bridge, Charles River Ventures, and Cisco.
Patrick J. Sweeney II, ODIN's founder, says that Reva will become his firm's Massachusetts office, and he'll retain about ten members of Reva's technology team. While Reva's chief executive, Bruce Berger, installed just last year, won't stay after the acquisition, Sweeney tells me that co-founder Ashley Stephenson and technology vice president Scott Barvick will. Sweeney also plans to hire more engineers (Java developers specifically) in Massachusetts.
Sweeney says that ODIN primarily puts together RFID systems for clients in healthcare, government, and financial services. He found Reva appealing for the real-time location system it developed using inexpensive, "passive" RFID tags, which don't require a battery. "It's exactly what hospitals are looking for," Sweeney says. "A typical tag in an active system costs $50 or $60 bucks. That makes sense for an infusion pump or an EKG machine, but you wouldn't put it on a floor mat or a pair of scrubs. The passive tags are about a dime apiece, or even cheaper in volume, and you can put them on everything. The holy grail has been passive real-time location systems, but no one has been able to figure out the complexity."
Sweeney, who is originally from Belmont and earned his undergrad degree from the University of New Hampshire, started ODIN in 2002. (In 2005, he authored the inevitable book "RFID for Dummies.") The company has just over 40 employees, and Sweeney says it was built without venture capital funding. Early on, he hired Daniel Engels as a consultant to Odin; Engels was the former head of research at MIT's Auto-ID Center.
ODIN's acquisition of Reva is "a mostly stock deal, with a little bit of cash," Sweeney says, declining to specify how much he's paying. As for whether Reva's investors are happy with the outcome, Sweeney says they may not be crowing about the return on their investment, but, "I think the Charles River and North Bridge guys probably think that the combination of the two companies, and our upside as the leader in the space, have the potential to get them there." Meaning: their stake in privately-held ODIN may prove valuable some day.
I placed calls this morning to Mike Zak at Charles River and Jamie Goldstein at North Bridge, but haven't heard back yet.
Checking with WePay, Boston-bred start-up trying to compete in the Silicon Valley talent battles
I stopped by the Palo Alto offices of WePay last week to visit co-founders Rich Aberman and Bill Clerico; it was a chance to check in on a start-up born in Boston, funded by Lexington's Highland Capital Partners, and groomed by the Y Combinator prep school for promising start-ups, which was created in Cambridge but now operates exclusively out of Silicon Valley.
WePay is focusing on "a chink in PayPal's armor," as Clerico puts it — the experience around managing payments for a group activity, like renting a ski house for the winter or running a soccer league. They've raised just over $9 million, and recently executed a pretty neat publicity stunt to focus on what they see as PayPal's shortcomings.
As a die-hard Boston booster, it's painful for me to acknowledge that WePay has found a more supportive environment in the Bay Area. When I first met Clerico and Aberman in 2008, they didn't have a working prototype of the service yet, and they were having trouble convincing investors that they could make a dent in the complex and highly-regulated world of online payments. They weren't accepted into the first season of TechStars Boston, but they did get into the Y Combinator program, so they packed up and headed for California. Since then, WePay has attracted west coast angel investors like Max Levchin, a co-founder and former CTO of PayPal; Ron Conway, Silicon Valley's highest-profile early-stage investor; and a former Intuit technology executive. They plucked a top engineer out of San Jose-based PayPal. And they briefly occupied the same office space in downtown Palo Alto that was once home to Facebook, but are now in a shed-like space recently vacated by the video site FunnyOrDie.com.
But now, the downside: with so many Internet-oriented start-ups getting funding in the Valley, Clerico and Aberman describe a hiring scramble reminiscent of the late 1990s. "The talent market here is just absurd," Aberman says. "Google and Facebook are at war with each other to hire the best people and hold onto them, and to be a start-up like us during this battle is intimidating." (Twitter, LinkedIn, and Zynga are also "hiring like mad," he adds.) Clerico told me that when recruiters call WePay's offices, one of the start-up's 15 employees will often transfer the recruiter to Clerico's line. "I'll yell at them and threaten to call their client." WePay's board members often use their personal networks to try to persuade other companies not to poach from WePay.
There's so much funding available in the Valley for new Internet businesses, Clerico said, that the best engineers are going out to start their own companies rather than looking for gigs at venture-backed start-ups. "It's just so easy for them to raise $1 million for an idea they may have," he says.
So WePay's strategy has been to look outside of the Valley — especially to the Boston area. They've been to the MIT career fair, and Clerico spoke at September's Startup Bootcamp event on campus. As Boston College alums, they host current BC students at their offices during the school's annual TechTrek. They've also hired employees from Utah and New York.
WePay has gained momentum in the Valley (and found funding) that would have been difficult to attain in Boston. But the company is also feeling the hypoxic effects of a bubbly environment. Every new online payment start-up that emerges gets a flash of attention as the flavor-of-the-week, and bringing on talented team members occupies a good deal of Clerico and Aberman's time. "There are hundreds of early-stage start-ups around that can give new employees significant equity grants, because they haven't yet taken VC funding," Clerico says. "We're sort of in the middle," caught between those companies and brand-name Internet giants like Facebook and Google.
For WePay, the Valley is the obvious place to be — but also a tough environment in which to operate.
FitnessKeeper raises $1.1 million, led by O'Reilly AlphaTech Ventures, for social exercise app
Can you turn a hit iPhone app into a substantial business?
Lots of people, myself included, have been skeptical. But Jason Jacobs, founder of Boston-based FitnessKeeper Inc., is doggedly proving the skeptics wrong. (That's Jacobs, in the photo at right, running the 2009 Boston Marathon dressed as an iPhone.)
FitnessKeeper develops the RunKeeper iPhone app and companion Web site that encourage runners, bikers, and even cross-country skiers to track and share stats about their workouts and races. There's a free version of the RunKeeper app, but the company also sells a $9.99 pro version. (Yes, they've developed an Android version, too, and they have plans to support other smartphones soon.) One really cool feature is that athletes using RunKeeper can broadcast their performance in races live on the Web; here's an example of a Boston Marathon page from this past spring. The RunKeeper app can also collect information from a variety of fitness-related devices, like Garmin GPS watches, Polar heart monitors, and the Withings intelligent scale.
Jacobs says that his company is about to surpass three million users, and today he's announcing a $1.1 million funding round led by San Francisco-based O'Reilly AlphaTech Ventures. FitnessKeeper has now raised $1.5 million in total — some of it from local angel investors like Will Herman, Don McLagan, and Dave Balter, as well as the Cambridge seed fund LaunchCapital.
Jacobs says he has nine employees working at FitnessKeeper's world headquarters in the South End. He expects FitnessKeeper's headcount to double in 2011, mainly in marketing and engineering. The company was among the first 200 apps to launch in Apple's iTunes Store back in 2008.
Update: Here's Jacobs' blog post about the new funding, and another from Bryce Roberts of O'Reilly.
TechStars Boston picks Katie Rae, formerly at Microsoft, as new managing director
The TechStars finishing school for start-ups is announcing today that Katie Rae will be the new managing director of the program's Boston operations. Rae was previously an executive at Microsoft Cambridge, Eons, Lycos, and AltaVista, and for the past few months she has been working with Reed Sturtevant to try to launch a new micro-venture capital firm, Project 11 Ventures.
(Rae was one of 11 people I put on my list last week, "Who Should Run TechStars Boston Next?")
TechStars offers promising start-ups $18,000 in seed funding, plus guidance from seasoned entrepreneurs, in exchange for a six percent stake in the company.
Rae told me last night that she first met TechStars CEO David Cohen and co-founder Brad Feld when they launched the program in Boston in 2009, and she helped bring the TechStars "Demo Day" (when the participating start-ups present to a large audience of prospective investors) to Microsoft's NERD Center in Kendall Square. Both she and Sturtevant, who worked together at Microsoft's Startup Labs, have served as mentors to the start-ups in TechStars' first two Boston classes, when Shawn Broderick was running the program locally.
Rae says she started talking seriously about the gig with Cohen and Feld earlier this month, at the "TechStars for a Day" event in New York.
As the new managing director in Boston, Rae says she plans to "spend the next month listening to people who've gone through the program and have served as mentors, and just ask how we can make this better. The philosophy is one of continual improvement." She says she hopes to bring on more mentors, and another to-do will be finding new office space for the program, which has so far been based in Central Square.
She says that she'll continue working with Sturtevant to get Project 11 up-and-running, noting that the heads of several other TechStars chapters are also early-stage investors.
Update: Here's Rae's blog post (her first) about the new gig.
$20 million more for Heartland Robotics, Cambridge company developing versatile and low-cost manufacturing bots
One of the most promising — and quietest — robotics start-ups in town is announcing today that it has banked another $20 million in funding. Heartland Robotics, headquartered in Central Square, has now raised a total of $32 million since its 2008 founding. The latest checks come from Highland Capital Partners in Lexington and Boston-based Sigma Partners, and Highland co-founder Paul Maeder is joining Heartland's board. (Paul Flanagan at Sigma Partners was the investor there most involved in the Heartland deal, though he isn't joining the board as Sigma was a pretty minor investor in this latest round.)
Heartland hasn't said much about what it is working on, aside from developing robots that will "increase productivity and revitalize manufacturing." Neither Maeder nor Heartland executives wanted to comment yesterday about what the company is doing, aside from the boilerplate included in the press release. (The company aims to introduce robots "into places that have not been automated before [to] make manufacturers more efficient, their workers more productive, and keep jobs from migrating to low-cost regions.")
The company was founded by robotics superstar Rodney Brooks, a co-founder of iRobot Corp. who retired from MIT earlier this year, after more than a quarter-century as a professor and research lab head there, to focus exclusively on Heartland. Brooks serves as chairman and chief technology officer. Working alongside him are head of software development Paula Long (a co-founder of EqualLogic), engineering chief Miki Rosenberg (formerly of Alung Technologies), and alumni of Segway, iRobot, MKS Instruments, Bosch, Handspring, and HP Laboratories. CEO Scott Eckert had been an executive at Dell and Motion Computing before joining Heartland earlier this year. The company has about 20 employees, I'm told.
Since the company isn't talking, I spoke to three people who've visited Heartland and seen demos of its technology. All were impressed — "the road map is pretty compelling," said one — though all had questions about how long it would take the company to get its product ready for customers, and how it would market a general purpose robotic technology that isn't focused on addressing a specific pain point that one particular industry faces (like the robotic agricultural helpers being developed by Harvest Automation, another local robotics company that raised significant funding recently.) Visitors to Heartland describe a light-weight robot that looks like a human from the waist up, with a torso; either one or two arms with grippers; and a camera where you might expect the head to be. The robot is on a rolling base rather than legs; it can be moved around but it doesn't move autonomously. The robotic arm and gripper can be quickly trained to do a repetitive task just by moving them — no software code required — and I'm told the robot has a sense for when people get close, so that it doesn't pose a safety hazard for humans working alongside it. The company is apparently targeting a $5,000 price point, and has been talking with BMW and Procter & Gamble as prospective customers.
Brooks apparently likens Heartland's robot, which is intended to perform the kind of assembly and packaging tasks that low-wage factory workers do today, to Apple's iPhone. He's interested in encouraging a community of software developers to create applications that will teach the robot how to do different tasks — like using its camera to recognize a defective widget, for instance, and pull it off a conveyor belt.
If the robot truly costs $5,000, one visitor to Heartland told me, then companies that haven't previously considered deploying robots in their business would be able to purchase one, see how it contributed, and then either buy more or simply write it off as an inexpensive experiment. "We've seen robots that are expensive and require a lot of customization," said this person. "Those are like mainframes and minicomputers. Heartland believes they're developing the PC of the robotics world."
The very first investor in Heartland was Bezos Expeditions, the personal investment firm of Amazon.com founder Jeff Bezos. Charles River Ventures of Waltham came in shortly after. I happened to run into Devdutt Yellurkar of CRV last night at Web Innovators Group — and he wasn't saying much about Heartland, either, aside from broadly touting the company's potential to keep manufacturing work happening inside the United States.
CloudBees collects $4 million from Matrix Partners
OK, let me be straight: as someone who is not a software developer, there is much I do not understand about CloudBees. The company is involved in cloud computing, as its name implies, but also Nectar, and Hudson, and virtualization, and platform-as-a-service, and continuous integration. CloudBees is excellent at generating buzzwords.
About all that is utterly clear to me is that they've raised $4 million in funding, mainly from David Skok at Matrix Partners, and they are setting up shop somewhere in the Boston area, though the CloudBees crew is currently strewn across the globe.
I sat down with Skok last week for a quick explainer.
Skok had been an investor in JBoss, an open source middleware company that was acquired by RedHat for $350 million back in 2006. CloudBees founder and CEO Sacha Labourey was the chief technology officer of JBoss, and individual investors in the new company include two other JBoss veterans, Marc Fleury and Bob Bickel.
CloudBees, Skok explains, is a development, testing and production environment for Java code that can be rented by the month. "The benefit for start-ups is that it's a way for them to reduce their IT staff," he says. "In even a small company, you usually have one or two people who focus on setting up maintaining the infrastructure for Java development." Key is that the production environment provided by CloudBees is an exact mirror of the development environment, so code doesn't need to be tweaked when it migrates from testing to real-world use. As with other cloud-based services, a customer can start small and scale up as demand dictates. The CloudBees investment fits into Skok's thesis that "more and more of computing is being outsourced to the cloud."
The company was founded in January of this year, and only emerged from stealth mode in August.
Labourey says that Java development is the company's first focus, but that CloudBees may eventually support other programming languages. He writes in an e-mail:
The cloud as we know it today enables great things, but is still way too focused on "virtual machines," "servers," and is pretty raw. While you don't need to walk around with servers and cables anymore, you end up actually doing more IT operations in the cloud than you use to on-premise, since you essentially have to find ways to stabilize an environment that is highly dynamic by definition — and this in a fully automated fashion. That's still IT. Let's get rid of that. What matters are applications, that is the unit of work that eventually delivers value, not whether you installed the right Java virtual machine or how you do your backups. It is only when the cloud infrastructure will be abstracted away with application-level constructs that the true cloud revolution will take place for companies — big or small — as it will significantly impact their ability to innovate, faster and cheaper.
It sounds like the CloudBees deal was fairly competitive, with General Catalyst, Atlas, and Benchmark also in the hunt.
Skok says the company will soon hire a chief operating officer and lease some office space in the Boston area. "This is a great place to find marketing and sales and support talent — people who really understand deep technologies," he says.
Labourey works out of Neuchatel, Switzerland, and doesn't have plans to move to the U.S. Other CloudBees team members are based in New Zealand, Australia, France, Texas, and California. Labourey writes, "We have a chance to hire the best of the best, keep them where they like to live, and we then extensively rely on tools (Skype, IRC, etc.) to work together." But Boston, he's clear, will be the central hive for CloudBees. "...While a lot of innovation takes place in California," he writes, "I think a lot of the *consumers* of that technology (enterprises, etc.) are actually on the East Coast: this helps East Coast companies to be very much customer-focused."
Today's press release suggests that the $4 million round is only the first in a "multi-stage investment." My favorite quote in it comes from JBoss founder Fleury: "Just as JBoss provided a streamlined and usable alternative to BEA and IBM, CloudBees will be providing innovation and ease-of-use compared to VMWare's bloated cloud stacks."
Sounds like fightin' words...
GreenGoose asks: What do you want to measure?
Are you trying to remember to drink more water, bicycle more, take shorter showers, or take your vitamins? Or are you constantly monitoring your kids to see whether they're brushing, flossing, or putting the toilet seat down?
Brian Krejcarek, founder of GreenGoose, thinks the solution may be peppering your home with a collection of small, inexpensive wireless sensors. The sensors are capable of detecting things like movement, sound, or temperature, and they report their findings to an egg-shaped base station that plugs into your wireless router so that it can send data to the Internet. Paste a sensor onto your daughter's trumpet case, and it can track how long she practices. Another on the dog's leash can let you know whether your spouse actually took Sparky out for his 6 a.m. constitutional.
"They're able to measure human behaviors when we interact with objects, whether it's getting on your bike or using your toothbrush," says Krejcarek. When I met him earlier this week, he was wearing a few prototype sensors around his neck, at the end of lanyards that looked like they might ordinarily carry employee badges.
Krejcarek came to New England from Portland, Oregon, and over the summer he participated in the Betaspring program for start-ups in Providence. He's now working in the Cambridge Innovation Center, and is in the midst of raising a few hundred thousand dollars of angel funding to get GreenGoose's sensors and base stations into production (he hopes to be able to start selling them next year; the price isn't yet determined).
"Just about everyone has a lifestyle goal they're trying to achieve, like getting more exercise," Krejcarek says. "We want to help people achieve those intentions." Offering a demo in a Kendall Square coffee shop, Krejcarek shows how picking up a toothbrush or opening a bottle of vitamins instantly transmits an update to a Web site, generating a feed of status updates that looks like something you'd find on Facebook: "Earned 12 lifestyle points by brushing teeth for 12 seconds at 5:50 PM." (See below.)
"We'd like to see ourselves as a kind of Twitter for behaviors and activities," Krejcarek says. "But without requiring you to do some extra step, like tap the information into your cell phone to let it know that you just did something."
Krejcarek acknowledges that the GreenGoose concept is somewhat similar to Fitbit, a San Francisco start-up that makes a wearable exercise sensor. "But we're targeting more of a mainstream audience than they are," he says, "and we're planning to deploy a lot of these sensors through partners," like a drugstore chain, health insurer, or bottled water company. (Krejcarek isn't yet working with CVS, I should note; this is just a demo page.)
He says GreenGoose isn't focused (at least right now) on dangling discounts or rewards to motivate its users to achieve their goals. "It's more about the intrinsic benefits of doing something that's good for you," he says.
Marginize materializes on Boston.com
Marginize founder Ziad Sultan called yesterday afternoon to let me know that his nifty online annotation system would be showing up on this very blog, starting today. Marginize will also appear on other stories throughout Boston.com's business section; you can see the little red Marginize tab over there on the far right side of the page.
What's Marginize? It's a communal, Internet-age update on marginalia. When you click the tab, you'll see comments that readers of a particular article or blog post have left — and also Twitter messages referencing that particular story. You can see other people who've visited the page recently, and people who are frequent commenters on the site.
Unlike the comments at the bottom of Boston.com blog posts and articles, though, Marginize requires you to log in with your Twitter, Facebook, or Google Buzz account — so it tilts the tables toward posting as a real, identifiable person (though it doesn't require it.)
I asked Sultan about whether Boston.com's millions of hard-working staffers could nix Marginize comments on an article that were advertisements, or crossed the line into hate speech or personal attacks. He says there is a way to yank objectionable comments, but that anything that is disappeared by a Boston.com staffer will show up on this special page, so that there's transparency about what is being pulled.
I'm bullish on anything that creates more of a conversation online between the two of us, and other readers, so we'll see how this goes. (I should disclose that I had absolutely nothing to do with bringing Marginize to Boston.com.) Marginize also lets you "check in" to Web sites, and earn badges and rewards, which is something that every start-up must do these days to show they are as hip as FourSquare, even if it's totally irrelevant to their business concept.
Marginize participated in the TechStars Boston development program earlier this year, and as a result raised $650,000 from angel investors. Sultan says the company has about nine full-time employees (some off-shore), and it is based in Kendall Square. Before starting Marginize, Sultan was an analyst at Longworth Venture Partners, the Waltham venture capital firm. (He says he is still an entrepreneur-in-residence there.)
Other sites deploying the Marginize "publisher widget" this week include VentureFizz, OnStartups, and Xconomy.
Portable power start-up Lilliputian Systems unveils Intel investment and partnership
The product that Lilliputian Systems has been developing for the better part of a decade sounds promising: a compact little fuel cell that can power consumer electronics, using replaceable $2 butane cartridges. The energy density of butane (a/k/a lighter fuel), of course, is much higher than a lithium ion battery. And who wouldn't want a cell phone or laptop that could run for a week or two, rather than requiring nightly assignations with a wall socket?
Wilmington-based Lilliputian has been slowly improving its fuel cell prototypes, and wending its way to the market. Company executives still won't say when you'll be able to buy one, but today they're announcing that Intel Capital is making an investment in Lilliputian, and that the chipmaker will also produce the silicon wafers — a crucial component of the finished fuel cells — at its Hudson, Mass. manufacturing plant. At right is a company-supplied example of what a finished fuel cell (the company calls its device the "Mobile Power System") might look like.
The Lilliputian Mobile Power System will cost about $100 and will be sold by partners, says vice president Mouli Ramani. Initially, it'll be used to recharge devices like mobile phones, Bluetooth headsets, digital cameras, and music players that have USB ports. (Power-thirsty laptops require more than the MPS' three watts of electricity, and Lilliputian's initial product won't be capable of recharging them.) Ramani says he's already traveling around with a prototype of the Lilliputian Mobile Power System, using it to keep his BlackBerry juiced up. "I now don't even think about what my cell phone charge is," he says. "It's like having a wall outlet in my pocket."
Eventually, Lilliputian's power systems could be integrated into new mobile phones or laptops, rather than sold as accessories. Instead of plugging them into a wall outlet once a day, you'd just jam in a new butane cartridge every week or two.
Whenever Lilliputian gets its first product on the market, it better hope it sells well: prior to today's Intel investment, the company had raised about $90 million in venture capital, and taken a $5 million low-interest loan from two state agencies, MassDevelopment and the Massachusetts Clean Energy Center. The company's backers include Kleiner Perkins, Atlas Venture, Stata Venture Partners, and Rockport Capital. (I mentioned the company in this February column, "Patience can pay off when investing in start-ups.")
Intel's investment and supplier partnership with Lilliputian were announced today at Intel Capital's annual CEO Summit in southern California.
Peter Thiel, Facebook’s first big backer, thinks the future of global innovation may hinge on more entrepreneurial college drop-outs
I had a chance to spend some time on the phone yesterday with Peter Thiel, the PayPal co-founder, venture capitalist, hedge fund manager — and early Facebook investor. He’s speaking at MIT this coming Tuesday night, at an event organized by the MIT Enterprise Forum of Cambridge.
We talked about Thiel’s new fellowship program, which will provide twenty $100,000 grants to potentially world-changing young entrepreneurs in the for-profit and non-profit sectors; why it might be better for would-be entrepreneurs to drop out of school today than it was when he attended Stanford; whether Facebook could have thrived if it had stayed in Boston; what Thiel sees as a dearth of innovation globally; and the risk tolerance of Boston investors.
(Incidentally, Facebook co-founder Mark Zuckerberg was twenty when Thiel first met him, so he wouldn’t have been eligible for the new Thiel Fellowship, which is open only to people who haven’t yet ticked out of their teens.)
Here's a very lightly-edited transcript of our conversation.
Scott Kirsner: So what will you be talking about Tuesday at MIT?
Peter Thiel: The objective is really just to give a general talk about technology entrepreneurship in the U.S. It’ll basically be a bit of an overview of my thinking about how to start companies. I’ll talk about my PayPal experience, and offer some perspectives on what I see going on in the technology industry in the decade ahead.
And I will probably talk about this fellowship program we just announced for twenty students under twenty to take a couple years off of school and work in a technology start-up-type context.
SK: You’ve gotten a good amount of criticism for the program, which some see as encouraging students to leave school. You went to Stanford, and finished, and then went on to law school and got a degree there, too.
PT: There are certainly a number of things that are quite different from when I went to college a quarter-century ago. The big issue we zeroed in on – which really hit me over the last year or so –is the extraordinary amount of student debt that people are racking up, and the ways that is effectively changing the kind of decisions they can make later in life. When you rack up enormous amounts of debt, it sort of tracks you toward the higher-paying job, but away from something that is less remunerative in the short run, but maybe more entrepreneurial – or a non profit – or something that’d be socially useful.
I think there’s a very significant set of problems around the debts people are amassing. One of my concerns is that that is starting to discourage genuine entrepreneurship. People get super-tracked toward safe things, so they can pay off their debts.
I basically graduated with no debt. I was lucky to have parents who were middle class and could pay for my education.
[For me,] there was a way in which getting educated was actually a way of deferring thinking about the future… Part of our effort is to encourage some thinking about why are people being educated – what is the purpose?
SK: Well, what about someone who is studying chemistry or molecular biology? That seems like an important foundation if you want to develop a new drug.
PT: It depends a lot on the subject matter and the field. But I’m actually not convinced that even in some of these harder technology type areas, the incremental value [of advanced education] is quite high.
SK: So you’re saying that after high school, a kid might be ready to develop an important new cancer drug?
FULL ENTRYSunday River wants to get skiers checking in on the slopes, using Facebook Places
It's November, the trees are bare, the air is chilly, and the thoughts of die-hard skiers and snowboarders are naturally turning to ... using Facebook on their mobile phones.
OK, maybe not naturally. But a nifty new Facebook application from the Boston social media agency Brand Networks, in partnership with the Sunday River ski resort in Maine, hopes to get you using your mobile phone on the mountain as frequently as you pull out your tube of Chapstick.
Here's how it works: you add the new Sunday River app to your Facebook page. Then, when you visit the ski resort, you use the Facebook app on your mobile phone to "check in" at various spots around the mountain. As a result, you both earn virtual "patches" that show up on your Facebook page, or actual rewards that you can redeem at the mountain, like half-off appetizers at one of the resort's restaurants, using Facebook's new Deals feature. (For you youngsters: back in the olden days, before there was Facebook, the way we wasted our free time was by sewing actual patches on our ski parkas.)
"If you check in at all eight of Sunday River's peaks, you get the 'Explorer' patch," explains Brand Networks founder Jamie Tedford. "Or if you check in on any day that it's snowing and write 'Powder Day' in your comment, you unlock the 'Powder Day' patch. If I'm riding the lift with a friend and I check in and I tag a friend who is with me, you and your friend get the 'Buddy' patch." Tedford says there will be signs around the resort encouraging visitors to use the Facebook app on their phones to check in.
The new app serves two purposes. First, it encourages Sunday River visitors to spread the word to their Facebook friends about where they are and how much fun they're having. That's very cheap marketing for the resort. But second, Tedford says that the app could evolve into a new kind of loyalty program for Sunday River, rewarding visitors who come often. Though this reward doesn't yet exist, Tedford says it'd be easy to offer a free lift ticket or Sunday River fleece vest at the end of the season to someone who'd checked in at the mountain on 20 different days, for instance.
Tedford contends that for marketers, it makes more sense to integrate with Facebook's "Places" check-in capability, rather than creating a separate mobile app or relying on Foursquare, which helped popularize the concept of checking-in with your phone when you arrive somewhere. "The #1 app on any of these mobile platforms is, or is going to be, Facebook. You either get with it, or you're up against it," he says. "You just don't want to be another app that someone needs to click."
The first time you'll be able to use the Sunday River app is this week, at the Boston Ski and Snowboard Expo, if you visit the Sunday River booth.
Recently, Brand Networks created a similar program with Starbucks, according to the company's blog. Starbucks customers can earn virtual gifts and badges — and also prod the company to donate up to $75,000 to Conservation International by checking in at the chain's cafés. Tedford said he couldn't comment further on that project.
Terry Waters to succeed Emily Green as CEO of The Yankee Group, tech forecasting firm founded in 1970
Boston’s oldest technology forecasting firm, The Yankee Group, has a new CEO today. Emily Nagle Green is turning over the corner office to Terry Waters, though she’ll remain Yankee’s chairman. Back in April, when Yankee announced an infusion of $10 million from private equity shop Alta Communications, its majority shareholder, the research firm also said that it was starting the search for a new CEO.
Waters had previously served two stints as an executive at the largest tech forecasting firm, Connecticut-based Gartner Inc. Most recently, he’d been CEO at Highline Financial, an Austin-based data and analytics company focused on the banking industry. (Waters stayed in that job for just 18 months, and never moved to Austin.)
“The goal,” says Waters, “is really to make Yankee Group a global firm. We’ve been focused on this theme of … ubiquitous connectivity, and how that is changing things for businesses and consumers, and we think that is a huge market opportunity.” In a press release today, Yankee Group said it had recently hired 11 new analysts to examine sectors like mobile payments, 4G wireless, and security. Waters tells me he’ll continue living in Connecticut and will commute to Boston.
Green, who has led Yankee since 2005, will continue as Yankee’s chairman, and says she will seek to serve on other boards and help “grow the Massachusetts tech hub.” Green is also vice-chair of the Massachusetts Innovation and Technology Exchange, the digital media and marketing trade group. She may also write another book, on the heels of 2009's "Anywhere: How Global Connectivity is Revolutionizing the Way We Do Business." On top of that, she has been learning how to play the accordion.
Yankee Group was founded in 1970 by Howard Anderson, and built its reputation on Anderson’s ability to turn out a pithy quote — and to accurately predict what was likely to happen next in the telecom industry. There have always been all sorts of interconnections between Yankee and its Cambridge rival Forrester Research: Forrester Research founder George Colony worked at Yankee early in his career, and in the late 1990s Green helped Colony build Forrester into one of the biggest tech research firms (it’s now #2 behind Gartner.)
Tuck Rickards at the Boston office of Russell Reynolds handled Yankee’s CEO search.
Blaze brings in $1 million from CommonAngels and Boston Seed Capital
Blaze Software is a start-up obsessed with speed — and the company has been setting some new speed records in its first few months of existence.
Michael Weider left his job at IBM in late August, started raising money for Blaze at the beginning of September, and "we had it sewn up by the end of the month," he says. His Ottawa-based company just raised just over $1 million in seed capital from individuals and organizations like Lexington-based CommonAngels and Boston Seed Capital, a new firm in Wellesley run by Nicole Stata.
Blaze was created to help customers make their Web sites zippier — when viewed on PCs, mobile phones, or tablets. "With poor site performance, you lose people," Weider says. "It used to be your pages could load in five seconds, but people are now looking for two seconds or less. There's a growing correlation between how fast a site is and its business success." And if your site is slow, that can hurt its ranking on Google, Weider adds. (Here's a sample analysis the company did on my personal Web site, http://scottkirsner.com.)
Weider says that Blaze's software automagically optimizes a Web site's performance for various desktop and mobile browsers, "without having to change any of your code." The start-up had a beta version of the software, and was able to show investors before-and-after examples of how it improved sites' performance.
Also helpful, Weider acknowledges, is that his last start-up, Watchfire Corp., was acquired by IBM in 2007, for an undisclosed sum. Three Watchfire veterans are working alongside him at Blaze. "People want to invest in teams that have done it before," he acknowledges.
Though Weider only left IBM at the end of August, several other engineers had been laying the groundwork for Blaze's product for several months, including co-founder and CTO Guy Podjarny, another Watchfire vet who left IBM back in January.
Blaze now has a six-person engineering team in Ottawa, but Weider says "we'll probably open up an office in Boston for sales and marketing as we get further along."
Here's a video explainer of how the technology works. It was produced by Blaze, which has several others on its Vimeo channel:
Blaze - How It Works from mikeweider on Vimeo.
Practically Green, site that suggests environmentally-friendly products and actions, raises $750,000
Practically Green, a Boston Web site that offers what you might call a "green lifestyle make-over," plans to announce tomorrow that it has raised $750,000 from CommonAngels and individual investors. The company was founded earlier this year by two former Boston.com executives, Susan Hunt Stevens (the former general manager for the site) and Jason Butler (formerly director of community product development.) Also coming tomorrow is an announcement about the site's first major media partnership.
Practically Green is built around a quiz that serves up a report card based on your household's current activities. Do you use an all-natural toothpase? Buy organic chicken? Have you installed a low-flow showerhead or toilet? Once the quiz is completed and you're scored in categories like energy and water usage, the site makes some recommendations about greener choices you might make. "It could be something big, like installing a programmable thermostat," Stevens explains, "or something small like switching to an all-natural dish detergent." The site has a database of more than 400 specific actions to recommend based on the results of the quiz.
The site also integrates social networking, allowing you to compare your rankings with friends, and, Stevens explains, "if you commit to taking an action, you can share that with a friend, which makes you more likely to follow through."
Practically Green's business model is built around pay-for-performance advertising and sponsorships. If your score on the quiz earns you the "natural baby" or "green kitchen" badge, for instance, that might be sponsored by a relevant brand. And companies will pay Practically Green lead-generation fees for consumers that the site sends their way. Someone, after all, wants access to all those consumers who suddenly want to install new toilets or thermostats.
Joining the board as the result of Practically Green's first round of funding are Chris Sheehan of CommonAngels and John Landry, a CommonAngels member and investor with Lead Dog Ventures. (Stevens had previously worked at Abridge, a New York collaboration software company where Landry served on the board, and she is on the board of Xconomy, a Cambridge-based media start-up, with Sheehan.) Also investing in this round is bacon baron Stephen McDonnell, CEO of New Jersey-based Applegate Farms, which markets organic and natural meats. And Eric Hudson, founder of Waltham-based Preserve Products, which makes consumer products out of recycled plastic, is joining Practically Green's advisory board.
Practically Green launched a beta in May with a test community of 100 mothers (they cleverly dubbed the group "the Mother Board"), and opened the site to other users in late June. The start-up is currently operating out of Back Bay office space loaned to it by the PR firm Elevate Communications.
Fig Card seeks to make it super-simple to pay merchants with a mobile phone
I had a chance last Friday to try another mobile payment system developed here in Boston. This one is called Fig Card, from the dynamic South End developer duo of Max Metral and Hasty Granbery, who previously built Povo, a wiki site that collects information about neighborhoods.
Paying with your mobile phone feels novel and cool, and one of the great promises that the techno-future holds for me is that I will no longer have to tote around my two-inch thick wallet, jammed with cash, receipts, credit cards, Charlie Cards, ZipCar cards, and various loyalty cards. Fig Card is developing an app (initially for iPhone and Android) that will allow you to pay for a purchase at a local merchant, get a digital receipt, and chalk up points in the store's loyalty program (for instance, giving you an eleventh coffee for free after you purchase ten.)
Of course, swiping back and forth on your phone's screen in search of a payment app could simply replace today's acts of jingling around in your pocket for correct change, or hunting through a wallet for the right credit card.
Metral and Granbery have an office on Appleton Street, and Metral also lives nearby, so it's natural that the spot they've chosen for a pilot test of Fig Card is the Appleton Bakery Cafe. They told me they've had lunch there almost every weekday for the last two months.
While Granbery was installing a beta version of the iPhone app on my phone, Metral purchased a couple cookies and a coffee to show me how the app worked. When he opened it, he first punched in a four-digit code for security, and then the app displayed a green button that said "Ready to Pay." After the cashier had rung up the order, Metral clicked the button, and an itemized bill showed up on his phone. (Metral's photo also popped up on the cash register's screen, to give the cashier a way to verify that the phone's owner was paying the bill — a second layer of security.) It offered him the opportunity to add a tip, and then click "pay," which completed the transaction. Fig's servers charged his credit card, sent information to the cash register that the transaction was complete, and filed a digital receipt away in his phone.
When I set up the app on my phone, it asked for a credit card number, a four-digit security code, and a photo that would allow cashiers to identify me as the rightful user of the Fig app. It took less than a minute. I went up to the cashier to buy a pound of coffee beans, and except for fumbling for a second to find the "next" button that would advance the transaction, everything went smoothly. The app offered me a screen where I could sign my name as an extra level of anti-fraud protection (this feature wasn't on Metral's phone, which was running a different version of the app.) My iPhone wasn't connected to the store's WiFi, but just the wonderful AT&T 3G wireless network.
Metral explained that from the merchant's perspective, the only hardware required is a $5 WiFi antenna that plugs into a USB port in the cash register. (You can sort of see the WiFi antenna in the picture at left, between all the cables.) When you open the Fig app, it looks for nearby cash registers using the system. When you click "Ready to pay," the cash register sends you the bill that's currently on its screen. (The phone and register don't talk directly to each other, but rather the phone sends info over the wireless network to Fig's servers, and then Fig's servers in turn communicate with the register.) Metral says the system is every bit as secure as using a credit card, except that "the one security hole is that if you're standing in line with a friend, and you click 'Ready to pay' before they do, you could pay their bill for them." Metral adds that your encrypted credit card information is only sent to Fig's servers once — when you initially set up the app — and that it is never actually sent to the merchants cash register.
The Fig app, unfortunately, isn't yet available for anyone to use. (They're submitting it to Apple's app store this week, so it may show up soon.) Metral and Granbery say they're hoping to raise some money — in the neighborhood of $500,000 — so that they can integrate Fig with all of the major cash register (or "point-of-sale") systems. They say they have a list about about twenty local merchants who've expressed interest in using it. And they've also got a list of features they plan to add: tagging receipts ("Client lunch with Jeff," for instance), allowing users to rate specific items on a restaurant's menu, or enabling one person to pay for a group and then automatically send e-mails to others to request their share. Metral, a co-founder of Firefly Network, one of the earliest online recommendation start-ups, also envisions being able to suggest dishes that are popular this week, or cocktails that you're likely to enjoy based on what you've bought and rated highly in the past.
They say that merchants who allow customers to use the Fig app for payment will pay the same for a credit card transaction as they do today — about 2.5 percent to 3 percent. Their expectations are that by building up enough transaction volume, they can get a discount from payment processors, and earn money on the spread. Eventually, Metral says the company could charge additional fees for helping merchants manage loyalty programs.
Later this month, Metral and Granbery are bringing on Dave McLaughlin to assist Fig Card with business development. McLaughlin was previously the founding executive director of Boston World Partnerships, a non-profit created by Boston mayor Thomas Menino to encourage the growth of entrepreneurial businesses in the city. Now, McLaughlin will try his hand working for one.
Seems to me that Fig Card is the kind of business that needs to get a bunch of merchants using it (and loving it), and garner some favorable buzz — and then get acquired by a company that needs a mobile payment solution and already has relationships with millions of retailers and restaurants. In other words, speed is of the essence...
Acquia, Woburn company that helps Web publishers build social sites, raises $8.5 million C round
Drupal.
Drupal drupal!
Drupal?
Drupal sounds like one of those words that Beaker the Muppet might say, with a dozen or so different inflections.
Techies know that Drupal is more than just fun to say; it's also an open source software platform that people use to build and manage Web sites — especially sites where users can contribute content and participate in online communities. Drupal was originally created almost a decade ago by Dries Buytaert, a Belgian computer scientist.
Buytaert is now a co-founder of the Woburn start-up Acquia, which, like RedHat before it, sells services and technical support to companies large and small that deploy Drupal. Today, the company is announcing an $8.5 million C round of funding from North Bridge Venture Partners and Sigma Partners; that's on top of $15 million Acquia had raised previously.
CEO Tom Erickson says that as companies seek to add more sophisticated and more social features to their Web sites, such as reviews and ratings, wikis, tags, video, blogs, and comments, Drupal has been gaining momentum as a solution for managing Web site content— and Acquia along with it. In 2009, the company introduced a hosted (or "cloud-based") Drupal offering, and earlier this year Acquia launched Drupal Gardens, a site-building tool that is offered free (at least in its plain vanilla incarnation.) Already, about 25,000 sites have been built on Drupal Gardens. "I like to say we're 100 percent buzzword compliant," Erickson quips. "We're social, open source, cloud, you name it."
Acquia's customers run the gamut from National Public Radio to The Economist to Fox News Channel. The company has about 70 employees.
Thirty percent of Acquia's research-and-development team works on enhancing the open source Drupal platform, "helping to ensure that Drupal stays at the forefront of social publishing," according to the company.
Buytaert tells me that he finally moved from Belgium to Boston over the summer, about three years after co-founding the company with Jay Batson.
xPeerient, connecting IT executives with service providers and one another, launches with nearly $2 million in funding
Let's say you're a CIO with a problem: you need a services firm to help you roll out desktop virtualization software to 5,000 employees, or to get the inventory system in your retail stores communicating with your e-commerce site. How do you find one that'll fit the bill? (Assuming that you don't want to hire any of the vendors who wine you and dine you and treat you to leisurely rounds of golf?)
Boston-based xPeerient, launching today, hopes to supply a solution by creating a marketplace where chief information officers and other executives who spend money on technology can explain their needs, and then anonymously screen the service providers who say they can help. The company has raised nearly $1 million in angel funding and another $1 milion from Waltham-based Stage 1 Ventures.
"We think of it as eHarmony for the IT industry," says founder Mark Hall. "The buyer can post a project anonymously at no cost, ask questions of the candidates, and create a short-list."
Hall says that online and print advertising to senior IT buyers just doesn't work anymore: "They've become incredibly desensitized to advertising. So we're trying to use technology to bring the buyer and the seller together at the right time."
About 5000 "partners" (like systems integrators, value-added resellers, and other service providers) are already participating in xPeerient's marketplace. Participation is free initially — they pay only for the opportunity to communicate with a prospective customer once they've made it to the short-list. Hall says the company will charge vendors a fee of "a couple thousand dollars for a $2 million deal, for instance, and the pricing is tiered based on the size of the deal." Hall also says xPeerient can provide value for IT executives by connecting them with one another on the site, so they can share advice with peers who may be embarking on the kind of project they've been through before.
Hall says xPeerient is still a virtual company, with 12 full-time employees but no office. Until late 2008, he was the chief information officer at Framingham-based CXO Media (publisher of CIO Magazine and other titles); he started xPeerient in early 2009, and began beta testing the site over this past summer with about 25 customers. He raised just under $1 million in angel funding for the company, from investors like Roy Rodenstein of Hacker Angels, Dennis Philbin of Lux Research, and Kevin Laracey, founder of edocs (and until recently an investor at Sigma Partners.) The company's Series A investment closed at the end of September, from David Baum at Stage 1. "We didn't want to do an equity round until we got the product built," Hall says.
MassChallenge finalist JoyTunes endeavors to make learning a musical instrument as much fun as a videogame
What makes a great demo?
For me, it's a product that actually works (or at least looks like it does), and that does something you've never seen before. And a back-story about why you developed the product always helps, too.
I finally got a chance to see the demo from JoyTunes last week. They're an Israeli start-up that has been participating in the first annual MassChallenge start-up competition this summer and fall. (An hour or so after co-founder Yuval Kaminka gave me the demo, MassChallenge announced that JoyTunes had made it into the final round of judging, which takes place Thursday.)
Kaminka told me that after watching how intently his 7-year old nephew played with his Nintendo Wii, and contrasting that with how unmotivated he was to practice his recorder no matter how much his mother harangued him, he began thinking about how to blend the two activities. Collaborating with his brother Yigal — a professional oboist — they developed JoyTunes. (The third JoyTunes founder is Roey Izkovsky, a buddy of Yuval's from the Israeli army.)
The concept is pretty simple: instead of a strumming a fake plastic instrument a la "Guitar Hero," music students play a real recorder into a microphone connected to a laptop or PC. The pitch, volume, and duration of the notes they play controls what happens on the screen. Play properly, and you advance in the games on the screen. Miss a note, and you don't. The software costs $35.
The game was developed in Israel, and Kaminka discovered the MassChallenge competition through a random Google search. As a result of participating, he says the company will maintain a sales and marketing presence in Boston even after the competition concludes this week. JoyTunes hasn't yet raised outside funding. The game launched in Israel earlier this year, and in the U.S. in August. (In addition to the Hebrew and English versions, there's also a German version in the works. Germans, he explains, are pretty serious about music education.) Kaminka says that after recorder, the company plans to develop versions of the game for flute and clarinet.
Here's one demo video:
And a few others are on YouTube.
(Two guitar-based videogames, PowerGig and Rock Band, both developed in Boston, also enable players to use real instruments, but the games are not focused on teaching elementary music principles... yet.)
BNI Video, formerly Beaumaris, tunes in $16 million from VCs and strategic investors
Not bad: video infrastructure player BNI Video in Boxborough is announcing a $10 million round this morning, bringing its total raised since June of last year to $16 million. Co-leading this round are Waltham's Castile Ventures and Time Warner Cable.
The press release is laden with buzz-phrases that say just about nothing about what BNI is up to: they will "drastically reduce time to market," "lower total cost of ownership," and "deliver richer, more personalized subscriber experiences." Oh, and the technology is also "simple, flexible, and scalable."
I asked CEO Conrad Clemson (pictured at right) how he'd explain what the company is doing if he were at a cocktail party. "We want to help companies like Comcast or Verizon get to every Internet-connected device in your house, whether that's your Xbox or your laptop. Our question is, why can't video reach you on all sorts of devices other than your TV? You should be able to find content on your laptop, surfing through a TV schedule, and ask that the content be shown on your TV set, because you want to go back to doing e-mail. We're creating the intelligence to do that." Today, he says, many customers may find that same flexibility by using services like Hulu on their laptop, or the Netflix service built into a Blu-ray player; Clemson wants to help cable companies and telcos stay competitive.
It's a big deal that BNI is backed by a mix of venture capital firms and strategic investors like Time Warner, Cisco, and Comcast Interactive Capital.
"This is a challenging business, and our customers are the video service providers," Clemson says. "Getting them as customers is like elephant hunting for a small company. The best way to make sure that we're lined up with them is to make them our partners."
Clemson says the company raised nearly $7 million last June from Charles River Ventures (where he'd been an entrepreneur-in-residence), Comcast, and Cisco. BNI has about 15 employees in Boxborough, ten in Philadelphia, and 35 in Beijing ? most of the company's engineering team.
Clemson's last start-up was Broadbus, where he was SVP of technical operations. That company was sold to Motorola in 2006 (for a reported $186 million), and Clemson went to Charles River Ventures for a time.
I asked him if that stint at CRV was in part to sit out a non-compete agreement with Motorola before starting his next venture. "That might've had something to do with it," he admitted.
Clemson is a first-time CEO, and he tells me that working with Broadbus CEO Vin Bisceglia "was like CEO school for me. I also picked up some from Bruce Sachs and the CRV guys. They said, if you really want to be a CEO, you've got to go out and get an order from someone."
Clemson started his career in tech while in high school at Philips Exeter, writing diagnostics for Stratus Computer, when that company had just 20 employees.
An open e-mail to Terry Ragon, Cambridge's anti-signage campaigner
Philip T. "Terry" Ragon
CEO and Founder
InterSystems Corp.
One Memorial Drive
Cambridge, MA
Dear Terry-
I wanted to write to you about your anti-signage campaign in Cambridge.
Like you, I live in Cambridge. Unlike you, I’m very much in favor of sensible signage in our city. You’ve been very vocal about why Microsoft shouldn’t be allowed to have a sign atop the Kendall Square building where your company, InterSystems Corp., is also based, and you’ve funded an anti-signage petition drive, to put the issue to a vote this November.
I want to explain why I think we need a clear process in Cambridge that makes it simpler for some of our city’s biggest employers to affix their names atop their buildings — while at the same time forcing them to abide by pretty conservative guidelines about how large and how garish they can be. I definitely don’t want the skyline along the Charles River to look like the Las Vegas Strip — and there’s no chance of that with the way Cambridge’s City Council is approaching the issue.
There’s simply no place on the planet with the innovation density of Cambridge. Within a few square miles, you’ve got schools like MIT and Harvard doing important research; start-ups working to turn that research into useful products, in industries like software, energy, and life sciences; and bigger multi-national companies (yours included) that continually improve great products and sell them all over the world.
I’m proud of that. I want visitors to the city to see how much happens here. More importantly, I want the student population of Greater Boston to see, when they ride the T across the Longfellow Bridge or run along the Esplanade, the companies that they could work for if they choose to stay in Massachusetts.
We’re not talking about signs whose primary purpose is to sell us on a particular brand of Venezuelan gasoline (like Boston’s Citgo sign, which has become a beloved landmark anyway.) As I see it, we’re talking about signs that will serve to send a message to tourists about this area’s central role in the global innovation economy (just as the Old North Church sends a message about our role in the American Revolution), and will serve as part of the “welcome mat” we put out to students, encouraging them to begin their careers here. As it stands today, we don’t make a strong enough case to our area’s smartest graduates to take jobs here and launch companies here.
I got a robo-call over the weekend from Gary LaPierre, no doubt funded by you. “This law allows big, out-of-state national corporations to pollute our skyline,” LaPierre told me. Not true. It just makes the guidelines clearer for both hometown and out-of-state companies that want to let people know they’re here. Already, you can see a Genzyme sign atop their Kendall Square headquarters, and Akamai and Forrester Research signs just a few blocks away. The old signage process in Cambridge simply required companies like those to spend more money and jump through more hoops to put signs atop their buildings, by applying for a variance. They had to prove that it was a hardship for them not to have a sign atop their buildings.
I'm proud of our hometown companies, and I'm also glad that national and international players are investing in Massachusetts, too. I love the way Swiss-based Novartis put a DNA double helix on the old NECCO water tower in Central Square. I'd love to see a sign atop Zipcar's building in East Cambridge, so that everyone shopping at the CambridgeSide Galleria would know about that local success story. I sure wouldn't mind a sign atop the Cambridge Innovation Center, the office tower that's home to dozens of promising start-ups, or one atop the building where Google operates its Cambridge outpost.
Now, I’ve only been part of the tech scene in Boston for the past fifteen years. Somehow, we’ve never met, and I’ve never seen you speaking at any of the dozens of conferences I go to each year. I notice you aren’t involved in any of the big mentoring programs that help young entrepreneurs, whether TechStars Boston or 12 x 12 or MassChallenge. I’ve never spoken to a college student who is aware of InterSystems as a prospective employer — and I run into a lot of them on my frequent visits to campuses. I’ve never been invited to an event that you’ve hosted in your offices, to the best of my recollection. I can’t even remember ever receiving a press release about InterSystems.
Contrast that with your out-of-state building mate at One Memorial Drive, Microsoft. They throw an annual “welcome back” party for college students every fall. They dedicate an entire floor of their offices to community events, offering meeting space to various tech and entrepreneurship groups for free. (You and your company have been suing Microsoft since 2008.) Hardly a week goes by that I'm not in Microsoft's space for an event hosted there, and I've run into everyone from first-time entrepreneurs to people who've taken companies public to the governor. Whether you love or hate Microsoft's products, you have to acknowledge that they've created a clubhouse for entrepreneurship and innovation here — something that didn't exist before they arrived in Cambridge.
Other local companies — those with and without signs atop their buildings — run programs to get kids interested in technology and engineering, like iRobot; they offer guidance to younger entrepreneurs, like Diane Hessan of CommuniSpace; they put on mixers, as did Digital Lumens recently, to educate students about jobs in their industry. (Disclosure: I was involved in that last event as a speaker. I should also disclose that I've spoken at, moderated at, or covered many local events sponsored by or hosted by Microsoft.)
It’s OK if you want InterSystems to be incognito and unplugged from our city’s innovation economy. That’s your choice – you obviously run a very successful private company, and you employ about 300 people in Cambridge. (You've also been a generous philanthropist, funding work on an AIDS vaccine.)
But it doesn't benefit our city's economy to have everyone else here — local companies and out-of-state giants — be as low-key as InterSystems.
We live in one of the world's great innovation centers. In an incredibly competitive global economy, some of us would prefer not to keep that information classified.
Scott Kirsner
Innovation Economy columnist,
The Boston Globe / Boston.com
Testing the MoGo Talk Bluetooth headset for the iPhone 4
I'm not a fan of Bluetooth headsets, so sending one to me in the mail is kind of like inviting a lactose-intolerant food critic to review your new fondue restaurant.
But last week, the MoGo Talk for iPhone 4, designed by Natick-based ID8-Mobile, arrived. (ID8-Mobile was known as Newton Peripherals when I wrote about them last.) The idea behind the MoGo is that it's both a protective case for your phone, and it also stores a slim Bluetooth headset in the back of the case. It costs $99.
The good: The MoGo headset was easy to pair up with my iPhone, and I was using it within a few minutes of charging it up. I like all things to have their own place, and it was handy to pop the headset in and out of the back of the case.
The bad: Like most (all?) Bluetooth headsets, even though this one integrates into the phone's case, it still requires its own micro USB charging cable. So it's one more thing to plug into your computer or a wall outlet, along with your phone itself. (ID8 chief executive Stuart Nixdorff says that a future version will feature "a very unique solution to charging both" simultaneously, but it won't be out until next year. Nixdorff also says that ID8's forthcoming Blackberry version of the MoGo will allow the phone and headset to share the same power source.)
Despite trying each of the half-dozen rubber earpieces that came with the MoGo, the thing wouldn't stay in my ear. There's no hook that allows it to hang from the top of your ear; you're supposed to just jam it into your aural canal and hope for the best. The result was that a supposedly hands-free headset turned into one that I had to hold in most of the time with two fingers.
The sound quality when I spoke to others on the MoGo was a little fuzzy, but just a smidge muddier than the wired headset I usually use, made by Scosche Industries. Listening was fine.
Like other Bluetooth headsets I've tried, there is a flashing blue light that announces to passersby that you are wearing a Bluetooth headset. There is also only one button on the headset that does everything, if you can remember numerous Morse-code-like commands. It can answer the phone, or reject an incoming call. It turns the headset on and off. It summons the police if you are being mugged, or sends out for pizza.
I'm returning to my small collection of inexpensive wired headsets, which fit my ears better; don't require charging; and also allow me to listen to music.
What's your take: do you use a Bluetooth headset... a wired headset... or none at all?
Harvest Automation wraps up $5.3 million funding round, brings on two prominent robotics CEOs as advisors
Charles Grinnell believes that every farmer needs a few good robots working his acreage, and this morning, he's announcing that he's wrapped up a $5.3 million first round of funding for his Billerica start-up, Harvest Automation.
The company, which once tested its prototypes in a greenhouse behind Grinnell's Groton home, initially had trouble finding financing to develop a robot strong and rugged enough to move potted plants around as they grow in nurseries. Harvest says that its initial target market will be the largest growers in the $4 billion wholesale ornamental plant market, I.E., the kind of company that grew that ficus tree sitting in the corner of your reception area. These plants get moved a lot from the time they are tiny seedlings to when they head for the marketplace, and Harvest's robots are designed to take over that manual labor. The company has conducted a few field tests of the robot, but Grinnell says they'll begin a more formal alpha test in the early part of 2011.
The new funding is the biggest investment so far for Cambridge-based Founder Collective, which joins other investors including the Massachusetts Technology Development Corp., Life Sciences Partners and Cultivian Ventures (formerly known as the Midpoint Food and Ag Fund.) Joining Harvest as advisors are iRobot CEO Colin Angle, and Mick Mountz, CEO of Kiva Systems, a Woburn company that makes a robotic order fulfillment system for warehouses. (Harvest's chief technology officer is Joe Jones, who led the development of the Roomba robotic vacuum cleaner when he worked at iRobot.)
"I think Harvest as a company really plays to the strengths of Boston," says Eric Paley of Founder Collective. "There aren't that many people with the expertise to create these complicated hardware-and-software systems." Paley says Harvest reminds him of the start-up he ran after business school, Brontes Technologies, which developed a 3-D imaging system that helped dentists create better crowns and bridges. "We pitched 40 VC funds, and had trouble raising money," he says. "It was a pretty weird niche, but there was a very specific customer with a very specific return-on-investment." (Brontes was acquired by 3M for $95 million.)
Harvest's belief is that growers will turn to robots to improve their productivity while lowering costs — and that robots can reduce the risks that some growers face of hiring undocumented workers and facing enforcement actions and fines.
I wrote about Harvest's technology back in 2008, and shot this video of their prototypes:
Pongr invites you to snap pictures of your favorite brands, get promoted to CEO
In the same way that certain people aspire to become the FourSquare mayor of their favorite coffee shop, will they vie to become the "CEO" of their favorite brand? Pongr, a Boston start-up planning a big promotional campaign during Advertising Week next week, hopes so.
Playing Pongr doesn't require an app on your mobile phone — you just snap a photo of an advertisement or product, and either e-mail it or text it to the company. Sending in a photo of your favorite Ben & Jerry's flavor after you've demolished a pint of it, for instance, might get you a reward from the company (like 10 percent off your next purchase), or it might help you gain status within Pongr's system. Your goal is to ascend the corporate org chart from intern to CEO. Pongr founder Jamie Thompson says that the photo-based game is a way for marketers to identify the biggest fans of their product, and build relationships. And through the magic of social media, of course, Pongr players can also share the photos they've taken with friends, generating even more brand awareness.
"People already like to take pictures of themselves with brands," Thompson explains. "So if you're a Sephora enthusiast, and you're inclined to take your picture in front of their lipstick poster, with Pongr you can do that and see if Sephora is going to give you anything in exchange."
Pongr's image-recognition software examines the photos that are sent in, comparing them to pictures in its database, and then it generates a scripted response, whether it is more information about the product, a special offer, an entry in a contest, or just status points on the way to becoming CEO of that brand. (Thompson says that you can take pictures of ads, objects, logos, or even TV commercials, and have Pongr's software identify what's in the image...as long as it's part of the company's database.) Thompson says that taking a picture of something is much more elegant than having companies plaster barcodes or QR codes on everything and then asking consumers to scan the code with their phones. (But how well and how consistently the company's image recognition technology works will be key; I haven't yet been able to test it.)
The company, founded in 2008, originally planned to use its image recognition technology to help shoppers conduct price comparisons on products, and either buy an item in the store or online through the shopper's mobile phone. But the price comparison space started to get crowded, and so the company began to focus on how marketers could better connect with consumers through photos taken on mobile phones.
The company's slogan is "The picture-sharing game with real-life rewards."
Thompson says Pongr recently raised another $500,000 from angel investors, including Chris Maeda, former CTO at Kana Software. The total funding Pongr has collected, Thompson adds, is "just under one million." The company has nine full-time employees, spread across Massachusetts, Connecticut, and Iowa. Last month, the company worked on a promotional campaign with Hearst's Marie Claire magazine to give readers more info about products featured in the September issue.
And next week, they'll be demoing the game to ad agencies and marketers at New York's Gansevoort Hotel, as part of Advertising Week.
Here's a zany company video that offers an overview of how Pongr works:
Cambridge company getting ready to mark $100 million raised for charities
When I first wrote about a start-up called CMarket, in October 2003, it was a little company challenging eBay for supremacy in the world of online auctions to benefit non-profits.
Since then, the Cambridge company has raised $30 million (from investors like Morningside Technology Ventures and Canaan Partners)... grown to 42 employees...changed its name from the generic-sounding CMarket to BiddingForGood.com...and generated $98.5 million for various non-profits. Company founder Jon Carson tells me that they plan to mark the $100 million milestone early next month with a party.
"What we'd initially developed was a tool for non-profits to put their auctions online, for the 90 percent of people who couldn't make it to the fund-raising gala to bid on things," Carson says. "And what we found is that the philanthrophy sector turned out not to be early adopters." He says it took the company nearly four years to run its first 1000 actions, and just over a year to do the next 1000.
On the site today, you can bid on things like a guitar autographed by Justin Bieber; a VIP tour of the U.S. Capitol, followed by lunch with a Senator; or an aerial tour of the New Hampshire seacoast.
BiddingForGood charges non-profits $595 for a year's access to the site, and also takes a percentage of each successful sale (for the first $20,000 in sales, the company's take is nine percent, and it decreases until the $90,000 mark, when it disappears entirely.) While many charities round up their own auction items, BiddingForGood also offers to provide auction items — it sources them in bulk — and in those instances, it takes one-third of the sale price and passes along two -thirds to the charity. As an example, Carson says the company secured 1500 one-week vacations at a resort in Cancun, which charities can offer as part of their auctions.
Carson says the latter part of the year is BiddingForGood's busiest time. "We typically have 400 or 500 auctions happening simultaneously in the fall, and December is the big month," he says. With charitable giving down over the past year, Carson hopes that more non-profits will look to online auctions to make up that revenue.
As for eBay, Carson says, "They've been the best of all competitors. They're out there, and they have two people who work in this space [non-profits]. But it is the age-old story of a specialist innovator picking off a corner of the generalist's market."
And on the subject of profitability, Carson explains that his company turned cash flow positive earlier this year. But, he writes via e-mail, "we raised $2.5M of growth capital in the spring and this summer turned the spend up (5 new sales reps for the AIRS item request system, testing NPR campaign this fall, adding auction sales reps, more engineers to work on mobile app, etc). We’ll spend that thru 2011 and then be back to profitability in 2012 presumably with a stronger market position."
Investing in the Twitter ecosystem: Audio from today's panel with Bijan Sabet and John Landry
I refereed a discussion this morning at the 140 Characters Conference in the Back Bay, featuring two local investors: Bijan Sabet of Spark Capital and John Landry of Lead Dog Ventures. Our focus was on the opportunities and dangers of building and funding companies that operate in the Twitter ecosystem.
We talked about how Sabet came to invest in Twitter; the seven acquisitions Twitter has done (mainly for Twitter stock); Landry's concern that Twitter may duplicate many of the most successful Twitter-related apps and services itself; Landry's investment in Oneforty, a directory/marketplace of Twitter apps headquartered in Cambridge; Twitter's revenue model; and Twitter's future.
"We've had multiple opportunities to sell Twitter, and nobody is interested in doing that," Sabet said.
Landry offered this advice for entrepreneurs: "The first thing I'd recommend for entrepreneurs is, think much more broadly about the real-time Web than just doing a Twitter app. [It] costs more money... and it's not something you're going to hack in your garage overnight."
"Locking yourself down to Twitter is not going to be a big company," Landry said, talking specifically about Oneforty.
Here's the audio (the session was about twenty minutes long):
(In the photo above, taken backstage at the conference: Sabet, Oneforty founder Laura Fitton, and Landry.)Is your smartphone the next killer videogame controller?
One of the cooler companies demoing at tonight's Web Innovators Group gathering in Cambridge believes that a computer keyboard is far from the ideal videogame controller. Brass Monkey, a spin-out from the Boston-based software development shop Infrared5, thinks that smartphones work much better.
Just hold your iPhone horizontally with two hands, and you can fly spacecraft or drive race cars, thanks to the phone's built-in accelerometer sensor (newer iPhones also include a gyroscope), which relays information about its position and movement via WiFi to your computer. "We think the future of the user experience is people interacting with screens in new ways," says CTO Chris Allen, pictured above. "You don't have to buy special gloves or anything. We said, 'Let's take the thing you already have in your pocket and use that as the input device.'" The Brass Monkey system requires that you download an app to your iPhone, but there's no download required on your computer; the phone can control a game that's being played in most major browsers.
To show what smartphones can do as game controllers, Brass Monkey "sister company" Infrared5 developed a game called "Star Wars: Trench Run" last year, under license from Lucasfilm. You can use your iPhone or iPad to fly the Millennium Falcon, shoot down TIE fighters, or try to destroy the Death Star from behind the controls of Luke Skywalker's X-wing. What's surprising is that there's basically no perceptible delay between your movements and what happens on the screen.
Eventually, the company envisions the Brass Monkey software deployed to enable multiple players to play the same game using different smartphones. (An Android version of the controller is nearly done, Allen says.)
The next game to use the Brass Monkey controller will likely be a driving game released as part of a promotional campaign for a major car maker. The company is also actively talking to other game companies about licensing the Brass Monkey software development kit for their own games. But one challenge will be the simplicity of many of the popular Web-based games these days: do you really need an iPhone controller to tend your virtual peas in Farmville?
Brass Monkey was one of the 100-plus finalists selected in the inaugural MassChallenge start-up competition. So far, Brass Monkey has been self-funded. The start-up is led by Jim Bull, a co-owner of Strategic Marketing Partners, a firm that helps market and distribute videogames.
DormNoise aims to help college students manage chaotic schedules
Between club meetings, classes, hockey games, and study groups, college students have a lot of demands on their time.
Few entrepreneurs understand the scheduling chaos with which students must cope better than Jay Rodrigues. The Rhode Island native and founder of DormNoise is today starting his senior year at the Wharton School of Business at the University of Pennsylvania. Rodrigues, 21, launched the company, which offers an online calendaring system for colleges, just after he finished high school at the Wheeler School in Providence.
"On any given day, I'll get probably 15 or 20 e-mails about events at Penn," Rodrigues says, "and that's not including e-mails from friends. On top of that, people will hand you printed fliers when you walk around campus, or a friend might text you about a study group." DormNoise collects everything in a single online calendar, from big campus events like the homecoming parade to small gatherings like a group working on a course project together, which can be synced with a user's smart phone or a calendar system like Outlook or iCal. Students can also be alerted about events via text, if they belong to a given group — like a last-minute marching band practice, for example.
Sold as a hosted application, universities can either pay a fee of about $2 per student to use DormNoise, or allow the company to sell corporate sponsorships to their application, and use it for free. (Colleges can also choose to blend those two options, paying less per student and perhaps even generating some revenue through the sale of corporate sponsorships.)
The company recently signed Bay State College in Boston and Newbury College in Brookline to three-year contracts. Rodrigues says DormNoise has raised $500,000 $950,000 in funding so far (some of the earliest came from his father, who runs a textile dyeing and printing company in Fall River.) The company operates virtually, with a half-dozen employees scattered around Massachusetts, Pennsylvania, and Florida. "We're gearing up to raise more money to bring everyone to one location," Rodrigues says, perhaps as soon as January. Both Philadelphia and Boston are under consideration.
Here's a company-produced video demo:
Backupify seeks to bring peace-of-mind to the cloud computing realm
Would you start to sweat if you accidentally deleted a crucial spreadsheet you’d toiled over using Google Docs? Would your spouse wail if someone hacked into your Flickr account and deleted the years of vacation photos you’ve uploaded there?
Safeguarding an extra copy of files that you keep on Internet-based services is the simple idea behind Backupify, a start-up born in Louisville, Kentucky that moved into new offices in East Cambridge last week. The company offers a free service for consumers who might want to make sure they have an extra copy of that video they uploaded to Facebook, and a paid offering geared to businesses, many of which are required by regulations to archive something as seemingly innocuous as a Twitter message. The free offering stores up to two gigabytes of data, and the higher-end paid offering, at $60 a year, stores up to 25 gigabytes of data and makes a new back-up copy of everything once a week.
The company is planning to announce a $4.5 million A round this week, led by two Cambridge investors: David Orfao of General Catalyst Partners and Rich Levandov of Avalon Ventures (that’s on top of just over $1 million the company had raised previously). Also investing in the A round are First Round Capital and Lowercase Capital, founded by former Google executive Chris Sacca.
Backupify CEO Rob May says the company is mainly acquiring customers through social media, PR, and the Google Apps Marketplace. When Web-based services like QuickBooks go down temporarily, or the note-taking service Evernote loses some customer data, that only helps get people focused on the downside of storing their data on someone else’s servers. But May says that most of the times when someone has an experience that makes them grateful for having signed up with Backupify, it’s user error: they’ve accidentally deleted something important.
Backupify already can stash a copy of data from services like Blogger, Photobucket and Gmail. The company is working to make its backups of Facebook content (like a company’s Fan Page) more complete, and May says that a link to SalesForce.com and Evernote are in the works. Where does Backupify stockpile all of its data? Yet another cloud service: Amazon's Simple Storage Service.
The company is also developing its own API (application programming interface), to enable other cloud-based services to easily integrate with Backupify, adding data to the service or pulling data from it. One example May cites is a new start-up that wants to create online accounting software: it might find that prospective customers are more likely to try it if they know a copy of their data can be stored with Backupify. But another is enabling Backupify users to write code that would synchronize data between two Web-based services, or move their data easily from one service to another, dropping SugarCRM, for instance, in favor of SalesForce.com. “We are starting to position ourselves as less of a backup company, and more of a data liberation company,” May says.
The company now has three employees in Louisville and seven employees in Cambridge, where it plans to hire five or six Rails developers and database gurus with experience with the Cassandra distributed database.
Backupify’s first angel investor, in 2009, was Dharmesh Shah, co-founder of the Cambridge marketing software company HubSpot. Shah had previously bought a small application that May had written, which tried to analyze the value of a user's Facebook account. When May built the prototype of Backupify, which stored only Twitter messages, he e-mailed Shah to get his feedback. “It was really a side project,” May says, “and I never thought I’d raise money for it.”
Shah’s feedback was positive. "We chatted about the idea a few times," Shah writes via e-mail, "and ultimately, I agreed to put $25k in to help give him that final nudge" to pursue Backupify full-time.
The company began its move from Louisville to Boston in the spring, shacking up for a while in unused office space at General Catalyst’s Harvard Square offices. May says that one reason that Boston was more attractive to the company than New York or San Francisco is that many potential acquirers and distribution partners are here, including EMC, Iron Mountain, and Carbonite.
While the company began by targeting consumers, Backupify’s strategy now focuses mainly on enterprises. “We want to be the market leader in office productivity backups for SaaS offerings,” says May.
A Carbonite customer confronts the CEO
Don't you ever wish you could take your tech support headaches straight to the CEO of the company?
I had the chance to do that this week, when I stopped in to visit David Friend, the co-founder and chief executive of the Boston-based online back-up service Carbonite, which was recently named by Inc. Magazine as one of the country's ten fastest-growing companies. (Their growth rate over the past three years was a scorching 11,208 percent.) The company has about 160 employees in Boston, and sells a service that starts at $55 a year for an unlimited amount of data storage for one computer. Carbonite operates two data centers in the Boston area, and has a third one in the works.
Friend says that the company has been working to broaden its strategy beyond just backing up important information (and family photos) as insurance against a laptop theft or hard drive crash. Once a copy of documents, videos, music, and photos has been stored on Carbonite's servers, the company wants to offer access to those files from anywhere, and make them more easily shareable. Carbonite already offers iPhone and Blackberry apps that give subscribers access to their data from a mobile phone, and an Android app is on the way. "With the Android app," Friend says, "we let you stream your music directly to the phone from our servers, or flip through your pictures. If all your data is going to live in the cloud, we figured we should give people access to it."
And rather than uploading one back-up copy of files to Carbonite, and then also uploading vacation pictures and videos to sites like Flickr, YouTube and Facebook so that others can see them, Friend says the company hopes to make sharing less of a hassle: "If my pictures are already in the cloud, why can't I just point my mom to them, rather than uploading a copy to Flickr?"
I told Friend that last February, I'd become a Carbonite customer, using it in addition to a hard drive in my office on which I regularly store back-ups. But when the Carbonite software I installed on my MacBook kept stalling after uploading just a few gigabytes of data to Carbonite's servers, I started e-mailing Carbonite's customer support staff. They instructed me to remove and reinstall the Carbonite software on my computer, and send them log files that might point to the root of the problem I was encountering.
Every e-mail came from a different person: Leena, Richard, Maxwell, Mark, Seth, and more. Not surprisingly, all of them treated my problem as though it was brand new to them. I got frustrated when they informed me that no matter what happened, I had already paid for a year of Carbonite service on my credit card, which they wouldn't refund — so I called the credit card company and disputed the charge. At some point during that process, after the third or fourth reinstallation of the software, the backup mysteriously resumed. I'm now happily using Carbonite to back up about 100 gigabytes of data from my laptop.
Friend told me that Carbonite handles all of its phone, e-mail, and live chat customer service in India (they employ about 200 people there, through a subcontractor.) When I told him about how frustrating I found my interactions, he calmly explained two things.
First, he said the company had recently decided to purchase different software to handle incoming e-mails from customers. Instead of bouncing e-mails to various customer service reps, software from RightNow "routes the e-mail so that you don't have to start all over again with every interaction," Friend told me.
Then, he acknowledged that "e-mail has the worst customer satisfaction, because it can be hard for the person on the receiving end to pick up the thread, and so the time spent to resolve a problem winds up being much higher than phone or live text chat." Now, he said, "if we can't answer a question or deal with something in one e-mail, we say, 'Let's talk,' and if we're chatting or talking on the phone, our people can remotely access your desktop to help you get the backup working."
Friend also noted that the company already offers 24 hour customer service via e-mail and text chat, and would be expanding phone support from 14 hours a day to 24 hours for Carbonite's small business customers, who pay a higher price for the "pro"-level service.
My Carbonite back-up has been quietly cranking along in the background for a few months now... but obviously I'm hoping I don't need to sample the company's customer service again.
Have you had more recent experiences with the company?
Moontoast, a 'social commerce' start-up spawned by Nashville's music scene, heads to Mass.
When a Tennessee start-up hires a Massachusetts-based chief executive, as Moontoast did last month, it means one of two things: either the new leader is going to be racking up scads of frequent flier miles, or the company is soon going to set up an office in the Bay State.
In the case of Moontoast, the second scenario is playing out. New chief executive Blair Heavey is subletting space for the company in Andover, and company co-founder Marcus Whitney has moved north from Nashville. The company is also hiring for a handful of marketing, infrastructure, and user experience positions.
The "social commerce" start-up aims to make it easier for entertainment and media companies to find fans of their properties wherever they may be spending time online; deliver content; and ideally, entice them to buy stuff. "It's a huge pain for a musician or a magazine to be able to keep fans and subscribers engaged both on their own sites and throughout social media sites," Heavey says. "And they also have revenue problems. They want to be able to monetize their content, wherever a fan base is, with things like exclusive offers and special member benefits."
The company describes its three software-as-a-service offerings as "branded communities, embedded stores, and private sale clubs."
Last month, Moontoast announced a partnership with Big Machine Records, a Nashville label whose roster includes Rascal Flatts, Trisha Yearwood, and Taylor Swift (whose Moontoast-powered Web site is pictured above.)
Heavey says the company has "funding commitments" of up to $5 million, but that they've been collecting money in "seed increments" of about $1 million at a time; most recently, the company pulled in $780,000 last summer.
Investors so far include country stars Vince Gill and Wynona Judd, according to Venture Nashville. Other Moontoast backers include the Martin Companies of Nashville; Stephen Collins, formerly CFO at DoubleClick; and Joseph Glaser, founder of a Nashville company that makes and repairs musical instruments.
Heavey says the company plans to maintain an engineering presence in Nashville, where about seven people work. Moontoast will likely move its Massachusetts headquarters from Andover to Boston or Cambridge within the next six months. At some point in 2011, Heavey says the company might seek additional investment from a strategic investor in the media or entertainment sector, or a traditional venture capital firm.
Heavey was an early executive at OpenMarket, the pioneering Cambridge e-commerce firm, and BeFree, the affiliate marketing company; both went public back in the dot-com era. More recently, he served as an entrepreneur-in-residence at North Bridge Venture Partners and CEO of My Perfect Gig, an online recruiting service funded by North Bridge and Commonwealth Capital Partners.
Zipcar and SCVNGR, East Cambridge neighbors, partner on new rewards program
Cambridge-based mobile game developer SCVNGR is announcing a new partnership today that'll let players earn real-world prizes from Zipcar, the car-sharing company based just a few blocks from SCVNGR's headquarters.
The deal is part of a recent trend toward integrating incentives and freebies into cell phone apps, as they become important marketing channels. Heavy users of the Foursquare app, for instance, can get discounts at Starbucks, and Shopkick users who hang out in Best Buy stores can rack up points that reduce the cost of their next purchase.
Starting today, Zipcar will be rolling out "challenges" in Boston using SCVNGR's mobile gaming app that'll enable players to earn goodies like a Zipcar t-shirt or $25 in driving credits. If you drive your Zipcar to IKEA and take a picture of yourself in front of the special parking spot reserved for Zipcars, for instance, you can earn five points. Share the nickname you've bestowed upon the Zipcar you're driving, and that's another three points.
"The idea here is that you don't just give away coupons, but you have people unlock rewards," says SCVNGR founder Seth Priebatsch. "You make them work for it."
And while SCVNGR users are working toward their rewards, they're also helping to generate buzz for Zipcar, since photos and updates on their game activity are shared through social networks like Facebook and Twitter. "This is a way for Zipcar to take their existing community and make it louder," says Priebatsch.
The rewards program will initially be available only in Boston, but Priebatsch hopes it might soon expand to other Zipcar cities.
Earlier this week, SCVNGR announced another rewards partnership with AT&T stores in the midwest, enabling users to rack up points that can be used for discounts on accessories or a new Samsung phone.
SCVNGR hasn't yet announced how many people are using its mobile phone app, available for iPhone and Android. The company has raised almost $5 million in funding from backers including Google Ventures and Highland Capital Partners in Lexington.
Last month, Priebatsch was a speaker at the TedXBoston conference, talking about building a "game layer" atop the real world. Here's the video from that event:
Zynga buys Cambridge-based Conduit Labs: Here's the backstory
Zynga, the San Francisco purveyor of addictive online games like FarmVille and Mafia Wars, is buying Conduit Labs, a game developer in Cambridge founded by Nabeel Hyatt, and funded by local venture capital firms Prism VentureWorks and Charles River Ventures. The purchase price isn't being disclosed, but one source close to the company tells me it is an all-stock transaction, so Conduit's founders and investors will now be hoping that Zynga turns into a huge success; news reports earlier this year pegged Zynga's valuation at $5 billion.
The Conduit office in Central Square will now become Zynga Boston, and Hyatt will continue to run it, according to today's press release. (The company already operates satellite offices in places like Baltimore, Austin, Los Angeles, Beijing, and Bangalore.)
Hyatt and Zynga executives weren't available for comment this morning, but in the press release, Zynga senior vice president Mike Verdu is quoted saying, "Boston is an epicenter for technology and has a strong talent market, making it an ideal location for us to expand operations." Zynga claims to have 215 million active monthly users.
Conduit, founded in 2007 to develop music-oriented games for the Web, never quite achieved critical mass. Its first game, Loudcrowd, was released last spring. Zynga seems to be acquiring the company less for that property or its user base, but more for the development team and its game industry expertise. (Conduit never revealed how many people played Loudcrowd...though Governor Deval Patrick gave it a spin last year).
Conduit discontinued Loudcrowd last month, and following the Zynga acquisition will kill the two Facebook games it developed, Music Pets and Super Dance, according to a blog post by Hyatt today. "Despite the countless hours we’ve spent working on them, and last month being our best revenue yet, we failed to make these products commercially successful enough," he wrote. "We had to make the decision to focus on what was working, and we think once you see what we’ve got next, you’ll agree it was the right choice.
Conduit raised $8.5 million in venture capital funding, most recently a $3 million round last November. Conduit's two investors were Woody Benson at Prism VentureWorks and Izhar Armony at Charles River Ventures. (As an aside, one of Zynga's board members and investors, Rich Levandov of Avalon Ventures, works out of Boston.)
The $3 million round, I'm told, was intended to help the company transition its strategy from building a stand-alone, Flash-based Web destination to gearing its games to the Facebook audience. In the midst of that transition, Conduit's board hired the Boston investment bank America's Growth Capital to look for prospective buyers. The thinking was that it was becoming hard to sustain a stand-alone games developer — especially one that hadn't yet cranked out a hit game or figured out, like Zynga and Playdom had, how to attract millions of users through Facebook. (ACG's Jon Guido handled the transaction.) The bankers talked to companies like CBS, Sony, Activision, and Playdom (which itself was acquired by Disney last month.) But Zynga was the most interested party.
Conduit's founder and investors aren't yet crowing about their winnings from the acquisition, but instead will now be rooting for Zynga — rumored to be wildly profitable — to go public in a year or two. Zynga CEO Mark Pincus "doesn't want a double or a triple," said one source close to today's deal. "He's looking for a home run or a grand slam."
Earlier this month, I was tipped off (while standing in line for a soft-serve ice cream at Fenway, would you believe it) to the impending acquisition. But when I called Hyatt, Conduit's investors, and a source connected to Zynga, everyone either gave me a "no comment" or didn't return my calls. (I shared that with you on Twitter...)
Occasionally, I guess, the rumors are right.
AisleBuyer: Augmenting the real-world retail experience with an iPhone app
Most of us have had a chance to use self-checkout systems at stores like Home Depot, Shaw's, and CVS by now. At some places, they're popular enough that there's no difference between the length of the cashier's queue and the self-checkout queue.
But what if you could scan items in the store as you put them into your shopping cart, using your iPhone, and pay with a credit card — without waiting in line? That's the idea behind the new app from Boston-based AisleBuyer, which showed up on the iTunes Store over the weekend. The free AisleBuyer app also lets you read product descriptions and reviews on your iPhone. The company calls it the "world's first mobile checkout system," and I had a chance to try it out yesterday morning at Magic Beans, a Brookline store that is the company's first retail partner. (Magic Beans sells toys and baby accoutrements like crib bumpers and $600 strollers; they operate four stores around the Boston area.)
I downloaded the app in a few seconds as I was walking to the store. Interestingly, it's branded as a "Magic Beans" app, not an AisleBuyer app (the company says that once it has a half-dozen or so retailers using the app, it'll create a "meta" AisleBuyer app that lets you select the store you happen to be in.)
The app can help you locate a store using your iPhone's GPS, or give you information about current deals. But the main function once you are in the store is the ability to use the phone's camera to scan the bar codes on items. I tried seven items, and most scanned within a few seconds. One item (some bubble bath) didn't seem to scan, and a few others had price tags stuck over the bar codes.
Ideally, after scanning, the AisleBuyer app will be able to pull up product descriptions, a star rating, and some buyer reviews for items. At Magic Beans right now, only some items (mostly those also offered on the store's Web site) present the star rating from previous buyers. With those items, you can also click to see a product description — though the interface doesn't make it obvious that you can do that. And while the app will tell you how many buyer reviews exist for a given item, you can't actually read them. Aislebuyer's CEO, Andrew Paradise, explained that the company was rushing to get the app out, and will remedy those problems in future releases. (He also says you'll soon be able to store items that you don't want to purchase now, but may want to pick up on a later visit.)
Once you've decided to purchase an item, you can add it to the virtual shopping cart on your phone. It keeps a running tally of how much you're about to spend, including tax. The first time you click the "Checkout" button, you have to enter your credit card info and billing address to set up an account. It took me about two minutes to peck in my data. (I bought a $4.99 spray bottle of scented hand sanitizer.) Once the purchase was complete, it turned into a digital "receipt" on the phone, with a verification code that you are supposed to show to a store clerk before you leave. Even if there's a long line at the register, Magic Beans founder Sheri Gurock explains that a clerk will happily hand you a bag and send you on your way.
Magic Beans isn't yet offering any discounts or coupons through AisleBuyer, but Gurock said she will likely experiment with that soon; AisleBuyer will allow her to create special offers that will pop up on the iPhone screens of people who've downloaded the app, encouraging them to come into the store.
My verdict on version 1.0 of the app: it doesn't (yet) consistently provide you with detailed information or useful reviews of a product when you might be on the fence about buying it, but it could very well help you avoid a long line at the cash register. (Gurock says Magic Beans' busiest time is Saturday mornings, when parents stop in to purchase last-minute gifts before heading off to birthday parties.)
AisleBuyer is aligning itself with brick-and-mortar retailers in an interesting little app-skirmish. One one side are apps like ShopSavvy, RedLaser, and Pic2Shop. They make it possible to compare in-store prices to those at online merchants (which, you may have noticed, are sometimes lower, even when shipping costs are taken into account.) And their pitch seems to be, "Go check out the product at BestBuy, but purchase it wherever it's cheapest."
But AisleBuyer is positioning itself as an ally of the real-world merchant — a way for them to encourage shoppers to use apps to provide a layer of additional info (as long as you don't want to hunt for lower prices), and a convenient self-checkout option.
That could be a tough sell, given that the most tech-savvy consumers (those most likely to have an iPhone and regularly add apps to it) are information omnivores, wanting to know everything about a product they're evaluating (including critical reviews that haven't been "blessed" by the merchant) and all of the purchase options.
Magic Beans plans to begin promoting the AisleBuyer app in its stores this Thursday (though you can download it and use it now.)
With 13 employees, AisleBuyer is moving into new office space in Kendall Square later this month. The start-up has raised some angel funding (individual investors include Gerald Kraft and Phil Cooper, both formerly of Charles River Associates), and plans to announce a Series A funding round in September. The company is currently a finalist in the MassChallenge competition as well as the PepsiCo10 start-up contest. Paradise didn't want to be specific about other retailers who may deploy AisleBuyer, but he did say that office supply superstores are a high priority for the company. An Android version of the app is in development.
(In the photo above, from left to right, are Andrew Paradise of AisleBuyer, Sheri Gurock of Magic Beans, and Chuck Ball of AisleBuyer.)
'Thanks for the referral. Here's your steak.'
In August of 2007, Lewis Weinstein launched the beta version of ReferralKey, a site intended to help digitize the process of sending referrals from one professional to another. If a real estate agent sent one of his clients to a mortgage broker, the site would track that ? and also keep tabs on whether the mortgage broker ever returned the favor. Weinstein envisioned building a new kind of social network for small businesses that would provide continual streams of leads to its members, in a way that sites like LinkedIn and Facebook do not.
But the site didn't immediately take off. Weinstein, a serial entrepreneur and third-generation tax accountant in Needham, found that professionals using the site felt it just wasn't helping them generate enough new business. "The common response was, 'I thought you were gonna send me referrals,'" he says.
That's where the steaks come in.
When Weinstein relaunched the site this past April, he decided to create a new system of incentives. Professionals can now offer a cash bounty to spur others in their online network (or anyone who views their profile on ReferralKey) to send them a new prospect. (Some professionals, such lawyers, real estate agents, and accountants, have codes of conduct that prohibit them from taking such a payment.) If the prospect turns into a paying client, the recipient of the lead instructs ReferralKey to cough up the money via PayPal.
Users of the site can also upload their databases of clients and send out a message encouraging them to refer their friends and relatives to their trusty financial planner, for instance. "The site will track what happens as a result, and offer them an Omaha Steaks gift certificate, one from Callaway Golf, or one from L.L. Bean, for the new business that gets generated," says Weinstein. As an accountant, he says, he would typically send his clients a letter once a year that offered them a $75 gift certificate to Legal Sea Foods for any new business they sent his way, but the program was a pain to administer.
Weinstein says that ReferralKey attracted about 5000 members during its beta period. Since then, it has grown to just over 32,000 members. Premium memberships, offering an unlimited stream of referrals, cost $19.95 a month. Weinstein raised a first round of about $1 million from individual investors to launch the site, and says he's now hoping to raise a $3 million second round from venture capital firms.
He still operates his accounting practice, with offices in Boston and Needham, noting, "Accountants work their a--es off three months of the year, but that gives me time to do entrepreneurial stuff the other months." ReferralKey, with four employees, is co-located in the Boston office of his firm, GenerationTax.
ThredUP, a trading site for kid's clothing, pulling up stakes in Cambridge
Just over a month after it raised $1.4 million from a quartet of venture capital firms, Cambridge-based ThredUP, a site that enables parents to swap clothing their kids no longer wear, is moving to San Francisco. ThredUP co-founder James Reinhart says the company signed a lease on office space this week. Five employees will head west with him, with two remaining in Boston (both working from home.)
Reinhart says the decision was primarily a personal one. He and his wife had their first child last month, and his wife is originally from the Bay area and has family there. Reinhart spent six years in Santa Cruz, working as a teacher and helping to start a charter school, in between his undergrad studies at Boston College and earning dual Master's degrees from Harvard Business School and the Kennedy School of Government.
In raising funds for the company earlier this year, Reinhart says "I'd mentioned to Trinity Ventures [based on Sand Hill Road in Menlo Park] that we were thinking about moving [west], and I think they sort of came to expect that it would happen at some point" — especially after Trinity decided to lead the company's funding round in July.
Two Boston firms, Founder Collective and NextView Ventures, and a New York investor, High Line Venture Partners, also put money into ThredUP in that round.
Eric Paley of Founder Collective told me this afternoon that "when I met James, before Trinity got involved, he told me that he was probably moving to the Bay area," but that Reinhart was also considering staying in Cambridge. "All things considered, I'd love for him to be here, but look, we invest in companies in Europe and California. I didn't push him in any direction," Paley says, noting that when he was running the MIT spin-out Brontes Technologies, Left Coast investors at times encouraged him to move the Lexington-based company to California. (Paley successfully resisted.)
"I don't think Boston would've been at all a bad place to do this kind of start-up," Paley says.
And neither does Reinhart, noting that several Boston-area companies like Swaptree, Gazelle, and RelayRides are encouraging people to swap, re-sell, and share things in new ways.
But he does note that when looking to hire people who've built and marketed consumer-oriented Web businesses, there's a much deeper talent pool in the Bay area. Reinhart says that Trinity has already started to help ThredUP connect with some prospective new hires.
ThredUP launched last fall, and shifted its focus from men's and women's clothing to kid's stuff this past April. Members of the site list a box of kid's clothing they'd like to get rid of, and they can select a box of clothes they'd like to receive from the site's inventory. Members pay $13 per trade, and a premium membership with extra features is available for $30 per year. (It costs the company $10.70 to ship each box via USPS Priority Mail.) About a quarter of the site's swappers eventually upgrade to the premium level, Reinhart says, adding that about 1000 members are joining the site each week. There are currently about 1500 boxes listed on the site for trade, he says, and members have shipped 3000 boxes to one another.
"We believe we're building something for every parent in America," Reinhart says. "This is a fundamental consumer behavior change. We want people to say, 'Oh, my kid has grown out of these clothes. I need to ThredUP.'"
Reinhart (center, above) met co-founder Oliver Lubin while studying history at Boston College; he met Chris Homer, ThredUP's chief technology officer and third co-founder, while at Harvard Business School.
ThredUP plans to be in their new Union Square digs in San Francisco by September 1st. In total, the company has raised about $1.7 million in funding.
(The photo above comes from a Boston Globe feature on the "25 Most Stylish Bostonians of 2009.")
The other big wedding of the summer
Now that the Clinton nuptials are behind us, we can turn our attention to the wedding that really matters to the Innovation Economy crowd in Boston: that of iRobot CEO Colin Angle to Erika Ebbel. It takes place August 20th at the Kona Village resort on Hawaii's Big Island. I'll be hovering overhead in one the Globe's many helicopters, trying to see if any Roombas roll down the aisle ahead of the bride and groom, or if they've engaged a Packbot to shoot the wedding video.
Angle co-founded iRobot in 1990, not long after earning his master's degree at MIT's Artificial Intelligence Lab, and he had a bit part playing an MIT professor in the 2008 movie "21," about the MIT blackjack team.
Ebbel is also an MIT alum, currently pursuing her PhD in analytical biochemistry at Boston University. Just after graduating from MIT, she was crowned Miss Massachusetts (the first MIT grad to win that crown), and later competed in the Miss America pageant. She is also the founder of the WhizKids Foundation, which dispatches actual scientists to elementary, middle and high schools to get kids interested science by working on fun projects.
Here's Ebbel in a video produced for the PBS Web series "The Secret Life of Scientists & Engineers." She talks about mass spectrometers, learning how to wave in a beauty pageant, and her desire to contribute to a cure of Lou Gehrig's disease.
Buzzing around Boston on Pietzo's $1300 electric bike
Ever ridden a battery-powered bike before?
Me neither.
So last month, I took a Bedford company up on their offer to lend me one for a week. The company, Pietzo, is essentially a marketing and distribution business that imports electric bikes from China and sells them here in the States.
They're in the midst of trying to raise some angel funding to dial up their marketing activity, and to support a new retail store that they hope to open in Burlington. The problem with selling e-bikes in traditional bike stores, company marketing VP Nora Gildea explained to me, is that most only carry one or two models, and the salespeople are much more experienced selling traditional bikes.
I tested the $1300 Zephyr folding commuter bicycle. (The price includes a lock, helmet, and free first tune-up.) It has a lithium ion battery mounted under the seat, and a motor built into the hub of the rear wheel. It can operate either in “pedal assist” mode, which makes you feel like a Tour de France rider in peak shape by reducing the work it takes to move the bike forward, or in “full electric” mode, with the bike doing all the work.
I took the Zephyr on three missions around the city.
But first, I got a short training session in a Cambridge parking lot from Gildea. It takes a little adjustment to get used to the idea of a bike with a throttle on one handlebar, a “kill switch” (which turns off the throttle so the bike doesn’t zip forward as you’re mounting it), and a set of keys to turn the motor on. To fold the bike, you need to release two bolts — one on the handlebars, and one in the middle of the frame. (The process was kludgy at first, and didn’t get any easier throughout the week.) I worried about leaving the bike locked on the street: would someone swipe the battery, or try to hot-wire it? Gildea said she didn’t think it’d be a problem. I decided to use the same U-lock I normally use with my non-electric mountain bike.
Mission #1: I loathe the pokey traffic (and pricey parking garages) in the Longwood Medical Area, so to get to an appointment there, I park my car near Fenway, pour a couple quarters into the meter, and pull the Zephyr out of the rear cargo area of my car. It takes me a few minutes to unfold it — even the pedals need to be folded down — but once I set out down Boylston Street, it's nice to use the throttle to quickly get up to speed with the traffic. When I go up on a sidewalk, though, the nudge of the pedal assist has me moving a bit faster than I want to be. I lock the bike at a meter, using the handle-shaped hole in the frame, and remember to remove the keys from the ignition and take them with me. On the way back to the car, the Zephyr’s speed helps me beat an imminent rain storm (and a potential parking ticket, since my meter had expired). But hefting the bike back into my car, I realize that while you might not burn as many calories pedaling it, you get a great workout lifting it — the Zephyr weighs 54 pounds.
Mission #2: Riding along the Charles River to an afternoon meeting at the Whole Foods Market on River Street, I appreciate the Zephyr’s extra speed, since I'm running a little late. But the bike has a teeth-rattling feel when it hits potholes or goes over tree roots that wrinkle the pavement, despite the shock absorbers on the front wheel. After my meeting, unlocking it from the bike rack, I talk to another bicyclist who has just finished doing some grocery shopping. She has looked at electric bikes online, but was a bit deterred by the price. On my way down Mass. Ave, from Central Square to Porter, I feel like I'm moving almost twice as fast as the traffic.
Mission #3: My goal is to see what it’s like to take the bike on the T. With an afternoon appointment in Newton Highlands, I first ride to Porter Square. Along the way, a young mom pushing a stroller asks about the Zephyr: “Is it heavy?” The only answer is yes. But I say it’s nice if you’re in a hurry, or riding up hills. “Or if you’re tired,” she adds. I take the bike down to the T in the elevator, and board the train without folding it up. At Park Street, I make the fatal mistake of trying to lug the bike up a stairway to the Green line. Yowza: back successfully wrenched. Upstairs, I fold up the bike as my fellow passengers watch. The first train is too crowded, but I hop the second. The bike, when folded, is the epitome of awkward. There’s just no good way to carry it. Inside the trolley, I find a spot to stand, and notice that there’s another non-folding bike on board. Before we leave the station, the driver comes back to boot my fellow rider (only folding bikes are allowed on the Green line.) As we head west, the car empties out and I have enough room to unfold the bike. When I disembark, I use the throttle alone to (slowly) ascend the steep ramp that leads from the station platform to the street. I ride about four blocks to a meeting. My wife has brought the car, and so instead of venturing back on the T, I put the Zephyr into the cargo area, gritting my teeth.
Conclusions: I’m not ready to trade in my old Bianchi mountain bike for a Zephyr. When I ride my bike around town, I enjoy doing 100 percent of the work and getting all of the health benefits. My bike also weighs roughly half what the Zephyr does, and without the pedal assist on, the Zephyr felt about as zippy as a dump truck.
But I enjoyed twisting the throttle to summon a fast, smooth acceleration from a full stop. And I imagine that the Zephyr might appeal more to people who have hilly commutes; who don’t want to get all sweaty on a hot day; or who want to keep a bike in the back of their car to ride into congested urban areas.
Big government contractor picks up Mass.-based Reveal Imaging, maker of explosives scanner for airports
One of the investors in Bedford-based Reveal Imaging tells me this week's purchase of the company by Science Applications International Corp. is "a very positive acquisition," though the price wasn't disclosed.
Reveal makes a special automated scanner that airports use to check bags for explosives; in 2004, just two years after its founding, the company won approval from the Transportation Security Administration, which became its biggest customer — spending nearly $80 million in stimulus money to purchase the scanners. The company's compact CT scanners are also used in Israel, Mexico, and China.
Reveal, with just over 100 employees, was #284 on the Inc. 500 list of fast-growing private companies last year, and I mentioned them in a recent column about IPO prospects. (Guess that won't be happening.) Reveal's 2008 revenue was $47 million, and the company ("nicely profitable," according to the investor with whom I spoke today) could surpass $100 million in 2010 revenues.
Investors including General Catalyst, Greylock Partners, and Flybridge Capital put just under $25 million into the company.
I first visited the company in 2003, and mentioned them again in a 2005 column about venture debt.
Mercavo hopes to create a marketplace for valuable sales leads... the Glengarry leads!
Anyone who has ever worked in or around the sales department has seen "Glengarry Glen Ross," the 1992 Alec Baldwin/Kevin Spacey drama in which a boiler room of salesmen all covet a collection of supremely valuable sales leads: the Glengarry leads.
"These are the new leads," Baldwin says. "These are the Glengarry leads. And to you they're gold, and you don't get them. Why? Because to give them to you would be throwing them away. They're for closers."
A new Concord start-up, Mercavo, wants to create an online marketplace where technology sales leads can be bought and sold. It's like the movie's stack of Glengarry leads crossed with Apple's iTunes Store model. Mercavo has been conducting a private beta for about a year, CEO Doug Atkinson says, but will offer its first public demo Thursday night at the Tech Cocktail event in Cambridge.
The company traces its roots to LeadSpark, a company Atkinson started in 2004 (and still runs) after he left a VP of sales gig at the Internet marketing company eDialog. LeadSpark employs about twenty people who dial for dollars all day, calling technology executives to try to find one who might be shopping for some better security software, for instance. That lead then gets passed along to one of LeadSpark's clients, who are predominantly big enterprise tech companies.
How did the idea for Mercavo emerge? "Our client would want us to find a specific sales opportunity — call it a diamond," Atkinson says. "And we'd be calling around and we'd come across another sales opportunity that might be valuable for a different company. A ruby. But we had nothing we could do with those rubies."
He and David Im, formerly at KMT Software and PingPoint, built Mercavo to see whether "you could sell ephemeral knowledge about a sales opportunity in an e-commerce transaction."
So now when LeadSpark's employees come across an opportunity that isn't relevant to a LeadSpark client, it goes into the Mercavo database. Atkinson says he has another local sales development company that is also pouring leads into the database. A lead that tells you, for instance, that a VP of e-commerce at a "very well-established e-tailer" is looking to "improve e-mail metrics and get better pricing" will cost you $379. (The lead comes not just with contact info and a time frame in which the executive plans to make a purchase decision, but a paragraph describing the opportunity, and the executive's complaints about his current situation.) Atkinson says that Mercavo will sell the lead to only three buyers, since he wants the VP to have a few different vendor options, but not to be overwhelmed by sales calls. And he wants to give each of the companies that purchases the lead a fair shake.
When a sales development company adds a new sales lead to the site, and it is purchased, it keeps between 70 and 80 percent of the $379 purchase price, and Mercavo pockets the rest. That's similar to the model Apple uses with app developers on its iTunes Store.
"There is a lot of inefficiency and negative connections in the sales process," Atkinson says. "The idea of Mercavo is to create transparency. Eventually, we'd like to see [executives looking to solve a problem] post an opportunity themselves, and say, 'here's what I need,' as opposed to issuing an RFP and hoping it gets to the right people."
In its private beta phase, Mercavo has been working with about sixty tech companies who've been examining and purchasing sales leads from the site.
The company has been funded with about $50,000 in friends and family money, and Atkinson has just begun to have conversations with venture capital firms about a Series A round.
Right now, the company is primarily focused on adding more sellers of leads to its marketplace, he says: "We just need some jet fuel to acquire sellers.
Day-after reactions to Rhode Island's play for 38 Studios, Curt Schilling's videogame start-up
Talking to people this morning about Rhode Island's apparently-successful play to lure Curt Schilling's game start-up, 38 Studios, with a $75 million loan guarantee, one thing emerges: the littlest state is taking a big risk.
Jeff Bussgang, a Boston venture capitalist who co-wrote a Harvard Business School case study late last year about 38 Studios, called the loan guarantee "a bold move."
"It's almost like Chinese-style industrial policy on Rhode Island's part, trying to create a games and digital media cluster this way," Bussgang said. (Rhode Island's legislature recently permitted the state to guarantee up to $125 million of loans... so $75 mil represents a big chunk of that.)
Of course, Bussgang said, the loan guarantee requires the company to raise money from banks or institutional investors first, perhaps by issuing bonds, with Rhode Island serving as a "backstop" for those investors. In that sense, the state's risk is pretty binary: either it'll have to pony up $75 million if the company fails, or it'll never need to actually cough up that cash. (Here are the details of the deal.)
Of 38 Studios' ambition to employ 450 people in Rhode Island by the end of 2012, Bussgang said actually doing so would be "extraordinary." (The company today has about 70 employees in its Maynard, Massachusetts office.) It'd mean that 38 Studios would grow into the biggest videogame company New England has seen in recent memory (even Turbine Entertainment and Harmonix Music Systems, two of the most successful existing game companies, have employed 300-350 people in their busiest periods.)
Bussgang said he doesn't think Massachusetts made a mistake in not trying to match Rhode Island's incentives.
Even Saul Kaplan, the former head of the Rhode Island Economic Development Corp., seemed surprised by the size of the state's loan guarantee. "I never really contemplated a deal this large," Kaplan said, but instead smaller loan guarantees and investments to get "a portfolio of technology and IT companies based here." Kaplan is now founder and "chief catalyst" of the Business Innovation Factory in Rhode Island.
In the old days of economic development, when a state got involved in assisting companies, Kaplan observes, there would be some hard assets — like a factory or production equipment — that could be sold off if things went south, helping to repay the loan. "In a knowledge-based industry like gaming," Kaplan says, "when these companies go out, there isn't much in the way of assets to liquidate."
"Now the real open question is what will the market demand and penetration look like for these two first games" that 38 develops, Kaplan says.
Interestingly, when I asked Kaplan about a few small Massachusetts tech companies that Rhode Island successfully managed to attract earlier in the decade with incentives, he had trouble recalling their names. Had any of them grown into 100 or 200-person companies? "Probably not," Kaplan admitted.
Dave Schlafman, a media entrepreneur in Watertown, told me he felt it'd be a challenge to hire a couple hundred videogame programmers and designers in Rhode Island. Many big game developers, like Harmonix, hit that same hiring wall even here in Massachusetts, and they're forced to find freelancers or small contract shops in other states.
On Twitter this morning, Angus Davis, founder of the Providence start-up Swipely, said that "since all Mass. VCs passed on [the] deal, I guess it's a great idea for RI taxpayer, right? Meanwhile, state cut Slater VC fund. Dumb."
(The Slater Technology Fund was created by Rhode Island in 1997 to make small investments in early-stage start-ups, and its funding was cut recently.)
Bill Reed, CEO of Demiurge Studios, a game development shop in Cambridge, posted this open letter to Schilling (and his employees) this morning. In it, Reed wrote, "If anyone on the talented 38 Studios team wants to stay in Massachusetts, where we play major-league ball, they're more than welcome to join the team at Demiurge Studios, the state’s soon-to-be largest independent game studio."
Game entrepreneur Jon Radoff says, "If they have a successful MMO launch and wind up being one of the top MMO products out there, then I think it's conceivable" that 38 Studios might employ 450 people in Rhode Island within a few years. [MMO refers to a "massively-multiplayer online" game, which is the second product 38 Studios has in development.]
Like many other states and provinces in Canada, Rhode Island "may be getting more aggressive to court the videogame industry because it is an industry that experiences a lot of growth, and can inject a lot into local economies," Radoff said, adding that the trend is "definitely a threat to Massachusetts."
Are HubSpot and Constant Contact turning into rivals?
About a year ago, Apple issued a press release to announce that Google's CEO, Eric Schmidt, was resigning from Apple's board.
"...[A]s Google enters more of Apple’s core businesses with Android and now Chrome OS," Steve Jobs said in the release, "Eric’s effectiveness as an Apple Board member will be significantly diminished, since he will have to recuse himself from even larger portions of our meetings due to potential conflicts of interest."
I have a hunch we could see a similar thing happen locally, with Constant Contact and HubSpot, two companies that help small and mid-sized businesses with digital marketing. Constant Contact, based in Waltham and run by Gail Goodman, is publicly-traded, and best-known for its subscription service that helps companies manage their e-mail newsletters; HubSpot, headquartered in Cambridge and run by Brian Halligan, helps companies use social media (including blogs and Twitter) to build their customer bases. Goodman sits on HubSpot's board.
HubSpot offers as part of its subscription service an e-mail marketing tool that makes it simple, the company says, to send "a single email to just a few leads or a personalized email offer to your entire database of contacts." In May, Constant Contact bought a small California company specializing in social media, and now offers webinars and an e-book on "35 things you should know about Facebook, Twitter, and other networks."
When I spoke to Goodman last month, she acknowledged that what was once a clear boundary between the two companies is now a bit fuzzier, but she said she didn't have plans to split from HubSpot's board. Goodman, in fact, was over at HubSpot's Kendall Square offices last week to give employees a talk about leadership.
Halligan acknowledges that the two companies have been edging closer together over the past year, but says that HubSpot sells to a "slightly bigger company," with a monthly subscription fee in the $500 range, while Constant Contact targets individuals and small business owners who pay an average of about $30 a month.
As for the question of whether there's a growing conflict with Goodman serving on HubSpot's board, Halligan says "it has definitely come up, but she doesn't seem particularly worried about it, and I'm not. We'll see how it goes down the road."
Goodman joined the HubSpot board in March 2008.
Predictions and favorite iPhone apps, from this week's Mobile Monday CEO dinner
You can say this about Boston's proposed Innovation District: it is already home to some pretty fine dining.
The networking organization Mobile Monday Boston assembled a group of CEOs in the private dining room at Barbara Lynch's recently-opened Menton, in the neighborhood previously known as Fort Point Channel (Mayor Menino once tried to christen it the "Cyber District," although that name didn't stick.)
I moderated a very informal conversation among the attendees, who were mainly there to network, swill wine, and dine on tasty salmon or beef. Two things we talked about: favorite mobile apps (just about everyone named apps that run on the iPhone or iPad), and predictions about the future of the mobile ecosystem.
Predictions first: some participants felt that as more smartphones can access the Internet at high speeds, the importance of apps will decline, since apps have evolved, by and large, to deal with the shortcomings of Web browsers and bandwidth limitations on most handsets. Folks seemed bullish about HTML5 as a format for delivering video to phones, as opposed to Flash (which most smartphones don't support.) Jeff Glass of Bain Capital Ventures (that's him at the center of the pic) predicted that Microsoft will make some mobile acquisitions to help make it more competitive in the space, and several people said they felt that iPhone, Android, and Microsoft will be the three surviving players with significant share in mobile operating systems. No one stood up for BlackBerry, and the prognosis for Nokia was even worse.
As for the favorite apps mentioned...
Skyhook Wireless CEO Ted Morgan (pictured at right, with Greg Raiz of Raizlabs) said he likes the Scrabble-like game Words with Friends... Merrill Lynch's Ken Sharma said he's a fan of the iPad news app Pulse...Goby CEO Mark Watkins says the travel app TripIt helps him stay organized while on the road...Cadio co-founder Thaddeus Fulford-Jones said he uses CardStar to manage his loyalty cards...Springpad CEO Jeff Janer likes the voice-driven personal assistant Siri (recently acquired by Apple)...music apps Shazam, Spotify, and Pandora all got favorable mentions...Kate Imbach of Skyhook, one of the prime movers behind Mobile Monday, plugged Kayak and Bands in Town (both created in the Boston area)...Maggie Taylor of Skyhook, clearly an aspiring singer, put I Am T-Paine and the "Glee" app atop her list...and Dave Mitchell of Connected Bits said he likes the Articles app, which is a sleekly-designed interface for Wikipedia, and Reeder, for reading RSS feeds.
Ted Morgan of Skyhook showed me an app that folks at his company developed called iSwig, which lets you share your favorite drink at popular bars ... and also see what others are drinking.
Menton, unfortunately, is too new a place to have any iSwig data about patrons' favorite cocktails. (Pictured at left are Walt Doyle of Where and Mark Watkins of Goby.)
Tomorrow night, there's another event co-sponsored by Mobile Monday: an open air block party in Downtown Crossing, with live music and an appearance by Cirque du Soleil performers.
The summer vacation that begins in Greece and ends in Kenya (one year later)
The Wilcoxes of Natick embarked earlier this month on a pretty lengthy summer vacation: it began in Athens, and it wraps up next July in Kenya.
When last we heard from Russ Wilcox, the long-time CEO of Cambridge's E Ink, he had left the company after its sale to Prime View International of Taiwan; he'd worked at E Ink for 13 years, shepherding the technology out of MIT's Media Lab and into products like the Amazon Kindle and Sony Reader. (Last month, display-maker Prime View changed its name to E Ink holdings.)
Before embarking on his next entrepreneurial adventure, Wilcox decided to plan an extended trip with his family: they rented out their house for a year, sold their cars, and devised a curriculum for their son and daughter, who would be missing 4th and 7th grade. They also set up a blog, 365 Saturdays, to chronicle the journey (with the kids handling much of the writing.) "We are trying to use the blog as a way for them to practice writing something other than IMs," Wilcox writes in an e-mail.
The itinerary includes London, Paris, Vienna, Egypt, Australia, Thailand, China, Argentina, the Galapagos, and Botswana.
Wilcox is staying fairly well-wired on the trip: an e-mail to him this morning yielded a quick return phone call via Skype. Where was he? Cappadocia, Turkey.
(And yes, in the photo he is wearing a wristwatch with an E Ink display.)
Interactions banks $6.3 million more for call handling service, plans growth in Franklin
IVR is an evil acronym: it stands for interactive voice response. Most times you call an 800 number with a question about your credit card bill, or a problem with your laptop, you're dealing with an IVR system that asks you to speak a phrase or punch a key to get one step closer to an answer — if all goes well.
According to Mike Iacobucci, chief executive of Franklin-based Interactions Corp., people forced to interact with an IVR system report being satisfied about 18 percent of the time. That's one of the reasons that Paul English, co-founder of the travel Web site Kayak.com, created his GetHuman site: it's a list of short-cuts on major IVR systems that will connect you quickly to a live human being.
Interactions wants to bring a human back into the equation — but they don't actually want the human to have a real-time, back-and-forth conversation with you. Instead, they use human beings listening to snippets of speech as a kind of air traffic controller, ensuring that you get the information or answers you are looking for. It's a way of applying human understanding to your needs, while keeping the cost of handling the call low. The company, previously headquartered in Indiana (and originally founded in New Jersey in 2002), moved to Franklin, Mass. after Iacobucci was hired as CEO last year. Iacobucci replaced founder Michael Cloran. (Guess this 2006 plan to create 200-plus new jobs in Indiana didn't exactly work out.)
Today, the company is announcing a new round of funding (a $6.3 million series D), bringing its total raised to $36 million.
"We're trying to create a really human-like conversation at a call center or on a Web site," says Iacobucci, who was recruited to the company by Boston-based Sigma Partners, one of Interaction's investors.
When he joined last January, Iacobucci says the company had a few early customers, but was struggling. "We totally redesigned the software and infrastructure," he says.
How does it work? Human operators (the company calls them "intent analysts") sit at a computer wearing headphones. They hear snippets of speech from a caller — "some jerk stole my wallet this morning and I need to cancel my credit cards" — and without responding verbally, click on the screen to direct the caller to the right pre-recorded voice response. For security and efficiency reasons, the same intent analyst doesn't handle the entire call; that way, they don't hear both your phone number and Social Security number, for instance, and while you are speaking your account number or listening to a response (like the address of a service center near you), they can be directing another caller to the right information. Iacobucci says many of the intent analysts are young, and they tend to be avid gamers with fast reflexes. They earn a higher hourly rate based on their speed and accuracy. Iacobucci says that some surveys have found that callers report a higher satisfaction rate when they've dealt with Interactions' system than speaking with a traditional live operator.
You can listen to some sample calls on the company's Web site.
Iacobucci has been hiring executives and building out the office in Franklin, including a CFO (Joesph Gildea), CTO (Yoryos Yeracaris), and head of professional services (James Nolan). He expects that Interactions will employ as many as twenty people in Massachusetts this year, in addition to offices in Carmel, Indiana and Austin, Texas.
As far as off-shoring the call analysis to bring down costs, Iacobucci writes in an e-mail: "...We've tested in low-cost labor markets overseas. But to date we've found a good, available workforce in the States (we've created jobs here), and our clients like — and some are requiring — U.S.-based labor. It's an option down the road as we expand."
Can Neuroscouting's software produce better baseball players?
One of the more intriguing start-ups I've been hearing about this year is Neuroscouting, currently operating out of the DogPatch Labs space in East Cambridge. The company is developing game-like software for evaluating athletes' brain performance — like the way their visual and motor systems respond to an oncoming curve ball — and also improving it. The company will focus first on baseball, but Neuroscouting's tagline ("The science of elite performance") implies that the company will eventually expand to other sports.
Several sources familiar with the company told me that the Red Sox are evaluating the technology for future use, but a team spokesperson didn't respond to multiple calls and e-mails requesting comment. Neuroscouting co-founder Wesley Clapp wrote in an e-mail that "breaching our confidentiality agreements would jeopardize everything that we are working so hard for." Clapp earned a PhD in neuroscience at the University of Auckland in New Zealand, and the company's technology is based on recent insights into neuroplasticity — the way the brain can change and improve based on certain kinds of training and experiences. Clapp's co-founder, Brian Miller, earned his PhD in neuroscience at UC/Berkeley.
Neuroscouting's Web site pitches the software it is developing as useful to teams for both scouting and coaching. "Our software tools...analyze and enhance the brain functions required to respond successfully to the intense visuomotor demands seen on the professional field," the site claims. "As a result, they provide a powerful scientific complement to current scouting and player development strategies."
A tweet from venture capitalist Mike Hirshland describes Neuroscouting as developing "videogames for pro athletes." Hirshland is a partner at Waltham-based Polaris Venture Partners, which operates the DogPatch Labs facility; DogPatch provides several months of free office space to promising start-ups. Hirshland said this morning that Polaris hasn't (yet) invested in Neuroscouting.
The company has met with at least one local angel investor, but Clapp wouldn't confirm whether they're seriously seeking funding at this point. The company was founded in 2007.
Google acquires ITA Software: The background briefing
Since news of a possible deal first started leaking out in April, lots of people have been wondering whether Cambridge-based ITA Software, which gathers and organizes data about airfares and helps airlines run their Web sites, would be acquired by Google, stay independent and possibly go public, or get bought by someone else.
The deal went down this week — with Google paying $700 million in cash — just as travelers were packing their suitcases for the Fourth of July holiday.
Update: According to a General Catalyst document I obtained, that firm (one of the local investors that put money into ITA in 2006, when the company was already nicely profitable) invested $18 million in the company at a post-money valuation of $310 million; Battery Ventures of Waltham was the lead investor. The General Catalyst document indicates that ITA's investors made about 2.25 times their money on the ITA investment — not a home run, but an OK return for an investment that they held for just four-and-a-half years. (General Catalyst partner Joel Cutler hasn't yet responded to my request for comment.) The document indicates that, in 2006 at least, ITA's EBITDA margin (earnings before interest, taxes, depreciation and amortization) was in the 50 percent range, and that ITA's cost structure was "less than one quarter of the closest known competitor." The document went on to say that the company had already entertained numerous acquisition offers, and that General Catalyst also believed that ITA could "be a public company given its large market, disruptive technology and strong financial performance." (Well, that didn't happen.)
Here are five links related to the deal, ITA, and its founder, Jeremy Wertheimer:
- Google's official announcement: "Taking off with ITA" (also worth a look is the company's page on "Facts about Google's acquisition of ITA Software," which seems especially crafted to counteract fears that Google could become too big and powerful in the travel industry.)- Back in April, I took a look at the cultural similarities and differences between Google and ITA.
- ITA founder and CEO Jeremy Wertheimer was on a panel I moderated last December about the "travel tech" cluster in Boston.
- In February, Fast Company wrote about the company's long-running project to create a brand new airline reservation system from scratch (not yet launched), in a story headlined, "Ready for take-off: At last, a flight check-in system that doesn't suck."
- In 2006, ITA brought in its first outside funding: $100 million in venture capital, from Battery Ventures, General Catalyst, Sequoia Capital, and others.
iPhone app-maker CardStar shops for office space in Boston
Scouting the Boston area for office space this week is CardStar Inc. The start-up makes a popular, free iPhone app (1.5 million downloads so far) that enables you to digitize all of your loyalty cards and then simply show the bar code on your iPhone's screen when you're at the checkout counter. The company has previously operated virtually, with employees in Massachusetts, Connecticut, and Washington, D.C. Bizdev chief Stuart Hilger says there will be three employees in the new Boston office, and CEO Andy Miller will work from it part-time.
I've tried the app three times now. It didn't work at my local Shaw's grocery or at PetSmart, but on the third try, at a CVS Pharmacy, it finally generated that sought-after beep from the laser scanner. (My hope was to be able to get rid of all those loyalty cards hanging off my keychain or stuffed into my wallet; for now, I'm holding on to them) On Apple's iTunes Store, CardStar currently has a 2.5 star rating, out of a possible five stars.
Hilger explains that the on-screen barcodes work well with some stores' scanning equipment, and not with others. "It's totally a binary thing," he says. "If it works the first time, you'll keep using it, and if it doesn't, you'll probably never use it again." Shoppers at City Sports tend to have good luck, but not Sears. At places like Staples and K-Mart, you may find one store where the app works, but others where it doesn't due to different scanning gear.
The company hopes to sell sponsorships in the app (Chase Manhattan Bank ran one recently), license its barcode-rendering technology to others, and also make it convenient to save and redeem coupons using the CardStar app. Hilger explains that CardStar can earn a few pennies for each coupon a user cashes in.
CardStar raised a first round of funding earlier this year: $1 million, some of it from Cambridge-based LaunchCapital. Hilger says the company may wind up adding a bit to that round, given that some strategic partners have expressed interest in putting more money into CardStar.
MassChallenge welcome party: Pics and name-checks
The MassChallenge start-up competition threw a party this evening for all of the entrants — and the wider entrepreneurial community — on the unfinished 13th floor of One Marina Park Drive on Fan Pier. The beer was by Sam Adams, the food by Strega in the North End, the views by developer Joe Fallon, who was mingling in the VIP room.
Among the folks I chatted with: Dave McLaughlin of Boston World Partnerships... Christopher Mirabile of Race Point Capital...Olivier Boss of the Cambridge biotech start-up Energesis Pharmaceuticals, developing drugs for obesity and diabetes...patent attorneys David Feigenbaum of Fish & Richardson and Melissa Hunter-Ensor of Edwards Angell Palmer & Dodge...Kabir Hemrajani of RiotVine...and Michael Raybman of WaySavvy Travel, a fascinating travel-planning site getting ready to launch its beta this summer.
A few pics...
Andrea Dacayanan of 1Fastbite, an online ordering and reservations management system for restaurants, wanted me to use the more serious photo I took of her. That one was mysteriously erased.
MassChallenge CEO John Harthorne (left) and Fallon Company CEO Joe Fallon (blue shirt with tie.)

Kayvan Zainabadi, founder of Instant Nightlife (left), with Tom Hopcroft of the Mass Tech Leadership Council and Anna Uritsky of Vestify. Instant Nightlife is a Web site and iPhone app that helps clubgoers share information about what's happening at Boston clubs, like how long the line is outside the door, how many people are on the dance floor, and what the male/female ratio is like. It currently covers clubs in the Theater District, but Zainabadi says it'll soon expand to the Faneuil Hall area and Allston-Brighton. Uritsky says that Vestify will help entrepreneurs raise money online from individuals who may not have the net worth to be accredited investors; they're still waiting on SEC approval to launch it.

Angel investor John Landry of Lead Dog Ventures has a look at the Instant Nightlife app.

Joe Caruso of Bantam Group with Amit Kanodia of Lincoln Ventures. Caruso, an angel investor and start-up advisor, is working on a project to designate a week in October as Bostion Region Entrepreneurship Week, or BREW. (Yes, beer will be involved somehow.) You can join a LinkedIn group to keep up with the initiative.

Michael Gaiss of Highland Capital Partners with Landry.

Architexa aims to make it easier for software developers to decipher complex code
In 2005, Vineet Sinha was a PhD student in MIT's computer science department, presenting some of his work at a prestigious academic conference in San Diego. The project, Relo, proposed that one way to increase programmers' efficiency was to help them understand vast swaths of already-existing software code more quickly; understanding the code that exists, Sinha explains, requires an enormous investment of time, but if programmers don't do it, their new contributions tend to create problems. Relo created diagrams that showed how various chunks of code were connected to each other — a sort of automatically-generated Rand McNally road atlas of complex software.
After that 2005 presentation, several people in the audience asked Sinha how they could buy a copy of Relo. It wasn't yet a packaged product that he was prepared to support, but after he earned his doctorate in 2007, Sinha began to focus on turning it into one. The company he started, Architexa, is preparing for its commercial debut this month; already, several hundred non-paying customers have been testing it. Sinha says the company has three full-time employees and several interns. Initially, it supports only the Java programming language, but he hopes to eventually expand into C++, and perhaps Ruby and PHP.
Sinha acknowledges that Cambridge-based Architexa will compete with some of the tools sold by IBM's Rational Software division, but he says that his start-up is focused on developing a wider range of features that will help programmers explore and understand knotty code bases.
Sinha says the company plans to price its product somewhere between $150 and $450 annually. He intends to "switch on" payment for the current free trial users of the product this month. Later, he may seek angel funding for the company, which would primarily go to staff salaries and a concerted sales and marketing effort.
But in advance of that, to help generate buzz, Sinha plans to launch a site that will offer Architexa's roadmaps for popular open source programs.
Here's a video overview of Architexa, produced by the company:
Highland backs NYC-based Pixable, photo printing service started by MIT alums
Manhattan-based Pixable closed on its first round of funding from Highland Capital Partners of Lexington earlier this month. A recent SEC filing puts the round at $2.1 million.
Pixable makes it easy to print photo books and calendars using images that are stored on Facebook, Flickr, Picasa, and other popular photo-hosting services. Bob Davis, the former chief executive of Lycos, and now a general partner at Highland, will join Pixable’s board. Pixable is Highland's third investment in a New York start-up since February. (Yesterday's Globe column was all about Boston VCs putting money into Manhattan start-ups.)
A team of MIT grads started the company last year, and were briefly squatting last summer in conference rooms at the school’s Sloan School of Management, but they moved to an office SoHo last summer. “We didn’t have a very strong preference between Boston and San Francisco and New York,” says Iñaki Berenguer, Pixable’s CEO. “But New York is famous for media, advertising, and events, and you could say we’re a media company, and that photos are mainly about events.” He adds that New York is “a good place to mix long working days with having fun on the weekends.” The company has ten full-time employees, and a dozen interns.
Pixable plans to enhance its site with other features related to aggregating and organizing photos from various photo-hosting sites, but Berenguer wasn't ready to be more specific.
Berenguer tells me that several sites, like Shutterfly, Kodak Gallery, and Snapfish, don't have APIs allowing services like Pixable to work with their photos. But he says that each of those sites host about a billion photos each. That sounds like a lot — until you learn that Facebook hosts about 50 billion photos, and is adding about 4 billion more every month. "Flickr has about five billion, so you could say that every month, a new Flickr is built on Facebook," Berenguer says.
Here's a company-produced video that offers an introduction to Pixable's service:
New mobile start-up, EverTrue, aims to help colleges stay close to young alums
Who better than a recent business school grad to launch a new start-up that is creating mobile apps to help universities stay connected to their alumni?
Brent Grinna started working on EverTrue while at Harvard Business School; he graduated last month, and around the same time, the company launched its first app, Brown Alumni Connect.
Grinna says EverTrue is focused on building "young alumni engagement tools" that will deliver news, sports scores, video, and an event calendar to alums via their iPhones (and eventually, Android phones and BlackBerries, too.)
"When you move to a new city, you can update your contact information so friends can find you, and you can use the app to find other alumni in the area," he says. Grinna adds that schools often don't dedicate much energy to communicating with young alumni, who aren't likely to become big donors for a decade or two. That's exactly the demographic that Grinna expects will be attracted to EverTrue's apps. ("Mobile giving" will also be rendered easy, presumably in small amounts, for those note yet ready to have their name chiseled on a building.)
Grinna has been bootstrapping the company thus far, following the advice of Jeffrey Bussgang, an entrepreneur-in-residence at HBS and a partner at Flybridge Capital in Boston. "Our plan is to sign up some more schools, and then raise some funding," he says. In addition to Brown (Grinna's undergrad alma mater, where he was captain of the football team), he says the company is in discussions with other New England colleges and boarding schools. EverTrue has developed a prototype app for HBS, but the school hasn't yet signed a deal with EverTrue.
CloudSwitch launches in SF; CEO lists five reasons corporate customers still fear the cloud
Burlington-based CloudSwitch, one of the better-funded cloud computing start-ups in town, officially launches Wednesday at the Structure 2010 conference in San Francisco. While many small businesses have gravitated to cloud-based storage and server horsepower because of the cost savings and flexibility they offer, CloudSwitch aims to make cloud computing "safe" for larger companies. Run by former SolidWorks CEO John McEleney, CloudSwitch has raised $15.5 million from a trio of local venture firms: Matrix Partners, Atlas Venture, and Commonwealth Capital Ventures.
CloudSwitch sells software that's installed in a corporate data center to enable a customer to easily use cloud services from providers like Amazon and Terramark to run their own applications. "You make no changes at all to your underlying app," McEleney says. "And you get complete encryption of all the data. The customer keeps the keys, and no one else has them."
CloudSwitch co-founder Ellen Rubin explains that big companies may want to "spin up" a few hundred extra servers when they're testing a new application to see how it will work in the real world, or for already-live applications during times of high demand, like a travel Web site during the height of summer vacation season.
"We see people saving from 30 to 50 percent, compared to maintaining servers and storage in their own data center," Rubin says. "The real savings is being able to shut it off when you don't need it, rather than running it 24/7."
The company charges a minimum of $25,000 a year for access to up to twenty servers, with pricing scaling up based on the customer's needs. McEleney says they're selling mainly to directors or VPs of IT infrastructure, and executives responsible for application development, as opposed to CIOs. "We don't want to get caught in the spin cycle of someone asking, how does this fit into our 10-year cloud strategy," says McEleney.
CloudSwitch has 24 full-time employees, and McEleney says they're hiring a bit on the business side, and "even more on the engineering side."
I asked McEleney for his list of the top five reasons big companies are still anxious about cloud-based services. Here's his run-down:
1. The cloud is not as secure as your data center (primary concern around multi-tenancy)
2. Moving to the cloud is hard
3. If I move to the cloud, am I going to be “locked in”?
4. The cloud is more expensive than buying hardware
5. No one is really using the cloud
As for that last concern, McEleney concedes that there isn't yet a list of Wal-Mart-sized companies using cloud-based services (or at least talking publicly about it.) But he says CloudSwitch is already working with some big financial services and pharmaceutical companies that just aren't willing to be named, and has been having meetings with a number of other potential customers in the Fortune 500.
At the Structure 2010 conference this week, there are a few other local folks speaking, including Akamai CEO Paul Sagan and Michael Skok of North Bridge Venture Partners. Also, Somerville-based Cloudant will be launching its "cloud ready" database service at the conference, along with CloudSwitch.
Delivering desktops virtually: A cluster emerges in Boston
If you don't work in IT, you may not be up to speed on VDI yet.
VDI is "virtual desktop infrastructure," and information technology executives have been hearing a lot about it over the past year. It enables them to manage the hundreds or thousands of PCs used by their employees more cost-effectively; rather than running around to each desk to install a new piece of software or an update, the IT crew can deliver the operating system and applications to each user over the network from a central data center. They get more control, and ideally the user can access the same customized desktop set-up whether they are at home, on a netbook, a laptop, or even a smartphone. Whenever she logs in, the same desktop picture is there, with all the applications she uses and the proper security privileges.
Boston is becoming a hub of VDI activity (also sometimes called "desktop virtualization.") Companies like Desktone in Chelmsford, Viewfinity in Waltham, and Virtual Computer in Westford are all taking different approaches to helping IT organizations lower the cost of managing PC users. Scott Davis, the chief technology officer of VMWare's desktop virtualization business unit, is based in Cambridge. And today, Marlborough-based Unidesk formally launches its VDI product.
Unidesk has been working on "the ultimate virtual desktop" for more than two years, says founder and CTO Chris Midgley. "Desktop virtualization is really all about people," he says. "You can't give everyone the exact same terminal. They want to make the desktop theirs. But IT wants to be able to treat thousands of desktops like they're one desktop."
Unidesk has raised $20 million in venture capital funding from Matrix Partners and North Bridge Venture Partners, and the company has 34 employees. Midgley says they're currently hiring in the sales and support departments. Early customers include architecture firms, universities, and the Glasgow Housing Authority in Scotland. Customers pay Unidesk on a per-user basis, starting at about $150 per user.
It was a coup for Unidesk when Don Bulens joined last June as chief executive; Bulens had previously run New Hampshire-based EqualLogic, acquired by Dell in 2007 for $1.4 billion in cash — Dell's biggest acquisition ever.
Bulens said he found that he "very much missed being part of a team on a day-to-day basis."
I asked Midgley about his fund-raising experience with Unidesk; he'd earlier sold LiveVault, an online back-up and recovery service, to Boston-based Iron Mountain. (That company raised about $25 million in venture funding, and was acquired for $50 million.) He said he pitched only two firms, Matrix and North Bridge (Matrix was among LiveVault's backers), and both decided to do the deal after about two weeks of due diligence. As for not making the rounds to talk to more firms, Midgley explains, "You want to keep ideas in this world extraordinarily confidential." Some founders seek to shop around their ideas to get the best possible valuation for their company, he says, "at the cost of too much exposure."
Data, deep analytics, and curry at next week's Enzee Universe
About 700 folks will descend on the Westin Waterfront next week for the fourth annual Enzee Universe conference, put on by Netezza. The publicly-traded Marlborough company sells hardware and software to help big companies run their data warehouses. Netezza's customers buy the technology (average order size is $1.2 million) to crunch large volumes of data in real-time, like figuring out what coupons to give you at CVS based on your purchase, or to calculating the best routes for 18-wheelers delivering goods around the country.
"The over-riding theme of the conference," says Netezza chief executive Jim Baum, "is that you have all these intelligent devices collecting data, and you have social networking and e-commerce, and our customers are looking to get a competitive advantage from analyzing all of that." Netezza's newest product, TwinFin, is five times faster than its older systems, Baum says, and relies on IBM's blade servers, instead of the proprietary blades Netezza sold previously. (Blade servers supply processing power and storage, and like razor blades, they can easily be installed and removed in a large rack containing other blades.) Netezza still makes a special database accelerator card that enables the blade servers to work speedily with large volumes of data.
Speakers at Enzee Universe include Stephen Baker, author of "The Numerati," which looks at how data is changing the way we live and work; analysts from Forrester Research and Gartner; execs from Major League Baseball and Conway Freight; and Gareth Sundem, author of "The Geeks' Guide to World Domination."
The big party Monday night is a "curry banquet" prepared by chef Kuldeep Makhni, who has cooked for Queen Elizabeth, the late Princess Diana, Mother Teresa, Sylvester Stallone, and David Copperfield. That alone should be worth the conference's $475 ticket price.
You can follow tweets related to the conference by watching the hash tag #enzee.
A trio of local companies prepare to begin betas
I've run into three entrepreneurs this week who are getting ready to begin beta tests of new products.
- Shelby Clark tells me that his new peer-to-peer car-sharing service RelayRides (I've described it as Zipcar without the fleet) logged the first rental of its summer beta test in Cambridge last night. RelayRides had a demo table at the Web Innovators Group last Monday night, and company employees were out in Central Square this week handing out postcards. The company is both looking for potential drivers as well as car owners willing to assign their car's unused hours to the service, and earn money in return. Clark tells me the vehicles available include a Toyota Prius and, amazingly, a Porsche Cayenne. (Vehicles start at $6 an hour for older models, and the Cayenne rents for $14 an hour.) The company is currently based at the Polaris-run DogPatch Lab space in East Cambridge.
- Brothers Kyle and Matt Rushton are both still working day jobs, but they're also nudging Blogcastr, a live-blogging tool, toward a closed beta test in the next few weeks. The idea is to make it easy for folks "blogcasting" from live events (publishing repeated updates) to share both text and photos (and eventually, audio and video, too) with readers, who'll be able to add their comments and reactions. The Rushton siblings started work on Blogcastr late last year, and they're hoping to get the service up-and-running before looking for angel funding.
- Vikram Venkatasubramanian and two other alums of Avaya are working on a neat voice-driven service called TopicPhone. Their idea is that it's still too complicated to navigate phone menus (especially on a mobile) by pressing 1 for sales, 2 for customer service, or 3 for billing. With TopicPhone, the goal is to enable a caller to say, "I need to have my house painted," and then serve up a choice of several painters in the vicinity. They plan to operate TopicPhone as an 800 service that would be free to callers, and initially focus on serving the elderly and visually impaired. Venkatasubramanian tells me his advisory board includes he has been getting some informal advice from Ron Croen, the former CEO and founder of Nuance, and now an entrepreneur-in-residence at Tufts.
As for the business model, Venkatasubramanian explained in an e-mail:
The revenue model for TopicPhone is an auction-based, pay-per-call model where businesses bid for the phone calls (which represent a 7-10 times more valuable lead than a web click) that are relevant to topics of interest for their business. We plan a TopicPhone premium [service] at a later date which is subscription-based and stores information about the callers, such as their prescription codes, bank account numbers, etc. so that they are able to do things like check their bank balances or refill their prescriptions by just stating that need.
(And if you're working on something that's getting close to launch, I'm eager to hear about it; just drop me a line using the comment box at right or by clicking my name.)
IBM officially opens "Mass Lab" tomorrow, company's biggest software campus in North America
Wednesday is the ribbon-cutting ceremony at IBM's "Mass Lab" campus spanning Littleton and Westford. It's Big Blue's biggest campus in North America devoted to software development, with about 3,400 employees. The company broke ground on the new campus in 2008, and folks started moving in late last year. Parts of the campus were once used by Digital Equipment Corp. and HP.
Among the pooh-bahs who'll be present tomorrow morning are Governor Deval Patrick; Greg Bialecki, the Commonwealth's secretary of housing and economic development; Mass Tech Leadership Council head Tom Hopcroft; MITX director Kiki Mills; and from IBM, Steve Mills, the senior vice president of IBM Software and Alistair Rennie, the general manager of Lotus (who is IBM's top exec in Massachusetts). Apparently, IBM chief executive Sam Palmisano must've had an important tee time tomorrow; he has yet to visit the new facility, I'm told.
IBM spokesperson Karen Lilla says that IBM first came to Massachusetts almost a century ago, opening a sales office here. More recently, the company has acquired more than a dozen Massachusetts companies since 2003, including Ascential Software, Cognos, WebDialogs, BowStreet, and Ounce Labs.
The event tomorrow will also include an announcement about IBM's enterprise mobile strategy, and some demos. Mills is expecting it to bring about 150 non-IBMers, including journos and analysts, to the new campus. IBM's other big facilities in Massachusetts are in Cambridge and Waltham.
Name checks and pics: Tonight's Web Innovators Group gathering
Big crowd, as usual, for tonight's Web Innovators Group shindig at the Royal Sonesta... so big that apparently the hotel's parking garage was turning away cars.
The audience favorite among the three presenting companies, both based on applause during the demo and a quick text-message vote that takes place at every WebInno, was DoInk, a Waltham-based start-up that makes it easy to create and share online animations.
In the "side dish" room were six start-ups including RelayRides, a company I've written about here before, and BirchBox, an interesting NYC start-up that sends women samples of beauty products in a small box each month, in the hopes of turning them on to new brands. The service will cost about $10 per month.
Here's who I ran into at the event:
Husband-and-wife entrepreneurs Jon Radoff and Angela Bull from Disruptor Beam... Nabeel Hyatt from Conduit Labs... Joselin Mane... Gemvara CEO Matt Lauzon... Mass Innovation Nights organizer Bobbie Carlton... Rebecca Xiong from Yana... Tom Summit of Genotrope... Nick MacShane from Progress Partners... Gopal Shenoy from Gazelle... Steve McAveeney from Autotegrity... Catherine Arnston of The Naughty Nutritionist... and Dharmesh Shah from HubSpot.
It felt like there were fewer VCs than usual (has the summer vacation season started already?), but new guy Andrew Parker from Spark Capital was there; it was his first day on the job after moving back to his home state of Massachusetts from New York. He compared WebInno to the NY Tech Meetup event in Manhattan, which apparently attracts a similar crowd. Rich Levandov from Avalon Ventures was there, too; his firm is in the midst of raising a new fund. Levandov is an investor in Zynga, the Silicon Valley "social gaming" start-up that is among the fastest-growing companies ever, and also Cloudant, subscription-based database service headquartered in Somerville that came through the Y Combinator program.

PR/social media gurus Chuck Tanowitz and Doug Haslam were there, checking in on Foursquare. Haslam quipped that he recently realized it was time to get another haircut when he was ousted as the "mayor" of his local barbershop.

Karen Miller, co-founder and president of DoInk, at the start-ups demo table.

Coach Wei, founder and CEO of Yottaa, a Cambridge start-up funded this spring by General Catalyst and Stata Venture Partners.

Allan Tear, one of the managing partners of the Providence-based start-up cultivation program Betaspring, which rented a small bus so that the folks participating in the program could come to WebInno tonight. Only a few extremely busy (and anti-social?) developers remained in Providence, he said.




Could Power Gig be the Next Rock Band?
Buzz is starting to build this week about the new videogame "Power Gig," from Boston's Seven45 Studios. The game isn't out until October, but the company will be demoing it next week at the Electronic Entertainment Expo in Los Angeles.
What's unique about the music game — aside from the fact that they've licensed some tunes from the likes of Eric Clapton and Dave Matthews — is that rather than playing it with a toy guitar, you use a real, tune-able six-string. It's as easy to use as a typical plastic guitar controller, but as you progress in your ability as a musician (or if you're already one), you can actually crank out real power chords, or simply plug it into an amp and rock out separately from the game.
Seven45's sister company, First Act, is a musical instrument maker in the Back Bay (and yes, 745 Boylston is the address of both companies.) Jeff Walker of Seven45 tells me the two companies share some executives and other resources, and that Seven45 has been entirely self-funded, without outside capital. (Walker is the VP of marketing for both Seven45 and First Act.) The game developer has about 75 employees, and has been working on "Power Gig" for just over two years, Walker says.
The guitar and drum peripherals that come with "Power Gig" will work with other music games, according to Seven45. Here's a preview of "Power Gig," which will be available for the Xbox 360 and Sony PlayStation 3, from IGN.
Interestingly, Billboard writer Antony Bruno says that the rival game "Rock Band," from Cambridge-based Harmonix Music Systems, may also wind up heading in a more educational direction with its forthcoming "Rock Band 3."
Here's a video from the company explaining how the guitar will work.
Tech Stars Boston Investor Night: Pics, Boldface Names, Awards
The annual TechStars Boston investor presentations tonight were a hot ticket: I'm told some people were turned away at the door for fear of violating the fire code, and Boston's digerati filled the 10th and 11th floors of Microsoft's New England Research and Development Center.
TechStars aims to help teams of entrepreneurs build a working product in three months, with as much as $18,000 in seed funding and mentorship from local investors and entrepreneurs.
All ten companies tonight were building Web-based businesses, ranging from online survey tools to social networking apps to customizable Internet radio stations. Two of the start-ups, Sparkcloud and Marginize, had received some sort of funding even before presenting to the audience tonight (Sparkcloud from Avid Technology founder Bill Warner, who helped bring the TechStars program to Boston in 2009, and Marginize from angel investors Joe Caruso, Jean Hammond, and others.)
During the course of the evening, HubSpot co-founder Dharmesh Shah tweeted me to let me know that he'd also decided to invest in Marginize — and the way he chose to let the company's founder know that was by using Marginize, a browser add-on that lets you annotate Web pages and see what comments others have added. "How very meta," wrote Shah. (That's founder Ziad Sultan, a former analyst at Longworth Venture Partners, at right.)
In the audience were folks like Rob Go and Lee Hower, who are working together on a new early-stage investing firm...NeoCarta Ventures managing director Jarrett Collins...Jim Savage of Longworth Venture Partners... Bijan Sabet of Spark Capital...Betahouse co-founder Jon Pierce, who also organized this week's first-ever Angel Boot Camp...Oneforty founder Laura Fitton, part of the 2009 TechStars Boston class...Secretary of Housing and Economic Development Greg Bialecki...Google Ventures managing partner Rich Miner...Viximo CTO Sean Lindsay...ex-Microsoftie Reed Sturtevant...FastIgnite's Sim Simeonov...North Bridge's Dayna Grayson...Elliot Katzman from Commonwealth Capital Ventures...Steve Kane, Gamesville founder, angel investor, and master of the Twitter koan...Harmonix co-founder Eran Egozy...and Rich Levandov of Avalon Capital Ventures.

Katie Rae, formerly of Microsoft, mentioned that she'll be teaching a course with Web inventor Tim Berners-Lee at MIT this fall, along with the aforementioned Sturtevant. And Janet Kraus, founder of Spire and Circles, is joining the faculty of Harvard Business School this fall to teach entrepreneurship. (Rae is at left, Kraus at right.)

Richard Dale of Sigma Partners, who writes the blog Venture Cyclist, with Izhar Armony of Charles River Ventures.

Google developer relations exec Don Dodge, who maintains the blog "The Next Big Thing," with Gus Weber of Microsoft NERD and John Landry of Lead Dog Ventures.
CommonAngels managing director James Geshwiler, who observed that I am one of his Foursquare friends, before correcting himself: "Or maybe you are just one of my square friends."
I was somewhat alarmed to learn that Ron Schmelzer, an MIT alum and one of the early Internet entrepreneurs in Boston, has (A) moved to Baltimore, where his wife is teaching at Johns Hopkins, and (B) started a baseball cap company called Zoptopz.

Shawn Broderick oversees the TechStars Boston program. He had a great sticker on his Macbook Air: "Those who say it can't be done shouldn't interrupt the people doing it."
OK, on to a few random awards for the entrepreneurs who presented, each of whom was impressive in his or her own way... (As with TechStars 2009, there was just one female CEO in the bunch, Francesca Moyse of Monkey Analytics.)
Most persuasive: Leon Noel of Social Sci, a site that intends to help scientific researchers conduct online surveys efficiently, dangling incentives (a free iPod Touch!) to entice participants. Noel presented first, and by the time he was done, it was easy to imagine every university in America buying a subscription to the service.
The Jerry Lewis Telethon Award: Marginize founder Ziad Sultan, for casually mentioning that he'd already raised $250,000 for the start-up, and just needed $100,000 more to complete his planned $350,000 seed round. (It worked, at least partially.)
Best Acronym Deployed: Appswell founder Daniel Sullivan, building a service that will help companies crowdsource ideas from their customers, talked about "HIPPOS." At big companies, HIPPOS make most of the decisions. Appswell wants to put that power in the hands of the customer. What's a HIPPO? The highest-paid person with an opinion. Love it.

Best Logo: Usermojo, trying to capture the emotions that users feel when they visit Web sites (like confusion) to help site designers improve the status quo. The colorful logo elegantly captures the concept that this is a product about both design and emotion.
Best Multimedia Demo: Brandon Casci of Loudcaster, an Internet broadcasting start-up that lets (paying) users launch their own radio stations. Casci showed some fun examples of how beta testers have been using it to create stations like "Infinite Accordion," a station that plays all accordion music, all the time.

Can't Wait to Use It Award: Jeremy Levine of StarStreet Sports, creating a stock market for trading shares of athletes and sports teams. Levine says it'll be legal for players to trade with real money, though for the World Cup soccer tourney, they're still using play dough. Every sports fan I know will invest at least $100, with StarStreet planning to take 2 percent from the sell side of every transaction. (That's Levine at right, pitching his "Big Vision.")
Appswell founder Sullivan mentioned to me that all of the TechStars Boston start-ups have found office space for the summer in Boston, to "keep the band together," as he put it. Most will wind up at the Cambridge Innovation Center's co-working space (thanks to a sponsorship from Microsoft that will pay the rent); a couple will shack up at Dog Patch Labs Cambridge; and one will share space in Somerville with Viximo. That's good news...and I'll be curious to hear whether some more fundings happen after tonight.
MIT robotics spin-out finds a home in Hong Kong

The last time I saw Cory Kidd, he was at the MIT Museum in Central Square talking about the "social robot" he'd developed as a project at the school's Media Lab; it was designed to help dieters meet their weight loss goals. A robot with expressive eyes and a face, Kidd had found, was pretty effective as a coach, nudging a dieter to eat better or exercise more, and affirming his accomplishments. (That's Kidd at right, speaking earlier today at the TieCon East conference in Waltham.)
Just over two years later, his nine-person company, Intuitive Automata, is headquartered in Hong Kong, and plans to start rolling out its first product in partnership with Hartford-based Aetna in late 2010 or early 2011, a pilot program that will be supported by Johnson & Johnson, he said.
"What healthcare insurers will tell you is that there's a difference in the amount they spend on people of normal weight each year, which is about $2400, and obese people, which is about $3600," Kidd says. "But they can't charge different premiums." It's in an insurer's interest, he suggests, to pay for or subsidize a device like the one he has built, to encourage customers to lose weight. (Kidd hasn't yet set a retail price for the bot.) He refers to the company's technology as "socially interactive robots" that support behavioral change, and also believes they could be use to help diabetes better manage their blood sugar levels.
How did Kidd's company, with its research roots at MIT and the Boston University Medical Center, wind up in Hong Kong? The short answer is: government incentives. Kidd says he looked at plunking the company in various US cities, as well as Singapore and Shanghai. But Hong Kong offered a roughly $250,000 interest-free, unsecured loan that could be paid back as a percentage of the company's revenues, as well as free rent for 18 months, and under-market rent for another 18 months after that. Intuitive Automata has also had several student employees whose salaries are predominantly paid by the government.
"Most of the angels and venture capitalists you talk to about social robots look at you like you're totally crazy," Kidd says. Since he'd only raised a small amount of angel money (mainly from MIT alums around the world, like the co-founder of Harmonix Music Systems), "I needed to go where I could run the company very cost-effectively." And being in Hong Kong also puts him closer to the contract manufacturing companies that will actually build the bots.
Kidd expects to start taking pre-orders for the product later this year; he also says he's in the midst of raising a first round of venture capital.
Here's a video demo of Intuitive's bot, called Autom:
Introducing Autom™ from Erica Young on Vimeo.
Sports stock market tests its technology with World Cup soccer
StarStreet, one of the Cambridge start-ups participating in this spring's TechStars development program, is down in New York this week for the TechCrunch Disrupt conference. They're using the event as an opportunity to open up the beta test of their "sports stock market" to more people, according to founder Jeremy Levine; all you need is a Facebook account.
The first event in which you'll have a chance to participate is the FIFA World Cup soccer tournament, which starts June 11th. StarStreet players can "buy" shares in teams and individual players using play money — and see how their decisions play out over time. The company eventually hopes to let you trade on StarStreet using real money (and either turning a profit or chalking up a loss), though there are some questions hovering over the legality of that. (I'm sure StarStreet would be much more hazardous to individual investors than, say, the NYSE.) An early test during the NCAA's March Madness tournament had a small number of users trading with actual dollars, and no legal or regulatory actions arose.
StarStreet will also be part of the TechStars Boston demo night next Wednesday (an invite-only event for prospective investors). The start-up's "coaching staff" (read: advisory board) includes Viximo co-founder Sean Lindsay and Black Duck Software veterans Doug Levin and Palle Pedersen.
The Friday Five: Innovative Financial Services Start-Ups
On Fridays, I regularly post a list of five things worth knowing about, and invite you to add others in the comments.
This week, it's New England start-ups working on new ideas in the financial services space.
- Cambridge-based Blueleaf wants to encourage you to collect all your banking and investment info in one place, and then collaborate with friends, family, or financial advisors to improve your returns.
- Currensee. A social network built especially for foreign exchange traders. It allows participants to discuss strategies and compare performance. Boston-based Currensee has raised $12 million in venture capital so far, from firms like North Bridge and Egan Managed Capital.
- Taking a page from the ING Direct playbook, PerkStreet is a bank without branches or toaster giveaways. Targets consumers who are happy to bank online, ask questions via e-mail, or call up a live person by phone. By keeping costs low, Boston-based PerkStreet can offer rewards for using your debit card that include free Dunkin' coffee, iTunes downloads, or Amazon.com credit.
- Swipely encourages users to share information with friends (or the Web at large) about purchases they've made, and to rate or comment on the things they've bought. Launched a beta last month, and announced $7.5 million in funding. Based in Providence, RI.
- Trefis is building a community of amateur equities analysts, who use the site to share their scenarios for how a particular stock will perform. Nifty visual tools for estimating how good or bad performance in a given line of business will affect the share price.
(One more company worth a mention is WePay, which offers a solution for group payment situations — like renting a Cape house for the summer with a bunch of friends. Founded here by two Boston College alums, it's now based in Palo Alto, unfortunately.)
Who would you add to the list? Post a comment...
What's a social media campaign really worth?
A new social media analytics company, Klurig Analytics, has been making the rounds of local angel groups this spring. Founded by Dag Holmboe, its goal is to help executives understand which of their social media initiatives are producing a positive return-on-investment, and which ones may be less effective. Cisco Systems, he says, is one of his early customers.
"The problem the app is solving," says Holmboe, "is that today you have the social media marketers who are facing pressure from upper management, or agencies facing pressure from their clients, to figure out what the return is in dollars and cents on a Twitter account, a Facebook page, or a YouTube channel."
Right now, the app is built atop Microsoft Excel, but Holmboe's hope is that raising some funds will enable him to create a Web-based version. Basic functionality would be free, but more sophisticated features would require a subscription.
The app doesn't go out and gather data automatically about things like YouTube video views or Twitter followers; rather, users enter it themselves. But the app helps them analyze (and visualize with charts and graphs) which campaigns are generating the best return. For instance, is doing customer support via Twitter helping to reduce the number of calls to a call center? Is customer input collected in online forums helping you avoid spending money on focus groups? "You can look at graphs, and see where the best return is — maybe it's creating brand awareness, or collecting customer insight — and then you can move your investment around based on what's working," Holmboe says. He adds that users can also use the app to estimate the return of various campaigns that are in the works.
Holmboe says he's got a handful of early paying customers: "I wanted to be able to talk to angels and ask for money based not just on the app itself, but a number of customers."
Klurig is part of what I think of as the "analytics cluster" in Boston — companies like Visible Measures, Localytics, Crimson Hexagon, and Compete that help businesses collect and analyze data.
Catching up with Foursquare co-founder (and Medway native) Dennis Crowley
Sidling up to a bar or sitting down at a sidewalk table, your first thought may not be to whip out your mobile phone to let the world know you've arrived at River Gods or Stephanie's on Newbury. If not, you're not yet an obsessive user of Foursquare, the social network/game created by Naveen Selvadurai and Dennis Crowley. Hop around to enough places and you can earn a Foursquare badge like "Bender" (going out four nights in a row) or "Pizzaiolo" (grabbing a slice at twenty different pizza joints.) Check in to the same establishment frequently enough, and you may earn the title of "Mayor."
KickFour aims to bring friends together online around favorite TV shows

You say you're a big fan? Then prove it, on Fantourage

EMC customers convene at Boston Convention Center this week
Adeo Ressi's Founder Institute coming to town in July
Have you heard the Audio Spotlight?

Nixdorff buys MoGo mobile product line, launches ID8-Mobile

Zipcar, Turbine, and a surprising stat about M&A in Massachusetts

Thirty years in business for Stratus, 17 years in action for one of its servers

The report from Chirp, Twitter's first gathering of its developer ecosystem
Your advice for college students looking to work in tech?
Yankee Group grabs $10 million for growth, starts CEO search
Techies, designers, entrepreneurs talk about what they've learned from Apple
- Antonio Rodriguez, venture capitalist at Matrix Partners and founder of Tabblo
- Edward Boches, chief creative officer at Mullen, the Boston marketing agency
- Avid Technology founder Bill Warner
- Harvard Business School professor and author Rosabeth Moss Kanter
- Harry West and Ed Milano of the West Newton design firm Continuum
- OfficeDrop chief executive Prasad Thammineni
- Philip Greenspun, entrepreneur, MIT instructor, flight school owner
- Vijay Kailas, founder of the start-up Numote
Stealthy Shaser gets $3 million more for home hair removal system
It has been a couple years now that I've been bugging Dan Roth to tell me what his Woburn start-up, Shaser Inc., was working on. News finally trickled out today with this SEC filing announcing that Shaser has raised another $3 million from Stata Venture Partners, and Roth shared a bit more by phone this afternoon. But Shaser's Web site still contains just the company's logo and an "info@" e-mail address.Help wanted: Boston needs more 'alpha users'
DeLoreans, Lightning Strikes & Innovation
I was showing this movie clip as part of a presentation on innovation last week at Olin College; it's one of my favorite illustrations of how innovators need to be scrappy (turning a used DeLorean into a Plutonium-powered time machine) ... be in the right place at the right time ... and have the presence of mind to deal with all kinds of unexpected last-minute snafus.
Do you have other favorite innovation-related movie moments? Post a comment if you would...
Vidgame couple build new venture around 'social gaming' trend


Silicon Valley display maker plans to expand manufacturing site in Mass.


The POPSignal Mix party report

Making technology more touchy-feely, this week in Waltham

On the Radar: Rally, which mines Twitter to improve your social life


On the radar: Blueleaf, a secure online space for discussing investment goals
I asked Prendergast about the initial inspiration. He wrote in an e-mail:
What we're trying to do with Blueleaf is connect people, their families and their financial advisors (if they have them) to ALL their investment and savings accounts and to one another. Its about simplifying the investing process and enabling those "kitchen table" conversations we all have huddled around stacks of paper. Families need to manage retirement, college savings and other investments and most of us collaborate to do it; wife to husband, son to mother (I manage my mom's money), advisor to client, etc. But until now there has been no way for everyone in that conversation to see the same information in one place and work together online.
Prendergast is a former techie at Jeffries & Company, the investment bank, who now serves on the board of Oneforty, the Twitter app store; Thorpe, Blueleaf's chief technology officer, worked at Tellme Networks and earlier in his career at Viaweb (an early e-commerce service acquired by Yahoo.) Working alongside them is Chris Paul, formerly the VP of engineering at Visible Measures, the video analytics firm in Boston.
The first line of code for Blueleaf was written last December, Prendergast tells me, and the Web site went live in January. The company is now running an invitation-only beta that will last for a few months, he says. Prendergast expects that some of the site's features will always be free, but there may also be a subscription-based premium version.
Blueleaf is definitely a start-up in the same vein as Mint.com, the personal finance site acquired by Intuit last fall for $170 million.

How do you get to South by Southwest?
Ray Ozzie: Five Years at Microsoft
E Ink's Russ Wilcox: The Exit Interview
Numote prepares to launch 'social remote control' for iPhone, Android, and TV


In the job market? New study sees a hiring rebound in tech, though Boston lags behind Bay Area
Haverhill company testing new wireless tracking system for runners, thoroughbreds, and running backs



Most innovative companies and most-loved venture capitalists

Sparkcloud, angel money already in the bank, is first company to join TechStars Boston for 2010

After selling to AOL, Going.com CEO hits the open road

The Red Line Tour of Innovation in Boston

How to get laid off: the Don Dodge approach

Two more start-ups aim to answer the question 'What's worth doing tonight?'
General Catalyst invests in CyPhy Works, new venture from iRobot co-founder Helen Greiner
Favorite iPhone apps of the mobile CEO set (...and more)
A business school grilling for Curt Schilling?

It was April 2009 and Schilling felt he had taken 38 Studios to the brink, extending himself and his family both financially and personally. ...He admitted [while considering the acquisition of another gaming company, Big Huge Games], "I have put the majority of the money I've earned in my life on the table. If I make another financial investment, I will have crossed the point of no return from a personal investment and company standpoint."
BaseballReference.com estimates Schilling's career earnings at about $114 million. Want to guess how much it cost him to operate 38 Studios, a 65-employee company, from 2006 to 2008?
Foursquare: The 21st century's version of 'Killroy was here'?
Project Concord: Stealthy video start-up has raised 'several million' from Andy Marcuvitz, formerly at Matrix Partners

How do you call Kayak's mysterious red telephone?
I enjoyed this "The Way I Work" piece from the February issue of Inc. Magazine, featuring Paul English, co-founder of the travel search site Kayak. In it, he talks about an old school red telephone he set up in Kayak's Concord office to take customer calls:
About a year ago, I bought a red telephone with a really loud ringer for the office. Whenever a customer calls the help number on our website, that phone rings. The engineers initially complained about it. They said, "That's so friggin' annoying!" And I'd say, "There's a really simple solution: Answer the friggin' phone and do whatever it takes to make that customer happy. Then hang up, unplug the phone, walk it down to the other end of the office, and plug it in down there."
It's like hot potato. Except I take it seriously. When the phone rings, I literally jump over the desks just so I can get to the phone before anyone else. I love talking to customers, even angry ones. I learn a lot from them about how to make the site easier to use. When the call's over, I'll say, "If you have any follow-up questions, my name is Paul English; I'm the co-founder of the company."
New book offers advice on how businesses can use Internet video

Garfield established a reputation as someone willing to help others figure out the right camera, software and services to start videoblogging on their own (usually doing it for free, sometimes as a paid consultant to companies.) Garfield became the Boston correspondent for the satirical daily news show "Rocketboom," and started making videos for Boston city councilor John Tobin, whom he dubbed "the first US elected official to vlog." ("Vlog" being the short-hand, of course, for videoblog.) At local events, he'd be the one streaming live from his cell phone, or explaining the merits of the new Flip point-and-shoot video camera. Garfield also helped convene the monthly Boston Media Makers gathering, now starting its fifth year of Sunday brunches at Doyle's Cafe.
His first book is out today, a compendium of his advice on shooting compelling video for the Web: "Get Seen: Online Video Secrets to Building Your Business." The book is part of a series about "the new rules of social media" from the publisher John Wiley and Sons that is being edited by Lexington resident David Meerman Scott, who wrote the foreword for Garfield's book.
Garfield, who earlier in his career was a radio producer on Eagle 93.7 and WFNX, has set up a social network for the book with lots of free material, including some fun videos he shot while researching it.
Here's Garfield chatting with "Late Night" host Jimmy Fallon at the Consumer Electronics Show:
Performable raises $3 million from Charles River Ventures to help sites retain visitors
How's this for bouncing back?

New book from Yankee Group chief exec Emily Green

Apple, LinkedIn, Salesforce.com, and...Rapid7?
Apple grabs Quattro Wireless, Waltham-based mobile advertising firm
Optics for Hire picks up Actuality assets (and founder, too)
Assets of the pioneering 3-D display developer Actuality Systems
were acquired over the holidays by Arlington-based Optics for Hire. Terms weren't disclosed, but Actuality founder Gregg Favalora tells me via
e-mail that the acquisition is "a combination of stock and cash based upon
future income from [Actuality's] patent portfolio." Actuality had
attracted $20 million in funding, and been granted 19 U.S. patents for hardware
and software related to three dimensional imaging.
The acquisition ends Actuality's 12-year run. The company had been exploring 3-D imaging applications in cancer treatment and, earlier, oil and gas exploration. Among its investors was Navigator Technology Ventures of Cambridge.
Favalora has been consulting for Optics for Hire since last summer, and he's now a full-time "customer engagement manager" at the design and prototyping consultancy.
I spoke with Favalora last June as he was working on selling Actuality's assets. And Favalora wrote a very honest blog post about the challenges of overseeing the orderly dissolution of a start-up that couldn't find a market niche to support it.
Here's the December 28th press release announcing the acquisition.
Actuality was based on some of the research Favalora had done as an undergrad at Yale, but his interest in 3-D imaging dates back to high school, as I wrote in Wired.
WePay founders put down roots in Palo Alto, raise $1.6 million
Audio: Panel exploring Boston's online travel cluster
- What each company has been focusing on in 2009
- Travel trends for 2010
- Their favorite new travel sites
- Facebook and iPhone apps for travel
- What Google may (or may not) do in the travel space
- How the economy has affected consumers' travel behavior and purchase decisions.
Name this e-commerce company...
Your weight, announced daily to your Twitter followers
If you feel that most messages posted on Twitter verge on over-sharing, you can stop reading here.
But if you're fascinated (as I am) by all the private-turned-public observations Twitter encourages, the WiFi Body Scale from Withings, a French company, will be just one more astounding data point. It not only charts the ups and downs of your body mass index on a password-protected Web site, but it can send out info about your morning weigh-in to all your followers on Twitter.
Yes, it tweets your weight.
It went on sale in the U.S. in September, and entrepreneur-turned-investor Bob Metcalfe of Polaris Venture Partners was one of the first locals to start using it. (The Twitter feature was added just last month.)
Every morning at 9 AM, the scale in Metcalfe's Back Bay townhouse sends out a tweet; he's trying to go from the 220-pound range to 179, by eating less and exercising more. A typical message might read, "My weight: 222 lb. 41.2 lb to go. Never too rich or too thin. http://withings.com."
Soon after I started seeing messages from Metcalfe's bathroom appliance, I noticed that Rich Miner, the Cambridge-based partner at Google Ventures, the investment arm of the search company, was sending out a tweet right after Metcalfe's. A characteristic Miner tweet would say, "My weight: 168.7 lb. 16.7 lb to go. How obnoxious is this... http://withings.com."
I sort of assumed that Miner was teasing Metcalfe about his very public weight loss endeavor, which is an occasional topic of conversation among the entrepreneurs and investors who know him. ("Is the Dow up or down today?" someone might ask you at a cocktail party, by way of greeting. "And how about Bob's weight?") I figured Miner was typing in the mocking tweet ("how obnoxious is this?") right after Metcalfe's had gone out -- or maybe, being a techie, that he'd written a software program to send it out automatically.
But no. Turns out that Miner owns the Withings scale, too.
His theory about why the tweets happen in such close succession is that the Withings server sends all of its users' weigh-in data to Twitter in a big batch, instead of at the precise moment they hop on the scale.
Joseph Kvedar, director of the Center for Connected Health at Partners HealthCare, also owns a Withings scale. As he has explained on Twitter, “[The] goal of [my] automated daily weight is to see if my followers will help me keep down around 182 – 183.”
Setting up the scale, Kvedar writes via e-mail, “requires one step which I think is beyond many ‘average’ users and that is plugging it into a computer via USB and downloading a set-up wizard to get it integrated into one’s WiFi network. However once that is done, it is incredibly reliable.”
The $159 scale is available on Amazon.com or Withings own Web site, if someone on your holiday shopping list would like to share his weight loss campaign with the world...
Dan Bricklin: From killer app to iPhone app
In the classroom at Harvard Business School where Dan Bricklin came up with the idea for an electronic spreadsheet, there now hangs a plaque that designates the resulting software program as the "original killer app of the information age."
Bricklin and his colleague Bob Frankston formed a company in 1979, Software Arts, which would eventually sell the VisiCalc spreadsheet program for $99. It ran on a new "personal computer" called the Apple II.
Thirty years later, Bricklin is now selling a $1.99 app for the iPhone called Dan Bricklin's NoteTaker. It debuted last Friday on Apple's iTunes Store, and is climbing up the list of most-popular productivity apps sold through the online store. (Here's Bricklin's post about the new app, which includes a video demo.)
I talked to Bricklin earlier today to ask about his plans for more mobile apps, and what inspired him to create this one.
FULL ENTRYSocrato Aims to Help Students Score Higher on Standardized Tests
You may be spending today preparing for Thanksgiving dinner, or a gift-buying foray shortly afterward.
But if you have a high-schooler in the house, the preparation they're thinking about is for two important standardized tests looming in December: the SAT (December 5th) and the ACT (December 12th.)
Socrato, a North Andover-based start-up, hopes to build a business upon students' (and parents') desire to do well on those tests. "With students putting all this effort into preparing for the test, we want to help personalize their learning plan in a very efficient way," says founder and CEO Raju Gupta. Students practice taking the test, and then they or their tutors or teachers can get personalized advice from Socrato geared to boosting their scores. Socrato already offers analysis for the SAT and MCAS tests, as well as the U.S. Citizenship test; the ACT should be online soon, and Socrato eventually plans to expand into exams for securities brokers, realtors, firefighters, and other professions.
Individuals can use a basic version of Socrato for free; the company earns money by selling its analysis tool to schools and tutoring centers. Pricing for that starts at $10 per student assessment, and decreases with volume.
Gupta says the start-up has just four employees, and outsources most of its software development to firms in India and China. Socrato raised some angel funding in 2008.
Here's an earlier Globe piece on Socrato, and a TechCrunch profile.
Also worth mentioning in the local test-prep space is Stoneham-based Studypoint, founded ten years ago to help connect students with tutors.
Why is It So Hard to Kill a Web 1.0 Dinosaur?
I was talking to Matt Douglas last week, founder of the Framingham-based party planning site MyPunchbowl. They're announcing tomorrow morning that they've acquired some assets from GroupGo of Waltham to help party hosts find local vendors, like a flower shop, a balloon-delivery service, or a Mexican restaurant with a private dining room.
Douglas talks about planning a party as a "workflow," which "starts with figuring out the date, sending a save-the-date announcement, then doing an online invitation, managing what people are bringing if it's a potluck, buying supplies, creating a gift registry, organizing travel, and then doing photo and video-sharing after the party is over."
Douglas and his team have raised $3 million from investors including Intel Capital , Contour Ventures, and eCoast Angels. And in many ways, they've built a site that has surpassed the Web 1.0 dinosaur of party planning, Evite (now owned by Barry Diller's online conglomerate InterActiveCorp.) MyPunchbowl makes it much easier to decide upon the best date for a gathering among a group of friends, or organize a potluck where everyone brings a different dish, for instance.
Douglas tells me that the main way people discover MyPunchbowl is that they're invited to a party that uses it, or they hear about it from a friend. "It is a viral model," he says. "The more people who are exposed to it, the more people who tell others about it."
I'm sure that's true, but MyPunchbowl (founded in 2007) still lags way behind Evite (founded in 1997) in terms of usage:
(The chart above doesn't show that MyPunchbowl has actually been growing its user base over the past year.)
So what's your theory? We all have our favorite example of a Web 1.0 dinosaur that hasn't innovated enough (eBay, Craigslist, and Expedia among them.) Is it just ennui inertia? I still find myself using KodakGallery (founded in 1999 as Ofoto) for much of my personal photo sharing and printing, even though I'm sure there are many better options.
Is it just that Web 1.0 dinosaurs got the flywheel spinning first, and achieved a level of virality that it's hard for anyone to match?
Interested in your opinions: why is it so hard to kill a Web 1.0 dinosaur? And what examples can you think of (aside from Google vs. Yahoo) where a Web 1.0 dinosaur has been brought down by a new entrant?
(Douglas, for his part, says that he doesn't like his site being compared to Evite; he says it's more similar to sites like TheKnot.com, which does start-to-finish wedding planning. He does acknowledge, though, that his start-up may suffer from a perception problem. "You can't win a war of perception on $3 million bucks. It's a long-term effort.")
Documentary Airing This Week Goes Inside the FIRST Robotics Competition
Airing on two WGBH channels this week is a great new documentary about the annual FIRST Robotics Competition called "Gearing Up."
You'll find it enjoyable whether or not you've been exposed to FIRST, the robot-building program founded by New Hampshire inventor Dean Kamen and MIT prof Woodie Flowers, which sneakily teaches kids about design, engineering, and problem-solving. The film follows four very different teams competing in the 2008 season, including one from an all-girls school in Baltimore and another from a correctional facility for teenage boys in Colorado. "Gearing Up" captures much of the energy and enthusiasm that FIRST generates, but I wish its tone was a little less dry and clinical.
You can catch "Gearing Up" on WGBH on November 22nd at 5 PM, and also several times (starting November 19th) on WGBH's World channel. The doc is also available on DVD, for $19.95.
Who's Still Around at Microsoft Cambridge?
In the wake of Wednesday's lay-offs at Microsoft, which affected several big names at the company's New England Research & Development Center, my big question today was, who's left?
The biggest name to be sent packing Wednesday was Don Dodge, who has been one of Microsoft's main links to the start-up and developer community -- both in New England and nationally. (An item on TechCrunch yesterday was titled, "Microsoft Loses Don Dodge: This is a Huge Mistake," and it attracted 200-plus comments.)
Allison Parker was also laid off, only a few weeks after Reed Sturtevant, her boss at Microsoft's Startup Labs technology development group, was let go.
With those three, Microsoft shed some of its strongest connections to the New England community.
So who's still there in a senior position?
FULL ENTRYNew Device is All Twitter, All the Time

I'm an avid user of Twitter, so when the San Francisco company Peek offered to send me a new device designed especially for reading and writing tweets (and nothing else), I said yes -- even though I don't usually review products, and there's no local link at all here.
I think the concept behind the new TwitterPeek device (just out today) is that if you don't have a smartphone with a keyboard, and you are not very good at typing short messages with your dumbphone's number keys, you might want a device like this. (How big a market is that? We'll see...)
There's no long-term contract, and you can either pay $99 for the device and get six months of free service, or pay $199 and get a lifetime service plan (as always, this doesn't mean your lifetime, or the device's lifetime, but rather the lifetime of the company selling you the plan. Peek has been around since 2007, selling dedicated e-mail and texting devices with inexpensive connectivity plans.)
Here's my Twitter-length review, with a bit more after it:
FULL ENTRYBots for Seniors: iRobot Creates New Division to Serve Eldercare Market

In 1978, at age 16, Tod Loufbourrow published a book called "How to build a computer-controlled robot." A few years later, he went off to Harvard, and grew up to be an IT consultant, e-commerce expert, and software entrepreneur.
But now, just thirty years after the book, Loufbourrow is getting back into robotics, joining Bedford-based iRobot Corp. to lead a new business unit called iRobot Healthcare. iRobot chief executive Colin Angle is in San Diego this morning at the TED MED conference, announcing the company's expansion into home healthcare robots with a provocatively-titled talk: "Will a Robot Care for My Mom?"
Loufbourrow told me this summer that he and Angle met through a "High-Growth CEO Forum" in Boston, and started talking about the opportunity for robots that could assist with eldercare. I caught up with Angle yesterday to find out more.
FULL ENTRYThe Official Betahouse Calendar for Techies
Betahouse is a Central Square co-working space where all kinds of interesting tech types hang out.
(The Globe called it a haven for Web entrepreneurs back in 2007, but its really more of a wretched hive of Ruby coders and villainy, with apologies to George Lucas.)
Jon Pierce and Brian Del Vecchio of Betahouse have put together a calendar of upcoming events in the tech community that is worth a look, since it's filtered through the lens of people who create software for a living. "We're aiming for concise and interesting instead of comprehensive," writes Del Vecchio. (It has been up since earlier this month, but I've been remiss in posting about it.)
I really like way they're curating it. And since it is hosted by Google, you can easily click the "+" sign at the bottom right corner to add all the events listed to your own Google Calendar (if you're a user of that service.)
So here it is:
FULL ENTRYAvoiding Inbox Overload: Advice on Better Managing E-mail
Today's Globe column sprang from a self-help urge: I wanted to get advice on improving the way I handle e-mail. So I asked the people who are generally pretty prompt about bouncing back e-mail responses when I get in touch.
One of them was Gail Goodman, CEO of the publicly-traded e-mail marketing company Constant Contact. Like many of the people with whom I spoke, she said she doesn't think she has yet achieved nirvana: "I don't feel like I do a spectacular job, and I have a constant low-grade worry that something got left in the inbox that was important for me to respond to."
And Rich Miner, the Google exec I mention in the opening of the column, admitted that while he ordinarily tries to empty out his inbox every day, he was dealing with a backlog of 2500 e-mails after he'd fallen off the wagon.
Miner recommended this video to me, featuring productivity expert Merlin Mann, and said he re-watches it every couple months to glean some new tips.
Below it are some examples of how busy people answered my e-mailed requests for an interview this week, and some advice on handling e-mail offered up by the Twitterati.
FULL ENTRYRemembering DEC: Memoir from Co-Founder Harlan Anderson Due Out in November

Harlan Anderson just turned 80 this month. With Ken Olsen, he started Digital Equipment Corp., which was one of the pillars of the Route 128 era here in Massachusetts, and at one point was the second-biggest technology company in the world. Next month, his memoirs are out: Learn, Earn & Return: My Life as a Computer Pioneer.
Oh, and he also started blogging recently.
I spoke with Anderson earlier this month to ask him about becoming an author; meeting (and later parting ways with) Ken Olsen; how they raised money for the start-up; what he views as the Achilles' heel that undermined DEC; and a surprising project he was involved with that you likely have appreciated on a summer afternoon.
(The photo above is of Anderson's "Employee #2" badge from DEC, which appears on the book's cover.)
FULL ENTRYThe Soft-Pedaled CEO Switch at Progress Software

One of the better-connected grapes on my personal grapevine e-mailed me earlier this year to ask: what happened at Progress Software?
Joe Alsop, who started the company in 1981, and served as its CEO for the better part of three decades, had vacated the corner office, and also left the board of directors back in March. He was replaced by Rick Reidy, who'd been the COO.
Progress under Alsop had always been an extremely low-key, marketing-averse company. (Over the years, I'd invited Alsop to participate in a couple panels, and he always refused.) But it seemed strange that no one locally was talking about the transition, given that Progress has a market cap of nearly a billion dollars, and almost 2,000 employees. The Globe ran a tiny news brief, and the Boston Business Journal noted that the CEO switch came at a real low-point for the company, adding that Alsop had received a golden parachute package worth about $5 million.
I dropped in on Rick Reidy, the new CEO at Progress, earlier this month to see what was up. (The pic above shows Progress employees ringing the NASDAQ closing bell last December. Rick Reidy is right between the "S" and "o" in Software. Alsop, interestingly, wasn't in the picture.)
FULL ENTRYBrian Halligan's To-Do List: Run Company, Write Book, Raise $16 Million

Brian Halligan is one of those people who is likely to make you feel really slothful.
In 2009, he has been building his 100-person digital marketing company in Cambridge, HubSpot. Earlier this month, he was speaking at and helping to emcee the Inbound Marketing Summit at Gillette Stadium. He has a book, written with HubSpot co-founder Dharmesh Shah, that's officially out today.
And he has also just raised a third round of venture capital -- $16 million -- for HubSpot, led by a Silicon Valley venture firm.
The company offers software and content that helps businesses understand what HubSpot calls "inbound marketing" -- essentially, a new kind of marketing strategy that uses blogs, Twitter feeds, and specially-designed Web sites to help interested prospects discover you, instead of spending zillions to broadcast a marketing message out into the void.
The book from Halligan and Shah, Inbound Marketing: Get Found Using Google, Social Media, and Blogs, is quite simply the best collection of practical, tactical advice I've seen to explain this important shift in marketing.
I spoke with Halligan last week to ask how on earth he'd written a book while running a start-up. We also talked about the new funding round.
(And interestingly, Halligan is planning a live Webcast at noon today to talk more about the company and its financing. More below.)
FULL ENTRYEx-Palm CEO Carl Yankowski Out at Ambient Devices

Chief executive Carl Yankowski has quietly left Ambient Devices, the Cambridge-based consumer device maker, after two years at the helm.
I broke the news in August 2007 (a mere four months before it was officially announced) that Yankowski had joined Ambient as its first outside CEO, replacing co-founder David Rose. It was more than a little surprising to see Yankowski in Ambient's tiny offices, overseeing a team of employees that didn't number in the double-digits: the Dover resident had previously served as president or CEO at companies like Sony Electronics, Reebok, and Palm.
Ambient makes single-use, wirelessly-connected information displays, like a square magnetic device for the refrigerator door that offers a five-day weather forecast, or a small flat-screen monitor for your office that lets you track what's going on with your favorite football team.
Yankowski left the company in late September, and he hasn't yet been replaced. As for the reasons why, I called Yankowski Friday afternoon to inquire. (His LinkedIn profile hadn't yet been updated with the news, but the Wikipedia page about him had.) An executive Yankowski had brought in to handle marketing has also left the company.
FULL ENTRYRe-org at Microsoft Startup Labs in Cambridge; Sturtevant cut loose
A somewhat sudden re-org rattled Cambridge-based Microsoft Startup Labs yesterday. The group is charged with cultivating new concepts for the software giant that could eventually grow into products, and developing potential new features for existing Microsoft products.
Microsoft's chief software architect (and part-time Massachusetts resident) Ray Ozzie decreed on Wednesday that a new lab shall be created, FUSE Labs (Future Social Experiences). It'll "explore new social, real-time and media-rich applications and services that add value to existing products, or could be released on their own," according to an e-mail I just received from a Microsoft spokesperson. FUSE will incorporate Startup Labs, as well as two groups out at Microsoft headquarters in Washington state.
While the forty or so people who work for Microsoft Startup Labs in Kendall Square will keep their jobs, the big news is that managing director Reed Sturtevant (pictured at right) is leaving to pursue those ever-appealing "other interests."
Sturtevant spent the last few weeks attending the Burning Man festival in Nevada, and then in Paris, and my impression is that he was caught a bit off-guard by the re-org.
I called Sturtevant to ask about his plans.
For VisibleGains, Is the Third Name (and Third CEO) the Charm?
VisibleGains is just the latest name of a local Internet video company with roots that meander back to the dot-com days, when peer-to-peer file-sharing and Napster were all the rage.
The company was formerly known as NetCableTV and PermissionTV. It's announcing a new name today, as well as a new focus. VisibleGains will help its clients produce, deliver, and analyze sales-oriented online video that is intended to help turn prospects into paying customers.
From today's press release:
VisibleGains helps B2B marketing and sales teams break through the clutter of traditional lead generation and qualification tactics with “buyer-led” video. Unlike traditional video, that lacks engagement because it asks nothing of the viewer, VisibleGains designed its solution to pull prospects in – deeper down the sales funnel – through a proven process for producing high-impact video segments, embedding interactive elements and capturing behavior through analytics. This approach helps sales teams better understand, qualify – and more easily close – prospects.
NetCableTV started in 2004, with peer-to-peer video delivery technology licensed from John Fanning, a co-founder of Napster. (South Shore resident John Fanning is the uncle of Shawn Fanning, who started the music-swapping service Napster while a student at Northeastern.) Fanning had started work on the technology in 2001, thinking it'd be useful for delivering movies online.
FULL ENTRYThe Local Twitter-conomy
Today's column focuses on the local companies that are part of the Twitter ecosystem -- and the two local VC firms that have money in Twitter itself.
Here's my list of all the local companies doing something related to Twitter. I invite you to add others in the comments. (Let's define local as New England-based.)
FULL ENTRYGrading Zipcar's New iPhone App
Apple finally made Zipcar's first iPhone application available today on its iTunes store, only a few months after Zipcar CEO Scott Griffith had hoped it'd show up there. It's a free app geared to the car-sharing company's existing members.
I had a chance to use it today for a lunchtime car rental. Here's my take:
- One of the things I was most eager to try was the app's ability to honk the car's horn (to help you locate the car), and open and lock the doors directly from your iPhone. So I was disappointed to find that the app wouldn't honk the car's horn until I'd "swiped in" to the car by waving my Zipcar membership card over the windshield, and that the app doesn't open the doors without your card. You still need to swipe the card to open the car when you find it and to lock it up when your rental is over. (I've been known to leave my wallet at home once in a while, and was hoping that my iPhone might come to the rescue on those occasions. And at least once, I've had trouble locating a Zipcar in a dark parking garage, when the horn honk would've been handy.) The honk function, as well as locking and unlocking the doors, worked perfectly once I'd swiped in to my Honda Accord this afternoon.
- The app enables you to make new reservations easily, or extend the reservation of the car you're currently using (important if you want to avoid Zipcar's $50 late fee.)
- You can also see on a map all the Zipcars located nearby. The app lets you sort them to see what kind of car is available at a specific time (if, for instance, you want a Mini Cooper for two hours on Friday at 10 AM.) But the car-sorting menu seemed excessively long -- it lists a lot of models and types of cars that aren't available in my neighborhood (no convertibles in Cambridge, for example.)
- The app has crashed twice so far. Not a big deal, but just wanted to note that. Also, sometimes it can get stuck in an operation (like "Loading Vehicles") with no way to get out of it other than exiting the app.
I give the app a B- overall. (It'll earn a B if future releases improve the stability.) I expect that I'll be more likely to use it to make new reservations while traveling to other cities, or extend the reservation time of a car I'm using, than I will to do all that honking and door unlocking that seemed so appealing when Zipcar first demoed the app back in June. (I do give Zipcar extra credit for having already trained their phone reps to answer questions about the app -- one of them explained that I shouldn't try to use the app to "check out" of the car when I was done with it.)
Update: I may have tried to honk the Honda before my official reservation time had arrived yesterday, which Zipcar says would be one reason it didn't work. Honking worked better with today's reservation, but I was vexed today by the slow start-up time of the app every time I wanted to lock or unlock the doors. And the display showed some weird text that read "Null Null Null." So I'm leaving my grade where it is...
Your thoughts?
Pop Quiz: Name This Company
Here are your hints:
- This company was founded in 1997, and focuses on e-mail marketing for big companies, including JetBlue, Dell, the Patriots, Red Sox, Bruins, and The TJX Companies.
- It just moved into a new headquarters facility in Burlington that's 50 percent bigger than its old digs.
- It began the year with 254 employees in Massachusetts, with plans to end 2009 with a headcount of around 300.
- It was acquired last year by a publicly-held Pennsylvania company for $157 million.
- It is holding its sixth annual client conference this week in Boston, with more than 200 attendees.
Give up? Answer after the jump...
FULL ENTRYThree-Minute Demo: A Wirelessly-Connected Device that Reminds You to Take Your Meds
Yesterday's Globe column focused on MedMinder Systems, one of a handful of local companies that's marketing a new device to remind consumers to take their medications. (Today, MedMinder announced that Harvard Pilgrim is testing the technology with some of its members.)
CEO Eran Shavelsky demos the MedMinder pill organizer in the video below.
What struck me most about the company was how many well-connected people Shavelsky has gotten involved over MedMinder's three years of existence. In the column, I focus on Lifeline founder Andy Dibner's involvement (Dibner has been helping Shavelsky get meetings with various insurers and health care companies.) But Shavelsky has also been getting assists from Mona Eliassen, founder of a local recruiting firm and MedMinder's largest investor; MIT mechanical engineering guru Woodie Flowers; and Marina Hatsopoulos, founder and former CEO of Z Corp., the pioneering 3-D printer company. Hatsopoulos told me last week that her dad, Thermo Electron founder George Hatsopoulos, has been happily using the MedMinder device at home for the past few months.
Eons, Tributes, and Why Newspapers Should Cover Competitors
Yesterday's Innovation Economy column focused on Tributes.com, a spin-off from Eons, the social network for boomers and seniors that Jeff Taylor launched three years ago.
Eons doesn't seem to be have too much wind in its sails (its last funding was raised in 2007, though there's still some cash left in the bank), and Taylor seems to be pinning more of his hopes on Tributes, which hosts digital obituaries. Like an earlier Jeff Taylor venture, Monster.com, Tributes is a "disruptive" start-up aimed squarely at the old-school business of selling death notices that show up in print, in papers like the Boston Globe.
The first e-mail I got Sunday morning, from a reader named John, said, "...I find it interesting that companies that are dissing newspapers [like Tributes] get newspapers to write articles about them."
My response: I acknowledge that newspapers have plenty of problems these days, but one thing I appreciate about them (and I'm not talking just about the Globe) is that they don't tend to respond to rivals by refusing to write about them. Would newspapers (and their readers) have been better off if they never reported on the emergence of new media like radio, TV, and the Internet, all of which represented threats to their business? Would the Globe or its readers be better off if the paper never covered the Boston Herald, the Boston Phoenix, Boston Magazine, the Improper Bostonian, etc.?
I was interested in Tributes' business model, and Taylor's prediction that Tributes' revenues will surpass those of Eons by next year. So I wrote about it.
I'm interested in your take...
Coach Schilling Makes a CEO Change
Interesting news today from the Maynard, MA headquarters of 38 Studios, Curt Schilling's massively-multiplayer games company. CEO Brett Close, whom Schilling recruited from Electronic Arts to run the company, is out, and Jennifer MacLean, the former head of business development, is replacing him as CEO. MacLean used to run the games business for Comcast, and is the chair emeritus of the International Game Developers Association.
France Telecom Shutting Down R&D Lab in Cambridge
Back in post-bubble 2002, France Telecom opened a swanky new research lab in Cambridge for its Orange wireless service. Orange Labs intended to look at how the mobile web, speech recognition, and data services would change the way we use mobile phones -- and also explore the potential for other connected devices like intelligent alarm clocks or tables. The lab was headed by Rich Miner, who later went on to help develop the Android mobile operating system for Google, and now runs Google Ventures from Cambridge. Orange Labs was a haven for many ex-MIT Media Lab folks, and lots of smart techies who'd been rendered jobless by the dot-com bust. (Here's a 2002 Globe piece that talks about the lab.)
Seven years later, France Telecom is shutting down the Cambridge facility, which employs 52 people and is supervised by CEO Frank Bowman. The lab's last day is October 30th.
Why? Those two loathesome words: cost-cutting and restructuring.
FULL ENTRYWhat's the Right Way to Say 'I Don't Want to Be Your Friend'?
The advent of social networking has added a task to our daily to-do list: approving, rejecting, or simply ignoring requests from people who want to befriend you on Facebook, add you to their digital Rolodex on LinkedIn, or persuade you to sign up for some new service like Loopt, which shares your current location via your mobile phone.
We all have our policies about how to respond, and maybe I'm a little old-school (or just cranky), but if I don't have a clue who you are, I probably don't want to be your friend. (Sorry.)
But how to explain that? I have my go-to excuses, ten of which are listed below.
And I'm also curious: What do you say when you get a friend request from some random person whose name rings absolutely no bells? You're probably much nicer about it than I am...
FULL ENTRYDo You Remember These?

If you've been around computers long enough, you may remember sprocketed printer paper, and the act of printing out a computer program to debug it (or just to have a copy for safe-keeping.)
The stack of z-fold computer paper pictured above is currently on display at the MIT Museum, where there's a small exhibit that celebrates the role that MIT engineers played in the Apollo program. It lists the assembly language code that helped American astronauts reach the moon: a true geek artifact. There's also a video at the museum that talks about MIT's collaboration with Raytheon to design and build the guidance and navigation system that helped the Apollo spacecraft find their way to the moon (and return home). The exhibit is there until September 13th.
And for those more impressed with role-playing games than space travel, the World of Warcraft pod, also designed at MIT, is on display nearby.
The Second Coming of Mass Customization
Sunday's Globe column focused on the Boston area start-ups that are offering customized products, from t-shirts to diamond rings to stiletto heels.
Here's my list of every customization-oriented company in the Boston area.
FULL ENTRYCurt Schilling on Entrepreneurship: The Retired Sox Ace Talks About His Videogame Venture
My Globe column yesterday dealt with Curt Schilling's Maynard start-up company, 38 Studios, which aims to build a credible rival to "World of Warcraft," the wildly-successful online role-playing game.
The company recently doubled in size, to 140 employees, after it acquired a Maryland game development shop. Schilling and his CEO, Brett Close, are in the process of hunting for funding to finish their first big game, code-named Project Copernicus. Money could come from venture capitalists, private equity firms, or a major game publisher that would distribute the game.
Here's a lightly-edited transcript of my July 14th conversation with Schilling -- which covered his role at 38 Studios, recruiting team members, and the fund-raising process.
My favorite quote: "I’m not going to complain about the economy. It’s like pitching on a rainy day – the other guy has to pitch in it, too."
FULL ENTRYThe Jeff Bezos School of Business: Eight Minutes, One Flip Chart

Here's a great video that has been making the rounds this week.
Jeff Bezos, founder and CEO of Amazon.com, recorded it as part of Amazon's announcement that they're acquiring the online shoestore Zappos. He offers an eight-minute overview of some of the things he has learned as a company-builder.
First point: obsess over customers.
FULL ENTRYRah! Rah! We're So Great!
I had a tough time sitting through these two new videos produced by Innovate MassTech, a group of tech leaders deputized by Gov. Deval Patrick to figure out how to improve the global competitiveness of our IT/digital sector.
Why?
FULL ENTRYAfter Dark at Cambridge VC Firm, An iPhone Skunkworks Swings Into Action
Heard about the Cambridge venture capital firm that turns into a skunkworks for new iPhone apps after 7 PM?
When the VCs clock out at GreatPoint Ventures, Ben Jabbawy, Yoni Gontownik, and Jesse Dunietz get down to work.
FULL ENTRYCrimson Hexagon: Tracking Online Conversations
Checked in this morning with Mike Troiano, a former ad agency and tech company exec who linked up with Crimson Hexagon back in April as an advisor -- mainly to help the company secure new funding. Crimson Hexagon, based on technology developed at Harvard's Institute for Quantitative Social Science, is a Cambridge start-up that digs into all kinds of online conversations to figure out what people are saying about a given product or service. The company got going in 2007, has been funded by angel investors and angel groups, and officially launched last fall.
FULL ENTRYFundraising a snap for FanSnap?
Reporters always love those moments when someone says a little bit too much...
I was having coffee at Diesel Café in Davis Square this morning with Andy Payne, co-founder and a board member at FanSnap. He mentioned that the company has just raised another funding round; FanSnap, which helps consumers search for tickets to sporting events and concerts across multiple sites, has already banked $10.5 million from General Catalyst Partners in Cambridge and Harrison Metal, including a B round last October. Payne didn't want to say much more -- and when I called FanSnap's communications contact, Christian Anderson, he told me the company is "in the middle of things" and "can't talk about it."




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