Innovation Economy

Facebook Drops $250K on Boston's LuckyCal

noreply@blogger.com (Scott Kirsner) — Thu, 24 Jul 2008 20:50:00 +0000

Earlier this week, someone turned me on to LuckyCal, a Boston-based service in beta that helps you connect with friends or business contacts while you're traveling... and suggests events you might be interested in. Sanjay Vakil, previously co-founder of PatientKeeper, is LuckyCal's founder.

One example is that your favorite band happens to be playing a gig in a city you happen to be visiting on vacation, and LuckyCal lets you know. Or your college roommate is visiting your city on business. LuckyCal uses your calendar to figure out where you are, what you're doing, and offer some visibility into what your contacts are up to, with your permission. Today, they just announced a $250,000 grant from Facebook's fbFund.

The latest Globe column: Can Pixily duplicate Netflix's success?

noreply@blogger.com (Scott Kirsner) — Tue, 22 Jul 2008 17:34:00 +0000

Sunday's Globe column focused on a boot-strapped start-up called Pixily. From the opening:

Here's the video, with Pixily founders Prasad Thammineni and Vikram Kumar... one of the things they talk about is why they chose to build the company atop Amazon's Web services infrastructure:

First Digital Magazine Cover Will be Powered by E Ink

noreply@blogger.com (Scott Kirsner) — Mon, 21 Jul 2008 12:14:00 +0000

Esquire Magazine and Cambridge's E Ink Corp. are partnering on an electronic paper cover for the magazine's September issue, according to the New York Times.

The display will read, "The 21st Century Begins Now." Inside the front cover will be an ad for Ford's Flex SUV, also using an E Ink display. The thin battery powering both should last about 90 days. Esquire's parent, Hearst Corp., is an investor in E Ink, and Esquire has an exclusive on use of the technology in the magazine biz through 2009.

The Times reports, "The electronic cover will be used in only 100,000 copies that go to newsstands — its overall circulation is about 720,000." That ought to make these hot among collectors and technophiles.

GenArts, Special-Effects Software Firm, Gets Big-Name CEO

noreply@blogger.com (Scott Kirsner) — Thu, 17 Jul 2008 13:11:00 +0000

GenArts, a little Cambridge company that makes software plug-ins used to create special effects in movies like 'Indiana Jones 4' and 'Iron Man,' just hired its first outside CEO, Katherine Hays. Hays was a founder of Massive, Inc., a company that pioneered the concept of advertising in videogames. GenArts founder Karl Sims will stay with the company and continue serving as president.

The official press release is here.

GenArts took some outside venture capital earlier this year from Insight Venture Partners in New York, but the amount wasn't disclosed. The company was founded in 1996.

(I wrote about GenArts, and New England's larger special effects community, in the Globe a few years back.)

What Innovation Economy is All About

noreply@blogger.com (Scott Kirsner) — Sun, 13 Jul 2008 14:15:00 +0000

Welcome, fellow Bloggers! (And thanks to Google for including this as a blog of note for July.)

Innovation Economy covers the entrepreneurial ecosystem here in New England... it's the companion blog to a weekly Boston Globe column that I write, also called Innovation Economy. There's also a video series that goes along with the column.

Some posts that might interest you:

Getting to know

holding onto

fifty coolest companies

nifty new kind of photo printer

impact on non-compete agreements

If this kind of stuff interests you, there are a few ways to subscribe to Innovation Economy via e-mail or RSS, up in the upper right corner of this page.

I also run another blog that focuses on how new technologies are changing the entertainment industry... that one's called CinemaTech, and it's also hosted on Blogger.

EO University in Boston

noreply@blogger.com (Scott Kirsner) — Wed, 09 Jul 2008 19:48:00 +0000

The Entrepreneurs' Organization (formerly the Young Entrepreneurs' Organization -- guess they were aging) is holding their annual gathering in Boston this month: EO University. Speakers include Ben Zander of the Boston Philharmonic, George Naddaff of Ufood Grill, Margaret Heffernan, and Jon Luther of Dunkin' Brands.

Paragon Lake: A New Paradigm for Student-Created Start-Ups?

noreply@blogger.com (Scott Kirsner) — Tue, 08 Jul 2008 15:13:00 +0000

Sunday's column in the Globe focused on the adventures of two Babson students, Matt Lauzon and Jason Reuben, who hatched a start-up idea in their Babson dorm and just raised $5.8 million in venture capital funding.

One thing that helped them build a foundation for the company, Paragon Lake, was Highland Capital Partners' summer entrepreneurship program.

My premise is that we need more initiatives like it targeted to helping sharp students put together businesses, and making sure they take root here (Lauzon and Reuben were considering setting up shop in LA, and even have the cell phone numbers to prove it.)

I talked with Lauzon about his participation in the Highland program ... and a unique hiring tactic: MP3 audio.

One small but interesting change in Highland's summer program: participants last year didn't owe Highland anything -- there was no right-of-first-refusal on investing, no exchange of equity for office space, nothing. This year, though, according to Highland SVP Michael Gaiss, Highland has the option to participate in up to half of a start-up's first round of funding:

Gov. Patrick: Let's Crack the Energy Crisis

noreply@blogger.com (Scott Kirsner) — Wed, 02 Jul 2008 19:28:00 +0000

Gov. Deval Patrick writes about the state's new energy law in today's Globe:

Later, he mentions a few companies by name:

Zink's first product: In stores this weekend

noreply@blogger.com (Scott Kirsner) — Wed, 02 Jul 2008 12:24:00 +0000

Zink Imaging's first products, marketed under the Polaroid brand, will hit stores this weekend, according to VentureBeat. Earlier coverage of Zink, which makes mobile printers that don't require ink (only special dye-coated paper) is here. Zink was founded in 2005, but the technology had been in development at Polaroid for years before that...

Will Twitter Be Spark Capital's First Home Run?

noreply@blogger.com (Scott Kirsner) — Wed, 25 Jun 2008 20:47:00 +0000

You can't have a conversation with a techie without Twitter entering into it somehow. Either:

1. They've just begun Twittering
2. They're skeptical Twitter will ever make money
3. They're complaining about Twitter's frequent outages
4. They believe Twitter is the future of communications

Yesterday, Spark Capital of Boston announced that it was one of two investors in Twitter's new $15 million funding round. (Twitter's parent, Obvious Corp., is based in San Francisco.) The other investor is a dude called Jeff Bezos. PaidContent says the new round values the start-up at a shade under $100 million. TechCrunch had it last month at closer to $80 million. Clearly, they'll use some of the fresh cash to make Twitter more reliable.

Spark partner Bijan Sabet, who'll join Twitter's board, talks about the investment here. Twitter co-founder Biz Stone tells the story from his perspective on the Twitter blog.

I spoke with Sabet this afternoon, and suggested that his avid use of Twitter might've helped him get in on the deal (several other Boston VC firms were angling to invest). Sabet said it'd be self-serving to explain why he thought Obvious chose Spark to invest in this latest round, but he did mention that three other partners at Spark use Twitter; I'm not aware of any other Boston VCs who do. It's hard to imagine a Boston VC lobbying to get into this kind of deal without having some first-hand experience with the product. Sabet says that for Spark, using Twitter "made us feel comfortable that we knew what was going on, beyond just reading the business plan." When I asked again if he thought his status as a Twitter user contributed to the company choosing Spark to be part of this round, Sabet dodged the question...

Of course, the Boston VCs who lost out here will say they didn't like the valuation, or they weren't comfortable putting money into a pre-revenue company... which is their prerogative. But it's worth reading this post from Jason Calacanis about Twitter's potential to be a billion-dollar business.

Getting into this round is a big deal for Spark... an investment that could put the firm on the map. I'll be shocked if Twitter isn't acquired before 2009 is out.

Nuance v. Vlingo: Legal Battles in the Speech-Recognition Space

noreply@blogger.com (Scott Kirsner) — Sun, 22 Jun 2008 16:50:00 +0000

It's great to have the biggest stand-alone company in the speech recognition business here in Massachusetts: Nuance Communications. But I wonder if we're starting to see some negative effects... as Nuance seems to believe it owns all of the IP in the speech-rec field. They've been fairly litigious of late, and have yet to win a lawsuit in court.

Today's Globe column focuses on Nuance's latest lawsuit against a rival. This time, the defendant is Vlingo, a 35-person start-up in Harvard Square, co-founded by an ex-Nuance executive, Mike Phillips.

I prepared a chart that didn't run with the column, highlighting some of the other recent Nuance lawsuits. Here it is:

Nuance sues Vlingo, Inc.

What Happened at Today's Panel Discussion About Non-Compete Agreements

noreply@blogger.com (Scott Kirsner) — Fri, 20 Jun 2008 02:36:00 +0000

Probably the most interesting aspect of this afternoon’s discussion of the impact that non-compete agreements have in Massachusetts, held at Harvard Law School, was the absence of any company willing to publicly defend the practice of having employees sign non-competes.

The organizers had lined up Melanie Haratunian, an Akamai executive, to represent that point of view, but she backed out earlier this week. The reason? Akamai is apparently in the midst of enforcing a non-compete agreement against a former employee, and was concerned that that employee’s counsel might be in the audience today. That, at least, was the story I was told beforehand by several of the event’s organizers; perhaps one of you can fill in the details.

Moderator John Palfrey simply said, in opening the discussion, that Akamai “had to pull out of this event due to some pending litigation related to this topic.” (When I called Akamai spokesman Jeff Young for confirmation, he said he was not aware of any such litigation.)

I wonder why, if the stalwarts of the Massachusetts innovation economy believe so strongly that non-compete agreements are essential to retaining their best people, that no one would come forward to defend that position? EMC? Nuance? Genzyme? Boston Scientific? Anyone? Anyone?

Update: Here's some video I shot:

Some notes from the discussion…

Harvard prof. Lee Fleming said that people and ideas move from states that enforce non-competes to states that don’t (think California.) His research has found that non-competes squelch employee mobility by about 20 percent, and 30 percent for experts in a given field. Fleming asked whether non-competes might stifle the reallocation of the best people to the best business opportunities.

Paul Maeder of Highland Capital Partners said that non-competes are like diabetes -– a silent killer. Before a company can get off the ground, a prospective founder thinks twice about risking a lawsuit.

One problem with the way non-compete agreements are written, said Bijan Sabet of Spark Capital, is that they often prohibit people from working in “an area deemed to be competitive,” which can be vague.

Maeder said he is seeing a lot of California start-ups crop up that aim to challenge Akamai’s business of Internet content delivery. He said that one of them “will likely become the market share leader,” and asked whether we want that successor company to be in California, or here

Rich Miner, an exec at the Cambridge office of Google, says that the company doesn’t require people to sign non-competes. At a previous company, Wildfire Communications, Miner recalled trying to hire an engineer from Comverse. Comverse decided to chase the employee and enforce the non-compete, and so Wildfire had to pay him for six or eight months before he could actually begin working.

Maeder observed that Washington State, where non-competes are enforceable, has produced two great tech companies: Amazon.com and Microsoft. But he noted that there had been no great operating system spin-offs from Microsoft, or online bookstore spin-offs from Amazon.

Maeder also compared non-competes to indentured servitude, and said they foster “sleepiness” here in Massachusetts. He advised employees to ask about them at the beginning of the interview process, not on the first day of work -- when it's too late to negotiate anything different (like six months instead of a year).

Maeder says that he discourages his portfolio companies from requiring employees to sign non-competes, but he said that isn’t yet a firm-wide policy at Highland. (It is, apparently, at Spark Capital.)

Maeder suggested that there are three ways to change the rules surrounding non-competes in Massachusetts:

1. Legislative fiat (“I don’t think it’s going to happen,” he said, having visited Beacon Hill recently. Miner agreed, saying that change needs to be “a grassroots effort.” He did say, though, that he mentioned the issue to Governor Deval Patrick when Patrick visited Google’s office recently.)

2. Educating employees about their impact

3. Get venture capitalists and executives who serve on boards to speak out about the issue with the companies they work with.

During the Q&A period, Steven Chow, an attorney at Burns & Levinson, recalled that he used to sue EMC on behalf of Digital Equipment over employees who were violating non-compete agreements by going to work at EMC. (Didn’t that do a good job of preserving DEC’s dominance?) He said that non-competes help “keep the cost of engineers down,” since employers don’t have to compete as aggressively on salaries.

'Twas a good discussion, but it would’ve been about 10,000 percent more interesting had someone been on the panel to defend non-competes as a tool for talent retention, or make a case that getting rid of them wouldn’t necessarily make Massachusetts more competitive.

Next time?

Photos from the recent Founders Club Schmooze-Fest

noreply@blogger.com (Scott Kirsner) — Thu, 19 Jun 2008 16:35:00 +0000

Some photos from the recent Founders Club party in Boston have surfaced on Flickr. The shindig was held at the Ritz-Carlton home of Marina Hatsopoulos, founding CEO of Z Corp. I wrote about the gathering here.

In the pic at right is Acme Packet CEO Andy Ory and Mick Mountz, CEO of Kiva Systems.

Take That, Larry Summers!

noreply@blogger.com (Scott Kirsner) — Wed, 18 Jun 2008 17:25:00 +0000

Tufts University's Nerd Girls are in the vanguard of a campaign to establish, once and for all, that science and engineering are cool fields that welcome smart young women.

From a Newsweek article this week:

Lawsuit to watch: Nuance sues Vlingo

noreply@blogger.com (Scott Kirsner) — Tue, 17 Jun 2008 13:20:00 +0000

Nuance, the biggest speech recognition software company in the world, is suing tiny Vlingo, a Cambridge start-up, for patent infringement. Vlingo co-founder Michael Phillips had been a Nuance employee before starting the company, which focuses on speech recognition on mobile phones. He took a year off to sit out his non-compete agreement before starting Vlingo.

From Nuance's press release about the lawsuit:

Update: Vlingo's PR rep just sent along this response, from CEO Dave Grannan:

Some earlier video of Phillips doing a Vlingo demo is here. And Phillips is also mentioned in this Globe column.

Time to Get Serious About Reinvigorating the Mass. Tech Economy?

noreply@blogger.com (Scott Kirsner) — Mon, 16 Jun 2008 15:04:00 +0000

Mass Insight releases a report today, produced by McKinsey & Co., on how Massachusetts can remain a leader in the IT, communications, and defense industries.

(I wrote a short sidebar in the report, focusing on what we can do to build a bridge between college students and the innovation economy here.)

From the executive summary:

The report has some suggestions for new strategies... some of which you may agree with (or not). Very much worth a read if you're interested in our state's continued competitiveness.

Patrick's Biotech Bill: The Decade of Truth

noreply@blogger.com (Scott Kirsner) — Mon, 16 Jun 2008 14:00:00 +0000

Todd Wallack has a great piece in this morning's Globe about the new $1 billion biotech stimulus initiative, which becomes law today.

Wallack writes:

Today, biotech is a pretty small (but influential) industry in Massachusetts -- about one percent of the state's workforce. Whether this billion bucks can be invested intelligently is the question that everyone in the industry was asking this past weekend at Convergence. Not everyone's optimistic. And we're not likely to know whether this money has really moved the needle for a decade.

Advice From the Vineyard

noreply@blogger.com (Scott Kirsner) — Sat, 14 Jun 2008 12:03:00 +0000

I've been down at the annual Convergence Forum on Martha's Vineyard since Thursday (an event I help organize)... and the audience and the speakers have been great. Yesterday featured Mark Levin of Third Rock Ventures in conversation with Infinity Pharmaceuticals CEO Steve Holtzman (they worked together at Millennium); Alkermes chairman Richard Pops; and Oxford's Jonathan Fleming moderating a panel on "Exit Scenarios."

My favorite quote of the day, though, came from the opening panel. Dicerna CEO James Jenson had been talking about how he pitched 70 VCs on his previous company before getting funding.

"The most important thing for the entrepreneur is, don't die," he said.

Craig Newmark "Fireside Chat," from TieCon East

noreply@blogger.com (Scott Kirsner) — Thu, 12 Jun 2008 19:22:00 +0000

Last month, I had the chance to interview Craigslist founder Craig Newmark in front of a great big audience at the annual TieCon East entrepreneurship conference.

Craig was hugely entertaining -- he's a witty, code-writin' blend of Woody Allen, Oscar Wilde, and Groucho Marx.

Here's a podcast (in mp3 form) of the event, just posted to Boston.com.

We talk about:

(Update #1: TIE has just put up a short video clip from the conversation.)

(Update #2: Here's my Sunday Globe column on Newmark and the growth of Craigslist.)

Most recent Globe column: The A123 Systems Back-Story

noreply@blogger.com (Scott Kirsner) — Wed, 11 Jun 2008 15:49:00 +0000

My most recent Globe column delves into the back-story of A123 Systems, the Watertown battery company that is smack in the middle of the plug-in hybrid frenzy, and apparently preparing to go public (though one might ask what's taking them so long with the S-1?)

Here's the opening:

I wrote about Broadband2Wireless here, in 2001. And I wrote about Anderson's exit from the VC world here, in 2005. (Can't seem to find the column that chronicled the death of B2W, but this one mentions the CEO's resignation.)

The weekly video for the column is here:

Competitiveness in the New Search Economy

noreply@blogger.com (Scott Kirsner) — Wed, 11 Jun 2008 15:43:00 +0000

A provocative post this morning from Jeff Bussgang at Flybridge: is our region deficient in search engine marketing and optimization talent?

The opening:

Jeff also offers some thoughts on how we might remedy things...

Worth reading: 'How Town Hurts Gown'

noreply@blogger.com (Scott Kirsner) — Tue, 10 Jun 2008 12:20:00 +0000

Former Boston city councilor Tom Keane had an interesting piece in Sunday's Globe magazine that sounds some alarm bells. We've always assumed that our education industry has no choice but to stay here: Harvard has been in Cambridge for centuries, and it always will be.

But Keane writes:

Definitely worth a read.

Demand for hybrids: It's hot

noreply@blogger.com (Scott Kirsner) — Mon, 09 Jun 2008 16:07:00 +0000

This weekend, I happened to be hunting for a used hybrid online... and finding almost nothing available within 100 miles of Cambridge. (Our one vehicle right now is a great Honda Civic Hybrid, which averages about 38 mpg.)

Today, Rob Weisman of the Globe has a great story about how the demand for new hybrids is also insane. From the piece:

Here's a fun historical piece I wrote for Salon four years ago about why GM thought hybrids weren't worth investing in.

Enterprise 2.0 and Enterprise 2Open

noreply@blogger.com (Scott Kirsner) — Thu, 05 Jun 2008 20:58:00 +0000

Two related events happen in Boston next week, at the Westin Waterfront.

The main show is Enterprise 2.0, which focuses on how Web 2.0 and social networking technologies are being used by companies. The three themes are cloud computing and software-as-a-service, search 2.0, and social networking in the enterprise. Speakers include Rob Carter, chief information officer at FedEx, Rishi Chandra, product manager for Google Enterprise, and local videoblogging guru Chris Brogan.

There's also a free unconference event on Tuesday, where anyone is welcome to present and participate (but you do have to pre-register.)

Edocs founder Kevin Laracey shacks up with Sigma

noreply@blogger.com (Scott Kirsner) — Thu, 05 Jun 2008 14:42:00 +0000

Sigma + Partners, the Boston VC firm, just announced they've added Kevin Laracey, formerly founder and CEO of edocs, as a venture partner.

Edocs was acquired by Siebel Systems back in 2004, for somewhere between $115 million (the amount reported initially) and $145 million (the amount Sigma lists on Laracey's bio -- which could include later incentive payments for hitting certain milestones).

That means that the company, which made Web-based account management and billing software, was a middling success for its investors. Edocs raised $80 million in VC from Sigma, Charles River Ventures, JAFCO Ventures, and others. So it was slightly less than a 2x deal when Seibel acquired it.

As with all newly-minted VCs, it'll be interesting to see Laracey's first few deals...