Last Night's "Thinking Big" Party: How Do We Build a New Generation of Really Big Companies in Massachusetts?

I've been interested for a while in the question of how we can build a new generation of "pillar" companies in Massachusetts...companies like EMC, Lotus, DEC, Akamai, Genzyme, and Boston Scientific.

Last night, a group of folks put together a cocktail party to talk about the issue.

It was an amazing crowd -- it felt like someone had summoned the 'Super Friends' to the Hall of Justice. George Hatsopoulos, founder of Thermo Electron, was there, as was Bill Warner, founder of Avid Technology, Carol Vallone, CEO of WebCT, Scott Griffith, CEO of Zipcar, Tim Healy, co-founder of EnerNOC, Rick Hess, CEO of Konarka Technologies, Aron Ain, CEO of Kronos, Jonathan Seelig, co-founder of Akamai, and Robert Coughlin, the new head of the Mass Biotech Council. At one point, Russ Wilcox of E Ink was showing off a new Amazon Kindle e-book reader, which uses a screen made by his company. Wendy Caswell, CEO of ZINK Imaging, was our host, and the firms KMC Partners, Goodwin Procter, and BSG Team Ventures helped underwrite the event.

Dan Bricklin has some photos and an audio recording of the discussion. Paul Maeder from Highland Capital Partners touched on some of the same issues he brought up at a lunch last month: "We have been selling the seed corn," is his assessment.

Here are some of my thoughts on the evening's "main event" -- a conversation that Maeder and Michael Greeley of IDG Ventures led, with my help and lots of input from the crowd.

First, the question of why pillar companies are important:

1. They get big, employ lots of people, and tend to be supportive of their community (through philanthropy, supporting local schools, etc.)
2. They tend to attract media and Wall Street attention, which lets the world know something important in their sector is happening where they are based. They also hold conferences for customers/users... think of the annual MacWorld conference in San Francisco as an example. All of this sends a message that a particular place is a center of gravity, which brings more people interested in that area -- and more small companies -- to that place.
3. They tend to think like acquirers rather than acquirees.
4. They tend to spin off smaller companies in their space. (But we need to get rid of non-compete agreements to foster this.)
5. They serve as a source of experienced employees and executives to other companies in their space. (Again, we need to get rid of non-compete agreements to foster this.)
6. They make it easier for companies in their space to recruit people to the area. Say a consumer tech company in Boston -- like Bose -- is trying to bring a marketer in from the West Coast. That person, should things not work out at Bose, will not have a lot of other wonderful choices of other employers here in the Boston area. Same is not true when a chip company like Intel tries to recruit people from anywhere in the world to move to Silicon Valley.
7. They pay more taxes.

Now, as for what we can do...

1. Entrepreneurs need to have a jones to build a big, important company. The typical New England VC will not push them to brush off acquisition offers and stay independent.

2. Big companies get their start by discovering emerging sectors and opportunities. I don't think we're going to build an important, independent new PC company in Boston, or a networking equipment company, or even a medical device company. Boston Scientific got big because they saw the opportunity for less-invasive medical procedures before anyone else. Invent a cool new medical device today, and you're basically gonna get integrated into the product line of someone like a Boston Scientific or Medtronic before you have a chance to launch a second product.

3. So that means we need to support entrepreneurs dedicated to building pillar companies in new, as-yet-undefined market sectors. (Avid, which helped establish the market for digital video editing, is a great example.) I think the media -- that's me -- plays a role, and I'm gonna do my best to focus on entrepreneurs working on these new frontiers. But angel investors and VCs also play a role (can they avoid the temptation to fund a serial entrepreneur doing his seventh enterprise software start-up, instead of a first-time entrepreneur who is breaking new ground?) And finally, entrepreneurs and executives who have built really big companies need to give back. This does not just mean donating to or speaking at their alma maters. They ought to be serving on boards, or as informal advisors, to a handful of interesting start-ups in or near their areas of expertise. Some do, but too many don't.

Dharmesh Shah, founder of HubSpot, offers a different perspective on his blog.

Good News / Bad News

Good news first.

The Entertainment Software Association says that the video game and computer industry in the Bay State grew 12.3 percent in 2006, quadruple the commonwealth's overall growth. They say that Mass. is the fifth-biggest employer of video game personnel... behind California, Washington, Texas, and New York. Average salary is $84,818.

Now, the bad news....a report from MassInc says that we're second-to-last in terms of creating new jobs. From the Globe's coverage of that report:

Even if the nation avoids a recession, a recent forecast by the New England Economic Partnership projects the state won't recover the jobs until 2012 - 11 years after the 2001 peak. That would mark the first time since at least 1940 that the state has gone more than a decade without increasing payroll employment, said Andrew Sum, director of Northeastern University's Center for Labor Market Studies and the lead author of the MassINC study.

"We should be embarrassed," Sum said. "The governor, the Legislature have to get back in there and say, 'What are we going to do to create jobs in this state.' Somebody's got to advocate for jobs here."

The erosion of manufacturing, long a ladder to the middle class, and the emergence of industries requiring specialized skills also threaten to create a "boutique economy" that rewards the highly educated and the skilled, but leaves behind broad swaths of the labor force, the study warned.

You Heard It Here First: $300K in Prizes for MIT Entrepreneurs

As this blog suggested back in September, the prize money at MIT's entrepreneurship competitions has leapt from $100,000 to $300,000, with the addition of a $200,000 prize for "Clean Energy Entrepreneurship".

Money comes from NStar and the US Dept. of Energy. Prize, according to Robert Gavin of the Globe, "will go to the team that develops and presents the best plan for commercializing alternative energy products and services."

TVM revamps Boston office, opens in New York

TVM, the VC firm based in Germany but with offices in Boston, is adding a general partner, Marios Fotiadis, to the Boston office, and promoting Jens Eckstein to general partner. Fotiadis has done stints at Advent International and SG Capital Partners, and also served as CEO of Achillion Pharmaceuticals. Eckstein is on the boards of Ascent Therapeutics and Magen BioSciences, and served as an advisor to Sirtris Pharmaceuticals.

TVM also recently opened a New York office. The company's backgrounder:

TVM Capital, founded in 1983, is one of the first venture capital firms formed in Germany and an early entrant into the U.S. market in 1986. Since inception TVM Capital has raised more than €1.3 billion ($1.6 billion) in six fund generations and has established itself as a leading technology investment group in Europe and the U.S. TVM Capital funds have made investments in more than 235 information technology and life science companies where innovation, effective management and sound financial backing have enormous impact on company growth.

'Guitar Hero III' vs. 'Rock Band': The Game Genre Harmonix Invented

Cambridge-based Harmonix gave birth to the newly-hot genre of music-based videogames, and this morning the NY Times has a story on the two latest releases: 'Rock Band,' from Harmonix and its parent company, MTV, and 'Guitar Hero III,' from Activision. In just one week, 'Guitar Hero III' (the franchise was launched by Harmonix, but is now the property of Activision) raked in $115 million in sales.

From Robert Levine's piece in the Times:

The rivalry between MTV and Activision is made more stark in that both Rock Band and the previous versions of Guitar Hero were developed by Harmonix Music Systems (the newest Guitar Hero was developed by another studio).

MTV purchased Harmonix in September 2006 for $175 million cash, in a deal that did not include rights to the Guitar Hero franchise. To distribute Rock Band, it signed a deal with Activision’s main competitor, Electronic Arts.

Like any battle of the bands, this one features its share of trash talk.

“MTV trying to take on Guitar Hero is like us trying to go into the music cable business,” [Activision chairman Robert] Kotick said. One of the largest video game makers, Activision is enjoying its best year ever, because of Guitar Hero II, several successful movie tie-ins and the latest entry in the action game Call of Duty.

Today's Globe column: What Bubble?

Today's Globe column considers the question of whether we're in the midst of another tech bubble, and if so, can it survive the economic downturn some are predicting for 2008. From the piece:

Bubble deniers think continued increases in Internet usage and online ad spending will keep some companies cruising through any recession or economic slowdown. But bubble believers say that's about as likely as the Supreme Court successfully repealing the law of gravity.

Here's the video, shot at this month's TechCrunch party in Boston, followed by some perspectives that got snipped from the column for space reasons. (And a few comments that arrived too late for my deadline.)



New York venture capitalist and blogger Fred Wilson wrote via e-mail that he is “long-term bullish on the Internet, but short-term cautious, and also very aware of the problems in the U.S. economy and the impact they could have on the sector.”

Here's the full text of an e-mail reply I got back from Guy Kawasaki, a bubble believer:

We're in another bubble for sure. What will cause it to burst is anything that causes companies to curtail online advertising. When you read about a company offering Porsches to people who helped it recruit people, it's time to short the market.

And from VC and blogger David Hornik, a bubble denier:

I think there has been talk of a new bubble since the day that VCs began investing in consumer internet technologies again. The bubble of the late 90's felt great on the way up and horrible on the way down. But it was inflated drastically by a public market for highly risky Internet stocks. This time around, although there is a great deal of enthusiasm for consumer Internet startups in the Venture Capital community, there is no public market to further fan the flames. So to the extent that money is lost, it will all be the money of professional investors. And, to my mind, that will never constitute the sort of bubble that causes far reaching pain in the event that it pops.

Alan Philips is the CEO of Frame Media Inc., a Wellesley start-up that plans to deliver images and news for free to a new generation of Net-connected digital picture frames in consumers’ homes (sprinkled with a few ads here and there.) His company raised $2 million earlier this month.

Philips says he isn’t worried about how much consumers will or won’t spend buying gifts this holiday season, the first time that Net-connected picture frames are widely available at electronics stores. The word he has been hearing is that many retailers are selling out of the frames, which start at about $199.

Stephen DiMarco says that “it’s a very bullish time if you’re in Internet ad sales, marketing, or analytics,” the arena where his Boston company, Compete, Inc., plays. “It’s bad times if you’re a mortgage broker.”

“Is anything going to slow down Google’s growth?” DiMarco asks. “It doesn’t look like it, and Google is a pretty good proxy for the rest of the industry.” (Those could prove to be prophetic words from an entrepreneur whose last company, the Web development agency Zefer Corp., was slated to go public in the spring of 2000, but decided to wait for the stock market to improve. That didn’t happen, and Zefer doesn’t exist today.)

Tight-Lipped Tango Looks to McKinsey as a Model

I had a conversation earlier this week with Jo Tango, founder of the early-stage venture firm Kepha Partners and an alumnus of Highland Capital Partners. The entire conversation was off-the-record, though. Tango says he wants to let the companies in which he invests do the talking. The comparison he used was McKinsey & Company, which never even divulges the names of clients it serves.

I acknowledge that VCs can often hog the spotlight, subtly trying to make themselves look like the geniuses, rather than the entrepreneurs they choose to back.

But Boston needs a new generation of high-profile VCs, and I had been hoping that Tango would be part of that group.

VCs ought to be a presence at public events (Tango usually turns down speaking invites, and doesn’t go to gatherings like Web Innovators Group or OpenCoffee), and they ought to blog/write/podcast/vlog about what’s on their minds and what they’re seeing.

That sends a message that:

A. They’re approachable, even if you’re not a done-it-before entrepreneur, and
B. It communicates that there is a vibrant, plugged-in VC community here that’s interested in new stuff, and brainstorming about it in public.

Unlike McKinsey, Tango does at least have a Web site listing the investments he has made so far. (He also lists a number of investments he made while at Highland.) Kepha’s two investments so far, AutoVirt and Peermeta, have both been made alongside Sigma Partners, another ultra-quiet local firm. Peermeta was a $6 million first round; AutoVirt’s wasn’t disclosed. Peermeta was founded by Cheng Wu, the successful serial entrepreneur who has been with Cisco, ArrowPoint, and Cascade.

The same day I spoke with Tango, Going.com CEO Evan Schumacher asked who I thought were the next-gen VC firms in Boston… the firms that are worth watching because of their new approach to investing. Off the cuff, I listed Spark Capital, IDG Ventures, .406 Ventures, Longworth, and General Catalyst. (Old school firms trying to reinvent themselves include Prism VentureWorks and Polaris.) While some of them don’t have dazzling track records yet, they are communicating with -- and presumably working with -- entrepreneurs in new ways.

Tango, I worry, is doing things the old “Waltham way."

(Am I being too cranky on the day before Thanksgiving? Maybe. So I'll note that Tango gets very high marks on TheFunded.com, mostly for his work while at Highland. Also, I compare Kepha with other new early-stage venture firms here.)

Pop Quiz: How Many of Y Combinator's Latest Start-Ups Got Funding from Boston VCs?

I was chatting this afternoon with Y Combinator co-founder and big thinker Paul Graham this afternoon, for my Sunday Globe column.

Y Combinator runs two three-month-long workshops each year for start-ups, one in Palo Alto in the winter and one in Cambridge in the summer. The firm also makes small investments, usually less than $20K, in the start-ups that it selects for these workshops. At the end of each workshop, they hold a Demo Day, where the entrepreneurs show their prototypes to a group of VCs and established entrepreneurs.

I'd been hearing rumors this fall that Y Combinator might stop doing its summer Cambridge workshop. But Graham told me that isn't happening. Rather, this year, they took the Cambridge class of start-ups to do a second demo session in Silicon Valley, a few days after they'd presented locally. (Interestingly, they don't ship the Palo Alto entrepreneurs out east for a second show-and-tell day.) That seemed to solve a problem Graham had noticed, which was that the East Coast group weren't getting as much funding action as the Palo Alto crew.

So what were the results of this first-year experiment with taking the East Coast cohort for a West Coast field trip? Graham says that not one of the 19 start-ups from the summer workshop has yet been funded by an investor in the Northeast. But about half got funding from an investor in Silicon Valley.

What's the meaning of that? You be the judge...

Kind(le) Words for Cambridge's E Ink

Cambridge's E Ink is supplying the screen for Amazon's new $399 e book reader, the Kindle. This is the first tech device I've wanted to spontaneously purchase in a long time... in part because it seems to fill a new need (I'm always hesitant to ditch my current cell phone or mp3 player or GPS for something slightly better.)

Steven Levy of Newsweek has the most comprehensive look at the Kindle, and he has some very nice things to say about E Ink:

A reading device must be sharp and durable, [Jeff] Bezos says, and with the use of E Ink, a breakthrough technology of several years ago that mimes the clarity of a printed book, the Kindle's six-inch screen posts readable pages.

...This decade's major breakthrough has been the introduction of E Ink, whose creators came out of the MIT Media Lab. Working sort of like an Etch A Sketch, it forms letters by rearranging chemicals under the surface of the screen, making a page that looks a lot like a printed one. The first major implementation of E Ink was the $299 Sony Reader, launched in 2006 and heavily promoted. Sony won't divulge sales figures, but business director Bob Nell says the Reader has exceeded the company's expectations, and earlier this fall Sony introduced a sleeker second-generation model, the 505.

Feinstein & Fleming: Dynamic Small-Cap Duo?

I've been curious about what blogger and former VC Michael Feinstein has been up to, ever since I bumped into him over the summer at one of the OpenCoffee Club gatherings in Central Square. Feinstein, formerly at Atlas Venture and Venrock, is also a regular presence at the Web Innovators Group.

At the last Web Innovators Group, Feinstein was wearing a stick-on name tag that linked him to Clear Stream Ventures, and when I asked him if that was the name of a new VC firm he was starting, he told me it was a placeholder.

Things got more interesting last week, when I ran into a VC who told me that Feinstein had been to a Deloitte-sponsored lunch, and talked a bit about what he was up to.

After trying for a time to put together an early-stage fund using the Clear Stream name, Michael has now linked up with Bob Fleming, founder of Prism Venture Partners. (Fleming left Prism as part of Woody Benson's extreme make-over of that Needham firm, now known as Prism VentureWorks.) Feinstein and Fleming are apparently now working together to raise a fund to invest in small-cap public companies, using some space at the Waltham office of Foley Hoag, a law firm.

"I will confirm that we are doing something oriented around small-cap public companies," Feinstein writes via e-mail, adding that he and Fleming won't have anything to announce officially until 2008.

Feinstein did acknowledge that he'd been working earlier to try to set up a seed-stage VC firm, but that he may have missed the right moment for that: "I was probably too late compared to some of the new funds in Boston -- .406, DACE, Kepha, etc."

This will be an interesting project to watch ... and I'm eager to find out more...

Sunday's column, and new Globe video series

Yesterday's Globe column focused on the different approaches that Iqbal Quadir and Nicholas Negroponte are taking to bring new technologies to developing countries.

There's also a new video series from Boston.com, "Office Invasion," which launched last week. The premise is that we take you inside a cool workplace and poke our cameras around for a while. The first target company was Continuum, a design firm in West Newton.

John Maeda's new shoe is *fast*

How fast did John Maeda's limited-edition Reebok sneaker sell out? One hundred pairs went in just one day, priced at $150, according to the Media Lab prof and artist.

Combating Global Warming: Last night's MIT Enterprise Forum

Last night I was at a meeting of the MIT Enterprise Forum of Cambridge that focused on "How Innovative Businesses are Combating Global Warming."

Ian Bowles, Massachusetts' secretary of the executive office of energy and environmental affairs, opened the evening with an update from the State House. Bowles talks so fast I am pretty sure his compensation package has a words-per-minute clause. Very smart guy. But he predicted that we won't see any federal action on a carbon tax or CO2 emissions trading, either of which could help mitigate global warming, until the next Presidential administration.

I moderated a panel with Emily Kreps from Goldman Sachs, Daniel Goldman from Great Point Energy, Phillip Boyle from Powerspan, and Professor Daniel Schrag from Harvard. Schrag led things off with a short and dismaying PowerPoint overview of the latest data and projections about climate change: Houston, we have a problem.

Goldman talked about how his company is transforming coal into natural gas, and sequestering the CO2. Boyle explained how Powerspan removes acid-rain-causing pollutants from power plant emissions, and can also sequester CO2. And Schrag explained some of the thinking related to "global dimming" -- figuring out ways to reflect sunlight before the earth's atmosphere absorbs the heat. He's concerned that some country might decide unilaterally to try a global dimming experiment, with dangerous effects, since we don't know enough about how climate works.

The panelists all agreed with Bowles that we're not likely to see any federal implementation of something like the Lieberman-Warner bill soon, which would cap emissions and reduce them over time.

I suggested that citizen action is what's needed, given that we have a little more than a year before our next President takes office. Initiatives like Hull Wind and the CalCars plug-in hybrid movement work. Why wait for Washington to get moving?

Afterward, I met a bunch of entrepreneurs working on swell stuff.... Michael Chen is trying to develop wind farms in China...Jon Strimling from PelletSales.com was explaining the benefits of using biomass fuels to heat one's home...and Benjamin Brown runs the Web site MakeMeSustainable.

Future Forward video scrapbook

Just posted the video snippets I shot at Future Forward last Thursday... including some shots from the stage, while I was interviewing Paul Sagan and Art Coviello. That was fun.

Sunday's Globe column: Social Networking Goes to the Dogs

I'm traveling this week, so a bit slow to post the link to last Sunday's Globe column. It focuses on two Boston companies working on intelligent, wearable tags -- one for humans, and one for dogs.

From the piece:

Entrepreneurs of every breed need to make a clean break with reality; their job is to imagine a product or service that doesn't yet exist and that fills a need none of us knew we had. Ideas that seem slightly crazy at first - Bluetooth headsets, anyone? - can become commonplace in just a few years. Or they end up as one more crazy concept that didn't fly.

SNIF [Labs] is the second local start-up to introduce wearable tags for information exchange. Charlestown-based nTag Interactive has raised $14 million to market smart name tags that enable conference-goers to swap contact information, peruse the day's agenda, play ice-breaker games, or respond to a speaker's survey question.

Both companies trace their genealogy to the MIT Media Lab. In 1995, the lab was organizing a party to mark the launch of a research initiative, called Things That Think. The objective was to explore what might happen when computers were embedded into all sorts of objects.

And here's the video ... a short conversation with SNIF Labs CEO Noah Paessel:

Future Forward 07: Some rough notes

I have to confess that I did not take copious notes during Future Forward yesterday, a conference I help organize, but I did shoot some video, which I'll post here soon. (Update: video is below.)

But there were some great questions raised, some really insightful comments, and lots of interchange between the speakers and the tightly-packed audience.

The big question in the opening panel, which featured CIOs and CEOs, was whether it makes sense to be the "first one in the pool" when it comes to deploying new technology, or to be a fast follower. Bill Wray from Citizens Bank said his budget doesn't allow him to experiment in too many places, so he tries the latter strategy. George Orlov from Forrester Research said he's creating a sort of sandbox, so that his employees (technology analysts) can play with new technologies they are writing about. Ken Chaisson from Legal Seafoods talked about how some of the company's servers gravitate to new technologies, and that others follow when they see that the first group of servers is turning tables faster and earning more tips.

CEOs Paul Sagan (Akamai) and Art Coviello (former CEO of RSA Security, now a division president within EMC) were up next. Sagan talked about Akamai's near-death experience after the dot-com bubble burst, which required letting go hundreds of employees and getting out of high-priced leases. He also talked about how the company had to focus - quickly - on what he called "permanent economy" customers. I asked whether the start-ups in the room represented the "transient economy." "Too soon to tell," Sagan quipped.

The question of whether the enforcement of non-compete agreements hampers entrepreneurship in Massachusetts came up. Sagan said cheekily that we should lobby California to institute non-competes, rather than eradicating them here. Attorney Gabor Garai from Foley and Lardner, in the audience, seemed to think that they're a real problem. When Art Coviello got on stage, the first thing I asked him was his position. EMC/RSA, of course, likes to hold on to its best employees, and Coviello said non-competes help them do that.

Next, Dan Primack ran a very high-energy panel about VCs, IPOs, and M&A. He started by exploring corporate venture investing ... and particularly the fickle nature of it. Corporations open and close venture groups as the economy changes, and one of the VCs on the panel, Maria Cirino, said that in her previous life as an entrepreneur, one corporate venture arm replaced the person who sat on Maria's board three times in four years. The panel also touched on the problem of big funds (Battery was named) trying to do everything from early-stage deals to buy-outs. There was quite a lot of skepticism about that, but no one from Battery or General Catalyst was present to defend the big boys.

Giles McNamee brought up a very salient piece of data - only one or two percent of companies ever make it to an IPO, so it's quite natural that entrepreneurs consider and explore the M&A route.

After a nice long lunch, we came back to hear from the delightful and insightful artist John Maeda, who works at the Media Lab. I've long been a fan of John's work, but this was the first chance I'd had to see him speak. (TED has a video of a shorter talk he gave about his book 'The Laws of Simplicity,' but yesterday John got a full hour.)

Next, George Colony and Fidelity exec Charlie Brenner sparred on stage about the future of IT. Colony is trying to change the term to BT (business technology), since he says IT people should no longer be talking about information-related metrics (how many records are in a database, or how many queries they handle every day), but rather business metrics, like how much they've increased the average order size on the Web site.

Colony blasted the news media, mentioning the NY Times in particular, for "pumping up Google like they pumped up Amazon in 1997." The degree of hype, he said, is "very irresponsible." Colony was very skeptical that Google can revolutionize the cell phone business, since its new Android strategy will require carriers to work against their natural interests.

The last session, as tradition dictates, is a murderer's row of entrepreneurs, showing new products they're working on. Mark Thirman of AirPrint Networks had a pretty nifty demo, of a small printer that can spool out lottery tickets, movie tickets, or little maps; it communicates via Bluetooth with your cell phone. And Mike Phillips showed off Vlingo's speech recognition technology, which speeds up data entry on cell phones.

One VC in the audience made a telling comment. He asked a question of Vertica CEO Ralph Breslauer, dismissing the rest of the panel as "not real companies" (I'm paraphrasing). Everyone else was a consumer-oriented play, and some have slightly hazy business models. Are Boston area VCs just a wee bit prejudiced toward heavy-duty enterprise tech? Hmmm....

One thing we've started doing is allowing the audience to "invest" play money into the start-up company that they like the best.... as a joke, we put General Georges Doriot on the face of the bills (Doriot was the founder of the first venture capital firm, ARD, and a prof at Harvard Business School.) During the cocktail hour, one of the FF attendees, Tom Hagan, told me that he'd actually been in a pitch meeting with Doriot, early in his entrepreneurial career. Pretty cool ending to the day...

Videos from Last Month's Business Innovation Factory Event

Lots of New England innovators spoke at the Business Innovation Factory gathering last month in Rhode Island... among them:

- Clay Christensen from HBS
- Dave Balter from BzzAgent
- Bill Herp from Linear Air
- Robin Chase from GoLoco
- Denise Nemchev from Stanley Bostich (yes, the stapler-maker)

Videos are here. I had a laugh hearing Clay Christensen describe himself as the Jewish mother of the business world -- always worried, even when things are going well for a company.

This Week's Meanderings -- So Far

I was at Web Innovator's Group last night .... big crowd, as usual ... really surprising how many of the folks who get up to explain their companies can't do it in a way that is either:

A) comprehensible, or

B) enthusiastic

(That applies mostly to the "Side Dish" ancillary presenters, not the "Main Dish" demo-ers.)

My favorite concept of the evening was Lemonade.com, a site that makes it easy for anyone to create an online store containing an inventory of items they like. It looks like it's much easier to build a "Lemonade stand" than it is to set up an account with Amazon.com's affiliate program, which allows you to sell Amazon products. And many retailers still aren't hip to the idea of affiliates, so there's big potential for Lemonade to develop a big base of affiliates, and bring new retailers on board. Affiliates get paid a commission on any sales they generate, and can also earn bigger "bounties," for instance when they deliver a new customer to a company like AT&T. (The whole concept harkens back a bit to BeFree, one of the Web's first third-party operators of affiliate programs. But that was Web 1.0.)

The favorite entrepreneur of the night was Steven Bao. Bao is a sophomore at Wellesley High School who has created Student Concourse, a site that helps students manage all the school assignments they're working on, and collaborate with their classmates. He got a warm round of applause when he got up to explain what he's doing, and afterward, at his demo table, he was fielding questions like a pro. (Carolyn Johnson included Bao in this Globe story about young entrepreneurs.)

This morning, the Globe held one of its occasional small business breakfasts. We heard some great war stories from Rich Doyle, co-founder of Harpoon Brewery (in their early days, they decided to self-distribute, since no distributor wanted to carry their product) and Ian Lane Davis, founder of Mad Doc Software. Ian is the sole owner of the company ... which never took venture capital funding ... and today has 100 employees. He mentioned that they're now working on a version of "Bully" for the Xbox 360, a game originally developed by Rockstar Games, and several other projects he couldn't talk about.

Tomorrow is Future Forward in Weston. I'm told it's sold-out this year, and that there's a pretty substantial waiting list, so it should be a fun day...

Tabblo Founder Antonio Rodriguez on East v. West

Antonio Rodriguez, the founder of Tabblo, gave a talk to the Stanford Alumni Club of New England today, which focused on the headwinds that consumer companies can sometimes face in our region. I didn't get to see it in person, but thankfully, Antonio has posted the notes of his talk on his blog.

An excerpt:

The hardest part of embarking on a consumer Internet startup here in New England is finding wealthy veins of talent to mine out of big companies that provide relevant experience sets. From my non-technical entrepreneur friends I often hear about how hard it is to find class-A engineers that know "web stuff," and we ourselves at Tabblo had a very hard time finding good direct marketing talent that understood how factors like viral adoption could be weaved into a coherent user acquisition plan.

HP acquired Tabblo in March of this year, for an undisclosed sum. Matrix Partners backed the company.

Did EMC Drop Out of the Bidding for EqualLogic?

Dell is paying $1.4 billion in cash for Nashua, NH-based EqualLogic. Company is run by Lotus alum Don Bulens, and backed by Charles River Ventures, Sigma Partners, Focus Ventures, and TD Capital. This is a big exit for all involved, since only about $52 million had been invested in EqualLogic. (Earlier this year, Bulens had touted the company as an IPO prospect.)

I had lunch today with a storage industry entrepreneur who suggested that EMC had likely been in the bidding, but dropped out before the price reached $1.4 billion. He also speculated that this could mean the end of EMC's partnership with Dell; Dell's reseller arrangement with EMC accounts for about 16 percent of EMC's storage revenue. The official word from EMC is that there will be no changes to the Dell partnerhship.

Goldman Sachs just downgraded EMC from a "Buy" to "Neutral."

EMC chief executive Joe Tucci gave this interview in October in which he vowed to catch up to the competition by early 2008. Which is coming soon.

Today's Globe column: The Elixir/Sirtris Rivalry

As a journalist, it's hard to resist writing about rivalries -- especially when big personalities are involved.

Elixir Pharmaceuticals and Sirtris Pharmaceuticals, two companies founded to exploit the science of sirtuins (which are enzymes thought to be linked to the aging process and age-related disease), have the big personalities: Jonathan Fleming and Ansbert Gadicke, heads of the two biggest biotech VC firms in Boston, are on the board of Elixir, and Christoph Westphal, the golden boy of Boston life sciences, runs Sirtris. (Westphal worked for Polaris Venture Partners before deciding to become a CEO.)

And Sirtris managed to go public first; Elixir is now trying to follow suit.

But the crucial difference is that Sirtris is still very much pursuing drugs based on the sirtuin work of local researchers like Harvard's David Sinclair, while Elixir has in-licensed a diabetes drug already approved in Japan (which has nothing to do with sirtuins), and is trying to get it approved in the US. Elixir, five years older than Sirtris, has decided to develop a near-term product, while Sirtris is still focused on the long-term vision.

“The decision was made that the company needed to really get commercial as quickly as it could,” Ed Cannon, Elixir’s first chief executive, told me. [His comments were snipped from the column before it ran.] “They needed later-stage molecules,” he says, referring to drugs that are closer to winning FDA approval.

Cannon is bullish on both companies' prospects (he still holds some stock in Elixir). “I think Christoph has been a magician,” Cannon says. “And it’s not just smoke and mirrors. He has surrounded the company with terrific scientists, and terrific business people and investors.”

Here's the video, featuring MIT prof and Elixir co-founder Lenny Guarente talking about his research:

Breakfast Next Wednesday at the Globe

The Globe is holding a breakfast next Wednesday, November 7th, titled "Building a Successful Small Business." It's a fun group of speakers, and you're invited:

- Joe Burkett, CFO of Cafco Construction Management will give a short talk (Cafco was the Boston Chamber of Commerce's Small Business of the Year for 2007)

Then we'll have a panel with Joe, plus:

- Ian Lane Davis, CEO of the video game company Mad Doc Software (the Chamber's Entrepreneur of the Year), and

- Rich Doyle, CEO of Harpoon Brewery

I'll be moderating the panel. We'll talk about some of the challenges each of these companies have confronted as they've grown.

Event starts at 8 AM and will wrap up by 9:45. To RSVP, just e-mail events@globe.com.