Monday, December 31, 2007

Endy heading to Stanford ... Big loss for MIT

I wrote about synthetic biology pioneer Drew Endy back in 2005, after his group's work had been covered in Wired.

Just saw this piece in the San Francisco Chronicle, which notes that Endy is hopping from MIT to Stanford at the end of the 2007-2008 academic year. Big loss for MIT.

Endy was also a co-founder of the Cambridge company Codon Devices.

(Photo credit: Leah Fasten)

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Sunday's Globe column: How non-competes make states less competitive

Yesterday's Globe column attempts to explain how non-competes can make states less competitive by limiting the cross-pollinating effects of people moving from one company to another, or forming new start-ups.

Here's some video of HBS researcher Matt Marx explaining how non-competes work -- and how they worked on him (Matt began his career as a speech recognition engineer in Boston, before moving out to Silicon Valley and then back):

Bijan Sabet, the VC at Spark Capital who has been leading the charge to change the law (or at least the culture) surrounding non-competes in Massachusetts, takes me to task for not talking to big company execs about how much they love non-competes. My colleague Carolyn Johnson already did that quite ably in this piece.

Very simply, big companies like to use non-competes as flypaper, so they don't have to worry about their best employees zipping away when a better opportunity presents itself. (At Future Forward back in November, Art Coviello of RSA/EMC and Paul Sagan of Akamai said as much... Sagan even suggested that a good solution to the problem would be to have California *start* enforcing non-competes.)

Two interesting data points about local companies...

- EMC Corp. had 8900 employees in Massachusetts, and 4900 in California (these numbers include VMware) at the end of Q3 2007. The California numbers were growing *much* faster -- California had added 1400 people since Q3 2006, and Massachusetts only 270.

- Biogen Idec has 1750 employees in Cambridge, Massachusetts, and 400 in San Diego, California.

Why (let me ask rhetorically) do these companies even bother having operations in California if it is so hard to retain top talent without non-compete agreements?

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Monday, December 24, 2007

Sunday's Globe column: Stonebraker, StreamBase, and Vertica

Yesterday's Globe column focuses on two start-ups created in pretty quick succession by database guru Mike Stonebraker; both were funded by the same two VC firms, Bessemer Venture Partners and Highland Capital Partners. The video is an interview with Chris Risley, who is the second CEO that StreamBase Systems has had -- he succeeded Barry Morris late this summer.

My favorite quote from the column comes from Risley, who says, "Stonebraker works best a fair distance from the enterprise." Don't we all know people like that?

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Friday, December 21, 2007

SideStep, Kayak Get Over It and Get Hitched

Kayak, the "meta" travel search site based in Concord, MA and Norwalk, CT, is merging with SideStep, based in Santa Clara, CA, according to GigaOM and Kayak co-founder Paul English. From the Wall Street Journal report:

    Analysts aren't convinced the deal will greatly benefit consumers -- or Kayak. The market appears to have plateaued, says Henry Harteveldt, an analyst with Forrester Research Inc., noting that 12% to 15% of online leisure travelers use meta sites, roughly the same share as in 2006.

I wrote about the two companies two years back, when SideStep founder Brian Barth told me about some fishy meetings he'd had at General Catalyst while that firm was incubating Kayak.

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MIT Media Lab prof John Maeda is the new President at RISD

Pretty cool when the first thing the new president of the Rhode Island School of Design does is make a video introducing himself. Maeda is a world-renowned digital artist and designer; his latest project was a limited edition shoe for Reebok.

His bio is here ... and Maeda's blog is here.

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Thursday, December 20, 2007

Avid's non-entertaining new CEO

Avid Technology, which sells systems for video and audio production, announced Gary Greenfield as its new CEO. He succeeds interim CEO Nancy Hawthorne and former CEO David Krall.

Greenfield doesn't seem to have much of a link to the entertainment industries that Avid serves; his most recent gig was at a Maryland business-to-business software company called GXS, and Greenfield is also an operating partner at the buyout shop Francisco Partners.

Which makes me wonder whether Greenfield is planning to take Avid private or sell it. Other bloggers are speculating along similar lines.

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Wednesday, December 19, 2007

James Currier and 'Here Comes Another Bubble'

James Currier is an ex-Boston entrepreneur who now works in San Francisco, running Ooga Labs, after selling his last company to (I've written about James here and here.)

His singing group, the Richter Scales, made the excellent video below, "Here Comes Another Bubble," which was recently reposted to YouTub. The first version was yanked after a photographer complained that one of her images from Flickr was used without permission. (You can read about the controversy here.) The video really wonderfully captures the Valley zeitgeist of 2007.

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Tuesday, December 18, 2007

Looking at Akamai's Competition

Talking to a well-known VC yesterday, the subject of Akamai came up... I suggested that they may be one of our region's new pillar companies; he argued that Akamai is facing scads of competition, and hasn't been as quick to develop new services, or buy rivals, as it should be. His view was that Akamai's moment in the sun may be a fleeting one.

My Globe colleague Hiawatha Bray has already been thinking about this topic; a story of his that ran yesterday was headlined, 'Akamai's Competition Grows in the Data Delivery Business.' It's worth a read. Here's an excerpt:

    ...the market has had a jaundiced view of Akamai for much of the year. Akamai's shares traded above $59 in February, but have slumped to around $35. Investors haven't taken much comfort in the company's solid financial performance.

    ..."Everybody's been piling into this space," said Melanie Posey, an industry analyst at IDC Corp. in New York. "A lot of the new companies, and also some of the network providers, are stepping up their efforts."

    Last December, Level 3 Communications Inc., a major Internet service provider, made its move into the space by purchasing the content delivery business of Savvis Inc. Limelight Networks Inc., a major Akamai rival with about 10 percent of the market, went public in June, and in August disclosed a major deal to deliver Internet music, video software, and games for Microsoft Corp.

    There are plenty of other smaller competitors, including Mirror Image Internet Inc. of Tewksbury, a privately held firm that entered the content delivery service in 1997, at about the same time as Akamai. Mirror Image handles streaming video for The New York Times Co., the Home Shopping Network, and a variety of local television stations in the United States.

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Monday, December 17, 2007

Sunday's Globe column: Building new pillars in the Bay State

I'm saying it: we need a new generation of pillar companies here in Massachusetts, and the wider New England region.

Sunday's Globe column explores what we need to do to start thinking bigger. From the column:

    I understand the argument that big acquisitions, like September's $430 million deal to sell Waltham-based Adnexus Therapeutics to Bristol Myers-Squibb Co., return profits to venture capitalists they can in turn invest in new start-ups and allow newly wealthy entrepreneurs to go off and try something else - maybe even a riskier idea.

    But we also need to build the next generation of "pillar companies" here - companies like EMC Corp., Genzyme Corp., Boston Scientific Corp., Hologic Inc., and Nuance Communications Inc.

    These companies employ hundreds or thousands of people. They're acquirers, not acquirees. They lead industries, set the agenda, and attract the attention of media and Wall Street analysts. Smaller companies cluster around them.

    Right now, acknowledges Steve O'Leary, an investment banker with Jeffries Broadview, New England "is a net sellers market, as opposed to a net buyers market." O'Leary, who earns a living by selling tech companies, says, "I'd like to see more of a food chain, from the big companies on down."

I wrote about this topic back in January, as well, and moderated a salon called 'Thinking Big' late in November.

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Friday, December 14, 2007

Two upcoming events in Boston

On Tuesday, January 8th, I'll be moderating a discussion with three local VCs, titled, "Looking Back on 2007; Looking Forward to 2008." My victims will be:

    - Larry Bohn of General Catalyst
    - Jonathan Seelig of Globespan Capital Partners
    - Alan Spoon of Polaris Venture Partners

It's free. More info here. Doug Levin of Black Duck Software is the organizer.

And on Thursday, Jan 10th, I'll be giving a talk to the Harvard Business School Association of Boston. This'll be a new version of a talk I've given twice, about the history and future of the innovation economy in New England -- and what we can do to ensure that it stays healthy. (Non-HBS alums are welcome...just register as "Other Alum Guest.")

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Peermeta Lands Ricotta as CEO

Acton-based Peermeta, founded by Cheng Wu and funded by Sigma and Kepha Partners, is starting to say a bit more about what they're up to...and today, they announced that they've hired IBM and Cisco veteran Jim Ricotta as CEO.

Here's their company description:

    Peermeta is a pioneer in Web 2.x enabled software platforms for intelligent end points utilizing mobile broadband infrastructure. Peermeta provides a method for tapping into the breadth of distributed heterogeneous content, extending control over consumable content to users for personalization and sharing among social networks, and closing the capability gap between today's fixed and mobile networks. The result is enhanced end-user experiences, mainstream adoption of mobile media and greater productivity in our daily lives.

That's what I need: greater productivity in my daily life!

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Wednesday, December 12, 2007

Mid-week links: Convoq closing, Alliance for Open Competition, O Beverages

A couple Wednesday links...

- When I ran into Chris Herot at the Tech Crunch party last month, he told me he was hoping to sell the collaboration company he co-founded, Convoq. It looks like a sale didn't come together, and Chris has posted some reflections on his blog about the five years he invested in trying to get the start-up off the ground. It's thoughtful writing -- and worthy reading.

- Spark Capital and Bijan Sabet are creating a new group, The Alliance for Open Competition to advocate for eliminating non-compete causes in Massachusetts. They're looking for people to sign on in support of the campaign.

- Xconomy reports on a new start-up from Highland Capital Partners' Consumer Fund, O Beverages. The founder is Tom First, one of the two Toms from Nantucket Nectars. O sounds like a new twist on Vitamin Water, which Coke bought for $4 billion earlier this year.

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Monday, December 10, 2007

Spark Capital's Campaign to Rid Mass. of Non-Competes

I've been on a long West Coast trip (Las Vegas first, then San Francisco), so I'd missed Carolyn Johnson's excellent piece in the Globe on Friday, about Spark Capital's campaign to get rid of non-compete agreements in the Bay State.

Johnson writes:

    Noncompete agreements typically bar employees from going to work for a rival firm for a set period of time. Under Massachusetts law, they are enforceable except for specific professions, such as doctors and broadcasters. Under California law, however, such agreements are generally not valid, meaning an ambitious entrepreneur can take a chance with a new venture that may challenge the former employer without a legal cloud hanging over the move.

    While a slew of factors contribute to the very different tech scenes on the East and West coasts, management and policy specialists have examined how noncompete agreements may contribute to very different culture.

    A working paper from the National Bureau of Economic Research published in 2005 found that employees working in the computer industry in Silicon Valley tended to job-hop more than their counterparts in other cities with technology clusters. The paper found evidence to support the idea that California's legal climate, in which noncompete agreements are not enforceable, may contribute to the unique tech cluster in Silicon Valley.

    A Harvard Business School working paper published this year also found that a 1985 legislative shift in Michigan, which made noncompete agreements enforceable, meant that inventors switched jobs less frequently.

Spark sent a letter to Gov. Patrick last Thursday. Here's an excerpt from it:

    As a venture capital firm based in Boston, we are in the business of fostering innovation and building valuable companies that employ highly skilled workers, pay significant taxes, and allow the Commonwealth to thrive in the increasingly competitive national and global economic environment. We have a unique vantage point into the factors enabling entrepreneurialism in Massachusetts.

    From this view point we have seen that employment non-competes are increasingly stifling the emergence of start-up companies in our State, forcing some of Massachusetts’ most innovative entrepreneurs to take on tremendous risks, and hampering Massachusetts’ ability to meet its fullest economic potential as a Commonwealth.

    We respectfully request that Massachusetts legislate the elimination of the general enforceability of these non-competes in order to restore balance to Massachusetts’ labor markets and to enable Massachusetts to compete better in the national and global marketplace.

    Due to the enforceability of employment non-competes in the Commonwealth, entrepreneurs must be willing to take on tremendous legal and financial risks as employers building new ventures. As a point of comparison, the State of California has largely done away with non-competes and has reaped the benefits. Just look at the vibrancy and success of Silicon Valley, which is home to more new company formations than any other location in the country. Why shouldn’t Massachusetts’ entrepreneurs have the same rights and opportunity as their counterparts in Silicon Valley?

At the end of the two-page lettter, Spark's partners commit to work toward eliminating non-competes within their portfolio of companies.

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Sunday's Globe column: Consumer Electronics for 2008

Yesterday's Globe column focuses on some of the consumer electronics products we'll see from Boston area companies in 2008, starting at the Consumer Electronics Show in January. (One company I should've included, but forgot: Chestnut Hill Sound and their George iPod dock.)

From the column:

    The consumer electronics industry fuels its growth not only by introducing new technologies, but by persuading you to ditch perfectly good products for Version 2.0. The Consumer Electronics Association, which organizes the Consumer Electronics Show, expects the US-based segment of the consumer electronics industry to hit $160 billion in revenues this year. And in no industry do fresh products become has-beens so quickly - except perhaps for sushi.

    But while thousands of new and improved products will debut at the Consumer Electronics Show on Jan. 7 and MacWorld, Apple's major trade show on Jan. 14, talking about them in advance could cause consumers to put off purchases, holding out for the next generation of a products, and the promise of longer battery life, higher resolution, or a less-painful price tag.

Here's the video: conversations with San Francisco-based Bug Labs, and Cambridge-based Ambient Devices about what they're up to:

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Tuesday, December 4, 2007

Stem Cell Start-Up Fate Gets $12 Million

Fate Therapeutics hopes to use stem cells to fix damaged tissue; the start-up just received $12 million in A round funding from ARCH Venture Partners, Polaris Venture Partners, Venrock, and OVP Venture Partners. The company's scientific founders hail from the University of Washington, Harvard, Stanford, and the Scripps Research Institute.

Fate says it'll have offices in both Massachusetts and Washington (the company was incubated in the Seattle offices of ARCH), but until a CEO is hired, they won't have a decision about where the HQ will be.

From the Seattle Times coverage:

    In Seattle "we're able to attract money to great ideas," [ARCH founding partner Robert] Nelsen said. "The hardest thing is finding the right team and the right CEOs."

    Fate will work on drugs that cause dormant adult stem cells to rebuild damaged tissue, as well as drugs that reprogram mature adult cells into stem cells that can repair ailing organs.

    The therapies could help treat Down syndrome, Alzheimer's and Parkinson's diseases, as well as repair tissue after heart attacks, infections or transplants. Stem cells could also help fight certain types of cancer.

Mass High Tech adds:

    The firm aims to develop chemical-based, or small molecule, drugs intended to "awaken" stem cells in the body to combat diseases and regenerate tissue. Its other molecules would reprogram adult cells to an embryonic state. None of the firm's treatments would be derived from embryonic stem cells, the company says.

    Other local notables involved in Fate Therapeutics include Massachusetts Institute of Technology professors Robert Langer and Ram Sasisekharan, both of whom serve on the firm's scientific advisory board.

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Monday, December 3, 2007

Let's Get Rid of Non-Compete Agreements

Venture capitalist Bijan Sabet has launched a discussion about getting rid of non-compete agreements in Massachusetts -- and I'm glad. In fact, Sabet's firm, Spark Capital, has decided to stop requiring that its portfolio companies ask employees to sign non-compete agreements.

A lot of people say that non-competes aren't a big deal. If you are one of those people, why not read this piece: 'SANgate CEO ruled out of job by EMC non-compete lawsuit.' Non-competes are not enforceable in California, Connecticut, and many other states ... but they most definitely are in Massachusetts.

Other people say that it is impossible to measure what the impact of enforceable non-competes is. And that's sort of true: it's hard to tell how many Raytheon, Analog Devices, EMC, or Biogen employees today have great ideas for start-ups ... or would be more productive working for a start-up ... but they can't do it because they worry about being tangled up in litigation.

But there has been some great data collection recently, by a Harvard Business School PhD candidate named Matt Marx. Marx and two colleagues looked at what happened after legislators in Michigan accidentally made non-competes enforceable in 1985. Inventors were suddenly 34 to 51 percent less likely to move from one company to another. And the "star" inventors were the least likely of all to move. (Marx also provides a history of the non-compete, which traces back to 1414.)

You can read an excellent Q&A with Marx here. The full research paper is here (in PDF form). Here's a cool data point: Marx himself was an engineer/executive at a Massachusetts speech-recognition company, Applied Language Technologies. While Marx wouldn't have been able to jump to another Massachusetts speech recognition company because of our state's enforceable non-compete agreements, he was able to go work at a Silicon Valley speech rec company, because non-competes aren't enforceable there. He says:

    At first I thought I wouldn't be able to take the job [in Silicon Valley] given the noncompete agreement I had signed in Boston, but I was nonetheless able to make the move because the California courts generally refuse to enforce such agreements. Ironically, when I returned to Boston a few years later for business school, the founder of the first company [Applied Language] invited me to do some consulting on the side while a student, but I wasn't able to because the Massachusetts courts would enforce the noncompete that the California company made me sign.

But if we want to change the non-compete environment in Massachusetts, we need more than just start-ups and VCs to agree that non-competes are a hindrance. We need the state legislature to change the law. That will require that big companies join in the crusade -- and in recent conversations I had with the CEO of Akamai and the president of RSA Security (now part of EMC), it struck me that they are very unlikely to want to get rid of non-competes.

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Sunday's Globe column: 'Green solutions start at grass roots'

Sunday's column offers an overview of some of the grassroots and entrepreneurial efforts around New England to make power generation more environmentally sensitive.

Here's the video, which includes an interview with David Marcus of General Compression and Rick Hess of Konarka Technologies.

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'Shocks and awe': Bose's new auto suspension system

I wrote about Bose's secret project to reinvent automobile suspension systems back in June of 2004. Three and a half years later, my Globe colleague Jeff Krasner reports, Bose is still not willing to let journalists drive the demo car outfitted with the heavenly shocks...and Bose still hasn't landed an automaker partner to put the shocks into actual cars.

I guess that if I were to look on the bright side, I'd say that it's a nice thing that 78-year old Amar Bose, the company's founder, still believes in long-range R&D.

A bit from Krasner's piece:

    Bose said a high-end Cadillac would be an ideal platform for his system, and acknowledges that General Motors gave Bose Corp. a big boost when it became the first car company to install its sound system (in a Cadillac) in 1981. But though the suspension system was a success when it was demonstrated to General Motors, he said, talks haven't progressed.

    "When we get ready, we'll give them an opportunity," he said.

    Another possibility, according to analysts, is Audi, the luxury arm of Volkswagen AG, Europe's largest automaker. Audi offers Bose sound systems on its models, and its large A8 luxury sedan has a reputation for employing advanced technology - it has an aluminum frame, unique among large cars.

    "We've shown the system to all of the major manufacturers and Audi has not expressed much interest at this point," said Bose.

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