Thursday, January 29, 2009

Healthcare in the Age of Obama

Steve Wardell is putting on an event in Boston next month called the "Transforming Healthcare Summit." It'll feature a keynote from Tufts Health Plan CEO Jim Roosevelt, and a panel with Harvard Pilgrim CEO Charlie Baker, Athenahealth CEO Jonathan Bush, and John Glaser, CIO at Partners Healthcare. (I'll be moderating.)

Here's the focus:

    The American healthcare sector has never experienced such a time of crisis, uncertainty, and opportunity. As a result, the new Administration has made healthcare the centerpiece of its stimulus and reform plans. Billions of dollars are flowing into healthcare from Bush’s Troubled Asset Relief Program, and tens of billions more are expected from Obama’s new American Recovery and Reinvestment Plan, and from Daschle’s comprehensive reform plan. But how do you and your organization learn about the change and get ahead of it?

Date is Thursday, February 26th, from 5:45 to 9:30 PM.

If you're interested, you can use the code "innoeco1" when you register to get 10 percent off.

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Wednesday, January 28, 2009

David Friend, Carbonite, and the Case of the Employee Reviews

The folks at EMC were kind enough to point out this blog post by David Pogue, which exposes the embarrassing issue of some reviews that were posted by employees of Carbonite. In 2006, two Carbonite employees posted glowing reviews of their company's back-up service. They used their real names, but didn't disclose that they worked for the company. Carbonite competes with Mozy, an online backup service owned by EMC.

I called Carbonite CEO David Friend this morning to find out what was up. He acknowledged that not disclosing that the Amazon reviewers were connected to the company was a mistake. "We had eight employees at the time but no sales," he said. "Frankly, every little company does that kind of stuff." But since 2007, he said, the company has explicitly prohibited posting-sans-disclosure as part of its policies.

Friend added that Pogue didn't contact him before he published yesterday's blog post -- which was based on info from an ex-Carbonite user using a pseudonym; Friend has since posted a comment on Pogue's blog.

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Stop Studying Already!

Just what the Massachusetts tech economy needs to improve its competitive standing in the world: another study!

The IT Industry Study Group put out an important press release yesterday that says that they plan to produce an important report on how important the tech industry is to Massachusetts. That report, when it is finished, will no doubt be accompanied by yet another important press release.

Now, you know that I am a big cheerleader for innovation in Massachusetts, and the entire New England region.

But I think that rather than talking to ourselves... and our elected officials...and telling one another how important we are to the regional economy... we should actually be communicating with the rest of the world. We should be focusing on building our brand... and attracting investment and business activity (like Google's Cambridge office, or the giant Novartis presence in Central Square) from elsewhere. We should also be figuring out how to create a welcoming environment for all the students who come here to get an education, funneling them into start-ups and bigger companies here, or helping them launch ventures of their own.

Correct me if you think I'm wrong, but these studies serve no useful purpose that I can tell. (Here's a 2008 study on basically the same topic: how Massachusetts can remain competitive in the IT and defense sectors.)

Here's what this new very very very important study will focus on:

    The Institute will undertake in-depth research documenting the size and scope of activities of the major IT industry sectors in Massachusetts. It will analyze the extent to which the presence of IT firms contributes to the competitiveness of other Massachusetts industries. In addition, the report will explore opportunities for the local IT industry and investigate major obstacles to growth and expansion in Massachusetts. The $150,000 project is being underwritten by the consortium of private companies, in partnership with the Massachusetts Technology Collaborative’s John Adams Innovation Institute.

Have fun, guys.

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Monday, January 26, 2009

Silver Lining, Boston's Cloud Computing User Group

A few folks have recently called my attention to Silver Lining, a relatively-new cloud computing interest group that holds monthly meetings. (January marked their fourth meeting.)

Mass TLC is also devoting its annual meeting on February 25th to the topic of cloud computing.

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DemoCamp Boston, on Feb. 25th

MBA Student Alex Hodgson of the Hult International Business School is organizing DemoCamp Boston for February 25th. Looks like fun. They're now seeking presenters.

What's it about?

    DemoCamp is a participant-generated social event for designers, developers, entrepreneurs. It is free. Participants sign up to demonstrate software, products or share ideas they have been working on, or to give a presentation with the goal to inspire, educate or challenge the audience.

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Consumer-Oriented Online Storage: Mozy vs. Carbonite

Sunday's Globe column looked at how Carbonite and Mozy are building the market for consumer-oriented online backup services. Carbonite is a Boston-startup funded first by CommonAngels; Mozy is a Utah start-up acquired by EMC in 2007.

From the piece:

    Mozy and Carbonite are two of the leaders of the online backup business, a rare bright spot in a gloomy tech economy. Rather than buying their own hard drives to save a copy of their data, consumers and small businesses pay a fee (Mozy's is $59 a year, Carbonite's is $50) to send their information securely over the Net, and have Mozy or Carbonite keep a copy that can be retrieved any time. IDC, a Framingham research firm, predicts that online backup services will generate about $715 million in annual revenue by 2011.

    The big question is whether a start-up like Carbonite, with 125 employees and $47 million in venture capital, can capture a bigger piece of that market, or whether a division of a big company like EMC will have the edge.

To accompany the piece, there's an audio interview with Carbonite CEO David Friend, who talks about how hard it was to raise VC money for a consumer-oriented company in Boston.

Tom Kennedy, who does some communications consulting for Iron Mountain, pointed out to me that that Boston company also offers online PC backup. I should have included them, even though none of the reviews I could find of consumer back-up services mention their Connected Backup for PC offering. (Perhaps because its pricing is much higher than Carbonite's or Mozy's?)

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Friday, January 23, 2009

Y Combinator Decamps from Cambridge

I don't think there's a glass-half-full way to look at Paul Graham's announcement this week that his Y Combinator start-up program will now take place in Silicon Valley year-round, rather than alternating between Cambridge and Silicon Valley.

Graham is a prickly personality, and he hasn't always had the best relationship with investors here in Boston, but Y Combinator was a net positive for the area: it exposed energetic young entrepreneurs to Boston investors, and vice versa.... even if Graham was never a strong advocate to his entrepreneurs of remaining in Boston once they had completed the Y Combinator program.

Here are the toughest two sentences in Graham's announcement:

    Boston just doesn't have the startup culture that the Valley does. It has more startup culture than anywhere else, but the gap between number 1 and number 2 is huge; nothing makes that clearer than alternating between them.

That's not just his opinion... it's reality... and we ought to be addressing it head-on.

Some more coverage:

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Thursday, January 22, 2009

$7.4 million for CloudSwitch, Which Aims to Make Cloud Computing Safe for the Enterprise

Better late than never?

Two Boston-area venture capital firms just put the finishing touches on a $7.4 million A round for Bedford, Mass.-based CloudSwitch this week. It's the first investment in a pure-play cloud computing start-up here in Massachusetts that I'm aware of. Matrix Partners incubated CloudSwitch in its offices for much of 2008, and Atlas Venture joined in the funding round.

The company was founded by Ellen Rubin (CEO) and John Considine (CTO), both of whom had earlier worked at other Matrix portfolio companies. Rubin had headed up marketing for Netezza, leaving last February following the company's 2007 IPO; Considine had worked at Pirus Systems, acquired by Sun back in 2002.

Rubin isn't saying much about what they're up to, other than that they're developing software to help enterprises manage cloud computing services. "I don't want to say much for competitive reasons, but we're working with partners and customers now, and building out our offering," she told me today. She said they'll be ready to divulge more in the spring. The company has about ten employees, and office space in Bedford.

Rubin says they're hiring, but there's no listing of jobs on the company's one-page Web site. Rubin says they're working with recruiters, and talking with folks who're part of the founding team's network.

"I've been paying attention to cloud ideas for about 18 months," says David Skok of Matrix. "John [Considine] is a storage guy, but I kept saying, 'Go look at what Amazon is doing. It's totally amazing.' He came back with a cloud idea, and I introduced him to Ellen. Then we spent a lot of time working with them to shape a defensible idea."

Axel Bichara is the Atlas Venture partner who'll take a seat on the board. Also on the board at CloudSwitch are Jit Saxena, CEO of Netezza, and Andy Palmer, a serial entrepreneur who has been involved with Bowstreet, Vertica, Infinity Pharmaceuticals, and Byledge.

The only previous mention of the company I've been able to find is this quick name-check from GigaOm.

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GM Throws A123 From a Moving (Hybrid) Car

I'd missed this news from last week's North American International Auto Show, until an eagle-eyed reader called my attention to it: GM has chosen Korean-made batteries from LG Chem, instead of batteries from A123 Systems of Watertown, Mass., for the first generation of its Chevy Volt plug-in hybrid.

From the AP:

    LG Chem CEO Peter Kim said the company may eventually build cells in Michigan, and it anticipates that its U.S. subsidiary, Compact Power Inc., will add to its 100-person work force in Troy, Mich.

    ...{Volt vehicle line director Tony] Posawatz said GM chose LG Chem because of its flat-cell design that dissipates heat better and stores more energy than competitors' cylinder-shaped cells.
    The competition from A123 Systems Inc. of Watertown, Mass., was very capable, Posawatz said, but "one has to be the lead."

The Christian Science Monitor offers more detail on the decision, in this Q&A with Robert Kruse, a GM executive director for hybrid vehicles. Kruse says:

    "...We selected LG as the cell source for Gen-one Volt; and we are also very intrigued and attracted to some of what A123 has to offer and are continuing to do advanced development with A123 for future applications – just not Gen-one Volt.

The Oakland Business Review has an interesting quote from GM vice chairman Robert Lutz:

    "A123 is still sort of a startup, they're still ramping up, and A123 has been specializing mostly in ...cylindrical cells, which are good with power tools and stuff. What we need here is prismatic, which is flat cells. And LG Chem is just farther along," he said.

John Dodge of Design News asks some interesting questions:

    – GM may have bought itself a problem, too. It has taxpayer loans now and despite all its plans to build battery labs and plants in Michigan and around the world, it can’t escape that fact it selected a Korean and not an American company to make the key component for its batteries. Could this be a problem for the incoming president whose number one priority is getting Americans back to work?

    – What did A-123 know when did they know it? Could its executives have been thinking on Jan. 7 [when they applied for a $1.84 billion government loan to build a new plant] that it was going to be GM’s key battery partner? Was the announcement a Hail Mary pass to convince GM that it would have the manufacturing prowess and capability to operate in the giant auto maker’s back yard? Did GM chose LG Chem in the 11th hour?

Ecogeek has more analysis.

No comments in the media from A123, which filed for an IPO last August so the company is still stuck in its quiet period.

Think that public offering will be happening soon?

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Tuesday, January 20, 2009

Raising Capital in the Current Climate

Sunday's Globe column focused on raising money from VCs, banks, angel investors, and other sources.

Here's the opening:

    Finding money to start a company (or keep one going) is worry number one right now for entrepreneurs, whether they're designing robots, starting a restaurant, opening a clothing boutique, or developing cancer drugs. And with banks, angel investors, and venture capital firms clinging more tightly than ever to their bankrolls, that worry is occupying much more mental bandwidth.

The video features entrepreneur (and occasional angel investor) Bill Warner offering some fund-raising advice of his own:

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Thursday, January 15, 2009

Posterous Finds an Angel in Cambridge

I went to see Avid Technology founder Bill Warner this morning... and he happened to mention that he'd put some money in Posterous, a blogging-via-e-mail start-up that was part of last summer's Y Combinator program in Cambridge.

TechCrunch reported last month that Posterous had raised about $725,000 from XG Ventures and a number of angels.

Warner is not just one of those angels, but he's also a Posterous user. He's using Posterous to run the blog of Oggi Gourmet Foods, the Harvard Square restaurant where he's a co-owner.

(In this recent post, Warner interviews one of Oggi's celebrity customers: Ray Magliozzi, co-host of NPR's "Car Talk.")

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Wednesday, January 14, 2009

Gaining Steam: The Campaign to Ban Non-Competes in Massachusetts

A bill was introduced on Beacon Hill this week to make non-competes illegal and unenforceable in Massachusetts.

Richard Tibbetts of StreamBase offers some advice about how you can get your Massachusetts representative and state senator behind the bill.

Will Brownsberger is the state rep from Belmont/Cambridge who introduced the bill.

Here's the key legalese:

    Any written or oral contract or agreement arising out of an employment relationship that prohibits, impairs, restrains, restricts, or places any condition on, a person’s ability to seek, engage in or accept any type of employment or independent contractor work, for any period of time after an employment relationship has ended, shall be void and unenforceable with respect to that restriction.

Just today, Play Hard Sports CEO Jeffrey Anderson was telling me how non-competes make it really challenging to get the best people aboard a new company... not a problem they have out in California.

Worth reading is Angelo Santelli's blog post on the bill:

    One argument that has been made in favor of non-competes is to prevent a cadre of engineers from leaving a company en masse to start another potentially competing company. I actually witnessed this first hand while at Shiva and I still don’t like non-competes. It was a mistake to lose these great engineers in the first place. The second mistake was not investing in their business and getting a seat at the table in the event that they were successful, which they eventually were.

    I commend Rep. Brownsberger for filing this bill and hope it passes. All in favor say, “Aye”.

...To which I offer a hearty "Aye."

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Tuesday, January 13, 2009

Living in Ponzi's Old Digs

I bumped into Izhar Armony of Charles River Ventures at a panel last month, and somehow the Jack Madoff scandal came up...

... which led to a discussion about Charles Ponzi, the Bostonian who invented the Ponzi scheme.

Armony asked me if I knew who was living in the old Ponzi mansion in Lexington. I said I had no idea. Armony replied that Ofer Gneezy, CEO of the VOIP services firm iBasis, bought it in 2000, right after the company's IPO. Just some interesting trivia...

Gneezy told me that he was simply looking for a house, and only later did he discover who the previous owner was. Makes for good stories at parties, he said.

The mansion was worth about $40,000 in 1921 when Ponzi's estate was liquidated. Gneezy bought it for $2.8 million. Here's the Zillow listing.

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Lightwedge leaving Nantucket

Lightwedge co-founder Debbie Bennett e-mailed this week to let me know that the company is closing its small headquarters office on Nantucket, and moving its downtown Boston office to less-pricey space in Newton. "...[T]he economy of 2008 and especially forecast right now for 2009 makes it imprudent to keep extra offices open," Bennett writes. "We have been greatly affected by the changes in the economy but are hanging in there and it’s all interesting and challenging still."

I wrote about the company last summer; they make a line of really nifty book lights.

There's quite a debate about the significance of the move over at YACK ON, a Nantucket community site.

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Tuesday, January 6, 2009

Start-Up Activity Continues at DEC's Old Mill

My most recent Globe column focuses on a hardware start-up, SiCortex, that is based in the Maynard mill complex that was once home to Digital Equipment.

From the piece:

    If you want to understand the phenomenal regenerative ability of Massachusetts' innovation economy, head for the hulking brick mill in Maynard, close by the Assabet River. Carpets were made there in the 1840s, until an economic downturn, sparked by bank failures, killed that company. A new textile firm at the mill made blankets and uniforms for the military during the Civil War. That business failed in 1898, and was replaced by American Wool Co., which shut down its production facility in Maynard in 1950.

    Starting in 1957, for more than three-and-a-half decades, the mill was Digital's world headquarters. In the 1990s, the career site made the mill its base. And more recently, it has been home to dozens of start-ups, including the video game company 38 Studios, founded by Curt Schilling, and SiCortex, founded by Leonard and two fellow Digital alums, Matt Reilly and John Mucci.

Here's the video, which features SiCortex CEO Christopher Stone talking about the energy-efficient design of his products.

You can find out more about the mill's history here... and there's still an active group of DEC alums with a site here.

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Monday, January 5, 2009

Which Mass. Companies Will Be at CES This Week?

The Globe's Hiawatha Bray wrote a piece over the weekend about some of the Massachusetts companies that'll take part in the Consumer Electronics Show this week in Vegas, including companies like MyVu, Tivoli Audio, and iRobot. Many smaller firms, like Zink Imaging and WiTricity (not mentioned in the piece), will have hotel suites instead of booths on the show floor.

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Sunday, January 4, 2009

Free DVDs: MIT Robotics Conference

(Update: DVDs have been claimed. Thanks for playing!)

If there's an Innovation Economy reader out there who'd like a set of DVDs from last month's MIT Robotics Conference, drop me a note. (Postage is on me, as long as you're here in New England.)

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