Innovation Economy

Stonebraker's Latest Start-Up: Byledge

2008-07-25T13:47:00.003-04:00

Database pioneer Mike Stonebraker is quickly becoming one of Boston's most prolific parallel entrepreneurs. When I wrote about him last December in the Globe, it sounded like there was something new cooking.

Turns out, there's at least two new pots on the Stonebraker stove. (Stonebraker is a founder of StreamBase and Vertica.. .and earlier in his career, Ingres Corp., Illustra, and Cohera.)

The first is Byledge, a new company funded by Kepha Partners and Flybridge Capital Partners (formerly IDG Ventures Boston.) There's no site yet, and no funding announcement. The company hasn't set up offices, but there's a team taking shape, and a rough strategy.

I'm told, by someone who is familiar with the company, that Byledge will focus on "long tail travel search," scouring the Web for hidden information about lodging, restaurants, activities, and events and organizing them in easily searchable databases. (Another person who knows about Byledge described it as "semantic enrichment" -- trolling for unstructured data and then applying the right tags and labels and categories to it.) If you're looking to go salmon fishing in Alaska, how do you find all the guides, and information about the terrain they cover? Byledge aims to supply the answer.

That places the company squarely in the middle of Boston's travel info cluster, which includes companies like TripAdvisor, ITA Software, and Kayak, which is partly based here and partly in Connecticut. Kayak co-founder Paul English told me he hadn't yet heard of Byledge when we spoke yesterday. The idea sounds to me like it's closest to what TripAdvisor does -- but TripAdvisor relies heavily on human editors to organize and clean up information from around the Web.

The Byledge technology originates at MIT, where Stonebraker is a prof. I'm told it was developed by a researcher named Mujde Pamuk, who has worked alongside Stonebraker at CSAIL, the computer science and artificial intelligence lab. (Here's some of Pamuk's published work, with Stonebraker as co-author.) Also involved in the start-up are Andy Palmer, who also helped start Vertica; Vince Russo, a former chief architect at Lycos; and Mark Watkins, who headed the development organization at the enterprise search start-up Endeca, and before that worked at PTC.

Stonebraker isn't talking about the company, describing it as "currently in stealth mode" in an e-mail. Chip Hazard, the Flybridge partner who's serving on Byledge's board, wouldn't talk about the company's focus but hinted that it could be broader or different than travel. I'm told that Byledge may try to both license its technology to other companies and also run its own destination site on the Web, a hybrid strategy that Paul English characterized as pretty difficult to pull off.

Andy Palmer said that "we're gonna work pretty hard to keep our cards close to the vest." But he did tell me that both he and Stonebraker will remain involved with Vertica. He wouldn't say how much the company raised, except to describe it as "well-financed." Hazard said they have "enough to get the company to critical milestones. It's not $50,000." Tango, as is his habit, wouldn't comment on the company at all. Byledge is the third investment for Kepha, which is essentially a one-man firm.

Stonebraker's second new project is an initiative that will be part of Vertica, code-named Horizontica. Palmer describes it as an open source database designed for cloud computing applications. Sounds like there's some cool potential there.

Vertica's also in the midst of preparing for a move from Andover to Bedford.

How many projects can one person juggle simultaneously, while still teaching at MIT? Stonebraker seems intent on setting a record.

(A thank-you to Genotrope, where I stumbled across the first mention of Byledge.)

Highland Capital: We Do Cleantech Now, Too

2008-07-25T10:54:00.003-04:00

Paul Maeder, co-founder of Highland Capital Partners, was a guest on NPR's 'Talk of the Nation' yesterday, analyzing the state of the economy. Maeder used the radio spot, essentially, to announce that Highland's now interested in doing energy and cleantech investments. In talking about innovation in the post-war period, Maeder suggested that there have been three major cycles:

"The next wave of innovation is going to be around energy and the environment," Maeder said, suggesting that there are big opportunities in "energy production, and making energy consumption more efficient."

I e-mailed Maeder this morning to ask him whether Highland is planning to actually dedicate money and partner time to the cleantech/energy space, as Polaris and General Catalyst have. He said they are, and that he's "on it full-time now."

Highland's only real cleantech investment so far was a Utah company called Amp Resources, which developed geothermal power generation facilities; Amp was sold last year for $90 million to an Italian company, Enel. (An earlier deal to sell Amp didn't go so well.) Maeder and Dan Nova from Highland had served on Amp's board.

As a side note, I spotted Highland's other founder, Bob Higgins, having breakfast this week with ex-Presidential advisor and Harvard prof David Gergen. As for whether Gergen will be joining Highland as a venture partner, Maeder would only say, "I can neither confirm or deny." But I think that's a long, long-shot.

Facebook Drops $250K on Boston's LuckyCal

2008-07-24T16:50:00.005-04:00

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?

2008-07-22T13:34:00.003-04:00

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

2008-07-21T08:14:00.004-04:00

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

2008-07-17T09:11:00.004-04:00

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

2008-07-13T10:15:00.004-04:00

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

2008-07-09T15:48:00.003-04:00

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?

2008-07-08T11:13:00.004-04:00

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

2008-07-02T15:28:00.003-04:00

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

2008-07-02T08:24:00.003-04:00

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?

2008-06-25T16:47:00.007-04:00

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

2008-06-22T12:50:00.003-04:00

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

2008-06-19T22:36:00.007-04:00

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

2008-06-19T12:35:00.003-04:00

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!

2008-06-18T13:25:00.003-04:00

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

2008-06-17T09:20:00.006-04:00

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?

2008-06-16T11:04:00.004-04:00

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

2008-06-16T10:00:00.003-04:00

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

2008-06-14T08:03:00.006-04:00

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

2008-06-12T15:22:00.008-04:00

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

2008-06-11T11:49:00.002-04:00

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

2008-06-11T11:43:00.003-04:00

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'

2008-06-10T08:20:00.003-04:00

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

2008-06-09T12:07:00.004-04:00

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.