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

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:

...[I]f an institutional venture capital round (not angel, f&f) is raised within 180 days, we have option to participate. It’s one of a couple variables we changed this year including preference to initiatives with some momentum (could be bringing together board/advisors/team, prototype stage) behind it (versus raw concept/idea), and letters of recommendation from administration/faculty, advisors/board members or others close to the initiative that could speak to it or the team.

Let's Brainstorm About How to Stop the Student Exodus

Sunday's Globe column focused on why Massachusetts needs more initiatives to retain the students who come here to get smarter. From the piece:

Convincing more newly minted grads to build their careers here isn't just about helping Massachusetts add more taxpayers and end a pathetic streak of losing population in the 25-to-34 age bracket. It's about bringing new ideas and energy to our established business giants (think Raytheon, Fidelity, and Biogen Idec) and supporting young entrepreneurs who want to start businesses of their own.

The West Coast, unfortunately, has done a much better job of taking new entrepreneurs seriously over the past two decades. Google, Yahoo, and Facebook were all founded by sharp-but-unproven whippersnappers. Here, iRobot Corp. is the only significantly sized company to have been started and run by recent grads.

I offered up seven ideas, free for the taking (or the adapting), which I think could move the needle. But I'm sure there are at least 70 other good ones.

I've been getting lots of e-mail about yesterday's column ... some of it explaining that Massachusetts high cost of living drives students away (um, have you ever tried to rent an apartment in Palo Alto?) ... some of it explaining that the state's anti-business attitude does it ... some blaming too much traffic. But what if we stopping trying to find things to blame and simply started reaching out to students, helping get them connected to the business community?

Here's the video that accompanies the column -- an interview with Harvard student Travis May about his company, StudentBusinesses.com, and student entrepreneurship in general:

A Gathering for Student Entrepreneurs, This Saturday at MIT

MIT senior Albert Park is putting together an event called Underground 2008 this Saturday, May 3rd. All student entrepreneurs are welcome. As Albert explains it, the goals are:

INSPIRE: Hear the latest and greatest on how your fellow entrepreneurs are changing the world.

CONNECT: Quiz successful entrepreneurs, investors, and each other for some new perspectives on entrepreneurship.

CREATE: Befriend your college's entrepreneurs and learn about what resources are available for you.

Students from MIT, Harvard, Babson, Olin, BC, Tufts, and BU are expected to attend -- but everyone is welcome. Dharmesh Shah, founder of HubSpot, will give the opening keynote. That'll be followed by panels on "Student Successes," "Alumni Entrepreneurs," and "Investors in the Hot Seat."

It starts at noon on Saturday. There's a Facebook group, but no Web site for the event. You can RSVP (with your name and college) to apark_87@mit.edu - and sooner is better. In addition to Albert, Underground 2008 is being organized by:

Harvard College Entrepreneurship Forum
MIT Science and Engineering Business Club
StudentBusinesses.com

How Do We Better Connect Students to Boston's Innovation Economy?

I joined a group of people for an informal dinner discussion last night, the topic of which was: “What can we do to better connect Boston’s student population with the entrepreneurial sector in town?”

The dinner participants included three student entrepreneurs; two venture capitalists (representing Sigma Partners and Spark Capital); profs and career services folks from Babson, Boston College, Boston University, and Tufts; one person from an industry association (Tom Hopcroft of Mass TLC) and one from an angel investing group (James Geshwiler from CommonAngels); and several entrepreneurs.

It was an interesting mix of perspectives. Everyone felt that we can do a better job of exposing students to entrepreneurial companies here, and helping them build the skills and connections they’ll need to eventually start their own business. Some of my notes from the discussion are below (they’re not comprehensive), but let me try to summarize what I heard as some of the key constructive recommendations for addressing the issue:

1. Our local industry groups, trade associations and conferences ought to offer student rates, even if they limit the number of students that can attend a particular event. Many do, but they don’t always make that clear.

2. Students and universities are eager to have more entrepreneurs and venture capitalists visit their campus to talk about what they do. They’re especially interested in hearing from companies with summer internship or job possibilities. I know entrepreneurs and VCs are very busy, but would it be too much to ask to have them do this once a year, or once a semester – at their alma mater or another local school?

3. It seems odd that Boston area students travel out to Silicon Valley for “Tech Treks,” where they visit the leading lights of Silicon Valley, yet there are very few opportunities for them to visit companies in their backyard, like EMC, Akamai, Genzyme, Zipcar, and Harmonix (creator of the “Rock Band” and “Guitar Hero” games.) Why isn’t there a weekly series of lunches, on Fridays say, that would run throughout the academic year, and invite a group of b-school students (and even a few motivated undergrads) to visit our most innovative local companies? If demand increased, this could be something that multiple companies do each Friday throughout the school year.

And what about the VCs? I wonder why there isn’t an “open house” once a year up on “Mount Money” in Waltham, where most Massachusetts VCs have an office, that welcomes students and offers an overview of each firm’s portfolio companies.

4. We need more events organized jointly by the students or faculty of several different schools. It’s nice that some schools have entrepreneurship conferences, or business plan competitions, but working together seems like it could accomplish much more. It was encouraging to hear that the BC and Harvard entrepreneurship clubs are beginning to work together on some initiatives.

5. We need to do a better job of marketing/communicating to students the high-growth industries that are rooted here, from robotics to cleantech to videogames to life sciences. This could be through a combination of on-campus events, advertising in student newspapers, or creating online resources especially for students. This hasn’t been a traditional area of focus of our trade associations – aside from organizing the occasional recruiting fair.

Participants Rob Go from Spark Capital and Gregg Favalora of Actuality Medical have already posted their thoughts about the dinner, beating me to the punch.

My rough notes follow:

- Companies ought to list internship opportunities on their sites. (Career services people at Boston-area universities: are there specific sites that you recommend to students, or see them using, that companies should also post to?)

- Cindy Klein Marmer from Babson said she uses the BBJ’s list of the top 100 fastest-growing companies to suggest places students might want to work or intern. I published a list of fifty “cool” companies recently. It’d be nice to create a “list of lists” somewhere that career services folks, and students, could peruse. Don McLagan mentioned that MITX has a list of its member companies, all involved in digital media and technology. Other trade associations, like Mass Biotech, also have good member directories.

- Pamela Goldberg of Tufts mentioned that she brought a table of Tufts students to a recent BBJ event honoring the 100 fastest-growing companies. That was the first time Tufts had done that, and she thought it was a success.

- One issue at the federal level that has people concerned is the availability of visas for foreign students, so they can stick around once they’ve finished their studies. Paul McManus from BU said that 47 percent of BU’s grad students are in the country on a visa, and most can’t stay to work here afterward.

- Entrepreneurial companies need someone to start today, CommonAngels’ James Geshwiler pointed out. They don’t have long-term hiring plans where they can recruit on campus in the fall for someone who’ll join them next June.

- One issue is that students aren’t inclined to leave campus very often for activities. Pamela from Tufts said her approach to is to bring entrepreneurs to campus for group lunches with students.

- Christine Griffin from BC talked about a recent visit to Silicon Valley. “There are no obvious hang-outs here,” she said, that compare to University Ave. in Palo Alto, where you might bump into Facebook’s Mark Zuckerberg or Ross Mayfield of Socialtext.

- She proposed a great idea, which is to pool resources among schools and create a “collaborative seminar” that would involve studying local companies and then visiting them. She’s working with some Harvard students on this project, and the idea is that students from a few local schools would each set up two or three company visits, sharing the burden.

- Paul McManus noted that faculty involvement in that kind of project is important, because it gives things continuity as students move on.

- At many schools, it’s not clear who the faculty point person is who could connect an entrepreneur to the most promising students – either for jobs or internships. Actuality Medical’s Gregg Favalora said that each school ought to have a “node” … an individual who is well-connected to the entrepreneurial and VC world, and also has a great sense of which students are hunting for jobs, internships, or even seed funding for a start-up idea. Running a blog would make it clear to the rest of the world who that person (or those people) are at a school.

- James talked about “the power of role models.” Celebrity entrepreneurs, like Zuckerberg, encourage others to try to make their ideas work. “We have the anti-celebrity mentality in New England,” he said. It was jokingly suggested that I start an East Coast version of Valleywag.

- Roger Krakoff of Sigma noted that Y Combinator is doing great work helping to cultivate early-stage start-ups. But he said that New York and Atlanta are much more focused than Boston right now on spinning up excitement about their tech scenes. He mentioned Tech Meetup in New York, which happens once a month. “New York is far more vibrant right now,” he said.

- Among the events in Boston compared to Tech Meetup were WebInno, OpenCoffee, Mobile Mondays, Biotech Tuesdays, and Tech Tuesdays, the new monthly event organized by software pioneer and all-around nice guy Dan Bricklin. Most are free to go to, and open to students. Krakoff spoke very highly of events organized by TiE, including their entrepreneur forum coming up in May. A student membership is $25.

- Hopcroft mentioned that students get half-off the member rate on MassTLC’s breakfast events, which makes the price $20.

- Favalora told a very funny story about TellMe Networks recruiting at Stanford by storming computer labs at midnight and handing out free pizzas. This was during the dot-com boom.

- Jessica Athas of The Martini Workout, a fitness entrepreneur, said that entrepreneurs from outside the tech world can sometimes feel excluded, since so many of the networking and educational events that happen here are geared to tech and biotech.

- Paul McManus said we ought to expose liberal arts students to entrepreneurship, too – not just engineers. Pierre Omidyar, eBay’s founder and a Tufts alum, wasn’t a programmer.

- Krakoff suggested we might need to create an event (“this big, combustible event” were his exact words) that brings together entrepreneurs with budding entrepreneurs, ideally from many different schools: Tufts/BU/Babson/Bentley/etc.

- “Let’s make the community responsible for the problem,” Krakoff suggested. “Boston needs to promote itself better.”

Innovation Economy’s “Cool Half-Hundred” Companies

Every week or two, someone e-mails me asking for my take on interesting companies in the Boston area. Usually, they’re hunting for their next job –- or they’re students looking for a fun place to intern.

Here’s my off-the-cuff list: call it the Innovation Economy Cool Half-Hundred. They’re chosen with complete disregard to any sort of scientific method. There were basically two questions I considered:

- Is the company working on something important, or at least fun?
- If you worked there, would you put people to sleep explaining what you do?

If the answer to the first question is “yes,” and the second “no,” the company is eligible. (You’ll notice a distinct shortage of enterprise software and telecom companies on the list.) At the bottom of the list, I suggest a few ways to discover other interesting new ventures. The list is in no particular order, and it’s not comprehensive: if your company isn’t on it, that doesn’t mean you can’t lay claim to coolness.

Feel free to share other advice, or list other cool Boston-area companies, in the comments area below.

Consumer Electronics

1. Ambient Devices: Integrating information displays into everyday devices, like umbrellas that tell you when it’s going to rain. (Video of Ambient founder David Rose.)

2. Bose: Noise-cancelling headsets, Wave radios, iPod docks, and other stuff that makes the world a better-sounding place.

3. E Ink: Pursuing the holy grail of electronic paper. Currently supplies high-contrast, low power screens to Amazon’s Kindle and Sony Reader, the leading e-books.

4. Emo Labs: Trying to merge speakers and displays.

5. Myvu: Digital displays integrated into eyeglasses.

6. ZINK Imaging: Polaroid’s last great hope, this spin-off is bringing to market technology for pocket-sized digital photo printers. (Video with ZINK CEO Wendy Caswell.)

Web 2.0 / Digital Media

7. Brightcove: Tools for publishing, measuring, and monetizing video on the Web. (Video of Brightcove CEO Jeremy Allaire.)

8. Frame Media: Delivering content to Internet-connected picture frames.

9. Going: Online social director for people interested in going out to live events.

10. Maven Networks: Pioneer developer of tools for online video publishing; acquired by Yahoo in 2008, so the future may be a bit hazy.

11. MyPunchbowl: Trying to knock off Evite as the dominant site for party planning.

12. ScanScout: Managing ads embedded in Internet video.

13. TripAdvisor: The definitive word on where to stay. Developing into a social network for travelers. Owned by Barry Diller’s Expedia Inc. in New York. (Video of TripAdvisor CEO Steven Kaufer.)

14. Veveo: Video search for mobile devices. (Video that includes a short interview with Veveo co-founder Murali Aravamudan.)

15. Visible Measures: Providing data about how users engage with video on the Web.

Product Design / Web Design / Marketing

16. Brickyard VFX: Visual effects for TV commercials and shows like “CSI: NY.”

17. Continuum: Design firm with offices in West Newton, Milan, and Seoul. Lots of work on medical devices, consumer products like the Swiffer, and hardware like the $100 laptop.

18. IDEO Cambridge: New England outpost of the famed Silicon Valley design firm that has worked with Apple, Palm, HBO, and Prada.

19. Sapient: Interactive shop whose clients include Staples, Celebrity Cruises, Sony, and Harrahs.

Software, Software-as-a-Service, Virtualization

20. Avid Technology: Software for movie, TV, and music editors and producers. (Video of Avid employee Matt Feury.)

21. Cakewalk: Software for amateur and professional musicians.

22. Desktone: Helping companies better manage desktop software by delivering it virtually.

23. Matchmine: Funded in part by the Krafts, the first family of New England football, company aims to deliver more personalized content: music, video, and text.

24. Nuance: The world leader in speech recognition software, right here in Massachusetts. (Video of Nuance exec Peter Mahoney demoing Nuance-powered GPS system.)

25. Vlingo: Talk to your cell phone and have it understand you. Run by former Nokia, SpeechWorks, and Groove Mobile execs. (Video that includes a short interview with Vlingo co-founder Mike Phillips.)

Networking

26. Airvana: Infrastructure for high-speed wireless networks. Also, developing femtocells (cell phone booster devices) for consumer use at home. Run by former Apple exec Randy Battat. (Video of Battat explaining the femtocell market.)

27. Akamai: The FedEx of the Internet.

28. Peermeta: Software platform to improve the end-user experience on mobile devices. Started by Acopia Networks founder Cheng Wu.

29. Verivue: Advanced networking services for the delivery of digital media.

Enterprise

30. Old Road Computing: Aims to help enterprises better manage mobile devices.

Hardware/Chips

31. Luminus Devices: Brighter LEDs for TVs and lighting applications.

32. Nantero: Nanotube-based memory chips.

Services

33. Zipcar: The world’s largest car-sharing firm is heavily dependent on technology. (Video of Zipcar CEO Scott Griffith.)

Robotics

34. Boston Dynamics: Creator of walking robots like BigDog, as well as simulation software for the military.

35. Hydroid: Robots that don’t mind getting wet.

36. iRobot: Robots for the living room and the battlefield.

37. Kiva Systems: Robotic warehouse workers. (Video with Kiva CEO Mick Mountz.)

CleanTech, Power, and Batteries

38. A123 Systems: Nanophosphate technology allows batteries to pack more punch; an A123 division called Hymotion also converts hybrid vehicles into ultra-high-mileage plug-in hybrids.

39. Great Point Energy: Converting coal into natural gas, while sequestering the CO2.

40. Konarka Technologies: This Lowell company wants to put thin, flexible solar cells on just about every surface exposed to the sun. (Video that includes interview with Konarka CEO Rick Hess.)

41. 1366 Technologies: Trying to bring down the cost of silicon-based solar cells.

Games

42. Conduit Labs: Start-up trying to bring more fun and games to social networks. Founded by Nabeel Hyatt, formerly of Ambient Devices.

43. GuildCafe Entertainment: Creating an online hang-out for players of role-playing games.

44. Harmonix Music Systems: The MIT spin-out that gave birth to “Guitar Hero” and “Rock Band.” Now owned by MTV Networks. (Video visit to Harmonix headquarters.)

45. Rockstar New England: known until recently as Mad Doc Software, this shop specializes in bringing artificial intelligence to games. Acquired in April 08 by Rockstar Games, publisher of “Grand Theft Auto.”

46. Turbine: Builder of online fantasy realms linked to “Lord of the Rings” and “Dungeons and Dragons.”

Research & Development

47. BBN Technologies: You’ve heard of the Internet? They helped build it. Ever sent an e-mail? They sent the first one. Since 1948, they’ve been working on the edge of what’s possible in software and networking.

48. DEKA Research: OK, it’s in Manchester, NH (about 45 minutes north of Boston). But founder Dean Kamen is the Willy Wonka of New England tech, always cooking up something tantalizing. (Video visit to DEKA headquarters.)

49. Google Cambridge: It’s not exactly Mountain View, but Cambridge engineers have contributed work to Google’s Android mobile operating system…and they’ve just moved into swanky new office space.

50. Microsoft Research Cambridge: Just set up in 2008 to focus on core computer science, design, and social science.

* * * * * * *

3 Ways to Find More Cool Companies

1. Go to events like the MIT $100K competition, the monthly WebInno gathering, the Mass TLC Investor Conference, and OpenCoffee Club. (Other events are listed in the right-hand column here, under “Regular Gatherings.”)

2. Meet someone who works at the Cambridge Innovation Center, and ask them to show you around. An astonishingly high percentage of cool start-ups in town start off in this space.

3. Keep an eye on new company fundings on the Web sites of local venture capital firms. Some good places to start: Prism, Flybridge, Sigma, Matrix, Polaris, Highland, Spark, General Catalyst and Greylock.

Summer Programs for Entrepreneurs in the Boston Area

I'm only aware of two summer programs here in the Boston area for entrepreneurs who want to spend the warmest months of the year penned up indoors, working to get a company off the ground.

One is run by Y Combinator in Cambridge. Unfortunately, the deadline for submissions was yesterday. They've helped launch companies like Reddit, Loopt, Justin.TV, and I'm In Like With You. YC invests $15,000 in a company with two team members, in return for usually about 6 percent of the equity in the company. "The goal is usually to give you enough money to build an impressive prototype or version 1, which you can then use to get further funding," they say.

The other is run by Highland Capital Partners in Lexington. It's called Summer@Highland, and applications are being accepted through April 22. Unlike Y Combinator, though, this one is open only to current graduate and undergrad students (as well as folks who graduated between December 2007 and the present.) But only one member of the team has to meet that criterion. Teams get office space either in Lexington or Menlo Park, CA.

And here's an important element: "...if a team goes on to raise venture capital within 180 days from the end of the program, then Highland [must] be provided the option to co-invest in up to 50% of the total financing round."

If you know of other summer programs in Boston/Mass./New England whose goal is to help entrepreneurs get companies off the ground, post 'em in the comments.

Why Student Entrepreneurs Matter

I dropped by a meeting of the Harvard College Entrepreneurship Forum yesterday evening to give my "stump speech" about New England's Innovation Economy.

But the most interesting parts of the evening were two things that happened once I was finished...

1. The room was full of student entrepreneurs not just from Harvard, but also from BC, WPI, MIT, and BU. It felt like there was something really powerful about students from different schools getting a chance to meet and talk about their start-up ideas with one another...especially students from schools that don't have, say, MIT's endless parade of entrepreneurship-related events and competitions.

2. I asked students about some of the issues or frustrations they encounter in trying to connect with entrepreneurs and investors from the "real world" (IE, post-collegiate people). To me, getting students plugged into the innovation economy here is Job #1 if we want to be able to hire the smartest people in our region and fund the most important new businesses.

Here are some issues they raised (and some that occurred to me as I listened to the students talk):

- The costs to go to most events put on by Boston's technology networking groups (MITX, MassTLC, Mass Network Communications Council, etc.) are too high. Why don't these organizations have a $10 or $20 student rate for all of their events, even if they limit the number of tickets sold at that price to five or ten?

- Why are there "tech treks" in Silicon Valley, where students can go and visit the hot Valley companies, but no similar tech treks in Boston? I've not heard business school students talking about their visits to Akamai, EMC, Genzyme, Boston Scientific, iRobot, etc. (Am I totally wrong about this?)

- Where can students go to meet investors? (Yes, I suggested events like the MIT and HBS venture capital conferences, and MIT's $100K competition)

- Where is there a list of cool start-ups to know about, intern with, and possibly work for? (I may take this one on at some point)

- Some Harvard students have created a Web site called StudentBusinesses.com, which aims to connect student entrepreneurs with one another. (I heard last night that one of the founders is currently out in California, looking to raise money.)

- Why isn't there one big event every academic year, or one a semester, that brings student entrepreneurs from all of the area's schools together...both to meet each other and to connect with entrepreneurs, executives, and investors from the New England business community?

My big obsession right now is what Boston and New England can do to capture more of the energy and intelligence of the students who come here to get an education. I am convinced this is the simplest way to invest in the future health of our innovation economy. We don't need to retain 100 percent of all students, of course... but retaining 5 or 10 percent more, whether they're starting their own businesses or working for others, would have a huge impact on the economy here.