Over the last week, 10 lucky companies have been getting the calls from HAXLR8R: they’ve been admitted to the inaugural session of the startup world’s newest venture incubator. Following the popular model pioneered by TechStars and Y Combinator, HAXLR8R will provide teams with a stipend of $6,000 per founder and about three months of mentorship, in return for a 6- to 10-percent equity stake. At the end of the session in June, companies will pitch their businesses to investors at a “demo day” in San Francisco.

There are just two big differences between HAXLR8R and all the other incubators. First, the program isn’t admitting software or Internet startups. It’s designed for companies building real stuff, rather than the usual mobile apps or consumer Web services. Second, it’s not actually located in San Francisco or any of the other typical U.S. startup hubs, like Boston, New York, or Boulder. In fact, it’s not even in the same hemisphere. HAXLR8R will gather its first class of startups at the Shiling Industrial Park in the Nanshan district of Shenzhen, a high-tech manufacturing city north of Hong Kong.

A recruiting poster for HAXLR8R

The theory behind the new program is that successful gadget builders—whether they’ve developed a toy, an appliance, or some kind of consumer device for health, fitness, or travel—will eventually have to figure out where to mass-produce their products. And chances are the answer will be China. Despite the new scrutiny being applied to U.S. consumer electronics companies over labor conditions in Chinese plants, China still has the world’s richest supply of low-cost manufacturing facilities, along with the engineers who know how to get them tooled up to make new things.

But to get something built in China, you have to know who to talk to, and the program at HAXLR8R is intended to smooth the way. Startups in the program will be “coming into an environment where they can work on their product and figure out how to manufacture it,” says Cyril Ebersweiler, one of the program’s co-founders. “They will get instant access to relationships which would take a year or more to develop on their own.”

HAXLR8R finished its selection process last week and began notifying the admitted companies. Ebersweiler says the program received “way more applicants than we expected,” from all over the world. The majority of the applications came from U.S. startups, but the organization also heard from companies in Europe, Asia, and India. The mix of applicants included “startup entrepreneurs, hackers, makers, and [people from the] open source movement; social entrepreneurs as well,” Ebersweiler says. “Most of the applicants have a working prototype.”

The 15-week HAXLR8R program starts on March 1. Teams will spend the first 13 weeks in Shenzhen, building their prototypes and gathering feedback from potential customers. Then they’ll decamp to San Francisco, where they’ll … Next Page »

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In the nearly five years since we started Xconomy, I’ve looked forward to few events more than our Silicon Valley “Xconomy Xchange” forum last night with Evernote CEO Phil Libin, Sequoia Capital partner Roelof Botha, and Morgenthaler Ventures partner Gary Little. I’m a longtime power user of Evernote’s online notekeeping application—it’s installed on my Mac, my iPad, and my iPhone—and interviewing Libin and Evernote’s biggest investors in front of a live audience was a little bit like being a Trekkie on stage with William Shatner, Leonard Nimoy, and Gene Roddenberry. Except, Libin is funnier.

We’ve got photos from the event in slide-show form below. Many thanks to Hanno Botha, newly wedded husband of Xconomy San Francisco’s director of business development Rachel Botha, for playing Peter Parker. (Hanno and Rachel are no relation to Roelof.)

While I’m thanking folks: I want to extend a special thank you to Microsoft Silicon Valley for hosting the event, especially to BizSpark evangelist Brett Laffel, operations manager Sherree Curtiss, and Paul the A/V technician. We’re also grateful to event sponsors Silicon Valley Bank and Turnstone (which showed off its forthcoming iPad app, complete with Evernote integration), event partners Dealmaker Media and Plug and Play Tech Center, design sponsor Mixtur, and Xconomy’s regular lineup of underwriters and venture members. Ching Wu at Morgenthaler Ventures, Andrew Sinkov at Evernote, and Mark Dempster at Sequoia Capital provided invaluable help spreading the word about the event.

Quite a few people tweeted from the event. You can get a look at the conversation by searching Twitter for the hashtag #xcevernote. One of the most tweetable gems of the evening was Libin’s formulation of Libin’s Law: “In a startup, you have to multiply Moore’s Law by Murphy’s Law. Every year, there are twice as many things that can go wrong.” On the final page in our photo gallery, you’ll find a Storify compilation of notable tweets from the event.

	NEXT IMAGE >>
	L to R: Wade Roush (Xconomy), Gary Little (Morgenthaler Ventures), Phil Libin (Evernote), Roelof Botha (Sequoia Capital).
	Photo by Hanno Botha

… Next Page »

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All the cool kids were doing it, so we just couldn’t resist. We’ve created an Xconomy page on Google+, where we’ll share several of our most interesting stories every day. We’ve also added Google+ sharing buttons to all of our stories here on the site—you’ll find them in the sharing box at right, and at the bottom of each story column.

We’re excited to have another great outlet for our content and a new way to engage with our readers online. We’re looking forward to some lively discussions and debates (and hopefully a few +1′s, too!). So please add us to your circles. Who knows, maybe you’ll even let us crash a hangout or two.

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Perhaps you’ve been meaning to buy a ticket to our big Silicon Valley event with Evernote CEO Phil Libin tonight, but you keep forgetting. Well, now’s the time to take action. We still have some tickets available online for $50 ($40 if you work for a startup)—but a walk-in ticket tonight will cost you $95.

Of course, if you’re one of Evernote’s 20 million users, you’d be very unlikely to forget something like that. The company is all about remembering the important stuff in your life—hence the elephant logo.

Now, if your promise to customers is that you’ll protect their digital memories forever, then you sort of have to plan for the long term. But that’s not how most startups think—they’re usually focused on the next product release, not the next decade or the next century. So the message Libin has been sharing lately about wanting Evernote to last 100 years or more is logical, but at the same time pretty radical.

That’s why I wanted to get Libin on stage at an Xconomy event—so that I could ask him how a startup CEO manages to think about the long-term even as he deals with the here-and-now demands of employees, customers, and investors.

And when you have an entrepreneur who says he’s not too concerned about getting acquired or planning an IPO, it takes a pretty special type of investor to back him. That’s why I also wanted to bring in Gary Little from Morgenthaler Ventures, one of Evernote’s earliest backers, as well as Roelof Botha from Sequoia Capital, which recently acquired a larger stake in Evernote by buying out previous investor Troika Dialog.

It’s this very pattern of secondary trading—with newer investors buying out older ones—that could help Evernote get really big without having to worry about going public. Tonight, I’ll be asking Little and Botha how working with Evernote is different from working with their other portfolio companies—and whether Evernote’s serial fundraising strategy can work more broadly.

Of course, we’ll also geek out a bit about Evernote itself, which is one of my favorite online tools. So register now. Meanwhile, for your reading pleasure, here’s an archive of all of my major pieces about Evernote.

Can Evernote Make You Into a Digital Leonardo? (July 2008)

Online Notebook Smackdown: Evernote vs. Springpad (April 2010)

The Rise of Evernote: An Interview with CEO Phil Libin (June 2010)

Evernote Opens a Trunk of Goodies for Online-Notes Fans (July 2010)

Sequoia Leads $20 Million Round for Evernote—Q&A with CEO Phil Libin (October 2010)

Xconomist of the Week: Phil Libin, Evernote, and the Death of the Exit (October 2011)

“Independent of Exit”: Talking Evernote with Morgenthaler’s Gary Little (January 2012)

Evernote Wants to Make Your Memories More Magical (January 2012)

How to Be a 100-Year Startup (January 2012)

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In enterprise data centers, servers and storage go together like hot dogs and buns. One isn’t much good without the other. But if your specialty is baking buns, you probably don’t spend a lot of time thinking about how to improve the dogs. And that, in essence, is one of the limitations that Hopkinton, MA-based EMC has been trying to overcome lately.

The Hopkinton, MA-based company (NYSE: EMC) is one of the world’s leading vendors of storage arrays for enterprise data centers. Because it has always thought of itself as a storage company, it has never crossed the line into building components for servers. And that’s how, even though EMC was first to market with Flash-based memory technology for enterprises, a much smaller company, Utah-based Fusion-IO, was able to come out of nowhere in 2005 and take the lead in a burgeoning new market for solid-state Flash memory chips for servers. Today HP, IBM, and Dell all put Fusion-IO’s ioDrive cards in their servers; the company went public last year and is valued at around $2.1 billion.

But it’s a natural market for EMC, and it wants in, badly. At an event yesterday in San Francisco, EMC took the wraps off a competitor to ioDrive called VFCache. It’s basically a card full of Flash modules that fits into a “PCI Express” or PCIe slot in a computer server, where it provides an instant memory upgrade. That allows the CPU to get work done faster, without having to slow down to wait for data from the storage array.

EMC's Pat Gelsinger introducing VFCache, aka Project Lightning

How EMC came back from behind in the server-side Flash business is an interesting story of internal innovation. Pat Gelsinger, president and chief operating officer of EMC’s flagship Information Infrastructure Products division, told me yesterday that to help EMC catch up with Fusion-IO, he authorized an unusual skunk works project, with most of the engineering team isolated in EMC’s facility in Tel Aviv, Israel. “We hired the very best people and treated it like an internal startup,” Gelsinger said. “We set incredibly focused goals for the team. We told them not to go to corporate meetings,” but to concentrate solely on “Project Lightning,” the code name for the VFCache product line.

That was the only way to get the job done once EMC had determined that it had to build, not buy, its own alternative PCIe Flash product, Gelsinger says. “Organic innovation is very hard in a big, successful company,” he says. “There are a lot of antibodies saying, ‘No, you can’t do that, we can’t go that fast.’ There are a thousand reasons these things can slow down in a company. So having a very hands-on, top-down focus, combined with a very maniacal, senior, aggressive team, is really what’s required.”

Flash memory, a technology pioneered by Toshiba, is far more expensive than hard drive storage, but it also works much faster. Companies have begun to put extra Flash-based “tiers” of memory between servers and storage arrays in order to address the gap created by ongoing improvements in CPU speeds. Hard drives just can’t read or write data as fast as today’s multicore processors can suck it in and spit it out, which means CPUs are often sitting idle, waiting for data to arrive.

To speed things up, EMC has been adding Flash memory to its storage arrays since 2008—in fact, it has shipped more Flash memory to enterprise customers than all other vendors combined. But before Project Lightning, it hadn’t tried putting Flash into servers themselves, where the benefits are … Next Page »

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You wouldn’t throw a fancy dinner party in a 7-Eleven. You wouldn’t hold a symphony concert in a subway station, or teach a meditation class on a tilt-a-whirl ride.

So why does anyone expect readers to read long articles on the Web?

Call me a traitor to my kind, but I think the World Wide Web is a terrible medium for long-form writing, precisely because of the mismatch between content and venue. The basic problem is that browsers are for browsing. Today’s commercial Web, where no morsel of exposition is more than one saccade away from a link, a logo, or an ad, is an impossible place to do any deep thinking.

No one designed this outcome. It’s just that the medium grew up so fast, evolving in less than 20 years from a hypertext file-sharing system at a European physics laboratory into today’s infinite digital bazaar. There wasn’t much time to think about whether it really made sense to translate our collective creative output into HTML, dump it onto Web servers, and pay for the whole operation with hyperlinked ads that, by their very nature, take readers away from whatever they’re trying to read.

Fortunately, there are folks scouting for ways out of this mess. Over the last few years, programmer-entrepreneurs like Marco Arment, the creator of Instapaper, have come up with a series of clever applications for separating or “parsing” the Web’s text from its context. This new menagerie of minimalism includes browser-based apps that zap the clutter around Web posts and replace it with a peaceful white background. It also includes mobile apps that let you store these pared-down posts for on-the-go consumption whenever you choose. And in this general category, I’d also include a few new curation services intended to spotlight contemporary and classic long-form writing and make it easier to consume.

I’ve picked 10 of my favorite reading apps and services for quick summaries on the following pages. If you’re like me and you spend a lot of time using the desktop or mobile Web, yet you also love getting lost in a long, thoughtful non-fiction article, then you’ll find some of these services to be life-changing.

But I wouldn’t say that we’ve reached an apotheosis—not by a long shot. At best, the Zen approach to repackaging Web articles is only one element of the solution, and it’s not one that will scale up very well. Already, critics are arguing that this kind of republishing is impolite at best, copyright infringement at worst. As soon as the big online publishers realize how many people are bypassing ads by saving parsed text to Instapaper and the other reading apps, they’ll freak out, the same way broadcasters did when TiVo came along. (It’s no accident that people have called the reading apps “DVRs for the Web.”)

What’s needed now are business models that would make publishers happy about providing more content in these ad-free environments. But we’re a long way from finding payment mechanisms that appeal to readers—let alone equitable ways to split up reading-app revenue between publishers, authors, developers, and platform providers, as a tussle last year between Readability and Apple illustrated (more on that below).

For now, damn the torpedoes—here’s my list of the 10 most interesting and useful reading apps and curation services. I’m going to describe the apps first, because once you understand those, the curation services will make a lot more sense. (For a single-page version of this article that you can export to one of the reading apps, click here.)

First app: Clearly.

… Next Page »

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The Web, as we’ve known it, is all about velocity. It wants you to move along. Click here! Go there! Watch this! As a result, it’s never been a great place to settle down and focus for the 30 minutes it might take you to read an 8,000-word article—the sort of long, in-depth non-fiction that made magazines like The Atlantic, Esquire, and The New Yorker famous.

But the Web is still a great medium for circulating such content, especially to readers who might never shell out for a newsstand, subscription, or digital copy of a magazine. And with the emergence of a new class of mobile and browser-based reading apps, there’s finally a more comfortable way for Internet users to enjoy this long-form writing. I’m talking about services like Instapaper, Readability, and Read It Later, which parse Web pages, zeroing in on just the article text and zapping all the ads and other clutter.

In a column tomorrow I’ll look at these apps one at a time and share some pointers about fun ways to use them. But today I want give you a deep-dive look at the newest addition to this category: an iPad app from Longform.org. If you’re an Instapaper user, you’ve no doubt heard of Longform. Brooklynites Aaron Lammer and Max Linsky originally founded the service to help commuters like themselves who wanted to fill up their Instapaper queues with good long reads—2,000 words and above—before hopping on the 2 train into Manhattan. (The company later added support for Readability and Read It Later.) Well, this Wednesday the company released a dedicated Longform app, which iPad owners can use to access not only the usual feed of articles chosen by Longform’s editors, but a more complete panoply of long-form articles pulled from the websites of 25 top-flight publications, such as The Awl, The Believer, Bloomberg BusinessWeek, Foreign Policy, The New York Review of Books, and Wired.

The $4.99 app is simple, elegant, and attractive—all prerequisites, if you’re promising readers a more serene reading experience. What sets it apart from the other reading apps is the way it fetches a supply of long-form articles from the chosen publications, so users don’t have to. With apps like Instapaper, by contrast, you do the curating yourself: if you find an article on the Web that you want to read later, you click on a special Instapaper bookmarklet in your browser, and it shows up in the app. But before you can do that, of course, you have to get the bookmarklet from Instapaper’s website. That’s two steps too many for most readers, according to Lammer. “I know that to the tech press this sounds ridiculous,” Lammer says, “but Instapaper is too complicated for some people to use. We wanted to create something that … works more directly.”

I talked with Lammer yesterday to get the Longform.org origin story and to find out more about the genesis and mechanics of the new app. An edited version of our interview follows.

For me, the critical question in our conversation was about how quickly the reading habits of Web and mobile users are changing, and what the rising popularity of the de-cluttering apps will mean for the business of publishing on the Web. The easier it gets to obtain ad-free renditions of Web content, after all, the more carefully publishers are going to have to think about whether to put that content on the Web at all—meaning the reading apps could inadvertently help to kill the very industry they feed on. But Lammer argues that the Longform app and its cousin are currently adding to overall page views, not subtracting—and that in any case, where readers want to go, publishers must follow. Read on for the nitty-gritty.

Xconomy: What possessed you and Max Linsky to get into the curation business?

Aaron Lammer: We were both Instapaper users. For both of us, getting the iPhone and starting to read on it was a pretty formative experience. I have a background in publishing and Web stuff, and Max has a background in journalism. We realized that you can burn through an Instapaper queue pretty quickly if you are commuting 45 minutes each way every day. I think it’s really a New York story, because New York is one of the few places where people spend over an hour a day underground, without a connection.

Both of us were hoarding stories, and passing them around internally in a small group. And we eventually said, … Next Page »

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No journalist can resist a good horse race. That’s why most stories about Trulia, the San Francisco-based real estate search company with 17 million users per month, also mention Seattle competitor Zillow (NASDAQ: Z).

After all, both companies were founded in 2005, and both offer fancy map-driven interfaces for canvassing rental listings and houses for sale. Trulia is a bit larger than Zillow (300 employees versus Zillow’s roughly 275). But Zillow beat Trulia to the public markets. It raised $69 million in its IPO last July, while Trulia continues, for the moment, to make do on the $33 million it has raised from venture investors like Accel Partners and Sequoia Capital.

But from my perspective, there isn’t much point in trying to pick a winner in the real-estate search business. The truth is that it’s big enough for both companies. The real prize in this market is an ongoing share of the dollars real estate agents spend on advertising. There are more than a million licensed real estate professionals in the U.S., who earn about $50 billion in commissions annually. Traditionally they’ve plowed about 10 to 20 percent of that income back into marketing and advertising. Do the math, and that’s a $5 to $10 billion industry.

Before companies like Zillow and Trulia came along, the vast majority of this spending went to offline channels: newspapers, classifieds, billboards, direct mail, grocery cart advertising, and the like. But both companies have built thriving businesses selling online ads and related services, with real estate agents now waiting in line to get their glamor shots and phone numbers on the sites’ listing pages.

What really interests me, then, is how quickly the real-estate startups have changed the way people buy homes—and the way agents sell them—even in the midst of the worst downturn in the housing market in generations.

I’ve had a couple of conversations on this theme recently with Pete Flint, Trulia’s co-founder and CEO, and it sounds to me as if both companies are using roughly the same playbook. It involves identifying the most common frustrations plaguing house buyers and real estate agents, and easing the pain by changing the way information gets delivered—whether that’s information about available homes, which was traditionally hard for consumers to find, or qualified leads on home buyers, which is what agents always want more of. “What we are trying to solve for is not only a consumer problem but an industry problem,” says Flint (he’s the one on the left in the photo above). “We not only needed to get smart on consumer needs, but also on how the real estate industry operates-the economics, the personnel, the legal aspects, all of those things.”

British-born Flint got a master’s degree in physics at Oxford and spent five years as a business development executive at UK-based travel site Lastminute.com before arriving at Stanford Business School in 2003. There he met a Finn named Sami Inkinen, who had also studied physics and had done his own spin in the startup and consulting worlds before deciding to pursue an MBA. “We became pretty fast friends,” says Flint. “We had a similar passion for high-tech, and we spent the first year at Stanford bouncing around entrepreneurial ideas.”

As second-year students in 2004-2005, Flint and Inkinen had spend time searching for off-campus housing in Silicon Valley, which is when “the light bulb went on,” Flint says. “At the time there were a handful of regional brokerage sites, but they were not really consumer destinations, and there were some very disappointing national sites, like Craigslist. It hit us that this was a big opportunity that seemed completely obvious, and it was remarkable that no one had done anything that was particularly strong.”

Before they even got their Stanford diplomas, Flint and Inkinen had founded Trulia and built a five-person office in San Mateo, CA. Flint took the CEO role and supervised product development, while Inkinen became president and hit the sales trail, selling realtors on the system. (Six years and about 200 employees later, the company moved to its current quarters in the historic Rialto Building in San Francisco; as one of the only big downtown office buildings that survived the 1906 earthquake and fire, it’s a real estate landmark in its own right.)

Inkinen and Flint figured that if they could bring lots of consumers to their site, they would be able to start siphoning real estate advertising dollars away from newspapers. But it was a chicken-and-egg problem. To attract consumers, Trulia needed actual real estate listings, but the … Next Page »

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I don’t think there’s ever been a textbook that made it this easy to be a good student. —Roger Rosner, vice president of productivity applications, Apple

Whenever a company as powerful as Apple, Facebook, or Google announces a big new product push, it evokes wonder and acclaim from some observers, head-scratching and horror from others, and the usual FUD from competitors. So I wasn’t surprised when Apple’s press event last week at the Guggenheim Museum—where it said it will sell low-priced iPad textbooks to high-schoolers through its iBooks store and give away the software needed to make them—was followed by a flood of criticism. But I was definitely impressed by the range and vehemence of the objections. I’ve spent part of this week trying to figure out where all the discomfort is coming from.

Here are a few of the reasons Apple’s textbook plans are doomed, misconceived, or just plain evil, in the eyes of the blogosphere:

A page from E.O. Wilson's "Life on Earth" for the iPad

This is all about one media giant trying to grab market share from other media giants. Education publishing is the most profitable part of the book business these days—maybe the only profitable part. So experiments with digital publishing have been cautious, and hampered by the lack of a great delivery device. Apple thinks it can hasten the technological transition, just as it did with music on the iPod, and grab a big slice of the profits in the process. The only difference this time around, say some observers, is that giants like Houghton Mifflin Harcourt, McGraw-Hill, and Pearson have decided to join ‘em rather than fight ‘em.

This is all about selling iPads. This point of criticism has two variants. The first says Apple’s textbook push will fail because it’s insincere: the company really just wants to hook teenagers on Apple hardware, so they’ll buy the iPad 7 (with direct neural interface!) when they grow up. The second says it will fail because iPads are too expensive: schools can’t afford to supply every kid with a $499 gadget that they’ll probably just break, lose, or misuse.

Schools will never buy e-textbooks if they can’t own them. Apple’s textbook program is dead in the water because the company wants schools to purchase books using “volume vouchers.” The vouchers would come with codes that students can redeem in the iBooks store; the textbooks would then be placed into the students’ personal iTunes accounts. The objection here is that schools won’t be able to grok the accounting math or the concept that the books will actually belong to the students, rather than being passed along from year to year.

Authors will never write textbooks for iBooks if they can’t sell them elsewhere. The biggest post-announcement hullabaloo has been over the terms of the end user license agreement for iBooks Author, the free program Apple built to help authors, publishers, and teachers create their own multimedia textbooks. Under the agreement, iBooks Author users who want to give away their textbooks free can do so by any means they like, but those who want to sell their books for profit may only do so through the iBooks store, where Apple gets its usual 30 percent cut. That might seem like simple business logic—there’s no reason Apple should help authors create content for competing platforms like Amazon’s Kindle. But critics screamed bloody murder about the provision, saying that it was like Microsoft taking a cut for every novel written using Word.

Nothing new here—iBooks textbooks are an inferior ripoff of existing technologies. Apple is obviously late to the consumer e-book party, where Amazon still has a commanding lead. The criticism here is that Apple, despite its boastful press releases last week, hasn’t really reinvented anything about e-textbooks. Companies like Inkling, Kno, Chegg, Vook, Flatworld Knowledge, and Cengage Learning already offer systems for creating and publishing multimedia textbooks, and most of these books work on multiple platforms, not just the iPad.

Apple is trying to kill open e-book publishing standards. Ahh, standards. Few debates are as bitter, partisan, and unending—it’s the tech world’s version of “The Blue and the Gray.” Apple is an ongoing supporter of the open ePub format. Books using this format work on devices from a variety of manufacturers (one exception being Amazon, but that’s another story). But critics are incensed that e-textbooks created using iBooks Author are … Next Page »

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This is a story about what goes on under the hood of your smartphone or tablet device. It’s also about Yahoo, the troubled Santa Clara-CA based advertising and information giant. But Yahoo doesn’t make a single mobile gadget of its own. So what’s the connection?

It turns out that Yahoo (NASDAQ: YHOO) has ambitious plans to help publishers get more efficient about how they push content out to mobile devices. Specifically, Yahoo wants to become the new middleman of the mobile publishing world, giving media companies software that they could use to reach users of iPhones, Android devices, Windows phones, and other gadgets without having to bow to the programming approaches favored by their powerful makers—namely Apple, Google, and Microsoft.

To show how the system might work, Yahoo launched a fancy personalized news app back in November called Livestand. The app lets you select feeds from Yahoo partners like Forbes and ABC News and browse their stories on customized, magazine-like pages. It’s full of nifty user-interface elements like a 3D sideways-scrolling publication gallery. So far Livestand only runs on the Apple iPad, and at first glance it’s pretty similar to Flipboard, Zite, Google Currents, and a number of other social news reader apps. But Livestand’s true importance is as a demonstration of what’s coming. The unique and potentially revolutionary thing about the app is its software design: it may look and act like a native iOS app, but it’s mostly written in Javascript and HTML5, the languages of the Web.

Bruno Fernandez-Ruiz

How Yahoo pulled this off, and what it could mean for content owners who don’t want to put all their eggs in Apple’s basket—or Google’s, or Microsoft’s—was the focus of a long Xconomy interview last week with Bruno Fernandez-Ruiz, chief architect for Yahoo’s platform technology group in Sunnyvale, CA. I’d heard Fernandez-Ruiz speak before about how Yahoo is betting on HTML5—the next-generation version of the markup language underlying all Web pages—as an antidote to overreliance on proprietary operating systems like Apple’s iOS. “If you only work in iOS you are bound to the rules of iTunes,” he said at a December talk in San Francisco. “Publishers want pixel-precise, ‘Cupertino-like’ experiences—and we can do that, but also make layouts fluid,” he said.

I wanted to know more about exactly how Yahoo can do this, so I invited Fernandez-Ruiz to my office and quizzed him about the state of mobile software architecture, the role of the Platform Technology Group inside Yahoo, and the true significance of Livestand. The story he told will be eye-opening for anyone who was under the impression that the future of mobile apps is in Apple and Google’s hands alone. Those two companies may control the lion’s share of the smartphone market at the moment, but if Yahoo goes through with plans to share the tools behind Livestand with outside developers, it could help push the siloed mobile-app world back in the direction of the open Web, where no single company is able to dictate how online software and services should work.

The first thing you need to understand about Yahoo’s publishing vision is that it’s coming from the Platform Technology Group. This is the same part of the company that created and then open-sourced key technologies that are now part of the Web’s infrastructure, such as Hadoop, which allows companies to run big, distributed software systems, and YUI, a library of JavaScript tools for building rich Internet applications. Yahoo built many of these tools as part of an effort that began more than half a decade ago to reduce what Fernandez-Ruiz calls a “technical debt.” The company was weighed down by all of the separate technologies its engineers had built to support services like Yahoo Music and Yahoo Movies, and it needed a central platform. “There was a realization around that time that we had to switch the company from being vertical to being horizontal, and start creating reusable technology that we could deploy across the whole place,” he says. “That is how Hadoop got started, for example.”

Technologies created by the Platform Technology Group, such as Yahoo’s Content Optimization and Relevance Engine (C.O.R.E.), also help the company and its partners tailor content to appeal to specific users based on their demographics. Fernandez-Ruiz says click-throughs increased 300 percent after Yahoo applied C.O.R.E. to … Next Page »

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When most startups reach a certain age—seven years, maybe nine; certainly, by the time they get acquired or go public—they stop being startups. They get slow and cautious. They lose the will to wow customers with unconventional ideas.

Evernote hasn’t reached that age yet. And CEO Phil Libin hopes it never does.

In a video released yesterday by Evernote, Libin says he wants the booming online-notekeeping company to be alive 100 years from now—but as a nimble, fast-moving competitor, not a museum relic.

Evernote made the video to help Xconomy spread the word about our February 7 event in Mountain View, “The 100-Year Company: An Evening with Evernote, Morgenthaler, and Sequoia.” If you’re a Silicon Valley startup founder, engineer, product manager, or investor, this is a must-attend event where you’ll hear Libin, along with key Evernote investors Roelof Botha from Sequoia Capital and Gary Little from Morgenthaler Ventures, share the company’s secrets for staying young while getting big. Here’s Libin in his own words:

There are two passages in the video with particular potency for startuppers. If you’re going to throw yourself wholeheartedly into building a company around your idea, Libin asks, why settle for the standard Silicon Valley exit scenario of getting acquired by a bigger company?

“Making any kind of company is so much work, and you put so much time into it and so much energy, any kind of a startup, it becomes your main passion, it becomes your quest, your mission, for years, for you and your co-workers and for your founders. So I think if you do anything other than try to build for the long term, you’re frankly selling yourself short,” Libin says. “It’s going to be just as much work to make a company that you’re going to sell in three years as to make a company that’s going to last for 100 years.”

But Libin isn’t promoting longevity for its own sake. “Of course our big challenge isn’t just to make a company that’s around for 100 years,” he says in the video. “It’s to make a company that’s a 100-year startup.”

If you want to go long in this way, it helps to build a team of investors who believe in the 100-year philosophy—and it really helps to show the kind of explosive growth that justifies the big bets being put on the table. At the moment, Evernote is doing both. We’ll delve deeper into the company’s success strategies with Libin, Gary Little, and Roelof Botha at Microsoft Silicon Valley the evening of February 7. Register for the event now—while you’re still young.

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Time once again for our irregular, data-driven roundup of local deals, M&A, and other news, from biggest to smallest. The truth is, it’s been a slow week since our last local deals roundup on January 17.

$2.89 billion—The total amount invested in venture-backed companies in the San Francisco Bay Area in the fourth quarter of 2011, according to data released Friday by VentureSource, a research unit of Dow Jones. That represented the smallest quarterly investment total for the region, across the smallest number of companies (232), of any period since the third quarter of 2010. For the year, however, overall venture investments across the country were up about 10 percent over 2010 levels, at $32.6 billion.

$558 million—The total secondary stock trades in private companies handled in 2011 by SecondMarket, according to the company’s year-end report. The New York- and San Francisco-based broker-dealer specializes in helping shareholders in pre-IPO startups sell their stock, among other things. That trading volume represented a 55 percent increase over 2010 levels.

$85 million—New funding announced today for San Francisco-based cloud services provider Joyent. A European investment group focused on telecommunications, Weather Investment II, led the round.

$85 million—A round of growth equity financing for Redwood Shores, CA-based game publisher Trion Worlds, maker of connected video games such as End of Nations, Defiance, and Rift. Ontario Teachers’ Pension Plan and Bertelsmann Digital Media Investments participated in the financing.

$15 million—A Series C financing round announced today for San Francisco-based TRUSTe, the provider of privacy verification programs for Web and mobile businesses and advertisers. New investor Baseline Ventures led the round, with participation from existing investors Accel Partners, DAG Ventures, and Jafco Ventures.

$11.4 million—A Series B investment announced last week for San Francisco-based Anaplan, a maker of enterprise planning software. New investors Granite Ventures and Shasta Ventures led the round.

$4 million—A Series A investment for security software firm Mykonos Software, according to a report today in Dow Jones VentureWire. Tom Golisano, chairman of Paychex, led the all-angel financing round, which also included Ironport Systems founder Scott Banister, Orbitz chairman Jeff Clarke, and Federated Clover vice president Mike Jones.

$2.3 million—Total venture funding raised by Redwood Shores, CA-based social shopping startup Mertado, which was acquired last week by Chicago-based Groupon last week for an undisclosed sum. The Y Combinator-incubated company was backed by Rustic Canyon Partners, Blumberg Capital, and Redpoint Ventures.

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Once upon a time, there was a magical innovation called RSS, for Rich Site Summary or Really Simple Syndication. It freed news articles, podcasts, and other content from their original homes on the Web and allowed news junkies to follow their favorite publications and blogs through story streams called news feeds, which could be bundled together inside programs called RSS readers. For a long time, RSS readers were the best tools for browsing stories from lots of sources quickly.

But RSS was invented by geeks and didn’t belong to any single company, so there was nobody with an incentive to make the whole scheme more user-friendly. Finding a publication’s RSS feed and adding it to your reader was always a hassle, and the RSS readers themselves weren’t particularly fun to use. On top of that, publishers didn’t have good ways to make money on all the content they were sharing in their news feeds. So the RSS system, while important and useful, never really developed into a booming product category.

Now fast-forward a few years to the birth of tablet computing. With their big screens and touch-based interfaces, tablets look and feel a little bit like real magazines. So programmers naturally started thinking about how to revive the news aggregation idea on Apple’s iPad and other tablet devices. Pulse, released for the iPad in May 2010, was the first tablet reader to feature a combination of features that has now become standard in this category: a graphically rich table-of-contents page for navigation, and a stripped-down story page for reading. Flipboard quickly followed in July 2010, adding a social element. Feeds now consisted not just of the articles being pushed at you by news organizations, but also of the content your friends were sharing on Facebook or Twitter.

In the free-for-all world of Web and mobile software, what’s worth doing twice is worth doing a dozen times. Today there so many social news reader apps to choose from that it’s hard to know how they differ and which ones are most useful. To help you get oriented, I’ve rounded up the most noteworthy tablet news readers on the following pages and made note of a few strengths and weaknesses for each.

Note that I’m restricting my list to free reader apps available for the iPad (since I don’t have an Android, BlackBerry, WebOS, or Amazon tablet). I’m leaving out apps that require a paid subscription, such as Ongo, and I’m not including pure RSS-aggregator apps like Reeder, which tend to lack the graphical and social features of the newer crop of news apps.

Click “Go to First App” to start reading, or jump directly to an app from the list below. Be sure to continue all the way to The Bottom Line on last page, where I share my personal favorites.

GO TO FIRST APP >>

	Editions by AOL
	Flipboard
	Flud
	Google Currents
	News.me
	Pulse
	SkyGrid
	Trove
	Yahoo Livestand
	Zite
	The Bottom Line

… Next Page »

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It’s not just Wikipedia that’s throwing its weight today behind the movement to stop the controversial anti-piracy bills moving through the U.S. Congress.

While the English version of the world’s most-visited encyclopedia site has gone dark for the day to call attention to the perceived dangers of the Stop Online Piracy Act and the Protect Intellectual Property Act, a number of other organizations are stepping into the spotlight, making their case that the laws—which, in their original form, would have given federal prosecutors and courts the power to block access to Internet domains deemed to be supporting “infringing” activities—would deter free speech and undermine the Internet’s technical infrastructure.

Given indications that markup of the bill is being delayed, as well as the Obama Administration’s recently declared opposition to SOPA (the House version of the bill) and PIPA (the Senate version), it’s doubtful that the anti-piracy bills will make it into law this year. But protesters and Internet entrepreneurs are saying today’s actions are necessary to forestall future Congressional action and call attention to the extent of popular opposition to the bills.

Here’s a quick survey of protest actions going on today around the San Francisco Bay Area and Xconomy’s other home cities.

—Hackers & Founders plans a live protest against PIPA and SOPA at San Francisco’s Civic Center Plaza at noon Pacific Time today. The group of programmer-entrepreneurs says it’s joining forces with other groups such as 106 Miles, SV NewTech, SF NewTech, Designers and Geeks, Hacks & Hackers, the Electronic Frontier Foundation, the Internet Archive, and TechNet to stage similar events in New York, Seattle, Silicon Valley, and Washington, D.C. Speakers expected at today’s protest in San Francisco include angel investor Ron Conway, Internet Archive founder Brewster Kahle, TechNet vice president Gideon Lett, and Hackers & Founders founder Jonathan Nelson.

—The Occupy Oakland website used by coordinators of grassroots protests in the East Bay has gone dark for the day—but features a nifty mouse-tracking spotlight that allows you to read a statement explaining the action.

—The 20,000-member New York Tech Meetup group has blacked out its site and is organizing an “Emergency NY Tech Meetup” today at 12:30 Eastern time at 780 Third Avenue in Manhattan, outside the offices of Senator Charles Schumer and Senator Kirsten Gillibrand. Speakers will include Meetup.com CEO and NY Tech Meetup founder Scott Heiferman, NYU media studies scholar Clay Shirky, Grateful Dead lyricist John Perry Barlow, Reddit co-founder Alexis Ohanian, and Tumblr vice president Andrew McLaughlin. New York Tech Meetup chairman Andrew Rasiej said in a statement that the tech community in New York is “appalled” by Schumer and Gillibrand’s support for PIPA.

–A Seattle Against SOPA rally originally planned for 11:30 a.m. Pacific time today has been postponed due to the city’s poor weather, but organizers say they will reschedule the event.

—Google is censoring itself by placing a symbolic black square over its logo. The search and advertising giant has also posted a petition urging members of Congress to vote against PIPA and SOPA.

—Craigslist has interposed a black landing page protesting SOPA and PIPA before users can reach its online listings (which are still accessible).

—Flickr, the photo sharing site owned by Yahoo, offered users the ability to black out up to 10 photos each as a symbolic way to”deprive the web of the rich content that makes it thrive.”

… Next Page »

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Cloud-based notekeeping service Evernote found its first 20 million users through sheer geek appeal. Hardcore users (full disclosure: that includes me) love the ability to upload Web clips, documents, images, audio files, and other materials to Evernote’s online notebooks, then search and retrieve them at will, from virtually any device. They also like features such as Evernote’s ability to recognize and search the text in photos and scanned documents.

But to grow to its first billion users—and CEO Phil Libin thinks that’s a realistic goal—the company may need to stop thinking about features and start thinking about experiences.

“The mainstream isn’t looking for fantastically powerful solutions. They are looking for real, elegant, magical solutions. And it turns out it’s much harder to build those,” Libin says.

But the Mountain View, CA-based startup has begun to move in a more magical direction. In the last couple of months, the company has rolled out three mobile apps and one Web app that tie into its central notekeeping service but are designed to offer dedicated, simple solutions to common problems, such as remembering the people you meet (Hello), keeping a record of your favorite meals (Food), learning new subjects (Peek), and clearing away distractions for a more streamlined reading experience on the Web (Clearly). And last summer, Evernote hired the Australian creators of a drawing app called Skitch and came out with a free tablet version of the image-annotation tool.

It might seem to outsiders as if Evernote has taken a left turn, forsaking its identity as an online personal archive in order to go after the sexy new thing, i.e., mobile apps. But in fact, it’s all part of a deliberate strategy to “add structure, intelligence, and context” to the information people are already storing in Evernote, Libin says. “If Evernote 1.0 was ‘Whatever you put in you can get out in the same format many years later,’ the next phase is ‘Whatever you get back is better’—it has been illuminated, so to speak.”

Libin says he means that in the medieval sense of an illuminated manuscript, such as a Bible decorated with initials, miniature illustrations, and other marginalia. “We really want your memories to be better—to have additional context and beauty in them,” he says. “One of the first steps is to start creating beautiful experiences for certain types of memories. They all live in the central Evernote location, but there are custom experiences for capturing and recalling particular things, like food, and people, and other stuff in the future.”

How Evernote designs these new custom experiences will be one of the themes of a public Xconomy event in Mountain View, CA, on February 7, where I’ll be interviewing Libin on stage, together with Evernote investors Gary Little, a partner at Morgenthaler Ventures, and Roelof Botha, a partner at Sequoia Capital. The evening’s main point will be to dissect the idea of the “100 year company,” that is, Libin’s plan to keep Evernote independent and ensure its long-term survival through serial secondary fundraising rounds. But there’s so much to say about Evernote’s app strategy that this will be a big topic as well. (Register for the event before January 24 to get the saver rate.)

I didn’t want to wait until February 7 to learn more about the app strategy, so I connected with Libin (pictured above right) for a long conversation on Friday. I started off by asking whether Evernote ever expected to have 20 million users—a milestone it announced it had reached shortly after the new year. “Yes, in the sense that when we were raising money, our business plan has us getting to 20 million right about now, so it’s exactly what we told our investors,” Libin answered. “On the other hand, we never actually believed it, so getting there is quite shocking.”

But as mind-blowing as it can be to actually hit one’s business-plan projections, Libin says he keeps reminding himself that there are still 6.98 billion people on the planet who aren’t yet using Evernote. Even if you narrow that down to the people with some access to smartphones and the Internet, “that’s probably 2 billion people right now who are easily within reach, and in 10 years, more like 4 billion,” he says. “So having a couple of billion users is not … Next Page »

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It’s time for our irregular, data-driven roundup of high-tech fundraising, M&A, and IPO news from around the San Francisco Bay Area.

$100 billion—The potential valuation of Facebook in an IPO tentatively planned for late May, according to a story yesterday from Kara Swisher at AllThingsD. Facebook hopes to raise $10 billion in the offering, according to Swisher’s sources.

$125 million—The amount San Francisco-based Splunk hopes to raise in an upcoming initial public offering, according to the startup’s S-1 filing last week. The main venture backers of the big-data analytics startup include August Capital, Sevin Rosen, JK&B Capital, and Ignition Partners.

$115 million—The amount Symantec is paying for LiveOffice, the Torrance, CA-based maker of cloud-based e-mail archiving systems. Mountain View, CA-based Symantec said yesterday that the acquisition “will extend Symantec’s intelligent information governance offering to the cloud, providing customers choice between on-premise, cloud or hybrid delivery of Symantec solutions.”

$75 million—The amount Mountain View, CA-based Audience hopes to reap in an upcoming initial public offering, according to S-1 papers filed last week. Audience makes noise-suppression chips for mobile phones that improve the quality of voice calls. Its biggest venture backers include Tallwood Venture Capital, New Enterprise Associates, and Vulcan Venture Capital.

$20 million—A Series C funding round for AppDynamics, the San Francisco-based maker of software that monitors the performance of enterprise applications. New investor Kleiner Perkins Caufield & Byers (KPCB) led the round, with existing backers Greylock Partners and Lightspeed Venture Partners also participating.

$13 million—New funding for PivotLink, the San Francisco-based maker of retail analytics software. Trident Capital, Emergence Capital, and Starvest Partners led the round. PivotLink also announced the acquisition of Salt Lake City, UT-based Acteea, a maker of e-commerce analytics software.

$11 million—New funding for Fremont, CA-based disaster recovery startup QuorumLabs. Airtek Capital Group led the round, which also included QuorumLabs’ existing investors.

$6.7 million—A Series B financing round announced last week for Senova Systems, a Sunnyvale, CA-based maker of solid-state pH sensors for the food, water, medical, and agricultural industries. Phoenix Venture Partners and Harris & Harris Group led the round.

$5 million—New funding for Affine, the San Francisco-based startup offering targeting software for online video ads. Crosslink Capital and Highland Capital Partners led the round. Former Quattro Wireless CEO Andy Miller, the chief of Apple’s iAds program, has joined Affine’s board.

$2.5 million—Seed funding for PandoDaily, a new San Francisco-based technology blog founded by ex-TechCrunch writer Sarah Lacy. Institutional backers, according to Lacy’s introductory blog post, include Accel Partners, CrunchFund (founded by ex-TechCrunch editor Michael Arrington), Greylock Discovery Fund, Menlo Ventures, Lerer Ventures, Ooga Labs, and SV Angels. Individual investors include Marc Andreessen, Andrew Anker, Matt Cohler, Chris Dixon, Tony Hsieh, Jeff Jordan, Saul Klein, Josh Kopelman, and Zach Nelson.

$990,000—New equity-based financing for San Francisco-based AllTrails, according to a regulatory filing. An alumnus of the AngelPad startup accelerator in San Francisco, AllTrails offers maps and reviews of hiking, biking, and camping trails.

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Earlier today I grabbed some time with Gary Little, who’s been a partner at Menlo Park, CA-based Morgenthaler Ventures since 1998 and has led the company’s investments in Evernote, the fast-growing Silicon Valley startup that aims to help you “remember everything.” I’ve long been intrigued by CEO Phil Libin’s publicly stated ambition to make Evernote into a company that lasts 100 years or more (“We don’t want to exit, we want to build a permanently great company,” Libin has said). Little, who’s on the startup’s board, agreed to share his own thoughts about that in a live, public chat on Twitter.

Little tossed off some great insights, as well as a few funny lines. For readers who may have missed the live chat, I’ve embedded a curated Storify version below. And for those interested in continuing the conversation, I’ll be hosting Little, Libin, and another Evernote investor, Sequoia Capital partner Roelof Botha, in person at a February 7 event called “Xconomy Xchange: The 100-Year Company—An Evening with Evernote, Morgenthaler, and Sequoia.” (The event is set for 5:30 pm to 8:30 pm at Microsoft Silicon Valley in Mountain View, CA; to get a ticket at the early-bird rate, register before January 18.)

If you really want to help people store their memories online permanently, you do have to think about how to make sure your company, or at least its computer servers, will be around decades from now. But there’s a problem: venture capital funds, traditionally the only entities willing to invest in risky high-growth businesses at the early stages, generally want to earn their money back on a much shorter time scale—10 years at the most.

Libin’s strategy so far has been to raise multiple rounds of venture funding, each dramatically larger than the one before, and use part of the money to provide liquidity for early shareholders (including employees). That helps to stretch out the time before a company has to think about getting acquired or going public. And in fact, if you think of an IPO or acquisition as just another in a series of liquidity events, it can make a company “independent of exit” altogether, in Little’s words.

But it’s only a plausible strategy, he acknowledged today, if a company can justify much higher valuations in each funding round. Finding investors willing to buy in at those levels takes “either huge growth, or huge cashflow,” he said in the tweetchat. “Growth firms invest in growth. LBO [leveraged buyout] firms invest in cashflow.”

Fortunately, Evernote has been demonstrating such growth. When Morgenthaler first invested, the startup had fewer than 5 million users. When we started planning our February event last year, it had 16 million. Now it has 20 million. Word of mouth has been powering new sign-ups so far, with Japan emerging unexpectedly as Evernote’s hottest market. The main challenge for Evernote right now, Little says, is “continuing to recruit the world’s best people” to keep the growth going.

Here’s the Storify version of the chat. We hope you can join us on February 7 to keep the conversation going.

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I have a lot of Apple gear, and I’m pretty happy with it. There’s just one problem. The better Apple’s stuff gets, the less patience I have for everyone else’s clunky hardware and software. Televisions and all the boxes we hook up to them are the worst offenders. No two TV manufacturers or set-top-box makers use the same remote controls or user-interface conventions, and they’re all painfully bad (except those developed for the hockey-puck-like Apple TV, which are decent but not great). That’s why I’m hoping that Apple will eventually follow through on Steve Jobs’ dying wish, in biographer Walter Isaacson’s words, “to do for television sets what he had done for computers, music players, and phones: make them simple and elegant.”

While we await that glorious day, though, there are some existing technologies that can help ease the pain. In fact, there’s no lack of innovation in the area of video entertainment, as the acres devoted to new “digital home” technologies at this week’s International Consumer Electronics Show in Las Vegas attested. The problem is a lack of unification—meaning interfaces that would make it just as easy to find, buy, watch, and share great cable content on your TV as it is to find, purchase, consume, and share great book, magazine, or game content on your iPad.

For the last few months I’ve been following a TV technology startup called Dijit Media that’s both innovating and making an attempt at unification. They know Apple is coming, and that the Cupertinoids—unless they’ve completely lost their touch in the post-Jobs era—are likely to create a product that melds beautiful TV hardware, a slick and simple operating system, and a rich content marketplace. Meanwhile, the San Francisco-based firm has built its own universal TV remote for iOS devices, and is using it to foster a new “second screen” culture.

Dijit's program listing and remote control on the iPad

The Dijit app, which controls your TV with help from a Griffin Technology gadget called the Beacon, marries channel listings from your cable operator with diverse Internet resources like Facebook, YouTube, and Netflix. It turns your iPhone or iPad into a kind of social command center for the living room—a place where you can browse listings, find out what your friends are watching, or rearrange your Netflix queue, all while sitting back in front of your big screen. It works with hundreds of models of TVs, DVRs, and set-top boxes, replacing the welter of remote controls and on-screen interfaces that come with those devices and moving all of the control and choice to the smaller but far more versatile touchscreen.

Unfortunately, it doesn’t yet fully integrate with Internet-TV boxes like the Apple TV and the Roku Player—and I’ll have more to say on that in a minute. But Dijit figures that the more progress it can make toward unification before Apple enters the market in earnest, the more Apple’s competitors will need to seek the startup out. “We think sooner or later Apple will come in, and it won’t be a ‘hobby,’ and it will show what’s really coming,” says Jeremy Toeman, Dijit’s chief product officer. “The Samsungs and Vizios of the world will need external technology to bridge the gap, and the only way to bridge it will be to go cross-platform. We think we can help the consumer electronics manufacturers adapt to a world where they are not as proficient at building the end-to-end ecosystem as Apple is.”

Dijit, originally known as UMEE, was founded in 2009 by former Nvidia and Riverbed Technology engineer Maksim Ioffe. It won funding in late 2010 from technology investor Alsop Louie, backer of streaming-video startup Justin.TV and mobile iOS game developer Smith & Tinker. The startup switched to its current name at CES in January 2011, which is also when it released the iPhone version of the remote-control app and announced its partnership with Griffin.

The $70 Beacon device, which is available at Apple Stores, bridges the communications gap between … Next Page »

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2011 was a very big year for natural language processing (NLP)—the science of teaching computers to communicate with humans in plain English (or French, or Japanese). First IBM’s Watson beat Jeopardy champions Ken Jennings and Brad Rutter. Then Apple captivated mobile consumers with the iPhone 4S, which included an enhanced version of Siri, the voice-driven assistant born at Menlo Park, CA-based SRI International. Suddenly, the idea that computers might be just as good as humans at carrying out certain types of requests seemed a lot less far-fetched.

For companies trying to win corporate and consumer adoption of their own NLP technologies, this is a long-awaited moment. And one of the firms that thinks 2012 could be the year this market really takes off is VirtuOz, a Paris-born company that moved its headquarters to Emeryville, CA, in 2009.

Fresh off a $7 million extension of its Series B funding round last June, VirtuOz wants to conquer the worlds of online marketing, sales, and support with its virtual agents—personal question-answering systems designed to help customers get the information they want faster. The company has already picked up a few big clients. If you go to Symantec’s support pages, for example, you’ll meet Nathan, an expert on installing and troubleshooting the company’s antivirus products. AT&T has Charlie, PayPal has Sarah, video game rental site Gamefly has Ryan, and Michelin has—well, the Michelin Man. All are powered by VirtuOz.

VirtuOz CEO Steve Adams

CEO Steve Adams says his aim is to double the company’s client base in 2012. That’s a plausible goal, if research firm Gartner is correct in its prediction that 15 percent of the Fortune 1000 will be using virtual agents on their websites within the next three years. “We think we can get the lion’s share of that business,” Adams says.

VirtuOz is the brainchild of Ecole Polytechnique graduate Alexandre Lebrun and co-founders Callixte Cauchois and Laurent Landowski. Back in the mid-2000s, Lebrun believed that the day was fast approaching when computers would be able to understand humans simply from their speech or writing. “Alex would tell you that the ultimate evolution of the technology is going to be the personal virtual assistant who drives both our business lives and our personal lives,” says Adams. But as a near-term commercial application, Lebrun decided to focus on a more limited idea, the virtual agent—a system that sits within a company’s website and represent its brand in real-time communications with consumers.

In its simplest form, a virtual agent isn’t much more than a fancy search engine that can parse natural-language queries and find preformulated answers, the way the original Ask Jeeves did. But Lebrun and his cofounders wanted to go a couple of steps farther. First, they thought a virtual agent should be able to detect and respond to a user’s actual intent. If an auction site visitor types “I want to cancel my bid,” for example, they thought the agent should be able to deduce that they’re talking about a specific bid in an active auction, and show them what to do. That meant designing virtual agent software that could be tied deeply into a company’s knowledge bases and website functions.

Second, Lebrun and his co-founders wanted interactions with their agents to feel like conversations, with a personality at the other end who can recognize tone and mood and ask clarifying questions. That’s why VirtuOz gives most of its agents names and faces. Sometimes they’re photos of models, as with Symantec’s Nathan (see upper right), but usually they’re cartoon renditions. If this brings to mind images of Microsoft’s infamous Bob and Clippy, forget that comparison—VirtuOz’s characters are much less nosey.

For the first four years of its life, VirtuOz focused on the French, German, and U.K. markets. Travel companies and wireless carriers … Next Page »

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In short order, startup incubator Rock Health has become one of the Bay Area’s hubs for entrepreneurs working on technology ideas that could change healthcare delivery.

Formed last year to test whether the startup accelerator model pioneered by organizations like Y Combinator and TechStars will work in the healthcare industry, Rock Health has already graduated its first class of 13 startups and assembled a high-powered group of entrepreneurs, investors, and other advisors to mentor the early-stage companies in its network. (A second group of startups enters the program this month.)

Rock Health drew on this community to fill a banquet hall at Farallon in downtown San Francisco this Sunday, on the cusp of the annual JP Morgan Healthcare conference, which draws much the leadership of the U.S. biotech and pharmaceutical communities. Loosely designed to recognize the 50 leading influencers in digital health, the dinner also served as a prime networking opportunity—and, for some entrepreneurs, a chance to show off their wares. AliveCor chief medical officer David Albert, for example, gave live demonstrations the company’s portable cardiac monitor, which is built into an iPhone case (see the third image in our slide show below).

“We organized the event to recognize and celebrate the leaders making things happen in digital health,” says Leslie Ziegler, creative director at Rock Health. “We hope the format of the evening allowed these diverse minds to talk freely about the future of the space, meet and support newcomers, and find new ways to collaborate.”

San Francisco-based photographer Toni Gauthier was on hand to document the event, and Rock Health has shared some of the resulting images with Xconomy, which was a media sponsor of the event. The dinner’s main supporters were Rock Health partners Silicon Valley Bank and Fenwick & West.

	NEXT IMAGE >>
	L to R: Michael Esquivel (Fenwick & West), Leslie Ziegler (Rock Health), Jackson Wilkinson (WeSprout).
	Photo by Toni Gauthier

… Next Page »

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