Two trends are driving the current job market: globalization, where everybody is becoming part of the economy, and innovation, which increases productivity and allows fewer people to do the same jobs. These two trends will not slow down during the next few decades. How should students train in college to build careers under these conditions?

The situation is similar to 150 years ago, when 98 perecent of people farmed. Now we need only 2 percent of the population to look after the farms. The other 96 percent are engaged in businesses that did not exist 150 years ago. Similarly, the globalization of the workforce and the concurrent productivity gains will take care of people’s current needs. New graduates over the next decades will be part of businesses that don’t exist today.

What are these new businesses? We know that the world faces several big challenges such as energy, sustainability, poverty, education and healthcare. We need to solve these problems, but no one is sure how they will lead to specific businesses. This is the challenge and the opportunity for new graduates.

New graduates who want to be players in the new economy will need a strong work ethic, rigor in their thought process, and entrepreneurial energy. In the old economy, individuals mastered a specific skill and practiced it over the course of a 50-year career. In the next 50 years, new graduates will probably change their field of practice every 10 years. They need a good work ethic to be able to learn new things. They need rigor in their thought process to learn to learn. They need to be flexible and be entrepreneurial to adapt to new businesses.

No matter what students study, whether it is technology, journalism, art, medicine, business, or law, they will have to be entrepreneurial to survive and prosper in the next 50 years. In universities they learn to solve problems. In addition to solving problems posed by others, students need to learn how to pick problems that they are passionate about solving. A big part of being an entrepreneur is to learn to pick problems that you want to solve.

I am a big believer that students should create experiential learning opportunities during their university years. They should treat the whole world and its problems as their laboratory, as opposed to confining themselves to their campuses. Picking a problem that they feel passionate about and finding a way to solve it builds confidence and gives students a taste of taking charge. New graduates have to be entrepreneurial and innovative in creating opportunities for themselves as opposed to waiting for others to do it for them.

Comments | Reprints | Share:          

Liberal science and technology. We need a new major that prepares the future workforce for constant change by teaching broad-based knowledge in many disciplines. This major would consist of, among other disciplines, the basics of engineering, biology, chemistry, physics, law, business, humanities and communications. This curriculum should be group-based, where students teach each other, which is how the most successful corporate teams function—from design to product launch. The rate of change will demand workers who can easily recognize and accept the rapid evolution of science and technology.

Comments | Reprints | Share:          

Fifteen years ago, the expansion model of a startup was fairly linear: The first three years were dedicated to building the business domestically. Year four generally saw European expansion. And by year five, the company was starting to explore the Asian markets.

The emergence of the Web as a viable commerce vehicle, though, brought about a paradigm shift in the startup world that obliterated that model—and forced entrepreneurs to change their plans. Rather than ignoring the global marketplace, today’s smart startups need to think with an international perspective from Day One—and work quickly to expand their footprint.

Of course, becoming part of the global network during a company’s formative days (when budgets are tight and research and development is crucial) isn’t easy, even with the advances and inroads the Web has introduced. At Allegis Capital, where I am managing director, many of our portfolio companies have found that the surest path to becoming an international company is by partnering with large, multinational corporations.

It’s a strategy that might sound curious at first. Big business works at a different speed and with different priorities than the startup world. But the backing of a large corporation can not only supplement a startup’s bottom line; it can also open doors that might otherwise remain firmly shut.

Beyond that, this sort of strategic partnership can provide market analysis that is impossible for startups to gather on their own, acting—essentially—as the ultimate focus group.

Navigating Hurdles

Naturally, there are some challenges that accompany these relationships. A successful pairing takes plenty of foresight and planning. You’ll need to not only find the company that best suits your startup’s philosophies, but also determine how best to take advantage of it (and navigate the hierarchy of that company) once the deal is finalized.

Allegis portfolio company Axcient has been particularly adept at learning to make things run smoothly with its strategic partner. After striking a non-equity partnership with Hewlett Packard in July of 2010, Axcient CEO Justin Moore quickly noticed the differences in how the two companies ran their operations. To ensure that his company saw the greatest possible benefits from the relationship, Moore developed four strategies to ensure things ran smoothly on a consistent basis.

These have not only helped Axcient grow, they’ve carved a path for other startups that might be unsure of how to get the most from a big business partner. Here are summaries of the techniques Moore has shared with us while growing his company:

Triangulate—Larger organizations tend to have an overlap in reporting. They also tend to have management shuffles with relative frequency. As such, there are often multiple people whose responsibilities for different areas of the business overlap.

Rather than maintaining a single point of contact, it’s important to develop several relationships in the organization, as this allows small business owners to have multiple allies to help accomplish a specific goal. When your company works with a single individual and that person leaves the company or their position, it’s a blow to momentum, which can be deadly.

Be Adamant—No matter how solid a startup’s partnership with a larger company may be, the people running that startup are going to have to occasionally break down walls. The best way to do this is with dogged persistence.

The ugly truth is: Partnering with a startup is not going to be the biggest priority for the big corporation, but it’s certainly the biggest priority of the entrepreneur. Therefore, it’s the startup’s duty to … Next Page »

Comments (4) | Reprints | Share:          

Well, it turned out that perhaps I was too cynical. On Friday morning, I posted the Labor Day Bad News Poll, pointing out that companies often buried bad news after markets closed on a Friday—and asking readers to predict what type of bad news they expected, if any, on the extra slow Friday before Labor Day, when hardly anyone is left around to see the aforementioned bad news.

In focusing on companies, I forgot about Uncle Sam (read on).

I presented my top predictions: major layoff, CEO ouster, and a lawsuit loss or otherwise bad news about a lawsuit. I also offered readers the choice of saying I was too cynical—that nothing too bad would happen this past Friday given all the bad news out there recently. And finally, I had a fifth option—for readers to write in with their own ideas of what bad news might be announced.

I shut off the voting at 4pm on Friday, when markets closed, and promised an update this week. So here we are:

The good news, I guess, is that nothing big seems to have come after the markets closed last week. Nothing I spotted, anyway-which could of course mean PR folks were successful at burying it!

As for our reader choices, the most popular vote—made by 40 percent of those taking the poll—was for major downsizing. (Wow, that is cynical—the idea a company would lay off a bunch of workers before Labor Day and try to bury it.) Next in line, in a dead heat with 18 percent of the vote each, were CEO ouster and major lawsuit. Only 7 percent thought I was too cynical, which it looks like I was: score one for the optimists.

But none of this means there wasn’t some big bad business/economic news last Friday. As one reader commented and another wrote in, the government released some truly dismal jobs news on Friday that showed no net new jobs were added in the U.S. in August—the worst showing in 11 months.

Technically, this jobs news was released before markets closed, so doesn’t qualify as being buried. But it sure does qualify as bad.

Comments | Reprints | Share:          

Former Washington Gov. Gary Locke’s nomination as the U.S. ambassador to China puts someone the state’s business community knows very well at the forefront of one of the nation’s most important global relationships.

That doesn’t mean every Seattle-area company can expect the red-carpet treatment in Beijing—after all, presuming he’s confirmed by the Senate (which seems likely), Locke will be representing the entire country, not just his home state of Washington.

But some folks we talked with said that, essentially, it can’t hurt to have a familiar face manning the desk in what is perhaps the country’s highest-profile ambassadorial posting. China, by the way, is Washington state’s largest export market and second only to Canada in two-way trade, according to the state Commerce Department.

“We’re not going to be expecting Gary to be spending all his time thinking about Washington state,” says state Commerce Director Rogers Weed. “But I think the fact that he’s coming right out of the [federal] Commerce role, and being a connection to industry in the Obama administration, means he’s going to be tuned in to the trade and industry issues pretty naturally, which I think is a positive for any industry our state.”

Weed also notes that Locke’s legal background—he’s a lawyer by training and spent his early post-gubernatorial years at Davis Wright Tremaine—is a bonus for technology businesses that face tons of intellectual property worries in China. As Microsoft CEO Steve Ballmer has prominently noted, the company estimates that only one of every 10 Microsoft users in China is actually paying for the products.

And don’t forget the people who worked for Locke during his days in the governor’s office who are now sprinkled throughout the private sector in Washington. That group includes Fred Kiga, a former Locke chief of staff who now works on policy issues for Amazon.com, and Roger Nyhus, a former communications director whose eponymous firm represents clients in life sciences, technology and clean energy.

Joseph Borich is president of the Washington State China Relations Council, a private nonprofit business association that works to strengthen ties with China. Borich sees plenty of growth potential in China for companies in Washington’s innovation sector.

“Many of them are fairly new. Some of them are still looking for more capitalization. Most, if not all of them, have international products and technologies, but they’re still trying to find some footing,” Borich says. “My sense is, for most of them, there is some interest in China but most of them are not ready to take that plunge.”

However, Borich adds, that could change significantly in the coming years.

Comments | Reprints | Share:          

Education is what remains after one has forgotten everything he learned in school.
—Attributed to Albert Einstein, Mark Twain and B.F. Skinner

There are 4633 accredited, degree-granting colleges and universities in the United States. This weekend I had dinner with one of them—a friend who’s now the president of Philadelphia University. He’s working hard to reinvent the school into a model for 21st century professional education.

The Silo Career Track

One of the problems in business today is that college graduates trained in a single professional discipline (i.e. design, engineering or business) end up graduating as domain experts but with little experience working across multiple disciplines.

In the business world of the of the 20th century it was assumed that upon graduation students would get jobs and focus the first years of their professional careers working on specific tasks related to their college degree specialty. It wasn’t until the middle of their careers that they find themselves having to work across disciplines (engineers, working with designers and product managers and vice versa) to collaborate and manage multiple groups outside their trained expertise.

This type of education made sense in design, engineering and business professions when graduates could be assured that the businesses they were joining offered stable careers that gave them a decade to get cross discipline expertise.

20th Century Professional Education

Today, college graduates with a traditional 20th century College and University curriculum start with a broad foundation but very quickly narrow into a set of specific electives focused on a narrow domain expertise.

Interdisciplinary and collaborative courses are offered as electives but don’t really close the gaps between design, engineering and business.

Interdisciplinary Education in a Volatile, Complex, and Ambiguous World

The business world is now a different place. Graduating students today are entering a world with little certainty or security. Many will get jobs that did not exist when they started college. Many more will find their jobs obsolete or shipped overseas by the middle of their career.

This means that students need skills that allow them to be agile, resilient, and cross functional. They need to view their careers knowing that new fields may emerge and others might disappear. Today most college curriculum are simply unaligned with modern business needs.

Over a decade ago many research universities and colleges recognized this problem and embarked on interdisciplinary education to break down the traditional barriers between … Next Page »

Comments (1) | Reprints | Share:          

Cementing the expansion of its entrepreneurship-focused Fast Track MBA program to the Bay Area, Babson College announced today that it has signed a seven-year lease on 7,000 square feet of space at 135 Main Street in San Francisco’s startup-saturated South of Market (SoMa) neighborhood.

As we wrote in a September profile, the Massachusetts-based school is challenging Bay Area b-schools such as the Stanford Graduate School of Business and the Haas School of Business at UC Berkeley by offering a 27-month program aimed at experienced professionals who want or need to keep working while they earn an MBA. The program admitted its first class of students last spring, and has been using rented classroom space at UCSF’s Mission Bay campus. The second class of 80 Babson students (up from 34 in the first cohort) will gather at the new Main Street location starting in March 2011.

135 Main Street, San Francisco

“This announcement is a strong signal of our commitment to the Bay Area and clearly identifies San Francisco as the hub of our Fast Track operations to serve the western United States,” Raghu Tadepalli, dean of the Babson’s Olin Graduate School of Business, said in a statement. Babson also runs a Fast Track MBA program in Portland, OR, but plans to wind down that operation and shift the resources to the San Francisco program.

The college said that the new facility is equipped with telepresence capabilities that will make it easier for Babson to stay in touch with its students. Fast Track MBA students spend most of their time on Internet-mediated distance-learning activities, gathering once every six weeks for two days of face-to-face classroom work with full Babson faculty.

Tadepalli said the new space will also give Babson the ability to host academic, professional, and networking events for the local business community, and to offer “access to content generated by faculty and students who are deeply committed to advancing Babson’s unique approach to entrepreneurial management education.”

With its choice of location, Babson isn’t shying away from the competition: the new Main Street location is just a block away from the San Francisco campus of the University of Pennsylvania’s famous Wharton School of Business.

Comments (1) | Reprints | Share:          

Transparency is viewed by many as the solution to many of the world’s problems, and perhaps a solution to failed collaborations. Indeed, a common explanation for disputes is that they result from an imbalance of information between the two sides. If we could have more transparency, some say, then we would all have the same facts and a lot of these disagreements would melt away.

But having information and being able to use that information effectively are two separate issues. The first is about access, which is certainly being expanded greatly with search engines and the Internet. The second issue, however, is about education, context, and perspective, none of which transparency addresses. Being able to interpret facts and perform critical analysis is a learned skill that a great many (too many) people don’t have. In the movie A Few Good Men, Jack Nicholson’s renegade soldier on the witness stand responds to Tom Cruise, the military prosecutor, who asked the witness to “tell the truth.” Nicholson’s answer: “You can’t handle the truth.” He was referring, of course, to the fact that no person without battle experience can understand what really happens on the front lines. That lack of experience or lack of education in battle, or in life, can be exploited. And a large industry exists to take advantage of the “opportunities” which that lack makes possible. Advertising, marketing, public relations, journalism, all exist to “help” those without the interest and/or ability to understand the subtleties of political issues, product comparisons, and many other things in life. This is a large force in our society. It can change elections, move products, and get generals fired.

As a result, transparency is a very sharp, double-edged sword. Although it sounds simple and “honest” to “do the right thing,” it requires enormous delicacy and skill to describe events or actions in a way that can be understood objectively by all. Emotional baggage colors our understanding of all news and information. And, of course, “news people” are trained to put a spin on things. They can interpret in imaginative ways and generally create a news item out of something that fits the ideology of what they are trying to promote. Whether that is distortion or objective reporting may depend upon the politics of the reader, as well as the writer. “Transparency” today may better refer to the fact that it is much more difficult to keep anything secret. Ubiquitous camera phones document events that governments and businesses would have rather kept private. Every rumor is tweeted. This activity can lead to “collaborations” of a different sort, where misinformation is used to polarize and sensationalize. How ironic that sometimes what started out as an effort at openness and transparency can be turned around by an opponent or the media into just the opposite.

A crisis can create interesting dynamics for public and private collaborations. When BP’s Deepwater Horizon rig exploded, then collapsed and began gushing oil into the Gulf of Mexico, the disaster quickly escalated into one of the worst environmental accidents in history. As the company worked feverishly to plug the gusher and clean up the oil spreading around the Gulf, a “Deepwater Horizon Response” Facebook page was established, garnering tens of thousands of members within weeks. While becoming a member of such a group usually means you are a “fan” or “friend,” the Deepwater Horizon Response page featured comments from more people who were incensed by the spill than “supporters” of BP. While creating the Facebook page may have seemed like a risky strategy, BP may have gained points for creating a public forum, and for allowing both “pro” and “con” participants. And the comments let BP know how people were responding to the myriad of news from many sources. Transparency might not be all it’s cracked up to be, but in this new age of camera phones and social media, secrecy may be much riskier.

Comments (3) | Reprints | Share:          

[Corrected: 1:15 pm, see below] Earth Class Mail was built on the notion that businesses which receive a lot of important documents through old fashioned snail mail may benefit from the services it has to offer. The Seattle-based company, founded in 2004 by former head and board chairman, Ron Wiener, develops software that digitizes incoming mail, allowing companies to manage their post electronically and avoid being inundated with envelopes and packages. For those of you out there who think this sounds a whole lot like e-mail, it’s a little more complicated than that. Postal items handled through Earth Class are imported into a digital database where customers can access it and choose to have items scanned and saved for company records. Once in the database, the documents can be forwarded to another address, securely shredded and recycled, stored in a digital lockbox, or opened and visually streamed on the spot. [An earlier version of this story said that Wiener is now chairman of the board. In fact this seat is currently held by Carr.]

New chief executive officer Sarah Carr, who joined Earth Class as COO in 2008 and took over the top job last September after Wiener had stepped down, says the software is essentially a “business process outsourcing” service. She describes it as both a convenient filing system and time-saving tool for companies looking to save time. And it hasn’t been without support. Earth Class Mail has been backed by well-known local investors, including Ignition Partners, Keiretsu Forum, and Alliance of Angels (which is no longer an investor in the company). There was only one problem, according to Carr: Earth Class Mail’s initial business model wasn’t profitable.

Earlier this week we checked in with Carr to see how she—and the company—are doing 10 months into this next phase with new leadership. Earth Class, she says, has undergone a “seismic shift” in that short period of time. We posed five questions to Carr, and she shared with us via e-mail a little bit about the effort to restructure the company’s revenue model, the future of Earth Class a few years down the line, and her merit-based approach to leadership.

Xconomy: You’ve done a lot since taking up your post as CEO less than a year ago. What is your new vision for the company? How are you going about implementing this new vision?

Sarah Carr: When I am figuring out how to make a business successful, I start with the customers that are most loyal to us. In examining the data about our customers it was clear to me that Earth Class Mail (in our retail business) is actually a business process outsourcing company. We have some really creative customers that are leveraging our solutions as part of their workflow in order to save time, money and scale their businesses without adding headcount. Given this, I reoriented the company to support this model. Our tag line has been changed to “making time for business” to reflect this new focus.

My vision for Earth Class Mail is to serve three markets: the small business customer through our retail channel; corporate enterprise mailrooms and mailroom service providers with our enterprise offering; and postal partners with our postal platform. All of these segments can be supported in a Software-as-a-Service (SaaS) model, or we can build a custom environment in the data center, as we did for our postal licensee, Swiss Post.

Evidence of how we are implementing this vision abounds—from our new product offerings, updated pricing plans, and revamped website, to our continued service improvements and product innovations.

X: What have been the biggest obstacles you’ve faced since coming on board (both as COO and CEO)?

SC: Unfortunately, the funds that were raised to support Earth Class Mail were spent before I took the helm. So we have had to re-build the company while at the same time cutting our burn rate by more than 80 percent. We were able to secure a small amount of additional funding from our very supportive and patient VC, as well as a few of our investors, but it has been a constant tradeoff around innovation and profitability. I have a really creative team. We have used this talent to build many things in-house such as the product demo on our website. We even built our own teleprompter for the filming of the demo!

X: Has there been a big shift in Earth Class Mail’s revenue model and/or customer strategy?

SC: There has been a seismic shift. The original vision for Earth Class Mail was … Next Page »

Comments (6) | Reprints | Share:          

The annual World Economic Forum confab in Davos, Switzerland is famous for gathering business and policy leaders to discuss the big issues of the day. Entrepreneurs, venture capitalists, and private equity professionals, big company CEOs and world leaders gather in a unique environment for mingling, collaboration, and idea sharing.

In a similar but more local fashion, the Progressive Business Leaders Network (PBLN) summit convened last Friday at the JFK Presidential Library represented a unique blend of over 200 leaders engaged in the thorniest of policy issues that are facing the Commonwealth and the nation. PBLN is a network of over 150 Massachusetts CEOs and top corporate officers who are interested in engaging and helping solve the most important problems of the day with data-driven, progressive policy solutions. The panels and round tables throughout the day were chock full of wonky issues, such as health reform and cost containment, education reform, climate change, tax policy, and housing. Participants dug into the data to analyze the impact various reform options might hold, with business leaders and public officials debating and discussing in an open, collaborative environment.

Among the more than 200 attendees at the annual summit were some of the Commonwealth’s most influential CEOs, such as Paul Levy of Beth Israel Hospital, Martin Madaus of Millipore, and James Roosevelt of Tufts Health Plan, alongside prominent venture capitalists like Bain Capital’s Jeff Glass and Flagship’s Jim Matheson. Also in attendance were the state’s most senior policy leaders, such as Education Secretary Paul Reville, Health and Human Services Secretary Dr. JudyAnn Bigby and the House Chairman of the Revenue and Tax Committee Representative Jay Kaufman (D-Lexington).

The public officials—including Governor Deval Patrick, who led a spirited dialog reviewing his administration’s agenda—practically begged the business community to stay personally engaged with the issues facing the Commonwealth and the nation. Governor Patrick pointed out that it is no accident that the blueprint for the landmark health reform being debated in Congress came from Massachusetts. And, as Boston Foundation CEO Paul Grogan pointed out, the education reform currently in front of the Massachusetts legislature (passed by the Senate and to be taken up by the House in January) will also have a powerful, national impact.

A unique element of this year’s summit was the willingness for policy combatants to appear together. Anne Wass, president of the Massachusetts Teachers Association, was brave enough to sit on a panel with charter school advocates like Akamai CEO Paul Sagan and venture capitalist and Massachusetts2020 CEO Chris Gabrielli. Ms. Wass was pointed in articulating the groundwork required for reform: objective data combined with mutual respect and trust. She observed that the skyrocketing cost of public education shouldn’t be a surprise. “If Milton costs $40,000 per year to provide an outstanding education to kids from the best homes with the most support and advantages, imagine how much it would cost to provide a similar quality education for a kid who comes from the most broken homes with no support.”

The day ended with a debate of four of the six major senate candidates, putting forward their rationale for why business leaders and the public at large should support their candidacy, a decision all the more poignant as the candidates stood in the shadow of the Kennedy family at the JFK Library. At the end of the debate, Senate candidate Alan Khazei exhorted the group, “Step it up. Pick your issue and get involved. There should be twice as many of you here next year.” You could see numerous members of the audience lean forward and straighten up, as the wheels began to turn on what issue they will try to make their own.

What will be your issue and how will you get involved? To learn more about the PBLN, follow them at www.twitter.com/pbln or go to www.pbln.org.

Comments | Reprints | Share:          

I have approximately 7,000 baseball cards in my collection. These treasures are arranged in numerical order, in long and slender cardboard “card boxes,” with the typical box containing cards from a single year.

The vast majority of my collection hails from the sixties. My heyday covered the years 1962 through 1965, when I collected every card made by Topps. But I am strong throughout the decade, and also have some great cards from the 50s, 70s, and 80s. Among my favorites: two Pete Rose rookie cards, Nolan Ryan and Reggie Jackson rookies, and a bunch of Willie Mayses and Mickey Mantles (several of which are so battleworn they have lost all but sentimental value). But what I’m most proud of are those four years when I collected every single card out.

Even though I finished this streak before my teenage years began, I still remember the rules I developed for collecting—rules that I only strayed from once, at a painful price (read on). Lately, with the detritus from Wall Street blocking sunlight from the business world like the comet dust that allegedly killed the dinosaurs, I have realized that these rules are helping me today as an entrepreneur. I don’t know how valuable they’ll be to other people running companies, but to me, at least, they seem like they might hold some insights about how not to become a business dinosaur.

So here they are:

1) Collect the Whole Set — A complete set is more valuable than the sum of its parts. That was obvious to me as a seven-year-old, even though I wasn’t thinking economic value, but intrinsic value. Especially for startups running on a shoestring, the temptation in this climate is to go extra lean and not hire every position you have open. This, it seems to me, is a huge mistake. Hire the people your business needs to be successful–you don’t want key roles to go unfilled or to be partially filled by employees who in turn must scrimp on their core responsibilities. One of the best decisions we made in recent months was to hire a part-time business manager to handle HR and office logistics previously taking up founder time.

2) Be Willing to Pay A Premium to Fill the Holes in Your Collection (Because That Still May Well Be A Bargain) — This one is really a corollary of Rule 1, but it merits special attention. Some hires may seem expensive at first blush, yet constitute bargains when you consider the value they add to the team as a whole. This isn’t only true for people, either. It may make sense to take what might seem like less-than-ideal terms on a deal, for instance, if that particular deal validates or allows you to realize a key part of your business model.

3) Collect from Different Sources — I learned early on that my neighborhood stores seemed to sell different editions of cards at different times than stores in nearby cities. I would occasionally convince my mom to take me to these other venues, tapping the high-turnover stores in the city for latest-edition cards that my neighborhood peers hadn’t gotten their hands on yet, and filling in holes in my collection with older-edition cards from stores in the boonies, where my half-brothers lived. Whether you’re looking for employees, partners, suppliers, or customers, diversification of sources can expand your horizons and help you think out of the box (even though in my case, it helped put cards into the box).

4) Develop Great Trading Partners With Whom You Create Mutual Value — Matty Holtz and Randy Dover. These fellow collectors and I always sought fair trades that helped all parties. If someone didn’t like a trade, we renegotiated. Obviously, if you do this consistently in the business world you will have great partners and customers who might just help you out when you need a special hand.

5) Trade to Value — This simply means that despite its “book” value, trading the same card to two different people can bring you wildly different … Next Page »

Comments (9) | Reprints | Share:          

Three quiet and unknown Finnish engineers in their late thirties, Kim Nyberg, Kari Sydänmaanlakka, and Teemu Rantanen, have spent their working careers at the engineering software company Tekla in Finland. Their clients have used the software they created to model several well-known buildings, including Frank Gehry’s Walt Disney Concert Hall in Los Angeles, New York’s Hearst Tower, the famous ‘Bird’s Nest’ that is Beijing’s Olympic Stadium, and the world’s tallest building, Burj Dubai.

But if matters had turned out a little differently, these men—and a former colleague named Kati Suominen (now Kati Borgers) who could not be present at the interview—might have become known as the Fathers and Mother of the World Wide Web browser.

[Editor's note: This article is our first from Juha-Pekka Tikka, Xconomy's new Fellow from Stanford University's Innovation Journalism program. "JP," a reporter at Ilta-Sanomat, a major national newspaper in Finland, will be based in our Xconomy San Diego offices.]

According to the trio, whom I met earlier this year in Finland, the Internet’s rise and emergence as a daily working tool might have happened a year earlier than it did had their group been able to complete their project.

The four Finns developed a graphical, point-and-click Internet browser a year before the pioneering Mosaic browser on which Netscape Communications was based: the historical Netscape IPO in August 1995 is widely credited with starting the Internet boom.

“Our 1991 X Window system browser, ‘Erwise,’ showed that a net browser was possible. We were ahead of the times. The next step, to commercialize it, did not happen,” Kim Nyberg says.

Aside from some local media, the Finns have never before been interviewed about this remarkable story. But Erwise has an important place in the Internet’s birth history. And its fate offers a case study of what happens when invention and innovation are not accompanied by funding, talent infusion, and a strong venture capital market or angel investor presence—all ingredients that Silicon Valley (where Mosaic was funded and developed) takes for granted.

In the U.S., commercialization of the browser, now so much a part of our everyday lives, began in 1994, after Marc Andreessen left the National Center for Supercomputing Applications at the University of Illinois, where he and Eric Bina had developed the Mosaic browser the previous year. Andreessen had moved to California following his December 1993 graduation and teamed up with Silicon Graphics founder Jim Clark, backed by venture capital powerhouse Kleiner Perkins Caufield & Byers, to form Mosaic Communications, later renamed Netscape Communications. Europe was quickly left out in the cold.

But for a few key factors, it didn’t have to be that way. In 1991, Nyberg, Sydänmaanlakka, Rantanen, and Suominen were young IT undergraduate students at HUT, Helsinki University of Technology. The campus is actually located in Espoo, just a few miles from Helsinki and only half a mile away from the headquarters of Nokia Corporation. At that time, Nokia was not internationally known.

The four were about half-way through their studies when they met that September at a HUT course on designing and coding software.

In Switzerland, meanwhile, Tim Berners-Lee had just laid the groundwork for the World Wide Web at the European Organization for Nuclear Research (CERN). He thought the Web would be a useful tool for researchers and others but was frustrated at its pace of growth, which he partly attributed to the lack of a point-and-click browser. As he notes in his 1999 book Weaving the Web, “We were so busy trying to keep the Web going that there was no way we could develop browsers ourselves, so we energetically suggested to everyone everywhere that the creation of browsers would make useful projects for software students at universities.”

How did this project end up in Finland? It was largely because … Next Page »

Comments (28) | Reprints | Share:          

It’s no secret that the Massachusetts economy benefits from the presence of large, prestigious, star-studded universities and the companies started by their faculty and graduates. In fact, these universities take every opportunity to remind people of their importance: Just a few weeks ago, Harvard put out a report
taking credit for nearly $5 billion in economic activity around the Boston area in fiscal 2008.

But it turns out that area universities may not be tooting their own horns loudly enough. Companies founded by the alumni of a single university—MIT—are responsible for more than a quarter of all sales by Massachusetts companies, or some $164 billion per year, according to a report released today by the Kauffman Foundation. If the revenues of all active companies around the world formed by MIT graduates were aggregated, the study estimates, they’d surpass $2 trillion a year—which is more than the gross domestic product figures of all but the 10 largest nations in the world.

The study, which will be released in full this morning at a briefing in Washington, D.C., was conducted by MIT Sloan School of Management professor Ed Roberts and doctoral candidate Charles Eesley. The point wasn’t just to cheer for the home team, but to build a detailed, quantitative picture of how one university’s entrepreneurial alumni—especially those in technology fields—contribute to regional economic growth. “We found that the MIT alumni-founded companies have a disproportionate importance to their local economies because so many of them are manufacturing, biotech, software or consulting firms that sell to national and world markets,” Roberts said in a statement.

The Kansas City, MO-based Kauffman Foundation, which focuses its spending on programs that foster entrepreneurship and innovation, paid for the study in part because it needed more ammunition in its fight to get more universities and state and local governments to support university-industry exchanges, says Lesa Mitchell, a vice president at the organization.

“Though everyone might tire of hearing about MIT, the reality is that they continue to encourage the things in terms of university-industry collaboration that we fear are really getting broken in other places,” Mitchell says. She points to efforts such as the Deshpande Center for Technological Innovation at MIT, which provides seed grants for proof-of-concept work by MIT faculty and graduate students and matches MIT innovators with experienced business mentors.

“There out outcries in Washington about too much interchange between universities and industry,” Mitchell says. “But in fact, it’s industry that is leading the idea process, and it’s the relationship between universities and industry that allows that to happen, because as ideas get funded and supported in the university they will spill over and land either in small companies or big companies. Having that porous boundary, we think, is unbelievably critical.”

On average, MIT graduates form just under 1,000 companies every year, according to an executive summary of the report shared with the media before today’s announcement. Massachusetts is home to some 6,900 alumni-founded companies, while another 18,900 are scattered around the world, including 4,100 in California. MIT alumni-founded companies employ just under a million people in Massachusetts, 526,000 in California, 231,000 in New York, 184,000 in Texas, and 136,000 in Virginia, the study found.

The study expands on a similar report about MIT’s economic impact published in 1997 with funding from BankBoston (now part of Bank of America). The earlier study was apparently far less thorough: it turned up only 4,000 companies founded by MIT alumni, with annual world sales of just $232 billion. The new study was based on … Next Page »

Comments (3) | Reprints | Share:          

“You should visit us more often!” said one of our hosts during the MIT Sloan School of Management’s Massachusetts Tech Trek two weeks ago. The host’s enthusiasm was understandable—the company had just received news of a fresh round of funding in the midst of our visit. But such enthusiasm and energy (pun intended) was clearly evident at all of the firms that we visited as part of the Trek’s energy track on January 12-14, and was a welcome distraction from the economic malaise we keep reading about.

Co-sponsored by the Sloan Energy and Environment Club, the Energy track allowed our group to visit energy-related businesses in the Boston area to learn about firms in different stages and sub-sectors of the energy space. With the economic crisis in play and Barack Obama’s administration taking control, it was definitely an interesting and opportune time to be visiting these companies.

The energy firms we visited covered energy generation and transformation, efficiency and conservation, and consulting and research. In the generation space, we met with firms working on fossil-to-energy, storage, waste-to-energy and solar power. Interestingly, each is currently in different stages of development as a business entity.

Ze-gen, which started with SEED funding in 2005, utilizes a molten metal bath to vaporize construction and demolition and municipal waste to synthesis gas and electricity. Chief operating officer George McMillan said the company’s business model is based on the premise that they can produce energy cheaply even without taking into consideration any carbon offsets, tipping fees, or renewable energy credits. Ze-gen has plans to build its first commercial plant by 2012.

GreatPoint Energy is tackling the controversial problem of utilizing fossil fuels to “cleanly” produce energy. Dan Goldman, GPE’s executive vice president and chief financial officer, told our group that the advantages of GreatPoint’s process are low cost due to the lower temperature catalytic process, and an ability to capture CO2, which can be delivered for oil recovery or geological sequestration. GreatPoint is planning on starting operations on its $30 million feedstock testing facility in Somerset, MA, and signed an agreement with Datang Hyoin Electric Power Company in China to build and operate a plant that will process 1,000 tons per day of feedstock.

Innovative battery maker A123 Systems‘ technology went through multiple phases to reach its current level, said Andy Chu, director of the company’s automotive product line. Chu seemed confident that A123′s diversification into new areas including grid stabilization and airplane starter battery backups will ensure the company’s future success.

There is a small but loyal group of entrepreneurs and thought leaders in the U.S. who are advocating energy efficiency over energy generation. Advanced Electron Beams is one of these. AEB claims that its technology reduces energy usage by 40 to 90 percent in the surface sterilization, air treatment, and advanced curing industries, according to CEO Mitch Tyson. With a Fortune Global 1000 ranking behind them, AEB is seeking Series C funding to take their technology application to the next level.

Remember when Nanotechnology was the “it” word? You’ll be glad to know some of the nano materials have become commercial and are widely used now. Aspen Aerogels manufactures insulation materials that are two to eight times more thermally efficient than convention materials due to their nanoscale properties. Don Young, CEO of Aspen, told us that the firm is concentrating on reaching a reasonable earnings level for 2009 and diversifying into new segments.

The huge inflow of human and financial capital into the energy sector in recent years has necessitated the need for unambiguous information on the viability of technologies and business ideas. The Brattle Group has industry practice groups in most major traditional energy sectors and has developed expertise in pricing carbon and trading emissions. Dean Murphy, a principal at Brattle, felt the new administration should focus on controlling carbon emissions via a carbon tax rather than through the cap-and-trade program.

Lux Research, our last host on the trek, is a strategic advice firm that provides intelligence and consulting services in the nanotech, solar, power, water, and bio-sciences sectors. Lux Research analysts gather critical information by visiting and talking to firms in the specific sectors, according to president Matt Nordan. He emphasized a continuing need for critical analysis as we move to large-scale investing where the tolerance for market and technical risk is low.

Our interactions with so many energetic and exciting entrepreneurs, investors, and thought leaders rejuvenated our group. Leaving the classrooms to witness innovative technologies in person was a rejuvenating experience for me personally. We are looking forward to being part of a revolutionary energy innovation phase in our history.

Comments (3) | Reprints | Share:          

When I first moved from Detroit to Boston a year ago, I discovered a plethora of opportunities in technology companies that are not available anywhere else. Unfortunately, I’ve found that personal connections sometimes matter more than resume credentials in finding a job in the start-up technology space.

As a second year MBA student at MIT Sloan School of Management who graduates in May, I will be jumping head-first into the
workforce in an economically difficult time. I am focusing exclusively on Boston start-up technology companies, which means I may not have a finalized job offer until April. Start-ups rarely know what their cash position will be three weeks from now let alone three months from now. If this all seems a little gloomy, well, then you are spot on. Business has never been tougher in recent history for fledgling ventures (unless you ran a dot-com back in 2000). So what is a poor MBA supposed to do?

Network as if your life depends on it.

Putting together a cold-call campaign is quite a daunting task for one person. The sheer volume of companies in the Boston area is enough to make my head spin. Furthermore, a target company may not have the time or resources to recruit and select from dozens of individuals who want a full-time job. Assuming I do not wave a stack of venture money in front of him or her, I find it hard to believe that a CEO will take an hour of his or her time to chat about jobs with me. How am I going to solve this dilemma?

Well, if I brought a group of MBA students all at once on a company visit, the company saves on recruiting costs. In addition, my classmates and I would get access to top executives at the companies of our choice. Sounds like a plan to me!

Years ago, a group of MIT Sloan MBA students and school administrators had the same revelation and called it the “tech trek.” The MIT Sloan School of Management created the Massachusetts Technology Trek (MTT) to give students an advantage by connecting them face to face with Boston area startups. The premise of the MTT is simple. Small groups of students meet with local companies to listen to a presentation by top executives. Students run the whole program with the assistance of school administration and this year they arranged for 32 company visits over 3 days.

Connections are the name of the game in this tough economy. From this couple of days of networking I received a solid foundation to begin my job hunt this spring. I netted follow-up coffee chats and e-mail conversations with some of the fastest growing tech companies in the greater Boston area. CEOs and directors from startups such as Vlingo, Pongr, JumpTap and HubSpot all took a seat to talk with me about their companies. The conversations got rolling along and I am now further toward getting a job than my classmates who did not attend the MTT.

So can you get a job out there? I assert that you can, but you need to get in the door first. Using the MIT brand name certainly helped me to open doors. Alumni want to help you; otherwise, they would hide from the alumni database. Leading a pack full of focused, excited MBA students also helps to get the ball rolling. Strength is always in numbers.

However, I think the most critical traits for getting a job in this economy are being creative and being assertive. The organizers of the MTT did not wait for CEOs and directors to call them for a time-slot. My fellow students sold themselves as an asset this company would want to have visit any day. So too will I sell my strengths and create projects that bring instant value to any start-up I join. Companies have pains and you can use this to your advantage. Is your dream startup running out of cash? Come in the door with a list of alumni VCs or maybe a few sales leads for their flagship product. Your imagination is the only bound to what value you can bring.

Now back to the issue of MBA-level jobs. I feel better now that I see all the work that someone needs to do inside the companies I visited. Cash-strapped companies desire the biggest bang for their VC dollar in terms of talent, now more than ever. Building companies is a full-time job and I think there is plenty of work to go around. If you are a MBA student and you’re graduating this year: keep your head up—and network hard.

Comments (6) | Reprints | Share:          

Map and list updated Dec. 19: Want to know where your favorite VC gets his or her morning latte? How about where tech and life sciences entrepreneurs gather to network and discuss ideas? If you’re looking to rub shoulders with the technological elite—or if you’re just looking for a quiet cafe to have a meeting or get some work done—you’ve come to the right place.

Here at Xconomy Seattle, we’ve been keeping track of the coffee hotspots around town favored by the tech-business leaders we talk to and write about every day. We thought it would be fun to share what we’ve found, both as a list and as an interactive map you can click around on (see below). In many cases, we’ve met the innovators or investors in their favorite haunts and sampled the local beverages. In other cases, we’ve gone by what they told us. But this is in no way a comprehensive list. We’d love to hear from you about where you like to go, where plans get hatched, and where tomorrow’s deals are being discussed. We’ll update the list as we go.

It may be cliché to say the Seattle innovation scene runs on coffee, but it seems to be true. One of the amazing things about the region is the sheer number of great cafes and places to gather, talk, refuel, and recharge. There’s something for everyone, from the quiet elegance of Caffe Fiore on Queen Anne Hill to the casual charm of Louisa’s on Eastlake to the hustle and bustle of Espresso Vivace near downtown. Not to mention the old reliables, Starbucks, Seattle’s Best, and Tully’s (especially on the Eastside—what’s with the dearth of independent cafes over there?).

View Larger Map

And behind every great cafe is a great story. Take Trabant Coffee & Chai, known for its strong espresso, tasty drip coffee, and spicy teas. The Pioneer Square branch is a personal favorite of Dan Shapiro, the co-founder and CEO of Ontela—and there’s an interesting reason why. In early 2006, Shapiro says, he was one of several entrepreneurs pitching their companies at a Keiretsu Forum angel investor meeting downtown. “We were singing for our supper,” he says. The guy in front of him was pitching a $12,000 drip-coffee maker, and he had coffee samples for everyone (Shapiro was too wired to try any). The panel asked the coffee guy questions like, Aren’t you just going to compete with Starbucks? Why wouldn’t Starbucks just do this? He replied that Starbucks’ leaders were too set in their ways, and the only way they’d do it is if they saw it in action.

The guy was Zander Nosler of the Ballard-based Coffee Equipment Company. His machine was called the Clover, and sure enough, he was right. His 11-person startup was bought last March by Starbucks, which now has Clover machines in several-dozen stores in the Seattle, Portland, San Francisco, and Boston metro areas. So what does this have to do with Trabant? The local coffee shop was a key early customer of the Clover, buying the machine in the spring of 2007. “Every time I go there, I feel like I’m supporting the local startup scene,” says Shapiro.

There are many more stories, but we won’t get to them today. Instead, we present our first pass of the Greater Seattle Coffee Cluster: an alphabetical list of cafes (50 and counting), and some of the notable people you might run into there. If you’ve got a favorite spot, or a story to pass along, please do comment below or drop us a note at editors@xconomy.com. Then again, you might want to keep your local treasures to yourself…

Belle Epicurean
1206 4th Ave, Seattle, WA
Recommended by Megan Muir of DLA Piper for its pastries, good coffee, and confidentiality.

Caffe Fiore
224 W. Galer St, Seattle, WA
Martin Tobias of Kashless is known to arrive for meetings here on his Segway. Also the favorite of Paul Thelen of Big Fish Games and Bill Bryant of Draper Fisher Jurvetson.

Caffe Ladro
600 Queen Anne Ave North, Seattle, WA
Paul Thelen of Big Fish Games also lists this institution as one of his likes. … Next Page »

Comments (11) | Reprints | Share:          

Virtualization software company VMware today announced that it will buy B-hive Networks of San Mateo, CA.

VMware, a Palo Alto, CA-based subsidiary of Hopkinton, MA, storage giant EMC, makes software for both desktop machines and servers that can make a single computer appear as a number of different virtual machines. These can be run simultaneously, and even have different operating systems. In this way, you can, for instance, run some applications in Windows and some in Apple’s Mac OS X on the same piece of hardware.

Data centers use VMware’s technology to assign different virtual servers to different users and different tasks. This form of virtualization helps companies save money on computer servers—if , that is, they can manage the complexity of having all these virtual servers as an extra layer on top of a network of real, physical hardware.

B-hive, which is based in California but has R&D labs in Israel, has developed programs that help monitor and control this virtual infrastructure. If a virtualized application starts to run very slowly, for example, b-hive’s software can automatically allocate more resources such as an extra virtual machine to help handle the task.

VMware made a similar acquisition in January when it bought desktop virtualization company Thinstall. The San Francisco company makes a system that lets users in large organizations run Windows programs on their computer, without having to install them locally.

Comments | Reprints | Share:          

Being the leader of the pride, it seems, doesn’t guarantee you a nice meal everyday. Waltham, MA-based Lionbridge Technologies (NASDAQ: LIOX) may be the world’s largest provider of localization services, helping hundreds of other companies from Microsoft to Merrill Lynch to Pfizer go global by translating their websites, product manuals, software programs, and drug warnings into other languages. But it sure isn’t getting rich doing it: On May 6 the company reported a net loss of $4.4 million for the first quarter—its third straight quarterly loss—and last Friday Lionbridge stock dipped to $2.37 per share, its lowest point in more than five years, and down 61 percent compared to a year ago.

That’s lower than even the most pessimistic analysts were predicting at the beginning of 2008. As the financial website 24/7 Wall Street put it in a catty post recently, “It looks like the lion’s roar is a meow, at best.”

It’s a frustrating reversal for a company whose CEO, Rory Cowan, was being lionized (that’s the last cat pun, I promise) just three years ago for putting together a $180 million deal to buy one of its main competitors, the Global Solutions unit of New York-based Bowne & Company. That acquisition vaulted Lionbridge into the ranks of Boston’s 60 largest companies. And it’s a puzzling state of affairs, given that the company’s revenues are large and growing—a record $117 million in the first quarter, up more than 8 percent from a year earlier. But no matter how high the company’s revenues go, its expenses seem to go higher.

One answer to the puzzle seems to be that Lionbridge’s expansion has put it at the mercy of the same twin forces—technology and globalization—that drive demand for its services.

Analysts who follow localization services—a $12 billion industry in 2007—point out that translation is still a labor-intensive process, and that Lionbridge’s strategy of employing hundreds of managers, engineers, and translators in expensive regions like Europe may be backfiring with the weakness of the U.S. dollar against the Euro and many other currencies.

And while Lionbridge has made a significant investment in technology—especially on work-flow automation and memory systems that save labor by identifying material that’s already been translated—it hasn’t really profited from that spending. “What has happened is that the benefits of the efficiency gain that Lionbridge has been able to produce through the use of technology have been handed right to the client” in the form of prices that have stayed flat despite global inflation, says Ben Sargent, content globalization strategist at Common Sense Advisory, a localization market research firm in Lowell, MA.

It wasn’t supposed to be this way. Lionbridge, founded in 1996, has spent hundreds of millions of dollars on acquisitions and other growth strategies, and has the client list (Bayer, Cisco, DuPont, GE, Google, IBM, Merck, Merrill Lynch, Microsoft, Morgan Stanley, Nokia, Pfizer, Sony, and Wal-Mart are a few of the big names) and revenues ($452 million in 2007) to show for it. With 4,600 employees in 45 offices around the world and a network of 25,000 freelance translators skilled in more than 200 languages, the company is three times the size of … Next Page »

Comments (11) | Reprints | Share:          

I’d like to explain what’s cool about Kalido, a Burlington, MA, software company spun off five years ago by Royal Dutch Shell, but let’s start with a story about beer.

Labatt Breweries is Canada’s largest beer producer, brewing 60 brands of ale and distributing them in stores, bars, and restaurants across the great North. Because Labatt has bought up so many regional brewers over the years, and because every province in Canada regulates the sale and taxation of alcohol differently, the company has inherited dozens of different sales databases and reporting systems, making it extremely difficult to figure out exactly which Canadians are drinking what kinds of beer.

Typically, big companies get a grip on their sales data, customer information, departmental budgets, and the like by buying a “data warehouse” where all of the most important information from lower-level transaction systems can be organized for fast retrieval; then they use “business intelligence” tools to transform the information in the data warehouse into charts and graphs that give historical, current, or predictive views. Labatt was deep into all of these technologies. It had enterprise resource planning software from Oracle, customer relationship management software from Seibel and SAP, data integration tools from Informatica, and business intelligence tools from Cognos. But when Labatt itself became part of Belgian beverage conglomerate InBev a few years ago—meaning that it would have to start feeding business performance data up the chain to managers in Europe—the company realized that its various divisions were still counting the same things different ways.

That’s when Labatt turned to Kalido, which is the product of a similar but even more severe crisis at Shell. During the 1990s, the petroleum giant acquired some 75 companies using 110 different reporting systems, according to Kalido CEO Bill Hewitt. “The guys in Beijing would call a brand of oil ‘A’ and the guys in Cincinatti would call the same product ‘B’, and the process of rationalizing the data every year was taking far too long,” says Hewitt. “So they built a data warehouse and generated reports off that—but the problem was that every time they wanted a different report or brought in a new company they’d have to rebuild the data warehouse, which would take months. Finally they ended up separating the rules that governed the data warehouse from the data itself. Instead of building a new warehouse, they built a business model”—a graphical representation of Shell’s business, with active links back to the raw data.

With this new interactive tool, the graphical model didn’t simply depict but actually controlled the way data was piped between the company’s low-level operational systems and its business intelligence software. So adding a new subsidiary’s data to the mix would be almost as simple as drawing a new box in the org chart and connecting it to the proper parent divisions. Other changes in the organization could be replicated in the model simply by dragging boxes around and redrawing the arrows between them (more details on that below). And not only that, but because the data was now tied to a flexible model, analysts could store snapshots of the model representing different points in time, then run the clock backward and forward to examine different what-if scenarios.

Back to Labatt. In 2005, the company hired Kalido to build a new data warehouse that would bring together data from 93 transaction systems databases holding 16 years’ worth of records on products, customers, suppliers, employees, and so on. A real-life test of the Kalido installation and its flexibility came almost as soon as it was completed, when Labatt acquired yet another brewery. Labatt’s field sales staff wanted to integrate the new company’s product information into the sales database right away, so they could see how Labatt’s new sales totals would look. But the company’s accountants didn’t want to integrate the new information until the end of the fiscal year, fearing it would mess up the books. “In a traditional data warehouse you’d never be able to have it both ways,” says Hewitt. “But because we have the ability to recreate a view at any point in time, the data warehouse managers could give the sales people the view they wanted and still wait until the end of the year to consolidate the financial information.”

Okay, you may have a hard time getting excited about a new data modeling tool that reconciles incompatibilities in a company’s database infrastructure and brings out the full potential of business intelligence software. And admittedly, developments in enterprise software can seem deathly dull to outsiders who aren’t enmeshed in the complexities of running a big business. But if you follow the larger world of software engineering, then you may appreciate the novelty and power of Kalido’s idea, which builds on more than a decade of R&D on graphical models that define and drive underlying data structures.

The linking of graphical models to actual software code and data is the core concept behind the Unified Modeling Language first developed in the early 1990s by Rational Software, which went on to be acquired by IBM and is now at the epicenter of Big Blue’s software development platforms business. Suffice it to say, business data modeling is an idea that’s picking up steam, and that’s likely to become more important as … Next Page »

Comments | Reprints | Share:          

Boston-based information protection and storage company Iron Mountain announced today that Richard Reese, CEO since 1981, will step down in June. Taking Reese’s place will be Bob Brennan, who joined the company in 2004 with Iron Mountain’s acquisition of Connected Corporation and has been its president and chief operating officer since 2005. Under Reese’s leadership, Iron Mountain grew from $3 million in revenue in 1981 to $2.1 billion in annualized revenue last year, and became a leader not just in secure document storage but in electronic records management. Reese will continue as the executive chairman of the company’s board.

Comments (1) | Reprints | Share: