How to sense and make sense of subtler factors that govern our behaviors, the choices we make as individuals and as part of groups. The point here is that there are some obvious physically measurable; things like body weight, miles driven, CO2 let out, around which we can develop diagnostics and policies. But these measurables are often the consequence of choices that are less tangible, like body image, the urge to stand out or blend in and so on.

I think we can sense these things as well by measuring brain activity or signs of mood changes in written communications. So as we get better at analyzing and archiving vast amounts of data we will find ourselves extending the frontiers of what we can gather. Many disciplines outside of the hard sciences will advance because of their ability to finally measure more things. So I would emphasize data analysis and also new ways of thinking of sensing.

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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.

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A new kind of countdown has begun. Carlsbad, CA-based ViaSat (NASDAQ: VSAT) says it recently transmitted the first test data to ViaSat-1, the highest capacity communications satellite ever launched into space. The satellite, launched Oct. 19 from Russia’s Baikonour Cosmodrome, successfully relayed e-mail, streaming video, and Web browsing data to ViaSat’s WildBlue high-speed data network.

In a statement today, ViaSat says commercial use of its 140 Gpbs (gigabits per second) satellite is expected to begin before the end of the month. In other words, the total bandwidth capacity of ViaSat-1 exceeds the combined data rate of all current Ku-, Ka-, and C-band satellites now serving North America, according to the company.

ViaSat-1′s coverage includes North America and Hawaii, and is intended to provide high-speed broadband Internet service to WildBlue customers in the United States, Xplornet customers in Canada, and aboard JetBlue Airways’ domestic flights.

The test transmissions were completed December 2 from ViaSat’s Carlsbad campus and relayed by the satellite to a ground station gateway in Milford, UT. After testing has been completed in another week or so, ViaSat-1 manufacturer SpaceSystems/Loral will transfer operation of the satellite to the operator, Telesat. Meanwhile, ViaSat says it plans to complete the integration of its network of 20 ground stations, which will connect the satellite to the Internet backbone.

In the company’s statement, ViaSat chairman and CEO Mark Dankberg says, “We have advanced satellite technology to the point that [our] satellite can now be a better alternative for broadband Internet than DSL, and 3G / 4G wireless offerings for fixed home use – an enormous leap for satellite broadband technology.”

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A comprehensive snapshot of San Diego’s innovation economy shows that 76 technology startups were formed during the three months that ended June 30, a nearly 20 percent increase over the 64 startups established during the same quarter last year.

Counting the 70 new tech companies formed during the first quarter, a total of 146 startups sprouted here during the first half of 2011, according to the latest Connect Innovation Report, which covers innovation activity in the San Diego area during the second quarter of 2011. The full report is available here.

Connect’s innovation report also highlights rising tech employment, a three-fold increase in the total value of M&A deals involving tech companies, and a historic high for patent applications. The report was prepared by Connect, the nonprofit group supporting San Diego innovation and entrepreneurship.

Taken as a whole, the indicators suggest that economic activity was improving for thousands of local life sciences, technology, and defense companies during the first half of 2011. For example, the 146 new companies founded during the first six months of 2011 marked a nearly 48 percent jump over the 99 new companies formed during the first half of 2010.

But the encouraging vital signs measured in the report were taken before this summer, when U.S. markets were unsettled by a variety of political and economic setbacks, both foreign and domestic.

Those broader economic concerns could have been a factor in a nationwide survey of CEO confidence conducted during the third quarter by Vistage International. The survey, which Connect included in its full report, found that small-business CEOs anticipate a slowdown in the pace of economic growth amid record-high economic uncertainty. Generally speaking, that means small companies are more cautious about making investments and slower to hire new workers. The September survey of 1,710 small business CEOs resulted in … Next Page »

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It was 1993 when the San Diego chapter of the American Electronics Association organized its first high tech industry awards to recognize local companies for their business excellence, technology innovation, community involvement, and sometimes simply for persevering in the face of adversity.

Since then, the nationwide organization that HP founder David Packard helped form in 1943 as the West Coast Electronics Manufacturers Association has morphed into the AeA, (in 2001) and TechAmerica (2009). Recently Tech America San Diego named the winners of its Eighteenth Annual High Tech Awards. The industry group handed out 10 awards in nine distinct categories:

—Software: Oceanhouse Media

—Internet/Web Commerce: Sorenson Media

—Computers and Related Products (two awards): AgigA Tech and One Stop Systems

—Communications Products and Services: MicroPower Technologies

—Software as a Service/Cloud-based Computing: ServiceNow

—Semiconductors, Industrial & Analytical Instrumentation: Creative Electron

—Cleantech: EcoATM

—Outstanding Emerging Growth: FieldLogix

—IT Service/Contract Services: Outsource Manufacturing-Made in San Diego

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San Diego’s high-tech sectors did not escape unscathed from the great recession of 2007-2009, but a new study says local technology industries have had a disproportionate effect in boosting the regional economy in recent years.

Using state employment data, the study released yesterday by the National University System Institute for Policy Research counted just over 6,000 high-tech employers in this region last year—or about 6 percent of all employers (with payrolls) in the San Diego region.

Yet these 6,000 companies directly employed 138,800 workers, or 11.2 percent of the total regional workforce in 2010. Using standard economic modeling, the institute estimated that San Diego’s technology industries indirectly created an additional 103,800 jobs last year, and induced another 120,400. The total—363,000 technology-dependant jobs—represents more than 29 percent, or close to a third of all jobs in the San Diego area.

Wages paid by technology companies have had an even-more disproportionate effect on the regional economy in recent years, according to the institute’s analysis. It shows the average annual wage of workers directly employed by technology companies in San Diego at $93,800 in 2010, more than double the $45,000 average annual wage paid by non-technology companies.

Accordingly, overall labor income generated directly by technology jobs reached $15.7 billion in 2010. The study found another $12.3 billion was generated by indirect and induced labor income, totaling $28 billion—or 45 percent of all labor income generated in the San Diego region last year.

San Diego’s technology sectors shed some jobs during the Great Recession of 2007-2009, contributing to a county unemployment rate that still stands at slightly more than 10 percent, according to August unemployment data. (The statewide unemployment rate in California was nearly 12 percent in August.) But technology employment held up much better than the overall  job market, according to the study. Employment in most tech sectors had returned to 2007 levels by 2010—except in computer and electronics manufacturing, which declined 8 percent, from 13,700 to 12,600 jobs throughout San Diego County.

In contrast to all other technology sectors, the number of biotechnology and pharmaceutical jobs actually increased by almost 21 percent in San Diego County during the recession—from 17,300 jobs in 2007 to 20,900 jobs in 2010.

The institute analyzed economic trends in nine high-tech sectors, based on a standard federal job classification system. The nine sectors are biomedical products, biotechnology and pharmaceutical, communications equipment, computer and electronics, defense and transportation, environmental technology, recreational goods, software, and technology consulting services.

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Here’s a sign that your industry is ripe for a technological overhaul: Last-minute scheduling is sometimes handled by old-fashioned phone trees, with human schedulers making hundreds of phone calls a day to fill open slots.

That was the case at Southwest Airlines (NYSE: LUV)—at least it was before a new text-messaging program supplied by Seattle-based Varolii helped push the quirky budget carrier’s system for last-minute scheduling into the mobile age.

Ten months later, some two-thirds of Southwest’s pilots have opted into the system to alert them about extra shifts. And Varolii, which recently raised $8 million in growth financing, is looking at ways to expand this new use for its mobile-messaging technology, possibly adding everything from flight attendants to ground-based package pick-up services.

Here’s the backstory: Like any other business, airlines sometimes have holes pop up in their employee schedule and need to find someone else to pick up the slack. Common enough—but that problem is a lot more complicated when you’re dealing with flights that have to leave on time, and a unionized workforce that doles out work based on seniority.

Southwest’s existing approach, Varolii vice president Andrea Austin said, included a website where pilots could check for open flights. But the airline also might have to turn to a call-down list in some cases, running through lists based on seniority until a pilot or co-pilot’s seat could be filled.

Varolii had already been working with Southwest, handling things like text-message alerts for customers and employee messages to spread word of shutdowns in emergency situations, like the landfall of Tropical Storm Irene earlier this year.

So could Varolii help tackle the pilot-scheduling problem? In one sense, adapting Varolii’s technology to that task wasn’t terribly complicated: In the broadest sense, you just point it at pilot data instead of customer data. The pilots can text back to claim a shift, problem solved.

But the particulars of having a union workforce definitely threw in some wrinkles. As mentioned, seniority is a huge issue. Mucking it up could cause big employee problems for Southwest, so … Next Page »

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Connect, the San Diego nonprofit group for innovation and entrepreneurship, says it has selected three finalists in eight categories for the region’s 24th annual Most Innovative New Product (MIP) Awards competition. The 24 finalists were culled from more than 140 nominations submitted, according to a statement from Connect. The finalists in each category are evaluated by San Diego experts and business executives in that category. Winners will be announced at an awards luncheon, set for Dec. 9 at the Hilton La Jolla Torrey Pines.

The finalists in each category are:

Clean Technology

Genomatica, for Process that produces high-volume industrial chemicals from renewable feedstocks.

Noble Environmental Technologies, for proprietary ECOR process to produce environmentally friendly building materials.

Wildcat Discovery Technologies, for electrolytic process that makes environmentally friendly materials.

Communications and IT

Ethertronics, for its Ether 1.2.1 technology for embedded antennas in mobile devices.

Kyocera Communications for Kyocera Echo, a dual-touchscreen smartphone.

Swarmology for Swarm.it, real-time contextual search and marketing technology.

Life Science – Diagnostics and Research Tools

Biocept, for OncoCEE-BR diagnostic screening technology to detect circulating tumor cells.

Life Technologies, for Ion Personal Genome Machine, technology for semiconductor-based DNA sequencing.

Targeson, for ultrasound contrast imaging of VEGFR2 receptor on lining of blood vessels.

Life Science – Medical Products

Hypnoz Therapeutic Devices, for Jaw Elevation Device used to maintain open airway during medical procedures.

IOS Technologies, for technology that enables dental professionals to create digital impressions and 3-D models.

Optimer Pharmaceuticals, for fidaxomicin (DIFICID), a new antibiotic treatment for C. difficile.

Software

FICO, for Falcon Fraud Manager 6 Analytics, used to detect payment card fraud.

MOGL for MOGL, online restaurant mobile rewards program.

SwoopThat, for online technology that helps college students find cheapest online price for every book they need to buy.

Hardware and General Technology

Aculon, for Aculon AL-X and Aculon H1-X products, nano-scale films and coatings for a variety of survaces.

LifeProof, for LifeProof case for the iPhone 4.

Memjet, for high-speed inkjet printing technology.

Action and Sport Technologies

Hydroflex, for flexing surfboard design.

KVA Stainless, for technology to produce seamless stainless steel tubing, pipes, stamping, and forming.

TaylorMade Golf, for R11 Driver with movable weight than enables golfers to customize to their swings more precisely.

Aerospace and Security Technologies

Geodetics, for positioning and navigation technology for dynamic platforms offering a variety of processing, global positioning system (GPS) and inertial measurement unit (IMU) options that can be configured to cover a broad performance spectrum.

Langford & Carmichael, for ScenGen, a software program that generates all possible scenarios for a given situation at a very high speed.

MicroPower Technologies, for MPT2500 Rugged-i, solar-powered wireless video surveilance camera technology.

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Burlington, MA-based Bluesocket, which produces wireless networking and security technology, has been acquired by ADTRAN in a transaction effective August 4, the companies announced today. ADTRAN (NASDAQ: ADTN), a provider of networking and communications equipment, will roll Bluesocket into its enterprise networks business. Bluesocket—whose investors include Ascent Venture Partners, Intel Capital, Menlo Ventures, and Vesbridge Partners—raised $8 million in January 2010.

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The economic deep freeze is thawing for IPOs on U.S. exchanges, according to a quarterly report issued today by the Ernst & Young accounting firm.

The number of companies in registration for an initial public offering increased to 140 during the three months that ended June 30, according to the latest the “Ernst & Young U.S. IPO Pipeline” study. That’s almost 24 percent more than the 113 companies that were registered during the same quarter last year, according to Ernst & Young’s data. Beneath story, I’ve put together a list of companies in the IPO pipeline for each Xconomy city as of June 30.

Ernst & Young says the 140 companies now in the lineup represent a potential total of $23.7 billion in estimated market valuation. That’s down from the $25.3 billion in total value during the same quarter last year, but the highest number of companies registered to go public since late 2007, when the financial crisis was beginning to engulf the U.S. economy. Just 28 companies were in registration at the end of the second quarter in 2009, one of the darkest periods of the recession.

A total of 42 companies went public on U.S. markets during the second quarter, a 13.5 percent increase over the 37 IPOs during the second quarter of 2010.

The warming trend is good news for the venture firms and other investors that view IPOs as a key way to keep the capital flowing to new companies, and to exit from startup companies with a return on their investments. Of the 140 companies in the IPO pipeline, venture capital firms back 40 percent, 31 percent are backed by private equity firms, and 23 percent are backed by both.

Technology-related IPOs accounted for 25 of the total companies in the pipeline at the end of the quarter, and they are trying to raise a total of $4.4 billion. The oil and gas industry was the next bigger sector, with 17 companies trying to raise a total of $4.6 billion. Other active sectors include financial companies, retail and wholesale, and diversified industrial products. Here’s a breakout of companies in the pipeline for each Xconomy city: … Next Page »

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Venture capital activity improved slightly year-over-year, with a total of $7.5 billion invested in 966 new companies nationwide during the quarter that ended June 30th, according to the MoneyTree Report released today.

Investment levels represented the highest quarterly total since the pre-recessionary second quarter of 2008, according the report, which is prepared by the National Venture Capital Association (NVCA) and PricewaterhouseCoopers, based on data from Thomson Reuters. The partners are expected to release details on regional venture activity trends later today.

The $7.5 billion invested during the quarter represented an 18.7 percent increase over the previous quarter, when $6.3 billion was invested across the country, according to the report. The 966 deals also represented an 18.6 percent gain over the 814 deals done during the first quarter. Compared to the same quarter in 2010, however, the numbers appeared less impressive, amounting to a 5 percent increase in dollars (from nearly $7.2 billion) and a 3 percent decline in deals (from 998).

In a similar way, the MoneyTree Report highlighted the $2.08 billion in financing that went to 206 biotech and medical device and equipment-makers during the quarter, saying it represented a 37 percent increase in dollars and a 12 percent gain in deals compared to the previous quarter. A year-over-year comparison, however, shows a 2.7 percent decline (from $2.14 billion invested) and a 21 percent decline (from 261) in deal volume from the second quarter of 2010.

The single biggest deal of the quarter involved the Boston-based online retailer CSN Stores, which raised $165 million from Battery Ventures, Great Hill Equity Partners, HarbourVest Partners and Spark Capital. The second biggest was a $138 million investment in the Gilt Groupe, another e-commerce provider based in New York, followed by a nearly $115 million venture round for Fisker Automotive, the Anaheim, CA-based electric vehicle maker.

The latest numbers in the MoneyTree Report’s roughly correspond with … Next Page »

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Private research organizations employ almost 31,000 people in San Diego County, more than the number of similar employees in any other California county, according to a new quarterly innovation report from Connect, the local non-profit group for technology and entrepreneurship.

Researchers teased that statistic from U.S. Department of Labor data for the third quarter of 2010, the most recent quarter available, according to Steve Hoey, a project leader at Connect who called the new finding “a testament to the strong R&D base we have in our region.” The report ranked Silicon Valley’s Santa Clara County second, with almost 19,000 working at private research institutions. Los Angeles was third with more than 17,000.

Such findings in the report underscore how San Diego has become a hotbed for early stage technology and life sciences companies, despite a decline in the amount of venture capital invested here.

Entrepreneurs started 70 companies in San Diego during the first three months of this year— double the 35 startups formed during the same quarter of 2010, according to Connect’s First Quarter 2011 Innovation Report. The report also shows an uptick in tech sector employment, continuing strength in federal research funding, a sharp increase in patents issued to local inventors, and increasing mergers & acquisition activity. Venture capital investments in San Diego startups, however, continue to decline.

Here’s a breakdown of the report’s major indices:

—The 70 new startups founded in San Diego accounted for nearly 12 percent of the 597 technology and life sciences companies created throughout California during the first quarter. San Diego’s tech startups created more than 130 new jobs, nearly 8 percent of the 1,700 new jobs created by new startups statewide. Twenty-seven of San Diego’s new companies are developing software, an increase that was offset in the life sciences where only 11 new companies were formed. Another 17 were communications startups, with the rest focused on recreational goods, defense, computer, and environmental sectors.

—Communications equipment manufacturing, as usual, represented the largest employment sector of the local innovation economy, with almost 28,000 jobs. San Diego’s life sciences sector and software each accounted for 27,400 jobs, and defense … Next Page »

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Fairfield, CT-based GE (NYSE: GE) and four venture capital partners said today they plan to invest a total of $63 million in 10 cleantech companies developing energy-related concepts in solar, communications and software, and building efficiency.

The funding represents the second phase of a crowd-sourcing challenge, this time focused on “Powering Your Home,” that GE launched in January with four venture capital firms, Emerald Technology Ventures, Foundation Capital, Kleiner Perkins Caufield & Byers, and Rockport Capital. With today’s announcement, the partners funding a $200 million pool for the “GE ecoimagination Challenge” have so far committed to invest $134 million in companies developing advances in home energy and power grid technologies

The recepients include cleantech companies in three Xconomy cities: Boston, San Francisco and San Diego. GE says its challenge has resulted in a total of 22 new commercial partnerships, as well as the acquisition of FMC-Tech, a smart grid technology company in Shannon, Ireland, that was among 12 companies that received funding in the first-round awards announced last year.

The amount of funding invested in individual companies was not disclosed. The companies are:

Ember, Boston, MA (Communications and software)

GMZ Energy, Waltham, MA (solar systems and services; co-investment with KPCB)

Hara, San Mateo, CA (Communications and software; co-investment with KPCB)

Nuventix, Austin, TX (Building efficiency)

On-Ramp Wireless, San Diego, CA (Communications and software)

Project Frog, San Francisco, CA (Building efficiency; co-investment with RockPort Capital)

SunRun, San Francisco, CA (Residential solar systems and services; co-investment with Foundation Capital)

Viridity Energy, Conshohocken, PA (Communications and software)

VPhase, Manchester, UK (Building efficiency)

WiTricity, Watertown, MA (Communications and software)

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I had the pleasure of sitting down with David Hauser recently to talk about his Boston-area company, the Grasshopper Group.

David is the CTO of the company and co-founded it with Siamak Taghaddos in 2003 when they were both students at Babson College. From its beginnings as a virtual phone system, the Grasshopper Group is now the parent company of multiple Web-based products all focused around the company’s core purpose of empowering entrepreneurs. Grasshopper employs about 50 people, continues to grow, and has never raised any capital from VCs.

The first part of our conversation (see video on YouTube) was focused on the origins of the company. How did two college students decide to start a telecom company out of their dorm room? As is often the case, it originated from an authentic need that the founders encountered through their own experiences as entrepreneurs.

We also talked about mentorship and role models. Grasshopper was started in the tech doldrums. David and Siamak admit to having very few role models in the ecosystem to look up to. During this part of the talk, David gives excellent advice on being bold and resourceful about seeking people out and sharing your story to get people (partners, customers, and mentors) to become advocates of your cause.

But the real magic of the Grasshopper story is the way the entire company is anchored around a core purpose and core values. As David says, “We are not just selling some stupid phone system.” Everyone in the company and everything they do is anchored by a vision of supporting 1 million entrepreneurs with products they love that help them achieve their passion, he says.

Vision and values are pretty soft stuff. Many great companies have value statements that don’t mean much (most employees couldn’t recite them if asked) and many startups want to stand for something, but fail in the process. What you hear from David is the way the vision and values of the company permeate through all aspects of the company. For example:

• Establishing culture and maintaining culture as a company scales
• Raising (or not raising) money
• Sending dead insects to 5000 thought leaders
• Staying creative in PR and Marketing
• Searching for companies to start

The whole interview is really meaty, but if you only have 5-10 minutes, watch the second segment, below, where this is all discussed. Also, you can keep up with David by following him on Twitter or checking out some of his presentations on entrepreneurship and Culture, Purpose, and Values.

Thanks to Xconomy for helping to make this interview happen, and to Sean O’Connor who helped me significantly upgrade the production quality of these videos.

[Editor's note: Rob Go blogs at www.robgo.org.]

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Microsoft’s biggest acquisition to date was on display this week, in Boston. I’m not talking about Skype. I’m talking about Qi Lu.

Lu, the president of Microsoft’s online services division, was in town on Wednesday to meet with employees at the firm’s New England Research and Development Center (NERD) in Cambridge, MA, and, in addition to private meetings with local companies and universities, to give a public talk that was co-hosted by Xconomy.

For those who don’t know, Lu was brought in at the end of 2008 by CEO Steve Ballmer to spearhead Microsoft’s fast-growing online efforts—including Bing, MSN, and mobile advertising. Before that, Lu was a senior exec at Yahoo for a decade, where he ran engineering for the search and advertising group. He had previously worked at IBM’s Almaden Research Center and Carnegie Mellon University.

So Lu is basically The One, charged with bringing the world’s biggest software company to a more competitive position in the digital, online, and social era (no pressure). And he was quite a steal—especially compared to the $45 billion that Microsoft offered to pay for all of Yahoo in early 2008.

This week, when he was in Cambridge, Xconomy sat down with Lu for an exclusive interview. Between that and his talk at the NERD center (see photo below), we learned a great deal about Microsoft’s (NASDAQ: MSFT) evolving strategy in search and the Web—and where the company sees itself playing across the various fields of consumer online services. We’ll have a separate story on that soon.

But first, we had to get Lu’s take on the big news of the week, and what everyone was buzzing about—Microsoft’s $8.5 billion acquisition of Skype, the Luxembourg-based Internet phone and video firm (which has a big Silicon Valley presence). Skype will become a separate division within Microsoft; it won’t be integrated into Lu’s online services division. Partly because it isn’t in his direct purview, Lu didn’t go into much detail. But from the high-level comments he made during our interview, and at his public talk, it sounds like there are plans to use Skype’s technologies across a wide range of Microsoft businesses.

“This acquisition is very strategic,” Lu told us. “Certainly we are very confident that … Next Page »

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Seattle-based business software company Varolii has a new president and chief executive: Former Microsoft general manager David McCann. He replaces Nicholas Tiliacos, who was with the company for 10 years. Varolii makes tools for text messaging, voicemail and email that help businesses reach customers and employees. It was founded under a different name by two MIT grads and has an office in the Boston area. Like many companies, Varolii’s fortunes have reflected the troubles in the broader U.S. economy in recent years. In 2008, Xconomy’s Bob Buderi wrote about Varolii shelving plans for an IPO that had been expected to raise up to $86 million. The company also laid off unspecified numbers of workers in early 2009 and late 2010. Varolii says it now has about 250 employees nationwide, and some 450 clients, including big players in banking, wireless, and healthcare.

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Imagine if your business phone system could track your employees’ sales actions, help you consolidate offices, connect you with offshore manufacturing facilities, and make your mobile phone act like an office landline.

Cambridge, MA-based Thinking Phone Networks is aiming to do that (and more) with its cloud-based communications platform. It’s a somewhat crowded space, but Thinking Phone says its price point, analytics technology, and target customers set it apart from expensive, incumbent technology (from providers like Cisco and Avaya).

The Thinking Phone technology offers elements like enterprise phone systems that allow any phone, even a mobile, to act as the four-digit extension of a corporate line, eliminating the need for expensive hardware and providing an automatic disaster recovery service by enabling phone calls to be rerouted in the case of a shutdown at a corporate office. The company built its software platforms from scratch, with the intention of deploying on the cloud, rather than having to rework its entire infrastructure once cloud computing really took off among business service providers.

Thinking Phone also integrates the phone systems of a company’s workforce with other business applications, like Salesforce.com, and applies analytics technology to the activity. So management can know just how long it takes for an employee to act on a sales lead—which is handy for businesses like real estate agencies whose physical offices have largely diminished in favor of online lead generation.

“It gives a realistic view into what people are doing every day,” says president and CEO Steve Kokinos. “We’re analyzing all the calls that are made and correlating that data with the appropriate application.” The analytics give management an explicit look at things like how much time salespeople are interacting with potential customers, and how those calling into corporate help desks are being handled.

The technology has been deployed at roughly 2,500 offices to date, with an average size of 25 people. Thinking Phone typically serves companies with employees of 1,000 to 1,500 customers, who are squeezed by the big price tags of incumbent technology in the unified communications space, says Kokinos.

Thinking Phone touts its cloud communication system as costing one-third as much as traditional enterprise hardware and communication equipment, and it charges companies on a per-user per-month basis, as if the system were a software-as-a-service application (which it is). And customers … Next Page »

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Pervasive was keeping a low profile last year, when I reported the fabless semiconductor design startup had raised $6 million in a round led by two Bay Area venture firms, New Enterprise Associates and Walden International. But that’s not true any more.

Reza Mirkhani, the company’s San Diego-based founder and CEO, tells me the company has changed its name to EnVerv, and is no longer in stealth mode.

EnVerv specializes in designing communications chips for advanced metering infrastructure and related power grid and utility applications. “The core strategy is to deliver a mission-critical level of performance to smart grid communications,” Mirkhani says. The company’s “system-on-a-chip” technology for power line communications enables a utility to transmit and receive data, using its own electric power lines as the carrier between communication nodes.

EnVerv, which had 22 employees seven months ago, now has more than 30 employees and full-time consultants, most of whom work in the company’s Milpitas, CA, office. Mirkhani says the company also has expanded its product development so it can offer chipsets that have been optimized for different markets overseas. Most of the customers targeted by EnVerv are outside the United States.

Developing a specialized chipset for a single market makes more sense in Europe than in the United States, where some 2,700 utilities operate the nationwide power grid, Mirkhani says. A single utility runs the power grid in Italy, and the same is true in France. In Spain, three utilities operate the nationwide power grid.

EnVerv has raised a total of $6 million since it was founded last year, and will likely need to raise another $12 million to $15 million by May or June, Mirkhani says. The company is fortunate to have NEA and Walden as lead investors, he adds, “because in the markets we’re entering, our financial backing is one of the first things that potential customers look at.”

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Venture investing in San Diego declined substantially during the last three months of 2010, according to additional data coming in today from Dow Jones VentureSource, and from the MoneyTree Report.

VentureSource found that venture firms invested $154.3 million in 21 San Diego startups during the fourth quarter of 2010. That was a 27 percent decline in capital and a 5 percent decline in deals from the $210.7 million that went into 20 deals during the same quarter in 2009.

The MoneyTree Report showed a 43 percent drop in venture capital invested during the fourth quarter in San Diego, with a 25 percent decline in deals. (Venture firms put $193.1 million into 26 startups in the quarter, down from $343.9 million in 32 companies during the same quarter in 2009).

Both surveys also showed an overall decline in San Diego venture funding for the year, with MoneyTree counting $846.9 million as a 10 percent decrease in capital invested from 2009 and VentureSource counting $655.8 million as a 28 percent drop from 2009. MoneyTree found that the number of deals in San Diego increased slightly (to 115 from 109) in 2010 while VentureSource said the number of deals declined (to 84 from 87).

“We are relatively flat year-over-year on the number of deals,” says Dan Kleeburg, a life sciences audit partner with Ernst & Young in San Diego. “On the value of deals, I agree that we’re down.” Kleeburg noted that San Diego’s strength lies in the life sciences sector and IT (especially networking and communications), which were weak areas for venture investing nationwide.

“Anecdotally, what I would say is there has clearly been a positive change in … Next Page »

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