Box, the Palo Alto file-sharing startup that recently snagged another $81 million in venture funding, has started to throw around the “E” word: ecosystem. At a media event in San Francisco last Thursday night, the company announced the formation of a community program called the Box Innovation Network—abbreviated /bin, a clever reference to a common name for a Unix directory containing executable files.

The bottom line here is that Box wants more outside developers and companies to build apps that take advantage of Box’s own cloud-based file storage system. So it’s getting serious about creating and sharing the application programming interfaces, or APIs, needed to do that. And it’s ready to put some money behind the program—Box said it has set aside $2 million to support faster software development by selected /bin members.

Box CEO Aaron Levie calls /bin an “open ecosystem,” in contrast to supposedly closed systems, such as Microsoft’s Sharepoint, that aren’t as easily accessible to third-party developers who want to add their own features. “Slow-moving enterprise software giants have produced very little innovation in recent years, and their closed ecosystems have made it all but impossible for outside players to create compelling experiences for customers on legacy systems,” said Levie, who never misses an opportunity to criticize Microsoft, Oracle, and other big incumbents.

But what kinds of “compelling experiences” does Box think its own partners will create using the company’s APIs? To find out, I talked Friday with Chris Yeh, whose title at Box is vice president of platform. Yeh joined Box this summer from Yahoo, where he spent four years running developer programs and managing community products such as Yahoo Groups and the Delicious social boomarking tool. Here’s an edited writeup of our chat.

Xconomy: At what point did Box start to think of itself as a platform or an ecosystem, not just a service?

Box Vice President of Platform Chris Yeh

Chris Yeh: I think Aaron has been talking about Box as a platform company for quite some time now, whether internally or externally. I think what Aaron realized is that Box’s core business has a long runway of growth, but you look at what the company really needs to do in the long run to become dominant, it needs to evolve toward being a platform company. Now is the right time to invest in this part of the business.

If you think about what we do at the very lowest level—storage of files for sharing purposes in the cloud—that is a function that is fairly low on the stack of functions that people need. We think there is a real opportunity to bring in third-party developers in a way that grows the ecosystem around us and drives business value for the company. When I came aboard, the mission was to push the pedal to the floor. That means my responsibility at Box is to do a few things. First, I own the product roadmap for our platform. We’re hiring engineers as fast as we can into the platform team. We have grown by 3x or 4x already. So we are starting to add some muscle. The other side of my job is to get out into the ecosystem and meet as many people as possible and make people aware of what we are doing and how they can integrate. So you are seeing the push within Box to start doing this.

X: How are companies using Box in their applications? Give me some of your favorite examples.

CY: The first /bin member we announced is a company called LiveOffice. They are an e-mail and file archiving company down in L.A., and they have built a legal e-discovery solution against Box. E-discovery isn’t everyone’s favorite example, but it’s one of my favorites, and somebody really needs this. We had a pharma customer who, when they heard this was even possible, asked if they could … Next Page »

Comments | Reprints | Share:          

Y Combinator unleashed its latest class of startups on the world yesterday at its summer Demo Day in Mountain View. The famed venture incubator, which provides mentorship, networking, investor access, and a modest cash stipend in return for an equity stake in each company, admitted a record 63 startups this time around. That’s up from 43 in the winter 2011 batch, and 34 in summer 2010.

To accommodate all those entrepreneurs, Y Combinator has had to expand, literally. For the second time, the organization has moved the signature orange wall in its common room about 30 feet to the west, roughly doubling the amount of space for work tables—and for Demo Day seating for investors and journalists, which is always at a premium.

Summaries of the YC startups’ pitches start below, one paragraph each. But fear not—you won’t have to wade through 63 paragraphs. That’s because a record proportion of this year’s startups, 33 out of the 63, asked to stay off the record, meaning they haven’t launched their services or they’re not ready to have it known that they took part in Y Combinator. Also, I just couldn’t get through all 30 summaries last night, so I’m dividing up this debrief into two parts. Today it’s A through Mo; tomorrow, Mu through Z.

I’m trying something new this time around. As in the past, each listing contains a link to the company’s website, the names of its co-founders, the tag line provided by each company (when there is one), and my summary. What’s new is the final line—my quick personal take on each startup. The presentations were admittedly brief (about three minutes each), so I’m not ready to form final judgments about any of these companies. But as they say, first impressions matter.

Aisle50

Chris Steiner, Riley Scott, George Korsnick

“Groupon for groceries.”

The founders of Aisle50 argue that newspaper circulars are losing their effectiveness and that large food manufacturers are looking for new ways to promote their products, including e-mail and the Web. Whereas the incumbent digital coupon provider, Coupons.com, simply reduces an entire circular to a few Web pages, Aisle50 crafts a single, custom page for each promoted product and features one discount per grocery chain at a time. When a member buys the currently featured product via credit card at the Aisle50 website, a matching credit is applied to his or her store loyalty card. The startup is currently working only with the Lowes Food chain in North Carolina, but will soon add hypermarket chain Meijer. A “giant pot of money” is waiting to migrate from paper coupons to digital platforms, the startups says, and it wants to become “the premier way for food manufacturers to market their product.”

My take: Reminiscent of YC S10 startup Anyleaf, which is also out to kill the supermarket circular, but Aisle50 has the Groupon twist. Y Combinator seems to return to certain themes again and again, as if searching for the right solution.

Bushido

Sean Grove, Kevin Zettler

“An app store for the cloud.”

To get their Web or mobile apps distributed, developers have to worry about lots of things outside their areas of specialty, such as hosting, authentication, and billing. Bushido says it can take an app written using the Rails programming framework and “wrap” it in a software package that takes care all of that, liberating developers to focus on their software. Over time, the startup says it will accumulate “all the apps, all the users, and all the data,” giving it an understanding of a “data graph” that will be as powerful as Facebook’s social graph.

My take: Probably the brashest and most cryptic pitch of the day. The company clearly hopes to bask in the glow of Heroku, the Ruby on Rails hosting service that was part of Y Combinator’s Winter 2008 term.

Can’tWait

Eric Florenzano, Eric Maguire

If the names Eric Florenzano and Eric Maguire sound familiar, it’s because these are the same two Erics who worked with Leah Culver to launch Convore, a YC W11 company that specializes in IRC-style group chat. That probably makes them the first startup founders to participate in two consecutive terms at Y Combinator. This time around, they’re going after the movie business—specifically, trailers. The startup’s iPhone app (coming soon to Android) lets users browse and watch movie trailers, share their favorites with friends, and set reminders so they won’t miss out when the movies hit theaters. Florenzano calls it “the best marketing platform Hollywood could hope for” and predicts studios will pay the startup handsomely to feature their trailers. In the future, the company plans to take on video games, consumer electronics, and other product categories where pre-orders are prevalent.

My take: It will be interesting to see what company Florenzano and Maguire start for YC W12.

… Next Page »

Comments | Reprints | Share:          

A local tech startup that has been toiling away for four years saw its first partnership with a big company come to fruition last week—and it could be a sign of bigger things to come.

Back in February, Cambridge, MA-based OfficeDrop, a digital filing software company, inked a deal with Nuance Communications (NASDAQ: NUAN), the speech and imaging tech firm in Burlington, MA. OfficeDrop provided the software and expertise for Nuance’s new cloud-based scanning and document-managing service, called PaperPort Anywhere, which rolled out last week.

It’s a big deal for OfficeDrop, which stands to get about $1 million in revenue from Nuance in the first year of the partnership, says Prasad Thammineni, the co-founder and CEO of OfficeDrop. Nuance’s scale could help the startup reach millions of new users—so it’s a distribution model that Thammineni is looking to replicate with other big companies in the next year or so.

OfficeDrop lets people (primarily in small businesses) organize, index, and share their digital data, and look at their documents instead of a list of files, for example. “We take visual elements of paper and replicate it,” Thammineni says. “And we bring search to the table.”

The startup sits somewhere in the middle of a swirling ecosystem of companies, many with Boston roots, offering cloud-based services like data storage (EMC), online backup (Carbonite, Backupify), paper digitizing and document management (Iron Mountain), personal file management and search (Evernote), and file hosting and sharing (Microsoft SharePoint, Box.net, and Dropbox, the astronomically-valued startup du jour).

OfficeDrop (formerly called Pixily) started in 2007 as a service to help people scan in and digitally organize their paper documents. It has evolved to include collaborative features and mobile apps, so people can scan documents and access their files from their iPhone, iPad, or Android device. The company has 20 employees, split about equally between the Boston area and Brazil, where most of its software developers are.

Interestingly, although the three founders are Indian, OfficeDrop has no employees in India. Thammineni says that’s because most software developers in India have a big-company mentality that doesn’t mesh well with a startup. Brazil, on the other hand, has a lot of “out of the box” talent that fits with the OfficeDrop culture. “They challenge you at every turn,” he says.

Thammineni’s company, his fifth so far, was self-funded in its early days. It raised a small financing round in 2009, followed by a $1 million angel round this spring—and it will be looking to raise more money this fall, he says. But for now, OfficeDrop’s main focus is on “making the product better and better,” Thammineni says. And on squaring away its next big-company deal.

Comments (2) | Reprints | Share:          

While managing the websites for the retail giant TJX, Richard DiBona encountered the pain of missing important files because they were too big to be sent through e-mail.

“With email and attachments, there’s no way of knowing that it failed most of the time,” he says. “It goes into oblivion and you hope for the best.”

So he set out to fix this problem, through his Watertown, MA-based startup, Episend. Originally he sought to create an e-mail program that could handle larger files, but he quickly reconsidered. “It would be kind of hard to kick off a company and say you’re competing with Gmail right off the bat,” he says.

DiBona instead focused on developing a platform where users could share large files with others via the cloud, by pointing recipients to specific URLs. “It’s kind of like file-sharing with some personality,” he says. On Episend, users can upload any file, including Word documents, pictures, MP3s, and even files from more sophisticated programs like AutoCAD or Adobe InDesign. The system allows the sender to present multiple files together in an annotated message, where users can insert instructions on which files to read first. If the message sender uploads multiple photos, they can appear in a stack to allow the recipient to scroll through them, in the order the sender specifies.

Uploading files to Episend is easy—users can simply drag and drop files directly into the Episend screen. They can also store certain files for reuse in what’s called a digital asset library, and customize the look of their messages with dozens of different background templates. When they’re done crafting their message, Episend generates a URL that the sender can forward via e-mail, LinkedIn, Facebook, Twitter, and Delicious. For an example of what an Episend message would look like to the recipient, check out my very rudimentary message here.

DiBona says he’s seen colleges use the site as a platform for sending their alumni magazines to the commercial printer, with specific instructions on where to put which text and photos. Other companies have used Episend messages, which can be set up to include multiple pages, as user guides, directly targeted at customers.

Episend isn’t just for the business user trying to send large design files as part of a major project, though. The platform has features that better enable the sharing of photos than existing sites like Facebook do, DiBona claims. On the social networking site, for instance, end users can’t directly download high-resolution photos. But Episend allows recipients to download files such as photos in both the size that appears on the computer screen, and the original size of the file as it appears on the sender’s computer.

DiBona has avoided a lot of development grunt work by setting up Episend so that … Next Page »

Comments | Reprints | Share:          

If you live or work in Silicon Valley, you’ve probably driven past the Box.net billboard on U.S. 101, near the Ralston Avenue exit (aka the Oracle exit). It says “No Hardware. No Software. No SharePoint.” A brazen dig at Microsoft, the billboard makes the point that Box.net’s system for sharing business documents works in the cloud, without requiring customers to buy their own servers or install special software such as SharePoint, Microsoft’s business collaboration and Web publishing suite.

If Box.net had really wanted to rub it in, it could have added “No cost.” The Palo Alto, CA-based startup offers a free personal version of its online service with up to a gigabyte of storage. Licensing SharePoint, by contrast, is so complex and expensive that the details aren’t even published on the SharePoint website. (You have to call Microsoft to get a price quote.)

Box.net is one of the many Silicon Valley startups gleefully pounding older enterprise-software incumbents over the head with the flexibility and viral appeal of cloud services. But just five years ago, when it was founded by high school buddies Aaron Levie and Dylan Smith from Levie’s USC dorm room with a $350,000 angel investment from Dallas Mavericks owner Mark Cuban, Box.net was just another online file sharing service, alongside Xdrive, Omnidrive, Streamload, and many others vying to help consumers and office workers offload local files to Web-based servers, where they were supposedly safer and more accessible.

Since those days, however, many of Box.net’s competitors have disappeared or imploded. To take one spectacular example, Streamload—renamed MediaMax, then renamed again as The Linkup—went out of business 2007 after permanently losing data for 20,000 customers. Meanwhile Box.net has soared, winning more than 60,000 business customers and raising nearly $30 million in venture funding from top-tier firms like Draper Fisher Jurvetson, U.S. Venture Partners, and Scale Venture Partners.

So how did Box.net grow to the point where CEO Levie and chief financial officer Smith—both Seattle natives, and both just 25 years old—feel ready for a head-to-head battle with Microsoft? And just as interesting, why did Levie and Smith decide to focus on the traditionally stodgy enterprise services market at a time when virtually all of their twenty-something peers in the world of Silicon Valley Internet entrepreneurship are building consumer-facing services like social networks, online games, and mobile apps?

I sat down with Levie recently to go through those questions and many more. While part of the message of Box.net’s Silicon Valley billboard can probably be ascribed to the youthful CEO’s brashness, it’s clear that business software incumbents like Microsoft, with SharePoint, and EMC, with its Documentum system, will have to come to terms with cloud-based sharing technology. When a 100-employee startup can come out of nowhere to win 4 million users—offering a collaboration service that requires no initial investment and can be up and running in minutes rather than weeks—that’s what you might call a game changer.

Box.net “is our file system in the cloud,” says Scale Venture Partners managing director Rory O’Driscoll, using words that must strike fear into the hearts of … Next Page »

Comments | Reprints | Share:          

Compared to the handful of “under the radar” deals we had to report on in our May roundup, the month of June was buzzing with deals, both small and large, for Seattle-area tech and biotech companies. Normally we publish our “under the radar” roundup for regional deals worth less than $1 million in a monthly post. However, for the first time this month we are combining our normal “under the radar” list with deals worth more than $1 million, creating one comprehensive report of all local equity deals. This information is based on data provided by New York-based private company intelligence platform CB Insights, and our own past coverage.

Despite the fact that deals of all sizes are represented on the June list, the majority were for less than $1 million. And contrary to what you might assume, given that Seattle is a hub for many areas of information technology, healthcare and energy/utilities companies dominated the roundup. Of the $104.3 million in venture dollars raked in through 20 equity deals in June, Washington companies in the healthcare sector pulled in $41.1 million, while those in energy and utilities brought in $35.8 million.

The third leading sector was computer hardware and services, which raised $15 million in investments last month. Internet startups came in fourth at $4.9 million, and industrial startups followed up with $3.95 million, while financing for business products and services, software, and video startups all trailed behind.

We reported on the majority of June venture investments as the news broke, including the $40 million nabbed by Seattle-based Calistoga Pharmaceuticals, amounting to the biggest Washington venture deal of 2010 thus far. Not far behind was three-year-old Intellectual Ventures spinout, Bellevue,WA-based TerraPower, which brought in $35 million in Series B funding for further development of its traveling wave nuclear reactor. Other notable deals include the $11 million Seattle software developer Opscode earned in Series B led by Battery Ventures, and the $4 million raised by cloud storage and data protection Seattle startup Symform.

However, a number of interesting deals slipped under our radar. Here are a few that I found interesting: Bellevue, WA-based online collaboration and file sharing software developer OneHub raised $750,000 in equity. The three-year-old company, which provides cloud-based software-as-a-service for thousands of companies, raised $1.3 million in Series A financing led by local venture capital firm Ignition Partners back in October. Liberty Lake, WA-based Demand Energy Networks, which is developing technology to help energy providers manage their electricity supply, brought in $650,000. The company, founded in 2008, has developed a tool called the Demand Shifter, which allows a variety of businesses and consumers to store electricity at distributed end points during times of low demand, and control and dispatch it as it’s needed.

Seattle-based medical device developer Uptake Medical raised $600,000 in equity in June. The interventional pulmonology company then followed that up with another $17.5 million in a Series B round led by Maverick Capital this month. The only video game startup on the list, Redmond, WA-based Novel, raised $550,000 in equity. The 20-person startup plans to change the gaming industry and corporate culture as we know them by applying massively multiplayer online (MMO) gaming techniques to create new kinds of games and business simulations for companies. Seattle-based Liquid Light brought in $200,000 in equity financing. The early-state energy startup is expanding on the research of Princeton University professor Andrew Bocarsly to develop highly efficient technology for converting carbon dioxide to fuels and industrial chemicals without using biological feedstocks. this month. The only video game startup on the list, Redmond, WA-based

Here’s the full list of June’s equity-based deals, both under the radar and on it:

June also saw a few startups raising cash through deals based on debt, options, and/or warrants, rather than equity. Those three transactions, worth a combined $1.64 million, are listed below.

Comments | Reprints | Share:          

It was a quiet week for deals in the Northwest, but we dug up some important ones in business software, wireless, and biotech.

—Seattle-based Amazon’s (NASDAQ: AMZN) acquisition of Zappos, the online apparel and shoe seller based in Las Vegas, has closed. The deal, first announced back in July, is valued at $1.2 billion in Amazon stock.

—Bellevue, WA-based Onehub has raised $1.3 million in Series A funding from Ignition Partners and angel investors. The company was founded in 2007 and makes Web-based software for business collaboration and file-sharing.

—We took a close look at small financing deals in the Northwest, worth between $100,000 and $1 million, that have flown under most people’s radar in the past month. According to stats from ChubbyBrain, a New York-based information and data services company tracking the innovation economy, the following companies raised a small amount of equity in September: Acucela, Adometry, BallLogic, InEnTec, Inson Medical Systems, Second Porch, Site 9, SynapticMash, Smilebox, Vantos, and WA 32609.

—Seattle-based Kineta, a biotech firm developing drugs to fight autoimmune diseases, has formed a strategic alliance with MPI Research, based in Michigan, as Luke reported. Financial terms of the deal weren’t given, but Kineta said it will receive support for animal studies that will enable the company to begin clinical trials next year.

—Portland, OR-based RF Arrays raised $6.5 million in equity, options, warrants, and/or other rights to acquire securities, according to a regulatory filing. The investors were not disclosed, but New York-based New Science Ventures has previously backed RF Arrays, which develops wireless communications technology.

Comments | Reprints | Share:          

Bellevue, WA-based Onehub announced it has raised $1.3 million in Series A financing from Bellevue-based Ignition Partners and angel investors. Onehub makes cloud-based software for collaboration and file-sharing, and was founded in 2007. Back in April, we reported that Onehub had raised $600,000 from undisclosed investors, and in September we mentioned the company was part of Ignition’s portfolio.

Comments | Reprints | Share:          

Back in August we wrote about Concord, MA-based EnjoyMyMedia, which was beta-testing a system it’s positioning as everyman’s media-sharing technology. The company describes itself as a mini-TV network; at its site, you can download a program that lets you turn any folder on your computer into a “transmitter” that will “broadcast” any file you put there to friends or family who subscribe to your private “channel.”

This week the company officially launched the service, and added a few features that weren’t there in August—including the ability to watch Flash versions of large video files while the original MP4 or MPEG files download, the ability to track files as subscribers forward them to others, and the ability to scan print items and transmit them with a single click.

EnjoyMyMedia CEO Keith Loris calls this latter feature “a small technical thing,” but says it’s illustrative of the company’s philosophy. “We do not view our mission as file-sharing; we’re trying to help you share your personal life, and a lot of people’s personal lives are not digital,” Loris says. “If you have a desktop scanner, this lets you scan a piece of paper right into your channel, whether it’s the portrait of Grandma on the wall or the picture your kid drew at preschool.”

The Flash feature is another seemingly small but useful enhancement to the service. If you’re trying to share an hour-long video of your daughter’s ballet recital, Loris points out, you don’t want to make viewers wait while their computers download a 1-gigabyte file. EnjoyMyMedia transcodes MP4, MPEG, and other video formats into Flash. The file then starts playing in a subscriber’s browser immediately, regardless of the size of the original file, which continues to download in the background. “It makes long videos really usable for casual Internet users for the first time,” Loris says.

Comments | Reprints | Share:          

If you fancy yourself an amateur TV network exec, the Web now has any number of tools to help you create and broadcast your own personal multimedia channel. I’ve tested several, including SplashCast, Vizrea, Veodia, and Bubbleshare, and have several more on my list to try, such as MixerCast, Flektor, Stickam, Ustream, blip.tv, Vpod.tv, Kyte.tv, and Cozmo.tv. But all of these services suffer from what I’ll call a high “geek quotient” that will probably limit their adoption. You have to know something about creating, formatting, and uploading media files in the first place. And then, to embed the channels in your Web pages, it really helps to have an understanding of HTML and blogging tools.

But why should geeks have all the fun? The guys at EnjoyMyMedia (yeah, none of us here much like that name, either), a small, self-funded startup based in Concord, MA, have been working on what they call a “brain-dead-easy” media-sharing system that mainstream netizens can use to broadcast their photos, videos, audio files, and other files to friends and family members without learning a line of code. At the heart of the system is the Really Simple Syndication or RSS standard, which, despite its name, is a somewhat technical way to subscribe to Web content. But EnjoyMyMedia’s software masks the details behind a truly easy-to-master interface and a familiar television metaphor revolving around “transmitters” and “receivers.”

“My 72-year-old dad is a target customer for this, and if you asked him what a blog or a social-networking site is, he would not have a clue,” says Keith Loris, EnjoyMyMedia’s president and CEO. “But if you say I’m going to have a transmitter on my PC and you’ll have a receiver with my channel, he gets it right away, because he watches TV.”

Loris says he and partner Bill Oncay, the company’s chief technology officer, set out to build EnjoyMyMedia two years ago. Their motivation: both had ReplayTV DVRs and were both fans of the fast-paced Fox show 24, but were frustrated because there was no easy way to swap video files if one of them forgot to record an episode. “It was like, why can’t I send this to you?” recounts Loris. “We could have FTP’d it [that is, used the ancient File Transfer Protocol--eds.], or set up a website for temporary storage, and we actually had the skills, but it would have been a pain. That was the impetus—-thinking that there’s got to be a better way.”

The pair designed a PC program would monitor a hard drive for new content, then send the content automatically to another PC, but the transfer mechanism was still a quandary. “At one point we had the bright idea of marrying that with RSS,” Loris says. All Web browsers today allow users to subscribe to RSS feeds, which are essentially notification services that alert subscribers whenever a new media item has been published somewhere on the Web. Loris and Oncay took that a step further, devising a way to create an RSS feed for an individual Windows folder on a user’s computer.

To begin “netcasting” on EnjoyMyMedia, a user simply has to designate a folder on their hard drive as the “channel” for the data to be transmitted, then send invitations through the EnjoyMyMedia website to friends or family members. Subscribers can add channels to the free RSS receiver pages provided by iGoogle, Firefox, Internet Explorer, My Yahoo, Facebook, and the like. Every time the netcaster adds a file to the designated folder, a thumbnail representation of it shows up immediately in every subscriber’s RSS feed. But only when a subscriber clicks on a thumbnail is the file actually transmitted.

By making media-sharing so simple, Loris, Oncay, and partner Warner Jones (the company’s vice president of website products) hope to attract a user base of average families—the kind of people who exchange birthday-party photo prints as a matter of course, but wouldn’t be likely to sit down and spend several hours uploading digital photos to a site like Flickr.

And given this family orientation, the company is putting an emphasis on security—even at the expense of some convenience. “I don’t want a video of my 15-year-old daughter just floating out there on the Web, where who knows who’s going to watch it,” says Loris. Subscribers are required to enter a username and password to view the thumbnails they click; a password is good for 24 hours, after which the viewer must log in again. (Security was once Loris’s bailiwick: He was president and CEO of Softlock, a company that earned fame for providing the digital-rights-management software protection for “Riding the Bullet,” a Stephen King novella published solely in e-book form by Simon & Shuster in 2000.)

EnjoyMyMedia’s basic service is free, and includes a 200-megabyte online locker where frequently viewed files can be stored so that others can download them “on demand,” i.e., even if the netcaster’s PC is off. The company plans to earn revenue by offering larger on-demand lockers—$4.99 a month for 10 gigabytes and $9.99 for 40 gigabytes. Paying users will have advertising-free channels, while people on the receiving end of media posted by free netcasters may see targeted ads.

Other software packages, such as Adesso Systems’ Tubes, also turn Windows folders into vehicles for private file-sharing across the Internet. But most require some kind of software to be installed on both ends of the connection, and that, Loris believes, means that none of these services are as simple or as straightforward as EnjoyMyMedia. “There are companies out there with ‘tubes’ and ‘pipes,’ but what does all of that mean to the average user?” says Loris. “Now, broadcasting—I kinda get that.”

Comments (2) | Reprints | Share: