“There’s sort of an infinite number of good ways to start a company,” says Xconomist Joe Chung. “One of the fundamental rules in startups is that there really aren’t any rules.”

But the serial entrepreneur has some pretty specific plans for how his new creation will pop out startups. That would be Cambridge, MA-based Redstar Ventures, which has been described by its other co-founder, Jeet Singh, as a “company that builds companies.” The pair would know a bit about putting together companies. Both were co-founders of the Cambridge, MA-based e-commerce software company Art Technology Group, which went public in 1999 and sold to Oracle last year for $1 billion. Chung went on to to start another shopping tech startup, Allurent, which didn’t see the success that ATG did, while Singh worked on his rock music career.

But back to Redstar, which was founded last year. There’s no shortage of entities that are specifically in the business of supporting other tech startups (read here for my colleague Wade’s thoughts about the incubator bubble), but Redstar doesn’t align itself with the heavily consumer Web-focused, three-month-long accelerator programs such as Y Combinator and TechStars, and their mentorship models. Instead, it’s using its team to research market opportunities for new companies, and then match them with the right entrepreneurs, using all its own internal funding.

Read below for some takeaways from my conversation with Chung on how they’re going about things at Redstar. (And check out Chung’s Xconomist posts on how to and how not to start companies.)

—Chung and his team take pride in their “maturity.”

“One good thing to do when you start any kind of venture is to start things that are biased in your favor, that play to your strengths,” Chung says. “Because we’re old, we’ve built a really strong network. Hopefully we’ll bring commercial relationships and partnerships to the table right from the beginning, and revenue and customers from the initial business proposition. We’re looking for companies in spaces where we already know or identify consumer needs or business needs.”

—We won’t be seeing any “solomo” companies being created at Redstar. No, that’s not a typo, but techie jargon for companies working in the social, local, and mobile sector, Chung says.

“We’re doing stuff that is targeted at the TechCrunch crowd’s mothers,” he says. “They have all the money and are deeply underserved by the Internet.”

Considering this and the Redstar team’s past experience, it might not come as a surprise that the first company it has put together is focusing on … Next Page »

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As Erin Kutz wrote about a few weeks ago, my fellow ATG co-founder Jeet Singh and I have recently launched Redstar, a “company that builds other companies.” Unlike most incubators and angel funds, which invest in companies that are already formed or at least well along in the process, Redstar’s goal is to create a stream of valuable startups completely from scratch. If you liken Redstar to a factory (for whatever reason, the startup business is rife with metaphor, so I will beg your forbearance for dragging in a few more by the scruff), then the inputs to our assembly line are essentially three things: ideas, people, and money. In contrast to the archetypal startup story, which invariably features a bolt of Eureka from the blue, we believe that it’s possible and even desirable to create startups more methodically, recruiting talented entrepreneurs and matching them to the ideas, fellow founders, and seed capital necessary to launch.

So the whole Redstar factory metaphor begs a very concrete question: How do you hire an entrepreneur? Aren’t entrepreneurs, by definition, people who have no inclination whatsoever to be hired, and anyways, aren’t all the good ones running stark and raving down the street? In fact, I think the best entrepreneurs know who they are from very early in their careers and are drawn, often defying all logic and reason, to the startup world to carve their own distinct paths by building and running their own operations. They’re just not assembly line sorts of people.

One of my mentors memorably advised me to invest in jockeys, not horses (those damn metaphors again). In this light, I think not so much of hiring entrepreneurs in the conventional sense, i.e. with a salary, bonus, and vacation packages, but rather in betting on a rider and then helping them choose or even breed a steed. In my experience, startups tend to end up doing something pretty far afield from the original idea (ATG’s original business plan, for example, was to build computer music systems for live rock shows—that’s why we called it “Art Technology Group”). In other words, the initial concept really functions more as a point of departure. So what we are really trying to do is invest the earliest tranche of seed funding in a super-talented person who can grow and evolve an idea with the help of some folks who have been around the track a few times before.

As for the entrepreneurs themselves who, if they are any good, are asking what’s in it for them, we’re offering a way to break out of the chicken-and-egg cycle of experience versus funding. It’s extremely hard to attract backers without a strong track record and just as hard to build a track record without ever having been backed. By investing in jockeys for several months before the race, everyone has a chance to learn a lot before the starting gun. And if it turns out the first horse just won’t run, there are plenty more in the stable to develop.

As my kids are fond of asking me, “How’s that working out for you so far?” I’ve just started a series of meetings with our first batch of potential entrepreneurs for hire, so I’ll continue to blog about what I see, hear, and learn…

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The streets of Cambridge, MA, are wind blown and snow-ridden these days. Quiet and beautiful in their way. The breeze is up, but only laggards have not yet cleared their sidewalks. So I thought it was a perfect time to slip on my snow pants, lace up my boots, and set out for a little walk. I didn’t think about it until after I was back, but my path took me right past, or very close to, the homes of some real innovation pioneers. See if you can trace my route by my description.

Here’s a big hint: I started at Full Moon restaurant in Huron Village. After a short walk, I found myself just a snowball’s throw from the home of Turing Prize winner Butler Lampson, a pioneer in Ethernet, WYSIWYG word processing, and laser printing. His famous 1972 memo, “Why Alto?,” envisioned the personal computer. He is now at Microsoft Research.

But instead of going right past Lampson’s place, I turned the other way and strode by the former home of Danny Hillis, the Thinking Machines co-founder and later VP of R&D at Walt Disney Imagineering, and more recently co-founder of Applied Minds out in warmer climes in California.

Next up was the home of Xconomist Bob Hower, a partner at Advanced Technology Ventures, and after that I saw some folks putting out garbage at the home of another Xconomist, Joe Chung—he’s a co-founder of Art Technology Group, Allurent, and now (along with former ATG co-founder Jeet Singh) of Redstar, a novel type of venture/investment firm. Right after passing Joe’s place, I threw a snowball at the home of Paul Maeder of Highland Capital Partners but kept on walking instead past the former home of Polaroid founder and legendary inventor Edwin Land.

From there it was a long loop past the old house of Mike Cavallo, domain director of the Clinton Foundation’s Clinton Climate Initiative. (He was previously CFO of computer software firm Trenza, as well as executive director of the U.S. Chess Federation.) Then I slipped past Yo-Yo Ma’s mini-mansion (well, he is a different type of innovator), and a short while later passed right in front of Eric Lander’s place—the mathematician and head of the Broad Institute bought an old school building, which he converted into a house but reportedly without sacrificing the gym/basketball court! He must be afraid to mix it up with me on the court (I was champion of the Xconomy H-O-R-S-E tourney this summer after all), which would explain why I haven’t been invited to play there.

Then I was back home, on the opposite site of the “tracks” from Lander. So, can you guess the route? Do you know of any other innovators whose homes my path crossed that I forgot or didn’t know about? Is there another place on the planet with the innovation density of Cambridge?

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Redstar, the stealthy new venture from the founders of e-commerce software maker Art Technology Group (NASDAQ: ARTG), is coming a bit more out of the woodwork. Redstar, which has been described by co-founder and ATG veteran Jeet Singh as “a company that builds companies,” has moved into a temporary space in Harvard Square this week and is hiring entrepreneurs-in-residence and research interns, Singh told me today. The jobs are also posted on Redstar’s still-sparse website.

Redstar, which is co-founded by ATG’s Joe Chung and Matt Beecher of SCS Financial, is taking a much more “macro” approach than other startup incubator programs like TechStars and Y Combinator, seed-stage fund Project 11 Ventures, and angel investing groups, which typically take pitches from already-formed startups. “The main difference of what we’re doing is we’re not looking for an entrepreneur attached to his idea,” Singh says.

When we first wrote about Redstar in November, just after news broke of ATG’s $1 billion acquisition by Oracle (NASDAQ: ORCL), Singh said the new project was not a venture fund, and not an incubator. Now, the website description and Singh have revealed a bit more of what the company is. The site says that the team is looking to identify startup trends and work on “systematically developing a constellation of concepts through in-house creative processes.” (This crew sure does like star references.) The entrepreneurs in residence will focus on a single business to pitch for funding, “with the goal of becoming President of an explosive, seed stage startup.”

Redstar is building a strong research team (thus the intern hires) to determine which business trends could lend themselves to the best companies, and which entrepreneurs are best poised to run those ventures—rather than trying to find exactly how a hot new company idea might work in the market. “We want to see where good market opportunities exist and work our way down to what businesses might work within them,” Singh says. (The description for the Redstar website on the Google results page references a quote from Gerry Laybourne, founder of Nickelodeon and Oxygen Media, that says, “It’s not an incubator. It’s an Ovulator.”)

The checks that come from Redstar will be much bigger than those awarded to startups through programs like TechStars, which gives up to $18,000 per company, and Y Combinator, which usually caps its investment at $20,000. “Concepts are filtered and refined through a rigorous market research process, and the most promising candidates are seed funded for real-world validation and further rounds of institutional funding,” the Redstar website reads. The funding will vary depending on the startup, Singh says, but Redstar will typically invest between $500,000 to $1 million in the first two or so years as its companies develop, prior to seeking outside VC funding. All of the money initially will come from Redstar’s founding team, Singh says.

ATG, which was started in 1991, went public in 1999. Chung, an Xconomist, went on to start another e-commerce software company, Allurent, which closed its doors late last year. Singh spent time recording albums with his rock band, The Singhs, among other things, and the duo reunited last year to start work on Redstar.

Redstar already has had software entrepreneur Andrew Lau, formerly of Endeca Technologies, working as an entrepreneur in residence for the last six or seven months, and it has brought on a developer and designer in the past few weeks, Singh says. The firm will pay the EIRs a salary while they flesh out new startup ideas, and is looking for entrepreneurs with a few companies under their belt who are familiar with growing startups from scratch, even if they “have not had huge success,” Singh says. “We’re looking for people who are kind of professional entrepreneurs,” he says.

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Cambridge, MA-based Allurent, an online-shopping software startup, has closed down sometime in the past month, according to a report in the Boston Globe. The article says the company was in discussions with a potential acquirer until the end. Xconomy first reported on Allurent back in 2007, when the startup had just closed financing from Polaris Venture Partners. Last year, Allurent co-founder Joe Chung passed the CEO baton to Graeme Grant and became executive chairman of the firm. More recently, Chung and fellow Art Technology Group founder Jeet Singh have started working on a stealthy startup code-named Redstar. Allurent has been shrinking over the past few months as Polaris’s Dogpatch Labs incubator has expanded within its office space near Kendall Square.

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The startup bug just keeps on biting for Joe Chung and Jeet Singh, founders of Cambridge, MA-based Art Technology Group. On the heels of news of Oracle’s $1 billion acquisition of ATG, a developer of software for e-commerce websites, Singh confirmed to Xconomy a growing rumor in the Boston innovation community—that the duo is working on yet another startup.

They’re keeping pretty tight-lipped about what the new venture is all about, but it’s operating under the code name “Redstar” and has been in the works most of this year, Singh says. Matt Beecher of SCS Financial is also part of the founding team.

“I’ll tell you the basic idea– we’re going to build a company that build[s] companies,” Singh says. “Not a venture firm, not an incubator.”

Speculation anyone?

Maybe there’s a clue in ATG, which they launched in 1991 and took public in 1999, at the height of the bubble. Along the way, ATG morphed into a company that built a software platform for e-commerce clients’ websites, but the team started out in multi-media consulting. “As the Web happened in the early 90′s, we started doing Web-specific design, and built a nice little reputation as folks who ‘could think about stuff and actually build it’ (to paraphrase some of our clients),” Singh says. We’ll have to keep our eyes out for what the team will build with Redstar.

Chung and Singh each spent more than decade with ATG. After his departure in 2002, Chung and a few others from ATG (but not Singh) started Allurent, another Web software company targeted at customers in e-commerce. The Cambridge-based firm, which launched in 2004, develops interactive widgets to help e-commerce websites to better engage customers.

Singh’s lifestyle since ATG, meanwhile, has been a bit more rock and roll. Seriously. He moved to St. Barts and recorded three albums with his band The Singhs, originally formed in 2001 under the name Dragonfly. (That’s the Singhs on the beach in the picture above, led by their namesake.)

Stay tuned for more from project Redstar. And in the meantime, feel free to conjecture in the comments section below on what exactly a company that builds companies, but isn’t a venture firm or incubator, might mean from the guys who first built ATG.

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[Updated 11/2/10 2:00 pm ET. See below] Cambridge, MA-based Art Technology Group, which develops software platforms for e-commerce websites, announced today that it will be bought by Redwood Shores, CA-based database giant Oracle (NASDAQ: ORCL) for a total of $1 billion in cash, at $6 per share. ATG (NASDAQ: ARTG) saw its stock price climb more than 45 percent today on the news of the acquisition, to hit $5.96 per share as of 10:52 am ET. The acquisition, which is subject to shareholder and regulatory approval, is expected to close early next year.

ATG was founded by Joe Chung (an Xconomist) and Jeet Singh in late 1991, went public in 1999, and is one of the few New England dot-com era darlings to have weathered the tech crash. “Of course one always feels a bit of nostalgia at the wedding, but mainly I feel really happy and proud,” Chung told Xconomy in an e-mail this morning of his reaction to the acquisition news. ”ATG has always had and continues to have awesome people and awesome products—Oracle is [a] great fit!”

But the Oracle acquisition news took him a bit by surprise. “The irony is that I heard the rumor flying around last week, but the ATG is being bought by X (fill in your favorite enterprise software company of various eras here) rumor flew around consistently pretty much from the day Jeet and I took it public, so I didn’t think much of it!” says Chung, who founded another e-commerce-focused software company, Allurent, with a crop of ATG veterans in late 2004.

[Updated to include comments from Singh.] One company could have bought ATG for $20 million at one point, “but they passed, thank goodness,” Singh told us in an e-mail. The context surrounding the Oracle acquisition makes sense, given when the company started, he said. “We founded the firm on very little ($5000) in a very bad economic time (1991). I suppose it’s fitting that it got acquired during a difficult period as well.”

ATG’s retail and e-commerce technology is complementary to Oracle’s strengths in customer relationship management, enterprise resource planning, and other areas. Assuming the deal goes through, we’ll be watching to see how well the integration works out, and where the companies go from here.

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Everybody running a startup must wonder from time to time what it would be like to leave it all behind and live on a balmy Caribbean island. And if you want to know what it sounds like, check out Supersaturated, the just-released third album from Jeet “Miki” Singh, co-founder of Art Technology Group (NASDAQ: ARTG).

Singh, who co-founded ATG with Xconomist Joe Chung, now spends much of his time on St. Barts. In 2001 he formed a band called Dragonfly, which has now been renamed The Singhs. Though many of the members of the band are Boston-based, Supersaturated was recorded mainly in the West Indies. It’s the result of a three-year-long effort, with Singh writing or co-writing all the music and lyrics. (We prevailed upon him to take a break from the effort last winter to help us judge our Battle of the Tech Bands.)

The Singhs play an interesting mix combining rock, pop, and funk—and to my ears, anyway, there’s at least some hint of reggae. You can check out the band, whose members include local legend guitarist Peter Parcek and other top area musicians, here. And you can hear tracks from the latest album on The Singhs’ MySpace page, here. My own favorite is Invisible. The album itself is on sale at iTunes, CD Baby, and Amazon, among other venues. The Singhs will be performing live on July 23 at Sullivan Hall in New York, and here in Boston on July 31 at Church, near Fenway Park.

I’m planning to talk to Jeet later today and ask him about the novel he’s writing. Maybe it will make good beach reading.

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Personal insights. Conversation starters. Gossip. Whatever the excuse, it’s high time for the second installment in Xconomy’s Who Knew? series, our wildly popular roundup of little-known, offbeat facts about the New England innovation community (and a few outside innovators with ties to the local scene).

In this installment, you’ll learn who runs his own indoor waterfall, who’s hit 40 straight Red Sox home openers, and who has a day named after him in the state of Kentucky. Then, of course, there’s the skinny on what family ties—real or not—to the Car Talk guys can get you. Obama’s Republican fundraiser? Yep, we’ve got that, too. Not to mention who can cough up Broadway tickets and seats at movie premiers.

The tip lines have been open—but we actually had to work harder to uncover these gems than we would have liked. We’d prefer much easier pickings next time, so please send us all the juicy details at editors@xconomy.com.

Meanwhile, here’s the second round:

MIT biologist David Housman tools around in a hard-to-come-by 2006 Volvo C70 convertible. How did he get the ride? Turns out that Josie and Annie, the aunts of Car Talk hosts Tom and Ray Magliozzi, ran kitchen support for the MIT Biology Department. In a ceremony whose details cannot be revealed here, gene hunter Housman was “officially” identified as Ray’s long lost half-brother. The Click and Clack family ties enabled the Prof to jump the queue for his wheels.

Rich Levandov of Avalon Ventures still (apparently) has not gotten his Tacoda tattoo. The body work was originally slated for last fall. Afraid of needles, Rich?

By the way, Levandov’s partner in Avalon’s San Diego home office, Kevin Kinsella, is a producer of the musical Jersey Boys, winner of four 2006 Tony awards (including Best Musical) and a Grammy for Best Show Album.

We bring this up because producing isn’t just a West Coast thing, baby. Todd Dagres, founder of Spark Capital, co-produced the 2008 train thriller Transsiberian, starring Woody Harrelson, Emily Mortimer, and Sir Ben Kingsley. The film, which will hit theaters in August, premiered at Sundance in January. Dagres also produced the 2005 teen comedy-drama Pretty Persuasion.

Speaking of moviedom, Colin Angle, co-founder and CEO of iRobot, had a speaking part as a Professor Hanes in 21, the movie about the MIT blackjack team. Xconomy had the scoop here.

Mark Levin, co-founder of Millennium Pharmaceuticals and Boston’s Third Rock Ventures, bought the most expensive house in Massachusetts in 2007, according to the Boston Globe and the Gloucester Daily Times. Last August, Levin and his wife, Becky, shelled out $11 million for Seahome, a 12,000-square-foot Manchester-by-the-Sea mansion that comes with its own deep-water dock, two kitchens, and an indoor waterfall. The property had been listed at $17.75 million.

Mark Fredrickson, vice president of Marketing Strategy & Communications for EMC, attended his 40th consecutive Boston Red Sox home opener in April. His mother started the tradition in 1969, when Frederickson was in the fifth grade. “My best Opening Day had to be 2005, when the championship banner was hoisted and rings were handed out at long last,” Fredrickson reports.

January 7 is Phillip A. Sharp Day in the state of Kentucky, and there is a Phillip Sharp Middle School, in Pendleton County, KY, where the MIT Nobel Laureate grew up.

Apple co-founder Steve Wozniak, aka Woz, keeps a spare Segway human transporter at the Brookline condo … Next Page »

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It was with some nostalgia—and thirst—that I visited the Allurent headquarters in Harvard Square last week. That’s because the rapidly growing e-commerce software startup occupies two third-floor rooms off Church Street that peer down on the abandoned digs of an old haunt of mine—the Brew Moon restaurant. It’s hard for me to drop by Allurent and not want a beer.

Even though Brew Moon shuttered a few years ago, I spotted a flurry of activity down there, and Allurent’s CEO, Joe Chung, told me they were about to auction off the pool table, barstools, and other items from the ill-fated brewpub. I digress, I know, but focus on the word “auction.” That evokes a sale, and maybe eBay, too. Put those together and you get e-commerce—and we’re back on track: e-commerce is what Allurent’s all about.

The company aims to help usher in what Chung, an Xconomist, calls Shopping 3.0. The first era was the local market. Shopping 2.0 began with the Sears catalog in the 1800s. The 1990s Internet boom? A mere extension of Sears to the Web. The next e-commerce transformation, Chung believes, is only now beginning. Hence Allurent. As Chung puts it, “I’ve always believed that the best time to create a startup is around one of these discontinuities.”

A few days before I visited, Allurent closed a $7.5 million Series B funding round led by Polaris Venture Partners that Chung says should position Allurent to capitalize on the transformation. It wouldn’t be the first discontinuity that the 43-year-old Chung, who has bachelor’s and master’s degrees in computer science from MIT and is notorious for his exotic shirts, has successfully exploited. In late 1991, when he was 27, Chung and Jeet Singh foresaw the coming of the consumer Internet itself; working from Singh’s Brookline living room, they launched e-commerce software firm Art Technology Group (NASDAQ:ATG), which went public in 1999 and now stands as one of the few New England Internet high-flyers to survive the crash. “It’s us, Akamai…” says Chung. He can’t think of another.

He and Singh stayed on at ATG until 2002, long enough to help it weather the storm, then retired. Singh, famously, moved to St. Bart’s to pursue his passion for music. Chung hung out mainly in Cambridge, playing video games and spending time with family. Then, towards the end of 2004, he was bitten anew by the startup bug. As the post-bubble recovery kicked into gear, Chung started weekly meetings in his Brattle Street living room (a far cry from Singh’s Brookline flat) with a core group of ATG veterans. They included Fumi Matsumoto, now Allurent’s co-founder and CTO; Joe Berkovitz, Allurent VP of engineering; and Bob Mason, who has since become CTO at Brightcove, working with Jeremy Allaire. Naturally enough, the group dove back into e-commerce.

Chung says the group had “unfinished business with the Web.” In particular, they believed it was time to stop thinking of websites as a series of static pages electronically linked together. Around this time, for instance, Google Maps appeared as one of the first widely used applications that broke the page metaphor: you could scroll to the edges of a map and it would keep on going, revealing more detail. “Instead of a page, it was an application that gave you a window into a larger map,” notes Chung. Similarly, he says, “The core idea behind Allurent was that Web pages were going away and [would] be replaced by these purpose-built, Web-distributed applications.”

Even though economic recovery was at hand, venture firms weren’t too keen on a new e-commerce company back in late 2004. “‘Been there, done that, got our asses kicked,’” is how Chung sums up the typical reaction to his idea. Still, he had a track record of success. With the founders putting in some of their own money, joined by family and friends who included Media Lab founder Nicholas Negroponte, he launched Allurent in early 2005. About a year later, he closed a … Next Page »

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