Do phones, food, photos, and fitness mix? Massive Health is hoping they do. The San Francisco mobile health startup, which debuted last spring with $2.25 million in seed funding from Felicis Ventures, Greylock, Andreessen Horowitz, Charles River Ventures, and Mohr Davidow Ventures, has come out with its first consumer app. It’s called The Eatery, and it’s designed to get iPhone owners to think more carefully about how they stuff their faces.

Introduced yesterday, The Eatery invites you to use your iPhone’s camera to take a picture of your meal—before you eat it, ideally—and then to rate it from “Fat” to “Fit” on an 11-star scale. The app will track your entries, and on a daily and weekly basis it will send you summaries intended to help you discover patterns and make healthier eating choices. There’s also a social element: you can connect with Facebook friends who also use The Eatery, and they’ll rate your meal photos too, providing a sort of reality check on your own ratings.

It’s all wrapped up inside a user interface that’s on the far slick-and-elegant end of the design spectrum. Noticeably absent: any way of quantifying what you’re eating, in terms of ounces, calories, or fat or carbohydrate content. “There are a bunch of apps in the App Store that are more about recording what you ate rather than helping you eat better,” says Massive Health CEO Sutha Kamal. “They are asking the wrong question. What you really should care about is how you are eating day to day or month to month.” The idea, Kamal says, is that simply paying more attention to what you’re eating and getting feedback from friends will prompt you to start eating better.

When Massive Health came out of stealth mode back in February, the team of ex-Mozilla, ex-Linden Lab, ex-gaming entrepreneurs declared that they wanted to bring great user-centered interaction design to the healthcare sector. They said they intended to build mobile apps that used crowdsourcing, game mechanics, social networking, and data analytics to help people deal with chronic health conditions.

True to that promise, Kamal says the startup is developing a diabetes app that’s still in alpha testing. But the company decided to bring out The Eatery first, as a way to get something into consumers’ hands faster and start testing its thesis that health apps will have more uptake and impact if they deliver what Kamal calls “delightful experiences.” With some pride, he describes The Eatery as “the most beautiful app in the Health part of the App Store…you don’t feel like there is a lot of work being done on your part, but a huge amount of value is being delivered.”

The startup isn’t planning to make any money on The Eatery, Kamal says. In fact, it’s presenting the app as “Massive Health Experiment 01″ rather than a full-fledged product. “This is a place where we are expecting to learn a lot,” Kamal says. The revenue opportunities will come down the road, when MassiveHealth introduces apps that help employers, insurers, and patients lower healthcare costs, he says.

In a phone chat yesterday with Kamal, I asked where the idea for The Eatery came from, how he thinks it will fit with existing social and mobile usage patterns, and where MassiveHealth is going from here. A summary of our conversation follows.

Xconomy: What’s the big idea behind The Eatery?

Sutha Kamal: If you step back and think about Massive Health as a macro thing, what we’re trying to do is build a lot of enduring value around helping people change their lives and stay healthy. We have another alpha [product] going in the diabetes space, and we have concluded that if you are thinking about getting and staying healthy, you care about four things: diet, exercise, medication adherence, and lastly … Next Page »

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The West Coast roll-up of Boston-area tech companies continues.

On the heels of Oracle’s acquisition of Endeca this week, networking and communications giant Cisco Systems said today it plans to acquire Boxborough, MA-based BNI Video for $99 million in cash and retention-based incentives. Cisco is one of the startup’s investors. The deal is expected to be complete by the end of this year, at which time BNI’s employees will join Cisco’s service provider video technology group.

BNI Video started in early 2009, originally known as Beaumaris Networks, to develop technology for video service providers. About a year ago, my colleague Erin reported on the company’s software, which is aimed at helping cable companies compete better with Internet video providers.

The startup’s cloud-based software manages how cable content is organized on the back end so that consumers can search and browse their programs across various Internet-connected devices such as laptops, tablets, and smartphones. The company is led by CEO Conrad Clemson.

BNI raised nearly $17 million in venture capital over two rounds, from Charles River Ventures, Comcast Interactive Capital, Cisco, TIme Warner Cable, and Castile Ventures. So this looks like a pretty healthy return for the startup’s investors. BNI had 50 employees as of a year ago.

San Jose, CA-based Cisco (NASDAQ: CSCO) says it plans to use BNI’s technology to advance its own Videoscape TV platform, which lets service providers deliver video to Internet-connected devices. Cisco recently acquired ExtendMedia and Inlet Technologies in the video sector, and also previously bought Starent Networks and LineSider Technologies in Massachusetts.

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It took enterprise social networking startup Yammer 18 months to gain its first million users, nine months to add its second million, and only six months to add its third million. At that rate of increase, according to my calculations, the startup will have 20 million users by late 2012, and 7 billion by 2014.

Okay, I’m joking about the 7 billion part—there aren’t quite that many people yet on Earth, and not even Facebook has figured out how to serve people who don’t yet have computers or smartphones. But considering how many people do work in wired, knowledge-based enterprises around the world—about 500 million—”the addressable market is enormous,” says Yammer co-founder and CEO David Sacks. “We are in 160 countries, and we are just getting started.”

If you aren’t an employee at one of the 100,000 businesses using Yammer, the freemium Web-based platform will look familiar to you anyway, as the central news feed—where employees can post status updates, links, videos, photos, documents, and other materials—is unapologetically modeled after the same feature at Facebook. Yammer is hardly the only imitator out there; Podio, Jive Software, SuccessFactor’s Jam, Salesforce.com’s Chatter, and other enterprise social networking entrants take the same approach. Here, as in other areas of enterprise software being transformed by the “consumerization” wave, the goal is to help employees feel at home, not to make them learn yet another new user interface. But one big difference, as Sacks explains, is that each instance of Yammer is private to a specific company, meaning that only people with a corporate e-mail address can log on.

The core insight at the San Francisco-based startup—the first to bring a social networking product to businesses, back in 2008—is that the Facebook-style news feed is a great medium for collaboration inside a company, as long as what happens in the network stays in the network. For a boatload of reasons, from protecting confidential information to complying with regulatory requirements, “internal and external networks should be completely separate,” says Sacks, who got his start in business as chief operating officer at PayPal. “You can toggle between them, but content can’t bleed from one to the other. We think it’s very important to be clear about where content lives.”

Yammer has 200 employees and recently raised $17 million in a Series D venture round led by Chamath Palihapitiya, a former Facebooker with a new venture fund called the Social+Capital Partnership. Previous investors Charles River Ventures, Emergence Capital, and US Venture Partners also participated in the round, bringing Yammer’s total venture pot since its founding to $57 million. The company has had a big year—embarking on a major integration with financial management software provider NetSuite; introducing new applications for desktop PCs, iOS devices, and Android devices; landing big customers like Ford, Shell, and 7-Eleven; and extending its platform to work with applications from Microsoft and Salesforce.com.

So I thought it was about time to sit down with Sacks for the trademark Xconomy interview, delving into how the idea for Yammer evolved, why the company went with a freemium business model, and how Sacks plans to keep the company on top in the enterprise social networking business, which is an increasingly competitive one. You probably didn’t know that Yammer is a spinoff of Los Angeles-based genealogy site Geni, or that Sacks took a spin in Hollywood, financing and producing the 2005 satire Thank You for Smoking, starring Aaron Eckhart. But as I learned, there are many sides to Sacks, who’s both understated and as intense as you might expect of a PayPal alum; both self-effacing and prone to cutting remarks. For example, he says it would be easier for growing companies to find software engineering talent in Silicon Valley if “fewer stupid ideas were getting funded.” Here’s a trimmed-down version of our conversation.

Xconomy: You were at PayPal in the early days. Can you talk a little about your history as an entrepreneur before that, and the steps that led to Yammer?

David Sacks: The short answer is there was not very much history. I had been an undergraduate at Stanford and knew Peter Thiel. I was 27 when I joined PayPal as the chief operating officer, and I was 30 when we sold it to eBay. So it was not like I had a tremendous amount of experience.

Subsequently to PayPal, I created another company called Geni, and we spun Yammer out of that. Yammer was invented as a tool inside of Geni. We started using it to … Next Page »

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New York-based LocalResponse announced that it has closed a $5 million funding round from Cava Capital, Vodafone Ventures, Advancit Capital, and Progress Ventures, with participation from previous investors. LocalResponse makes tools that allow companies to detect when people are “checking in” to places where their products are sold—so they can offer them coupons and the like in real time.

LocalResponse started back in 2007 as Buzzd, a site that aggregated check-ins from Foursquare, Gowalla, and other location-based sites. But co-founder and CEO Nihal Mehta had trouble monetizing that business, so he pivoted the model from a consumer-based site to a business-to-business platform. One key feature of LocalResponse’s technology is it can translate natural language into check-ins. So if a person tweets that they’re on the way to a certain restaurant, say, that restaurant can use LocalResponse’s technology to pinpoint that customer and offer him or her a deal.

LocalResponse has signed on Coca-Cola, Walgreens, Verizon, USA Networks, Aveda, and McDonalds as early customers. The company says ads placed through its platform have a click-through rate of about 40 percent.

Among the existing investors that participated in this round were Metamorphic Ventures, Extreme Venture Partners, FF Ventures, Acadia Woods Partners and Jim Pallotta. Last December, LocalResponse raised $1.5 million from Verizon Ventures, Penny Black/BOLDstart Ventures, Charles River Ventures, and Greycroft Partners.

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For vacationers who are unsure of where to go for their next trip, New York’s Wanderfly is bringing its recommendation technology to a broad audience of travelers. Last Wednesday, technology from Wanderfly began running on some 1,000 travel pages hosted by The New York Times, according to Christy Liu, co-founder and director of marketing for Wanderfly. Her company’s website and technology offers users ideas on where to travel based on such criteria as personal interests and price range. The new partnership puts Wanderfly in front of readers visiting The New York Times‘s travel section and makes good on the startup’s plans for funding it raised early this year.

Two-year-old Wanderfly raised $1 million in February from investors such as Charles River Ventures; MentorTech Ventures; Jason Calacanis, CEO and founder of Mahalo; and Path co-founder and CEO Dave Morin. Part of that funding was put towards bringing Wanderfly’s technology on partner websites. Wanderfly has raised a total of $1.4 million, says Liu, since its inception.

Under the partnership with The New York Times, Wanderfly’s technology generates travel recommendations that appear in the left margin of the Web pages, based in part on the destinations the readers are already viewing. “If you are on the New York City page, you might also like L.A. or Milan,” Liu says. “That is powered by our data.”

Wanderfly’s website lets users choose a price range for a trip, and … Next Page »

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Regular visitors to the Xconomy website may have noticed that we recently killed off the “News Xpress” box at the top of each city’s home page. The news that formerly appeared there—mostly notices of venture investments, mergers & acquisitions, and the like—will now show up in the main news stream, alongside our regular features. But here in San Francisco, my plan isn’t to pepper the main story flow with lots of small news items. Rather, I’ll be gathering them up as warranted into short roundups—starting with this one.

—Lanyrd, a UK-based event-finder startup that emerged from the Winter 2011 term at the Y Combinator seed accelerator, announced in an e-mail to users today that it has closed a $1.4 million round of seed funding. Index Seed and PROfounders Capital led the round, which also included individual investors Joi Ito, Esther Dyson, Joshua Schachter, Matt Biddulph, Blaine Cook, Matt Haughey, Tim Cederman-Haysom, and William Burks Spencer. The startup previously raised money from Y Combinator and Start Fund. Lanyrd said that the closing is “really great news” that means the startup can now “focus on creating a team and building new features for Lanyrd.”

—San Francisco-based Mashape, c0-founded by Augusto Marietti, Marco Palladino, and Mike Zonca, said today that it has raised $1.5 million in seed funding for its online marketplace for cloud APIs. APIs, or application programming interfaces, are software connectors that developers can use to integrate their apps with existing services; Salesforce.com, for example, provides numerous APIs that help channel business to the provider of sales automation systems. Mashape’s seed round was led by New Enterprise Associates (NEA), with participation by Index Ventures, Charles River Ventures, and Ignition Partners, and Eric Schmidt’s Innovation Endeavors as well as individual investors Jeff Bezos, Erik Rannala, Russell Seigelman, and Rick Webb. Mashape’s service is still in private beta testing but will launch “soon,” according to today’s announcement.

—Solar industry financing and services startup Clean Power Finance of San Francisco, CA, said Friday that it has raised $25 million in new funding from a group of new and existing investors. The newcomers included Kleiner Perkins Caufield & Byers’s Green Growth Fund and Google Ventures, and the existing investors included Claremont Creek Ventures, Clean Pacific Ventures, and Sand Hill Angels. The company also announced that it has picked a new CEO, SunRun co-founder Robert Kreamer.

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MotherKnows, a Menlo Park, CA-based startup building an online health record system for parents, said today that it has raised $1.7 million in seed funding. Among the startup’s backers are First Round Capital, Giza Ventures, Charles River Ventures, The Band of Angels, former Google Health product manager Maneesh Arora, and other individual investors. “MotherKnows is the first product specifically for parents that will collect and post all health data to a secure website and mobile app to help them stay on top of immunizations and share this information with schools, camps and caregivers as well as remain prepared for an emergency,” the company said in a statement. The startup will use the funds to complete development of its Web and mobile products, co-founder Hesky Kutscher said.

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Hold on to your lighter fluid there, Mr. Barbecue. Not so fast, Ms. I’m-Leaving-Early-For-The-Cape. Yes, I’m talking to you, Fourth of July holiday slackers.

Actually, go ahead and slack off—this should go down pretty easy. At the end of each quarter, we like to look back at some of Xconomy’s top stories. These are not necessarily the ones that got the most traffic (though in some cases they are). But they exemplify what we try to deliver day in and day out—real news and stories behind the companies, people, ideas, and trends that are shaping the future of innovation in our network of cities. Basically, they are stories we liked that will stand the test of time.

For the second quarter (April through June), our Boston editor’s picks cut across a wide variety of tech, life sciences, and energy. The topics range from scrappy startups (PerkStreet, Skyhook, SMTP) and midsize successes (Acme Packet, CSN Stores) to giants (Microsoft, Google, Biogen Idec, Genentech/Roche); from venture capitalists (Polaris, Charles River, Braemar) to entrepreneurs (Greentown Labs, Semyon Dukach); from profiles (Harvest Power, Tal Medical) and deals (Forma) to clusters and trends (m-Qube mafia, future of the Web); and from big industry developments (Vertex’s FDA approval) to individual scoops (Robin Chase’s new startup, iPierian shakeout).

Without further ado, here are Xconomy Boston’s top 20 stories of the second quarter, sorted by sector:

Debit Cards Aren’t For Stupid People: Q&A with PerkStreet CEO on Flying Into the Startup Abyss

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If you’re the founder of a new Internet or mobile startup and you’re looking for Silicon Valley investors who can contribute some star power and hands-on guidance along with their capital, sooner or later you’ll probably send your business plan to Floodgate Fund. Headed by Mike Maples Jr. and Ann Miura-Ko, the Palo Alto, CA-based firm has $74 million under management, which makes it more super than a super angel fund but much smaller than most traditional venture funds; “micro VC” is probably the most used and most accurate label for this category, which includes firms like First Round Capital, Founder Collective, Felicis Ventures, and Harrison Metal. Floodgate’s investments, which range from $150,000 to $1 million, are also in the middle range for early stage startups—-not enough by itself to get most companies off to a secure start, but enough to bridge the gap between angel funding and a more serious Series A venture round.

Maples’ investments in Silicon Valley wonders like Chegg, Twitter, and Ngmoco (acquired by DeNA last fall for $400 million) catapulted him to number 17 on this year’s Forbes Midas List, the publication’s lineup of influential tech investors. Maples tends to portray his investing success as one big lucky break. And indeed, there’s some truth to that. His background is in business software rather than consumer-facing Internet services—he worked at Silicon Graphics and Tivoli Systems before co-founding Austin, TX-based broadband software company Motive in 1997—and he got into Twitter mainly because he’d invested in Evan William’s previous company Odeo, which folded. But he has also paid his dues, working at August Capital and Foundation Capital before embarking on his own investing career.

Mike Maples

Maples’ firm was known until March 2010 simply as Maples Investments, but it rebranded itself that month as part of a bid to become more of a fixture in the Valley, where it regularly invests alongside other micro VC funds, angel investors, and even traditional Sand Hill Road firms. The change also reflected the fact that there was more to the firm than Maples. Miura-Ko, who got her PhD in computer science from Stanford University and still lectures at the School of Engineering, joined as a co-founding partner in 2008. She’s a Yalie and a former McKinsey consultant who learned the investing ropes at Waltham, MA-based Charles River Ventures; Forbes has called her “the most powerful woman in startups.”

I’ve profiled so many of the companies that Floodgate has funded—Chegg, Okta, PayNearMe, Stipple, TaskRabbit, and Vook, to name a few—that I figured it was time to meet Maples and Miura-Ko in person and find out how they think. So back in April, I spent a couple of hours with them at the firm’s eco-conscious new offices on Ramona Street in downtown Palo Alto. I’ve boiled down my notes on the conversation into the abridged Q&A below. We covered so much ground that I’m going to break the interview into two parts: today’s part covers Floodgate’s picture of the startup world today and how the firm singles out promising entrepreneurs and business ideas. Part 2, coming in a few days, looks at specific startup trends such as incubators.

Xconomy: Let’s start at the beginning. What’s Floodgate’s basic investing philosophy?

Mike Maples: Sometimes it helps to start even before the beginning. Ann and I have this really strong belief system that there is a fundamental change underway in the way innovation is happening. People talk about “lean startups” and people talk about the low cost of going to market, but we think it’s even more fundamental than that. We think the Internet has a constellation of things that have developed around it—offshore labor, search engine marketing, ubiquitous broadband penetration, variabilized-cost Web servers—that have fundamentally democratized the process of innovation. So what it costs to prove or disprove an idea has been fundamentally altered. When you project forward what this really means, we think it’s as important as Eli Whitney and the cotton gin, or Frederick Winslow Taylor and the birth of manufacturing, or Alfred Sloan and the invention of the modern corporation with General Motors. Our view is that the people who understand this shift are going to win in the next 20 to 25 years. That is not just a statement about entrepreneurs. That is a statement about the people who capitalize their companies.

Ann Miura-Ko: That is a trend I saw coming out of Stanford, where I was doing a PhD [starting] in 2003. When I first got there, there were students starting companies based on blade servers and open source software. It was fairly expensive. But by 2007 and 2008, I had students who were leveraging Amazon Web Services and other increasingly commoditized technologies. You literally had kids starting companies out of their dorm rooms. Before that, it was figurative but not literal. This commoditization of entrepreneurship is truly profound. Now any undergraduate at Stanford or any other university can … Next Page »

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Updated, see below—The January 2009 announcement by Y Combinator that it was leaving the Boston area and moving full-time to Silicon Valley gave a real jolt to the local innovation community. Then, only a few months later, Greylock Partners dropped a similar bombshell. The storied venture firm, arguably in the elite of the elite alongside Accel Partners, Kleiner Perkins Caufield & Byers, and Sequoia Capital, and the only one based in New England, said in May that it was shifting its headquarters to the San Francisco Bay Area, where it had long had an office—though, unlike Y Combinator, Greylock said it would keep its Boston area office open.

Since then, while no other Boston-based venture firm that I know of has moved its HQ west, several have opened offices in the Valley, joining others, like Advanced Technology Ventures and Highland Capital Partners, that had already opened digs there.

Meanwhile, another group of venture firms—encompassing some of the same companies—began moving into Boston or Cambridge from the Route 128 burbs (usually, though not always, from the famed Winter Street office park that has long constituted the Sand Hill Road of Boston).

You can point to several factors for the moves, from leases coming due to the shrinkage of some funds and the need to quit big office spaces. But whether heading west to California or east into Cambridge and Kendall Square, the bottom line was the same: the desire to shimmy up closer to deal flow and the entrepreneurs on whom the venture capitalists’ jobs depended. In some sense, it was back to the future here in Boston, since many venture firms were originally based downtown and moved out to Waltham and environs as the Route 128 corridor sprang to high-tech life.

These comings and goings have been noted in each instance, sometimes with a lot of commentary, angst, and even applause. If you’re like me, though, you’ve had trouble keeping track of it all—including what has already happened and what is still planned. So here is my timeline of venture capitalists on the move—in two groups. One is for those who have opened offices in the Bay Area, the other for firms who have moved operations closer to the action here in Cambridge. The starting point is January 2009, when Paul Graham announced Y Combinator’s Cambridge pullout.

Venture Firms Head West

—January 2009: Y Combinator, which previously alternated between summer programs in Cambridge, MA, and winter camps in Mountain View, CA, announces it will stay in Silicon Valley year round.

—May 2009: Greylock Partners says it will shift headquarters to Silicon Valley. As of August 2010, the firm has been based on Sand Hill Road in Menlo Park.

2010 — I can’t find any firm moves that took place last year. But that September, … Next Page »

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