Yesware, the Cambridge, MA-based developer of e-mail plug-ins for salespeople, announced today that its $1 million first-round funding came from Google Ventures, Foundry Group, Golden Venture Partners, and angel investors Geoffrey Hyatt, Colby Wood, Mike Baker, David Cohen, Mike Dornbrook, and Will Herman. The money will go toward developing Yesware’s technology for helping salespeople contact leads and helping sales managers track their workforce’s activities.

“Google and others can make better e-mail, but I really think if you want to hit it out of the park, this whole concept of vertically adapting e-mail for a specific vertical problem or task is just a brilliant space,” Google Ventures partner Rich Miner said on a phone call this morning.

Foundry Group’s Brad Feld has a track record of investing in e-mail-related startups, such as Email Publishing, Return Path, and SendGrid. “He was top of my list of people I wanted to work with because he has such deep e-mail investing experience,” Yesware founder and CEO Matthew Bellows told me today.

As Bellows explained when we met this summer, Yesware first raised the $1 million funding on the premise of building an entirely new e-mail platform for salespeople, but its board members suggested it change its model to work with existing e-mail systems (it now plugs into Gmail and Android phones and is in the works for Outlook). The software offers e-mail templates for helping sales people pitch and follow up with potential leads, and can copy those e-mails to salespeople’s accounts on customer relationship management (CRM) tools like Salesforce.com, Microsoft Dynamics, Oracle CRM, and Highrise. That information helps sales managers track their employees’ actual activity with potential customers, instead of requiring them to rely on what the salespeople enter themselves into their CRM accounts. “It saves time and provides better data,” says Bellows.

Yesware also provides reports to salespeople showing them how contacts are responding to e-mails and enabling them to prioritize who to follow up with first. Those reports can be viewed on a mobile browser for free. The Yesware e-mailing templates are also available via its Android mobile app, which costs $4.99. The Yesware software is available for free to individual salespeople, but starting in October, Yesware will charge sales managers who want to use the technology for their teams, at $20 per user per month.

The company, which has three full-timers and several contract and part-time employees, is “hiring like crazy,” particularly in the engineering department, says Bellows. “This funding and next round of funding is all about building up the team,” he says, noting that the company will soon start looking to raise its Series A round.

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It looks like New England’s tech and life sciences firms are working to ink financing, collaboration, and acquisition deals before the holiday weekend hits.

—Digital media and video-hosting firm Brightcove filed paperwork with the SEC indicating its hopes to raise $50 million in an initial public offering. Morgan Stanley and Stifel, Nicolaus & Company will serve as joint book-running managers for the deal for Brightcove, which is based in Cambridge, MA, but is planning a move to Boston.

—Verizon Communications said it acquired Burlington, MA-based CloudSwitch, whose technology creates a temporary work space on a cloud service for companies to run virtualized applications as if they were still running on their home infrastructure. CloudSwitch—which has raised $15 million from investors like Atlas Venture, Matrix Partners, and Commonwealth Capital Ventures—will be rolled into Verizon’s Terremark IT services division, working in enterprise cloud services. The CloudSwitch Burlington office will remain and even expand, the companies said.

—Buzzient, a Boston-based maker of analytics software enabling companies to use social media to track customer sentiment, raised $1.1 million in equity funding. The deal was led by Buzzient CEO Timothy Bernard Jones’ seed fund, TBJ Investments, and included Buzzient board members John Luongo and Ann Fudge, and serial entrepreneurs Allen Graber (of Atlanta) and Ralf Faber (Boston). The money will go to new hires in development, sales, and marketing.

—Norwood, MA-based early stage investment fund Advancit Capital raised $3.2 million. The newly formed firm is co-founded by Shari Redstone, daughter of CBS and Viacom director and National Amusements president Sumner Redstone, and will focus on investments in media, entertainment, and tech startups.

—Adimab, a Lebanon, NH-based developer of human antibody discovery technology, signed collaboration deals with Biogen Idec and Novo Nordisk. Each firm will use the Adimab technology to identify human antibodies against two targets of their choosing. Neither deal terms nor specific targets were disclosed, but Adimab will receive upfront payments and preclinical milestones, and could be eligible for clinical development milestones and sales royalties if the antibodies discovered are commercialized.

—EMD Millipore, the Billerica, MA-based subsidiary of Merck KGaA, has agreed to acquire Seattle-based Amnis for an undisclosed sum, in a deal expected to close fourth quarter of this year.

—Lexington, MA-based GI Dynamics, a maker of medical devices targeting obesity and diabetes, raised $80 million in Australian dollars ($85 million USD) in an initial public offering in the country, according to a report from The Australian. It had initially targeted an Australian IPO worth between $85 million and $102 million in U.S. dollars.

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Boston-based Buzzient, a maker of software enabling businesses to use social media to more effectively keep tabs on their customers, has taken in $1.1 million in equity based funding.

CEO Timothy Bernard Jones says the financing is an inside round, led by his own seed fund TBJ Investments. Other investors are TiE Angels Boston, Buzzient board members John Luongo and Ann Fudge, and serial entrepreneurs Allen Graber (of Atlanta) and Ralf Faber (Boston). The deal includes a $500,000 convertible debt investment the company inked in 2008, which has now been converted to equity. The SEC document Buzzient filed yesterday indicates that the total funding round could hit $1.4 million.

“Development hiring is the number one priority,” says Jones of where the company will put the money. It will also add to its sales and marketing staff. The startup now has a head count of a dozen that it hopes will hit 30 by the end of this year, says Jones.

Buzzient has no definite plans to raise venture capital funding in the future. “Our thought process all along has been, if we can build this company without raising VC and build a world-class company, we will do it,” he says. If the company does seek outside funding, “it’s going to come down to the specific partner and the specific firm—it has to be the right venture capital relationship,” says Jones.

Buzzient, which started in Cambridge but set up an office in Boston’s innovation district last year, is different from others in the cluster that use social media for company marketing. (That area has seen some deals lately, including HubSpot’s acquisition of Oneforty.) Rather, Buzzient’s analytics software uses natural language processing to crawl the Internet for what the public is saying about a given company, and firms use that information to make decisions on products or markets to target. Businesses—like financial services firm Motley Fool, life sciences technology developer PerkinElmer, Seattle-based RealNetworks and its GameHouse division—use it to track macro-level market conditions and customer reactions to a company’s existing products and features.

The Buzzient technology can help customer service departments keep tabs on customers’ tweets about a company, as Twitter handles are becoming another item that companies track in customer relationship management (CRM) databases. The software is the only Oracle-validated integration for social CRM with Oracle’s existing customer relationship management products, says Jones, who started his career at Oracle.

“We’re using social as part of the operational 24/7 business process; we’re not using social for a purely campaign-driven exercise or only for lead generation,” says Jones.

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Cambridge, MA-based Yesware kicked off late last year with the aim of building an entirely new e-mail system, one that would help salespeople close their deals and help enterprises actually understand their sales forces, says CEO and founder Matthew Bellows. It even raised $1 million on this premise. Then the company’s board spoke up. You see some of its investors knew the whole e-mail space pretty well, and told Yesware not to reinvent the wheel.

So Yesware scratched its plans for an e-mail reboot, and drew up new ones for a sales interface that would work with existing e-mail systems. Late last month the startup, which works out of Dogpatch Labs, opened up its beta version of an e-mail plug-in that offers customizable templates for salespeople. The objectives are still the same. At the individual user level, “we are down in the trenches with the salesperson trying to help them close that business,” says Bellows. And at the organizational level, “it extracts data that their enterprise needs from their activity, to learn from what they do and report on that.”

There are plenty of companies whose business is to generate and qualify sales leads (think Eloqua and HubSpot), and others aimed at managing sales account information (Salesforce), but few that provide tools for actually making the sale, Bellows says.

Yesware’s plug-in offers pre-set e-mail forms to help salespeople first connect with customers, and also to help them once they start getting objections from the customers they’re chasing. Say a salesperson keeps hearing from potential customers that the product costs too much, or that it can’t stack up to an existing offering from a big-name competitor. He or she can pull the appropriately template from Yesware addressing that concern.

“It’s a templates-on-steroids kind of thing,” Bellows says. “We help the salesperson with the right answers at their fingertips.”

The Yesware plug-in also has a button for automatically copying e-mails to a salesperson’s account on the customer relationship management system Salesforce. “It’s a very low cost way of having salesperson update Salesforce,” Bellows says.

Those updates are key to Yesware’s bigger mission of helping sales managers better track the work of their sales force—by actually looking at their communications with customers, rather than relying on the relatively cryptic notes salespeople often type into CRM systems, Bellows says.

“What a salesperson does from an action standpoint is going to be much more helpful than what they say that do,” says Bellows, who saw the frequent disconnect between the two firsthand while managing sales at companies like Vivox, Floodgate Entertainment, and WGR Media, the gaming media startup he sold to CNET in 2004. What’s more, “if we … Next Page »

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San Francisco-based Connected, a maker of simplified, Web-based contact management tools, said today that it has raised $500,000 in seed funding. Trinity Ventures led the seed round, which was joined by Ignition Partners and 500 Startups and individual investors Christopher Michel, Michael Hoydich, and Mark Gray. “Our innovation is that we’ve removed all the mundane work associated with maintaining your contacts so you can focus on building, maintaining, and leveraging your most important relationships,” CEO Sachin Rekhi said in a statement. The startup plans to use the funds to expand its software for small businesses and acquire more users.

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New England’s tech and life sciences companies are roaring into spring with a number of startup financings, acquisitions, and partnerships.

—Harvest Power, a Waltham, MA-based startup focused on producing energy from organic waste, announced it had raised a $51.7 million Series B funding round led by Generation Investment Management, a firm co-founded by Al Gore and David Blood. Harvest’s previous investors, Kleiner Perkins Caufield & Byers, Waste Management, Munich Venture Partners, and TriplePoint Capital returned for the round, alongside new investors DAG Ventures and Keating Capital.

—SustainX, an energy-storage technology developer out of West Lebanon, NH, said it nabbed a $14.4 million financing from GE Energy Financial Services and other investors including Cadent Energy Partners, Polaris Venture Partners, and Rockport Capital.

—Cambridge, MA-based gene therapy firm Bluebird Bio set up a deal with the French Muscular Dystrophy Association to develop a treatment for sickle cell anemia and the genetic blood disorder beta-thalassemia. Bluebird will get $1.4 million upfront and and up to $2.8 million in credit to manufacture clinical trial material at Généthon, AFM’s bio-therapy research center.

—EntropySoft, a French software maker with U.S. headquarters in Cambridge, announced it snapped up a $3.5 million financing led by Alven Capital. The money will go to expanding the sales team and U.S. presence of EntropySoft, which makes software for managing data and documents between different content management systems.

—Cambridge-based cancer drug developer Ariad Pharmaceuticals (NASDAQ: ARIA) took the option to co-promote ridaforolimus, its experimental drug for treating soft tissue and bone sarcoma, with its partner Merck & Co. (NYSE: MRK), as part of a May 2010 licensing deal.

—Needham, MA-based Illume Software, a developer of a mobile application called iZUP for preventing cell phone usage while driving, raised $2.4 million from the Massachusetts Technology Development Corp. and individual investors, bringing its … Next Page »

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Bedford, NH-based JitterJam, a provider of social customer relationship management software, was acquired by San Francisco-based social media and news monitoring firm The Meltwater Group for $6 million, Meltwater announced today. All JitterJam employees will join MeltWater, and the company’s technology will be integrated into the social CRM platform Meltwater Buzz.

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The name’s Baum. James Baum.

OK, he might not be a dead ringer for 007, but I get the feeling Baum could handle himself in a firefight, high-stakes poker game, or dinner with the Queen, all with equal aplomb. He is a highly skilled pilot. He’s also pretty good with business intelligence, data warehouse appliances, and “big data”—all of which sound like tools of the trade for any self-respecting spy.

Except he’s not a spy, of course. Baum is the president and CEO of Netezza, the Marlborough, MA-based business analytics firm that was snapped up by IBM for $1.7 billion last September. He has helped lead Netezza since 2006, so his experience includes taking the firm public (in 2007) and managing big teams through tough economic times. He also has a unique perspective on building business software companies over the past couple of decades, working on startups in the dot-com era, and fending off competitors in crowded spaces. (He talks some pretty good trash about these competitors too, as you’ll see towards the end of this story.)

I sat down with Baum last week to talk about the IBM (NYSE: IBM) deal and integration, but also about his broader tech experience and the dramatic rise of big data. Lately, the term has become a buzzword for the skyrocketing amounts of information that businesses are trying to harness to better serve their customers. The field is certainly hopping in Massachusetts, as evidenced by EMC’s acquisition of Greenplum, Hewlett-Packard’s purchase of Vertica, and, of course, the Big Blue-Netezza deal last fall.

“Big data is here to stay,” Baum says. “This is a really important trend in the technology industry. There’s still a lot to be done. We haven’t figured all of this out yet.”

If you don’t know big data from pig data, don’t worry. Baum, 47, is adept at explaining its significance to experts and novices alike. He grew up in Burnt Hills, NY, the son of a Skidmore College professor and the head of a hospital nursing department. Baum studied engineering at WPI in Massachusetts and RPI in New York before starting his career at Boston-area-based Parametric Technology Corporation (PTC) in 1989. And that’s where things got interesting.

(In case you were wondering, PTC (NASDAQ: PMTC) is the computer-aided design and product development software firm that grew into a billion-dollar giant in the late ‘90s, slipped in the early 2000s, and is back to raking in $1 billion in annual revenues since 2008. It’s one of the underrated success stories of the Boston tech scene.)

Read below for Baum’s deeper insights and perspective on big data and business intelligence, as well as broader lessons for entrepreneurs and executives. I’ve edited the interview for length and clarity:

Xconomy: So tell me about your early career and how it shaped you.

Jim Baum: It was an interesting time in 1988. The tech industry as we understand it today was pretty young. It was a very formative time, with Data General, Digital, and Oracle was just getting going. I went to a small startup in Waltham, called Parametric Technology, or PTC. Sam Geisberg started it in 1985 with $50,000.

I joined PTC in 1989 as employee 95. It was a great, great experience. I worked for some of the best leaders I’ve ever met. I was there 11 years. The company went public [in 1989] on about $11 million in revenue. We had 40 quarters of growth in earnings and revenue. It was a rocket ship, … Next Page »

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Salesforce.com, the cloud-computing provider that has been in an extended battle with Microsoft for market share and talent, plans to hire as aggressively as possible to fill its new 11,000 square-foot space in South Lake Union.

And the pace apparently won’t be slowed by a recent court battle over Salesforce.com’s (NYSE: CRM) hiring of a manager from Microsoft (NASDAQ: MSFT).

“We’re after the best talent in the industry, wherever we can find them—and not all of those people are at one company,” Salesforce.com’s Woodson Martin says. “The truth of the matter is, a lot of people want to work on the next generation of technology. They want to be out on the cutting edge and innovating, and not maintaining the status quo.”

Martin, a senior vice president for San Francisco-based Salesforce.com, spoke to reporters this morning while joining some colleagues at an event to celebrate the official opening of the company’s new Seattle office.

Salesforce.com’s Seattle team—which includes new and existing employees working on its major products—moved into the new office over the weekend and had a little shindig Monday night, Martin says.

It must not have been too crazy, because several people made the 9 a.m. call at Operation Sack Lunch, a local charity.

Seattle Mayor Mike McGinn welcomed Salesforce.com’s larger presence here, part of … Next Page »

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San Francisco-based Assistly, a 2009-vintage startup in the “social CRM” space alongside companies like Get Satisfaction and Zendesk, said today that it has raised $3 million in new funding. The money came from Bullpen Capital, Index Ventures, Social Leverage, True Ventures, and individual investor Kenny Van Zant. The company, which offers a collaborative Web-based desktop for customer support professionals, said the funds will help it accelerate software development and sales and marketing initiatives.

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For Guy Suter, starting from scratch is a good thing. At least when it comes to user interfaces, he says. His Ann Arbor-based startup Nutshell is building a customer relationship management software system from the ground up that he says offers a better user experience than what’s long been out on the market.

Suter first saw the problems with existing CRM software options while CEO of BitLeap, an offsite data backup and disaster recovery company that was acquired by Barracuda Networks in 2008. He found products like Salesforce.com and SugarCRM to be “cumbersome” and not particularly user friendly, he says.

Many of the biggest names in CRM got their start before the big modern features of the Web existed, says Suter, Nutshell’s CEO. Pretty important features, like Ajax, the Web development system used to create more interactive application on sites. Some of these long-time CRM brands have added layers to and tweaked their software to keep up with new Internet standards, but Suter says piling new features onto an existing, outdated platform still makes for a clunky user experience.

“That kind of leaves things lacking, it doesn’t feel as seamless as something you could start with a blank slate,” says Suter, who also works as a director at Barracuda Networks.

His 12-person team at Nutshell is putting a big focus on making the software systems for salespeople easier to navigate. Some features include: automatically refreshing the page when users update information, breaking up information so that it doesn’t read as one giant log that takes minutes to scroll through, and allowing users to grab data and move it to the appropriate place. The software also enables users to customize different steps and milestones of their sales process, offering different data entry variables and options for each step, Suter says.

Nutshell, was launched in 2009 by Suter and is internally funded—with no immediate plans to raise outside money. The company also has two staffers completely dedicated to developing the product for the mobile phone. “We want to build the best mobile CRMs in world; that’s where the world is going,” Suter says.

Right now, the iPhone version of Nutshell enables users to sift through their customer data and research leads, but in the future the company is adding geo-location features. One of the big problems for salespeople who travel is entering a lead’s or client’s information into the software system from a computer, and finding the Internet access to do it. With upcoming versions of the mobile edition of Nutshell, users will be able to enter information into the system “between the door of the client they just met with and the door of their car,” Suter says. The GPS features in the phone will enable the system to readily pick up a client location and enter it into the system.

The Nutshell software first hit the market a month ago, offering customers a free 30-day trial of the product, which normally costs $25 per individual user per month. Those first trials were just ending last week when I chatted with Suter, so now “it’s getting to decision time” for those first several hundred customers on whether they’ll stick with the product. The company attracted a mix of customers, but those in the Web development and design space were big, Suter says.

The first crop of customers will also determine the features and focus of Nutshell in the future, which could include mass marketing and enterprise resource planning, Suter says. “Ultimately Nutshell will be an entire business suite of software,” he says.

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It would be easy to say that Zoho, whose online office productivity software has attracted 3 million users, is the worst nightmare for desktop software makers like Microsoft and even for a newer generation of Software-as-a-Service companies like Salesforce.com. But Zoho is more complicated than that.

To figure in its competitor’s nightmares, Zoho would have to be an entity that other companies understood and therefore feared. In fact, the Pleasanton, CA-based company is something new and almost completely alien to the established software culture: a tech-savvy company that got tired of paying high prices for the software it needed to run its own business, and simply assigned its engineers to build something cheaper and better.

There are plenty of startups in the San Francisco Bay Area where the engineers “think they can build a better word processor than Microsoft can,” says Sridhar Vembu, Zoho’s founder and CEO. “But if you apply business thinking to it, it’s not strategic for them. But [at Zoho] the engineers rule. From the beginning I have kept the company in that mode.”

The first application Zoho’s engineers built, a primitive online word processor called Zoho Writer, came in 2005. It was a side project at the time—the company’s real revenue was (and still is) generated by its network management software for enterprises. Zoho Writer didn’t really take off until Google bought a competing program called Writely, turned it into Google Docs, and proved to the world that browser-based software could handle tasks like word processing.

But five years down the road, Zoho has created online alternatives to nearly every piece of software required to run a small or medium-sized business. Business customers pay a single bill each month and get access to e-mail, word processing, calendars, Web conferencing, spreadsheets, project management tools, presentation builders, customer relationship management tools, website monitoring, and more. “We are trying to be the IT department for these small and medium businesses,” Vembu says. “We’re trying to create a portfolio of products so that businesses can pay a monthly fee like a utility bill and get all the software they need.”

Of course, that’s also the ultimate vision behind Google Apps, Microsoft’s Office Web Apps, and Microsoft’s brand-new Office365 offering. But Google itself offers only seven Web-based office applications (Gmail, Calendar, Docs, Groups, Sites, Video, and Wave). Microsoft’s experiments with online software, meanwhile, extend only to Word, Excel, PowerPoint, and OneNote on the productivity side, plus Exchange, SharePoint, and Lync in Office365. Both companies have been lapped several times over by Zoho, which offers 25 online productivity applications—all built on a single core that makes it almost trivial for Zoho’s programmers to let users cross the boundaries between its apps. If you’re a sales executive using Zoho CRM, for example, it’s easy to read and reply to Zoho e-mail and even open and edit Zoho Writer documents without leaving the CRM app.

How has a 1,200-employee, 100-percent bootstrapped company come out of nowhere to offer a serious challenge to the giants of consumer and business software? As Vembu hints, it’s largely the story of a company where the engineers have the upper hand—which isn’t too surprising when the CEO has a B.Tech from the India Institute of Technology and a PhD in electrical engineering from Princeton. So there was nobody sitting in the company’s sales, marketing, or financial offices with the power to tell its developers that it was impossible to reinvent the productivity software market.

But there are some other important factors as well. For one thing, the company had room to experiment. Known as AdventNet until last year, when it took on the brand of its fastest-growing product line (the name Zoho is a play on “small office/home office”), the company enjoys … Next Page »

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Yesterday we told you all about Recurve, a San Francisco home energy auditing and retrofitting startup whose founder argues that before energy-conscious homeowners put solar panels on the roof, they should focus on fixing what’s under it—poor insulation, leaky ducts and windows, inefficient HVAC systems, and the like. But let’s assume you’ve done all that. What’s next? Here in California, there’s an array of companies working to make it far easier and more affordable to install electricity-generating solar panels on your home.

One of the most innovative and fast-growing startups in this industry is Oakland, CA-based Sungevity, which is probably unlike any cleantech company you’ve heard of. The company doesn’t have its own installation workforce, and unlike competing firms such as SunRun, it doesn’t have “power purchase agreements” under which homeowners buy electricity from the company. What it does have is software. It’s got applications that allow technicians to peer down from the sky (via Google Earth-style satellite photos) and figure out exactly how many solar panels will fit on your roof, then generate a project estimate. It’s got applications to automate the sales process, and it’s got applications to cut through the red tape around permitting for solar installations.

In effect, Sungevity is a new low-overhead, high-efficiency middleman in a business that’s long been a cottage industry, dominated by small solar installers who have to roll a truck every time a potential customer requests an estimate. (In many of these respects, Sungevity is similar to Recurve, which, as I explained yesterday, is also using software to systematize and scale up a cottage industry—in its case, home energy retrofitting.)

Danny Kennedy, Sungevity’s founder, argues that simplifying and automating the solar installation process is the only way to bring this form of renewable power to the mass market. Together with co-founders Andrew Birch and Alec Guettel and chief financial officer Charles Ferer, he’s built a business that’s collected $9 million in venture backing and is set to grow from $3 million in revenue in 2009 to nearly $30 million this year, with no end in sight. The core of the business model is the 10-year “solar lease,” an idea Ferer brought with him from former employer Solar City. In return for assigning solar tax credits and rebates to the lender—Sungevity and its financial partner US Bank, in this case—homeowners get to install solar panels for only about half of the actual cost of equipment and labor, and they can pay for the project over the course of 120 months.

Sitting down with Kennedy to talk leases and rebates and software is an unusual experience, given that his background isn’t in the energy business at all, but in environmental activism. A native of Australia, Kennedy is a 12-year veteran of Greenpeace, where he started out in the 1990s working to block oil projects in Africa and went on to run the organization’s California Clean Energy campaign. That campaign helped to bring about Governor Schwarzenegger’s $2.8 billion California Solar Initiative, under which the state is providing cash rebates of $1 to $2 per watt for solar photovoltaic installations. (A typical home installation might amount to 3 to 10 kilowatts.)

Those rebates are a big part of what’s making programs like Sungevity’s solar leases affordable, and are one of the reasons Kennedy and co-founders decided to build their business in the Bay Area. Another is the population’s openness to new ways of doing business: “If there is anywhere that’s going to be comfortable adapting to Internet commerce models [for solar installation], it’s California,” Kennedy says.

Our look at Sungevity comes in the form of an extended Q&A. In Part 1, below, Kennedy talks about Sungevity’s business model and technology, and describes how the installation process works. In Part 2, coming tomorrow, he talks about how he made the leap from Greenpeace to energy entrepreneurship, how Sungevity plans to scale up, and how the company’s work fits into global efforts to reduce carbon emissions and blunt the effects of climate change.

Xconomy: What is the mission of Sungevity?

Danny Kennedy: The big picture mission is to take solar to scale. Which I’m sure every solar entrepreneur says they want to do, but our vision is to do it in the residential market, which is ultimately the highest value market for solar electricity. Finding a scalable way to deliver solar electricity to residential customers in middle America is the best chance to make large profitable ventures, which will in turn scale the production and consumption of solar itself.

If you can capture developed-country, grid-connected markets, such as the wealthy German, Japanese, or California markets, it will drive solar production in … Next Page »

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You may have heard of Valleywag, the tech gossip site owned by Gawker Media. But you’ve probably never heard of Valleyschwag—a short-lived startup where subscribers could sign up to receive monthly grab-bags full of surplus promotional goodies.

Late one night in 2006, the Valleyschwag team updated its website with a new feature, sent out an e-mail to all of its customers, and went to bed. “Unfortunately, there was a typo in the link we sent out, and hundreds of Europeans waking up as we were going to bed tried to access the site and couldn’t,” says Thor Muller, one of Valleyschwag’s founders. “They tried to talk to each other in the comment section of our blog, and one person figured out what the typo was. So by the time we woke up, hundreds, if not thousands of people had already seen the solution.”

It was an amazing example of customers collaborating to solve a problem without the company even being involved—and it gave Muller and his co-founders the idea for a totally different business. Today that business is called Get Satisfaction, and this week the San Francisco startup is finally collecting its first big pot of venture money.

The $6 million Series A round, being announced today, was a long time coming: Muller, Get Satisfaction’s chief technology officer, says the recession upended earlier fundraising plans (of which more below). San Francisco’s Azure Capital Partners led the round, with seed-round funders O’Reilly AlphaTech Ventures and First Round Capital also participating. With thousands of clients already using Get Satisfaction’s platform to communicate with their customers, and to help customers communicate with each other, the startup is hoping it’s now on its way to dominating a market that’s been labeled “social customer relationship management,” or social CRM.

Definitions of social CRM are fuzzy and rapidly changing, but at its heart, it’s about software that helps companies get more systematic about the way they engage with customers. Many Get Satisfaction clients use the company’s Web-based platform to help their customers answer each other’s technical questions, thereby reducing the costs of customer support. But these online communities also turn out to be good places to collect customer feedback, which can be funneled into product design or marketing efforts. In fact, the comments left by many Get Satisfaction users, and the data they reveal in the process about their needs, wants, and preferences, is the kind of stuff many consumer-facing companies happily pay market researchers to collect.

“Where Get Satisfaction came from, and where it is distinctly placed right now, is online customer service and support communities,” says Cameron Lester, Azure’s founding partner, who is joining the company’s board as a result of the investment. “But although they have great customers who use it predominantly for that, they also use it to get advice about product usage, and to develop new product ideas. When you look at customers like Procter & Gamble and Mint.com and Zappos and Nike and British Telecom and Motorola…what Get Satisfaction is doing is helping these companies get into a dialogue with their users in a non-offensive, engaging way.”

One big factor that sets Get Satisfaction apart from other providers of customer-support software is the fact that it’s creating a single, cohesive community of consumers.Once you’ve registered as a participant in a customer support forum at one Get Satisfaction client, … Next Page »

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You’ve been sleeping under a rock if you haven’t realized yet that what’s being said on Twitter, Facebook, user forums, wikis, YouTube videos, and personal blogs has a big impact on what people think about a brand.

And there’s no shortage of companies developing technology to monitor this ever-changing buzz to paint a picture of consumer sentiment. But these software platforms are often targeted to those on the public relations and marketing side of a brand.

Buzzient, a tenant of the Cambridge Innovation Center in Kendall Square, is taking a different approach to social media analytics. The startup’s Web-based software is targeted directly at those in the company who make decisions about which products to offer consumers, and what features to offer within those products, says CEO and founder Timothy Jones. Buzzient also represents a growing trend of companies that aren’t taking outside money; the startup has been self-funded since its inception, and is “cash-flow positive” as of this year, Jones says.

Jones says he was first alerted to the massive amount of data available in the Internet cloud while he was an MIT Sloan fellow working at the school’s Center for Digital Business, where he analyzed and determined pricing for Google’s enterprise-level business apps. He started working on Buzzient in 2008, and in early 2009 the startup attracted its first customer: the multimedia-based financial services company Motley Fool.

“Coming out of the crash, they were interested in what people were saying about different asset classes,” he says. Buzzient’s software helped Fool, which publishes investing research online and sells in-depth reports, gain an understanding of what financial information consumers were looking for, Jones says.

Another customer is PerkinElmer (NYSE: PKI), the Waltham, MA-based provider of research and diagnostics technologies. Jones says the life sciences company uses the Buzzient software to monitor which diseases or medical conditions Internet users are talking about, in order to figure out where to focus its products. Seattle-based healthcare marketing firm Appature also develops technology for tracking and measuring customer input for companies in the pharmaceutical, medical devices, and wellness spaces.

The Buzzient software uses natural language processing to crawl the Internet for keywords relating to a brand, and track what’s … Next Page »

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This is the fifth in a series of profiles of companies emerging this summer from Mountain View, CA-based startup incubator Y Combinator.

When Google launched Gmail five years ago, a lot of people were freaked out by the keyword-based text ads that appeared alongside e-mail messages. The idea that Google’s algorithms were “reading” your e-mail and serving up related ads seemed a little creepy and invasive. But now most people have gotten used to that, and have moved on to being freaked out about Facebook’s privacy settings. These days, most Gmail users never even glance at the ads filling the right-hand column.

Now there’s a way to put that space to more practical use. Rapportive, a San Francisco company that’s part of this summer’s crop of Y Combinator startups, makes a free browser plugin that replaces Gmail ads with digital dossiers on your contacts. If I sent you an e-mail message and you opened it in Gmail in a Rapportive-equipped browser, you’d see my whole social-media life spread before you: my photo, my title, my e-mail address, a list of my current and previous employers, my last three tweets from Twitter, and links to my Facebook, LinkedIn, and Flickr, FriendFeed, Google Profile, and YouTube accounts (see the screen shot below).

The idea is to give you real-time intelligence about the person you’re corresponding with—whether they be a friend, a source, a business associate, or a sales prospect—in order to bolster your rapport with that person (hence the company’s name, which is among the cleverer ones I’ve seen this year). “People love it because of the photos—there’s something very visceral about seeing a photo—and because of the tweets,” says Rahul Vohra, a University of Cambridge computer science graduate who is Rapportive’s co-founder and CEO. “They can talk immediately about something someone has just said. It shows you really care because you are following them on multiple channels.”

Putting a contact’s photo and personal and professional details right alongside his or her e-mail messages isn’t a brand new idea. San Francisco’s Xobni makes a popular add-in for Microsoft Outlook that does many of the same things, and Seattle-based Gist makes a Google Apps gadget that lets Gmail users click on contacts’ names to see profiles. But Rapportive is more automatic, filling the right sidebar with contact details without requiring any action on the user’s part. And when you think about it, the idea makes perfect sense: e-mail is the original, and still dominant, “social media” technology, so when you’re reading or writing messages, it’s useful to have all of the Web’s miscellany about your correspondents gathered up on the same screen. (There’s also a box that allows you to save personal notes about each contact.)

I’ve been using Rapportive’s tool since April, well before the company announced that it was part of Y Combinator, a startup school in Mountain View, CA, that provides several months of mentorship and networking assistance in exchange for a small amount of founding stock.

Along with Y Combinator’s investment, the startup has raised $1 million in seed funding from an impressive, bicoastal list of venture firms and angel investors. The venture investors include BoldStart Ventures, Charles River Ventures, 500Startups, Kima Ventures, and Zelkova Ventures, and the angels include Paul Buchheit, Scott Banister, Jason Calacanis, David Cancel, Shervin Pishevar, Naval Ravikant, Roy Rodenstein, Dharmesh Shah, and Gary Vaynerchuk.

Because Gmail runs inside a Web browser, meaning it’s really nothing more than a bunch of HTML, style sheets, and JavaScript, it’s a straightforward matter for Rapportive and other startups to write plugins that manipulate the appearance of the Gmail page—and there’s not a thing Google can do about it. So far, there are Rapportive plugins for Chrome, Firefox, and Safari, and Vohra says the three-man startup is working on a plugin for Apple Mail.

Vohra himself has the sort of hybrid background—heavy on both computer science and entrepreneurship—that makes him a natural as a social media startup founder. He says he’s been coding since age 9, starting with BBC Basic, the language developed for … Next Page »

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The bigger the company, the tougher it is to innovate. There are two main pillars to this “innovation resistance” that seem common in large, profitable organizations.

1. Fear that innovative products will cannibalize existing revenue streams. The bigger the product line revenue, the more resistant that product group is to innovation that would threaten its growth.

Consider the post by former Microsoft exec Dick Brass in the New York Times Op-ed section, titled Microsoft’s Creative Destruction:

“At Microsoft, it has created a dysfunctional corporate culture in which the big established groups are allowed to prey upon emerging teams, belittle their efforts, compete unfairly against them for resources, and over time hector them out of existence. It’s not an accident that almost all the executives in charge of Microsoft’s music, e-books, phone, online, search and tablet efforts over the past decade have left.”

There’s a lot going on in this Microsoft example, but the undesirable effect of cannibalizing existing revenue streams is a substantial contributor to resisting innovation. As an example, e-mail built into a social networking app could threaten Exchange revenue, so naturally the Exchange team might lobby to restrict that feature on behalf of revenue protection. (Note: there is an increasing percentage of people that leverage Facebook’s messaging capability as their primary e-mail service.)

2. Product re-invention means throwing away deep feature lists. Market-leading products measure their dominance by revenue and feature depth. Feature depth broadens their relevance to a wider array of customers. So, adding functionality and features to a product trumps re-invention.

Clayton Christensen’s explanation of the impact of “disruptive technology” is a straightforward summary on why this is so common. One part of Christensen’s theory states:

“Low-end disruption” occurs when the rate at which products improve exceeds the rate at which customers can adopt the new performance. Therefore, at some point the performance of the product overshoots the needs of certain customer segments. At this point, a disruptive technology may enter the market and provide a product which has lower performance than the incumbent but … Next Page »

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“Platform” is such an overused buzzword in the software world that my ears start oozing cerebrospinal fluid every time I hear it. But my reaction notwithstanding, history does include a few genuine examples of devices or programs developed by one company that became critical platforms for new products from a host of others. The Windows operating system is the archetypal case—and in more recent years there are examples like Facebook, which has become a playground for hundreds of third-party developers, and the Apple iPhone and iPod Touch, the home environments for what is now probably history’s largest collection of mobile applications. Both Facebook and the iPhone boast substantial communities of third-party developers right here in Boston.

Now there’s a new platform in town. It’s in its early stages, and it’s much less familiar to average software users, but may eventually have the same sort of impact on the business world that Facebook and the iPhone are having on consumers. It’s Salesforce’s Force.com AppExchange—an online marketplace where users of the San Francisco company’s popular online customer relationship management (CRM) package can buy and download add-on applications that greatly extend Salesforce’s capabilities.

In some cases, these programs add features that would fit perfectly as built-in parts of the Salesforce.com platform itself. In other cases, AppExchange applications add features that have little or nothing to do with CRM or the sales process, but simply become more powerful when delivered on-demand using Salesforce’s existing software-as-a-service (SaaS) infrastructure.

Just as in the Facebook and Apple cases, software companies around Boston have been quick to take advantage of this new platform—either by building new “native” Force.com versions of their products that run entirely on Salesforce’s cloud-computing infrastructure, or by creating connectors that allow existing Salesforce users to tap into their applications without having to leave the Salesforce (NYSE: CRM) environment. For the last few weeks I’ve been canvassing local firms with apps in the AppExchange, and from what I can gather, it’s becoming an important adjunct to many organizations’ main product lines and sales channels. This being the business world, the new platform isn’t taking off in the red-hot way that iPhone apps did after the launch of the iTunes App Store last summer—but the AppExchange already offers more than 800 programs, from an application built by Lexington, MA-based Makana that helps companies track incentive-based compensation for salespeople to one from Cambridge, MA-based Hubspot that helps marketers track the success of their campaigns.

Salesforce, according to a recent observation by Saul Hansell of the New York Times‘ Bits Blog, is on a path that “mirrors that of Facebook (and in some ways that of Yahoo and Google)…Both Salesforce and Facebook started out as rather handy Web-based services for keeping track of contacts. And both have realized that these lists of people, and the underlying technology to manage them, can be central to a lot of different problems that their customers may want to solve. So both are now turning into ‘platforms’ on which other companies can create and run a wide range of applications.”

That transformation hasn’t been totally hiccup-free: last week the Salesforce platform suffered an hour-long outage affecting more than half a million users. And several of companies I spoke with complained about a lack of technical support from AppExchange administrators, as well as alleged favoritism by Salesforce (there’s a perception that the company showers more attention on outside developers who direct larger numbers of users to the core Salesforce application). But in general, contributors to the AppExchange say creating Salesforce-compatible applications has widened their markets and solidified the appeal of their other products.

If you aren’t up to speed on CRM or Salesforce, a quick primer: CRM is the industry jargon for the category of software that most businesses today use to track their sales prospects; “a very fancy Rolodex” is Hansell’s apt thumbnail description. Companies like Siebel Systems, SAP, Oracle, and Peoplesoft have been selling PC- and server-based CRM packages since the 1980s. But beginning in 1999, and accelerating greatly since 2005 or so (when I first covered the company), Salesforce, led by ex-Oracle exec Marc Benioff, has been gleefully disrupting the CRM business with its subscription-based SaaS product, which stores clients’ sales database on “multi-tenant” servers. That means everyone’s data lives side-by-side on the same machines and is accessed by individual users via their Web browsers.

The Web is, by its nature, open, and a big part of the Web 2.0 revolution has been about building interfaces that allow applications to request data from one another and repackage it at will. So Benioff’s early decision to go the SaaS route meant that Salesforce could invite other companies to build software that talked with its database. That became especially useful when … Next Page »

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No, my caps-lock key is not stuck. Collaboration Online, a Burlington, MA, software-as-a-service company that hosts Microsoft e-mail, collaboration, and CRM programs for other companies under brands such as groupSPARK and 123Together, is being purchased by Fairfax, VA-based mindSHIFT Technologies, a provider of managed IT and voice-over-Internet telephony services, the two companies said today. “We are delighted to join forces with mindSHIFT, an East Coast powerhouse of managed IT and VoIP services,” Ravi Agarwal, CEO of Collaboration Online, said in an announcement. “Their considerable resources will enable us to more quickly become the market leader in hosted services, reach more customers, and offer additional industry-leading hosted software services.”

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