There’s lots of buzz in the startup community about agile software development; there are software programs, books, and seminars on the topic, and even huge firms like IBM are now touting their “agile development solutions”. The general idea is to create a team and a software process that is flexible, quick, and adaptive to feedback from the market. Put stuff out there, collect feedback on what works, kill what doesn’t, improve what does, rinse and repeat.

But there’s a parallel trend occurring in the early stage technology market that hasn’t been talked about much. Programs like TechStars, Y Combinator, and Founder’s Co-op have been pioneering what I like to call agile organizational development. These “initiator” organizations provide founding entrepreneurs with an incredibly compressed calendar of iterative feedback on all aspects of their company. The feedback comes from a broad network experienced entrepreneurs who serve as mentors in these programs, and it comes often, regularly, and relentlessly.

Mentors in these programs provide feedback on the startup’s team, 30 second pitch, fund raising pitch, positioning, product, pricing—on just about every aspect of the organization. Some of the feedback is contradictory—just like market feedback can be. The TechStars program even has a name for the confusion that results from conflicting advice: “mentor whiplash”.

The net effect of all this mentor input is a set of organizations that adapt to market feedback much more nimbly than startup organizations of the past. This feedback cycle and the entrepreneurs’ response is what I’m calling agile organizational development, and my bet is that the companies that embrace it are much more likely to succeed than those that don’t.

These programs are all relatively new, and there aren’t any books or seminars on the topic yet—but I’m betting there will be.

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“People say if you fail in Seattle, you’re screwed,” said Marcelo Calbucci. “If you fail in the Bay Area, you just have a badge of honor.”

We were at the TechStars reunion event in Seattle last week, listening to early-stage investors Brad Feld, Andy Sack, Steve Hall, Greg Gottesman, Shawn Broderick, and Chris Sheehan speak about entrepreneurship and the tech startup scene in their respective cities. Calbucci, the founder of Seattle 2.0 and Sampa (which folded in August), was asking the panelists about how the tolerance of failure, whether real or perceived, affects a region’s culture of innovation.

It’s a deep question, and it continues the discussion of startup cultures in different cities that I highlighted last week. It’s also part of a debate on failure that has been going on since long before I wrote about it in Xconomy last January. There seem to be two camps. Most entrepreneurs I’ve talked to feel there is a stigma associated with having a failed startup in Seattle. Most venture capitalists, not so much. But it’s a much broader issue than just Seattle. My colleague Bruce talked with a Web 2.0 startup founder in San Diego last week who said his first failure, earlier this year, “was truly a painful experience, and I’m still not over it.” And meanwhile, Brad Feld, the co-founder of TechStars and Foundry Group in Boulder, CO, had some provocative things to say about the failure aspect of Boston’s culture.

But first, Andy Sack of Seattle’s Founder’s Co-op gave his perspective on having failed at his last startup, Judy’s Book, after having had three successes prior to that. “As much as you teach entrepreneurship, as much as there’s supply of capital out there, really when push comes to shove, entrepreneurship comes from within,” he said. “I couldn’t take a job at any of the big companies. We’ve been through the tech boom of the ‘90s. We’re just coming off of a major hiccup. I’d say right now, early-stage investors in Seattle have retreated some; venture capital has retreated some, they’re focused primarily on their portfolio. That said, you [Calbucci] failed and went out and started your own thing. I failed and went out and started my own thing. Because we didn’t know any better. The entrepreneurs that don’t know any better, they just go do it again.”

Greg Gottesman of Seattle-based Madrona Venture Group is one of those VCs who says he doesn’t see failure as a black mark. “My sense in this community is, to people who matter most, I don’t think failure is a huge negative,” he said. “There are certain types of failures, like failure of integrity—that’s hard to recover from. But failure of a startup, just speaking with all my partners, that’s not a negative. We talk about that as a learning experience. It’s just another piece of the puzzle.”

So how does Seattle’s tolerance of failure differ from, say, Boston’s or Silicon Valley’s? Feld, who has been investing nationally for 15 years, said, “I actually believe that the shtick of ‘failure as a badge of honor’ is really great shtick. I’ve failed a lot. It’s hard to fail. Failure impacts a person in …Next Page »

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I was chatting with a couple of local investors at the TechStars (seed fund and mentorship program) event in Seattle on Wednesday. They thought the VC panel discussion of the startup climate and culture in different cities around the country was boring. If you’re an entrepreneur or investor, they said, that’s just where you are, and you deal with it.

But au contraire, mon frère—as a journalist and outside observer—I view those comparisons across different innovation clusters and their respective histories as a way to generate some good stories and insights. On the panel, there were certainly some constructive (and at times controversial) things said about the entrepreneurial climate in Seattle, Boston, and Boulder.

Here are a few edited highlights from the panelists, several of whom bring an outside perspective to their current cities:

Brad Feld of TechStars and Foundry Group gave a brief history of the startup scene in Boulder, CO—useful for any city with entrepreneurial aspirations. “When I showed up in ’95, what I found was on the software side you had a lot of smart engineering talent but you didn’t have much else. A handful of entrepreneurial companies in storage and cable infrastructure. Not much in the way of entrepreneurial executive leadership other than from these pockets. In the mid-90s, because of the counter-culture community—and the Internet was purpose-built for places like Boulder—you had a lot of people who were independent, very smart, doing their own things suddenly intersecting with a medium that allows you to be anywhere. It’s 100,000 people plus 25,000 college students. A pretty small town, but it has the largest percentage, per capita, in the United States of computer scientists and PhDs. Yet there wasn’t a broad wave of entrepreneurial experience,” Feld said.

“In the mid-to-late 90s, there was huge activity around the Internet. Anybody with a pulse could get a company started. The predictable thing eventually happened, there was a lot of wreckage. But from ‘95-2001, Boulder had imported a lot of executive talent—CEOs, VP sales, engineering leadership. We also had a lot of entrepreneurs who had one or two companies in that cycle. So by 2003, people were starting to come back and get re-engaged in entrepreneurial activity. There were probably 50-plus people that made $10 million or more, so there was enough of an angel community. There was critical mass around this. But what was missing was something that tied the community together. There was the endless cocktail party circuit of entrepreneurs. Eventually people got bored and stopped going.”

That led David Cohen, Feld, and others to form TechStars in Boulder. “It cemented this notion of first-time entrepreneurial activity is the core of the ecosystem. What was needed was fresh meat into the system. We got a lot of new, young people into the community,” Feld said. “The other thing was that one of the hardest things for first-time entrepreneurs is to have an engaged relationship with an experienced entrepreneur. We found we were creating this thing that integrated the whole value chain of entrepreneurs. It really energized the existing entrepreneurial activity around a thing.”

Chris Sheehan of CommonAngels then gave his thoughts on the Boston innovation scene. [Disclosure: Chris is on Xconomy’s board.] “In the IT ecosystem in Boston, there are a number of things going on,” Sheehan said. “It’s a wonderful place for universities and colleges. MIT has been the granddaddy in terms of the entrepreneurial ecosystem. But what I’m seeing is a fresh set of energy coming …Next Page »

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This morning I checked my e-mail, powered by Google, and then used Google Maps to find my way to the Google Kirkland open house. It reminded me a little bit of the scene in “Being John Malkovich” when Malkovich, the actor, finds a portal into his own brain and sees that everyone looks like him and says nothing but, “Malkovich, Malkovich.” OK, I guess the analogy would fit better if I also worked for Google and uttered “Google, Google” all day—but that might even happen sometime, if Google’s pace of hiring keeps up. (Just kidding.)

Engineering and site director Scott Silver, who’s been on the job since June (succeeding Peter Wilson, who left the company), introduced the new Kirkland facility, which has been officially open since August 31 and employs more than 350 people in a unified campus setting. He gave a little history of Google’s Kirkland operation—the first office was at Carillon Point in 2004, Google’s first major presence in the Northwest—and how it has grown and contributed to the company’s products. Google Talk, which does Internet telephony and instant messaging, was born and raised in Kirkland, for instance.

Other areas of focus for the Kirkland office include:

—Search: Webmaster tools, and instant indexing for real-time news.

—Advertising: AdPlanner (see below), AdWords Opportunities (helping advertisers optimize search ads), Google Analytics, and Campaign Insights (a new service released last week that’s around making brand ads more effective).

—Applications: Google Talk, Google Talk Video (within Gmail), Google Maps (including a new application for directions on mobile phones), the Chrome Web browser, YouTube video clips, and Google Sync (for synchronizing your mobile phone).

—Infrastructure: system and corporate billing software for supporting applications at huge scales.

Silver, a former Amazon and Netscape veteran, said he’s “quite proud of what we’ve done here, and immensely happy to come to this day,” and to be able to say Google is here to “create great products and find great engineers.”

I followed up with Silver afterwards, and he confirmed Google Kirkland is actively hiring software engineers, but he didn’t say how many positions are open at the moment. He said his team is doing hundreds of interviews per month, “and we’d love to do more.” I asked him about the 800-pound gorilla down the road, Microsoft, and whether Google is recruiting much talent from …Next Page »

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Working for the man. It’s what most entrepreneurs want to avoid at all costs. But if their startup gets bought by a big company, that’s often just what happens—at least for a while.

Although the acquisitions market for tech startups has been relatively soft during the recession, there have been a few recent local examples to draw from. I took a highly unscientific sample of how three Seattle startups are doing post-acquisition. I wanted to hear about the cultural fit, the level of autonomy, and so forth. Not surprisingly, the ones I talked to said their transitions have gone very smoothly. Maybe the surprising thing is that I believe them (well, mostly—they did have to be pretty vague about future plans).

Here’s an update on the three startups and their founders:

Ethan Lowry, Urbanspoon (acquired by IAC in February 2009, announced in April)

The transition has been “remarkably uneventful,” Lowry says. “They’ve been very hands off.” He says IAC (NASDAQ: IACI) has been very supportive of Urbanspoon’s restaurant site, and that his team touches base with the mother ship once a week. “There’s all sorts of discussions before you get acquired. They say you’ll run your own ship…you’re kind of nodding, but what’s it really going to be like?” Lowry says. “I’ve been through other acquisitions that left you feeling more ripped out of your culture.”

He does say, half-jokingly, that Urbanspoon has gone through a “huge shift for us”—growing from three to five employees (adding a developer and a customer service person), and relocating to an office with a better view of Lake Union in Fremont, about a mile away from the old digs on Eastlake Avenue.

Last week, Urbanspoon introduced its “Scope” feature for its iPhone app, which lets you discover restaurants on the street around you by adding visual info to the camera feed on the screen. “In the beginning of summer, ‘augmented reality’ got a little bit of buzz,” Lowry says. “We thought, ‘This is cool, but seems super-gimmicky.’ We started prototyping something, and quickly discovered it’s entertaining. It’s fun, but can solve a real problem.” He adds that Urbanspoon has about 7 million installs of its iPhone app, making the Scope the biggest augmented reality app so far.

IAC’s future plans for the company are under wraps, but Lowry says Urbanspoon is …Next Page »

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It took about a year and a half before I could even begin to understand the I Can Has Cheezburger (or “LOLcats”) phenomenon online. The mundane yet bizarre cat pictures. The misspelled captions. The curious Internet-slang grammar. They were kind of funny, but mostly they were weird—and, at times, even a little annoying.

Yet millions of people flocked to these Web pages, submitting their own photos and captions and commenting on others. The Cheezburger Network, as the company behind it is now called (formerly Pet Holdings), has become a runaway success—an Internet sensation that has spawned a total of 26 humor sites, including FAIL Blog, GraphJam, Engrish Funny, and Emails From Crazy People. The original Cheezburger site hit 1 billion page views (10 billion cat images) earlier this month. And during the first half of 2009, the company raked in seven figures’ worth of revenue from advertising, licensing fees, and sales of merchandise, according to Time magazine.

So what’s its big secret? Why has the Cheezburger Network succeeded where so many other humor sites and blogs continue to toil in obscurity? It took me a while to realize it’s not about luck, or marketing, or the power of certain kinds of humor. There’s some good timing involved, sure, but mostly it’s about the drive and mentality of the company’s leader, Ben Huh.

Huh is often portrayed in the media as a jokester. Photos in articles show him wearing a funny hat or mask, surrounded by stuffed animals, or posing with a cheeseburger. That image is pretty far from the reality, as I understand from reading more about Huh and interviewing him recently. In a Q&A with Advertising Age earlier this week, for instance, Huh emphasized, “I am a business person.” And he shed some very interesting light on his approach to business: “We’ve gotten into situations where we’ve tried to acquire a blog for large sums of money, and they turned us down, and we’ve gone on to compete and we’ve won,” he said. “My final offer is, ‘If you do not do this, we will start a competitive blog, and we will not stop until we win.’”

Clearly, Huh has the killer instinct. He is deeply competitive, but not in an over-the-top way. He could turn out to be the Michael Jordan of consumer Internet startups, though we probably shouldn’t put him in the Hall of Fame just yet. Still, as a promising entrepreneur in his early 30s with a pretty big success already under his belt, his story—and his company’s strategy—is worth a closer look.

Huh first arrived in the Northwest in 2005 to work for Intava, an interactive media startup in Bellevue, WA. Before that, he had graduated from Northwestern University with a degree in journalism during the dot-com bubble. “They were handing out bonuses to college grads because we’d used the Internet once,” he jokes. Huh worked for a number of startups in the Chicago area, including his own Web analytics firm. “I made all the mistakes they say you’ll make,” he says. “I raised too little money, and spent all my time fundraising and not making a product for the market.”

By the time he landed in Seattle, Huh had made it a priority to always work for a company’s CEO, or at least have a dotted-line connection to them, in any job he took. “That was going to teach me more about running a company,” he says. “This is for my career, not for [any particular] job.” Huh had also learned from his previous startups to have a “huge focus on staying profitable.”

In 2007, he came across the I Can Has Cheezburger site, which had been started by a …Next Page »

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How do you go about summarizing a company’s culture in one word? I haven’t a clue, but whenever I ask CEOs, they always come up with something interesting—and often surprising. In the past couple of months, I’ve been asking top executives at Northwest tech startups to talk about their company culture and why it’s unique. So far, none has refused to play the “one word” game.

I’ve received a fascinating array of responses that speak to the companies’ management styles, the kinds of talent they’re looking for, and their overall strategy—what they think sets them apart from their competition. From Bellevue, WA-based Apptio’s “paranoid” to Seattle-based Picnik’s “easy,” you can see a lot of a company’s mindset through the keyhole of just one word. And last month, Bob did a comparison of Boston vs. Seattle one-word cultures—and found that the New England startups were a little more New-Agey in their responses than companies here in the Northwest. (No idea what this means, but it’s always fun to go up against the East Coast.) And Bruce followed that up by checking in with five San Diego firms.

Now I’m extending the exercise to Seattle’s public tech companies. I wondered whether their responses would show any glaring differences from the startups—more conventional, say, or boring. After checking with a few of them (each has been around for six years or longer), my scientific answer is “not really.”

Our initial short list of public companies spans the fields of supercomputing, data storage, and online advertising. Be warned, Mr. Ballmer, Mr. Bezos, and Mr. Glaser—I’m coming for you too.

Cray (NASDAQ: CRAY)
CEO: Peter Ungaro
Culture: “Next”
Comments: Ungaro says, “Never satisfied with the status quo, our employees are committed to providing our customers with the next-generation of Cray supercomputers. Collectively as a company, our passion is setting new boundaries of what supercomputers are capable of and providing those resources to the world’s researchers and engineers.” He adds, “We celebrate achievements and acknowledge milestones, but we are focused on what’s next and what we all have to do to get there.”

Isilon Systems (NASDAQ: ISLN)
CEO: Sujal Patel
Culture: “Driven”
Comments: Patel says, “We have been through a million different things that show how driven we are. We survived…we grew, we built, we went public, we ran into some nasty roadblocks, we recovered from that.” He adds, “We only get through that stuff because we are driven as an organization—and that’s not about me, it’s about the people in this building.”

Marchex (NASDAQ: MCHX)
COO: Peter Christothoulou
Culture: “Innovative”
Comments: Christothoulou says, “Being innovative is at the core of everything we do; from delivering the most innovative products and technology, to hiring and employing innovative, collaborative people to provide our customers with the best experience possible.”

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When California Gov. Gray Davis created the California Institute for Telecommunications and Information Technology in 2000, it was part of a broad state initiative that spawned four new centers for science and innovation with a shared mission “to invent the future.” The specific mission for the institute known as Calit2 (Cal IT²), which is based at UC San Diego and UC Irvine, was to “radically expand the capacities of communications and information infrastructures.”

In the nine years that he has served as Calit2’s director, Larry Smarr has done all that and more. He describes the institute as a “collaboration framework” that enables researchers throughout the University of California to take a multi-disciplinary and systems-based approach to complex problems. As a result, Smarr says Calit2 has engaged hundreds of UC researchers, formed affiliations with over 300 federal agencies, and worked with more than 200 industry partners. “I have to say we’re pleased with the progress we’ve made,” he says. (Smarr talks about the origins of the Internet in Part 1 of my story here.)

But Smarr also is looking at the path forward. He tells me he’s spent the past six months “on a vision quest” to identify the large societal challenges that he anticipates the next decade will bring. And if there is a thread that runs through his vision, it is to harness the power of Calit2’s expanding resources—“to build across the successes that we’ve had”—to tackle four over-arching problems of the next decade. These are Smarr’s big ideas for what he calls the digital transformation of healthcare, energy, the environment, and of our culture itself:

—Healthcare. Smarr sees healthcare moving increasingly to “a prevention and wellness model” that relies on innovations in the emerging field of “wireless health” technologies and the digital transformation of medical care. In our conversation, Smarr compares the way it will work to an automobile maintenance schedule:

“I just bought a new car, a hybrid,” Smarr says. “It has 30 computers in it. It probably has another 60 or 70 sensors, actuators, and memory chips. So my car will easily run …Next Page »

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Xconomy Seattle’s editor Greg Huang got this idea going last month when he conducted an informal and wholly anecdotal survey about the startup culture in the woodsy Pacific Northwest. His premise was that you can tell a lot about a company’s corporate culture from its chief executive.

Within a couple of weeks, Xconomy’s founder and editor-in-chief Bob Buderi followed suit with a survey of corporate culture in Boston’s startup community (and based on Bob’s endorsement, may I just take this opportunity to say this is terrific idea!)

To make this a trifecta of corporate culture insights, I followed the examples set in Seattle and Boston by contacting some San Diego CEOs to ask them to describe the corporate culture at their companies in a single word. In a variation on a theme—what I like to think of as a fugue in our continuing coverage of technology innovation—I chose San Diego CEOs whose business is focused on digital television and video. It is an industry that has been subject to fast and furious changes, which will likely continue for the foreseeable future.

In another twist, I asked each CEO if they think there are enough TV-and-video technology companies in San Diego to constitute a cluster or even a mini-cluster of innovation. Technology clusters, defined by Harvard University’s Michael Porter as geographic concentrations of interconnected companies, specialized suppliers, service providers, and associated research institutions, have become a touchstone for promoting prosperity as well as advancing innovation in specific fields.

Packet Video (San Diego)

CEO: James C. Brailean
Culture: “Innovative.”
Comments: Brailean responded to my journalistic lob with a volley of innovations that Packet Video has introduced since 1998, when he says the software developer for wireless media was the first to demonstrate video on a handset. “PV has been out in front of several of the key trends in mobile multimedia over the last decade.”

“We do have a significant cluster,” Brailean says. “It may not seem like it, since we are focused on different aspects of digital video. However, we all have compression, transmission, and managing digital video at our core…The move to digital video was driven by …Next Page »

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The Baseball World Cup qualification series started this week over here in Sweden, as well as in several other countries in Europe. South Korea, Canada, the Dutch Antilles, and Sweden will meet each other at a field in the Stockholm suburb Sundbyberg. The finals will take place at the end of the month in Italy.

Since baseball lost its place in the Olympic Games, the world championship is supposed to be the most important international baseball event, even if you Americans are more interested in your not-so-global World Series. Even though I root for the home team, I have to admit that Sweden’s chances are slim against both Canada and the big favorite, South Korea. To be honest, what else could you expect when the game is a very small sport in a small country, with just over a thousand registered players. (The actual Swedish expression is “licensed players;” you have to register for a license to get insurance during the games.)

To give a sense of proportion for those of you who are used to the lines outside Fenway Park; the venue in Sundbyberg normally seats just 100 spectators, although it’s been upgraded with temporary bleachers during the championship to 2,436 seats.

Baseball is just a newcomer on the Scandinavian sports scene, with teams trying to recruit players, fans, and financing, and facing fierce competition from well-established team sports like soccer and ice hockey. (Even though Boston author Robert Skole has written a baseball fantasy novel in which an American bomber crew introduces the game to Sweden during WW2.)

In my opinion, the situation for the fledgling baseball league in Sweden mirrors the challenges facing start-ups and entrepreneurs everywhere. You have a great new idea, maybe even a developed product, and you’re convinced of its great qualities, but now you have to …Next Page »

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Pacific-Northwest Armani Exchange it isn’t, but it is totally the height of Geek Chic. Penny Arcade Expo (PAX) has become the ultimate destination for gaming fans.

Since 1995, every gamer has dreamed of being able to sneak into E3: the video game industry’s annual closed-to-the-public trade convention, where new games and products are introduced and sneak peeked. PAX has become E3 for the public. While Gabe and Tycho just wanted to throw a party about the joy of gaming and hanging out with other gamers, they have helped to level the playing field for the promotion and distribution of games by giving individuals and small companies the opportunity to promote their games directly to consumers in a cost effective method. Traditional tiered systems, typified by trade-only conventions such as E3, mean that consumers receive their information about games via others such as the press and retailers. But with today’s distribution becoming increasingly direct to consumer via download, the need exists to promote directly to consumers as well. PAX can play a large part in helping game publishers of all sizes do so.

But PAX is not a trade show that is open to the public, it is a festival of all things geek: with seminars as varied as “The art of the Dungeon Master” to “How the iPhone has Changed Portable Gaming”; tournaments as varied as “Settlers of Catan” to “Halo 3”; and a Saturday evening concert featuring geek musicians. Of course, there is a little geek in all of us, or a lot of geek in my case, and since the conventions founders Mike “Gabe” Krahulik and Jerry “Tycho” Holkins love tabletop games to casual games to hard core first person shooters, their convention embraces this diversity as well, meaning that the audience is as broad a demographic slice as you could imagine.

The largest Internet gaming segment, women over 30, was well represented and interested in all the new “casual” games from PopCap, Big Fish, and the like. Younger kids flocked to the new Nintendo DS games and Nanovor (had to throw in a plug somewhere). Tabletop gamers had plenty to do with Privateer Press’s skirmish game WarMachine and Well’s Expeditions new mass action miniature game Arcane Legions. Card players competed in Hasbro’s Magic the Gathering and laughed all night with endless Munchkin games from Steve Jackson Games. Of course, the majority of the show reverberated with sounds of either machine guns or wailing guitars as the seemingly endless variety of first person shooters and music-based games continued to entertain the console core demographic of 18-to-35 males in huge numbers.

You can imagine that a festival started by guys who love gaming, but also make their living by humorously skewering both games and gamers in their enormously popular online comic penny-arcade.com, the show featured both planned and unplanned humor and provided a venue for other critics of geek culture such as Mega64 and RedvsBlue.

Gaming of all types has always been and will always be a social activity, and PAX embraces that in its very essence, providing a great experience for gamers of all types and a terrific opportunity for consumers to directly engage with creators.

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This is a special, bi-coastal edition of the X Factor (it doesn’t usually run in Seattle). For my column on Tuesday, I surveyed seven Boston-area startup CEOs and asked them to characterize their company cultures in one word. Truth be told, I canvassed nine CEOs, but only seven got back to me before my deadline. The remaining two have now weighed in, so part of this post is to share their words with you.

The other reason behind this post is to compare the words chosen by the Boston CEOs I canvassed with the words chosen by some counterparts in Seattle. As you’ll see, there was a surprising trend that had at least one Xconomy editor (chief correspondent Wade Roush) wondering whether entrepreneurs on the two coasts have gotten their personalities mixed up in some kind of bizarre startup transporter accident. Read on for that.

Here are the last two Boston entries:

Taligen Therapeutics (Cambridge, MA)
CEO: Abbie Celniker
Culture: “Passionate”
Comment: Taligen, which moved to Cambridge from Colorado in mid-2008 and raised $26 million out of a planned $65 financing round in May, according to a regulatory filing, is developing drugs to fight arthritis and other inflammatory diseases. “We all passionately believe in the science. We are all passionate about winning and we are all passionate about how imperative it is to have fun while you are working to solve challenging problems,” Celniker says.

Visible Measures (Boston, MA)
CEO: Brian Shin
Culture: “Energetic”
Comments: Shin’s four-year-old company has raised nearly $30 million for its efforts to index and provide analytics around web video content. “We have a lot of eclectic and energetic folks and we try to foster an open culture to embrace and enable their success :),” says Shin in an e-mail.

Now to the East Coast-West Coast “word-off.” As I mentioned on Tuesday, I had “borrowed” the idea for my column from Greg Huang, Xconomy’s Seattle editor. Earlier in the month, in two separate stories, here and here, he had posted the one words (if that’s how you say it) from nine Seattle-area CEOs. He had nine, and now I have nine, so I thought, ‘Why not take this whole West Coast vs. East Coast thing to a whole new, no doubt meaningless, level and compare the words from both coasts?’

So, here, for your amusement and edification or whatever, are the nine Seattle CEO words stacked up against the nine Boston CEO words. As you will see, only one word, “focused” was mentioned on both coast. And only one other word, “passionate,” was mentioned twice (both times by Boston CEOs).

When Wade saw this comparison, his first reaction was to accuse me of mixing up the two lists. After I assured him that wasn’t the case, he said he thought most of the East Coast CEOs gave New-Agey, feel-good answers that seemed more reminiscent of West Coast lifestyles, while the West Coast entrepreneurs gave hard-edged, down-to-earth words that are more traditionally associated with New England’s Puritan work ethic.

What do you think? Have East Coast entrepreneurs been studying the West Coast playbook too hard, or vice-versa? Do you see other patterns? Which single word do you like best? My own favorite is “vibrant” (I was born in Berkeley, after all). But I think the best word for a startup culture to be built around is probably “focused.”

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First, let me get this out up front—I’m ripping off the idea for this column from my colleague Greg Huang, editor of Xconomy Seattle. Thanks Greg!

Second, I spend a lot of time talking with venture capitalists about the startup business, and with entrepreneurs about venture capitalists AND the startup business. But those can be pretty detailed conversations. So the idea here is to short-circuit all that—and get the entire conversation down to one word, literally.

As Greg noted in his article, “A startup’s culture is what sets it apart from its peers. It is the essence of the operation. It directly affects the company’s strategy, hiring practices, and the personality of its products.”

I’d add that establishing and maintaining a corporate culture that employees buy into, and that even inspires them, is critical to success, and can often be a source of strength or guidance when a company goes through trying times.

So, following Greg’s example, I contacted a slew of Boston-area CEOs to ask them to sum up corporate culture. I got back seven answers in time for this column. There’s no deep analysis here, but I have added a bit of context to their remarks. I’d be curious to hear what you think.

Allurent (Cambridge, MA)
CEO: Joe Chung
Culture: “Synergistic.”
Comments: Actually, Chung’s first response was “synerfystic,” and I thought, being a creative guy, he had coined a new word with some deep meaning. But then he clarified, citing a Blackberry error, and said he meant “synergistic.” Allurent is doing retail e-commerce in a recession, a tough challenge. I’d say if you can find synergies in just about anything you do, that’s a plus.

Aveo Pharmaceuticals (Cambridge, MA)
CEO: Tuan Ha-Ngoc
Culture: “Vibrant”
Comments: Aveo has an aggressive vision: take on the big boys of cancer drug development, thanks partly to a unique and, the company says, more accurate way to mimic cancer in mouse models. But as Ha-Ngoc says, “Vibrant is an appropriate word that describes our culture since it is both the result and the sum of all other elements of AVEO’s culture i.e. creative and dedicated people working together in a transparent, respectful way and with tremendous passion in making substantial impact in the lives of cancer patients around the world.”

Daily Grommet (Lexington, MA)
CEO: Jules Pieri
Culture: “Adventurous”
Comment: Okay, it turns out Pieri, whose e-commerce startup features …Next Page »

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On Friday, I wrote about the corporate culture of six Northwest tech startups, boiled down to one word each. From “paranoid” to “easy,” from “humble” to “obsessed,” these companies—which spanned business software, mobile, gaming, and other areas—clearly follow the lead of their CEOs and founders.

Here are three more, from the tech worlds of Internet, healthcare-IT, and e-mail and information discovery. Keep ‘em coming.

Gist (Seattle)
CEO: T.A. McCann
Culture: “Focused”
Comments: With $6.75 million in new funding last spring and an aggressive new set of beta releases, Gist is helping more and more customers manage their e-mail and information flow. (We had to disqualify McCann’s other word choice, “metrics-driven.” No hyphens!)

Talyst (Bellevue, WA)
CEO: Carla Corkern
Culture: “Safety”
Comments: Talyst helps pharmacies manage medications safely, efficiently, and reliably. Corkern says her staff is focused “on doing whatever we can to help our customers increase patient safety. This permeates our culture to test exhaustively, share problems early and broadly, and to work tirelessly when we identify a potential problem.”

TeachStreet (Seattle)
CEO: Dave Schappell
Culture: “Growth”
Comments: Having recently raised $1.2 million in new funding and expanded to seven metro areas around the U.S., TeachStreet is looking to gain some serious traction in the student-teacher networking space.

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You can tell a lot about a company from its chief executive. They set the tone, the direction, the pace of operations. For a startup, it all starts with the CEO.

A startup’s culture is what sets it apart from its peers. It is the essence of the operation. It directly affects the company’s strategy, hiring practices, and the personality of its products.

Corporate culture is notoriously hard to define and measure, but critically important to whether a business will succeed. So I recently took a small (and highly unscientific) sample of Northwest startups, spanning the fields of business software, Internet, mobile, gaming, video, and materials—and asked the CEOs to talk about their company’s culture. Furthermore, I asked them to boil their culture and philosophy down to one word.

I’ll spare you any psychoanalysis of their answers, but it’s interesting to see how their descriptions reflect both their own personality and the market they’re in:
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Apptio (Bellevue, WA)
CEO: Sunny Gupta
Culture: “Paranoid”
Comments: Gupta says the Apptio mantra is “glass half-empty.” But he doesn’t mean it in a negative way. He means the company is relentlessly focused on pushing its advantage, improving its weaknesses, and crushing its competition all around—a necessary mindset in the crowded and cutthroat environment of IT cost management and optimization.

Elemental Technologies (Portland, OR)
CEO: Sam Blackman
Culture: “Execution”
Comments: Blackman says he and his co-founders came from a previous company that started out executing well, but then took its eye off the ball and got distracted by things like …Next Page »

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Want to know how to raise a big round of venture funding in a recession? If you’re in the software business, talk to Sunny Gupta.

Gupta’s company, Bellevue, WA-based Apptio, is announcing a $14 million Series B financing round today. The round includes existing investors Madrona Venture Group and Greylock Partners, and also new investors Shasta Ventures and Andreessen Horowitz Fund. Apptio is not the only company Marc Andreessen and Ben Horowitz have co-invested in with Madrona; they also bet on Seattle-based ExtraHop Networks in April.

The Apptio investment is a pretty big deal, given its size and the difficulty software startups everywhere are having in securing follow-up funding. Apptio previously raised $7 million from Madrona, Greylock, Ignition Partners, and others in November 2007. Today’s announcement is a huge vote of confidence from its lead investors—and it means Apptio will be able to ramp up its expansion and sales in a major way.

“This is a big milestone for us,” says Gupta, Apptio’s CEO, who previously founded iConclude (which was acquired by Opsware and then Hewlett-Packard in 2007). “Nineteen, 20 months in, we’re executing like crazy. We’ve really delivered on the vision. We’re starting to transform the way CIOs [chief information officers] manage the business of IT by helping them understand the cost of services.”

When last we checked on Apptio, the firm had announced a slew of new, high-profile corporate customers that it helps manage and optimize the costs of IT systems like computers, mobile devices, software packages, servers, and data centers. Apptio’s software, which it provides “on-demand” as a service, helps make companies’ IT costs more transparent, allowing CIOs to “run IT like a business,” Gupta says. “Our investors believe it’s a billion dollars-plus opportunity.”

Apptio has signed up about three dozen corporate customers, small and large, including Starbucks, Alaska Airlines, SumTotal, and NYK Logistics. Because of its strong customer traction, Gupta says, Apptio was able to raise “more money than we thought we really needed. We wanted to have …Next Page »

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Yesterday, I talked a little about balancing short and long-term effort at a startup. Today, I want to discuss “cranking,” which I’ll define as a short-run effort to achieve an extremely important short-term goal.

How hard can people possibly crank? For a sufficiently motivating goal, people can work well in excess of 70 hours per week for months. With occasional short “vacations” that normal people would call a “weekend,” this level of effort can be productively sustained for much longer, although not indefinitely. I know this for a fact because I’ve done it, and I’ve seen it done.

Just because this is possible does not imply it is the best course of action in many (or, in fact any) cases. We ought not to plan on effort levels greater than what we are likely to be able to achieve. Planning on working 160 hours per week for even one week is nothing but foolish bravado.

I’m going to use a personal story to illustrate my point. This isn’t a typical startup, but it exemplifies maximum short-term effort. Moreover, I happen to have good contemporaneous estimates of my and other people’s effort, that are well documented in government reports and this article from Wired magazine.

In 1994, I worked as a programmer for the South African election commission during that county’s historic elections. I was one of the last people added to the organization, 20 days before the election. In the following 25 days, I worked approximately 400 hours (an average of 16 hours a day). This level of effort was not universal, but it was typical in many departments. Some people had been working at this level of effort with brief 2- or 3-day breaks for several months. The organization was only five months old, and a few people had been working pretty fiercely that whole time.

The hours were not just long, they were hard. To illustrate, consider my diet. I ate three big meals a day, and consumed an additional 1000 calories a day in soft drinks and snacks. Over the course of the project, I still managed to lose five pounds. The only explanation I have is that I was thinking that hard. I was also consuming about half a gram a day of caffeine, which significantly increases …Next Page »

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Beneath the friendly, laid-back veneer, the Seattle tech community is a rough-and-tumble lot ready to throw down at a moment’s notice. That’s what you might surmise after the past week, anyway. And this is not necessarily a bad thing. (Though the heat wave might have had something to do with it.)

Here’s a quick update for those who missed the action:

—We’re getting pretty sick of being compared to Silicon Valley. Most of the time, we defer to the sheer number of startups, entrepreneurs, and venture firms in the Bay Area, taking solace in the quality of our talent and companies. But every once in a while, someone really stirs the pot, like UW TechTransfer’s Janis Machala did last week at a public forum on campus. She said Seattle pays a price for its laid-back, outdoors-y lifestyle, and implied that some of our entrepreneurs don’t work as hard as those in the Valley. To which many local observers, including Dave Schappell of TeachStreet, have taken offense (albeit respectfully), arguing that Seattleites work just as hard.

Silicon Valley readers apparently believe they can learn a thing or two from Seattle’s startup efforts. Case in point: Marcelo Calbucci of Sampa and Seattle 2.0 has taken considerable time and effort to blog about lessons learned from Sampa’s demise, and he’s getting a lot of readership in the Bay Area.

—And don’t even get us started on Portland, OR. We Seattleites hate to be ranked behind Portland in anything. Yeah, so they still have a pro basketball team, and a pretty good Japanese garden and bookstore, but that’s about all we are willing to concede, right? So when Entrepreneur magazine ranked Portland as one of the top cities for startups and snubbed Seattle (at least that’s how it was perceived), this meant war. Even though Gerry Langeler of OVP Venture Partners was quoted as saying Portland is “too small to have competing ventures,” and its entrepreneurs tend to lack a “killer instinct.”

TechFlash went on the offensive, calling out Portland for its relative dearth of venture capital and venture-backed public companies. The Oregonian and Silicon Florist came to Portland’s defense; blogger Rick Turoczy pointed out that Portland entrepreneurship is incredibly diverse, with startups not just in software and cleantech, but in food and drink, clothing, books, comics, and other creative arts. In short, Portland is a collaborative, entrepreneur-friendly town, and its culture is separate from Seattle’s. (OK, it’s not quite Red Sox-Yankees blasting each other in the tabloids, but you get the idea.)

—I say we settle all this bad blood with a Battle of the Tech Bands: Seattle Vs. All Comers. Xconomy CEO and editor-in-chief Bob Buderi has already dropped hints that he wants to stage a Boston vs. Seattle band battle. Judging from the quality and tremendous energy of the bands we saw at the Pyramid Alehouse last week, it could shape up to be quite an epic. (See more photos from the Battle and WTIA party here, courtesy of Kevin Pedraja.)

I don’t know about you, but my money’s on this guy (left), Peter Dixon from the metal band Juda’s Wake (representing Microsoft), winning it all… You want a piece of Seattle? Come and get it.

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A group of about 40 Taiwanese businessmen and scientists, who were in the U.S. to learn about how best to commercialize technologies from the lab, were treated last Thursday to a University of Washington panel of three veterans of the process, who shared their experiences and the lessons they’ve learned.

The panel consisted of serial entrepreneur and cleantech consultant Jeff Canin, neurological surgery and pediatric dentistry professor Pierre Mourad, and bioengineering professor Buddy Ratner. All three have been involved in several companies spun out of technology developed at UW, ranging from designing ultrasound toothbrushes to reprogramming skin cells into cells that can rebuild a heart after a heart attack, to improving how long beer can be stored without going bad (”one of the most important industries on this planet,” Ratner asserted).

Here were my Top 10 takeaways from the panel, which was moderated by Janis Machala of UW TechTransfer.

10. Bringing together money, talented managers, and good engineers is difficult.

9. Some of the stereotypes of scientists and business people have an unfortunate basis in truth. Ratner pointed out that many scientists can be tremendously naive, and often don’t realize that the technology they have is not a product—and that a lot has to be done to bridge that gap.

8. Mourad said (and the other panelists agreed) that the most important element to a successful company is the relationships between all the people involved. Citing the company that spun out of the ultrasound toothbrush technology, he said that even though the company raised about $23 million, infighting between management and the board destroyed the technologically very sound company.

7. Mourad cautioned that even though business people have all the money, “Treat tech people nicely,” to succeed.

6. Canin said that to be a good entrepreneur, a scientist or engineer must have a lot of …Next Page »

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Watching the acquisition of Genentech by Roche has been a fascinating process. I wasn’t so interested in the eventual price paid per share, but whether Basel, Switzerland-based Roche, one of the oldest and most traditional pharma companies, could preserve the special science-based culture at Genentech that made it the world’s pre-eminent biotech company. Would Genentech’s top scientists stay in the San Francisco Bay Area? Could Roche successfully integrate a free wheeling West Coast culture into an East Coast (and indeed, European based) organization?It will take time before this question will ultimately be answered. However, the signs are that Roche doesn’t want to mess things up.

This was illustrated by the recent stunning announcement from Roche that it was resigning from the Pharmaceutical Research and Manufacturers of America (PhRMA), the chief trade association and lobbying group of the US pharmaceutical industry, in order to join the Biotechnology Industry Organization (BIO), the trade association for biotech. This announcement, coupled with the decision to move many of their scientific research programs from the East Coast to the West, told me that Roche was serious in their desire to remake their own culture in Genentech’s image. We’ll see over the next six months or so if Roche can hang on to Genentech’s key employees and culture, now that they have begun their restructuring of Genentech, including employee layoffs and buyouts.

If you are buying a research organization both for its novel drugs and the culture of innovation that created them, it makes sense to do what you can to preserve that culture. I discovered the cultural divide that separates pharma from biotech when I was first looking for a job in the industry. The contrast between pharma and biotech couldn’t have been more striking. A job interview at “Big Pharma” introduced me to scientists, dressed in jackets and ties, who spent most of their time devising new types of screening assays against which the company’s library of chemical compounds could be tested. In marked contrast to the scientists, lab assistants wore overalls with their names sewn on the front in a style that was strangely reminiscent of auto mechanics. If hired, I was told that I could spend as much as 20 percent of my time doing any research of my choosing, as long as my primary focus was on developing new screening assays. Promotions and long-term success at the company were based on your success …Next Page »

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