When it comes to tech startups—especially in Internet software and app development—San Diego has been adrift in the horse latitudes. That’s the term Spanish mariners had for the waters where the trade winds died out for days and even weeks at a time. Becalmed sailors desperate to gain some headway would heave their horses overboard to reach the New World.

It hasn’t reached that point yet in San Diego, but you would never know that software was once a thriving entrepreneurial community here. Even now, the software sector accounts for more than a third of San Diego’s private technology companies. But as I’ve written previously, it feels as if the local software companies speak different languages. In contrast to the flourishing tech hubs in Seattle, Boston, and New York—not to mention Silicon Valley—San Diego’s software scene is sleepy and indifferent.

Still, there are signs of a freshening breeze.

David Cohen last week at UC San Diego

Scores of new seed-stage startups have begun to emerge throughout the region, including a dozen that just moved into the new EvoNexus incubator in downtown San Diego. These emerging companies are led by young entrepreneurs who view San Diego’s innovation establishment as old-school and irrelevant. They are turning out instead for informal “hackathons” and “meetups.” They tell me they’re yearning for real mentoring by real tech entrepreneurs, and for access to real tech investors who are really investing.

Last week, more than 200 people turned out to hear David Cohen talk at U.C. San Diego about TechStars, the early stage fund and accelerator program for Internet startups that he co-founded with three partners in Boulder, CO, six years ago. Cohen is the CEO, and by any measure, the startup program has been wildly successful.

TechStars enrolled its first 10 Internet startups in 2007, providing as much as $18,000 in seed funding and an intense, three-month mentorship program for each company in exchange for a 6 percent stake. Since then, TechStars has expanded to … Next Page »

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Don’t know about you, but I’m less interested in Facebook’s IPO than I am in the efforts of people trying to find the next Facebook out of Boston/Cambridge. One such effort is the new Experiment Fund, based at Harvard University, which I wrote about earlier this week.

Turns out there’s more to the latest seed-stage fund in Boston than initially meets the eye. I had a chance to speak with the Experiment Fund’s co-founders, Hugo Van Vuuren of Harvard and Patrick Chung, a partner at Silicon Valley-based New Enterprise Associates (not that Patrick Chung, that Patrick Chung).

They clarified the goals of the new fund and provided some more context around how it plans to distinguish itself from other similar efforts. I’ve also talked with a number of other early-stage investors around town and have gotten a better sense of how the Experiment Fund is being received locally (more on that below).

First, some mechanics of the fund, which has been in the works for about two years. Harvard has no financial stake and will have no say in the fund’s investment decisions, but it has provided support and office space, Van Vuuren says. He declined to specify the projected size of the fund, but he said it plans to make four to six new investments over the next two years, each in roughly the $100,000 to $250,000 range.

The Experiment Fund has already invested in four companies: Rock Health (see my colleague Wade’s stories here and here), Omada Health, Punch Media, and Tivli. Interestingly, only Tivli is based in the Boston area. Rock Health and Omada are in San Francisco, and Punch Media is in the DC area. They all were started by Harvard students—the key ingredient for now—but the fund intends to invest in teams from other schools around Boston and the East Coast, as well. So I’m guessing its next four investments will be pretty different from its first four, at least geographically.

“We want to meet them here,” Chung says. “We want to help you right here in Boston where the ideas were first born, where the team was put together.”

One issue they wanted to address was the notion that the fund is … Next Page »

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The explosion in incubators for early stage tech companies has spawned a familiar startup storyline: A team of bright founders hits on a promising idea, builds a prototype, and applies to one of the big-name programs. After they get accepted (or sometimes even if they don’t), it’s off to the races for a few intense months of coding, meetings, demos, late nights, long weekends, and camaraderie.

And when it’s over, a big demo day where everyone shows off their hard work—and hopefully lands some investment to really get things going. Not as much ink is spilled about that day-after reality, when the wunderkind founders get to work actually building a business.

That brings us to Seattle-based FutureAdvisor, a startup that graduated from the summer 2010 batch of Y Combinator—biggest of the big-name startup incubator programs. Among the other companies produced in that group are Hipmunk, the travel-booking site, and Contagion Health, which has since merged with another company to form Habit Labs, also based in Seattle.

FutureAdvisor is a Web-based software service for individual investors who want help maximizing their retirement savings, but don’t have enough money to get the attention of a traditional financial advisor who typically focuses on bigger fish—all the better to earn fees.

FutureAdvisor focuses on index investing, a growing trend that eschews professional mutual fund managers in favor of pegging investments to stock market indexes compiled by financial firms, like the S&P 500 or the Russell 1000. FutureAdvisor is still in a beta phase, but says it’s now able to offer services to employees at the 15 biggest companies in the greater Seattle area, with many more in the pipeline.

The company was founded by Bo Lu, 28, and Jon Xu, 32, who met while working at Microsoft on a “skunkworks” project called Catalyst, which eventually became part of the new Windows Phone system—Lu worked on the technology that would become the all-in-one social networking feature on Windows Phone 7, and Xu helped build the system that tied together instant messaging and text messaging.

Once they knew they worked well together, and felt they’d been bitten by the entrepreneurial bug after working on a 40-person team inside the behemoth of Microsoft, Xu and Lu ran through some side projects until hitting upon the idea that would become FutureAdvisor. It’s actually based on a problem that Lu, an active investor since the age of 16, had seen with friends: People wanted his advice on how to allocate their money, but didn’t have the time, patience, or acumen to keep up with the homemade spreadsheet he’d been using since he was a teen.

“Immediately, Jon and I were like, ‘That looks like a software problem,’” Lu says. “So we made something, and we applied to Y Combinator with a super-ghetto prototype that, at the time, had my Fidelity credentials in the code base.”

“But at least it was fast,” Xu says with a smile.

That was the spring of 2010, and the idea that would become FutureAdvisor was just taking off on its wild ride. Fast forward to today, with a team of eight people pretty evenly split between financial and technical expertise, working out of a historic building in Seattle’s Pioneer Square.

They’ve landed financial backing from Silicon Valley venture capitalists, although the amount and investors haven’t been publicly announced yet, and are advertising on social and professional networking sites to recruit more customers.

And they’re still working to add more companies to their database—a painstaking task that requires importing all of the retirement account options available to any given company’s employees, so that when new customers log in, their options show up automatically. (As they note below, FutureAdvisor recently added a big fish to the collection in their old employer, Microsoft.)

Here are Xu and Lu’s lessons from the first few months of living out in the wild.

BUILDING A BUSINESS
BO LU: ”You spend a lot of time in the incubator building a product … once you’re out of the incubator, you spend a lot of time on scalable economics. Which is not something that we as hackers ever did. So rather than staring at code all day, we felt like we stared a lot more at spreadsheets. How much it costs to acquire a customer, how would this channel do, and all of those things.”

HELP WANTED
JON XU: “Shortly after Y Combinator … we were faced with, ‘Well, do we come back here? What do we do? And I think we’d always thought that this was a good area to start a company, but also, more importantly, we knew our technical networks were pretty deep up here, having been from Microsoft.”

BO LU: “This is a unique vein of talent. And we found … after comparing notes with our batch-mates who stayed in the Bay, that it was easier for us to recruit here. We had a much higher accept rate of offers, and it just wasn’t as nuts. So over PG’s [Y Combinator founder Paul Graham] strident objections, we moved.”

JON XU: “Really, you’ve got to get down to actually building a team. Building a machine that generates the actual products.”

BO LU: “No one learns how to hire during the incubator. They all learn how to hire afterward. And they all learn it on their own. … And when you compare notes, some teams do really well and some teams do really, really poorly.”

HAND-TO-HAND COMBAT
JON XU: “A lot of times to get your business started, you need to do some hand-cranking. It’s not going to be a skyrocket all the way, but there’s definitely this grind of hand-cranking the engine to get it started.”

“Because we deal with retirement products, quite often it’s knowing what investment options are in people’s 401(k) plans. … So we’re hand-cranking, essentially company by company in the Seattle area, and we actually launched Microsoft—that was a big milestone for us.”

BO LU: “Every day’s just like every other day. You make your own progress, and you make your own headway. So there are great days, like when you launch to a new company, and there are not-so-great days, like when you launch to a new company and a bunch of bugs are discovered. So that’s where we are.”

STAYING CONNECTED
JON XU: “The way I’ve heard it put, from one of our friends who founded Posterous, was that quite often after the Y Combinator experience where you have such a deep network of like-minded entrepreneurs that you’re dealing with, you kind of go your separate ways to build your own teams, and you kind of have to establish a culture for your own team. So very much by design, you have to spend a lot of time building that up rather than being interconnected with various other companies.”

COMPETITION (OR NOT)
BO LU: “People are always like, ‘Oh, what’s it like competing against financial advisors?’ And the answer is, we don’t compete with financial advisors—financial advisors love us. Which I never thought—that was super-surprising.”

“We meet with a financial advisor, and they’re like ‘Oh my God, I wish that I could give some service to the people who come to me who don’t have enough money for decades. But I can’t do it, my friends won’t do it, no one will help these people, and so I end up doing pro bono work just to be nice and be part of the community.’ But he’s like, ‘Man, if somebody could help these guys cost-effectively, that would be awesome, because I don’t have a business model to do that with.’”

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There’s a new player in the seed-stage investment game in Boston. As of this week, the Experiment Fund is open for business at Harvard University, backed by the Silicon Valley venture firm New Enterprise Associates (NEA). The startup investment fund is being hosted by Harvard’s School of Engineering and Applied Sciences in Cambridge, MA.

The new fund is led by Hugo Van Vuuren (see photo above), a Harvard graduate student and entrepreneur, and two venture capitalists from NEA, Patrick Chung and Harry Weller (both Harvard alums). David Edwards, a Harvard professor of biomedical engineering, serves as an advisor to the fund. Van Vuuren and NEA did not respond to requests for comment in time for this article.

The basic structure of the Experiment Fund is that selected startups—mostly student-led teams from Cambridge—will receive up to $250,000 in seed funding over the next two years, presumably in exchange for a sizable equity stake in the companies. The fund is based out of Harvard but says it will operate independently of the university and will look at teams from other local schools—and, more broadly, from the East Coast. The sectors targeted are pretty broad as well; they include information technology, healthcare, and energy.

No word yet on the size of the fund or how many companies it will invest in. But Van Vuuren, a recent fellow at Harvard’s Berkman Center for Internet and Society, said in a press release that he and his partners are looking for “smart and resourceful people, zealous full-time teams, and experiments in need of seed funding and hands-on help to get off the ground.”

Not to beat a dead Zuckerberg, but the overarching goal here is to keep the next Facebook in Boston—and, preferably, affiliated with Harvard. “It’s continued growth of the ecosystem for Harvard and beyond,” says Gordon Jones, director of the Harvard Innovation Lab, which is collaborating with the Experiment Fund to provide office space and resources, but is separate from the new fund. Jones calls the Experiment Fund “extremely complementary” to the i-Lab.

One of the first Harvard teams to receive an investment from … Next Page »

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Sometimes the most interesting gatherings have the strangest names. What does “Boston Hadoop Meetup Group” say to you? To me, it says “future of big data in Boston.”

Hadoop is an open source data-analysis platform that is gaining popularity for helping companies and IT departments crunch huge amounts of information. The Hadoop meetup group in Boston, like those in other cities, has been around for a couple of years, but until now it hasn’t been very active. That’s about to change on February 15, from 6:00-9:00 pm, when the group is getting together at Fidelity in Boston to talk about the technology and how it can be used.

Spearheading the new effort is Hadapt, a big-data software startup in Cambridge, MA, that combines Hadoop with advanced database technology. Hadapt moved to the Boston area from New Haven, CT, in early November after raising a Series A venture round from Bessemer Venture Partners and Norwest Venture Partners.

Hadapt will join Cloudera and MapR, other players in the sector, in giving informal talks at the meetup, which is expected to draw upwards of 50 developers, entrepreneurs, and folks from big companies like Akamai, IBM, and EMC/VMware. “It’s important to build awareness about Hadoop and bring together people already working on it,” says Justin Borgman, the CEO of Hadapt. “We don’t yet have a community built around it in this city.”

The meetup is the latest sign of a critical mass of interest building around Boston in big data and analytics. Earlier that same day (the 15th), MassTLC is organizing an event around the impact of big data on the tech industry. Last month, startups Chart.io, Kinvey, and Session M organized a very well attended meetup around data analytics and visualization. And earlier this week, Vertica (acquired by HP last year) said it is relocating to Cambridge and setting up a center for big data analytics and community outreach.

Bryan Stevenson, chief technology officer at Cambridge-based startup InsightSquared, says he has just joined the Hadoop meetup group and that “there’s a lot of buzz around the technology in general.” InsightSquared, which helps staffing, recruiting, and software businesses analyze and display their data, has been experimenting with Hadoop. Stevenson, who’s relatively new to Boston, says it’s important to have a peer group so he (and others) can “ask the stupid questions.”

Hadapt, for its part, has grown to about 20 employees and is currently hiring. The Yale University spinout’s software is in late-stage beta trials now and will be generally available later this year, Borgman says.

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Everyone knows mobile is everywhere, and everything is mobile. Smartphones, tablets, and mobile software are transforming how we all shop, connect, get around, and lead our daily lives. In the five years since Steve Jobs unveiled the first iPhone, the mobile industry—and the tech world, more broadly—has changed radically. So what are the emerging opportunities, pitfalls, and strategies in this sector? And how will the next five years play out?

On March 14, Xconomy will hold its fourth annual half-day mobile conference to tackle these questions—and much more. Mobile Madness 2012: Total Mobility will take place at Microsoft’s New England Research and Development (NERD) Center in Cambridge, MA. We are convening some of the most prominent mobile technology and business leaders from the Boston area and beyond—and we are expecting a packed house.

We are still working on the agenda and full speaker list, but I can share a few highlights with you now. We will have a keynote panel consisting of Boston’s “mobile mafia”—founders, CEOs, and investors from some of the region’s biggest mobile successes, including m-Qube, Enpocket, Quattro Wireless, and Where. This distinguished panel—which will include Jeff Glass, Mike Baker, Lars Albright, and Ryan Moore—will discuss Boston’s mobile history and how the region can continue to lead the world in mobile innovation.

Other themes we’ll tackle include next-generation consumer and social apps; mobile retail and commerce; the convergence of mobile marketing and big data analytics; emerging business strategies around mobile apps, mobile websites, and hybrid models; and, more broadly, how mobility will continue to change the way we all interact with content, products, and each other.

To those ends, we will also hear from Jason Jacobs, CEO of FitnessKeeper; Jeff Janer, CEO of Spring Partners; Ted Morgan, CEO of Skyhook; Seth Priebatsch, CEO of SCVNGR; Greg Raiz, CEO of Raizlabs; Michael Schreck, CEO of Zmags; and Michael Putnam, director of mobile products for TripAdvisor (only the biggest consumer Web company in New England). We’ll also hear from up-and-coming startups including ByteLight, HeyWire, Kinvey, and Crashlytics. Again, this is only a partial list of speakers—we’ll have more updates soon.

If you register by February 1, you can take advantage of the early bird rate. Looking forward to seeing you all at NERD on March 14.

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Brayden Olson was frustrated. After a couple of years spent beating the bushes for successful young entrepreneurs in the Seattle area, the 24-year-old says he could only find a few people he considered peers.

And even worse, Olson says, was the lack of generosity he found among the 30-something generation of Seattle entrepreneurs that came up before him.

“A lot of them are doing great things. But it surprises me that the way they’re looking at this next generation is, ‘I’m going to help you out so that I make more money,’ when they’re already successful,” says Olson, who leads Novel, a startup that aims to bring game mechanics to business recruiting.

That attitude, he says, went something like this: “‘We’ll incubate you for a significant amount of your company, and we’ll make connections for you for a significant amount of your company, and we’ll give you our expertise for a significant amount of your company.’”

Olson’s answer is a new organization called the Young Entrepreneur Social, a group aimed at bringing successful under-30 entrepreneurs together for networking events and mentorship programs—particularly reaching out to other promising twentysomething entrepreneurs, and even high-schoolers who have an entrepreneurial bent.

The group already has thrown a pair of events, drawing 50 people to the first gathering on a yacht and about 80 to a “mansion party” in the North Bend area. They’re planning a third event for February, and hope to hit about 100 attendees.

Membership is free, but restricted mostly to entrepreneurs under 30 who have built business with either venture backing or $1 million in annual revenues. The idea is to have half of the crowd at a Young Entrepreneur Social event made up of those successful young businesspeople, with the balance representing promising up-and-comers who need connections, advice, and support to get to the next level.

The focus on the under-30 crowd isn’t just by chance, or because they’re feeling bruised from those mean married guys with mortgages. Olson says there are studies that bear out the anecdotal observation that big, world-changing tech companies are typically started by people in their 20s. (It’s a theory that brand-name investors like Ron Conway and Vinod Khosla also endorse.)

“There are some organizations that are out there that are really great for people entering their 30s or in their mid-30s. But they’re dealing with their houses and their spouses and having kids for the first time,” Olson says, leaving younger entrepreneurs feeling disconnected. “I know from some of these events, they started with younger membership but now they don’t really want the younger members anymore.”

Olson says he put up the money to get the events started, and the nonprofit seeks sponsorships to cover its mission. An annual budget in the neighborhood of $200,000 is envisioned to support the various programs, which will call on young entrepreneurs to give back.

The event side of the Young Entrepreneur Social is headed up by Colin Christianson, founder of the Seattle digital marketing startup Tenacious Ventures. Mentorship programs, including incubating selected startups at member businesses, will be headed by Morgan Carson, founder and designer of fashion startup Rene Ropas. The volunteer program, including outreach to young student-entrepreneurs, will be led by Jacquie Brown, a former Miss Washington and aspiring singer.

It’s another interesting idea for Seattle’s startup community, which is in the midst of one of those moments that can move a region into a higher echelon. As the big Silicon Valley companies come to town and raid talent from Microsoft or Amazon, they add more diverse company cultures and skills, which can enrich the DNA in the local tech gene pool. At the same time, we’re also seeing the continued growth of the TechStars incubator, fuel for more seed-stage investment, and a drive to recruit more angel investors.

Olson says that building the bridge for the youngest entrepreneurs is one of the missing ingredients in turning up the volume in Seattle’s startup scene. And he hopes it will help prevent more stories of the ones that got away—companies like Box, the hot enterprise storage startup that moved to the Bay Area in early 2006, a few years after being birthed by two Seattle-based college students.

“The bottom line is, if we want to see another Microsoft or another Amazon in our community, it is this audience that YES is targeting that we have to focus our attention on,” he says. “In every statistic, every time it’s happened it has been this demographic. “Cities can be a startup hub for a while and go away. And that’s what we’re at risk of doing.”

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It’s one of the most nagging questions for Seattle-area technology entrepreneurs: How do you get more of the region’s tech wealth invested in local startups? Business veteran John Sechrest sees a possible answer in Oregon, where investors have created a series of events that help get newbie angels into the game.

He’s hoping to replicate that model with an event called the Seattle Angel Conference.

The project is still in the very early stages—when I talked to Sechrest over coffee this week, he was heading to the first organizing meeting of 10 or so people interested in working on the project. But he’s no rookie with the idea, having already organized the Willamette Angel Conference when he worked in Corvallis, OR.

“If you listen closely to Seattle, Seattle has the opportunity to pop like the Bay Area popped. It really feels like something’s happening here,” says Sechrest, currently serving as an advisor and organizer for Startup Weekend. “Just a little more push on it, and maybe we can make it go.”

John Sechrest

The Puget Sound region does already have established groups for angel investors, such as the Alliance of Angels, the Keiretsu Forum, and Zino Society.

Sechrest, whose resume includes an early stint at Hewlett-Packard and the spin-out of an Internet service provider from Oregon State University, says those groups do a great job. His pitch is that adding a new initiative—particularly if it’s focused on recruiting new angels—can only help make the community more robust.

“If we’re going to double the number of successful exits in Seattle, what has to happen? Somebody has to put more money into the puzzle,” he says.

The Angel Conference model from Oregon is fairly straightforward: A group of investors each contribute a small stake—about $5,000. That serves as the “prize” pool for entrepreneurs, who enter the conference’s multi-month winnowing process for a chance to pitch as finalists. In the end, a winner gets the collective investment.

Like other competitions of this kind, the Angel Conference model runs competing startups through their paces with weeks of due diligence and preparation, to ensure the finalists are worth getting a chance at the investment.

Sechrest says the combination of a low dollar amount and weeks of engagement with entrepreneurs and other investors helps foster fledgling angels who might not know a whole lot about the system of selecting and backing early stage companies.

“In Corvallis, we were able to get a significant number of H-P middle managers to invest, and they did fine and now are active angel investors,” Sechrest says. There are similar Angel Conferences in several other cities in Oregon, where they’ve been running for several years.

The lack of early stage investors involved in the Seattle tech scene is a longstanding gripe in the region, especially given the amount of tech-based wealth. Economist Dick Conway once estimated that the number of “Microsoft millionaires” created in the region by 2000 might be around 10,000. But experienced investors and entrepreneurs say you wouldn’t necessarily know it by their impact on startups.

Chris DeVore of Founder’s Co-op recently wrote that if he could “wave a magic wand and change one thing about our local community, it would be to turn every Microsoft and Amazon alum who walked away with at least $5 million in personal net worth into an angel investor.”

“Paradoxically, because the vast entrepreneurial wealth Seattleites enjoy today was created by just a few massively successful companies, too little of that wealth is being recycled in the next generation of local entrepreneurs,” DeVore wrote. “And with fewer dollars flowing into the local innovation economy, the odds of the next Microsoft or Amazon emerging in the region are that much lower.”

After the recent TechStars Demo Day in Seattle, entrepreneur, investor, and former Microsoft executive Charlie Kindel wrote that “I personally can think of 30 or 40 people who I worked with at Microsoft who should have been there, but probably didn’t even know about it. They probably can’t even spell angel.”

“Early stage startups looking for seed money (e.g. $100-200k) are having to seek out angels in other cities,” Kindel wrote. “This makes no sense to me given Seattle’s economic base. I believe the population of people in the Seattle area who could be involved is much, much larger than those currently engaged.”

Kindel is among the Seattle investors who are interested in making a Seattle Angel Conference happen. Sechrest says if there’s enough interest to get a solid group of investors together in January, the goal is to have the pitch competition at the end of May.

“I’m now into the next phase to find out whether or not I can get to a reasonable number of investors,” he says. “I’ll run this if I have 20, but I’d like to have 40 because I’d like to have the prize be $200,000.”

If Sechrest is right about the Oregon approach enticing more wannabe angels off the sidelines, you’ll probably be reading about the newest Seattle-area pitch competition a few months from now. If not, one of Seattle’s biggest gripes about itself might get a little louder.

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Immigrant entrepreneurs are playing important roles at U.S. technology startups, with immigrants serving in key management and product development positions at 37 of the top 50 venture-backed companies—or roughly three out of every four of the startups—according to a study released yesterday.

“It’s clear that America gains a great deal when we’re open to talent, wherever that talent was born,” said Stuart Anderson, executive director of the Virginia-based National Foundation for American Policy and author of the study.

The foundation, a non-profit and non-partisan research outfit, says Anderson’s study is the first to examine the role played by immigrants in starting companies that develop new technologies, products, and services in information technology, health, energy, business and financial services, and other fields.

Mark Heesen, president of the National Venture Capital Association, said the venture-backed companies in the study with immigrant founders created 150 jobs on average—and “job creation is so critical in this day and age.” During a media conference call, Heesen also lamented “the amount of time and capital that entrepreneurs and VCs spend on trying to help these entrepreneurs get green cards so they can stay here in the United States.”

Of course, the study comes at a time when Congress is considering various legislation that would make it easier for talented and highly educated foreign nationals to gain permanent U.S. residency. While roughly 140,000 immigrants win green cards that enable them to remain in the United States each year, Anderson said U.S. immigration policy should be relaxed to allow foreign-born students to remain permanently in the United States after … Next Page »

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When the veteran entrepreneurs behind Digital Lifeboat settled on a location for their fledgling company, they weren’t concerned with landing one of the hot tech-startup addresses in South Lake Union or Pioneer Square.

“Our offices are between the cemetery and the trailer park in Redmond,” co-founder and CEO Steve Teglovic says with a laugh. “That’s called being very efficient with our cash.”

Instead, the small Digital Lifeboat team has been pouring its time and resources into developing the software engine for its version of online file backup—including getting patents. Now, it’s a little more ready for primetime.

The startup recently added $1 million in financing to round out a $3 million round that originally was filed with regulators last year. Investors include Mercer Island, WA’s Keeler Investments, San Francisco’s Catamount Ventures, and angel investor Brian Finn. The company just ended its nearly yearlong beta testing phase, and is now open for new paying customers—”Basically, it works now,” Teglovic says.

Digital Lifeboat’s product is an online file backup service, offering consumers a place to securely save copies of their important documents and other digital treasures. Big deal, right? There are plenty of companies offering similar services already, including EMC/VMWare’s Mozy, which is based in Seattle, and Boston-based Carbonite.

The difference is that Digital Lifeboat uses individual computers on its network as nodes in a distributed storage system, rather than requiring a concentrated mass of data centers to store everyone’s files. That’s similar to the idea behind Seattle startup Symform, which is targeting business customers with a distributed storage system.

When users sign up for a Digital Lifeboat account, starting at $30 a year, they get unlimited backup on the system. But by joining the service, users also agree to become a part of the storage network for everyone else, giving up a piece of their unused hard drive space to store someone else’s stuff.

Of course, security is hugely important in this kind of arrangement. All of the files are encrypted and hidden in multiple ways to ensure that private data remains unseen by anyone else, Teglovic says. One of the major features is something called “erasure coding,” which splits files into pieces and distributes them across the network. In layman’s terms, here’s how it works: After each file is encrypted, it’s split into 20 different “chunks.” Those 20 chunks are then split again, this time into 50 chunks, which are sprinkled across different PCs on the storage network.

But the chunks overlap, so to get their file back, a user only needs to access 20 of the 50 chunks at any given time—giving more flexibility for Digital Lifeboat to manage how much space to take up on the network.

The startup’s software and central control server act as the traffic cop this whole time, ensuring that everyone on the network has access to the files they need, but also retains enough room on their hard drives to keep running their computers properly.

The whole thing is designed to be “opaque” to the end user, Teglovic says, and if things ever get too close to affecting performance, Digital Lifeboat scraps that machine as a storage option and moves the pieces of data … Next Page »

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I didn’t know the full extent to which the Boston area has a thriving data and analytics startup scene.

I had always associated the city primarily with biotech innovation. My company, Chart.io, provides hosted business dashboards to help companies visualize their database data. We’re based out in San Francisco (we were part of the 2010 Y Combinator class), but our investors, Avalon Ventures, call Boston home. When my friends at Avalon-backed Kinvey (mobile backends as a service) and Boston-based SessionM (a platform to spark deeper consumer engagement with mobile content and ads) and I decided to co-host a data visualization and analytics meetup for the local community, we expected to get 20-30 RSVPs at most. Instead, we broke 100 in a flash and saw a steady torrent of emails from data enthusiasts pleading for admission.

In fact, a deeper look into the Boston tech scene reveals quite a rich history of data and analytics companies, including Netezza, Endeca, ITA, EMC, and other giants. And it turns out, the startup scene is equally rich, with companies innovating around NoSQL, data storage, search, healthcare, and a variety of cloud computing ventures. Here’s a quick tour of the Boston- data landscape. And this is only the tip of the iceberg.

As data volumes have exploded in the past decade, so have the number of companies building tools to store, retrieve, analyze, and generally manage the deluge of data.

Two Boston-area companies, Cloudant and Basho, are tackling the big data problem through non-relational databases (NoSQL), designed to handle hundreds of gigabytes and even terabytes of data and enable applications to elastically scale out to meet the demands of millions (or hundreds of millions) of concurrent users. In this vein, Cloudant offers tools to help companies use Apache CouchDB, while Basho developed its own data store called Riak.

Meanwhile, other local firms are focusing on the next generation … Next Page »

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Gadget girl walks in carrying a red umbrella. It’s not just any red umbrella, though. This one is a “blunt” umbrella. It has round tips, instead of pointy ones, so you don’t poke people in the eye as you walk down a crowded street. It also has what looks like a special tensioning system along the underside of its edges, to withstand high winds and keep the thing from blowing inside-out.

Gadget girl also has touchscreen gloves with her. These are fashionable-looking items with special conductive fingertips—it’s all in the threading—so you can use your iPhone, iPad, or other capacitive touchscreen device in cold weather. (Plus, with the gloves, you can save on your home heating bill so you can afford more gadgets.)

Gadget girl is Fatma Yalcin, a recent MIT Sloan School grad and startup CEO. She found both of the above items on Curisma, the gadget-discovery site she started with Eugene Gorelik earlier this year.

The idea is to provide a social platform for finding and sharing new technologies and products. Users can sign in and post gadgets they like—everything from inkless pens to a “magic cube” that projects a keyboard onto any surface—and others can follow them, recommend products, see the most popular items, and sign up for a personalized feed. The site sends users to other retailers if they want to buy a gadget, but Curisma plans to make money by working with brands and eventually enabling people to make purchases through the site itself.

“It’s the power of community meets personalization, and it’s all determined by you,” Yalcin says. “Within a year, we’d like to reach half a million users.”

Curisma, which operates out of Dogpatch Labs in Cambridge, MA, has some features in common with personalized product sites like Pinterest, Daily Grommet, Krush, and Stylefeeder (acquired by Time), as well as private sales … Next Page »

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If you just read the headlines and watch the reality shows, the life of a tech entrepreneur probably sounds something like this: Work hard, play hard, raise tons of money, change the world, retire early. It’s a swashbuckling, mile-a-minute joyride filled with the best and the brightest.

Except when it’s not. The flip side of that wide-open adventure and hard-charging culture can be an extreme sense of loneliness when things don’t work out—a spiral of dread and depression that can be fatal, as Cheezburger Network CEO Ben Huh told us this week.

In a remarkably personal blog post, Huh tells how the failure of his dot-com bubble-era company Raydium left him stuck in a dark, depressed place, face-to-face with thoughts of suicide.

“Was I not meant to be an entrepreneur? Will I never get to pursue my dreams again?” Huh wrote. ”I spent a week in my room with the lights off and cut off from the world, thinking of the best way to exit this failure. Death was a good option—and it got better by the day.

“I don’t remember why I left my room. The most meaningful act I performed on my long climb out was to leave that room. It was the best decision I made in my life. … It wasn’t for several months that death no longer became an option, but leaving that room and dealing with reality was the best antidote to a make-belief world where life just wasn’t worth it.”

Huh was moved to write about his experience from years ago by the recent death of Ilya Zhitomirskiy, the 22-year-old co-founder of social networking startup Diaspora. While no official cause of death was given at the time, The New York Times reported that “friends and associates of Mr. Zhitomirskiy said there were indications of suicide.”

I talked with Huh Wednesday afternoon—he was in New York attending a conference—to learn more about why he wanted to make such a personal topic extremely public. Huh said that, months before Zhitomirskiy’s death, he had spoken with another Diaspora co-founder about the startup’s struggles.

“It was very clear to me that they were struggling. They were struggling at a fundamental, conceptual level of who they were,” Huh says.

He also notes that the loneliness may have been compounded by the fact that Diaspora raised seed money through Kickstarter, the online crowd-funding platform—which meant they were fully in charge, but also didn’t have a venture capitalist or angel investor who could provide close guidance. “Even thought they were loved by so many people, they were really, truly alone.”

“When I read about Ilya’s death, it was one of those things where even before the reports come out that they suspect it was suicide, you just kind of know,” Huh says.

As an entrepreneur who’d been through the dark times, Huh says he wanted other young people who might be in a similar position that there was a way out—to break the sadistic comfort that depression can provide, find something to do, and get on with your life.

That can be extremely difficult in the startup world, where your company or product is more than a 24-7 job: “It’s everything that you are,” Huh says. “When that falls apart—that’s the only purpose for living.”

And for all the talk of prizing failure, learning from mistakes, iterating, and moving on, Huh says, the entrepreneurial culture doesn’t do enough—at least publicly—to confront the obvious dark sides of crashing and burning along the way.

“For a culture that supposedly embraces fast failures and pivots, we don’t talk about the psychological and emotional effects of those failures,” Huh says. “We’ve actually come up with a safety word for failures, called ‘pivot.’ We’ve kind of swept it under the rug.”

His tale is one of renewal and redemption in the end. As Huh eloquently writes, surviving his depression left him with the perspective and strength to handle another failure, should it come his way. “Nine years after I left that room, I would call Brad Feld to invest $30 million in my odd-ball company. Before I picked up the phone, I thought long and hard about losing that money—every single penny of it. And I was OK with it.”

Huh does worry about some negative effects of laying some very deep, personal moments out in public. “Is an investor going to say no because of what I went through? Will this divert the attention of what I do to this topic?” he asks. “As the CEO and founder, the thing I’m most focused on is the welfare of my company and employees.”

A day after the post went up, however, the positive responses were flowing in. Huh says people who read the post were sending thanks for his story to the Cheezburger Twitter account, with some saying they also had struggled with depression.

Entrepreneur Dan Shapiro, now at Google after its acquisition of Sparkbuy, was among the people giving Huh public kudos for sharing his tale.

“Building a startup is about the highest of highs and the lowest of lows. The problem is that while people shout about the highs from atop the tallest mountains (or TechCrunch), the lows are suffered in private,” Shapiro told me in a follow-up email. “It’s a feat of profound courage to share your darkest moments. With more brave truth-tellers like Ben, perhaps we can avoid tragedies like what befell poor Ilya.”

“Part of me felt like so many people struggle with this,” Huh says. “I feel good that I wrote it.”

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When last we checked in with Gordon Jones, it was six months ago and he had just been appointed the inaugural director of the Harvard Innovation Lab. It was May, the birds were singing, the Red Sox had pulled out of their season-starting slump, and anything seemed possible.

Now the cold, dark days are upon us, and we need a place to rejuvenate our spirits as we gear up for the holiday season. Students and young entrepreneurs especially need such a place. The Harvard i-lab, as it is called, might be that place—a $20 million center whose mission is to support all Harvard students interested in entrepreneurship. And it is officially open for business as of today, complete with a ribbon-cutting ceremony, school administrators, and politicians.

The important news is that the i-lab is real, and it marks a serious and ambitious effort to foster entrepreneurship on a grand scale. The unstated goal is to keep the next Bill Gates or Mark Zuckerberg from leaving town (and Harvard) and building a multibillion-dollar company somewhere else. Will it work? Who knows, but you have to start somewhere.

Back in May, Jones talked with me about just trying to get his baby to first grade—the idea being, walk before you run. He has been heads-down since then, but I recently caught up with him about the i-lab’s opening, and the progress and challenges to date. (And yes, he hosted Zuckerberg’s recent visit to the lab.)

“I’ve been pleasantly surprised so far,” Jones says. “It’s genuine, the interest here, and the level of engagement across the Harvard schools is strong.” He says that the overall support from the university and the enthusiasm from the academic and business communities “exceeds what I expected.”

Jones adds, “When we first talked six months ago, there was this question of, ‘Is Harvard late to the game?’ I think this is a great time to be doing what Harvard is doing.” And that is, in his words, “trying to bring the best of Harvard’s knowledge and network and make it available to students. And being part of the Boston innovation community.”

Here are my takeaways going into the first day of school at the i-lab:

1. Jones isn’t going anywhere. Yes, he has an extremely challenging job. (You try being accountable to seven different deans across Harvard, for starters.) The fact that he’s still alive and kicking—not to mention attending lots of entrepreneurship events and getting to know students and the local business community at every turn—bodes well for the lab’s future. “You’ve got to pick your battles,” he says.

2. The lab is already active. It officially opens today, but stuff has been happening there for months already: a “startup weekend scramble,” guest speakers (the series includes Eric Ries, Peter Thiel, and Jeff Taylor), Harvard courses on entrepreneurship and global innovation, special panels, startup workshops (Alex Taussig led one about mistakes entrepreneurs make; Eric Paley did one on career choices), and one-on-one consultations with “experts in residence” and “innovation partners” … Next Page »

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When the ex-Microsofties behind local services site MiNeeds thought about expanding their business, they got what seemed like weird advice. They had built their company as a resource to help people connect with service providers like plumbers, painters, accountants, and more. But when they looked to expand into wedding services, they found a niche that didn’t think it should be lumped in with all that other stuff.

“The feedback was very strong, very consistent, and clear: I love this experience, but I need it to be beautiful and I want to feel it,” co-founder Raed Malhas says. “I’m planning my wedding. I don’t want there to be a carpenter there.”

Like typical guys, Malhas and co-founder Deniz Erkan thought that was nuts. We’re trying to build a strong brand name here! Why would we fragment our audience?

Raed Malhas

“Then we said, ‘You know what? We’re very data-driven,’” Malhas says. “We have a philosophy in this company: It’s not my opinion or your opinion. Let’s let the data decide.”

So they tested the idea with a wedding services site that had a special look and feel, and the results were basically a slam dunk. Conversion rates of people coming to the site for wedding services doubled, and MiWeddingNeeds was born. Even after a very quiet debut in February, some 5,000-7,000 brides per month are coming to the site to help plan their big day.

If MiNeeds does its job right, a good chunk of those brides-to-be could become repeat customers. More than a quarter of them are already searching for honeymoon packages to add on after the wedding, Malhas says. And it’s obvious where things go from there.

“Suddenly, she starts to think about the mortgage,” Malhas says. “When she comes back from the honeymoon, she starts looking for home-related services.” Baby-related services might not be too far behind. “The lifetime value of that bride is massive,” he says.

That success is a big part of why MiNeeds sees a bright future for its twist on local services search. The startup lets consumers post the services they want performed and gets professionals to bid for the business, offering up reviews and ratings to help make the choice. Outside of the wedding vertical, the startup still maintains its standalone site for all kinds of services, from photographers to house cleaners to lawyers. Investors include Paul Thelen, founder of Seattle’s BigFish Games, and former Yahoo chief data officer Usama Fayyad.

The company is definitely not alone. There are several other players in the sector, including membership-based service reviews site Angie’s List, which just raised more than $100 million in its public stock-market debut. Other companies like San Mateo, CA-based startup Redbeacon or ServiceMagic, a unit of media conglomerate IAC, use a similar mechanism of letting professionals bid for consumer jobs.

MiNeeds claims more than 50,000 service providers have signed up so far to bid for jobs through its website. Servicemagic claims more than 80,000, and Malhas says Yellow Pages has in the neighborhood of 800,000. But MiNeeds seeing strong growth and should have more than 100,000 professionals signed up by early 2012, Malhas says.

“Once we go over six figures in terms of professionals, we’re no longer a small player. Even today, I’m sure people are eyeing us and thinking, ‘Who are these guys?’” Malhas says. “Once we’re over six figures, it’s at a point where they can no longer ignore us.”

MiNeeds, which has offices in Seattle and New York, is generating revenue but focusing on growth over profitability, Malhas says. The service is free to use for consumers and free to join for service providers, but MiNeeds requires a paid subscription from the skilled professional to actually communicate with possible customers. Prices are tiered, from about $25 to $100 per month.

As for the possibility of other verticals to follow the wedding example, Malhas says MiNeeds has hedged its bets by securing domain names and doing some preliminary research. So far, shopping for home or legal services, for instance, may not require a special site. But they’ll keep their minds open this time.

“Looking at the data there, it does not seem that we need to have a white label for each of those industries,” Malhas says. “Then again, I might be completely wrong, and it might be worth launching it to see the conversion rates.”

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It’s an exciting time to be an entrepreneur. There are no shortage of problems to solve, ever-lowering barriers to entry, and near-ubiquitous access to low/no-cost technologies, which makes damn near anything possible. I adore working side-by-side with those who also see the world as an experience in which to participate rather than just consume. I am constantly energized and inspired by their works. These are my people, ambitious and proud.

My business being invention and intervention during a company’s earliest stage, I spend a good deal of time in different American cities working with entrepreneurs and those who advocate on their behalf. Having the opportunity to serve these folks while experiencing their local entrepreneurial networks firsthand, I have observed a number of too-disparate, closed-loop entities along the way that are effectively guiding startup community members towards market viability. Historically, entrepreneurs have existed at one end of the ecosystem with investors at the other. A startup has to leap the chasm of proving their business scalable and, as such, investment worthy. The accelerator model pioneered by Paul Graham with Y Combinator disrupted that century-old model, moving down the chain halfway closer to budding entrepreneurs and providing them with sustenance in the form of small investments, as well as mentorship and a community of fellow entrepreneurs off which to bounce ideas.

It is my contention that the proliferation of startup accelerators and the subsequent realignment of early-stage capital behind the best of them to serve as a pipeline and viability filter has revealed a kink in the overall process of starting up for an overwhelming majority of entrepreneurs. As a result, thousands of would-be founders are currently mired in the “dead zone” that exists between ambition and minimum viability. The accelerator model, while certainly a net-positive for entrepreneurship, only serves the small minority of today’s entrepreneurs—those with technical expertise or a co-founder with the same who can clearly and concisely convey an idea. In aggressively cultivating the large majority, you direct the flood of ambitious folks waiting to be guided toward viability to existing early-stage market filters, fundamentally changing the landscape of entrepreneurship while simultaneously realigning the existing network of capital behind filters even further down the chain and closer to entrepreneurs.

Most every market—be it thriving, dormant, or beginning to burgeon—has more than enough resources to catalyze and drive a fertile startup community, including Detroit. You all have the raw ingredients: advocates, entrepreneurs, and investors. It’s not a question of resources, but how they are directed or, in this case, misdirected. Who you consider to be an entrepreneur or, more specifically, what your allocation of attention and resources would suggest, is fundamentally flawed. After engaging with hundreds of entrepreneurs on the subject, I find that for a city and its investment community, there are actually five types of entrepreneurs, and that acting passively … Next Page »

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The first thing Charlie Kindel wants you to know about the buzzworthy mobile sector is that it’s actually “old, dead, and boring.”

OK, so that’s kind of for shock value—Kindel, who recently left Microsoft after 21 years, will admit as much. After all, this comes from a guy whose last job was serving as a general manager on Windows Phone, and whose still-stealthy startup company is aiming for the mobile arena.

Charlie Kindel

Here’s what Kindel really means: The world of mobile apps revolving mostly around a specific operating system is coming to an end, quickly. Instead, platform providers will make it easier for developers to attack multiple platforms at once—making an OS something you plug into, rather than an existential question for small companies.

That will usher in a new era of cloud-based services that can be served up on any of the devices in a consumer’s life, Kindel says, from smartphones to tablets to laptops and smart TVs. Think about Twitter as an example—available just about anywhere a user might want it.

“The real value of the service is the connection it enables between the devices you have, the people you interact with, and the services that compose the experience,” Kindel says. “So what I see happening is an inflection point where the value and the emphasis that people have been placing on building mobile apps is shifting to an investment on the white space between the devices, the services, and the people.

“When I talk to startups and mentor other people investing money, I’m trying to get people to think about that, because that’s where the growth is going to be.”

Expect to hear more of those insights on December 6, when Kindel (on Twitter @ckindel) joins our all-star cast of presenters at Mobile Madness Northwest—a premier half-day Xconomy forum presented in partnership with the Washington Technology Industry Association. The afternoon-to-evening event at F5 Networks in Seattle will be packed with smart speakers, startup demos, and plenty of time to network. Here’s where to get your tickets.

Kindel’s point about the death of mobile OS wars is an interesting one, particularly since the battles for market share between Apple, Google, and Microsoft in the smartphone market have been dominating the tech headlines.

It sounds like a scary proposition for Apple, which defined the modern smartphone market, and threw in tablets for good measure, by exerting a huge amount of control over the operating system, app ecosystem, payment processes, pricing, and more.

But the writing is on the wall, since big companies already are doing this, Kindel points out. Say you’re at a big tech company with a Web service, and you want to build an app for it. The costs are getting low enough that it makes developing for several different platforms a no-brainer.

“You would be insane if you spent more than $250,000 per client platform. It’s likely closer to $100,000,” Kindel says. “It’s mouse nuts. It’s irrelevant in the scope of these businesses. And so these businesses are going to target all of the platforms.” And soon enough, that kind of efficiency is going to trickle down to smaller companies, startups, and individual developers, Kindel says. That’s why you see big investments in platform players like Portland’s Urban Airship, and the rise of startups like Seattle’s Buddy Platform, which Kindel has joined as an adviser.

“I think that there is very little value in client platforms moving forward. The real value is in the services that light up those devices and the services that enable people to interact across multiple devices,” Kindel says. “And so we’re in a period right now where there are these huge battles around what device operating system is going to ‘win.’ And my argument is none of them are going to win. It’s an irrelevant question. The real battle is what platforms developers are targeting to enable their cloud-based, service-based experiences.”

Kindel says he gets plenty of eye-rolls for these assertions, for some pretty big reasons—people see the billions of dollars being pumped through the current app-centric, operating system-based mobile ecosystems. That’ll continue for roughly another year or more, he says. But the end is coming.

“I think it’s obvious from their behaviors that all the big players are very conscious of this,” Kindel says—specifying Apple, Google, Facebook, Microsoft, and Amazon in that group. “In each case, they recognize that there are several assets that they have to have at their disposal to be successful in this new world. And I say that they have to have them at their disposal because I don’t think that they have to own them. They just have to have access to them—although owning them is better.”

—The Social Graph: This is the first and most important asset for the big players to have access to, Kindel says. “It’s all about the network effect,” he says. “This is why I believe Google is going to invest until the cows come home in Google Plus. They’re going to do whatever it takes to make Google Plus successful.”

—E-Commerce: “They have to have an ability to directly take and give money to end user consumers in very fine-grained amounts,” Kindel says, with Amazon and Apple the clear leaders right now.

—The Cloud: “They have to have a cloud platform asset that allows third parties to build on the core services they provide, and extend them and leverage them,” Kindel says. Amazon Web Services, Microsoft Azure, and the Facebook Platform are all examples of this critical type of service.

There’s plenty more where that came from, and I’m psyched to have Kindel joining us for Mobile Madness Northwest. Our Early Bird rate expires November 15, so make sure you get your tickets now. We’ll see you on the other side of Thanksgiving.

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You might not think of a grocery store inside a recycled shipping container as a technology-centric startup. But without some cheap, powerful devices and software, Web-enabled crowdfunding, and tech startup methods, Stockbox Grocers probably wouldn’t be where it is today.

The Stockbox team, which recently wrapped up the run of its first prototype store, is trying to fill a niche in grocery shopping by putting its mini stores in “food deserts,” areas of a city where good-quality staples are hard to find or too far away. The experimental store, in the parking lot of an apartment complex, attracted 20-35 customers on an average day—a performance good enough that Stockbox is already planning for a more permanent store in the spring.

So what’s that got to do with technology? Plenty. “In the end, they’re just selling fruit and vegetables and dry goods. And yet, there is this huge amount of technology underlying it that makes it possible,” says tech entrepreneur Michael “Luni” Libes, who’s serving as a volunteer adviser to Stockbox.

“The overall trend we see in the software industry is the price to start a company is trending toward zero. And it’s interesting to compare that with starting an actual brick-and-mortar retail business,” Libes says. “And for some of the same reasons why software’s going to zero, the costs of starting a brick-and-mortar businesses is getting less. It’s not going to zero, but it’s getting less.”

First of all, back when they were still working on the project as students at Bainbridge Graduate Institute, co-founders Carrie Ferrence and Jacqueline Gjurgevich were able to use Google’s SketchUp application to rough in their crucial first schematics.

“It’s what we used in all of our contract designs and our presentations and our business plan. Especially when you have a new idea and it is a different take, it was really hard for people to visualize it,” Ferrence says. “It enabled us to come up with a somewhat professional- looking image before we invested in professional architects and designers.”

That business plan, by the way, won Ferrence and Gjurgevich second place in this year’s University of Washington business plan competition. With prize money in hand, the pair next turned to Kickstarter to seek more money to get their prototype Stockbox Grocers store installed. They exceeded their goal, raising more than $20,000 from 195 backers—and nearly a third of those people were introduced to the little startup by the Kickstarter campaign, making it a useful marketing tool as well.

“This launch plan of Stockbox could not have been done 10 years ago,” Libes says. “It would have been a friends and family plan that would have raised money from, literally, friends and family, or gone back to their school and gone begging to the other students to do it.”

Once the prototype store was becoming a reality, Stockbox needed a way to process electronic payments. An obvious choice was Square, the mobile card-swipe startup from Twitter co-founder Jack Dorsey, which allowed Stockbox to process payments on an iPad with no upfront cost.

Square also has some inventory-tracking capabilities, which were a nice additional feature for the prototype store. Stockbox might move to a more robust system to track the goods in its permanent stores, but the Square device and payment processing service was a perfect tool for getting the concept operating quickly and inexpensively.

“It’s been interesting to see customers come into the store and people get excited about the iPad and the Square,” Ferrence says. “And we explain to them that, really, it was just cheaper and easier to do the iPad and the Square than something more traditional like a big clunky cash register.”

Even the signs on the outside of the store to dress up its workmanlike exterior were done with cheap printing services that might have required hiring a signmaker a few years back.

“That was all done on a PC and printed out to vinyl, and done in what looks like an incredibly professional manner for almost no money,” Libes says. “It’s probably safe to say that we overlook 90 percent of the technology that’s avail to all businesses that make businesses look more professional, make everything look more polished.”

At a higher level, Stockbox is operating on some concepts that have gained a huge amount of popularity in the tech field, particularly the “Lean Startup” principles of entrepreneur and author Eric Ries—using cheap and powerful tools to distill a product very quickly, and continually tweak your path based on customer feedback.

“Startups are startups. It doesn’t matter if you’re a tech startup or a green startup or a retail startup. We should all be learning the same lesson, which is the Lean Startup method—get something out there, learn from it, measure from it, and expand upon it,” Libes says. “And there’s just this huge amount of tools, free and cheap and easily accessible, that make that possible now. It just wasn’t possible 10 years ago, 20 years ago.”

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[Editor's note: Cross-posted from The Economist, 11/2/11]

New York Mayor-entrepreneur Michael Bloomberg, not known for shyness, recently proclaimed New York City as America’s new entrepreneurship capital, roaring past Boston in venture capital and soon to leave Silicon Valley in the dust as the “go to” destination for entrepreneurs. Indeed, the world media are awash with proposals to kick start entrepreneurship as a strategy for economic revival, with support for venture finance at the heart of many programs. Yet the title of Harvard’s Josh Lerner’s recent book, “Boulevard of Broken Dreams,” is no coincidence, because proclamations are one thing, actual success is quite another.

Fortunately, there is a lot of experience around the world about what works and what doesn’t. Here are some practical principles that the Babson Entrepreneurship Ecosystem Project have been identifying and developing for public leaders who have, correctly in my opinion, identified entrepreneurship as an essential plank in economic policy.

1. Be clear that the objective is to foster an entrepreneurial finance ecosystem, not to directly provide capital to entrepreneurs. Over time, a healthy entrepreneurship ecosystem makes available capital to ventures that deserve it, while denying it to ventures that do not. This does not mean that governments need to revert to selecting the deserving. This idea has regained currency recently, but we learn time and again (Solyndra anyone?) that it does not work. It does mean that the availability of capital, and other resources, needs to be part of a natural process in which the ecosystem elements—in this case, deal flow and capital—continually evolve and adjust to each other, a concept that is consistent with Smith’s “invisible hand.” But the concept goes further by suggesting that enlightened and skillful leadership can play a critical role in encouraging the evolution of a self-sustaining ecosystem, but leaders have to understand how and when to get in, and how and when to get out.

2. Stimulate financing, but stay off of ventures’ balance sheets. Presence of government and government-owned entities as direct debt or equity holders of ventures should be a red flag. The only reason government should be on a venture’s balance sheet is in the rare case when it is absolutely necessary to entice private, profit-oriented entities to get involved as the natural selector of investment targets, and in those cases, government should have a clear plan to get out. Governments can, as have Israel, Finland and some other countries, provide smart, off-balance sheet funding in the form of repayable grants, matching grants and so forth. But presence on ventures’ balance sheets ultimately leads to a conflict of interest between governments’ social priorities and obligations, and the need to provide a positive return to invested capital. Overall, there is evidence that a moderate amount of this kind of financing can be beneficial, but as it gets to be too great, the benefits rapidly turn into liabilities.

3. Make sunset clauses for financial support programs the rule, not the exception. Permanent, or evergreen programs of government-supported venture capital, loan guarantees, startup grants, angel tax credits and so on, risk becoming white elephants and/or political assets, not economic ones, and in the process risk squandering public funds. Sunset clauses, or “sell-by dates,” help focus policy-implementation programs on (a) achieving results, and (b) creating self-sustainability by building capacity and mutually reinforcing systems (for example, by showing private sector players that they can actually make profits.)

4. “Pulse” incentives to foster discovery. An implication of sunset clauses, in general, is that if providers and consumers of risky capital can “discover” that it is profitable to engage, then they will accelerate self-interested behavior when the “visible hand” is removed. Seeing if providers and consumers of entrepreneurial capital “discover” the correct pricing mechanisms to allow them to engage in a profit-seeking transaction is one test as to whether the problem is really a market failure or not, and is not just … Next Page »

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This year’s MassTLC Innovation UnConference, in Boston on Friday, was as overwhelming—and inspiring—as ever. Apart from the “secrets of scaling startups” session, which I recapped in a separate story, there was a lot going on. Far too much for any one person to take in.

There were sessions on picking the right startup accelerator; building the right company culture; choosing board directors; common mistakes startups make; the talent and recruiting crunch; and the interplay between the New York and Boston innovation scenes, as well as sector-focused sessions on gaming, big data, analytics, mobile cloud, social marketing, and so forth.

To keep track of the main themes this year, I benefited from random chats with Lawrence Schwartz of Tokutek; Michael Raybman of WaySavvy; Gus Weber of Dogpatch Labs and Polaris Venture Partners; Semyon Dukach of SMTP; Vineet Sinha of Architexa; Jeremy Levine of StarStreet; Josh Bob from Textaurant; Dharmesh Shah of HubSpot; and many others. My colleagues Erin Kutz and Lilly O’Flaherty roamed the halls and sessions as well, so I will include some of their observations too.

Here’s a quick sampling of what we all learned about:

1. There are about 100 “big data” companies around Boston. That was the count given at one of several sessions focusing on big data and analytics, led by Steve O’Leary of Aeris Partners and Bob Zurek of Endeca (nice exit). For comparison, earlier this year MassTLC estimated the huge mobile/wireless cluster around Boston to be about 400 companies strong. Big data encompasses big companies like Netezza (part of IBM), Oracle, EMC, ITA Software (Google), Vertica (HP), and Progress Software, as well as upstarts like Hadapt, Jana, Ginger.io, Hopper, Kyruus, and Tokutek. The common thread is technology to help people and companies manage and make sense of tremendous amounts of data so they can make better business decisions.

2. If you’re tired of SoLoMo (social-local-mobile media) as a tech theme, try SoMoClo…the social mobile cloud. In case your eyes just glazed over, think of it this way: Google is mobile plus cloud (see Android). So is Apple (more mobile than cloud, but getting there). Facebook is social plus cloud. Whoever gets all three wins. Beyond consumers, an emerging sector for this technology is healthcare. Jeffrey Tingle of PolyRemedy talked about opportunities in making electronic medical records accessible by patients and doctors—along with the major challenges of privacy, security, and compliance.

3. Web content and advertising are becoming much more interactive—and that interplay leaves an opening for startups. “Traditional church-and-state separation of content and commerce is dying,” says Michael Raybman from travel site WaySavvy. “Sidebar display ads are totally 2005. Commerce and advertising are becoming personalized and contextual, while content is becoming increasingly actionable, where ‘share with friends’ is not the only action. This brings immense opportunities for the travel vertical.”

4. Just when you thought the engineering talent crunch couldn’t get much worse: Undergrads aren’t coming out of school with the right coding experience, and startups can’t afford the time or … Next Page »

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