As I reflect on my time in the Northwest, I find myself gravitating toward the bigger picture: which areas of technology and business innovation is this region poised to really own over the next few years? After giving us the likes of Microsoft, Amazon, Boeing, McCaw Cellular, and Starbucks, surely Seattle is ready for an encore or two?

It’s a topic that comes up often in tech startup circles. For example, on Tuesday, TechFlash put together a provocative panel and town hall discussion on the future of startup financing—but it ended up being about much more than financing. I wish I could have been there, but I’ve been on the East Coast this week.

During the event, the founders of Avvo, BigOven, BuddyTV, Jackson Fish Market, Wetpaint, and other prominent Seattle Web startups talked about the various tradeoffs between bootstrapping, taking angel money, and venture capital. I reported on this topic back in late 2008, and things haven’t changed all that much since, although company valuations are lower and it seems like more entrepreneurs are bootstrapping out of necessity.

One point of discussion in particular caught my eye from the TechFlash writeup of the event: the need for entrepreneurs to think bigger, balanced against giving up equity to VCs. “I don’t see how the small-time thinking of ‘I want control, I want control, I want control’ is going to create the incredible successful outcomes that not only Seattle needs but our industry needs in a time of change,” said Ben Elowitz of Seattle-based Wetpaint.

Entrepreneur and investor Andy Sack, from TechStars, RevenueLoan, and Founder’s Co-op, had a bit of a conflicted take on the venture capital industry, according to the report. He called the business “a racket,” but also said VCs are misunderstood in the entrepreneur community. In the end, his main message was consistent with Elowitz’s. “I think as a community Seattle has fallen behind other cities, and as a community we need to stop whining and start kicking some ass,” Sack said.

Michael Arrington of TechCrunch concurred, talking about the success of companies like Twitter, and the importance of dreaming big: “Where are the people here in Seattle saying, ‘We want to be the pulse of the planet’?” he asked.

Here’s where I stand: I think it’s mostly a cultural issue. Seattleites tend to be more reserved and laid-back than their counterparts in Silicon Valley or Boston. And they are a bit more isolated from the rest of the world than those other geographies. That doesn’t mean they don’t want their startup to rule the world (it might even be an advantage). And in fact, lately I’ve been thinking about the ways in which Seattle tech startups could rule the world. These are my five best guesses at the moment:

1. Alternative financing schemes

Seattle is quickly becoming an epicenter of new models and structures for financing … Next Page »

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There’s no better way to kick off a Seattle visit than to have a two-hour meeting with Bill Gates. That was Arun Majumdar’s morning yesterday.

The director of ARPA-E, the new $400 million research agency within the U.S. Department of Energy, was on tour to promote novel energy R&D programs and get feedback from innovators across the country. He and Gates had an in-depth discussion about energy and climate change—some of the greatest problems facing humanity, and what Majumdar called “the challenge of our lifetime.” Earlier this week, Gates addressed these same points in his talk at the TED conference in California, calling for very fast-paced “miracle” innovations to increase energy efficiency and production while reducing carbon emissions.

It sounds like Gates and Majumdar are very much on the same page. Before being appointed to lead ARPA-E, where he reports to Energy Secretary Steven Chu, Majumdar was a professor of mechanical engineering and materials science at UC Berkeley, and also led research programs at Lawrence Berkeley National Laboratory. His expertise includes energy conversion, transport, and storage, from the nano-scale level to large energy systems.

After his meeting with Gates yesterday, Majumdar convened a group of about a dozen local energy entrepreneurs and investors, including Lars Johansson and Byron McCann of Northwest Energy Angels, Rick LeFaivre of OVP Venture Partners and the UW Center for Commercialization, Alla Weinstein of Principle Power, Rick Luebbe of EnerG2, Christina Lomasney of Modumetal, Jill Watz of Vulcan Capital, Niki Parekh of Bio Architecture Lab, Dan Rosen from Alliance of Angels, Chris Tagge of LivinGreen Materials, David Kaplan from V2Green (GridPoint), and Daniel Malarkey of the Washington State Department of Commerce.

Those I talked to after the meeting were very positive. They said Majumdar stressed the importance of risk-taking in R&D, and sought feedback from local leaders on things like who the customer will be for ARPA-E projects. This is a critical issue. The whole effort is modeled after the Defense Advanced Research Projects Agency (DARPA), which has the Department of Defense as its main customer, and falls under a centralized policy. In the case of ARPA-E, however, Majumdar is navigating a discontinuous set of customers—essentially the entire energy market.

One key takeaway from the entrepreneur meeting was that the U.S. government needs to create a technology “pull” as well as a push. Majumdar noted in the meeting—as he also did in a recent presentation to Congress—that government is one of the largest consumers of energy (think buildings, transportation, and so on). So ARPA-E needs to use that power to create adoption and purchasing standards, as local leaders discussed with Majumdar.

“The U.S. government can come back and say, ‘We’re going to create a buying policy,’ and only buy production processes that have [a higher] level of efficiency,” says Lomasney from Modumetal, a Seattle-based nanotech startup that hopes to reinvent the metals industry. “ARPA-E has to supply the technology, but it also has to be the first adopter.”

Majumdar also gave a public talk at the University of Washington yesterday, hosted by the Department of Computer Science & Engineering. The theme was to address the “three Sputniks of … Next Page »

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Lest Apple take all the headlines this week, a certain software powerhouse in Redmond, WA, is making waves in its own way. Analysts and stockholders are anxiously awaiting the results of Microsoft’s fourth-quarter earnings call today, with some predicting a boost in revenues thanks to Windows 7. But there are other things going on too.

—OK, he doesn’t technically work at Microsoft anymore, but chairman Bill Gates has certainly been in the news a lot lately. One item you might not have noticed, however, was a report this week from Science magazine reporter Eli Kintisch. He wrote that Gates has been funding academic research on geoengineering, climate change, and energy since 2007. According to the story, Gates has put up at least $4.5 million to explore things like altering the stratosphere to reflect some solar energy, filtering carbon dioxide from the atmosphere, and brightening ocean clouds. None of this is surprising, given Gates’s involvement with huge, Earth-scale projects at places like Bellevue, WA-based Intellectual Ventures. But the specific connections to the University of Calgary, the Carnegie Institution for Science, and Silicon Valley inventor Armand Neukermans are interesting.

—Microsoft CEO Steve Ballmer went on the record yesterday about doing business in China. This is a topic I have some familiarity with, having documented Microsoft’s research and development efforts in the Middle Kingdom over the past decade. Ballmer’s post comes on the heels of the flap involving Google in China. He didn’t say anything earth-shattering, but his comments reinforced the notion that Microsoft has been in China far longer than Google has, and has built up deeper relationships with Chinese government officials and businesses.

He wrote, “We have done business in China for more than 20 years and we intend to stay engaged, which means our business must respect the laws of China. That’s true for every company doing business in countries around the world: we are all subject to local laws.” Ballmer continued: “At the same time, Microsoft is opposed to restrictions on peaceful political expression, and we have conversations with governments to make our views known. In every country in which we operate, including China, Microsoft requires proper legal authority before we remove any Internet content; and if we remove content, we give users notice.”

—On the healthcare-IT front, Ryan reported today that Microsoft’s HealthVault software platform for managing electronic health records has expanded to its third country (after the U.S. and Canada), via a licensing deal from German conglomerate Siemens. The partnership was created through Siemens’ IT services and solutions division. Financial terms weren’t given, but it could be an important step in getting Microsoft’s health-related products to be adopted much more widely.

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Comcast Sues FCC Over Bandwidth Cap

Comcast is suing to overturn a ruling by the Federal Communications Commission, Ars Technica reports. The FCC ruled in July that Comcast could not slow down the Internet access of users who share files over peer-to-peer networks. The dispute is part of a growing controversy over whether the Internet faces a data traffic jam and what service providers can do about it.

Is Geoengineering a Good Idea?

A number of ideas that go far beyond cutting down greenhouse gas emissions have been floated to combat the effects of global warming, such as seeding the atmosphere with reflective particles or placing giant mirrors in space to divert sunlight from the planet. The International Herald Tribune reports that some scientists say such plans could have unintended negative effects, while the Royal Society, a British scientific body, says they might become necessary regardless of how risky they are.

PCs Rapidly Infested with Bot Software

The number of PCs infected with software that can turn them into “bots,” remotely controlled by criminals to send out spam or denial-of-service attacks, has jumped from about 100,000 to 400,000 over the past three months, says the Washington Post. The estimate comes from a group of volunteers, called Shadowserver, who monitor such activity. The Post says the real number of infected PCs is probably much higher.

McCain Being Googled More Often, Data Show

As the presidential campaign heads into its final two months, the number of people doing Google searches on Republican nominee John McCain is gaining on the number searching Democratic candidate Barack Obama. TechCrunch charts the data coming from Google Trends and finds that McCain spiked in searches when he announced Alaskan Governor Sarah Palin as his running mate. There’s no knowing, of course, whether this increased online attention translates into votes.

Candidates Differ on Plug-in Cars

It’s probably the first presidential campaign this has come up in, but both Barack Obama and John McCain have staked out positions on plug-in electric vehicles. CalCars takes a look at where the two stand. Obama would support more tax credits for plug-ins and switch the White House fleet to all plug-in vehicles. McCain wants to offer $300 million for developing more advanced batteries and has specifically supported Chevrolet’s electric Volt.

Startup Promises Power from Dirt

A company in Cambridge, MA, is working on fuel cells that use the metabolic processes of bacteria to generate power. Technology Review says the company, Lebone Solutions, realizes the process only produces small amounts of electricity, but thinks it will be enough to meet some needs in developing countries with populations living off the grid. The developers recently completed a pilot study of the technology in Tanzania.

Computer Makers Try to Get Greener

Computer manufacturers are looking for ways to make PCs more environmentally friendly, the Wall Street Journal reports. Dell, for instance, has introduced a machine built with recycled parts. Other companies are developing software to make computers use less energy, or building chips that are more energy efficient.

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