Merry Christmas, Boston. You asked for it, and you got it. A big, publicly traded consumer tech company to put us on the map alongside the Silicon Valley bad boys and uppity New Yorkers. I present to you: TripAdvisor (NASDAQ: TRIP).

Sure, we already have Zipcar (NASDAQ: ZIP), Carbonite (NASDAQ: CARB), iRobot (NASDAQ: IRBT), and privately held but well-established companies like Wayfair, Kayak, and Harmonix. But TripAdvisor is different. Although the online travel firm is not new—it’s been cranking here in Boston for more than a decade—it has become one of the biggest consumer-focused Internet companies on the East Coast, with more than 1,100 employees; 50 million-plus unique visitors a month checking out hotel, restaurant, and travel reviews; and, oh yeah, a market cap north of $3 billion. Yet it hasn’t received as much media coverage or tech-community-adulation as you might expect over the years. (An exception to the former would be this in-depth story by my colleague Wade Roush; the latter would be this commentary from investor Chris Dixon.)

I spoke with TripAdvisor CEO Stephen Kaufer on Wednesday, the day his company officially became independent from Expedia (NASDAQ: EXPE) and started trading on the Nasdaq under its own stock symbol. Here are my takeaways from our chat:

1. TripAdvisor wants the spotlight now. “We have generally been very, very surprised at how little attention the press have paid to TripAdvisor,” Kaufer said. He pointed to his company’s size, number of employees, traffic, revenues, and profits, calling it “the $3 billion company in our own backyard.” On the local training and ecosystem front, he says college interns are turning down offers from Facebook and Google and working at TripAdvisor instead.

2. TripAdvisor is global. Seventy-five percent of the traffic to the company’s branded websites comes from outside the U.S. Think about that for a minute. “We’re almost unchallenged in most countries in the … Next Page »

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A decade ago, scooters and mopeds made up the bulk of motorized transport in India. Today, motorcycles and cars of all makes are a common sight, from Harley Davidson and French carmaker Renault to Suzukis. India is undergoing important socio-economic shifts that are resulting in the segmentation of existing markets and the opening of previously nonexistent ones.

Even though India seems full of opportunities and market potential for almost any foreign product, it requires a lot of sensitivity and awareness because the complexities arising from its heterogeneity make it a challenge for companies looking to copy-paste business models from abroad. In addition to experiencing growth in the consumer market, India is also the stage for an emerging entrepreneurship sector.

Big retail is a prime example of how the diversification of India’s class structure is creating new market opportunities. As little as five years ago, the viability of giant retail stores operating in India would have been seriously questioned. In her book Winning in the Indian Market, published in 2006, India’s leading market strategist and consumer analyst, Rama Bijapurkar, explains that large discount retail outlets in Indian cities have failed for multiple reasons. The principal one being that supermarkets cannot cater to India’s lower income groups because they live day by day and do not have the discretionary income for volume purchases, even at a discounted price. The model adopted by manufacturers of fast moving consumer goods (FMCG) is small quantity at an even smaller price. An example of such would be hotel-like sachets of shampoo for two rupees (0.04 USD); these small packaged goods accounted for 40 percent of the sales of FMCG. Nonetheless, India’s rapid growth has given rise to a new socio-economic group that is filling the demand void, allowing hypermarkets to set up shop in India.

India’s middle class has grown tremendously over the years, due in part to substantial investment in education, and a booming job market fueled by foreign investment. India is outputting almost half a million engineers a year, amongst others skilled employees. Salaries are on the rise with 11.7 percent hikes in 2010 and a projected growth of 12.9 percent in 2012, according to consulting firm Aon Huwitt. Devinder Mahna, general marketing manager at Mechelonic Engineers, explained that it is no longer infrequent for engineers graduating from top schools to find jobs with salaries closely matching those they would find in the U.S. Even though this is not the norm and many will only earn between 400 and 700 dollars a month, it is still preferable for them to buy their groceries at a one stop-shop location rather than waste time purchasing their goods in the various specialty stores.

Even though many of these young wage earners shop at big retail outlets and drive a Chevrolet, it does not translate into a general infatuation with western goods, for the simple reason that Indian and western consumers have diverging tastes. Satya Bonala, head of Delhi-based market research firm Vox Populi, argues that many multinational companies have often made this mistake. India, having 20 officially recognized languages, with dozens more regional tongues, each with its own culture, is an extremely heterogeneous market requiring products tailored to each segment’s needs. Bonala went on to explain that The Coca Cola Company learned this lesson when it attempted to re-introduce its product in India after almost a 20-year absence, by … Next Page »

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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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One of the Boston area’s most intriguing tech startups—because of its global reach—has emerged from a fairly quiet period with a new name and a refined mission.

Boston- and San Francisco-based Txteagle, a mobile research and marketing startup focused on developing countries, has rebranded itself as Jana (pronounced “Jah-nuh”). The name is Sanskrit for “people,” and as co-founder and CEO Nathan Eagle explains, it highlights the focus of the young company. It also fits the aesthetic profile of what the team wanted in a name: “It’s short, has two consonants and two vowels, and is easy to recognize and spell,” he says.

Yes, Eagle is a precise kind of guy. Precisely crazy enough to think his startup can change the world by enabling companies to do market research and mobile marketing in nearly 100 developing nations (and counting) via mobile phones. All by compensating consumers for participating by rewarding them with airtime on their mobile subscriber accounts.

This is interesting because, first of all, most brands and ad agencies don’t have good access to detailed data about consumers in emerging economies. “We want to generate data that simply doesn’t exist,” Eagle says. And, second, Jana has a way of reaching a lot of people with what sounds like a pretty compelling offer. “As far as I know, there’s no other company on Earth that has the capability to instantly compensate 2 billion people,” he says.

Where did this company come from? Ten years ago, Eagle (see photo, below) was a graduate student in the wearable computing group at the MIT Media Lab. He convinced his advisor to let him program a Nokia phone to collect data about his behavior and surroundings, instead of strapping on bulky equipment like other students. “So I wouldn’t have to dress up as a computer for the rest of my graduate career,” he quips. “I’ve been hacking on phones ever since.”

He finished his PhD in 2005, and wanted to make an impact on people’s lives through mobile devices. Mobile phone adoption was taking off fast in Africa, so Eagle took a faculty position at MIT but arranged to live in Kenya, where he taught mobile-app development at the University of Nairobi.

That led to a number of interesting projects. One was an app to enable rural nurses to send text messages about the local blood supply levels in their hospitals, so that centralized blood banks could see where blood was needed. (Previously this was done by having people drive from hospital to hospital, with long delays in information flow.) The first week of the release went well, but in the second week, about half the nurses stopped texting. By the end of the month, all the texting had stopped.

“It failed simply because of lack of insight on my part,” Eagle says. “We were asking these rural nurses to send a text message every day with the data. That was like asking them to take a pay cut. The price of a text message was a surprising fraction of their day’s wage.”

So he went back to the drawing board. Eagle’s work was around mobile phones, but it was also around “big data,” he says. “I was working with dozens of mobile operators in East Africa, … Next Page »

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Written on the whiteboard on the first day of my entrepreneurship class at Tufts was a sobering statistic: 80 percent of startups die in their first four years. There exist a variety of factors that can kill a business. Luckily, Boston is full of programs and organizations designed to help entrepreneurs navigate through the startup process. The National Collegiate Inventors and Innovators Alliance’s Sustainable Vision VentureLab, led by James Barlow, is a five-day intensive incubator program for companies doing business in emerging markets (it ran August 26-30). I initially thought that it would be an abbreviated version of a conventional business class curriculum, somewhat similar to what I had experienced in the five-day boot camp organized by MassChallenge: what are the best ways to structure a company, to manufacture, distribute, and market product X in market Y, and how to go about getting VC funding?

On the contrary, it is a back-to-basics introspective program that emphasizes the human element of a business, such as being able to communicate your value proposition in an effective and clear manner. This may sound elementary. The reality is that this is the foundation for any business. James compared it to humming a song in your head. When vocalized you can clearly hear the tune and the words, even though the person across from you may be shooting you a puzzled look. This is a problem many entrepreneurs unknowingly struggle with. Having become so familiar with the intricacies of their businesses, they have lost the ability to break it down into its simplest and most coherent forms. When hearing these entrepreneurs pitch, the listener finds himself unable to understand the core of their idea, akin to listening to a hummed song.

Oftentimes, the founders themselves are confused and are unknowingly in disagreement about what the value proposition of their businesses is. Even if they are aware of the value proposition, they are unable to translate it in a way that speaks to the wants and needs of their market. That is why the VentureLab program focuses so much on deconstructing the human element aspect of your business. This is often a tricky process because it requires you to examine your business in a manner in which you are unaccustomed to and uncomfortable doing. At Roof For Two, we looked at all the factors that could sink our company and discovered the need to connect with different influencers in our product market. It became an exercise in stitching together our business and value proposition in a manner that resonated with each one of these individual actors. For example, our company provides a motorcycle weather accessory for riders in India to shield themselves from the monsoon rains. It saves them time in their commute and increases the efficiency of businesses whose employees lose time when seeking shelter from the downpour. When we started looking beyond our end user and examined other people potentially impacted by our product, we began asking ourselves very different questions from the ones we had originally posed. We had initially asked: What do Indian motorcyclists look for in a product? How will our product affect their lifestyle?

However, during VentureLab we looked beyond the commuter towards businesses, institutions, and society. We asked ourselves very different questions: What businesses stay open during the heavy monsoon season? Would small businesses have incentives to subsidize our product for their commute sensitive employees? How do we best communicate our value proposition to both the commuters and the businesses that depend on them?

Besides the introspective portion, part of the learning process in programs such as VentureLab comes from the interaction between participants who can help one another, despite operating … Next Page »

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Lean startup, schmean startup. There’s more than one way to build a Web company.

Just ask Coach Wei, the founder and CEO of Yottaa, a two-year-old tech startup in Cambridge, MA. Yottaa (pronounced sort of like the green Jedi master) makes software tools to help business websites run faster, monitor their performance, and generate sales more efficiently—a field known as Web performance optimization. In a previous life, Wei worked at data storage giant EMC (NYSE: EMC) and founded business software firm Nexaweb Technologies. He is a graduate of MIT and Tsinghua University in Beijing, China, which foreshadows the approach he is taking with his current startup.

Over lunch recently, Wei talked in depth about what he’s doing with Yottaa. You might call it the “anti-lean startup” (my description, not his). In some ways, it is the opposite of the lean startup model, coined by Silicon Valley entrepreneur Eric Ries, which involves having a small team, creating software prototypes quickly, and using customer feedback to rapidly iterate code. The process is much faster than traditional software engineering and uses methods such as “agile” software development and “customer development.”

As Wei explains, that approach works well for some social media and Web startups, but not all. In particular, he says, if you’re trying to build a company that will be able to grow from, say, $1-5 million in revenue to $50 million, you could run into difficulties with the lean startup model. If you start small and local, ramping up to hire a team of 100 people in Boston or San Francisco will be almost impossible because of the current talent crunch and skyrocketing cost of good developers. “There’s a huge scalability gap,” Wei says.

So he’s trying something different at Yottaa—and he’d probably be the first to acknowledge that it might not necessarily work. The idea, he says, is to be “global from day one and have scalability built in.”

Translation: hire most of the team in Beijing and the rest in the Boston area, from the start. “We try to integrate the best of here, and the best of China, to build a company,” he says.

This is different from offshoring, he says, because it’s not about cost, and the Beijing employees are not seen as second-class citizens. “You don’t do it for the sake of cost saving,” Wei says. “You have to think of building a scalable growth engine into your company. You have to build it into your DNA.” More specifically, he says, it’s about “how to leverage the global workforce.”

Here’s how I see it. Plenty of U.S. tech startups—and big companies—make use of developer talent in other parts of the world like Brazil, China, and Eastern Europe. But few are building their … Next Page »

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If you see a couple of guys riding around on a motorcycle with a weird contraption over their heads, don’t worry, it’s not the latest fraternity hazing ritual. You might have caught a glimpse of a local startup testing out what could be a very global product. Especially if it’s raining.

Boston-based Roof For Two is developing a collapsible, detachable roof that can be pulled over a motorcycle in a few seconds to protect the rider(s) from heavy rain. Yes, it’s kind of a quirky idea. But it just might work. The seven-person startup, which is a finalist in the MassChallenge incubator program, came out of Tufts University, where it won first place in the Tufts $100K business plan competition this spring.

The idea came from founder and CEO Karan Randhawa, a native of New Delhi, India, and a recent Tufts grad. He was working in New Delhi and noticed that his colleagues were coming in sopping wet during monsoon season. Many people there rely on motor bikes to commute, yet there isn’t much they can do to shield themselves from the incessant rain except to use a poncho, umbrella, or other improvised method (see photo above). So Roof For Two is targeting Indian consumers exclusively for now.

The company’s bike roof is designed to protect up to two riders from the top, sides, and back, says co-founder Max Pinto, who serves as chief marketing officer. Pinto says the material is “very lightweight,” and the system is designed to be safe for speeds of up to about 100 kilometers per hour (and maybe faster in the future).

Roof For Two has just filed a provisional patent on the technology. Until now, it has been pretty cagey about the details. The startup is in the process of finishing its third prototype and has been testing and tweaking various models—hence the bike rides around the Boston area. (The team bought a motorcycle that resembles the most popular bike in India to do its tests here.)

Pinto might not have the best last name to represent a transportation-related company (as those of us alive in the ‘70s will attest), but he makes up for it with his drive, enthusiasm, and general worldliness. He’s a native of France and has lived in the U.S. and Argentina. And he says the Tufts competition, entrepreneurship classes, and all-night work sessions helped the team learn how to craft its business plan and better understand the market it is going after.

The dynamics of the Indian market make it “drastically different from how you would market to Americans,” Pinto says. “They think differently,” he says, pointing out that the Indian middle class is broken up into many tiers, and each has a distinct mentality. (He didn’t get into specifics yet about how the company will sell its hardware to the different tiers, but I presume that as usual, it’s about understanding the problems of each customer and solving them in a reliable and affordable way.) About his current incubator experience, he says MassChallenge is “fantastic” and has opened a lot of doors for the startup.

By late August or early September, Roof For Two plans to build about 25 prototypes and ship them off to Delhi, where Randhawa is based, for consumer testing. If all goes well, the company will then look for a first round of outside investment to help it produce 100 to 200 prototypes for further testing.

For now, the startup has a simple goal, which is reflected in its tag line: “making monsoons manageable.”

By the way, it looks like rain is expected in Boston on Sunday and Monday. So keep your eyes peeled.

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I recently had the pleasure of taking a two week academic trip to China with Babson’s MBA program, where several dozen of my classmates and I were led through Beijing, Dalian, and Shanghai by the inimitable Robert Eng. During the course of the journey, our group visited with government officials, leaders from state-owned enterprises, and a number of businesses operated by domestic and foreign owners. While there are many interesting and non-trivial idiosyncrasies of doing business in China, such as the need for government contacts, I thought it would be more informative to share some of the broader business trends that became clear during the course of our visit.

First, China is beginning to capture more of the value chain. As the world’s third largest manufacturer, China has developed a solid reputation as a nation that builds products for Western companies to attach their brands. Apple is one of the most famous examples of this. Perhaps more surprisingly, Nike and Reebok both have their shoes manufactured in the same facility. Li Ning, China’s leading sports apparel maker and the number four sports apparel company in the world, also has its shoes made there. If you’ve heard of Li Ning, you’re ahead of the curve. If not, you probably will soon. Li Ning has begun opening stores in the United States and other countries overseas. In the U.S., it decided to launch its pilot store in Portland, OR, which seems like an odd choice until you realize that it’s right in Nike’s backyard. It’s a bold statement from a bold company and serves an appropriate example for the changing mentality of Chinese business; no longer content with the margins available to them making things for others to sell, the Chinese are now looking for ways to move up the value chain and capture the margins commanded by being a globally recognized brand.

Second, China is starting to look inward for markets. While the rest of the world is still staggering from financial crisis to financial crisis, China’s chugging along at a brisk 9 percent annual growth rate. Shanghai has joined the list of top tier metropolises, on par with London and Moscow, complete with a Starbucks and a McDonald’s around every corner. Shopping malls are awash in luxury brands. With that kind of affluence at home comes increased spending power, and Chinese companies are beginning to recognize the potential of the domestic market. (By Chinese companies, I also mean the Chinese government. State-owned enterprises still command roughly half of the country’s industrial assets, and the government has tentacles in just about every successful business in the country, private ownership or no.) As evidence of this, the 12th Five Year Plan explicitly discusses the yawning trade imbalance that China has created with the U.S. and other nations, and proposes to address this dependence on foreign consumption by directing more goods to the domestic market. It’s uncertain what the government will do about Chinese households’ astronomical savings rate.

Third, national stability is not a guarantee. Incidents of social unrest have been growing more frequent in the past couple years. Chaffed by a widening wealth disparity and the trampling approach to development, Chinese citizens are expressing their dissatisfaction in a way that makes government officials and many members of the business community nervous. Restrictions on freedom of speech and the flow of capital have done a great deal to boost the Communist Party agenda of security and growth, but they’ve also created an economic and social pressure cooker. The 12th Five Year Plan seeks to address these concerns by explaining how the government plans to handle rising inflation and housing costs (regulatory controls), the income gap (higher taxes for the rich), and the blistering pace of development (cleaner environmental standards and lower growth targets). Perhaps more revealing, social stability was a concern voiced by several businessmen we visited during the trip. One Chinese business leader who spoke to our delegation put it especially elegantly: “China will continue to grow as long as the Communist Party is in power. The Communist Party will stay in power as long as China continues to grow.”

The state of Chinese development offers an interesting puzzle: free market incentives bounded by strict financial and political controls. The tremendous opportunities of doing business there are matched by equally tremendous challenges. From this point in history, it almost seems possible that Communist China will continue growing in perpetuity, achieving global dominance in our lifetimes. Or the entire system could collapse spectacularly, and we will ask each other why we didn’t see it coming. 

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[Editor's note: Cross-posted from The Economist, 6/16/11]

As the G8 last month pledged $10 billion to aid the Arab Spring to support the building of economic and political institutions, the May 24th NASDAQ debut of Russia’s $10 billion Yandex was but one of many green shoots of an equally significant Entrepreneurial Spring blossoming out from Chile to China, and Israel to India. Led by two brilliant entrepreneurs who knew how to take native search engine technology and implant it in the emerging Russian marketplace, for over a decade, Yandex, a Moscow-based Internet venture, had been growing inside of its language-walled garden. Finally, after a planned 2008 IPO was foiled by the economic crisis, this ambitious venture burst onto a global stage with the largest NASDAQ Internet offering in recent history.

Like its Middle East counterpart, the Entrepreneurial Spring is a grass roots movement, and, although fertilized by innovations originating in the United States, it is fundamentally global and only loosely connected to America. China’s RenRen, Estonia’s Skype, Japan’s Rakuten, and Bangladesh’s GrameenPhone represent ripe fruits of the last decade’s entrepreneurial investments in environments outside the U.S.

Also similar to its Middle East counterpart, the global Entrepreneurial Spring can lead to the democratization of opportunity and increased control by citizens over their own economic fates. However, just as the Arab Spring is a first fraught step on a long, even treacherous, path, so is the Entrepreneurial Spring neither a panacea nor a fait accompli. Left unaided, exposed to the vicissitudes of climate and availability of resources, the fragile shoots can easily be stunted or trampled. To take root, they will require enlightened leadership and the patient cultivation of a rich environment of institutions and norms in order to become part of a self-sustaining ecosystem.

To sustain and spread these new ventures, like political democracy, leaders everywhere—not only publicly elected leaders, but a broad base of leaders of public and private, formal and informal, institutions—need to democratize the entrepreneurial choice without over-controlling it. That will require deliberately fostering an entrepreneurship ecosystem that (a) is conducive to increasingly broad numbers of citizens making the choice to take their economic futures into their own hands, and, (b) after that choice is made, facilitates the broad, merit-based access to the resources—capital, human, cultural, institutional, educational, and legislative—required in order to be successful. The helping hand and the invisible hand must clasp each other.

Fortunately, there are also green shoots of such enlightened leadership. Startup America, StartUp Britain, Startup Africa, and Start-Up Chile are but a few outward manifestations of the new national priority that leaders are assigning to entrepreneurship. Kauffman Foundation-initiated Global Entrepreneurship Week, launched less than three years ago, already conducts 100,000 discrete activities in more than 100 countries. In four years, Startup Weekend has spread to more than 100 cities in 30 countries with 30,000 participants. These two private initiatives, impressive by themselves, show that leadership of the Entrepreneurial Spring can and must go beyond government.

The bubbling up of the Entrepreneurial Spring shouldn’t be confused with the capital market bubble of social media valuations. Up-and-coming next generation stars from Lebanon (SABIS; management of K-12 schools in 15 countries), to Slovenia (Studio Moderna; multi-channel retailing in 20 countries), to Brazil (Tecsis; wind-turbine blades for the US and Europe) to Iceland (Actavis; generic pharmaceuticals in 40 world markets) show that entrepreneurship spreads far beyond the latest Internet technology. These rapidly growing, high potential ventures––and thousands like them––may still be under the public radar, but they are already having huge impact in their respective fields; no less importantly, they are making their economies more competitive, their citizens more prosperous, and they are creating jobs for many and inspiring further entrepreneurship in others.

For those countries not yet blooming with new ventures, get ready. As the successes become more visible and prove that value-creating entrepreneurship can and does happen anywhere and everywhere, the cultivation of a conducive ecosystem will not be a “nice-to-have” opportunity but a “must-have” necessity. Citizens everywhere will expect and demand the equal access to the possibility of prosperity that entrepreneurship can provide.

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You might call it the perfect up-and-coming Boston tech startup. A mix of higher education, financial services, and a global market. The brainchild of an MIT student entrepreneur. A company with the support of a young, well-connected Boston venture capitalist and many notable angel investors.

I’m talking about Cambridge, MA-based peerTransfer, which has 17 employees split about half-and-half between Dogpatch Labs in Kendall Square and an office in Valencia, Spain. Founder and CEO Iker Marcaide, 28, started the company in part to address some personal pain he experienced as an international student. It all started when he had to pay his MIT tuition from a European bank, and got stuck with high transaction fees and a bad exchange rate that cost him thousands of dollars.

Inspired by that experience, his startup has zeroed in on its target market—helping international students make online payments to U.S. colleges through peerTransfer’s website. The company’s software plug-in is now being used by schools such as Suffolk University, Wellesley College, Reed College, Bryn Mawr College, and the College of Wooster. (PeerTransfer is demoing its technology at the Finovate conference in San Francisco this week.)

The first time I spoke with Marcaide was last June, almost a year ago. He was only a few hours removed from a late-night beach party in Barcelona, where peerTransfer had just won a 20,000-Euro prize at the HIT Global Entrepreneurship Competition. Marcaide, a native of Spain and the son of an astrophysicist, is an engineer by schooling who worked as a management consultant before getting his MBA at MIT’s Sloan School of Management.

Last fall, peerTransfer raised a $1.1 million seed financing round from Spark Capital, Project 11 Ventures, and angel investors including John Landry, Ken Morse, Roy Rodenstein, and Dave McClure. Spark Capital’s Alex Finkelstein, a general partner, led his firm’s investment in the startup. He recently told me about the first time he met Marcaide.

It was at a warm-up event for the MIT $100K Business Plan Contest, last spring. Finkelstein was there for a series of short meetings with entrepreneurs, and Marcaide wasn’t even on his schedule. But the young Spaniard (who comes across as quite friendly without being pushy) came in and started talking to the VC about his startup. The two hit it off, and Marcaide followed up with a phone call a few months later, after peerTransfer had hit some more milestones.

“We met on a Thursday and had a signed term sheet on Tuesday,” Finkelstein recalls.

What stands out to Finkelstein is that peerTransfer is trying to solve a problem that is “painful for the student and painful for the school,” he says. Marcaide says his service can save students on the order of $1,000 a year or more, and saves schools the time and hassle of dealing with unidentified wire payments and manual posting into student accounts. PeerTransfer says it saves students money by collecting their home currency, bundling purchases of U.S. dollars in the market, and then … Next Page »

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He says he is “part entrepreneur, part educator…part ambassador, part politician.” Who is this masked man?

He’s Gordon Jones, the inaugural director of the Harvard Innovation Lab, and until last week many people in the startup community might not have known who he was. I’m just starting to get to know him, having talked with him on the phone from the West Coast (where he was earlier this week). So this isn’t going to be a rigorous analysis of his new job or anything, but let’s just say the man has his work cut out for him. Given all the twists and turns in what he calls his “custom-created career,” I’m betting he just might be up to the task.

The Harvard Innovation Lab is a new, $20 million center for entrepreneurship that is slated to open this fall. The 30,000-square-foot space, still under construction, is located where WGBH-TV’s studios used to be in Allston. The “i-lab” will house classrooms and meeting space for students, faculty, investors, and local businesses, as well as provide business development resources and develop new classes and programs focused on innovation. It will also operate as a nonprofit incubator of new companies. The broader goal, Jones says, is to encourage entrepreneurship and commercialization across all of Harvard’s various schools—arts and sciences, engineering and applied science, business, law, and government.

“The promise is to be a home for entrepreneurs at Harvard,” he says.

And the unstated goal? To keep the next Bill Gates, Mark Zuckerberg, or Tony Hsieh—all Harvard undergrads at some point—from moving his or her company (Microsoft, Facebook, Zappos) out of Boston. Harvard thinks it’s found the man to lead the effort.

Jones, 42, is a former marketing and sales exec and an expert in consumer goods. He talks like every well-polished MBA you’ve ever known. But he brings real experience selling real stuff you can get your hands around—everything from Oral-B toothbrushes and newfangled dental floss, to window and glass scraper tools, to a “mosquito magnet” that uses propane and a catalytic converter to keep pests away. He has done time at Gillette, American Biophysics, and Universal Pest Solutions, and he has experience selling to international markets like Asia and Latin America. All of that will be useful in advising student teams on product-market fit and building partnerships with businesses across a wide range of industries.

“Fundamentally, I have such respect for R&D groups, whether they’re people working on toothbrushes or coders working on technology,” he says.

Jones also brings some more recent educational experience. He has taught marketing and entrepreneurship at Bentley University since 2007, and also works with Harvard Business School’s admissions office. He says he hopes to cultivate an environment where student entrepreneurs think big and “celebrate the journey.” And that applies across different levels of interest—from students who are curious about entrepreneurship to those in the idea stage seeking mentorship, to … Next Page »

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Are Americans more social and Scandinavians more interested in making things? These questions came to my mind when we recently compiled our annual list of Sweden’s 33 most innovative startups at Ny Teknik, a Swedish weekly magazine covering business, technology and science news.

The companies in the finished list, as well as those (several hundred) candidates that didn’t make it, seemed to be more geared towards what you might call “hard technology” than those on similar lists from the U.S., where there is a lot of interest in “soft technology.”

“Social” is hot among American entrepreneurs and investors, while manufacturing technology can at most be considered lukewarm.

We, on the other hand, had one company on our final list developing new low-friction coatings for bearings and axles in automotive applications, another focusing on advanced cross-binding agents for polymers, and a third with a highly advanced embossing process for producing holographic signs and stickers. Not to mention the ones that were sorted out during the ranking process, like the guys with a new method for aluminum casting that saves energy, gives better quality in the finished goods, and a more rapid manufacturing process.

I’m not talking about a clean-cut dichotomy. There is a great deal of overlap; biotech and cleantech, especially in the energy field, are clearly attracting a great deal of interest—and money—on both sides of the Atlantic. Still, the difference in focus is evident, but why is that so?

The simplest explanation would be to attribute it to cultural differences, to argue that Americans have more of a knack for making friends and influencing people. While Scandinavians are more concerned with making things. (We, or at least the Danes, gave the world Lego bricks, didn’t we?)

A more reasonable explanation is perhaps that startups tend to reflect the existing enterprise structure. Sweden has still got a large manufacturing industry; with two heavy truck and two car manufacturers there is a nearby market for a startup in low-friction coatings. There is a pool of talented people who have first-hand knowledge of the sector, including investors, consultants, and experienced managers. While in the U.S., the success of Facebook, Twitter, and the like has fostered a herd of new social-media entrepreneurs and investors. In other words, success breeds success.

If this is the real explanation, it also leads to a somewhat depressing conclusion. What our late-industrial societies need is break-out innovations, the ones that not only reflect what we’ve already got, but can grow into something totally unexpected, like Google did a decade ago. Instead, Larry Page exhorts his employees to be even more “social.”

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The mobile hits keep coming—though I guess “mobile” is officially redundant in the tech world now.

Boston- and San Francisco-based Txteagle, which makes a mobile-messaging platform for developing markets, has raised $8.5 million in Series A financing led by Spark Capital in Boston. The company’s other seed investors, Flywheel Ventures, RBC Venture Partners, Qualcomm Ventures, and New York angel investor Esther Dyson, also participated in the round. The news was reported earlier by All Things Digital, the Boston Globe, and Mass High Tech.

Txteagle is led by CEO and co-founder Nathan Eagle, a Stanford and MIT Media Lab alum. The company, which started in 2009 (when Xconomy first wrote about it), focuses on software for mobile marketing and market research via text messages, with a twist. Through partnerships with wireless carriers in dozens of countries from Afghanistan to Kenya to Vietnam, Txteagle helps companies and organizations compensate consumers and workers for their texting airtime, which can be expensive. (Basically it’s a way to reward people for responding to mobile ads, and to do good too.)

For those who complain that Spark Capital doesn’t make enough investments in Boston-area startups, Txteagle is just the latest counterexample. Spark has also invested in peerTransfer, 8D World, and Linkwell Health, to name a few recent deals.

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A New England energy giant is making big strides overseas. Devens, MA-based American Superconductor (NASDAQ: AMSC) said today it plans to acquire The Switch Engineering Oy, a power technologies firm based in Finland, for 190 million Euros (about $265 million) in cash and stock. The deal is expected to close by the end of August.

American Superconductor, which focuses on wind power and other renewable energy technologies, says the acquisition will make money immediately and will support the firm’s growth to $1 billion in annual revenue by 2014. The Switch makes power converter systems, permanent magnet generators, and other equipment for wind turbine manufacturers in China, Europe, Korea, and the U.S. The Finnish company made a profit of about $15 million on $179 million in revenue in calendar year 2010.

AMSC’s fiscal year 2009 (ending March 31, 2010) was its first full year of profitability, thanks in large part to its wind power business. The company says it expects “another record year of revenues and earnings in fiscal 2010,” which ends this month.

AMSC, which was founded in 1987 by four MIT professors (including current CEO and chairman Greg Yurek), initially entered the wind power market in 2006-2007. The company has a strong presence in Europe, China, and India.

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For some people, innovation is not enough. Gururaj “Desh” Deshpande is one of those people. Let’s just say the Boston-area tech entrepreneur and billionaire philanthropist has earned the right to make such a claim.

“For innovation to have impact, it needs relevance,” he says. “Innovation plus relevance equals impact.”

Deshpande is talking about global impact, but his latest project is in his own backyard. Last month, his foundation committed $5 million over the next five years to support a new innovation center housed at the University of Massachusetts Lowell. The Merrimack Valley Sandbox, as it’s called, will work together with local colleges and nonprofits to boost entrepreneurship among students and professionals, and to develop local leadership through mentoring and seed funding programs.

The new initiative has similarities to the Deshpande Center at MIT and a social entrepreneurship center Deshpande set up in northern Karnataka, India—with some big differences. But to understand what Deshpande is really trying to accomplish with the Merrimack project, you need to know more about his story.

Gururaj Deshpande grew up in India and studied electrical engineering at the Indian Institute of Technology in Madras (Chennai). He went on to do his PhD in data communications at Queen’s University in Ontario, Canada. Starting in the late 1980s, he founded a series of successful technology companies—Coral Networks, Cascade Communications (which sold to Ascend Communications for $3.7 billion in 1997), Sycamore Networks (NASDAQ: SCMR), and Tejas Networks. He currently serves as chairman of Sycamore, Tejas, and A123Systems, among other top-level duties.

The success of Cascade and Sycamore made Deshpande a wealthy man, and he and his wife Jaishree set up the Deshpande Foundation in 1995. Its unifying theme has been to foster innovation ecosystems and social entrepreneurship. Its first major initiative was setting up the Deshpande Center for Technological Innovation at MIT in 2002. That organization has been active in providing grants to MIT labs, connecting faculty with the business community, and more generally tying ivory- tower research to market realities.

“In society, thinkers all come together, and they come up with new ideas,” Deshpande says. “But as they keep coming up with new ideas, they have to play the game of impressing each other”—whether that means other professors or government funding agencies. “In the process they lose the ability to have impact,” he says, because of a lack of relevance to real-world problems (and products). “The center at MIT is about bringing that relevance.”

After a few years, Deshpande looked at setting up something similar in his native land. “But somehow doing nanotechnology in India didn’t sound that exciting,” he says. Instead, he thought, … Next Page »

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[Corrected, 4:40pm. See below] Last month, Jon Medved, the founder of Jerusalem-based Israel Seed Partners, a multi-million dollar venture capital fund, came to the University of Michigan to give a lecture on high-tech development. But Medved wasn’t there to talk about Silicon Valley or another U.S. startup hub. Instead he was meeting with a group of students to discuss the future of Israel’s high-tech economy.

Medved’s visit to Michigan was made possible by TAMID Israel Investment Group, an organization founded three years ago by two U-M students. The goal of the group, which has already expanded to a handful of campuses across the U.S., is to give business-minded students a way to connect to the Israeli economy, according to TAMID’s executive director Brett Siegal, a senior in Michigan’s business school. [An earlier version of this story reported that Medved had visited UC Berkeley, not Michigan. We regret the error---Eds.]

Though there are hundreds of campus organizations that connect Jewish students to Israel through cultural or academic activities, Siegal says that before TAMID (which translates to “always” in Hebrew), there was no outlet for students to make connections in a more business-oriented way.

And through a three-phase program, the group’s members get to do just that. The students get a crash course in important business concepts, and the chance to invest the group’s fund of Israeli securities or to do consulting work for a variety of Israeli companies. In addition, TAMID sends the students to Israel—and pays many of their expenses—for internships with Israeli companies or multi-national corporations with offices in the country.

Though the group works with companies ranging from a startup focused on solar housing to big firms like Thomson Reuters, Siegal says the nature of the Israeli economy means that much of TAMID’s work is focused on startups and the high-tech sector. “It’s about a 30-year-old economy, essentially, as a developed economy,” Siegal says. “The economy, for a number of different reasons, sort of spawns a lot of startups.”

According to Siegal, the Israeli government sponsors about 20 startup incubators and also participates in institutionalized venture capital programs that match private investments.

Though Israeli government involvement plays a large role in the proliferation of startups in the country, Siegal says the nature of Israeli culture also helps to foster self-starters. Compulsory military service “creates these very self-motivated people,” Siegal says. In addition, many of the immigrants that came to the country in large waves from the Soviet Union during the 1970s and 1980s were scientists in their home countries, and the Israeli government attempted to help these immigrants commercialize their ideas.

It’s for all of these reasons that Israel “has the highest level of startups outside of Silicon Valley,” according to Siegal. In addition, the country is home to between 3,000 and 4,000 high-tech … Next Page »

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It has been a ridiculously busy week for EMC—and for everyone else, it seems. For starters, the Hopkinton, MA-based data storage giant (NYSE: EMC) announced record quarterly revenues for the third quarter of 2010. Yesterday the firm hosted its fourth annual innovation conference from its center in Cork, Ireland—which amounted to a company-wide session on strategy and research, the largest of these gatherings to date, involving 15 EMC facilities worldwide. And in other news, the rumor mill has been buzzing with talk about EMC being a possible acquirer of Seattle-based storage firm Isilon Systems (NASDAQ: ISLN), in a deal that reportedly could be worth upward of $2 billion.

Amid all this activity, EMC chief technology officer Jeff Nick took some time to talk with me last week about the company’s broader innovation strategy—tackling aspects that are internally and externally focused, home-grown and acquisition-based. Like IBM (NYSE: IBM), one of its main competitors, EMC is known as an aggressive acquirer of companies, using new businesses to further its technology and attack new markets—witness its recent purchases of Mozy, Greenplum, and Data Domain. But it’s also known for pursuing some pretty interesting in-house initiatives aimed at turning cutting-edge research into technologies and services that its product groups can use.

Unlike big tech companies such as IBM and Microsoft (NASDAQ: MSFT), EMC doesn’t have a big traditional research organization charged with advancing the state of the art in technology. Instead, EMC pursues more of a virtual model—an “innovation network” (run by Burt Kaliski, formerly of RSA) that consists of virtual centers as well as a few physical research facilities, and collaborations and partnerships with academic researchers at places like MIT, Harvard University, Carnegie Mellon University, Stanford University, University of Michigan, and Tsinghua University in Beijing. The topics of its R&D projects include things like scalable file systems, Internet cloud security, and data availability on peer-to-peer networks.

In our recent chat, Nick didn’t deviate too much from his message about EMC’s innovation network and conference, but I did get him to open up a little about how the firm balances its in-house R&D with its acquisition efforts, how it works with and thinks about startups and smaller businesses, … Next Page »

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Adriane Brown was the CEO of Honeywell Transportation Systems, based in the Los Angeles area, when she got a call from a headhunter last year. The next thing she knew, she was talking with Intellectual Ventures, the Bellevue, WA, company focused on the business of invention. One thing led to another, and Brown is now the president and chief operating officer at Intellectual Ventures, helping run the daily operations of the 600-strong firm led by co-founder and CEO Nathan Myhrvold.

Brown admits she was an outsider to the company, and new to its whole concept of supporting inventors, and investing in both new and existing inventions and patents. In fact, her outside perspective is probably one of her strengths. Brown says that when she first looked into Intellectual Ventures as a place to work, she thought, “This company has done something unique and could have a huge impact on the world.”

In her new role, Brown has responsibilities in “all of the key functions across the company,” she told me recently. She has about 10 direct reports, and the biggest adjustment for her has probably been the transition to a smaller, private company. But that transition seems to be going fine. “I just love this job. It is exactly as advertised,” Brown says. “It is a neat addition to my career.”

Brown’s experience is both broad and deep. She spent 19 years at Corning (NYSE: GLW), the materials and manufacturing giant, where she rose from the rank of shift supervisor to vice president and general manager of environmental products, and became an expert in the automotive industry. She then moved to AlliedSignal, which acquired Honeywell (NYSE: HON) in 1999 (the merged company is called Honeywell). There, she distinguished herself in the aerospace sector, becoming president and chief executive of Honeywell Transportation Systems, a $5 billion business unit. Before all of that, Brown studied environmental health at Old Dominion University (where she later received an honorary doctorate in humane letters) and got a master’s degree in management at the MIT Sloan School of Management as a Sloan Fellow.

I recently had a chance to speak with Brown and hear about her first 100 days on the job. She started on January 1, and this was, to my knowledge, her first media interview since joining. We didn’t have time to drill down into new details of the company’s strategy, but I got the sense that she is both a process person and a people person, and that she brings a unique worldview to Intellectual Ventures’ leadership. Here are some condensed and edited highlights from our conversation:

Xconomy: You talked about having impact on the world. Can you give some examples of how your background fits with Intellectual Ventures’ broad vision?

Adriane Brown: My undergraduate degree was in environmental health. Over time, as I spent a number of years at Corning, I rose to lead the catalytic converter business. While it was the automotive industry, we were incorporating a technology that makes a difference in the world. When I traveled to Third World countries, the first thing I noticed was the pollution.

After Corning, I was looking to be uncomfortable. I find it exciting to step into a situation … Next Page »

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It’s an exciting day for Joe Lauer. The Seattle entrepreneur and founder of Cloudhopper, a mobile messaging service, just told me his startup has been acquired by Twitter, the micro-messaging giant based in San Francisco. Financial terms of the cash-and-stock deal weren’t released, but Lauer and fellow employee Kristin Kanaar have joined Twitter full-time. Lauer says he will stay in Seattle and commute to San Francisco regularly.

Lauer couldn’t give any specifics about the purchase price, but he says, “I’m super happy with it. It’s a great early exit. It was good enough to get me to exit early, let’s put it that way.” The deal is Twitter’s fourth acquisition overall, after Surmise, Myxer, and the Tweetie iPhone app. It is Twitter’s first Seattle-based purchase.

Lauer founded Cloudhopper in late 2008. Previously he had co-founded Simplewire, an SMS text-message aggregator, in 2001. That company was bought by Seattle-based Qpass in 2006. Lauer stayed there for two and a half years before using the money he made from the acquisition to start Cloudhopper.

Cloudhopper makes software and infrastructure to help optimize how text messages flow, so that companies can make SMS programs that work at huge volumes and across different geographies. “As Twitter grows around the world, if we want to service Indonesia really well [for example], we want to keep SMS and tweets localized in a data center in Asia,” Lauer says.

In other words, Cloudhopper handles the routing through data centers in an efficient way, with a focus on international mobile operators. “We’re going to really aggressively expand and keep adding on carrier partnerships overseas,” he says. “It’s going to become more and more important as we add more countries around the world.” Currently people can tweet via SMS in about 30 countries. Lauer says that “about 100 operators are coming up over the next year.”

Lauer’s connection to Twitter actually dates all the way back to his days at Simplewire. “We were Twitter’s first SMS aggregator years ago,” Lauer says. At that time, Twitter founders Biz Stone and Evan Williams were running Odeo, and that’s how Lauer knew them.

Twitter has been using the Cloudhopper service for the past eight months. “I had no plans of selling now,” Lauer says. “It was kind of a coup when I won the Twitter business.” The bulk of his business before that was in wireless consulting for companies including Seattle-based Ground Truth (another “Qpass mafia” connection, as Ground Truth is led by former Qpass president Sterling Wilson).

Lauer says Cloudhopper was handling a billion SMS messages per month on behalf of Twitter. “With those numbers, they’re the single largest mobile program in the world,” he says—much bigger than, say, “American Idol” SMS voting. (Which is interesting, because until recently nobody really knew how big Twitter was.)

Cloudhopper had seven employees before it was acquired, some of whom will be joining Twitter full-time. Lauer now works in Twitter’s mobile group, which has a dozen people. He reports to Twitter’s head of mobile, Kevin Thau, who also used to work at Qpass, out of Atlanta.

Lauer says there are now a handful of Twitter employees based in Seattle, but no local office space as of yet. “Twitter’s hiring like crazy,” he says. “There’s a lot of good momentum in the area.”

Meanwhile, at San Francisco headquarters, where Lauer was today, late-night TV personality Conan O’Brien stopped by to meet and greet the staff (see photo; Lauer is on the right, Kanaar on the left). “It’s more like a media company these days,” Lauer says.

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Bellevue, WA-based SinglePoint, a mobile messaging software company, announced today it has acquired M2Junction, a leading mobile advertising startup based in Hyderabad, India. Financial terms of the deal weren’t given. The move should make it easier for SinglePoint to connect with and sell its services to content publishers, mobile operators, brands, and ad agencies in India.

It looks like a significant step in SinglePoint’s global expansion strategy. India is one of the fastest growing text-messaging markets in the world, with some 525 million mobile subscribers as of December 2009. And in general, text messaging (SMS) is considered one of the most powerful channels for brands to reach new audiences and do mobile marketing. M2Junction, for its part, is already a SinglePoint partner, and a collaborator in terms of market positioning and knowledge of the Indian mobile ecosystem and culture.

Gowri Shankar, SinglePoint’s new CEO, noted in a statement that there is “an incredible mobile advertising opportunity” in India. “We at SinglePoint want to be a part of this growth and revolutionize the Indian industry with our offerings,” he said.

SinglePoint makes a Web-based software platform for handling transactions in contextual mobile advertising—delivering things like brand messages and interactive coupons within text messages. With its move into the Indian market, the company says it is looking to deliver more than a quarter of all the mobile advertising opportunities in India in its first year, and within two years, to become the nation’s biggest player in SMS advertising.

That sounds pretty ambitious, given what must be fierce competition among local companies in India. But in the past few years, SinglePoint has become a leader in helping publishers and brands reach mobile subscribers, and it has expertise in the Indian market. The company, formerly called Wireless Services, was co-founded by former Microsoft and McCaw Cellular veteran Steve Wood in 1996. It has been backed by a slew of venture investors and private equity firms including Ignition Partners, Madrona Venture Group, SeaPoint Ventures, Intel Capital, Northwest Venture Associates, and Rally Capital.

Last week, SinglePoint announced that Swedish mobile giant Ericsson had bought its mobile aggregation business, and that Shankar has become chief executive. Shankar succeeds Rich Begert, who led the company from 2004 until this year and remains on the board.

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