Last week Steve Case wrote an op-ed in the Washington Post called “Give Entrepreneurs Room and They Will Grow the Economy.” For those not familiar with him, Case was the founding CEO of AOL and has been an active healthcare investor, among other things, for the past seven years. My firm, Psilos Group, has co-invested in a health company with with Case’s Revolution Health Fund.

Anyway, it was a very good editorial and one of the statistics within it particularly stood out to me in light of my venture capital role: firms less than five years old have produced 40 million American jobs over the past three decades—accounting for basically all of the net new jobs created in that period. That is a pretty stunning fact and also one that really makes a person scratch their head about current U.S. policy towards startups.  It is worth watching this Kauffman Foundation 3 minute video that is very instructive about start-ups and job creation.

Nowhere is this issue more relevant than in the healthcare industry, which conveniently happens to be the only thing I know anything about. In a world where there is no way out of the healthcare crisis except through the generation of new ideas to solve our healthcare problems, young companies are the golden ticket to new employment.

In his State of the Union speech last week, President Obama specifically stated that he wanted Congress to work with him to institute policies that advance research in medical devices, a field in which the U.S. has long been the leader. However, due to a combination of factors, including several government policies, we are now in peril of losing this supremacy to other nations like China and India. Research is nice, but tax and other policies that support the genesis of new companies and growth of existing ones are better right now in a world where medical device start-ups can’t catch a break. As AdvaMed President Stephen Ubl points out, the Patient Protection and Affordable Care Act (PPACA) imposes a $20 billion annual tax on the medical device industry to help cover the cost of health reform, and this new tax is already causing layoffs at large and small companies. FYI, the companies that sell branded drugs will also be hit with a $2.5 billion excise tax. Add these taxes to the challenges and costs presented by today’s FDA and it’s a toxic cocktail.

The small start-up companies that have answers to our healthcare challenges should be growing, not shrinking, but they are gasping for air in the current environment. I was in a board meeting at a medical device company just last week where we had a frank discussion about the R&D projects we would have to forego in order to cover this medical device tax, which is being imposed equally on large profitable and young unprofitable companies starting in 2014.

If healthcare startups are not allowed to thrive, I can assure you that the jobs in healthcare are not going to come from larger healthcare entities, either. The American Hospital Association has stated that anticipated reductions in Medicaid and Medicare funding and reimbursement will cost hospitals 278,000 jobs as revenue declines in these programs. The pharmaceutical industry has already laid off over 124,000 people in the last three years; expected further consolidation in this field isn’t going to help. The large medical device companies have also been shedding their staffs. It is the young upstarts that make the jobs appear.

As Steve Case clearly says in his op-ed, “America’s best chance to achieve robust, sustainable growth and prosperity is by ensuring that the United States increases its entrepreneurial competitiveness relative to the rest of the world.” There has been some activity in the form of a variety of bills supporting crowdsourcing of young companies (although that is a mixed bag, if you ask me), relaxed Sarbanes-Oxley rules to encourage smaller companies to go public, the StartUp Act, and others. But so far these are bills, not laws, and startups are having a hard time raising financing, particularly in a world where the IPO market is so compromised. It is worth noting, for instance, that in the last four years there were a total of nine medical device IPOs but in the four preceding years there were an average of 13 per year. In the pharma/biotech sector, a similar phenomenon: 26 IPOs in the last four years in total and an average of 21 per year in the prior three years. This is important because IPOs have traditionally given these young firms the capital to grow exponentially, creating many jobs in their wake.

Case refers to a great Thomas Edison quote in his Op-Ed that applies perfectly to the entrepreneur: “Vision without execution is hallucination.” Nothing could be more true, as I have seen hundreds of entrepreneurs over the years I have been a healthcare investor, and it is only those who have the gene for excellent execution that reach nirvana. I can’t say if the others are merely hallucinating, but I have my suspicions.

Edison’s quote applies equally well to our lawmakers, however, who are all running around saying “Jobs! Jobs! Jobs!” when they are not busy pointing out which Republican candidate is the true pillar of family values. Job creation can be the byproduct of these lawmakers’ endeavors but … Next Page »

Comments (1) | Reprints | Share:          

[Editor's Note: We asked selected Xconomists a series of questions designed to zero in on the big issues of the year, including "What would you be willing to throw a punch over?"]

The FDA is the easy target for those of us who are in drug development. But what I am most mad about is the unwillingness of our industry to focus and invest in innovative, high-impact drugs instead of “me too” knockoffs. Thus, my “anger” is focused on institutions that myopically insist on investing in low-risk, copycat ideas that undermine the true strength of our industry over the long term.

Risk-taking and innovation in drug discovery are critical to our field. Aspiring merely to be fast followers instead of striving for innovation is putting our competitive advantage at risk. The entrepreneurial spirit has been key to America’s success in many industries, especially biotech, but there have been several recent events that are stifling innovation.

The downturn in the economy has obviously dampened the financing of new ideas. Changes to patent law arguably encourage long, drawn-out opposition hearings that could be detrimental to the smaller inventor. However, my key concern for our industry is the lack of new and innovative drugs, despite the stunning pace of scientific progress over the last several decades. Not enough companies are focused on innovation and not enough people in charge are taking the right level of risk to actually come up with a new idea that can have a substantial impact on human health. Innovation is the alpha and the omega of our industry and should always be cherished as a way to create valuable and meaningful high-impact drugs.

Comments (1) | Reprints | Share:          

Turns out sonic-wave motors aren’t just good for cleaning your teeth or skin. Seattle startup Revel Body, newly backed by an array of Northwest angel investors, is using a similar motor technology to power a new line of sex toys.

Yep, that’s right—vibrators. Revel Body founder Robin Elenga says the resonant motors that power sonic cleaning products are vastly superior vibration producers when compared to old-fashioned rotary motors powering most adult toys these days, but they’re still not being implemented in the industry.

Revel Body plans to change that. The company, which has been quietly doing bootstrapped research and development for about five years, recently closed an $825,000 seed round from the Alliance of Angels, Puget Sound Venture Club, and Zino Society. The company is readying its first product for retail outlets, aimed at going on sale later this year.

The Seattle area has a prolific history with sonic-wave consumer health devices. A lot of that traces back to the team from Optiva and entrepreneur David Giuliani, who developed the Sonicare toothbrush and sold the company to Netherlands-based Philips in 2000.

Giuliani then took the sonic-wave-creating motor technology to a new venture, Pacific Bioscience Laboratories, which developed the ClariSonic skin-cleansing brush—a consumer hit that cracked $100 million in annual sales before being acquired by L’Oreal USA in November.

Revel Body isn’t related to those companies, but Elenga—a software guy and former consultant for Fortune 500 companies—says the startup is working with a similar type of resonant motor in its device. One major difference, which Revel Body is in the final stages of patenting, is the ability to run the vibrator in a range of speeds rather than at a fairly stable rate, such as with the Sonicare or ClariSonic, Elenga says.

Revel Body’s pitch is that the resonant motor technology allows the device to produce a more vigorous and pleasing vibration, something much more modern and advanced than the old-fashioned devices proliferating the adult market today.

“The big things that consumers don’t like about these products, pretty much the majority of them, come back to the motor,” Elenga says. “It seems like with a vibrator, you’d want to compete on vibration. But nobody is doing that. It’s kind of a head-slapper when you look at it that way.”

Not that consumers haven’t noticed the advantages on their own. “I’ve heard from multiple close sources within Sonicare that there were a lot of people out there in the world using the Sonicare toothbrush as a sexual vibrator,” he says.

Revel Body has been operating on a relatively small budget, spending around $150,000 over the past five years to develop and test the product. The first device, named the Orb, looks a lot different from what you might think for a product like this. Elenga says the resonant motor technology allows different forms for devices, and allows it to be battery powered yet still powerful. The company plans to assemble the products itself from third-party components, with relatively little labor.

Revel Body's Orb

As for the subject matter—this isn’t a mobile-social app we’re talking about, here—Elenga says it’s something that he had to take a little time getting used to at first when doing pitches. But “after about 100 conversations, you get kind of numb to it.”

As a guy, I wondered whether there was a particularly delicate way for him to proceed in pitching the product to investors, partners, or testers, since the target market is heavily female. Wouldn’t there be a creepiness factor to avoid?

Elenga says it’s actually been men who have blanched the most.

“At a couple of groups, virtually every woman in the crowd is smiling and nodding their head. The guys might have smirks on their faces—occasionally a guy would walk out of the room because he was so uncomfortable,” Elenga says. “People would apologize whenever that would happen, but I think it’s good because it shows that this industry is still transitioning into the mainstream. And I think that’s when you want to get into an industry.”

Comments (6) | Reprints | Share:          

[Editor's Note: We asked selected Xconomists a series of questions designed to zero in on the big issues of the year, including "What would you be willing to throw a punch over?"]

It takes a lot to get me riled-up—I’m overly rational, if anything. Outside of the bad behavior we were supposed to outgrow in kindergarten—dishonesty, disrespect, etc.—there are few professional issues of sufficient emotional magnitude. One of the most frustrating issues today is the FDA situation. While easy to say, “The FDA is at fault and needs to be reformed in order to speed the approval of new medicines,” that is a dramatic oversimplification of the problem. All parties in the ecosystem are at fault to some extent, and it will take concerted efforts and change by each in order to fix it.

For example, the FDA has absolutely been more/overly safety conscious in recent years, but I believe we all would act that way if faced with being hauled in front of Congress to justify the risk-benefit of a drug approval that positively impacts more than 99.99 percent  of the people who use it. Why should we, as a country, require or expect that medicines be as safe as clean water? At the core, sick people, whether with cardiovascular issues, autoimmune disease, or other afflictions, are taking a medicine in order to improve their condition, so while absolutely safe drugs would be wonderful, a level of risk is warranted based on the improvement in the disease. If we can cross that bridge and accept that medicines will have risks, then we have the tools to deal with the safety vs. speed of approval conundrum. We can shorten commercialization timelines while dramatically improving safety monitoring if we test for efficacy and major safety during development, while tracking long-tail safety issues in the commercial setting—perhaps the first 100,000 people prescribed a new product?

Comments (2) | Reprints | Share:          

[Editor's Note: We asked selected Xconomists a series of questions designed to zero in on the big issues of the year, including "What would you be willing to throw a punch over?"]

The most important issue facing Aastrom and many other companies in biotechnology is the lack of adequate funding to support innovative new companies, technologies and therapies. The challenges in drug development, especially in the early stages, are only compounded by the current regulatory environment with a primary focus on risk reduction.

Unfortunately, with this combination there isn’t one punch we can throw to rapidly improve the situation. But, the current situation has to change if the United States is going to remain the global leader in the discovery, development, and commercialization of innovative new therapies in the next two decades. If we don’t improve the current conditions, we will continue on a path to increasing irrelevance in biomedical research and innovation, especially given the fact that other countries are rapidly recognizing the potential of our industry to improve human health and create jobs, and they are in many ways ahead of the U.S. in supporting these companies.

To address the problem in the U.S., NIH funding has to be re-directed to focus less on support for early-stage research and discovery and more on the critical translational phase of new product development. This period is often referred to as the “valley of death” in new product development in healthcare—the period between early preclinical promise and clinical proof of concept. In a risk-averse environment, funding for products at this stage is very limited, and many will not move forward even though they could represent important advances in patient care. We need to introduce more funding sources that are positioned to accept the inherent risks at this stage.

As we work to introduce new funding sources, the FDA should also consider opportunities to recalculate the risk/benefit equation for many products. Working more as a supportive partner with industry, the FDA can work to make faster decisions. To protect both patients and industry, the FDA can also introduce mechanisms to more rapidly respond to post-marketing issues related to approved products. In this way, the FDA can balance the benefits of bringing new therapies to market quickly with the risks associated with the decision and a plan to take action post-approval if necessary. The ability to review and approve new therapies with great speed and, equally importantly, the ability to “disapprove” and remove therapies from the market or alter the product indication post approval, could significantly improve the competitive position of the U.S. in biotechnology in the years ahead. Industry will have to accept the fact that FDA decisions might not mean approval forever. They will build a model where marketing can begin while additional data is collected to provide further confirmation that benefits outweigh risks.

Finally, venture capital investors need to return to their roots—funding truly innovative companies, technologies, and therapies at the early stages. They need to lose their recent aversion to risk—seemingly honed over the past decade. Importantly, they may be more willing to move in this direction if the FDA takes steps to establish a more receptive and less uncertain regulatory environment.

A reflection of the current funding environment: a partner with a prominent venture capital firm recently told me that his firm is only funding companies that have an already approved product (the historical province of private equity and growth capital firms) or very early-stage “science-based” companies. The level of regulatory uncertainty has reached critical levels. When very smart and successful venture capital firms cannot accept the level of regulatory uncertainty, the alarms have clearly sounded—and changes in Washington and within industry seem essential to address these problems successfully.

Comments (1) | Reprints | Share:          

[Editor's note: We asked a group of Xconomists to answer the following question: "If you could patent one thing, what would it be?"]

Transgenic foods that are programmed and cultivated not so much to lower costs at the risk of ruining health and the environment, but the opposite—like a tomato that produces lots of Omega3 EFAs.

Comments (2) | Reprints | Share:          

[Editor's note: We asked a group of Xconomists to answer the following question: "If you could patent one thing, what would it be?"]

Two patents:

a. A low-cost holographic pad: an “hPad,” which would sit on your desk and project three-dimensional fixed and moving images. It would include a touchscreen-like functionality. This would not only have extraordinary commercial potential, but would provide very high utility for medical diagnoses, building and infrastructure visualization, energy management, and many other individual and societal benefits.

b. A low-cost photovoltaic coating material and application process for virtually any exposed surface, including road surfaces, which when combined with simple conductor fabric could provide low cost, low maintenance, embedded renewable energy generation infrastructure everywhere energy is used.

Comments | Reprints | Share:          

When dot-com entrepreneurs Benjamin Wolin and Michael Keriakos founded Everyday Health in 2002, everyone thought they were nuts. Their idea was to take well-known offline brands in the health industry and give them an online presence—a strategy that during the depths of the dot-com bust seemed mighty risky. “When we told people we wanted to start an online-content company they said things like, ‘The Internet is going to go out of business,” recalls Wolin (pictured at right), CEO of New York-based Everyday Health. “I said, ‘Well the Internet’s not exactly a business, but I get your point.’”

Wolin and Keriakos persevered, and eventually won the digital rights to some of the best-known names in health. Everyday Health now operates the websites for more than 35 big names, including South Beach Diet, exercise gurus Denise Austin and Jillian Michaels, and the ultra-popular pregnancy series What to Expect. Today Everyday Health attracts 28 million unique visitors a month across all its sites, making it one of the top providers of online health information, and it generates over $100 million in annual revenues.

But Wolin and Keriakos are well aware that if they want to stay on top of the digital-health world, they have to move themselves—and all their brands—beyond the bread-and-butter website. “When I think about what is going to drive the future of our business, the one thing that hasn’t changed is that consumers want health information from high quality brands,” Wolin says. “But what has changed is that the delivery device is now as much about mobile and video as it is about dot-com.”

So about two years ago, Everyday Health embarked on a multi-pronged strategy to expand its presence across every form of media, from the old (television) to the new (Facebook). Many of those doubters from a decade ago likely took notice on September 12, when the company recruited ABC News veteran producer Paul Slavin to run Everyday Health’s new video studio, which is producing a variety of programs, including a syndicated Saturday morning series it created in partnership with leading TV distributor Litton Entertainment.

Then, on October 13, the company announced that it had been selected by YouTube to launch an original online channel called “Everyday Health TV: Content to Change Your Life.” It’s all a testimony to the company’s ability to adapt to changing times, says Habib Kairouz, a managing partner at Rho Ventures, which invested in Wolin and his team back when … Next Page »

Comments | Reprints | Share:          

A couple of months ago, the publisher and CEO of the weekly Strategic News Service Newsletter introduced an article by San Diego Xconomist Larry Smarr, saying, “This issue may be the most important Special Letter we have ever published.”

Smarr’s 23-page article, which takes up the newsletter’s entire Sept. 26 issue, is part scientific paper and part personal odyssey into what Smarr calls his “Quantified Health.” In the 10 years since he moved to San Diego to become founding director of the UC system’s California Institute for Telecommunications and Information Technology (CalIT2), Smarr has scrupulously measured and analyzed his own biological data. In his paper, Smarr writes, “What I have learned about myself both illustrates and foreshadows the ongoing digital transformation of medicine.”

Xconomy Biotech Editor Luke Timmerman previewed this personal experiment last year after Smarr gave a presentation in Seattle. Smarr tells me he initially began by simply charting his weight. “I really wasn’t paying attention to my weight and general health until I came to San Diego from Illinois in 2000,” he says. “Once I looked around at all the fit people here I realized I better pay attention or I might get sent back to the Midwest!”

Through the years, however, Smarr has expanded his survey to include regular blood tests to monitor more than 60 biochemical markers. He now keeps meticulous notes on his diet, exercise, and supplemental vitamins, saying, “I routinely use food and supplements to ‘tune my numbers’ to more optimal levels.” Smarr says he uses the BodyMedia armband and the Fitbit clip to measure his physical activity, caloric burn, and sleep efficiency. He uses the Zeo device to monitor his sleep patterns and the HeartMath‘s emWave Desktop program to measure his stress and train himself to relax.

In 2005, when Smarr detected unusually high levels of a key blood marker for inflammation, his scientific quest escalated to a whole new level of detail—one that included tracking multiple biomarkers in his own stool samples and even obtaining an analysis of his DNA. “Yet this is precisely what the digital revolution in healthcare is all about,” Smarr writes. “The combination of trend-revealing graphs of time series of individual biochemical markers, with population-wide comparisons to people with different health outcomes is transforming biomedical research and ultimately clinical care, into an entirely new paradigm. In this new world, we become personally responsible for … Next Page »

Comments (2) | Reprints | Share:          

In Fairbanks, AK (where I spent a year after I graduated from college), winter temperatures can plunge to minus 40 degrees (F) for weeks at a time, creating ideal conditions for a local phenomenon called “ice fog.”

When temperatures get that cold, the air can’t hold much water vapor. Automotive engine exhaust is mostly water vapor, so emissions go from a maximum cylinder temperature of, say, 3,100 degrees (F) to minus 40 in a matter of seconds. Vapor cooled that fast forms tiny ice particles so small that 10 could fit side-by-side on the edge of a piece of paper. They also are so light that they remain suspended in mid-air—and of course each one is coated with fine soot particles. In short, the ice fog that eddies and curls through the winter streets of Fairbanks is a surreal cloud of pale brown murkiness.

It might seem like a remote problem, but the sub-arctic temperatures in Fairbanks visually illustrate a process that happens much less visibly with internal combustion engines everywhere.

Over the past decade or so, air quality regulations have focused chiefly on limiting the overall amount of soot emitted by internal combustion engines, but recent studies indicate that soot particles smaller than 100 nanometers can be especially harmful to human health. As a result, new “Euro5+” environmental regulations set to take effect next year are intended to substantially reduce the size and number of soot particles emitted by gasoline and diesel-powered cars and light trucks throughout Europe.

Some industry observers say it’s only a matter of time before U.S. environmental regulators impose similar restrictions on fine soot emissions.

Still, reducing soot emissions represents an unusual challenge for engine makers, in part because the targeted soot particulates in engine exhaust are nano-sized flecks of nothingness. (For the sake of comparison, the thickness of a human hair ranges from 50,000 to 100,000 nanometers.) Current methods of engine design rely more or less on the empirical results of trial and error, which can be a costly and time-consuming process when it comes to building and testing a series of engine prototypes.

So it was a welcome breakthrough when San Diego-based Reaction Design said recently it had led a consortium in developing software that can accurately simulate the formation of soot particulates during internal combustion. Engine designers can use the modeling software to … Next Page »

Comments | Reprints | Share:          

The folks who put sonic wave technology in the Sonicare toothbrush have hit another homerun, and a major consumer brand couldn’t sit by and watch any longer. Pacific Bioscience Laboratories, the unassumingly named makers of the Clarisonic skin-cleansing brush, is being acquired by cosmetics powerhouse L’Oreal USA, the companies announced today.

Terms were not disclosed, but L’Oreal indicated that it will be keeping Clarisonic’s new Redmond headquarters and manufacturing facility—in a release, the company said it plans to “create in Redmond an outstanding center of innovation for L’Oreal.” The senior management team at Pacific Bioscience Laboratories also has committed to stay on board after the acquisition “to maintain the continuity of excellence,” L’Oreal said.

Clarisonic was founded in 2001 by electrical engineer David Giuliani and a team of people he’d worked with at Optiva, the company that developed the sonic-wave-powered Sonicare toothbrush before being sold to Royal Philips Electronics. The Clarisonic device works by employing the same kind of sonic-wave technology, but applying it to the face to gently but powerfully remove makeup, dirt, surface bacteria, dead skin cells, and oils.

It’s not hard to see why a major brand would want to snap up the Clarisonic device and its team. As Luke detailed in this story, Clarisonic topped $100 million in annual sales last year, more than doubling its performance from two years earlier.

At that time, president Jack Gallagher said the company was “very profitable” and had added about 100 employees in the previous 18 months, bringing its staff up to about 300 people. The device, which retails in three versions at prices ranging from $149 to $225, has picked up a long list of celebrity fans, including Oprah and Lady Gaga.

Early investor Dan Rosen, chairman of Seattle’s Alliance of Angels, even predicted that “Clarisonic will be one of the great success stories of Seattle entrepreneurship.”

Comments (4) | Reprints | Share:          

David Cohen has seen this movie before. As the founder and CEO of TechStars, he knows that the first year in any city is about building community, making impressions, and proving the model. Then things get turned up a notch.

“Year one is a lot of excitement, the town really supports it,” Cohen said. “People come out to the first Demo Day and they see it for the first time as a finished product, and people talk about it. Year two, you get a much bigger audience. I’ve seen that pattern everywhere.”

Seattle is no exception. The second-ever TechStars Seattle Demo Day, held Thursday afternoon, saw attendance way up, with 350 or more investors, entrepreneurs, and insiders flocking to the SoDo neighborhood to see some of the hottest startups in town. The competition was fiercer, with 700 applicants for just 10 spots, compared with 400 a year ago.

And the money was flowing faster—as of Thursday’s demos, nine of the 10 proto-companies already started raising financing rounds, TechStars Seattle director Andy Sack said.

“Last year, the companies coming out of TechStars 90 days after Demo Day had successfully raised over $2.5 million,” Sack said. “This year, coming into Demo Day, the companies have already raised over $3.5 million.”

Here’s a rundown of the 10 companies that showed themselves off Thursday evening, with some key notes from the presentations. We’ll have more from Cohen later, as he looks at the trends in companies and incubators overall, and some more thoughts from Sack on year two of the Seattle TechStars experience.

Beamit Mobile
Tagline: Enables convenient international money transfers from the U.S. to a mobile phone abroad
Beamit is targeting the huge market of international remissions—the money that immigrants send back to friends and relatives in their home countries once they get to America and start earning cash. That amounts to $325 billion globally each year, CEO Matt Oppenheimer said, with 80 percent handled outside the traditional banking system.

Beamit seeks to make those transfers easier and cheaper by using mobile devices and the Internet as a platofrm. People in the U.S. will be able to send money to a virtual wallet in another country online or through a mobile app, which the recipient could either spend from their device or cash out at a traditional transfer office.

The first test market is the Philippines. Beamit can make transfers free for its most loyal customers, Oppenheimer said, which implies that Beamit makes money on fees of some kind. The startup already has closed a $750,000 convertible note, and is raising a Series A round.

Bluebox Now
Tagline: Turning brand advertising into daily viral campaigns.
The former employees of Pelago, which was acquired by Groupon, have a platform that allows retailers and other brands that offer loyalty or rewards programs to increase consumer spending by offering casual games as a hook, rather than dry, boring email campaigns.

The loyalty market has more than 2 billion memberships, but two-thirds of them (66 percent) are inactive, co-founder Chad Reed said. Early tests show the concept has shown a ten-fold increase in the use of loyalty programs, Reed said.

Customers include Murphy USA, which operates gas stations like those seen at Wal-Mart locations, and Caesar’s Entertainment, the casino company. Bluebox Now is raising a $500,000 round, with $100,000 already committed as of the presentation.

EveryMove
Tagline: Rewarding and inspiring people to a healthier lifestyle.
One of the health-minded startups on stage Thursday, EveryMove seeks to connect consumers with rewards from their employers, health insurers, and other brands by collecting, tracking, and visualizing health-related data. So, if a user checks into their gym via Foursquare and completes a series of runs via Runkeeper, they could qualify for a discount from their insurance company.

In one of the most energetic presentations of the day, co-founder Russell Benaroya pitched this as a social movement, a huge business opportunity, and a no-lose proposition for everyone involved. Advertisers get targeted access to health-conscious people, employers and insurers and … Next Page »

Comments | Reprints | Share:          

What’s a technology entrepreneur do when facing the head-slappingly opaque process of shopping for individual health insurance coverage? Get to work hacking together a solution.

That’s what gave rise to PickHealthInsurance, a new online search service developed by Urbanspoon co-founder Adam Doppelt.

PickHealthInsurance is a side project—Doppelt is hard at work on Dwellable, which helps people find vacation rentals. “If people love the app and traffic is through the roof, I could monetize it later. My skills are really more around product building, though,” he says via email.

The insurance-shopping that led to the project came about because Doppelt’s COBRA was nearing expiration, part of his transition back to being a full-time entrepreneur after working at IAC, which bought Urbanspoon in 2009. As he wrote on Hacker News, Doppelt nearly bought a family plan that would have included a $20,000 deductible for maternity coverage, something he discovered too late in the process.

“I figured I could build something better, that would offer the details up front. I wanted to start presenting rates immediately, even if they were approximate,” Doppelt says. “Why should it be so hard? I have the skills, I just needed the time.”

There’s a big player in the market already: Ehealthinsurance.com, which is actually licensed to market and sell insurance and has partnerships with lots of insurance providers. Doppelt says that in this sector, “all roads lead to ehealthinsurance. Every other site that claims to offer rates is just an affiliate. But their site is slow and dated, and the plans’ details are squirreled away in difficult to reach places.”

PickHealthInsurance is a much more slimmed-down site by comparison in this early release version. The front page allows shoppers to narrow plans down by age, ZIP code, whether it’s for a single person, couple, or family, and whether you use tobacco, with more detailed information on individual plans after it jumps to the results.

One funny note: I think all of the results in the test search I tried actually redirected me back to Ehealthinsurance.com if I wanted to purchase. Doppelt says he’s getting all of the health plan data by crawling the Web, not through any direct relationships with insurers (this was put together in a few weekends, after all).

Comments (1) | Reprints | Share:          

Andrew Trader, an early executive at social-game juggernaut Zynga, has been promoted to venture partner at Maveron, the consumer-focused venture capital firm of Starbucks CEO Howard Schultz. Trader started working with Maveron as an entrepreneur in residence since last fall.

Trader was part of what’s been called the founding team at Zynga, where he focused on the business side. He left the fast-growing company, which produces Facebook games like FarmVille and Mafia Wars, in spring 2010, as reported at TechCrunch. In a news release announcing the promotion, Maveron also pointed to Trader’s previous stints as CEO of Utah Street Networks (which sold some assets to Cisco) and co-founder of Coremetrics (acquired by IBM).

Maveron has offices in Seattle and San Francisco, which is where Trader is based. The firm, co-founded by Dan Levitan, focuses on consumer web, retail, education and health-related companies. Some notable portfolio companies include big names like eBay and Groupon, and up-and-comers like Seattle startups Zulily and Decide, along with more  Starbucks-like consumer product firms like Potbelly Sandwich Works and Pinkberry.

In the release, Maveron partner Amy Errett said Trader (known as A.T.) has helped the VC firm “by identifying investment opportunities and working with our portfolio companies.” I’ve reached out to Maveron to see if there’s any more detail on the companies or investment areas where Trader has made an impact, and I’ll update if I hear more. Trader has stayed involved in gaming companies, joining the board of Kixeye earlier this month.

Comments (1) | Reprints | Share:          

In New York, the name Leona Helmsley often evokes snarky jokes about Trouble, the pooch who inherited $12 million in 2007, when the hotel heiress known as the Queen of Mean died. So it might be a surprise to many New Yorkers to learn that Helmsley and her husband, Harry, set up a charitable trust in 1999—a fund that in the last 10 years has devoted more than $85 million to research into Type 1 diabetes. One of the newest projects to emerge from the Helmsleys’ largesse is T1D Exchange, a Boston-based clinical registry that’s designed to unite diabetes researchers and patients.

This fall, T1D Exchange will launch its most visible platform yet, a social media site for patients called Glu. The site will serve as a sort of Facebook for the diabetes community—a place where patients can go to interact with each other, as well as with the researchers who are trying to learn more about the disease so they can find better treatments. (See preview video below.) “The idea was conceptualized by the Helmsley Trust two years ago based on a gap a lot of people saw on the research side,” says Janak Joshi, executive director of T1D exchange. “The idea is to link patients with the research community, both academic and non-academic.”

T1D exchange is being funded by a three-year, $26 million grant from the New York-based Helmsley Charitable Trust. It launched in September 2010 as a patient registry, where participants could voluntarily self-report or upload data from their blood-glucose monitors. In June, T1D announced that 12,000 patients had enrolled in the registry, and that it had assembled its first set of data from the information those patients provided. The data showed that more frequent glucose testing correlated with lower HbA1c—a key measure of blood-glucose control.

T1D Exchange is also developing a biobanking service, which will collect samples from patient volunteers that researchers can use to study Type 1 diabetes.

True to its name, the social portal Glu is designed to bring all the stakeholders in the fight against diabetes together, Joshi says. The site will be completely voluntary—patients can reveal as much or as little as they like, he says. But the idea is to foster … Next Page »

Comments | Reprints | Share:          

New York’s Health Guru Media raised $6 million in a funding round that includes new investor Western Technology Investment, according to a press release. Other investors in the round included Castile Ventures and Village Ventures. Health Guru hosts health and diet video content online after pivoting in 2006 away from its initial incarnation as the William Shatner Sci-Fi DVD Club. The videos include commentary from nutrition experts and physicians. Thus far Health Guru has raised $12 million including the latest round, according to VentureWire. Previous investors in the company include Long River Ventures, Granite Point Capital, and The Berkshires Capital Investors.

Comments | Reprints | Share:          

In April, OrganizedWisdom co-founder Unity Stoakes told Xconomy that his New York-based Web company was on a mission to improve access to health and wellness information online. Former Time Warner CEO Jerry Levin had just invested in OrganizedWisdom and joined its board. Now Levin and OrganizedWisdom are making good on their promise with a new health entrepreneurship initiative—one that comes with the blessing of the U.S. Department of Health and Human Services (HHS), U.S. chief technology officer Aneesh Chopra, and former AOL CEO Steve Case.

This afternoon at the HHS headquarters in Washington, D.C., OrganizedWisdom is launching StartUp Health, a mentoring and support program for entrepreneurs who want to build companies focused on health and wellness. The announcement will be made at the Institute of Medicine’s Health Data Initiative Forum, where entrepreneurs from around the country are learning how to take advantage of a wealth of new health data being released by HHS at healthdata.gov.

StartUp Health will be chaired by Levin and will be the latest organization to team up with Case’s Startup America Partnership, a program initiated in January to

… Next Page »

Comments | Reprints | Share:          

The summer after her first year at Harvard Business School, Halle Tecco got an internship at Apple in Cupertino, CA, helping to evaluate mobile apps for the health and medical category of the iTunes App Store. “I was on the phone all day with big hospitals and healthcare organizations who didn’t put the love into their apps,” she says. “They were building things with a check-box strategy, and in my opinion they didn’t have much creativity or innovation.”

Sitting in the next cubicle over, by contrast, was a woman who worked on game apps. “She had a really colorful cube with people in and out all day long. It was like a party,” says Tecco.

Tecco felt that health-related mobile apps could benefit from some of the same fun and imagination going into games—and the idea stuck with her. She went on to found Rock Health, a new non-profit incubator in San Francisco that’s exclusively tailored for startups working on Web- and mobile-based healthcare technologies. And today Rock Health named its first class of companies, from a team using camera phones to diagnose ear infections to a startup dedicated to using social networking to prevent Type 2 diabetes. (For the full list, read on.)

I visited Tecco and Rock Health creative director Leslie Ziegler a couple of weeks ago at San Francisco’s Aberdare Ventures, one of the incubator’s founding partners, and got the whole story behind the incubator. With prestigious supporters such as the Mayo Clinic, Harvard Medical School, Microsoft, and Qualcomm and advisors like 23andMe co-founder Linda Avey and former MIT Media Lab director Frank Moss, Rock Health is on a mission to reverse the problem that Tecco’s Apple internship experience hinted at: the huge innovation deficit in the healthcare sector.

The barriers to innovation in healthcare are legion, Tecco acknowledges: the FDA’s fickle history of medical-device regulation, the red tape that makes it difficult to sell new technologies to hospitals, and the baroque complexity of insurance reimbursement systems, just to name a few. But “we view that as a huge opportunity,” says Tecco, who is now Rock Health’s managing director. “If we give an entrepreneur the resources and confidence to overcome those barriers, there is a huge arbitrage opportunity, because they are building something in a space that was uprecedented before.”

Tecco unveiled Rock Health to the world at the South by Southwest Interactive Festival in Austin in March, at a launch event that featured both Todd Park, chief technology officer of the Department of Health and Human Services, and Aneesh Chopra, chief technology officer of the United States. More than 350 teams sent in their applications before the April 1 deadline, vying for berths that include a $20,000 grant for each team, five months of startup mentorship from advisors, office space at Rock Health’s newly renovated startup digs in San Francisco’s Chinatown, and prototyping and testing support from the Mayo Clinic, Cincinnati Children’s Hospital, and Harvard Medical School.

You can think of Rock Health as an aspiring Y Combinator for health and medicine. (Though Y Combinator itself, it should be said, has incubated health and fitness-related companies in the past; this winter’s batch included at least two, DrChrono and FitFu.) But Rock Health is also designed to help entrepreneurs with a history of success in more traditional technology companies make the switch into a risky and unfamiliar new field. As a comparison, a program I covered back in Boston—an executive retraining program designed by the New England Clean Energy Council to help turn IT executives into energy entrepreneurs—comes to mind. Says Ziegler, “We really want to attract the kind of people Y Combinator is attracting: bright people who are maybe a little scared of … Next Page »

Comments (1) | Reprints | Share:          

Much of the action this week was taking place downtown, at the 6th annual Convergence Summit hosted by the nonprofit Wireless-Life Sciences Alliance. The three-day conference included CEOs, entrepreneurs, investors, executives, and innovators—and we’ve got the highlights of that and other area life sciences news wrapped up here.

—San Diego’s Qualcomm (NASDAQ: QCOM), the largest wireless chipmaker in the world, said during the summit that it’s helping the X Prize Foundation set the ground rules for a proposed $10 million Tricorder X Prize. X Prize organizers want a real-life medical tricorder—like the one Dr. McCoy used on Star Trek—that is portable, uses wireless sensors, and has the capability to rapidly diagnose patients better than or equal to a panel of board-certified physicians.

—Eric Topol, the Scripps Health cardiologist and director of the Scripps Translational Science Institute, said during his talk at the convergence summit that he wants to start a new medical school for tech-minded students in San Diego. Topol says medical students should be learning how to handle new wireless technologies and genomics in their practice. Topol was instrumental in founding the Cleveland Clinic Lerner College of Medicine in 2002.

—Exton, PA-based ViroPharma (NASDAQ: VPHM) agreed to pay San Diego’s Halozyme Therapeutics (NASDAQ: HALO) as much as $83 million to license Halozyme’s recombinant human hyaluronidase. ViroPharma wants to develop the Halozyme compound as an experimental injection medication for a rare genetic disorder that causes potentially life-threatening swelling.

—San Diego’s Meritage Pharma said its experimental drug for a little-known condition called eosinophilic esophagitis (EoE) passed a mid-stage clinical trial of 71 children. The study found … Next Page »

Comments | Reprints | Share:          

Lifebooker, an online marketplace for discounted health and beauty services, has raised $4 million from Edison Ventures, according to a press release. The Brooklyn-based Lifebooker provides businesses in New York and Los Angeles with the ability to advertise open appointment times or limited-time discounts on the Internet, which consumers can then book through the site. The company hopes to expand the service to other cities.

Comments | Reprints | Share: