If luck favors the prepared mind, as Louis Pasteur is credited with saying, we’re in danger of becoming a very unlucky nation. Little of the material taught in schools today is relevant to the future. Consider all the science and economics that has been updated, the shifting theories of psychology, the programming languages, political theories, and even how many planets our solar system has. Much, like literature and history, should be evaluated against updated, relevant priorities in the 21st century. So, what can we “teach” our students to prepare them for the future?

1. The fundamental tools of learning and analysis, as well as basic concepts

2. Knowledge of a few generally applicable topics

3. The skills to “dig deep” into their areas of interest in order to understand how these tools can be applied to one domain and to be equipped to change domains every so often

4. Preparation for jobs in a competitive and evolving global economy

5. Preparation to continuously evolve and stay current as informed and intelligent citizens of a democracy

To me, the fundamental tools of learning stem (no pun intended) from science, technology, engineering, and math. This updated curriculum should eclipse the archaic view of liberal education still favored by institutions like Harvard and Yale based on a worldview from the 1800s. Critical subject matter should include economics, statistics, mathematics, logic and systems modeling, current (not historical) cultural evolution, psychology, and computer programming. Furthermore, certain humanities disciplines such as literature and history should become optional subjects, in much the same way as physics is today (and, of course, I advocate mandatory physics study).

Finally, English and social studies should be replaced with the scientific process, critical thinking, rhetoric, and analysis of current news—imagine a required course each semester where every student is asked to analyze and debate topics from every issue of a broad publication such as The Economist, Scientific American, or Technology Review. Such a curriculum would not only provide a platform for understanding in a more relevant context how the physical, political, cultural and technical worlds function, but would also impart instincts for interpreting the world, and prepare students to become active participants in the economy. After all, what is the job of education?

Should we teach our students what we already know, or prepare them to discover more? Memorizing the Gettysburg address is admirable but ultimately worthless; understanding history is interesting, but not as relevant as topics from the Economist; a student who can apply the scientific process or employ critical thinking skills to solve a big problem has the potential to change the world or at least get a better-paying job. No wonder half the college graduates who fill jobs actually fill jobs that don’t need a college degree! Their degree is not relevant to adding value to an employer. Often, in my view, it is even less relevant to being an intelligent voter in a democratic economy. Most graduates cannot read the Economist and separate “facts,” “assumptions by the writer,” “biases,” “projections,” or “conclusions and their validity” in a critical way.

I’d also suggest tackling several general and currently relevant topic areas such as genetics, computer science, systems modeling, econometrics, linguistics modeling, traditional and behavioral economics, and bioinformatics (not an exhaustive list). Not only do these topics expose students to a lot of useful and current information, theories, and algorithms, they may in fact become platforms to teach the scientific process—a process that applies to (and is desperately needed for) logical discourse as much as it applies to science, and of much future learning in general. Even if the specific information becomes irrelevant within a decade (who knows where technology will head next; Facebook, Twitter, and the iPhone didn’t exist in 2004, after all), it’s incredibly useful to understand the current frontiers of science and technology as building blocks for the future, more so than understanding history or Kafka.

If we had enough time in school, I would suggest we do everything. Sadly that is not realistic, so we need a prioritized list of basic requirements because every subject we do cover excludes some other subject given the fixed time we have available. We must decide what is better taught during the limited teaching time we have, and what subjects are easier learnt during personal time or as post-education pursuits. For instance, passions like music and its history may be best left to self-pursuit, while exploring the structure and theory of music may be a way to teach critical tools!

For some small subset of the student body, pursuing passions and developing skills in subjects such as music or sports can be valuable, and I am a fan of schools like Juilliard, but in my view this must be in addition to a required general education. It’s the lack of balance in general education which I am suggesting needs to be addressed. Setting music and sports aside, with the critical thinking tools and exposure to the up-and-coming areas mentioned above, students should be positioned to discover their first passion and begin to understand themselves, or at the least be able to keep up with the changes to come, get (and maintain) productive jobs, and be intelligent citizens.

After grasping the fundamental tools of learning and some broad topical exposure, it’s valuable to “dig deep” in one or two topic areas of interest. For this, I prefer some subject in science or engineering rather than literature or history (bear with me; I’ll explain in a minute). Obviously, it’s best if students are passionate about a specific topic, but it’s not critical as the passion may develop as they dig in (some students will have passions, but many won’t have any at all). The real value for digging deep is to learn how to dig in; it serves a person for the duration of their life: in school, work, and leisure.

If students choose options from traditional liberal-education subjects, they should be taught in the context of the critical tools mentioned above. If students want jobs, they should be taught skills where future jobs will exist. If we want them as intelligent citizens, we need to have them understand critical thinking, statistics, economics, how to interpret technology and science developments, and how global game theory applies to local interests. Traditional international relations and political science are passé as base skills and can easily be acquired once a student has the basic tools of understanding.

Back to history and literature for a moment; these are great to wrestle with once a student has learned to think critically. My contention is not that these subjects are unimportant, but rather that they are not basic or broad enough “tools for developing learning skills” as they were in the 1800s, because the set of skills needed today has changed. Furthermore, they are topics easily learned by someone trained in the basic disciplines of thinking and learning that I’ve defined above: this isn’t as easy the other way around. A scientist can more easily become a philosopher or writer than a writer can become a scientist.

Besides, physics is a much more important tool to understand the science and technology that drives modern life than history is, not to mention that it’s far more useful in helping someone understand how her car or refrigerator works. This makes it all the more concerning that many states don’t require physics to graduate from high school but do require many years of history classes—a lopsided and poor use of student time. University education continues this tradition, especially as students flock to the “easier/less work” courses. If subjects like history and literature are focused on too early, it is easy for someone not to learn to think for themselves and not to question assumptions, conclusions, and expert philosophies—this can actually do a lot of damage. On the other hand, with the right critical lens, history, philosophy, and literature can help creativity and breadth by opening the mind to new perspectives and ideas. Still, learning about them is secondary to learning the tools of learning.

In the end, school is a place where every kid should have the opportunity to become a potential participant in whatever they might want to tackle in the future, with an appropriate focus not only on what they want to pursue but also, pragmatically, what they will need to do to be productively employed. By embracing thinking and learning skills, and adding a dash of irreverence and confidence that comes from being able to tackle new arenas (creative writing may have a role here, but Jane Austen does not make my priority list), hopefully they will be lucky enough to help shape the next few decades or at least be intelligent voters in a democracy and productive participants in their jobs. At the very least they should be able to evaluate how much confidence to place in a New York Times study of 11 patients on a new cancer treatment from Mexico or a health supplement from China and to assess the study’s statistical validity and whether the treatment’s economics make sense. And they should understand the relationship between taxes, spending, balanced budgets, and growth better than they understand 15th century English history.

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More than anything, they should be studying math, including statistics and probability, and programming. No matter what the subject, we will have huge amounts of data about it, and will need these tools to get meaning from the data. The areas I’m thinking of include medicine, genetics, nutrition, and neuroscience; human behavior; energy management and consumption; materials science (so that we can use our personal 3D printers more effectively); aerospace and cosmology (so we can find asteroids, whether to deflect them from an earth-bound path, to mine them of valuable minerals or terraform them for human habitation); and of course biology, so that we can enjoy the company of animals, grow food, and ultimately create human-friendly living conditions on other planets and asteroids. It would also be great to get better at modeling and managing economic fluctuations!

But in the meantime, don’t forget to read world literature so you can understand your place in history and know how to be a human being.

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I’m so sad this evening—as millions are—to hear of Steve Jobs’s death. Scattered over the last quarter century, I learned much from Steve Jobs, and was proud to consider him a friend. And indeed, he contributed in various ways to all three of my major life projects so far: Mathematica, A New Kind of Science and Wolfram|Alpha.

I first met Steve Jobs in 1987, when he was quietly building his first NeXT computer, and I was quietly building the first version of Mathematica. A mutual friend had made the introduction, and Steve Jobs wasted no time in saying that he was planning to make the definitive computer for higher education, and he wanted Mathematica to be part of it. I don’t now remember the details of our first meeting, but at the end of it, Steve gave me his business card, which tonight I found duly still sitting in my files:

…

Over the months after our first meeting, I had all sorts of interactions with Steve about Mathematica. Actually, it wasn’t yet called Mathematica then, and one of the big topics of discussion was what it should be called. At first it had been Omega (yes, like Alpha) and later PolyMath. Steve thought those were lousy names. I gave him lists of names I’d considered, and pressed him for his suggestions. For a while he wouldn’t suggest anything. But then one day he said to me: “you should call it Mathematica“.

I’d actually considered that name, but rejected it. I asked Steve why he thought it was good, and he told me his theory for a name was to start from the generic term for something, then romanticize it. His favorite example at the time was Sony’s Trinitron. Well, it went back and forth for a while. But in the end I agreed that, yes, Mathematica was a good name. And so it has been now for nearly 24 years.

As Mathematica was being developed, we showed it to Steve Jobs quite often. He always claimed he didn’t understand the math of it (though I later learned from a good friend of mine who had known Steve in high school that Steve had definitely taken at least one calculus course). But he made all sorts of “make it simpler” suggestions about the interface and the documentation. With one slight exception, perhaps of at least curiosity interest to Mathematica aficionados: he suggested that cells in Mathematica notebook documents (now CDFs) should be indicated not by simple vertical lines—but instead by brackets with little serifs at their ends. And as it happens, that idea opened the way to thinking of hierarchies of cells, and ultimately to many features of symbolic documents.

In June 1988 we were ready to release Mathematica. But NeXT had not yet released its computer, Steve Jobs was rarely seen in public, and speculation about what NeXT was up to had become quite intense. So when Steve Jobs agreed that he would appear at our product announcement, it was a huge thing for us.

He gave a lovely talk, discussing how he expected more and more fields to become … Next Page »

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Vanity Fair got the first-excerpt scoop on Microsoft co-founder and Vulcan head honcho Paul Allen’s new book, “Idea Man,” and one element in particular is drawing most of the attention today: Allen’s depiction of a past rift with longtime friend and co-founder Bill Gates over Allen’s holdings in the company.

The Wall Street Journal has a nice follow-up story, based partly on a glimpse at the book provided to two of its reporters, that delves into the reaction among inner-circle Microsofties to that and some of the other Allen recollections.

The semi-sensational, rich-guy fight is doing its job in generating public relations buzz around Allen’s new book—after all, he’s setting off on a worldwide promotional tour. And I guess it makes perfect sense to choose a very Gates-centric portion for the first leak, because to the wider world, Paul Allen is often That Other Guy from Microsoft, who hasn’t worked at the company in a long time.

I do agree with other commentators that the vibe you get from reading today’s excerpted recollections is Allen seeing himself as a bit of a thinker and big-brother type to Gates’ hard-charging, brilliant entrepreneur: “Each time I brought an idea to Bill, he would pop my balloon … And he was right. My ideas were ahead of their time or beyond our scope or both.” But there’s also a bit of humility woven in there that I didn’t expect.

Allen clearly is still in awe of Gates’ mental prowess from their school days, even while he’s amused by the social oddities that Gates’ focus could produce.

I was particularly struck by Allen confronting his own intellectual limits at Washington State University, not exactly an Ivy League school, upon being totally perplexed by a blackboard full of equations: “It was one of those moments when you realize, I just can’t see it. I felt a little sad, but I accepted my limitations. I was O.K. with being a generalist.” I guess it’s worked out for him so far.

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In the 15th century, British noblemen decided that they needed brighter colors for their coats of arms to help their armies more easily distinguish them on muddy battlefields. They naturally approached suppliers in their own nation. But when British tradesmen refused to accept this innovative approach to their traditional ways, the noblemen turned to Germany, where tradesmen were more than willing. This in turn helped spawn the German chemical industry, then the German petrochemical industry, then the German pharmaceutical industry. The British were left on the competitive sidelines.

Five centuries later, Otis Elevator, which had dominated its business until the 1970s, found itself in a war with GE, Westinghouse, Hitachi, and Fujitsu. The challenge was how to respond. After all, weren’t elevators just motors and bent metal? Then a member of Otis’s internal IT department made a breakthrough: Otis developed software that could automatically configure elevators and gave it to architects so that they could conform to local building codes, thus gaining market share for Otis. By putting computer chips in elevators, Otis could also send repair crews before systems broke down. Since the real money in elevators is maintenance, those who win the installation battle end up with a cash flow that will continue for as long as the building is standing.

Though separated by a half millennium, these examples show how innovation has always driven new technology, which drives new companies, which create economic growth and jobs. But innovation does not just happen. It requires far more than just inventors: it needs the entire organization. The messianic belief held by many organizations that they can lead in innovation by increasing research and development spending is simply not true. Apple, for example, trails its industry in R&D spending, yet it leads in innovation. And large companies that brag about their research departments by day often end up having to make large acquisitions because their own R&D departments continue to fail them.

America cannot maintain its dominance in some sectors and regain it in others without innovation, the importance of which has been hailed by everyone from the President to the local manager. But innovation does not occur automatically. To produce workers, managers, investors, and others who recognize and reward innovation requires making innovation a state of mind. Innovation should be taught, beginning in kindergarten. Properly run business schools combine … Next Page »

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A friend recently complained that my tweets are often along the lines of, “Boring company raises X million dollars.” And this is a guy who works in the tech startup community.

But, au contraire mon frère, they are only boring if you don’t know the stories behind the companies and their deals. The tales of hardship, breakthroughs, betrayals, fights with investors, all that good stuff. (Unlike me, you probably saw “The Social Network.”)

OK, but without all that context most companies do sound, well, pretty boring. Not everyone can be Facebook, Amazon, or Groupon (thank goodness). Not every startup can try to create “The Matrix” for businesses, or a flying car, or cure male baldness, or make everything taste like bacon, or have a founder who, by all accounts, shouldn’t even be alive.

Yet they soldier on. And in technology and business, as in life, it’s often the boring stuff that survives and ends up killing the competition. So, point taken, I decided to make my own short list of the Boston area’s most boring-sounding tech companies that readers should actually care about. (Yes, I can throw out backhanded compliments with the best of them.)

Actually I had compiled quite a long list, so maybe this will become a regular feature. I won’t rank these companies by boredom level—how well would that go over?—but I’ll tell you what makes each company a snoozer at first, and then why it’s actually quite interesting.

I did my best to avoid old chestnuts or well-known firms. Here are 10 companies that have gotten my attention recently, in alphabetical order:

Currensee (Boston, MA)
This startup sounds pretty boring unless you’re a professional investor. Currensee, led by CEO Dave Lemont, provides automation and social-network services to help day traders invest in world currency markets. (My colleague Wade profiled the company back in April 2009.) As of last fall, the startup had signed up more than 7,000 members, and last month it passed the $2 billion mark in trading volume in its social network that lets investors follow expert traders. Lesson learned: sign up rich customers.

Cyber-Ark Software (Newton, MA)
Global information security provider. Manages privileged users, applications, and sensitive data. Improves compliance and productivity, and protects against insider threats. (Yawn.) How about being profitable with 200 new customers and 37 percent revenue growth in the past year? Cyber-Ark, founded in 1999 and led by CEO Udi Mokady, says it has some 850 corporate customers in 50-plus countries (including more than 35 of the Fortune 100). Now that’s security.

Dyn (Manchester, NH)
You might not know what DNS (domain name system) is or how it works, but I bet you’ve heard of Twitter, Groupon, and Zappos. Those are some of the big customers that use Dyn’s DNS and Web hosting services. DNS is so boring I can’t even explain what it is, but it’s crucial for Web page delivery. Here’s what you really need to know: Dyn (pronounced “dine”), led by CEO Jeremy Hitchcock, is … Next Page »

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Most readers will be aware that Vertex announced it is moving from 900,000 square feet of laboratories and offices in Cambridge to over a million square feet in Boston.

Some are asking if this spells serious trouble in Cambridge. This question surprises me. Cambridge is one of the world’s most important sources of next-generation technology and companies, and regularly exports them. A 2009 Kaufmann Foundation study showed that MIT spin-outs alone, if collected together, would rank as the 11th largest economy in the world. Vertex and its Telaprevir hepatitis C drug, which is on the verge of approval by the FDA, follow a time-honored tradition.

Once ideas are proven, those pursuing them should and do move into production mode. Sometimes that means taking larger, cheaper space elsewhere. When this happens, it makes room for another generation of new companies in Cambridge. While nobody wants to lose a taxpayer, Cambridge should feel proud of the contributions it makes to the rest of the world.

For nearly 400 years, Cambridge’s powerful blend of intellectual and entrepreneurial oomph has given the city an enviable self-renewing quality. Let’s look at the record. It starts with the book. Cambridge printed the first book in North America 370 years ago. About that time, it also became home to its first university, Harvard. The first computer (the Mark II) and the Internet (then called the Arpanet) came out of Cambridge. Thomas Watson placed the first two-way telephone call from his lab in Kendall Square, the wires stretching across the river to Alexander Graham Bell’s home on Beacon Hill. Some other Cambridge creations include the microwave oven, the sewing machine, instant photography, ship-to-ship radar, synthesis of penicillin and quinine, fractionation of blood, and deployment of vaccines. Many of Cambridge’s inventions today are so complex, the inventors win Nobel Prizes while most of us don’t even understand them.

(If you want the full background on these inventions and others, you are in luck. The Cambridge Historical Society is readying a comprehensive website on the history of invention in Cambridge. Send a note to innovation@cambridgehistory.org if you’d like to be notified when it’s up.)

Cambridge has launched some pretty interesting ideas in other departments as well. … Next Page »

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The MIT Museum in Cambridge, MA, is running a special exhibition, starting this weekend, to celebrate the 150th anniversary of MIT’s charter. The “MIT 150” exhibit showcases a collection of stories and artifacts that represent the institute’s contributions to science, technology, business, education, and society—things like Marvin Minsky’s robot arm, Claude Shannon’s maze-solving machine, J.C.R. Licklider’s Internet-presaging paper, Norbert Wiener’s letter describing a meeting with Albert Einstein, and much more.

The exhibit’s objects and themes were crowdsourced from the MIT community and organized by Deborah Douglas, curator of science and technology at the museum. It’s all part of a 150-day-long campus-wide celebration of MIT’s distinguished history. (Some sticklers for detail point out that MIT didn’t actually open its doors to students until 1865, so we might have to do all this celebrating over again in 2015.)

Here are a few items and links that caught my eye as being particularly relevant to MIT’s entrepreneurial legacy:

—The first business plan for Digital Equipment Corporation, and other items from American Research and Development Corporation, the equity investment firm co-founded by former MIT president Karl Compton (which originally invested $70,000 in DEC in 1957).

—Artifacts commemorating the 25,000-plus active companies around the world founded by MIT alumni and faculty.

—Nicholas Negroponte’s One Laptop Per Child “XO” Laptop, from 2002.

—MIT’s first patent policy, from 1932.

—Richard Stallman’s GNU manifesto (1985), in response to companies making proprietary software.

—Project Athena (1983-1991), a joint project by MIT, IBM, and DEC to integrate computers into the university curriculum. (OK, I’m sentimental about my first e-mail account.)

There is a celebration at the museum for the MIT community today from 3:00-5:00 pm, and a public program on January 14. The MIT 150 exhibition officially opens to the public tomorrow.

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The grand ballroom of the Royal Sonesta hotel in Cambridge, MA, was jam-packed last night and had a collective energy that I haven’t felt in a long time. Hundreds of people were on hand for the Web Innovators Group meeting, organized by venture capitalist David Beisel (formerly of Venrock, now with NextView Ventures).

I had to miss most of the presentations from TurningArt (Jason Gracilieri) and AisleBuyer (Andrew Paradise)—both very interesting startups—but I did catch the talk from Shawn Broderick and his new social gaming startup, Cambridge-based Play140. (Broderick also leads TechStars Boston.)

Here’s the idea behind Play140, from what I gather. Social games—video games that people play with their friends on social-network sites like Facebook—are all the rage, what with FarmVille, Pet Society, Bejeweled Blitz, and the like gaining in popularity. But these kinds of games “require a certain level of hardware and commitment,” Broderick said. Namely, an Internet-connected laptop or smartphone, and some time to kill. Play140, by contrast, is about simple, text-based games that can be played via SMS texting, instant messaging, or Twitter.

“Text is sexy, super creative, and a powerful way to have fun,” Broderick told the crowd.

He then unveiled Play140’s new game, called TAG (The Acronym Game), and had the audience play it right then and there via Twitter. The audience was given a category (“elevator pitch”) and an acronym (“LTEP”), and players had two minutes to come up with a witty phrase that the acronym could stand for. Some of my favorites from the crowd, which were projected on the big screen in real-time: Long Talker, Everybody’s Pissed; Little Toe Extender Pads; Let This End Please; and Like Twitter Except Popular. Then everybody voted for their favorite—the winner was the “Twitter” one.

Maybe you had to be there to see why this could be a big deal. It struck me as a pretty disruptive approach to social gaming—coming in with a cheap, easy, non-fancy set of games that can be played on traditional cellphones, say, but still actively engage the imagination of consumers. If Play140 gains traction (always the issue with games), it can then move up-market and add graphics and other bells and whistles. Meantime, it’s an inexpensive and revealing experiment—and a glimpse into the possible future of social games.

Broderick said the startup is actively working on more than a dozen text-based games, and plans to make money through subscription models and licensing deals. After the demo, his Play140 partner, Andrea Shubert, said the company is exploring a massively multiplayer online game to be played over Twitter. This might sound surprising, but Shubert says most commands and actions (even in a game that looks as complex as World of Warcraft, say) are simple enough to convey in short-form text.

Play140 previously talked to Mass High Tech about its approach and its first game, a multiple-choice quiz game called MatchUp. According to that report, Shubert and Broderick worked together in the mid-to-late ‘90s on a gaming startup called Genetic Anomalies, which was sold to THQ for about $8 million in stock in 1999.

Shubert, who previously helped conceive the online multiplayer word game Acrophobia back in 1995, pointed out that social games used to be all about text. So it sounds like Play140 has a bit of “everything old is new again” going for it. We’ll be watching to see how things play out, so to speak.

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The big question these days in Seattle biotech is about people. What will happen to the 320 people who work at ZymoGenetics (NASDAQ: ZGEN), now that the pioneering company has agreed to be taken over by pharmaceutical giant Bristol-Myers Squibb for $885 million?

Given the history of takeovers like this, the safe bet is that many employees, especially those on the administrative and business side of the house, will lose their jobs. But ZymoGenetics CEO Doug Williams insists that “no decisions have been made,” yet, and that it could take a couple months for executives from both companies to make the hard choices.

While everyone waits for those answers, the takeover has also created uncertainty about the future of one of Seattle’s important historical landmarks. It’s the old City Light Steam Plant, designated as a city landmark in 1988. It’s the place that generated electricity back in the city’s early days, fell into disrepair, and was reinvented into a modern gem of biomedical research in the 1990s. Even Northwesterners who know nothing about biotech know that this landmark at 1201 Eastlake Avenue East, with the restored smokestacks, is one of the city’s iconic locations, seen by thousands every day as they drive down Interstate 5.

There’s some fascinating recent history to this building, first built in 1914. The power plant was de-commissioned in 1987, declared a landmark the following year, and sat vacant for several more years. By 1993, ZymoGenetics, which was owned by Danish drug giant Novo Nordisk, bought the building and the adjacent Hydro House, and agreed with developer William Justen to spend $25 million to transform them into a biotech center. The following year, the city passed an ordinance which essentially mandated that anyone who wanted to alter the exterior of the building would need approval from the city’s Landmarks Preservation Board.

ZymoGenetics, which lived large for many years as the research wing of Novo, turned it into one of the iconic headquarters buildings in Seattle. It took a ton of work—ZymoGenetics chairman Bruce Carter called it “the mother of all fixer-uppers” in this post at HistoryLink.org. I’ve done many interviews there over the years with Carter and others at Zymo. It’s hard not to admire the tasteful art collection on its walls, the central foyer decorated with flags that represent the multi-national heritage of its employees, and the gorgeous views of Lake Union for its scientists. The place even has kayak access along the lake, and employees are known to sometimes do a little rowing during breaktime.

The old Seattle City Light Steam Plant

“It’s an awesome space,” says Bob Mooney, managing director of Jones Lang LaSalle in Seattle, who represents ZymoGenetics in its effort to sublease part of the facility.

ZymoGenetics spokeswoman Susan Specht had no comment about what might happen to the facility as part of the transaction, and a Bristol-Myers Squibb spokeswoman said “no decisions have been made” about the people or the site. The owner of the building, Alexandria Real Estate Equities, didn’t respond to a request for comment. (Disclosure: Alexandria is an underwriter of Xconomy, and is also our landlord in Seattle, San Diego, and Boston.)

Since ZymoGenetics and the Steam Plant’s developer struck their agreement with the city, a lot has changed. ZymoGenetics agreed to sell the headquarters to Alexandria for $52 million in October 2002, as part of an agreement to lease the space for another 15 years (a story which I covered for The Seattle Times.) The deal was later extended another two years, and the total value ballooned to … Next Page »

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Timing is everything—especially in the tech world. If you follow trends in technology, science, or business for long enough, you realize there are very few new ideas. Instead, the combination of the right idea with the right timing and execution is usually the key to success in any field.

Look at all the snazzy tech products that have sprung up around us in recent years—iPhones and iPads, Kindle e-book readers, mobile and gaming apps, GPS and mapping technologies. And some services are so ubiquitous that we don’t even notice them anymore, like Internet banking or online shopping.

It made me think back a decade to 1999-2000, the height of the tech bubble, and consider which of these ideas were already around back then, but either didn’t quite pan out or failed. (Of course, you could go back much further than that, but 10 years feels like an eternity in tech these days.) If you paged through Red Herring, Fast Company, or Technology Review in the late ‘90s, I suspect you’d find many ideas that look a lot like the current tech landscape.

So I informally surveyed a few techies and venture capitalists on both coasts, and have compiled a list of 10 old ideas from the dot-com era that have finally arrived. In some cases, the old product was not positioned correctly, or the technology of the day didn’t support it well. But in most cases, the main issue was the timing of the market—the offering just wasn’t compelling enough at its price point or it cost too much to produce back then. Now times have changed.

This list is by no means comprehensive. If you’ve got a company or idea that I missed—or if you have a different take on the reasons for the turnaround—please leave a comment below.

Without further ado, here are 10 oldies that are new again:

1. Group-buying sites (Mercata vs. Groupon)

This is the quintessential old idea whose time has come. Mercata, the Paul Allen-backed dot-com that withdrew its IPO in early 2001 and closed down, struggled to gain traction in part because it competed for consumer-product deals with e-retailers and big portals like Yahoo and AOL. In the past couple of years, Groupon solved this problem by focusing on one deal per day, but across very different kinds of stores. A down economy, mainstream use of the Web, and lack of competitors didn’t hurt. Now there are more than 100 group-buying sites around the world—mostly blatant knockoffs of Groupon, which is … Next Page »

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There has been plenty of tech-business news in the past week to put Seattle on the national radar. But it takes years to understand the innovation community here; I’ve only scratched the surface so far. So, in honor of my colleague Thea’s first week on the job, I thought it would be useful to look back at some of the more interesting stories I wrote (if I do say so myself) in Xconomy’s first six months in Seattle, back in 2008—and to think about what they mean now.

The stories span software and IT, advanced materials, energy and cleantech—and coffee. Many of you didn’t see them the first time around, but perhaps they’ve become more interesting with a couple years of hindsight. Here they are in chronological order:

1. Modumetal Grows Nanotech Metals for Military, Aiming to Make Parts for Your Car

This Seattle company has burst onto the scene in the past couple of years, with a method to produce a new kind of metal that could potentially disrupt the steel industry. Modumetal continues to grow, accumulate new customers and partners, and just closed a second round of venture funding this month.

2. With Intellectual Ventures, Nathan Myhrvold Out to Create “Invention Capital” Industry—and Reinvent Invention in the Process (Part 1)

My first sit-down with Nathan Myhrvold for Xconomy was an eventful one. He laid out his plans for Intellectual Ventures in great depth, showed me the company’s new lab, and talked about everything from the physics of ping-pong and quantum cosmology to “invention capital,” global expansion, and a nuclear power project (what would become TerraPower). In part two of the interview, he spoke for the first time about his team’s far-out approach to stopping hurricanes—and about new kinds of malaria intervention, and geo-engineering to combat global warming.

3. Tableau Raises $10M in Second Venture Round, Wants To Be the Adobe of Data

This is one of the fastest-growing and most successful startups that people around town need to know about. Tableau makes data visualization and analytics software for companies, organizations, and consumers, so they can make sense of increasing amounts of data and pull out useful trends and patterns. CEO Christian Chabot told me the story of the company and where it’s headed. So far, he’s been pretty much on target.

4. Second Avenue Partners’ Keith Grinstein Dies at Age 48

Obviously this was not one of our favorite stories. Nevertheless, this tragedy is part of the fabric of the innovation community, and we need to report this kind of news with urgency and sensitivity. Nick Hanauer and Michael Butler wrote in with their thoughts on Keith Grinstein’s passing.

5. Founder’s Co-op Gets Warm Reception, Wants Startups That Will Survive Cold Recession

An increasing amount of early-stage tech startup activity these days is centered around Seattle-based Founder’s Co-op, started by Andy Sack and Chris DeVore. In 2008, Sack told me about the goals of the group, and its plans to invest in small companies and provide mentorship to … Next Page »

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

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

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

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

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

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

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With summer on its way in, we’re starting to gear up for Xconomy’s Battle of the Tech Bands, which is happening on July 30 at the WTIA Summer Celebration at the Pyramid Alehouse in Seattle. If you or someone you know plays in a band that has at least one member who hails from a Northwest tech, life sciences, or tech-investment firm, we want to hear from you (application info and event details are here).

The field is already shaping up to be pretty competitive. How will we choose the finalists and the overall winners, you ask? Very carefully. To that end, we are enlisting the help of some of the Seattle area’s finest tech and music minds (and ears) to serve as judges for the event, in addition to the Xconomy staff. Their duties will range from vetting demos and selecting the finalists to helping us decide which bands get the awards on the big night.

We thought you might like to know a little bit about the judges we’ve recruited so far. Their professional expertise spans the worlds of software, venture capital, and music history. Their musical tastes span everything from heavy metal and Eddie Van Halen to post-punk and alternative rock. Without further ado, here are the luminaries who will help us decide the outcome (not sure who will be the Simon Cowell yet):

—Peter Blecha, music historian, author, and former senior curator of the Experience Music Project in Seattle. Peter is the author of the recently released Sonic Boom! The History of Northwest Rock: From “Louie Louie” to “Smells Like Teen Spirit” (Backbeat Books, 2009). He calls himself a “rock and roll archaeologist,” and has been a drummer with a number of bands in the Seattle area, including The Debbies.

—Steve Hall, managing director at Seattle-based Vulcan Capital, the group that manages Paul Allen’s investment holdings. Steve leads the firm’s early-stage venture capital investments across the technology, life sciences, and alternative energy sectors. He also plays a mean lead guitar, and notes that he has been brushing up on his Eddie Van Halen guitar solos in the past year.

—Jeff J. Lin, Microsoft program manager of Virtual Earth 3D. Jeff is the co-founder, guitarist, and pianist of the Seattle-based band Harvey Danger. You probably know them from their infectious hit single of the late 1990s, “Flagpole Sitta” ( “I’m not sick but I’m not well, and I’m so hot ’cause I’m in hell…”). Harvey Danger has released three full-length albums, played shows with bands like Death Cab for Cutie and Green Day, and once appeared on The Late Show with David Letterman.

We’ll have more details on the judges and prizes soon. But don’t delay, the deadline for submissions is June 12 (event details and info here). If you want to enter, please e-mail your band’s info to techbands@xconomy.com.

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One of the great pleasures of being a journalist is listening to influential leaders discuss where they come from and how it affects their strategy. Luke and I recently sat down with Tom Alberg, co-founder and managing director of Seattle-based Madrona Venture Group. In addition to sharing his thoughts on the future of newspapers and online media, Alberg spoke extensively about his career and how he has witnessed, and participated in, the rise of the technology industry in Seattle.

Let’s take a big step back here. At Xconomy, we’re about delivering the most important breaking news and in-depth analysis of tech and life sciences innovation. But it’s hard to fully appreciate all the latest trends unless you understand the perspectives of the top players. In our interview, Alberg touched on the early days of his career as a lawyer at Perkins Coie in the late ’60s, his later stints as president of LIN Broadcasting and executive vice president of McCaw Cellular, and the birth of Madrona in the mid ’90s. Along the way, he built notable relationships with leaders in wireless, medical devices, and e-commerce—people like Craig McCaw, Jeff Bezos, and Gordon Kuenster of ATL (and more recently, Asemblon).

Maybe you know all the history already, maybe you don’t. Certainly the story of Madrona’s involvement with Amazon has been told many times. But I bet the broader story of Alberg’s career and his observations from the local scene will give people a deeper understanding of Seattle-area innovation and Madrona’s role in the business community.

Here is an edited account of our conversation:

Xconomy: So tell us about your early days in Seattle.

Tom Alberg: My career has paralleled, a little bit, the growth of the technology industry. I started off as a young lawyer in 1967. In those days, there were a few high-tech companies. There was Fluke Manufacturing, and Physio-Control was about to start. There wasn’t much. Seattle had Boeing, and it would go through phases of being less about airplanes, more about computer services and other things. But there were little companies, and there was starting to be more entrepreneurship. When I joined Perkins, I’d been in New York a couple of years, so I was an expert, I thought, in securities law and raising money. But I’d been dealing with hundreds-of-millions-of-dollar deals, not startups. For some reason, I always had a technology interest.

One of the early things that happened was a guy came in named Gordon Kuenster. He’d been a Boeing executive and had been hired to run this startup called ATL [Advanced Technology Laboratories], an ultrasound company out of the University of Washington. He comes into Perkins because Perkins handles The Boeing Company. I’m the low man on the totem pole, so the partner in charge of Boeing has me come and meet with this guy. The partner said, ‘I don’t know, we don’t really do startups.’ I had to plead, ‘Let’s try it!’

X: How did ATL play a role in the rise of the Seattle tech scene?

TA: ATL became a major success at the same time as Physio-Control. Physio went public, and ATL got bought by Squibb for $60 million—big money in those days [1979]. And then what happened was, Hunter Simpson at Physio-Control and Gordon Kuenster at ATL, they invested in some other companies. People who made money in those companies invested in some companies. And then the biotech thing started. I represented Immunex when it first started [in 1981]. It went public, the stock crashed, it survived all those years somehow. So on the biotech side, a bunch of stuff started happening. There was quite a bit of activity, but nothing like it is today.

And then, of course, there was Microsoft. So in 1990, I was still at Perkins. It was a good technology practice. I went over to McCaw Cellular, partly because I was interested in technology. McCaw was sort of a secret company in Seattle. It was in the cell phone business; nobody had cell phones. There was that phone in some people’s cars, sort of like a radio phone or something. Nobody knew much … Next Page »

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In football, the expression is “three yards and a cloud of dust.” But at Microsoft, it’s apparently “three screens and a cloud.” That’s according to chief software architect Ray Ozzie, who took part in a keynote conversation with University of Washington computer scientist Ed Lazowska at today’s State of Technology Luncheon, hosted by the Technology Alliance at the Westin Hotel in downtown Seattle.

Ozzie was speaking about the evolution of cloud-based software to serve three key device categories: phones, laptops, and TV-sized monitors. He and Lazowska (an Xconomist) touched on many other aspects as well, including Microsoft’s leadership and culture, the past, present, and future of computing, and even Boston versus Seattle (which suits Xconomy’s mission particularly well since we’re in both cities). The event was a big deal, especially because Ozzie doesn’t make a lot of public appearances around town, but there was also plenty of other high-profile news and activity from the lunch. Here’s a quick recap, including an edited account of the Q&A with Ozzie.

Susannah Malarkey, executive director of the Technology Alliance (also an Xconomist), made the opening remarks and introduced Gov. Chris Gregoire, who kicked things off with a few comments about the region’s technology leadership. “On a national scale, I’m very excited that science and technology is back in a big way,” she said. “The innovative spirit that is the lifeblood of the 21st century economy is going to happen in our state.” Gregoire cited the importance of such technologies as the smart grid, broadband access, and healthcare software, and stressed the need to improve education from early childhood through graduate schools. Lastly, Gregoire singled out a few Washington companies, including Modumetal, Insitu, and Verdiem, saying “This is the future of our great state…It is not going to happen without all of us working together. We will get through this terrible downturn in our economy.”

Next up, Marty Smith of the Seattle-based Alliance of Angels announced his group had just closed a $4 million-plus seed fund yesterday, to make “sidecar-type investments.” The Alliance of Angels funded five companies that were acquired last year—Cleverset, Shelfari, Insitu, SnapIn Software, and Coffee Equipment Company. And one of these, SnapIn Software (acquired by Nuance for an estimated $180 million last August), was named the Alliance of Angels 2009 Company of the Year, Smith announced. SnapIn, based in Bellevue, WA, was backed by Frazier Technology Ventures, Trilogy Equity Partners, Hunt Ventures, and Oak Investment Partners.

Jeremy Jaech, chair of the Technology Alliance and CEO of Seattle-based Verdiem, followed with an eye-opening rundown of benchmarking stats comparing Washington state with its top technology peers around the country: Massachusetts, Maryland, New Jersey, Connecticut, Virginia, California, New York, Colorado, and Utah. Jaech, who’s also an Xconomist, pointed out that Washington ranks 4th among its peers in terms of its share of total U.S. venture capital investment (behind California, Massachusetts, and New York), which is encouraging. Washington also ranks in the top 5 in the strength of its engineering workforce, but suffers in education rankings such as 8th grade math proficiency, high school graduation rates, number of bachelor’s and graduate degrees awarded, and state spending on academic research. The most urgent recommendation from Jaech’s team? Boost investment in undergraduate and graduate science and engineering education.

Then it was time for the keynote. The UW’s Lazowska introduced Ray Ozzie by telling the story of how the latter showed up in Seattle in 2005 (when his startup Groove Networks was acquired by Microsoft) and gave a three-hour lecture on collaborative software in Lazowska’s class on the history of computing. I’m not going to do justice to Ozzie’s background here—he’s the main creator of Lotus Notes, among other things, and was a developer at Data General, where Craig Mundie also worked—but let’s just say I’ve long been fascinated by his story of discovering the PLATO mainframe at the University of Illinois in Urbana. (In part because that’s where I did my first computer programming as a high-school kid in 1983. And also, props to a fellow Illini alum.)

Here’s a condensed and edited version of the Ozzie conversation:

Lazowska: In Malcolm Gladwell’s Outliers, he talks about the importance of serendipitous timing. What is it about people born in 1955 for computing—Bill Gates, Steve Jobs, and you?

Ozzie: Timing is a huge, huge factor. Something else in Gladwell’s book is pretty … Next Page »

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Leave it to Paul Allen to create a museum that flies. Literally. This Saturday afternoon in the skies above Everett, WA.

Okay, the museum doesn’t really fly, it’s an aircraft hangar that remains on terra firma. The part that flies is most everything inside the museum, which the billionaire with omnivorous interests calls his Flying Heritage Collection. It’s composed of 15 World War II-era fighter planes that Allen has assembled from around the world over the past decade, polished up, and restored to FAA-certified flying condition.

Aviation fans can marvel at the roaring engine of the P51D Mustang, or imagine the danger pilots of other planes faced when performing night bombing raids over Berlin or London. But the larger question Allen is raising with his collection is an even more fascinating one, for me, anyway: What ingredients are necessary to make big leaps ahead in innovation? After all, this short historical period from 1935-1945 saw planes go from propeller-driven to the era of jet engines. Speeds went from 60 mph to 600 mph. Wood and fabric were replaced by all-metal body frames. Radar went from concept to mainstream. How did those stars align so quickly?

I drove up to Paine Field on a rainy Wednesday afternoon to see for myself and meet Adrian Hunt, the executive director of the Flying Heritage Collection. Since it opened in June, the flying museum has apparently been something of an instant hit. More than 11,000 people have already visited, the type of attendance figure that organizers thought it would take six months to eclipse, Hunt says.

Apparently, people are drawn to the living, breathing aspect of the place, where the artifacts don’t sit around collecting dust. Hunt pointed to an eye-washing station on the wall next to an exhibit, and a fire hose. They aren’t props—this is an active aircraft hangar. “That’s not the sort of thing you see at the Seattle Art Museum,” Hunt says. He adds, “It’s important that these are restored to flying condition, so people can experience the power, the engines, and the noise.” (The public can’t hop on board, the planes are flown strictly by professionals.)

By taking a close look at each plane, you can see the step-by-step advances aviation made in those formative years. Allen’s exhibits credit the leaps in innovation to six main themes, which you can see etched on the wall before you enter the hangar. The first is political will, defined by government leadership and public support, which the museum says was “driven by ambition or the need to survive.” (I’ll go on a limb and say that’s a more powerful motivator than stock options).

But political will alone wasn’t enough. For one, the means and manufacturing capacity from capital and labor had to be in place. For another, the support technology like weather instruments needed to mature. More precise weaponry had to be developed. Of course, engines had to evolve with greater horsepower to fly longer, higher, and faster. Then fuselage and wing materials needed to get stronger and lighter in order to make planes safer and more nimble.

Even though I’m the biotech guy at Xconomy, it made me think there’s got to be some lesson here for my corner of the world. Maybe it’s the next flu pandemic that mobilizes political leadership and public support around vaccine research, which could be the catalyst to propel us to a new era of disease prevention after decades of immunology research. Then again, if we aren’t already laying the right foundations in research, maybe we won’t be equipped to make such rapid leaps in a time of crisis. That’s something to think about when the 70-year-old planes rumble in the skies over our modern high-tech mecca this Saturday afternoon.

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Last October marked the 50th anniversary of the Soviet Union’s launch of Sputnik, the world’s first artificial satellite. And next month, Sputnik’s American offspring, the National Aeronautics and Space Administration, will also hit its 50th birthday. The milestone has occasioned the biggest flurry of media retrospectives on the space program since Ron Howard’s 1995 film Apollo 13, including two well-made documentaries that aired this week on the Discovery Channel’s HD Theater, When We Left Earth and In the Shadow of the Moon.

If you missed them, it’s worth searching your local listings to catch these two programs when they’re shown again. (They’re also available on DVD and Blu-Ray disc.) Though much of the footage in the two films is familiar, they’re notable because this is the first time most of this material has been shown in high definition. Also, both programs contain extensive new interviews with the surviving astronauts from the Mercury, Gemini, and Apollo days—plain-spoken rocket jockeys who are just plain fun to listen to.

I’m a veteran space buff—my first piece of “technology journalism” was a poster on the Saturn V rocket that I designed when I was in the fourth grade—and the Discovery Channel programs sent me on a trip across the Web to see what else I could find in the way of historical images from the Apollo missions. If you follow NASA at all, you know that the Web is the best place to see the raw data coming back from current-day missions like the Mars Phoenix lander and the Spirit and Opportunity rovers (which are still trucking across the Martian surface, four years after they were expected to expire). But it turns out that the Web also holds a vast mine of original data from the Apollo project, and in today’s column I thought I’d point you toward some especially rich veins.

While NASA itself has a large collection of Web resources about the Apollo days, they aren’t particularly well organized, and they tend toward the hagiographic. The two Apollo sites that impress me the most are labors of love created by amateur historians with no direct connections to NASA. One is the Project Apollo Archive, assembled by a Lynchburg, VA, native named Kipp Teague.

Pay no attention to the 1994-era Web graphics and ugly HTML tables (Teague deliberately labels his collection of history sites the “RetroWeb”). The glory of the Project Apollo Archive is the material itself: thousands of photographs scanned from NASA originals, including large-format Hasselblad images captured by astronauts on Apollo 7, 9, 11, 12, 14, 15, 16, and 17; hours of MP3 recordings of communications between flight controllers and the astronauts; and a few MPEG videos covering events you don’t see in the TV shows about the moon landings, such as the moment when Apollo 12 lunar module pilot Alan Bean accidentally points the television camera at the sun, destroying its vidicon sensor (and preventing the world from witnessing the rest of the mission on TV).

An even more detailed resource—hosted on a NASA web server but assembled and edited by a former Los Alamos scientist named Eric Jones and a Canadian space buff named Ken Glover—is the Apollo Lunar Surface Journal. Destined to be used by historians far into the future, the site is a collection of transcripts of all the recorded conversations between the lunar surface crews and Houston, interwoven with after-the-fact commentary from the editors and from 10 of the 12 astronauts who were actually there. It’s supplemented by MP3 and RealAudio clips of the same transmissions, as well as hundreds of photos, Quicktime VR panoramas, and flight documents, right down to the technical checklists the astronauts wore on the cuffs of their spacesuits.

Here’s one of my favorite passages from the journals. This is from Apollo 17, at the moment when Harrison Schmitt—a PhD geologist, and the only trained scientist to go to the Moon—noticed something unexpected:

145:26:22 Schmitt: Oh, hey! (Very brief pause)
145:26:25 Schmitt: Wait a minute…
145:26:26 [Eugene] Cernan: What?
145:26:27 Schmitt: Where are the reflections? I’ve been fooled once. There is orange soil!!
145:26:32 Cernan: Well, don’t move it until I see it.
145:26:35 Schmitt: (Very excited) It’s all over!! Orange!!!
145:26:38 Cernan: Don’t move it until I see it.
145:26:40 Schmitt: I stirred it up with my feet.
145:26:42 Cernan: (Excited, too) Hey, it is!! I can see it from here!
145:26:44 Schmitt: It’s orange!
145:26:46 Cernan: Wait a minute, let me put my visor up. It’s still orange!
145:26:49 Schmitt: Sure it is! Crazy!
145:26:53 Cernan: Orange!
145:26:54 Schmitt: I’ve got to dig a trench, Houston.
145:27:00 [Bob] Parker [EVA Capcom]: Copy that. I guess we’d better work fast.
145:27:01 Cernan: Hey, he’s not going out of his wits. It really is.
145:27:07 Parker: Is it the same color as cheese?

It turned out that Schmitt had discovered an unusual deposit of volcanic glass—formed under the surface of the moon billions of years earlier and stirred up by a relatively recent meteor impact—with a colorful orange cast that strongly contrasted with the Moon’s generally gray-black soil. (The moment is recreated fairly faithfully in From the Earth to the Moon, a wonderful 1998 TV mini-series produced by Tom Hanks, who, of course, played astronaut Jim Lovell in Apollo 13). If people ever go back to the Moon, … Next Page »

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For your afternoon viewing pleasure, may I commend to you the following video from Alex Randall, co-founder of the Boston Computer Exchange.

To commemorate what he says is the 25th anniversary of the very first e-commerce transaction, Randall sat down in front of a video camera to tell the tale of how he and his wife, Cameron Hall, set up an online marketplace for computers in their living room and, on March 5, 1983, sold the first one to a customer in Chile. It’s a fun story filled with nostalgia gear (remember the days of the Apple I, the Osborne, and 300 BPS modems?), and a great reminder of the Boston area’s key role in computer and internet history. Happy birthday, e-commerce!

And now, for those of you who want to dispute Randall’s claim to having facilitated the first online transaction—and I know you’re out there—fire away.

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In studying why Boston has been a center of innovation for nearly four centuries, the Boston History & Innovation Collaborative has identified a set of drivers which came up in all eras, in all types of innovation (technical, medical, and social). Deep historical research on more than 60 cases, conducted with funding from the Massachusetts Technology Collaborative, pinpointed five drivers that re-appeared over and over in the stories behind each of these particular innovations—why they happened in Boston, and why they happened at the time they did. These are Boston’s “secret sauce,” explaining why we have an innovation tradition.

We call these five ingredients or drivers the “High Five.” They are:

1) A driving entrepreneur or a team of leaders.

2) A local network of people and businesses/organizations sharing information, working across silos.

3) Local funders.

4) Local demand which the entrepreneur can use to refine and perfect the new idea or product.

5) National or global demand for the innovation.

An example of entrepreneurship truly driving a particular innovation in Boston’s past is the Boston Associates, a group of entrepreneurs including Lowell, Appleton, and others, who set up the first factories in Waltham and later Lowell, taking the wealth from shipping and transferring it into a new industry, textile manufacturing. More usually innovation is driven by a single entrepreneur like Cambridge’s Elias Howe and his sewing machine or An Wang and office word processing in the 1970s.

An example of the second driver, local networks and clusters, can be found in the fierce debate in Boston between black abolitionist David Walker and white abolitionist/journalist William Lloyd Garrison, which helped to spur the abolitionist movement—a social innovation.

The third driver, local funding, or capital and financing from Bostonians and local institutions, was central to King Gillette’s development of the safety razor, funded by John Joyce; the birth of state-chartered banking in 1784; and Georges Doriot’s invention of the venture capital model in the 1940s.

Local demand, the fourth driver, helped to get Dan Bricklin’s Visicalc, the first electronic spreadsheet, off the ground. Bricklin was able to sell his first units in 1979 because there was a local market exemplified by the Boston Computer Society, a user group founded in 1977. Other cities didn’t have such a ready market.

Finally, the development of the lucrative salt cod trade in the 17th century was a response to national and global demand. Bostonians have been particularly good at gauging and meeting this demand, whether with salt cod in the 17th century, mass-manufactured textiles in the 19th, or Ned Johnson inventing check-writing off mutual funds in 1976.

Four of the High Five drivers are local in nature. Taken together, these factors led us to identify the phenomenon of the “bump and connect.” Proximity brings about crucial encounters among entrepreneurs, funders, and researchers, collaboration within industries and clusters, and professional and social networking. Even in today’s digital world, business leaders like Novartis’ Bernard Aebischer report that networking opportunities are important—and were in fact a determining factor in the decision to locate Novartis’s research headquarters in Cambridge’s Central Square, in close proximity to Cambridge’s “Genetown,” MIT, MGH, and Harvard’s Longwood campus.

Also central to our research findings is that innovation in Boston has had a broader racial, ethnic, and gender base over the past few centuries than many think. Our innovation tradition is not only white and male. African-Americans, Asians, and Hispanics have made an important difference in technical, social, and medical innovations. Immigrants have played a leading role in introducing new ideas and social movements. And the role of women has been critical, from the first years of Massachusett’s settlement all the way through to the present.

Our History & Innovation Collaborative works to ensure that the “bump and connect” is recognized and continually woven into our fabric—whether in new real estate developments, or the Boston Museum coming soon to the Greenway, or our 2008 History & Innovation Awards. Helping to generate new waves of innovation is all about fostering the bump and connect.

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