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

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

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

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

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

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

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

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

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

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What do running a farm, being a mobster, and taking orders at the drive-through at Dunkin’ Donuts all have in common?

They’re all experiences simulated on Facebook, thanks to game developers Zynga (maker of Mafia Wars and Farmville) and a much newer startup, PartingGift, which operates in a Massachusetts area not exactly known as a tech hub: Hyannis on Cape Cod.

Haven’t heard of the Dunkin’ Donuts game? Called On Your Mark, it debuted on the first of this month and lives on Dunkin’ Donuts’ Facebook fan page. The game interface pushes an image of a coffee cup along a virtual coffee assembly, with stations for flavor, sweetener, milk, and brew, with a virtual customer’s order. The player is responsible for correctly filling the order in the allotted one minute. The orders become bigger and the cups move faster as the players hit higher levels of the game. Ten players a day have the chance to each win $10 gift cards to Dunkin’.

On Your Mark does more than waste hours of the players’ time and earn the game developer money in the process, though, says PartingGift founder and CEO Brad Crowell.

“The whole game platform was designed with research in mind; there’s a strong data-collection component that’s part of our platform,” Crowell says.

See, On Your Mark starts off by asking the player to input their favorite Dunkin’ Donuts beverage to make at the virtual drive-through.

“We are looking to figure out what people’s preferences are in terms of beverages—that’s sort of the starting point of being able to understand what we can do with those preferences,” Crowell says. “We’re working with Dunkin’ on multiple games, building on that sort of information.”

He says he got the idea for the company four or so years ago, after automakers like Ford released online apps where consumers … Next Page »

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Motista, which runs online market-research surveys for Fortune 1000 customers, said today that it has completed a $4.5 million Series A funding round. El Dorado Ventures was the sole funder in the round, and El Dorado general partner Tom Peterson has joined Motista’s board. At the same time, the company announced that it is relocating from Rockville, MD, to San Mateo, CA. “We’ve been quietly building Motista in close collaboration with some of the world’s top brands,” Motista co-founder and CEO Scott Magids said in a statement. “With El Dorado Ventures’ investment and support, Motista is excited to transform the way all Fortune 1000 marketers use consumer intelligence by getting it in their hands every day.” The company said it’s working behind the scenes on a new version of its consumer survey product, to be released “later in the year.”

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These days, the simple act of going to the grocery store is a fraught and anxious affair. Americans are being told that what they choose to eat isn’t just a personal decision, but has major economic, political, and moral implications. For one thing, there’s the spiraling cost to society of food-related health conditions, from obesity and diabetes to heart disease and hypertension. Then there are books like The Omnivore’s Dilemma and Eating Animals and movies like Supersize Me, Food Inc, and Our Daily Bread, which expose the unsavory sides of a food economy dominated by supermarkets and fast-food joints and the factory farming system that’s grown up to serve them. And, of course, there are the burgeoning organic and local food movements, which argue that foods produced locally and without the use of pesticides or antibiotics are healthier and more sustainable—even if they’re beyond many consumers’ price range.

Into the middle of all this steps ShopWell, a Silicon Valley Web and mobile startup spun off last year by the design consultancy Ideo. The company’s proposition to consumers is simple: tell us a little about you, and we’ll tell you which products on the supermarket shelves best fit your nutritional needs.

It sounds great, given the difficulties ordinary mortals face with the very first step of responsible shopping and eating: trying to figure out how ingredient lists and nutrition labels relate to their own lives. But the company’s plan for making money is a bit more complex. It wants to be an advisor and information broker to food producers, who supposedly lack good data about how consumers make buying decisions in the grocery store and therefore have a terrible record when it comes to launching new products. To collect useful intelligence for its food-industry clients, ShopWell will need lots of users. And to sign up lots of users, it will have to provide non-obvious product recommendations in a usable format.

But frankly, it’s not there yet—which isn’t surprising, given that the company launched its beta site in September and its iPhone app even more recently. So in this third and final installment in our ShopWell case study, we’ll look at the product development challenges the company has ahead of it, and the business-model hypotheses it has yet to test.

[Editor's Note: This is the third article in a three-part series on ShopWell. Part 1 appeared Monday, November 1 and Part 2 appeared on Tuesday, November 2.]

What makes ShopWell worth following, and sets it apart from the scores of Silicon Valley startups launched every month, is not just that it’s trying to validate two premises at once (i.e., that consumers want an easier way to identify healthy food, and that food producers will pay for fine-grained data about consumer preferences). It’s also that the startup’ fate will reflect on Ideo’s ability to launch successful companies. Is the consultancy’s fabled user-centered design philosophy an effective tool in the real rough-and-tumble of startup life? Do good designers also make good entrepreneurs? Such questions may not be answered until ShopWell itself exits the startup market and its venture cashiers ring up the totals.

The Google of Food?

Whatever else it may mean, the “user-centered design” philosophy espoused at Ideo and many other creative hotbeds is about listening to people and creating things they’ll want, rather than force-feeding them products that don’t fit with their existing behaviors. But one of the interesting things about food and wellness, according to ShopWell CEO Jasmine Kim, is that many people only start thinking about the subject once they’re forced to give up their old behaviors. “A big insight from user-centered design”—that is, from the stories people have told Ideo and ShopWell—”is that when you are starting a transition, that is when you need nutrition advice,” Kim says. “You could be told by your doctor, ‘You have type 2 diabetes, eat less sugar,’ but people are left to their own devices to go figure out what they could eat.”

That’s why ShopWell has put a lot of energy into allowing users to filter its database of foods based on health needs—there are simple “preselects” on each users’ account page that will … Next Page »

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With the ShopWell concept for helping consumers make more sense of the nutrition labels on food, Ideo thought it had a winner. But while the design consultancy has many of the attributes of a startup incubator—a large flock of creative thinkers and a commitment to testing new ideas, to name just a couple—it’s not equipped to fund and staff new companies on its own.

As soon as Ideo senior designer Michelle Lee and entrepreneur-in-residence Brian Witlin had formalized their pitch on ShopWell in mid-2009, Ideo partner Brendan Boyle put out the word that the team was looking for venture support—preferably from a firm that understood how to manage the spinout process.

“Within one or two hops, somebody told Brian, ‘You should talk to these guys at New Venture Partners,’ and that is how they found us,” says Robert Rosenberg. “It was actually a cold-call e-mail that came in via LinkedIn.” (Score another one for PayPal alum Reid Hoffman’s professional networking service.) [Correction, 11/2/10: Rosenberg sent Xconomy this revision: "The thread that actually brought Ideo to New Venture Partners wasn't LinkedIn.  It was somewhat high tech (someone at IDEO posted the question "does anyone know anything about spinouts?" on a Stanford GSB listserve), but it was also a little old fashioned in that a person who saw the post forwarded it to Frank (Rimalovski, a partner at the firm)."]

[Editor's Note: This is the second article in a three-part series on ShopWell, a Palo Alto, CA, Web startup that rates food products based on shoppers' personal health goals. Part 1 appeared Monday, November 1.]

Rosenberg is a longtime partner at New Venture Partners, which has offices in San Mateo, CA, and Murray Hill, NJ, as well as the UK and the Netherlands, and purports to be the world’s only venture firm specializing in corporate spinouts. (In a two-part conversation in September with another partner at New Ventures Partners, David Tennenhouse, I learned exactly how that process has worked in cases such as Freescale’s spinoff of magnetic memory startup Everspin.)

Lee, Witlin, and Boyle presented their plan to Rosenberg and his former colleague Frank Rimalovski, who has since left New Venture Partners to head up NYU’s Innovation Venture Fund. “One of the first things we saw was how fully thought-through the whole concept was,” Rosenberg recounts. “The prototypical entrepreneur has a hammer and everything looks like a nail; they think they can take over the world with their hammer. What Brendan, Brian, and Michelle had was a much more realistic and frankly more nuanced vision. I think part of the reason is that at Ideo, where they come from, they have the discipline to think that way. But it also reflects the fact that ShopWell itself is not a point solution. There are lots of innovations that brilliantly spot a problem and pair that with a brilliantly conceived solution, but with ShopWell, it’s that times two.”

On the consumer side, Lee and Witlin had come up with a plan for offering personalized food ratings reflecting consumers’ specific circumstances—not just their age, gender, height, and weight, but their health conditions and fitness goals. “This stuff is not just for health nuts,” says Rosenberg. “There is a real desire to understand the health impact [of different foods]. It’s just really hard to get at that on a personal basis. The tools that are out there are the quintessential one-size-fits-all tools—the USDA Food Pyramid says, ‘Eat this, not that.’ Well, what’s good for me could kill my mother.”

And on the producer side, ShopWell was offering a solution to food manufacturers’ age-old problem predicting what new products consumers will buy. “These are some of the world’s largest companies, and they are swimming in data from supermarket scanners and from generations of focus groups sitting behind one-way mirrors,” says Rosenberg. “But it turns out that … Next Page »

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Researchers at the Centers for Disease Control shocked the nation two weeks ago with a study projecting that by the year 2050, as many as one fifth to one third of U.S. adults could have diabetes, up from just 10 percent today. Part of this increase is inevitable—a side effect of the swelling population of people at high risk for the disease, such as the elderly and Hispanics. It’s also a result of the fact that diabetics are living longer thanks to better treatments. But the CDC researchers also offered evidence that key “preventive interventions” could considerably reduce the future prevalance of diabetes and the resulting burden on the healthcare system.

It’s no mystery what those interventions might be, and they aren’t expensive or high-tech. The most effective way to prevent adult-onset diabetes, by far, is weight control through exercise and healthy eating. And diabetics aren’t the only ones who could benefit from a better diet: 34 percent of U.S. adults are obese, according to the CDC.

Unfortunately, choosing healthier foods is easier said than done. The huge stakes involved in those choices—and the opportunity to help simplify them—are among the reasons why team members at ShopWell, a recent spinoff of Palo Alto, CA-based design consultancy Ideo, are so passionate about their business: a Web-based service that helps consumers make smarter grocery buying decisions. As its name implies, ShopWell shows consumers which products on supermarket shelves mesh best with their health goals, and which are non-starters.

“Before I came on board here, I asked, ‘Is this just a Palo Alto problem that you’re trying to solve at Ideo?,’ because I really want to solve a big problem,” says Jasmine Kim, who joined the startup as CEO in September. “Well, when one in three children under 17 are overweight; when Americans don’t even recognize what overweight is now, because it’s the new normal; when you have Michelle Obama tackling childhood obesity on a national level; when Jamie Oliver is trying to get schools to go from chocolate milk to regular milk—that all tells you that this is a big problem, and that’s the kind of problem we want to solve.”

The first challenge ShopWell is biting off: the sorry state of nutrition labeling on food packaging. It’s been more than 70 years since Congress mandated that food makers list ingredients on their labels, and 20 years since the advent of the familiar “Nutrition Facts” chart. But while these labels are packed with information, it’s largely a contextless, one-size-fits-all deal—the percent daily values, for example, are based on a 2,000-calorie diet, which may be more or less than you really need, depending on your age, weight, gender, and activity levels.

Using ShopWell is like getting a Nutrition Facts label made just for you. At the ShopWell website, you start by entering personal details like age and gender, along with information about your health goals and conditions—whether you have high blood pressure or diabetes, for example. That allows ShopWell’s behind-the-scenes algorithms to spit out personalized ratings for thousands of common products. If you’re trying to lose weight, foods with lots of added sugar will obviously score low (bye-bye, Betty Crocker Cookie Mix). But on a subtler level, ShopWell will also bump up the scores of high-calcium foods for people with osteoporosis, or those with high levels of fiber and potassium and low levels of fat and cholesterol for people with heart disease. Armed with this data, you can build a shopping list that speeds your trip through the nutrition minefield that is the typical supermarket.

ShopWell’s executives and investors see the service as the missing link between nutrition labeling and personal health. “There is a groundswell of interest in the connection between food and wellness,” says Robert Rosenberg, a partner at New Venture Partners, the San Mateo, CA-based venture firm that backed ShopWell’s launch. “But if you look at where the rubber meets the road, in the supermarket, day after day you are going to see a consumer holding a box of this in their right hand and a box of that in their left hand, trying to figure out, ‘What does this mean for me?’ The world needs a personalized food rating engine that can connect this impenetrable mound of scientific data about nutrition and ingredients with my personal preferences or medical needs as a consumer.”

Of course, Silicon Valley is humming these days with Web startups and apps promising to help consumers with one challenge or another, from monitoring their finances to keeping track of their kids to buying a car. What makes a food website with only a dozen employees so interesting? Quite a few things, actually.

One is the undeniable scale and importance of the problem: some 100 million Americans have food-related health problems, from annoyances like lactose intolerance to life-threatening conditions like … Next Page »

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Focus groups are such a standard part of our market-driven culture that they’ve long since become the subject of parody. Decision-makers are seen as being afraid to act without consulting them; surely, no political party would pick a candidate, no legislator would introduce a big policy initiative, and no movie studio would green-light a big-budget film without focus-grouping it first.

But while they may be ridiculed, the truth is that business organizations—especially consumer product companies—still spend quite a bit of money on focus groups. Such ensembles are considered a crucial way to identify products people will buy and weed out bad ones before they’re brought to market.

The rise of the Internet, however, has created faster, cheaper alternatives to the classic eight-people-around-a-table-and-a-whiteboard scenario. Since 2000, Waltham, MA-based Invoke Solutions has been one of the companies running online surveys that, in effect, let market researchers assemble focus groups that are hundreds or thousands strong.

Until recently, Invoke’s surveys were still real-time affairs, conducted at scheduled times. Groups of researchers huddled in control rooms, administering questions, interacting with participants directly, and watching the data pour in. Last year, though, Invoke introduced a new “asynchronous” survey system called Engage that allows volunteers to participate in market studies at any time they choose. And in January, it enhanced the system with new reporting and analytics software that lets Invoke’s clients view and explore the results, via instant PowerPoint presentations and other types of visualizations, as they come in.

Invoke’s president and CEO Ben Cesare, who came by Xconomy’s office a couple of weeks ago, says the response to the new reporting software has been “thrilling.” Within 60 days after Invoke rolled out the Engage Analytics tool, 120 Fortune500 clients were already using it, says Cesare, who joined the company in 2005 and became CEO a year later. The veteran of Apple Computer, Psion, and Agile Software says he’s “not a research guy”—meaning he isn’t steeped in the strategies of giant market-research firms like TNS or Ipsos. But he says he does understand “innovation that works, capturing the information that matters. That’s what I really care about, and that’s what attracted me to Invoke.”

Cesare (pronounced like “Caesar”) argues companies need to embrace market research systematically, the same way they’ve embraced enterprise resource planning (ERP) or customer relationship management (CRM). In fact, he’s got his own three-letter term for what Invoke does—RDM, for research data management.

During his visit, Cesare gave me the basic download about the venture-funded, 55-employee company (which raised a $7 million round one year ago) and its latest accomplishments in the young discipline of RDM. But I started out asking him about the competition—the old fashioned focus group. A greatly abridged version of our conversation follows.

Xconomy: What’s wrong with focus groups?

Ben Cesare: The problem with focus groups is that they are time-consuming and expensive and they give you a small sample size. You could spend a month and a half flying around to six cities and talk to eight people in each city and then find that only three of those eight do all the talking. Are you going to make a call based on the opinions of 18 people? We’ll put you in front of 1,000 people over a week at a fraction of the cost, and all the answers will be believable. There’s no groupthink, no bias in the room. You’re not traveling.

X: So why do companies keep doing them?

BC: You know the old saying—nobody ever got fired for buying IBM. There’s a lot of safety in the same old stuff. People will say, “I have to do my focus group, I have to look those eight people right in the eye.” I submit the opposite. My point of view is that people will … Next Page »

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Forrester Research (NASDAQ: FORR), the Cambridge, MA-based technology market research firm, said yesterday it will deal with the economic crunch by cutting 50 positions, or about 5 percent of its global workforce. But the move comes after a big hiring surge in 2008; even after the cuts, the company will still have 14 percent more employees than it did in February 2008, the company said. We’ve updated the Boston Tech Layoff Tracker with the latest numbers.

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Commercialization is rarely a solitary pursuit; bringing an idea to the world requires a set of diverse skills and knowledge, a proverbial commercialization village. Or a crowd. Enter the power of crowdsourcing.

Crowdsourcing refers to aggregating a large number of people to express their opinions or ideas about specific topics—and the term first appeared in a 2006 Wired magazine article by Jeff Howe. But simply bringing together a large number of people is not enough to create new products. An integral part of engaging a large community to solve the world’s biggest problems is matching the right type of crowd to two stages of the commercialization process: a diverse crowd for brainstorming of breakthrough innovations, and a large crowd for refining the product for the market.

By its definition, innovation requires a break with the status quo. Research repeatedly shows that groups with diverse backgrounds propose the largest number of unique solutions to a problem. This has also been my experience with BrainBuzzes, brainstorming events that I organize for Young Inventors International. The simplest explanation for this phenomenon arises from research by James March and the late Nobel Laureate and Turing Award winner Herbert Simon, who suggest that our capacity to search for solutions is limited by what we know. Thus, we find solutions that are “locally” optimal to what we know, but which may not be “globally” optimal for innovation because we are restricted in our search space. By bringing together a diverse group of people, we end up expanding the search field for increasingly “global” solutions and drawing on expertise from unrelated fields. While a larger number of people can brainstorm more solutions, diversity is key when crowdsourcing new, breakthrough product ideas.

One of the most established Internet companies that uses crowdsourcing to assist with brainstorming is Innocentive. Innocentive brings together companies that post problems for scientists and engineers around the world; the winning solution receives a specified amount of prize money. Innocentive focuses on brainstorming new breakthrough solutions; its model allows the company to provide economic opportunities to a diverse group of researchers from outside of North America whose experiences may be different from those of their North American colleagues. Another web site, Innovation Exchange, works on a similar premise, although it also allows for collaboration among problem solvers.

However, the success of an innovation depends not only on its ingenuity but also on its appeal to and adoption by the market. The market is perilous and fickle, and the products that are most likely to succeed are those that are best able to anticipate and satisfy the needs of the largest number of customers. For many years, marketing experts have used focus groups of potential customers to assist with identifying issues of usefulness and usability of new products. Today, the Internet allows for relatively easy aggregation of large numbers of people who can provide feedback on a product or vote on the optimal solution. The number of participants matters more in this case. Indeed, the ideal crowd to source is one comprising of all potential customers.

Other companies in the space include Cambrian House, Kluster, IdeaScale, CrowdSpirit, FellowForce, and IdeaBlob. All of these companies incorporate elements of voting for the best ideas. But to arrive at the wisdom of the crowd, the sites require large amounts of traffic. As more of these sites arise, there is a battle for users and, unless there are incentives for participants to contribute, these communities may suffer. For product refinement and focus group crowdsourcing, the best model might be for companies to encourage feedback on their own web site, such as Dell does through its Idea Storm site and Salesforce does through its Idea Exchange. This model is likely to generate better results because the companies already receive large amounts of traffic interested in their products and participants can be rewarded with free products or product discounts relevant to their interests.

While giving away products, discounts, or flat fees might suffice as compensation for focus group participants, determining sufficient compensation for innovators who create truly disruptive ideas with breakthrough market potential is more difficult. If correct incentives do not exist to compensate participants for their contribution of intellectual property, those with the most promising ideas will choose to commercialize them on their own. Understanding the type of group that must be sourced for a specific purpose allows us to begin designing rewards that will attract the right crowd essential to the complex journey of commercialization.

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Lexington, MA-based economic forecasting firm Global Insight said yesterday that it will be acquired by IHS (NYSE: IHS) of Englewood, CO. Global Insight’s 700 employees, including 325 analysts, provide business analyses and risk assessments for regions around the world to industrial, financial, and government clients, while IHS specializes in analysis energy, security, environemental, and product lifecycle issues. The companies did not disclose the terms of the deal.

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In a merger of market research minds, Cambridge, MA-based Forrester Research (NASDAQ: FORR) announced today that it will purchase JupiterResearch and its parent company, JUPR Holdings, from MCG Capital Corporation (NASDAQ: MCGC) for $23 million in cash, plus assumed liabilities. JupiterResearch, with 2007 revenues of roughly $14 million, has 83 employees. Forrester reported 2007 revenues of $212 million and 1,000-plus employees, according to a release.

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When was the last time you had a spare 45 minutes to sit through a telephone survey or to take part in a focus group? Finding willing participants for traditional market research studies is getting increasingly difficult, but Invoke Solutions of Waltham, MA, gets around the problem by shifting market research to the platforms where people are focusing more and more of their attention: the Web and mobile phones. And today the company announced that it’s picked up $7 million in new venture funding to build out its technology and pursue new customers.

In January, the nine-year-old company rolled out a new family of products called Engage that allows real-time interaction and feedback between panels of consumers participating in Web-based surveys and marketing experts from the companies sponsoring the surveys. For example, clients using the Engage Live Web-based system can watch participants’ answers to multiple-choice or open-ended questions as they come in, add questions on the fly to drill deeper on specific issues, and open direct chat sessions with individual participants. All of the information survey participants provide is captured in Excel and PDF reports.

The company’s InvokePing service, meanwhile, hits volunteers with survey questions right on their mobile devices, while they’re still inside a store or restaurant. Customers opt in by texting a message to the short code displayed on an in-store sign. They’re then sent a few questions via text message; after about 5 minutes, they get a reward such as a discount code. Study results accumulate on a Web-based dashboard available to store managers.

The company partners with research firms like HarrisInteractive and the Gallup Organization to design its surveys, and has worked with a range of Fortune 1000 customers such as Microsoft, Washington Mutual, Conagra, Dell, and Nestle. North Atlantic Capital, an expansion-stage investor based in Portland, ME, led the new funding round, which also included existing investors Bain Capital and BEV Capital.

“Our new Engage Family of Solutions is being quickly embraced by our partners and customers, both in the U.S. and in Europe,” said Invoke president and CEO Ben Cesare in a company statement published today. “This funding from North Atlantic Capital and our existing investors enables us to keep growing across the entire organization in order to scale the business in 2008 and beyond.”

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