Time for an update on Boston’s marketing tech cluster. It’s one of the real strengths of the local entrepreneurial ecosystem. And it looks like it’s getting stronger, with a couple of leaders making news this week. Here is a tale of two companies that have become competitors:

—Constant Contact (NASDAQ: CTCT), the Waltham, MA-based online marketing firm, has seen its stock price jump nearly 30 percent—from about $24 to just over $30—since Facebook filed for its IPO last week (coincidence?). Constant Contact has been positioning itself as a leader in digital marketing for small businesses across e-mail, social media, and Web platforms—especially social campaigns. The company also released some promising stats on its revenues and profits for 2011 and its most recent quarter.

—HubSpot, the Cambridge, MA-based marketing tech firm, said it has hired J.D. Sherman, Akamai’s former chief financial officer (also a former IBM exec). The company says Sherman is being brought in partly to help it prepare for a future IPO. HubSpot has been hiring aggressively and working on new products, while it pares away others (like Oneforty.com, which it acquired last summer). It remains to be seen whether the company will actually make it to an IPO before getting snapped up by Salesforce.com or some other suitor.

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If you’ve turned on your TV anytime in the last, oh, decade or so, you’ve no doubt been bombarded by ads imploring you to “ask your doctor” about Drug X. And you’re well familiar with the routine: You get treated to happy images of folks dancing, perhaps, or walking their dogs in pretty green meadows, while a soothing voice in the background tells you that Drug X may cause you to lose your ability to drive safely, lose your vision, or lose your mind.

Forgive the exaggeration but you get the picture.

Well, the FDA isn’t pleased with the pharmaceutical industry’s advertising practices. So it’s proposing a new set of rules that would not only limit the ability of drug advertisers to use so many cheerful images, but may indeed force them to place more emphasis on their products’ potential side effects.

The FDA actually proposed the new rules back in 2010. But it re-opened the matter to public comment on January 27, after it published the results from an experiment it sponsored to measure the impact of distraction on consumers’ ability to understand the risks and benefits of drugs being advertised. The rules would pertain to direct-to-consumer (DTC) ads for prescription drugs on television or radio.

The original proposal is rather bulky. But here are the basics of what the FDA is suggesting: The agency wants to amend the rules for DTC advertising to more clearly define the standards for determining whether side effects are presented in a “clear, conspicuous, and neutral manner.” For example, the new guidelines would dictate that the adds cannot include “distracting representations,” such as statements, images, or sounds that might draw the audience’s attention away from those laundry lists of potentially adverse events.

So what exactly makes an ad distracting? The FDA’s proposal doesn’t really spell it out clearly, but you can get a hint of what the agency was thinking in the newly released report on its study, which it titled, “Experimental Evaluation of the Impact of Distraction on Consumer Understanding of Risk and Benefit Information in Direct-to-Consumer Prescription Drug Television Advertisements.” The FDA planned the study to answer a number of questions. Among them: Do visual images that are positive in tone affect viewers’ ability to comprehend the risks inherent in a product? Do positive images influence how people feel about the product? And if the advertiser super-imposes text onto the images—spelling out the side effects—does that change how viewers perceive the product?

All good questions, to be sure. To answer them, the FDA asked 2,000 consumers to go online and watch an ad for a fake blood-pressure drug called Zintria. But the participants didn’t all see the same ad. Some heard the side effects cited while watching “mildly” positive images (rocks, chairs, metal arches), while others saw “strongly” positive images (babies, puppies, girls jumping with beach balls). Some viewers saw the side effects spelled out in superimposed text, while others didn’t.

Not surprisingly, those who watched cute babies and puppies while hearing about the side effects felt better overall about the product than those who watched the more boring images. Both groups, however, understood Zintria’s risks just fine—and they really got it when the side effects were displayed on the screen in clear text, too.

The FDA has published the study on the Web and re-opened the proposed rules to comments, which the public can submit up until February 27 (instructions below).

We here at Xconomy are plenty distracted by the plethora of peppiness in drug advertising. Here are our votes for … Next Page »

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Boston startups should be focusing more on creating strategic partnerships with big companies.

An “if we build it, they will come” mindset appears to dominate the Boston startup scene. Too many startups also rely mostly on a pricing and plans revenue model combined with implementing the latest inside sales and marketing 2.0 tools to “get found” while driving demand. A complementary and proactive approach in targeting big companies for strategic partnerships is needed.

Wake up… Most big companies have realized that their current set of technology providers lack the innovation and speed to deliver new competitive solutions. There are new sets of problems that need to be solved that may not have existed even a few years ago. As a result, new innovation programs and budgets have been established, led by senior executives. Their motivation is to fund pilots with emerging technology providers that most times lead to a much larger transaction and partnership strategy. Interesting areas include mobility, social, analytics, and cloud computing.

Take advantage of these customer-funded opportunities as these dollars may also complement your angel and VC funding efforts. Plus, for those leveraging lean startup principles, incorporating a big company “voice” to validate your product development roadmap may commit them to buy additional products and enhancements in the future.

If big companies are approached correctly, senior executives leading innovation programs will make swift decisions. Unfortunately, there are major challenges I see within the startup community to take advantage of these budgets. These include:

• Little focus on proactively targeting big companies. Also, the startup team and their mentors may not possess the sales skills or experience to effectively connect with and relate to big-company senior executives.

• Boston startups are too focused on the product and technology. Big companies are also evaluating their ability to work and collaborate with the startup team. Chemistry is important to these executives.

• You are not the center of the universe. There may be additional value in extending and leveraging existing ecosystem investments.

What I am describing here is not an outdated sales process where the cost to acquire a customer is high and the sales cycles are very long.

Keep in mind that big companies would rather … Next Page »

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Snapette was supposed to be an unusual way for Sarah Paiji to spend the summer between her two years at Harvard Business School. It was a mobile app idea she started working on last winter with Harvard alum Jinhee Ahn Kim, aimed at enabling women to better share and find fashion products in brick-and-mortar stores.

Then, two days before school was set to wrap up that first year, a Twitter interaction with the colorful Silicon Valley investor Dave McClure more or less changed all that, Paiji says. She tweeted an infographic about local shopping, which McClure then retweeted. He also directed his Twitter followers to sign up for the Snapette fashion app. The resulting traffic clued Paiji in to the fact that McClure was someone important in the startup world.

At the suggestion of friends, Paiji reached out to McClure, who runs the 500 Startups seed fund and accelerator in Mountain View, CA, to share some more information on her company. “He liked the idea but said he doesn’t know anything about fashion,” she says. So McClure passed Snapette along to his 500 Startups partner Christine Tsai and Jess Lee, founder of fashion tech startup Polyvore, to take a look at the company. Snapette got the OK, the 500 Startups fund invested an initial $50,000, and Snapette left its digs at Boston’s MassChallenge program to join McClure’s accelerator—three weeks after it had already started.

Now, Paiji is working full-time on Snapette and has no foreseeable plans to return to business school. The 500 Startups demo day in August put Snapette in front of 700 investors.”If they’re interested, it’s hard to say you’re going to back to school and will do this on the side,” says Paiji.

“It was very thematic of the whole journey: unexpected,” she says.

(And this isn’t the first startup I’ve written about whose Twitter interactions with McClure ultimately led to inking an investment from him. The other one would be Cambridge, MA-founded and now San Francisco-based Baydin.)

Snapette officially launched its app in late August in conjunction with demo day, and Kim and Paiji finished up the year at Dogpatch Labs in Palo Alto, CA. The company also continued to be a part of the MassChallenge program remotely, Paiji says.

Just last month, it made the move to New York City (to Dogpatch Labs, again) to be near the “high shopping density of boutiques and users,” says Paiji, who I caught up with in Boston this week.

There’s plenty of buzz around social, local, mobile, and even fashion tech startups. So what makes Snapette different? Most of the plug-ins and apps and platforms aimed at better tailoring shopping to consumer preferences exist in the online world. Not so much for the physical world. “Our idea was, we would love to help women find great products in stores using crowdsourcing,” Paiji says.

Snapette’s iPhone and iPad interface provides a stream of product pictures that have been uploaded by the user community, with information on the brand, price, and store that carries it. Users can search streams near them, and get directions to the store selling the products nearby. They can also interact with and follow others in the Snapette community, share products to other social media outlets, and view a stream of what products are hot and trending based on likes and comments on Snapette.

“It feels like Pinterest for the real world,” says Paiji. (The comparison had to be drawn.)

Snapette has since expanded beyond this crowdsourced content, and is explicitly partnering with brands and boutiques looking … Next Page »

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An acquisition and startup financings made up the New England deals news this week.

—Waltham, MA-based marketing software firm Constant Contact acquired the Boston startup CardStar, the developer of a mobile app for customer loyalty and rewards programs. The deal, whose terms were undisclosed, enables Constant Contact (NASDAQ: CTCT) to expand its marketing offerings for small businesses.

—My colleague Greg rounded up the top 10 venture deals in the Boston area from the fourth quarter of 2011. Rapid7, Warp Drive Bio, and Agios Pharmaceuticals were at the top.

—Hewlett-Packard has spent more than $10 million to set up a new office near the Alewife train station in Cambridge, MA. The office serves as the new headquarters for Vertica, the big data company HP acquired last winter (previously based in Billerica). The new facility will also serve as a center for technology development and local outreach.

—Bluefin Labs, a Cambridge-based startup focused on understanding social media conversation surrounding TV, nabbed $12 million in Series B financing. The deal was led by Time Warner Investments, and included new investor SoftBank Capital and return backers Redpoint Ventures and Lerer Ventures. Bluefins says it will put the money toward sales and client services, as well as its social analytics technology and further R&D.

—Mevion Medical Systems, a radiation therapy company based in Littleton, MA, announced it had pulled in $45 million in funding from ProQuest Investments and existing investors Caxton Heath Life Sciences, Venrock, and CHL Medical Partners. The money will go toward development of its proton beam radiation therapy system, which is designed to be smaller and less expensive than existing X-ray radiation therapy devices.

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The evolution of Constant Contact continues. The Waltham, MA-based online marketing firm (NASDAQ: CTCT) said today it has acquired Boston-based CardStar, a maker of a mobile app that lets people consolidate their loyalty and rewards cards. Terms of the acquisition weren’t given.

The deal represents Constant Contact’s first foray into mobile rewards technology aimed at helping small businesses stay connected to consumers. CardStar’s app lets people create a digital version of their physical membership cards (for retail stores, gyms, and so on) all in one place, on their smartphone. CardStar started in late 2008 and has four employees joining Constant Contact, including founders Andy Miller and Danny Espinoza. The startup says it has more than 2 million active users.

“I was a user before I was an acquirer,” says Constant Contact CEO Gail Goodman.

And acquiring CardStar makes a lot of sense for Constant Contact, which has been working to transform itself from an e-mail marketing firm into a one-stop shop for small businesses trying to reach customers through social media, online marketing, rewards programs, and other methods.

“This acquisition is at the intersection of everything we do,” Goodman says. “As we look at what small businesses are trying to do, they are trying to use every possible channel to reach customers—e-mail, social, mobile. At the core of that is a loyalty program. Andy and his team will help us weave those pieces into a really simple, really impactful application on the merchant side.”

Goodman declined to give specifics on any upcoming mobile products, but she emphasized that CardStar’s app will continue to run, and that more is on the way. “We are on a pretty aggressive product roadmap,” she says. “Much of what we’ve done has loyalty at its heart. Our customers have always wanted to take that a step further. But without mobile, it’s pretty hard.”

As for why Constant Contact chose CardStar over other companies in the mobile couponing and rewards sector, Goodman pointed to the startup’s traction with consumers and the culture fit with her team.

Constant Contact says it has more than 450,000 customers, mostly small businesses, nonprofits, and associations. Last summer, I spoke with the firm about its plans for innovating as a young public company (IPO in 2007), and about the biggest technology shift in its 13-year history (integrating Web software with existing database systems, among other things).

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Some interesting news tidbits in Boston-area mobile and marketing/ad tech today.

—Zmags, the Boston-based mobile and social commerce company, has raised $7 million from Square 1 Bank and existing investors OpenView Venture Partners and Northcap Partners. Zmags makes a software platform to help brands and retailers design marketing and merchandising campaigns across mobile devices, tablets, and Web. The new money roughly doubles the amount Zmags has raised to date; the company expects to close an additional growth equity round this year. Last May, CEO Michael Schreck spoke with me about the firm’s transition from digital publishing to commerce, and about mobile marketing trends over the past decade.

—Jumptap, the Cambridge, MA-based mobile advertising firm, has been working with Mitt Romney to create and run targeted campaign ads (at the zipcode level) for the Iowa Caucus and New Hampshire primaries. The company says Romney is the first candidate to run mobile ads in both sites. We’ll be watching to see how mobile technologies influence the upcoming presidential election.

—Apperian, the Boston maker of a mobile-app platform for businesses, is powering AT&T’s new mobile application management product. The software helps companies and other organizations create, distribute, and manage secure mobile apps. Apperian has worked with AT&T for the past several years, but the new announcement could be an important validation of where Apperian stands in the market.

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[Updated 12:20 pm] Here are a couple of notable Boston-area deals in digital advertising and marketing, each with a certain je-ne-sais-quoi European flair. Plus one more local company worth watching…

—Neolane, a social marketing tech company based in Paris with North American headquarters in Newton, MA, has closed a $27 million financing round led by Battery Ventures. The company’s previous investors also participated in the round. Neolane, which has 240 employees globally—just under 50 in New England—says it will use the money to expand its operations, particularly in North America. Neolane says it competes with IBM/Unica, Aprimo, and SAS.

—DataXu, the Boston-based digital advertising and marketing startup, has acquired U.K.- and Germany-based Mexad, a top European “demand-side platform” provider (meaning it gives advertisers tools to optimize when and where they place ads). Terms of the deal weren’t given. DataXu makes a software platform for advertisers who want real-time information and insights on consumer behavior across Web, mobile, and video channels. I spoke with CEO Mike Baker last year about DataXu’s recent growth and strategy in the ad-tech sector.

—ClickSquared, a Boston marketing software startup, has closed $9 million in equity financing led by Staley Capital, with existing investors also participating. The company, which started in 1999, does e-mail marketing and delivery, customer analytics, and campaign management, among other things. [This deal was added to the roundup after the first two were published---Eds.]

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Holiday shopping season is a fun time of year for a company like Daily Grommet. The Lexington, MA-based Web startup finds unusual consumer products and tells a story about one such “grommet” each day through videos and text.

This week I touched base with founder and CEO Jules Pieri, who shared some info with me on the top-selling grommets of the season so far. As someone who hates holiday commercialism, but likes warm puppies and weird gadgets as much as the next guy, I found the range of items available on the site pretty enlightening.

So in case you’re looking for an unusual-yet-personal gift for that special someone, you might want to browse around the Daily Grommet site, which includes product categories like home, food & drink, health & wellness, and green & eco-living. Sounds pretty standard, but the products you’ll find there are anything but.

Here are some examples of bestsellers (and links to the story behind each item):

—Sugru, a kind of hacking putty for real-world stuff (“fastest Grommet out of the gate, in history,” Pieri says).

—Urban Cheesecraft, which sounds like slang or euphemism but is actually just a handy cheese-making kit.

—Soggy Doggy, a super-absorbent doormat/shammy for dogs.

—Picture Keeper, an elegant way to grab and store photo libraries from your computer.

—Ila Security, a small, portable security-alarm device, like a personal panic button (good for long board meetings).

—Drawer Décor, a custom drawer organizer for kitchen supplies and other goods (mundane but useful if you don’t like clutter).

Good luck with the shopping, readers. I’ll probably see you online.

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Boston-based Fiksu, a startup focused on mobile app marketing, is introducing a new service today that it says will get consumers paid mobile apps for free, while still bringing mobile app developers revenue and traffic.

The service, FreeMyApps, allows consumers to rack up credits by trying free, mostly advertising-supported apps from select sponsors, and then redeem those credits for paid, premium-content mobile apps. The developers of the free mobile applications bid to promote their apps to consumers in the FreeMyApps system, similar to the way they would bid in other online advertising platforms. Paid app developers, meanwhile, also bid to get their content in front of consumers who are ready to cash in their app credits. The hope is that the FreeMyApps platform will drive a great enough volume of users and downloads that the price paid for the bids and the iTunes store cut will be worth it.

The consumer doesn’t have to put in cash for premium content apps, just their time testing out other free apps. “What’s so unbelievably exciting about the process is that the consumer wins big,” says Fiksu vice president of business development Craig Palli.

Fiksu got its start in 2008 under the name Fluent Mobile, as a developer of a news aggregator mobile app. The startup pivoted its business to mobile app customer acquisition after realizing how much effort and money it had put toward getting users to download the news application, CEO Micah Adler told me in an interview this past spring. Since 2010 Fiksu has offered an algorithm-based platform called Fiksu for Mobile Apps for helping mobile publishers more cheaply and efficiently find loyal users of their apps.

FreeMyApps relies on the same algorithms as the Fiksu for Mobile Apps, and both services tap into existing mobile traffic sources and real-timing bidding exchanges to determine which sources will likely yield loyal customers The high volume of bidders is supposed to keep costs down for developers. The services are complementary to one another, says Palli, but FreeMyApps offers additional insight on which bids lead directly to app downloads. The company said that it has about 15 to 20 mobile app developers enlisted on both the paid and free side of the FreeMyApps service for today’s launch.

FreeMyApps requires consumers to complete quite a few steps to score a roughly $1 mobile app for free. But Palli said the FreeMyApps team has been testing the service among consumers for a few months, and “the response from consumers has been fantastic.”

Whether FreeMyApps’ strategy for recruiting engaged app users is effective may depend on the quality of apps that plug into its ecosystem. We’ll have to keep an eye on which apps developers choose to promote, and how much consumers are willing to work for their “free” bonus.

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Shoppers with iPhones will be able to discover Nike products in a virtual way at Finish Line stores today, thanks to technology from GoldRun in New York. GoldRun raised $1.2 million in a seed round in April with a plan to conquer an emerging field: augmented reality, which is technology that adds images, sounds, or contextual information to content viewed on mobile devices. The company’s idea is to help brands virtually insert their products into consumers’ lives.

GoldRun CEO and co-founder Vivian Rosenthal says her company’s technology put virtual Nike Air Max shoes inside Finish Line stores for the new promotional campaign that shoppers can only see by using the cameras on their mobile devices.

It’s an idea that’s quickly gaining traction in the advertising and media industries. GoldRun has already landed work with Ford, HBO’s True Blood series, and retailer H&M, among others. With the help of GoldRun’s technology, these brands are creating virtual experiences for their customers and fans.

For example, viewers of True Blood can download the free GoldRun app from Apple’s iTunes App Store and use it to insert the characters in the show into photos they take with the smartphone’s camera. “Fans can be watching the show and take a photo with one of the characters on their couch,” says Rosenthal.

Users can also search their own surroundings with their iPhone cameras for images placed virtually in designated geographic areas on behalf of GoldRun’s clients. That could include shoes, dresses, or other objects. The app also lets users superimpose a product they may want—such as a new car—in a photo taken of an empty driveway.

Rosenthal says augmented reality offers marketers a way to reach customers in the real world that goes beyond the check-in model made popular by Foursquare. “A check-in from a brand or advertising perspective doesn’t bring that much value because it’s not visually driven,” she says. The limitations of other technology, she adds, motivated her to create GoldRun. “I realized advertising agencies and brands needed a platform where they weren’t spending tons of money and time developing one-off apps,” she says.

With augmented reality, Rosenthal says, brands can connect the social experience with a visual experience. “It can be any kind of product, message, or content as a virtual layer on top of reality,” she says. GoldRun, she says, can also tie the images to rewards such as discounts or the option to buy products.

GoldRun charges each client by the number of “hot zones” it establishes. These are … Next Page »

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This is a tale of two CEOs whose reputations precede them. It is a short tale.

The news today is that Cambridge, MA-based Kinvey and Portland, OR-based Urban Airship have formed a technology partnership involving mobile applications. Basically, Kinvey will handle the data back-end for mobile app developers whose apps reach end users through “push notifications” powered by Urban Airship; push notifications are typically marketing or news messages sent by publishers over a data network. Financial terms of the partnership weren’t given.

But this story isn’t really about financials. These are two startups, separated by 3,000 miles, and each has a personal flair. Last year, Urban Airship CEO and co-founder Scott Kveton told me about how his company first got off the ground. It was June 2009, Urban Airship had barely started, and Kveton and his team couldn’t afford to attend the Apple Worldwide Developers Conference in San Francisco. Instead, they bought $1,500 worth of donuts and camped outside the Moscone Center, chatting up (and feeding) hundreds of developers waiting in line about their mobile messaging needs.

Fast forward, and today Urban Airship’s thousands of customers include ESPN, Fox, LivingSocial, Warner Bros., and the White House. The company has raised more than $20 million, and its investors include Foundry Group, True Ventures, Founder’s Co-op, Intel Capital, Salesforce.com, and Verizon.

Kinvey’s back-story is no less dramatic. The founding team moved to Boston from Austin, TX, and graduated with the most recent class of TechStars Boston. Last July, when founder and CEO Sravish Sridhar and chief technology officer Morgan Bickle were stuck underground for two hours on the Red Line subway, they spent their time chatting up commuters about their mobile-app needs.

Sridhar’s startup has since raised a $2 million seed round from Atlas Venture, Avalon Ventures, and numerous angel investors. Kinvey is building its business around providing cloud-based back-end services like storing and managing app data, handling security and analytics, and enabling purchases. We’ll be watching to see how much its partnerships, like the one with Urban Airship, help boost its profile among developers and publishers.

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How annoying is the Web? I’m not talking about the nonstop distractions, the social-media window into human stupidity, or even the endless pop-up ads that block your view of the screen. I’m talking about the utter loss of privacy that most consumers have suffered online, yet rarely think about.

Sure, the Web is a net positive (we hope), but there are costs. When you visit any website, you leave a record of who you are, where you are, and what you looked at. That by itself might not be traceable to your specific identity, but over time, sites can track you via social media, share buttons (Facebook “likes,” even if you don’t click them or log in), check-ins, and other online activities. Companies can then show you personalized ads based on your product preferences, zip code, and history of Google searches. Worse, they can create a profile of your activities, often combined with data from public records, and sell it to other companies to do whatever they want with it.

Trying to combat all of this is a small Boston tech startup called Abine (pronounced “uh-BEAN”). Its name stands for “A Bit Is Not Enough.” The company is working to give consumers more control over their personal information on the Web. I’ve heard a fair amount about this startup over the past year, but I recently had a chance to meet co-founder Andrew Sudbury and CEO Bill Kerrigan over a beer.

The timing seems good for Abine, what with the massive flak Facebook has been taking over user privacy lately. As Sudbury points out (along with others), Facebook treats its users not as customers, but as products. Meaning that each social network member’s profile, with its likes, recommendations, and social connections, can be thought of as just part of a $100 billion machine for marketers.

“We don’t want our users to be our product,” Sudbury says. Instead, he says, consumers pay Abine to help shield them from Web tracking and other misuses of their personal information. “We want to sell privacy services,” he says. “We want to be at the point of contact between the user and the net. We want them to use the Web without worrying that all their data is flying out the door.” For example, “users think they’re going to Boston.com, but they’re really going to 10 other websites,” Sudbury says. (That’s because their browser fetches different pieces of the website from other sites—things like ads and snippets of code that let advertisers know a little bit about who each visitor is.)

So what does Abine do about it? The company makes add-ons for browsers like Internet Explorer, Firefox, and Chrome; at the moment, different pieces of its software work for different browsers. The software, called Do Not Track Plus, blocks unwanted tracking by detecting all tracking requests … Next Page »

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The Boston ecosystem for tech startup investing just got a little more active. Boston Seed Capital said today it has hired Dave Balter, the CEO of BzzAgent, as a venture advisor (see photo, right).

Balter joins Peter Blacklow from Worldwinner, now executive vice president of digital for GSN, as a top advisor to the fund. Both are keeping their current roles in their respective companies as well.

Boston Seed Capital is run by Nicole Stata, the founder and former CEO of human-resources software firm Deploy Solutions, which she led for 11 years before its sale to Kronos in 2007. (If there’s one thing you get from this article, please learn how to pronounce Stata correctly: “STAY-ta.” Yes, she comes from a famous family.)

Boston Seed, which has offices in Newton, MA, is an early-stage investment firm that is about a year old. It invested in eight startups in its first year—most recently, Shareaholic, FitnessKeeper, and Relive (just last week). Other investments include Krush, Yottaa, EverTrue, Kinvey, peerTransfer, and Smarterer. Most of its startups are based around Boston, though Stata says, “We invest from Boston to pretty much anywhere.”

Stata (see photo, left) declined to give specifics about the size of her fund or how much she’ll invest in a typical startup. She did say she’s looking at seed-stage to Series A investments, is testing “the micro-venture model” while “keeping as close as possible to a traditional venture fund,” and is “eager to work with [other] venture firms.” In terms of sectors, Stata says Boston Seed focuses on “enabling platforms for Internet, mobile, and data.”

There is a question of how Boston Seed will differentiate itself from other local micro-VC funds such as NextView Ventures and Project 11 (not to mention angel groups). Stata herself has expertise in software as a service, human capital management, and business software. Blacklow brings plenty of gaming and marketing know-how. And the addition of Balter brings more leadership in marketing, social media, and company-building, as well as more contacts with entrepreneurs, investors, and thought leaders.

Indeed, the point of bringing in Balter is to provide “existing CEO feedback” to startups, says Stata. “It’s something I wish I had done when I was running Deploy,” she says. (Balter’s company, BzzAgent, is owned by Tesco/Dunnhumby after an acquisition earlier this year.)

So why does Stata want to do venture capital now, instead of starting another company herself? At Deploy, she says, “I was heads down, and quite myopic in my field. I wasn’t good enough at looking around at what was happening. I wanted to understand, what does the world look like today and where is it going?” As an investor, she says, “I can help a lot of companies instead of just one. That’s a big motivator.”

That brings her back to Boston Seed’s essence. “We really want to help startups,” she says. “That’s the reputation we want to get. We have to earn it.”

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Step right up, ladies and gentlemen, and behold…the eighth wonder of the world. No, not King Kong, I’m afraid. But how about a computer that can read and interpret human emotions and mental states?

That would be from Affectiva, a Boston-area startup co-founded by Roz Picard, a 20-year veteran of the MIT Media Lab. Picard (see photo, right) is the founder and director of the Media Lab’s Affective Computing research group, and she has done extensive work in computer vision, machine learning, and human-computer interfaces, with applications in autism communication, health and wellness, education, marketing, advertising, and other areas.

Picard is speaking at this Thursday’s Xconomy “6×6” event (Six Cities, Six Big Tech Ideas) in Boston. In advance of her appearance there, I sat down with Picard at Affectiva’s offices this week to get a demo of the company’s technology and to talk a little about the future of emotional and gestural interfaces.

One of the demos involved a computer tracking my facial expressions via webcam (and also my heart rate via blood flow to my face) while I watched a series of TV commercials. Based on indicators like raised eyebrows, smiles, or a furrowed brow (see example, below), the software tried to figure out how engaged, interested, amused, or disturbed I was during the course of each ad. It’s hard not to be self-conscious during all this, but I’m pretty sure the computer concluded: this guy hates all commercials. (And since I haven’t smiled since 1995, we’ll enlist my fellow editor Erin Kutz for the live demo on Thursday.)

Affectiva also will be rolling out a new product on Thursday—one that has applications in finance and healthcare, among other industries—but I’ll let Picard speak for that when the time comes.

Meanwhile, I asked Picard whether the field of affective computing would continue to advance incrementally (like speech recognition, say) or whether it would undergo a breakthrough of some kind. “I think it’s going to make some leaps,” she said. “There’s going to be a lot more happening by indirect measurement—nonverbal [cues] that people don’t really think machines can do. That’s going to really progress.”

To me, Picard’s work exemplifies what truly big ideas are about—for the first 20 years or so, they might be more interesting scientifically than commercially. But once the technology and marketplace gets to a certain point, a viable business can be built around them, even as the science continues to advance. And then who knows what will happen?

We’re looking forward to a fantastic 6×6 program and some great networking this Thursday (you can register here). Hope to see you there.

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From Phil Fernandez’s point of view, there’s a precise moment in the sales process when a potential buyer is ready to be contacted by a seller. Reach out too soon, and they’ll be annoyed or spooked. Contact them too late, and they may have moved on to another vendor.

In the old days, human salespeople chose that magic moment—picture the car salesman standing in his office at the dealership, watching out the window as consumers wander the lot and calculating which ones are ready to buy and which ones are just tire kickers. Today, though, companies should “let the buyer control the dialog,” Fernandez argues. What’s more, he says they should let software pick the moment of outreach.

That’s basically what technology from Marketo, the San Mateo, CA, startup where Fernandez is co-founder and CEO, is designed to do. The cloud-based system monitors and scores a prospective customer’s every interaction with a company, down to the Web pages they visit and the e-mails they open. When its mathematical models say the prospect is ripest, the system prompts human salespeople to follow up with a phone call or meeting.

There’s no more role today for the hard-driving, Glengarry Glen Ross-style salesperson who goes on instinct alone, Fernandez says. In fact, he says, that kind of hucksterism could only persist as long as there was no data to show how dysfunctional it was. “The notion of a salesperson as a lone wolf is totally dead and obsolete,” he says. If companies retired their old-school salesmen and broadly adopted technologies like Marketo’s, he argues, it could add $2.5 trillion to the world economy every year.

Marketo CEO Phil Fernandez

That’s an extreme claim—but then again, companies convinced by Fernandez’s message are adopting Marketo’s technology at an extreme rate. The startup’s revenues grew by 1,486 percent between 2007 and 2010, making it the fastest-growing private company in Silicon Valley, according to a list published last month by the Silicon Valley Business Journal. More than half of the 220-employee startup’s $57 million in venture funding is still sitting in the bank, Fernandez says. The company has been able to fund most of its growth from its revenue, which will be between $30 million and $40 million this year.

Marketo’s technology is totally separate from salesforce automation or customer relationship management software like Salesforce.com or SugarCRM, although it communicates with those systems. This is about marketing automation: tracking every interaction between a company and a potential customer, and figuring out how to increase the chances that a prospect who enters one end of the marketing funnel comes out the other end as a buyer.

Marketing technology may not be as sexy as mobile app development or as socially enlightened as e-waste recycling or crowdfunding—but it’s an area that has attracted some serious investment over the last few years. Google Ventures and Sequioa Capital, for example, recently put $32 million into Hubspot, which Fernandez calls Marketo’s “East Coast doppelganger” (though it mostly serves smaller companies). And there are some serious brainiacs involved too—Marketo’s chief scientist Yan Zou is a Stanford statistics and machine-learning PhD who used to build financial models for the hedge fund industry.

Marketing automation has been both enabled by and necessitated by the rise of the Web and social media, in Fernandez’s view. “Prior to the mid-2000s, the seller had some degree of power, which was that they controlled information,” he says. “As a result the ability of the seller to control the dialog was very strong. The explosive shift to the Web and now social media has … Next Page »

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In advance of his appearance at Xconomy’s “6×6: Six Cities, Six Big Tech Ideas” conference on Dec. 1 in Boston, I did a live tweet chat with Kabir Shahani, the co-founder and CEO of Seattle-based Appature, yesterday. Thanks to all who tuned in and sent us their thoughts; we had a great audience.

Appature is a four-year-old startup that makes Web software tools to help healthcare, pharma, and medical device companies reach hospitals and doctors and build important relationships with them. The big idea, as I see it, is to allow brands to drill down into a huge customer relationship database and quickly target the right people to sell to—and for the right reasons, namely, patient health. Yes, it’s big data, analytics, cloud, marketing, and healthcare, all wrapped up in one.

Which is why I think Boston-area tech companies like HubSpot, Buzzient, Constant Contact, SocMetrics, Kyruus, Ginger.io, Athenahealth, and others should be interested. And young entrepreneurs, who can really relate to Shahani. Plus I hear there are a few pharma and medical device companies (and hospitals) around town…

While some things don’t necessarily come across in tweets (like Shahani’s youthful charisma and CEO hair), other things do. Here are my top takeaways from the chat:

1. Appature knows more about Boston than Boston knows about Appature. “There are some incredible companies in Boston,” Shahani tweeted. “We have customers there and I absolutely love being out there to spend time with them.” Sure, Appature has customers and partners around town (and soon, employees—see below), but the general Boston tech and health-IT community doesn’t talk about this company very much. I’m telling you to pay attention, because Shahani and his crew are potentially on to something big. Whether they’ll execute and take full advantage, we’ll see.

2. The cutting edge of marketing tech for niches like healthcare is moving fast. “The dynamic has changed dramatically in the past 12-18 months,” Shahani wrote. He was talking about pharma companies trying new ways to reach and target customers, rather than just pursuing traditional approaches with their sales reps. It’s no surprise that cloud-based analytics and social technologies are transforming the way most industries work.

3. Growth is challenging for any startup, especially one based on relationships. Shahani, who bootstrapped Appature to profitability before taking a venture round, tweeted that his biggest mistake was “not getting an [East] coast office sooner.” (The company has employees around the New Jersey/Pennsylvania border, presumably to work with lots of pharma customers. It also has people in San Francisco, San Diego, and Chicago.) And here’s a news flash on its expansion: “Stay tuned on news about a Boston team in [January],” he wrote.

For the record, here’s the full live chat stream, via Storify (thanks to my colleague Lilly O’Flaherty for this).

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Twitter has already sucked away 20 percent of your life. What’s another 30 minutes?

If you don’t know Kabir Shahani or his startup, Appature, here is your chance. I will be hosting a live Twitter chat with him tomorrow (Thursday, Nov. 3). This open chat will start at 2 pm Eastern / 11 am Pacific Time, and you can ask him whatever you want for 30 minutes.

What’s the occasion? Well, Shahani will be one of our featured speakers at Xconomy’s “6×6: Six Cities, Six Big Tech Ideas” conference in Boston on Dec. 1, and I want to give him a hearty welcome.

I got to know Shahani and Seattle-based Appature while I was living in the Northwest a couple years ago. The company has a remarkable story. It started in 2007 and bootstrapped itself to profitability before taking a VC round in late 2009. Appature is also interesting because it is complementary to many companies in Boston’s marketing tech cluster, like HubSpot, Constant Contact, BzzAgent (Tesco), and Buzzient. It works with a lot of healthcare companies and institutions around Boston and the East Coast. And, of course, it is going through many of the same growing pains that young companies around Boston (and elsewhere) talk about, as it expands its customer base across the country.

Appature’s founders are hardcore techies with a social networking background, but they chose to go after the healthcare market—making new kinds of software tools for medical device and pharma companies to build relationships with their customers (mostly hospitals and doctors), all in a fundamentally different way from traditional marketing.

So, in our live chat, I’m interested to hear what the big idea is all about at Appature and why it chose its particular niche. Other areas up for discussion include social marketing trends in healthcare and other industries; startup/VC lessons and tech advice; and maybe a little Boston vs. Seattle talk (in terms of innovation ecosystems, talent, and coffee). I’ll bet the tech and healthcare communities will have some good questions for Appature, too—so please get them ready.

Here’s how it will work on Thursday. I’ll send off a few questions to Shahani from @Xconomy, and then we’ll open it up to everyone’s questions. Shahani will be responding from his personal account, @Kabir, with an assist from his team @Appature. And we will all keep track of the running dialogue using the hashtag #XCappature. That’s the key for you to follow the conversation on Twitter. (You can use TweetChat or another app to focus on the half-hour discussion, or for however long you want to tune in.)

See you online at 2pm ET / 11am PT on Thursday…

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This year’s MassTLC Innovation UnConference, in Boston on Friday, was as overwhelming—and inspiring—as ever. Apart from the “secrets of scaling startups” session, which I recapped in a separate story, there was a lot going on. Far too much for any one person to take in.

There were sessions on picking the right startup accelerator; building the right company culture; choosing board directors; common mistakes startups make; the talent and recruiting crunch; and the interplay between the New York and Boston innovation scenes, as well as sector-focused sessions on gaming, big data, analytics, mobile cloud, social marketing, and so forth.

To keep track of the main themes this year, I benefited from random chats with Lawrence Schwartz of Tokutek; Michael Raybman of WaySavvy; Gus Weber of Dogpatch Labs and Polaris Venture Partners; Semyon Dukach of SMTP; Vineet Sinha of Architexa; Jeremy Levine of StarStreet; Josh Bob from Textaurant; Dharmesh Shah of HubSpot; and many others. My colleagues Erin Kutz and Lilly O’Flaherty roamed the halls and sessions as well, so I will include some of their observations too.

Here’s a quick sampling of what we all learned about:

1. There are about 100 “big data” companies around Boston. That was the count given at one of several sessions focusing on big data and analytics, led by Steve O’Leary of Aeris Partners and Bob Zurek of Endeca (nice exit). For comparison, earlier this year MassTLC estimated the huge mobile/wireless cluster around Boston to be about 400 companies strong. Big data encompasses big companies like Netezza (part of IBM), Oracle, EMC, ITA Software (Google), Vertica (HP), and Progress Software, as well as upstarts like Hadapt, Jana, Ginger.io, Hopper, Kyruus, and Tokutek. The common thread is technology to help people and companies manage and make sense of tremendous amounts of data so they can make better business decisions.

2. If you’re tired of SoLoMo (social-local-mobile media) as a tech theme, try SoMoClo…the social mobile cloud. In case your eyes just glazed over, think of it this way: Google is mobile plus cloud (see Android). So is Apple (more mobile than cloud, but getting there). Facebook is social plus cloud. Whoever gets all three wins. Beyond consumers, an emerging sector for this technology is healthcare. Jeffrey Tingle of PolyRemedy talked about opportunities in making electronic medical records accessible by patients and doctors—along with the major challenges of privacy, security, and compliance.

3. Web content and advertising are becoming much more interactive—and that interplay leaves an opening for startups. “Traditional church-and-state separation of content and commerce is dying,” says Michael Raybman from travel site WaySavvy. “Sidebar display ads are totally 2005. Commerce and advertising are becoming personalized and contextual, while content is becoming increasingly actionable, where ‘share with friends’ is not the only action. This brings immense opportunities for the travel vertical.”

4. Just when you thought the engineering talent crunch couldn’t get much worse: Undergrads aren’t coming out of school with the right coding experience, and startups can’t afford the time or … Next Page »

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New Boston-area startup Bozuko is working at the intersection of a lot of big trends. Mobile. Gaming. Location-awareness. Software-as-a-service. Marketing promotions. Sound crowded? Company co-founder Jake Epstein says that people would rather play for a smaller chance to win something big than a guaranteed slim discount, and that’s what makes his business different from what’s out there.

Medford, MA-based Bozuko offers a software platform enabling businesses to create mobile game promotions. Customers can play virtual scratch ticket or slot machine games on their smartphones to win prizes like free dinners, $25 gas cards, and baseball tickets from businesses offering those promotions.

And no, this isn’t a gambling startup. The only currency for playing the Bozuko games is some type of engagement with a particular business on Facebook. So, something like a “like” of a business’s Facebook fan page or mobile check-in to their location gives players entry into the games. Bozuko’s mobile app interface displays all the games going on near a consumer’s given location.

The aim is to tackle an area dominated by group buying and traditional paper coupons, says Epstein.

“This is a market that’s dominated by really boring coupons that no one cares about and really steep discounts that are very expensive to businesses and potentially damaging to their product or services,” he says.

Damaging? Epstein explains that businesses offering the massive discounts that come with group buying deals are basically reducing the value of their product and causing consumers to be less willing to ever pay full price for that product. “Bozuko has the opposite effect. It raises their own product as a prize you can win,” he says. Players also have the chance to win each time they walk into a business and play, so Bozuko has a better shot at driving customer loyalty for these businesses, says Epstein.

Bozuko will operate on a software-as-a-service model, requiring businesses to pay a monthly fee to use the platform. It will offer free access to the platform to smaller pools of consumers, but plans to charge a flat monthly rate once the volume of consumer players at a given business hits a certain level. Monthly rates will also increase for Bozuko to customize games and additional features in the games.

Businesses determine the win probability they want their Bozuko games to have. That way, handing out prizes is a “controlled cost for businesses,” says Epstein, unlike group buying promotions which are criticized for sometimes costing businesses dearly when one-time customers pour unexpectedly through their doors chasing a steep discount.

In August Bozuko kicked off a free pilot involving eight area businesses across 10 Boston-area locations. Among them, a car wash, a minor league sports team, a few bars and restaurants, and a parking garage. So far the app has seen 2,000 downloads and 60,000 unique plays, and has helped award about $5,000 in prize money. Bozuko announced last week that it had opened its platform to all interested businesses. The three-person company raised $346,000 in angel funding in the spring.

Bozuko obviously isn’t the first startup to offer discounts through mobile gaming or location tech. (Hello Foursquare, SCVNGR.) Epstein says what sets it apart is the fact that its games are “addictively simple” (even more so than Angry Birds, he claims), and that offering a chance to win bigger, more tangible prizes is more enticing than the small percentage discounts often offered through things like check-ins. We’ll have to see if he’s right.

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