Portable ultrasound maker SonoSite is being acquired by Japan’s Fujifilm for just under $1 billion. SonoSite will remain based in Bothell, WA, under its current leadership team, the companies said in a joint announcement.

The $995 million price represents a cash offer to purchase all SonoSite (NASDAQ: SONO) shares for $54 each, a 50 percent premium on the average closing stock price for the past three months. The price also includes payments in connection with SonoSite’s convertible debt. The companies’ boards have already approved the deal.

In the announcement, SonoSite President and CEO Kevin Goodwin said joining Fujifilm “will enable us to significantly accelerate our international business and product development efforts, and respond to the fast-evolving needs of physicians around the world.”

SonoSite was itself an acquirer last year, paying $71 million for Toronto-based Visualsonics, whose initial market was in preclinical biology labs. At the time of the deal, SonoSite said the ultrasound market for preclinical research was estimated to be worth $350 million with projected double digit annual growth rates.

Comments (1) | Reprints | Share:          

Waltham, MA-based Avedro, a medical tech startup, said yesterday it has completed a $25 million Series C financing led by SCP Vitalife and Aperture Venture Partners. Existing investors Prism VentureWorks, De Novo Ventures, Flagship Ventures, Borealis Ventures and Echelon Ventures also participated in the round. Avedro said the money will be used to expand commercial operations internationally and to seek FDA clearance in the U.S. The company is commercializing a vision-correction technique that uses a pulse of microwave energy to flatten the cornea to treat myopia and other conditions, as an alternative to Lasik surgery. The technology has its roots in research done at Dartmouth College in the early 2000s.

Comments | Reprints | Share:          

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

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

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

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

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

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

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

Comments (1) | Reprints | Share:          

Andover, MA-based SiGe Semiconductor, which first revealed its plans to go public last July, is instead set to be acquired by another Bay State semiconductor technology company, Skyworks (NASDAQ: SWKS). Woburn, MA-based Skyworks, whose analog and mixed signal semiconductors have applications in the military, medical, broadband, mobile, industrial, automotive, and energy management spaces, will pay as much as $275 million for SiGe, with $210 million in cash upfront, and potentially $65 million more if certain milestones are met.

Last year, SiGe proposed to raise $143.8 million in an initial public offering. “Skyworks clearly represents the best strategic and cultural fit for SiGe Semiconductor,” said Sohail Khan, president and chief executive officer of SiGe Semiconductor, in an announcement of the deal. As of last year, SiGe had raised about $130.7 million through the sale of preferred stock. According to a filing amended in March, SiGe, which makes fabless semiconductors for wireless multimedia applications, had revenues last year of $103.3 million, and net profits of $4.1 million. The acquisition by Skyworks has been approved by both company’s boards, and is expected to close in June, subject to customary closing conditions.

Comments | Reprints | Share:          

San Mateo, CA-based mobile medical reference company Epocrates priced its initial public offering and began trading on the Nasdaq exchange yesterday under the ticker symbol EPOC. Shares began trading at $16, bringing in about $57 million in working capital for the company and $29 million for selling shareholders. Xconomy profiled Epocrates and its push into electronic medical records on January 25.

Comments | Reprints | Share:          

TriReme Medical, a Pleasanton, CA-based developer of cardiovascular stents, catheters, and balloons, said this week that it has raised $17 million in Series D funding. The round was led by EDB Investments subsidiary Bio*One Capital of Singapore, with existing investors Three Arch Partners and Adams Street Partners also participating. “This investment will allow us to ramp up our commercial activities worldwide, continue to develop internal R&D programs and pursue key regulatory approvals for our products in large markets such as the US, Japan, and China,” said TriReme president and CEO Eitan Konstantino in a statement.

Comments | Reprints | Share:          

Castlight Health, a stealth-mode San Francisco startup building software that lets its customers’ employees compare the costs of medical treatments and procedures, has raised $60 million in Series C venture funding, according to a report in Venture Wire. Existing investor Maverick Capital organized the round, which was joined by previous investors Venrock and Oak Investment partners and new investors Morgan Stanley Investment Management, U.S. Venture Partners, and Wellcome Trust. Co-founded in 2007 by former RelayHealth CEO Giovanni Collela and Todd Park, currently CTO of the U.S. Department of Health and Human Services, Castlight has now raised some $81 million. The company was formerly known as Ventana Health Services.

Comments | Reprints | Share:          

Mercer Island, WA-based Liberty Dialysis, which operates more than 100 dialysis clinics around the U.S., has received a new investment from KRG Capital Partners, Bain Capital Ventures, and Ignition Partners, according to a press release on Friday. The funding amount was not disclosed. Liberty Dialysis was founded in 2002 and is led by CEO and co-founder Mark Caputo. The firm is backed in part by Seattle-area Ignition’s later-stage growth fund.

Comments | Reprints | Share:          

Pushing to get past a raft of pending patent infringement lawsuits, Boston Scientific (NYSE: BSX) said today that it will pay Johnson & Johnson $1.725 billion to settle three suits related to cardiac stent technology.

The Natick, MA-based medical devices giant said it will pay Johnson & Johnson $1 billion today, and the remaining $725 million within the next 11 months. The settlements mean Boston Scientific can sidestep risky jury trials in three separate cases involving claims by Johnson & Johnson that three of its stent patents were infringed by a variety of Boston Scientific products, including its Express, Taxus Express, Liberte, Cypher, BX Velocity, Genesis, and Taxus Liberte stents.

Last September, Boston Scientific announced a $716 million settlement that brought an end to 14 other patent lawsuits involving Johnson & Johnson. President and CEO Ray Elliott said in a statement today that the settlements are all part of an effort to “mitigate risk” at Boston Scientific, including litigation risk.

“In the past year, we have significantly reduced the volume of outstanding litigation, having now settled 17 lawsuits with J&J, as well as disputes with other competitors and the government,” Elliott said. “We believe today’s settlement—while substantial—is in the best interest of the Company and its shareholders. It resolves major litigation without exposing Boston Scientific to the uncertainties of a jury trial and a potential damages award that was impossible to predict…With the resolution of these matters, there are now no material judgments or jury verdicts pending against the Company.”

Comments (1) | Reprints | Share:          

The patent portfolio and other assets of Actuality Systems, a Bedford, MA-based maker of visualization systems for medicine, oil and gas exploration, and other applications, has been acquired by Optics for Hire, the Arlington, MA, company announced December 28. Actuality launched in 1997 after winning the MIT $50K business plan competition; its flagship product, Perspecta, creates hologram-like images from 3-D digital data. As part of the acquisition, Actuality founder Gregg Favalora has taken a full-time position at Optics for Hire, which is a product development house specializing in lens design for lighting and medical devices and video games.

Comments | Reprints | Share:          

Salient Surgical Technologies of Portsmouth, NH, has raised $15 million in equity-based financing from a group of 10 unnamed investors, according to a regulatory filing published online yesterday. Established in 1999 and formerly known as Tissuelink Medical, Salient makes devices that stop bleeding and seal wounds by allowing surgeons to apply focused radio-frequency energy and saline solution to collagen fibers in the body. Salient raised $17.9 million in Series F funding in October 2008, with backing from, Piper Jafray Ventures, Arnerich Messina & Associates, Medtronic, and Rivervest Venture Partners; the Series F round came shortly after Salient withdrew plans for an $86 million initial public offering.

Comments (1) | Reprints | Share:          

MicroCHIPS, the Bedford, MA-based startup developing wireless medical implants containing chemical sensors or drug reservoirs, has raised $16.5 million in Series C venture funding, according to a company announcement today. Existing investors Polaris Venture Partners, Novartis Venture Fund, Flybridge Capital Partners, Medtronic, Saints Capital, Intersouth Partners, Care Capital, and CSK Venture Capital were all on board for the new round, which also included new investor InterWest Partners.

Diabetes is the first health condition the company hopes to target. The company says it will begin initial clinical tests this year of an implant designed to monitor blood glucose levels and deliver the data wirelessly to a mobile device. Such a system could help diabetes patients maintain blood sugar levels more consistently. A second implantable device in development would treat osteoporosis by delivering doses of a bone-building hormone directly to the spine, freeing patients from pills, patches, or self-injections.

MicroCHIPS founder and CEO John Santini formed the company in 1999 around technology developed in the laboratories of MIT professors Robert Langer and Michael Cima. We profiled Santini in 2007; this month he’s heading to Davos, Switzerland, for the annual meeting of the World Economic Forum, which recently named MicroCHIPS and five other Boston-area companies as “Technology Pioneers.”

Comments (1) | Reprints | Share:          

Who says consumer websites are dead? Maybe you don’t need the ridiculous traffic of, say, Seattle-based Cheezburger Network (LOLcats) to survive on advertising revenues. Maybe user-generated content around a targeted niche, especially where there are purchasing decisions being made, can work well after all.

That’s the sense I got after talking with Tom Seery, the founder and president of Seattle-based RealSelf. Launched in 2006, RealSelf.com provides information about cosmetic treatments in an online community format that includes user reviews, doctor listings, and expert advice from cosmetic surgeons, dentists, and dermatologists. The treatments in question—a multibillion dollar market worldwide—run the gamut from nose jobs and tummy tucks to orthodontic braces and breast implants.

RealSelf is particularly interesting because it sits at the intersection of a number of fast-growing (but also challenging) areas for startups—social and community review sites, health 2.0, and ad-supported media sites. The company has gained some traction, growing 150 percent year over year in Web traffic; it now gets more than 700,000 unique visitors per month, Seery says. In terms of local startups with a similar strategy for capturing niches of Internet content (but these are not competitors), I’d mention Avvo, TeachStreet, Raveable, Redfin, Urbanspoon, and Zillow.

Like most promising startups, the story of RealSelf began with some important personal and business observations. Seery was a longtime employee of Bellevue, WA-based Expedia (NASDAQ: EXPE), and he saw the competing startup TripAdvisor plug away at hotel reviews and other user-generated ratings until 2004, when IAC (which then owned Expedia) had to buy it. “That was the ‘aha,’” Seery says. He thought, “Where else can we take this empowerment of consumers?”

Around the same time, Seery’s wife was researching a laser cosmetic treatment, and was having a hard time finding trustworthy reviews. So he thought, “Let’s create TripAdvisor for the cosmetic space.” The key adjustment he made was to introduce medical experts to the user community. The challenge there, as with most e-health sites like WebMD and Revolution Health, is that doctors are … Next Page »

Comments | Reprints | Share:          

There’s a big argument over whether venture capitalists and even angel investors are doing as many early stage or small deals these days. The general sentiment is that no, they aren’t. Since we began our monthly roundup of Massachusetts venture deals back in June, however, we’ve argued that the data doesn’t support that view: virtually every month, the number of seed and Series A rounds has topped the number of later-round financings, and often by a wide margin.

Now comes what could be another blow to the small-deal naysayers: new data on the extremely small deals—those between $100,000 and $1 million—that typically aren’t reported in financing tabulations. As my colleague Greg Huang, Xconomy’s Seattle editor, wrote in his own look at small deals in the Northwest earlier this week: “Though small in size, these investments need to be included along with the bigger deals that get more press, if you want a more complete picture of the funding landscape in the innovation community.”

It turns out there were 10 of these “under the radar” high-tech deals—7 in Massachusetts, 2 in Connecticut, and 1 in New Hampshire (see table below)—in New England in September, according to data supplied by our partner ChubbyBrain, a New York-based information services company that tracks VC, angel, and other investments in private companies.

Six of the 10 deals involved equity investments; the remaining four were debt financings. And they spanned a wide range of fields from medical displays to tracking tags to new approaches to education. To me, the most interesting was OmniGuide, a Cambridge, MA, company we’ve written about before that took in $249,999 (you gotta wonder why that figure). OmniGuide, which raised $1.8 million in May, $25 million last year, and some $50 million before that (it’s a long story, go here), makes highly precise optical laser scalpels; its chairman is Analog Devices founder Ray Stata, and the CEO is MIT materials scientist Yoel Fink.

As the parent of two teenagers, I was also highly interested in the Westonian Group, which raised $170,250. The Westonian Group doesn’t appear to have a website, but it is the company behind Abroad101, a website for sharing information about study abroad programs.

Here, then, are our 10 “under the radar” deals from September.

Carrot Medical (Waltham, MA)                 Equity           $635,000
Ultra-high-definition displays for medical images

SoundTag (Braintree, MA)                         Equity          $535,000
Tracking tags for priority shipments

TenMarks Education (Newton, MA)          Debt            $350,000
New approach to math, science, and English education for children

SpecPage (Attleboro, MA)                           Equity          $313,000
Product marketing information exchange for food service and janitorial industries

SeeClickFix (New Haven, CT)                    Debt              $265,000
Technology for reporting and tracking non-emergency issues via the Internet

OmniGuide (Cambridge, MA)                   Equity             $249,999
Designs and manufactures highly precise optical laser scalpels.

Validus DC Systems (Brookfield, CT)         Debt              $204,000
Direct current power infrastructure for data and telecom centers

Paneve (Florence, MA)                                 Debt               $175,000
Software and hardware to reduce the costs of delivery and display of video media content

Westonian Group (Weston, MA)                Equity             $170,250
Company behind Abroad101, an interactive online community around study abroad programs

EnerTrac (Hudson, NH)                               Equity              $125,000
Fuel, oil, and propane tank monitoring products

Comments (2) | Reprints | Share:          

They are the deals that slip through the cracks unnoticed. They are worth less than $1 million, but at least $100,000. Though small in size, these investments need to be included along with the bigger deals that get more press, if you want a more complete picture of the funding landscape in the innovation community. And there were at least 16 of these deals in the Northwest in September (see table below), according to ChubbyBrain, a New York-based information services company tracking VC, angel, and other investments in private companies.

It’s probably too soon to talk about trends, because this is the first month we’ve had access to ChubbyBrain’s data on these smaller deals, which were compiled from regulatory filings, user submissions, and other sources. But here are some quick observations.

About two-thirds of the deals (11 of 16) were equity investments, while one-third (5 of 16) were debt financings. Half the investments (8) were in software companies, while about a quarter each were in biotech/medical (4) and cleantech (3) firms. The majority of the deals were in the Seattle area (10), but a significant number were near Portland or in Oregon (6). Anecdotally, all those breakdowns seem consistent with the deal flow we’ve been seeing and reporting on in the Northwest for the past year or so. The data didn’t include the investors or the stage of the investments.

Without further ado, here are the 16 “under the radar” deals from last month:

Vantos (Seattle)                                            Equity        $873,487
Investigation software

InEnTec (Bend, OR)                                     Equity        $800,000
Cleantech fuels

WA 32609 (Redmond, WA)                           Equity         $800,000
Biotech

Inson Medical Systems (Bellevue, WA)      Equity         $642,536
Biomedical drug delivery

Napera Networks (Mercer Island, WA)         Debt           $600,000
Networking software

Acucela (Bothell, WA)                                    Equity         $439,603
Biotech drugs

Adometry (Kirkland, WA)                               Equity         $400,000
Analytics software

Smilebox (Redmond, WA)                              Equity         $399,999
Consumer software

Asemblon (Redmond, WA)                             Debt            $386,000
Cleantech/materials

Ohio River Clean Fuels / Baard Energy (Vancouver, WA)    Debt            $245,000
Cleantech fuels

Safetec Compliance Systems (Vancouver, WA)                    Debt            $235,000
Software for chemical compliance

Second Porch (Portland, OR)                          Equity         $225,000
Social software

SynapticMash (Seattle)                                    Equity         $200,000
Educational software

Silere Medical Technology (Kirkland, WA)      Debt            $120,000
Medical devices

BallLogic (Portland, OR)                                   Equity         $100,000
Consumer devices

Site 9 (Portland, OR)                                          Equity         $100,000
Web development software

Comments (1) | Reprints | Share:          

We’ve brought you a lot of third-quarter venture data in the last week or so—and we’re not done yet (hint: I have something special coming up for you baseball fans). But we haven’t gotten around to our usual Top 10 deals list.

So let me remind you, it was a pretty good quarter here in Massachusetts. Overall venture investment into Bay State startups climbed substantially over Q2, capped by a strong September in which VCs invested some $228 million in 25 deals, according to data from ChubbyBrain, a New York-based information services company.

And now let me show you the list of the top 10 venture deals in New England—all of which happen to be from Massachusetts. This comes from a different set of data provided by Dow Jones VentureSource.

Top 10 New England Venture Deals of the Third Quarter

Epizyme (Cambridge) — $32 million
Second round
(Investors: Amgen Ventures, Astellas Venture Capital, Bay City Capital*, Kleiner Perkins Caufield & Byers, MPM Capital)

Avila Therapeutics (Waltham) — $30 million
Second round
(Investors: Abingworth Management Inc., Advent Venture Partners, Atlas Venture, Novartis Venture Fund*, Polaris Venture Partners)

Gloucester Pharmaceuticals (Cambridge) — $29 million
Later stage
(Investors: Apple Tree Partners, Novo*, ProQuest Investments, Prospect Venture Partners, Rho Ventures)

iWalk (Cambridge) — $20 million
First round
(Investors: General Catalyst Partners*)

Aveo Pharmaceuticals (Cambridge) — $20 million
Corporate financing
(Investors: OSI Pharmaceuticals)

PrimeraDx (Mansfield) — $19.8 million
Later stage
(Investors: Abingworth Management Inc., Burrill & Company, CHL Medical Partners*, InterWest Partners, Invus Group, Malaysia Technology Devt Corp, MPM Capital)

Rapid Micro Biosystems (Bedford) — $18.6 million
First round
(Investors: Kleiner Perkins Caufield & Byers, Quaker BioVentures, TVM Capital GmbH, VIMAC Ventures)

MooBella (Taunton) — $18 million
Later stage
(Investors: Inventages Venture Capital*)

Pervasis Therapeutics (Cambridge) — $17 million
Later stage
(Investors: Flagship Ventures, Highland Capital Partners, Polaris Venture Partners)

Advanced Electron Beams (Wilmington) — $14.3 million
Later stage
(Investors: Atlas Venture, Flagship Ventures*, GE Energy Financial Services, General Catalyst Partners, RockPort Capital Partners)

* Lead investor

I have to mention the 11th ranked deal—iMedX, which took in $13 million in first-round funding. The company hails from Shelton, CT, and was the biggest third-quarter deal in New England outside of Massachusetts.

Comments | Reprints | Share:          

Netherlands-based ProFibrix, which has a Seattle subsidiary, announced today it has raised $11 million in Series B funding, led by new investor Gilde Healthcare Partners and including existing investor Index Ventures. ProFibrix was founded in 2004 and makes a dry powder topical tissue sealant that stops bleeding during or after surgery. The product, called Fibrocaps, is currently in a clinical trial in the Netherlands. ProFibrix plans to submit an Investigational New Drug Application to the FDA in the first half of next year.

Comments (1) | Reprints | Share:          

Bellevue, WA-based medical imaging detection software company Confirma will be acquired by Milwaukee, WI-based health IT provider Merge Healthcare for approximately $22 million, according to a press release sent out today. The acquisition will allow Merge to incorporate Confirma’s technology into its IT offerings to doctors. Confirma’s main product, CADstream, is used for prostate and breast MRIs, with other functions in development.

Comments | Reprints | Share:          

When Merck recalled its arthritis drug Vioxx on September 30, 2004, Connecticut-based online pharmacy FamilyMeds wasted no time notifying customers. Within three hours after the recall was announced, an automated telephone system began calling Vioxx users to inform them about the change. But there was a twist—to comply with the federal healthcare privacy law known as HIPAA, the system had to verify that the person on the other end of the line was actually the patient taking the drug. If the answer was yes, the system would go on to explain the recall. If it was no, the system would leave a phone number and passcode so that the patient could call back later.

That kind of interactive voice response technology is all fairly standard today—but in 2004 it was brand new. The company that made it possible was Burlington, MA-based Silverlink Communications. And from this single application—HIPAA-compliant automated phone communications—Silverlink has since built a major consulting and service operation designed to help healthcare providers reach patients with behavior-related messages of all sorts.

Say a big health plan with millions of members wants to nudge members who take a certain drug toward buying a new, cheaper formulation at twice the dose, then splitting the pills before taking them. Silverlink can not only figure out the most cost-effective way to convey that message, but it can follow up by combing pharmacy claims data to see how many people actually switched.

Though I first met Silverlink CEO Stan Nowak at a local conference on “Health 2.0,” the movement to apply Web-based automation and communication to many aspects of the healthcare system, Silverlink doesn’t fit snugly into that category. The company is really about two things: communication—via whatever mechanism, even the old-fashioned telephone or snail mail—and analytics, to find out what effect each message is having and craft more effective ones.

Because Silverlink’s customers have so many customers of their own, the company is able to package each message in many ways, deliver the variants over many channels, and quickly determine which combinations are most effective for each group. For example, if you want to encourage members who are in the 40-to-55 age group to switch from name-brand drugs to generic ones, is it better to emphasize the cost savings, the convenience, or the fact that everyone else is doing it (in other words, applying a bit of peer pressure)? “Effectively, we’re running multiple simultaneous controlled experiments at scale across populations and measuring the results within microsegments of that population,” says Nowak. “It works in a dramatic way to improve communication yields”—meaning real changes in patient behavior.

Founded in 2002, Silverlink has about 100 employees, and has increased its headcount by 40 percent in the past year. The company has raised about $14 million in venture backing, including a $2.1 million Series A round in 2003 led by Sigma Partners, a $5.6 million B round in 2004 led by HLM Venture Partners, and a $6 million Series C round in 2006, also led by HLM. Kaiser Permanente Ventures, the investment wing of the giant California HMO, joined for the C round. Customers include the nationwide health insurer Aetna and leading pharmacy benefit manager Pharmacare. The company doesn’t share financial figures, but it does say that 2008 revenues were up 47 percent over 2007, and that it recently passed the 200 million mark—meaning that many healthcare consumers have received communications administered by Silverlink.

Nowak says Silverlink’s market is still growing, thanks to some big, long-term shifts in the way health insurance works. “The role of the consumer in healthcare has expanded pretty dramatically since 2003, and looks to expand even more as we … Next Page »

Comments (1) | Reprints | Share:          

The economic climate these days reminds me of the famous line about the weather at the “Crosby Clambake” golf tournament (now the AT&T Pebble Beach National Pro-Am) held each February on California’s Monterey peninsula, in unpredictable conditions that shift quickly from sun to cold and rain: “There’s plenty of it.”

So it seemed a good time to get out a barometer and ask what the &!#@* an entrepreneur/startup should do in today’s climate? Is the economy really on the rebound? If so, is it time to change strategy? Should companies, say, get more aggressive about hiring people or expanding? Maybe they should court a suitor or investors because deal terms are improving? Or maybe not—maybe you should just stay the course.

[The X Factor is a mostly weekly column featuring conversations with local innovators, entrepreneurs, and investors that mostly runs on Tuesdays. This is an exception.]

I put my queries to four Xconomists, all experienced and highly successful investors, entrepreneurs, and business executives. No one pretended to have figured out whether the economy is rebounding or not. As serial entrepreneur-turned-VC Carmichael Roberts, now of North Bridge Venture Partners, put it: “It is impossible to tell what the heck is going on right now and whether we’re starting to recover or not.” The market, he says, is “too sideways.”

But that didn’t mean Roberts et al didn’t have some valuable advice and insights about what entrepreneurs should do in the current weather. All felt that for the foreseeable future, the climate would be fundamentally different than in recent years—and so should a company’s business strategy. As Boston Scientific co-founder John Abele says: “If you think the same strategy that worked before the meltdown is going to work now, you’re not living on earth. This is a different world, probably similar to the what this was 30 to 40 years ago, and it requires a different mindset.”

Their advice and insights, laid out below, focused largely on how to change your mindset. The ideas run from being extremely flexible about business models to asking tough questions about your business and its value to customers—and about your customers and investors and their value to you. Much of their advice has to do with entrepreneurs raising money in this climate, but parts are also relevant to executives of established companies.

John Abele, co-founder and director, Boston Scientific:

Be willing to make hard assessments—and be flexible with your own models.

“You got to do some slicing and dicing,” says Abele. “Some things are going to be more valuable in a constrained environment,” he says of today’s climate. “A number of things are going to be less valuable.” This includes your own products and your customers, and you must be prepared to adapt your model and offerings to take advantage of what will be most valuable. “A lot of people get trapped in their model and seem to have difficulty moving beyond that,” he says.

For instance, Abele is the owner of the Kingbridge Conference Centre & Institute outside Toronto, which is focused on better ways to conduct meetings and conferences to facilitate collaboration and education, among other things. “So one of the categories we focused on was infrastructure, for example power companies, that will have to do a lot of education to accommodate changes in regulation and technology,” Abele says. “They will be even more valuable to us, particularly if we have special education packages.”

Similarly, a medical company might look at its customers and prospective customers to determine which will be best off in the current climate and then ask whether those customers will … Next Page »

Comments (5) | Reprints | Share: