In February, Munich-based car giant BMW set up a corporate fund, BMW i Ventures, in New York City, with the goal of fostering startups that are developing location-based technologies. The fund’s first investment was MyCityWay, a company founded by three former Wall Street execs who created a series of apps designed to help people find products and services in 50 cities around the world—starting with their hometown of NYC. BMW is currently searching for office space to house the fund and an accompanying technology incubator.

BMW’s head of Project Mobility Services, Bernhard Blattel, is based in Munich and working with a team of four New York-based colleagues to get i Ventures off the ground. Xconomy spoke with Blattel by phone about why the automaker is fostering the development of technologies that are not necessarily car-based, and why it chose New York as the fund’s home.

Xconomy: What was the genesis of BMW i Ventures?

Bernhard Blattel: We were seeing trends that we thought provided growth opportunities for a company like BMW. One trend is growing urbanization—the tendency for people to move into urban areas. These people will still have the need for mobility, and the desire to be comfortable when they’re being mobile.

One enabler of transportation in urban areas is electric cars, which speaks to new products, like our new i3 and the i8 vehicles. But on the other hand, we think that connectivity, location-based services, and the rising penetration of smartphones will make the future a great enabler for a new set of services that will help customers to be more mobile.

We believed that we could combine our engineering know-how, products, great brand, and marketing with the agility and the drive and innovative ideas within startup companies. That’s why we created i Ventures and decided to invest in these companies.

X: You created the fund and chose its first investment in parallel. Why that strategy?

BB: When we started the plan for BMW i Ventures, we thought it was important to show our board and other people internally what we meant when we said we were going to invest in these new companies. So we had to very quickly focus on making the first investment.

We chose MyCityWay because it is a one-stop city portal. It goes way beyond classical concentric services, and provides a complete menu of city information. We were able to demonstrate immediately what the mission of BMW i Ventures is.

X: But the MyCityWay app was not designed to be used in a car. So why is it of interest to BMW?

BB: It’s an example of the scope we have for Project Mobility Services. Of course, mobility services will sometimes have to do with cars—that’s our home turf. But we’re convinced that the key to success of this new field is to … Next Page »

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You often hear about inspiration prompting a great business idea, but for the three founders of New York-based MyCityWay, the impetus came from quite a different sensation—frustration. Archana Patchirajan, Sonpreet Bhatia, and Puneet Mehta were all working on Wall Street and struggling to find an app for their smartphones that would provide day-to-day information to help them get around New York City, such as subway maps, restaurant reviews, and event listings.

“We know our city always has something to offer,” Bhatia says. “But finding it can be difficult.”

So the three friends turned their quest for information into a business—quickly. In late 2009, they got wind of NYC BigApps, a new city-sponsored competition for developers of applications that employed data the city had made available at NYC.gov. They only had 40 days to build an app and enter it in the contest, so they pulled a series of all-nighters to finish the product, which they called “NYC Way.”

MyCityWay’s founders didn’t win the BigApps grand prize, awarded in February 2010, but they did pick up $10,000 for winning the “investor’s choice” and “popular choice” awards. That won them something far more important: The admiration of carmaker BMW, which was in the process of starting a corporate fund and incubator in New York City designed to foster the development of mobility-based apps.

In February of this year, BMW announced that it would launch the fund, called BMW i Ventures, and that its first investment would be in MyCityWay. BMW led a Series A round of $5 million, which also included funding from FirstMark Capital and IA Ventures. On March 31, the carmaker followed up the announcement with news that it would establish an incubator in New York City. MyCityWay will be the anchor tenant in the new space, which BMW is searching for now.

In the meantime, MyCityWay’s founders are staying put at TechSpace, a sprawling warehouse in the West Village that houses fledgling IT companies, and putting their newfound cash to use. They’re improving their flagship NYC offering, as well as rolling out similar city guides around the world. Within the next few weeks, Bhatia says, NYC Way will take on a whole new look.

As Bhatia whipped out her iPhone to give Xconomy a preview of the redesigned app, it became clear just how far the company has come in a short time. The original app used about 14 datasets from the city to provide such information as traffic updates, restaurant inspection results, and directories of … Next Page »

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Today San Diego-based TelCentris is announcing at the Mobile World Congress in Barcelona that it has incorporated a new free offering—a “universal translator”—as part of VoxOx, its free, cloud-based, unified communications service.

Some online services, such as Babelfish.com, currently enable users to copy and paste in foreign language text to get a translation. But TelCentris says its VoxOx Universal Translator is the first translation service built into messaging and VoIP messaging software—making VoxOx the first to provide an instantaneous foreign language service that automatically translates e-mail, text messaging, Internet chat, and certain social networking messages.

VoxOx client

It’s a cool feature, kind of Star Trek-y, and the announcement is tailor-made for the wireless industry’s biggest international conference, which just happens to be held this week in a big international city. TelCentris spokesman Erik Bratt tells me the VoxOx Universal Translator is an ideal application for companies that do a lot of international business. The company’s cloud-based translation software currently supports 50 languages for instant messaging, e-mail, and social media; it also supports 37 of those languages for text messaging.

In a statement issued by the company, TelCentris president Michael Faught says … Next Page »

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Today marks the start of CTIA Wireless I.T. & Entertainment 2008, the world’s largest wireless-data event, in San Francisco. A host of local wireless companies are peddling their products there, and at least one of them has some interesting news. Seattle startup Ontela, which makes software to transmit digital photos from camera phones, is announcing today that it has formed a partnership with 14 additional wireless carriers from around the U.S. and eight new photo-sharing social websites.

I called Ontela CEO Dan Shapiro, a veteran of Microsoft, RealNetworks, and local startup Wildseed, to learn more about the deal. The new carriers include United Wireless, Alaska DigiTel, Cellcom, and Golden State Cellular, who build on Ontela’s existing customer roster, which consists of Alltel, Cellular South, Cincinnati Bell, and nTelos. On the photo-sharing website side, Ontela has added the likes of Facebook and Friendster to its current stable of Blogger, Flickr, Photobucket, and Snapfish. All told, that could translate into millions of new users, says Shapiro.

It’s an important step for Ontela, which sells its software directly to wireless carriers, who bundle and sell the service to subscribers as part of a monthly package. Ontela was founded in late 2005, and is backed by Steamboat Ventures, Oak Investment Partners, Hunt Ventures, and Voyager Capital. (Venture capitalist Tom Huseby, profiled here last week, is chairman of the board.) The company raised a $10.3 million Series B round in May. About CTIA, Shapiro says, “We’ve got a couple of enormous projects just about finished, and we’re having conversations around that. We’ll show our latest demonstrations.”

Here’s how the technology works. A carrier pre-installs the Ontela application on a camera phone. The software detects when there’s a new picture taken on the phone. It sends the photo wirelessly to Ontela’s servers, located in Tukwila, WA (hosted by Qwest), which then redirects the photo to wherever the user wants it—into his or her e-mail inbox, a photo-sharing website, or a laptop hard drive. (While we were talking, Shapiro took a snapshot of himself, on the left, and emailed it to me in 30 seconds… showoff.) As Shapiro puts it, “Our mantra is ‘no clicks.’ You take the picture and it gets delivered automatically.”

And that’s the key to building Ontela’s customer base—ease of use. You’d think someone would have done this already, made it easy to send photos from your phone. But it’s surprisingly hard to make that process simple. “The big dirty secret of mobile data sevices is that they’re really hard to install, and even hard to find,” Shapiro says. “I can do it, but my parents? No way, no how.” So Ontela is targeting mainstream users, not tech-savvy teenagers or “power” business users who have all the latest gadgets. (Full disclosure: I once took a trip to China and rented a camera phone, but never managed to get my photos off of it, so I would qualify as mainstream. Except I still don’t even own a camera phone.)

I asked Shapiro about the challenges of selling software to wireless carriers—especially as a startup—and he was pretty candid. “It is a pain in the neck to sell to the carriers,” he says. “For us, for our business of selling to the mainstream, it is the only way [to reach those customers]. But for an advanced email client, or something targeted to Slashdot users, I’d go off-deck…It was two years of continuous work, it’s a long sales cycle…We were taking a big gamble, putting it in carriers’ hands to sell. We have to make sure the value is there for carriers, so they sell it effectively.”

On the plus side, the sales strategy of going through carriers gives Ontela access to an enormous marketplace—basically anyone who buys a mobile phone. “The carriers’ webpages have been phenomenal; people learn about [Ontela] when they pay their bill online,” Shapiro says. “We’re seeing great results from demonstrating the value of our product through people using it, and carriers training sales people to sell at the point of sale [of phones].”

The next step? Going after the big carriers, and then the international market. If Ontela can do its one simple thing and do it well, it should catch on with those who just want their mobile technology to be easy to use. That’s certainly a big opportunity in a world where an estimated 3.3 billion people use mobile phones, but only a small percentage know how to make them live up to their full capabilities.

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Tom Huseby has a fairly normal-looking BlackBerry phone. No fancy software on it, he says—not even from Ontela, SnapIn, or Zumobi, local mobile-tech companies for which he serves as chairman of the board. It rang two or three times during our meeting at his downtown Seattle office, and he dealt with the calls right then and there. It’s the only way he ever gets things done, he says.

I’d expect nothing less from one of Seattle’s foremost VC authorities in wireless and mobile technology, though he would disagree with that label (OK, maybe I’d expect a fancier phone). And what with all the local wireless deals in the past few weeks—SnapIn Software’s $180 million acquisition by Nuance, Medio Systems’ contract with Google and Verizon to do mobile search, and RadioFrame Networks’ latest $28 million funding round—I thought it would be a good idea to sit down with Huseby. He is the co-founder of SeaPoint Ventures, as well as a venture/strategic partner at Oak Investment Partners, Hunt Ventures, and Seattle-based Voyager Capital. I wanted to get his take on the history of wireless in the Seattle area, his strategy in doing wireless deals, and where it all comes from.

Huseby began by establishing that the Seattle area has “the highest concentration of wireless technology in the world. There are more cool [mobile] applications within a 10-mile radius than anywhere else.” (Next would probably be London, he says.)

Next, he gave a fascinating modern history of wireless, starting with the original AT&T Bell Labs technologies and moving into spectrum allocation by local towns and territories. Those territories got put together into the first nationwide network by Craig McCaw in the 1980s, when he started McCaw Cellular in Seattle. In 1994, AT&T acquired McCaw Cellular for $12 billion-plus. One of McCaw’s veterans, John Stanton, went on to start VoiceStream Wireless and Western Wireless in the area, which were bought by T-Mobile and Alltel in 2001 and 2005, respectively. “Every time someone was bought, they actually didn’t move people out of Seattle. People would move here, and it just kept growing,” Huseby says. “We have more concentration of carrier presence here than anywhere else in the country. It’s unbelievable. There are no wireless carriers headquartered in the Bay Area.”

The stage was set for a local explosion of mobile software and services companies. “The big famous shift in it all was, this also was ground zero of a lot of Internet technology,” says Huseby. “So when you combine Internet with the fact that we know mobile here, all of a sudden we started generating some of the first mobile data applications.” (These applications are distinct from things like networking equipment, fundamental radio-frequency technologies, and handsets, which are centered in other locales like Texas, Southern California, and Massachusetts.)

Pretty soon big software companies like Microsoft, Google, and RealNetworks were into mobile tech. On Microsoft, Huseby notes, “They should be buying software companies to get stuff on mobile phones, one after the other.” He adds: “So all of a sudden, little Seattle became the place to go if you wanted to build wireless applications.”

Which is where he enters the picture. Born in New York and brought up in São Paulo, Brazil, Huseby started his career in the 1970s with materials science company Raychem. Through the process of selling products to telecommunications companies, he got to know them very well. “It’s just as hard as selling to a wireless carrier. You had to work … Next Page »

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