It’s been a busy week around here for the big tech companies. At Xconomy, we don’t usually report on things like product releases from Microsoft or sales figures from Amazon—our main focus is on new ideas, models, and companies—but readers need to understand where the big players are heading so they can see the gaps and opportunities for new businesses. So, for each of these pieces of mainstream tech news, I’ll tell you why savvy innovators and business leaders should care.

—Google (NASDAQ: GOOG) demonstrated its Web-based Chrome operating system for the first time in public yesterday. It won’t be available for another year, but the tech community is scrambling to understand all the implications. (Google’s Seattle engineers have contributed technology to the Chrome Web browser, helping to boost security—one potential advantage of a cloud-based operating system).

Sure, a fully cloud-based OS is a direct threat to Microsoft’s business model and the ecosystem of companies that support Windows. But more than that, it could reshape the landscape of online advertising by providing a new platform for launching ads on mobile devices, video channels (YouTube), and Internet TV. Perhaps the only thing that can slow down Google’s dominance on the Web is the federal government. In other words, this could get ugly.

—Microsoft (NASDAQ: MSFT) has teamed up with LinkedIn to provide info about your business contacts within Outlook e-mail. It’s all part of Microsoft’s Outlook Social Connector, an add-in that feeds you data from your social networks. Integrating e-mail with social networks and search is a fast-growing area, with startups like Gist in Seattle (backed by Paul Allen and Foundry Group) helping lead the way. Gist’s CEO T.A. McCann told TechFlash that he’s known about Microsoft’s effort for a while and doesn’t see it as a direct challenge. Gist’s offering is more advanced, he said, and it includes features like integrating with Salesforce.com and the iPhone. But startups and investors beware: if you’re in this crowded space, you better have a product that cuts through the noise and has a way to attract customers fast.

—RealNetworks (NASDAQ: RNWK) is in discussions with Viacom’s MTV Networks to sell off at least some of its stake in the Rhapsody music service, as first reported by PaidContent. In a regulatory filing, prompted by a tender offer to issue new stock, Real said it is in talks to reorganize the management structure and/or corporate governance of the division, which might mean giving up its majority ownership stake (51 percent) in Rhapsody. Back in September, digital-media guru Bill Baxter (now at Seattle-based Cozi) wrote in Xconomy about Rhapsody’s fierce competition with Pandora, iTunes, and piracy. Message to startups: the world of digital music services is probably not where you want to be.

—Amazon (NASDAQ: AMZN) has been busy ramping up operations ahead of the holiday shopping season. Its billion-dollar acquisition of Zappos is helping it expand into shoes and apparel, and its Kindle sales look poised to take off, especially now that Barnes & Noble’s competing e-book reader, the Nook, has sold out until January. Amazon has really become the business and technology model to follow in online retail and product search. While there is still room for e-commerce startups to compete in various niches, they would be wise to study how Amazon built its brand and customer relationships before branching out to the wider world of retail.

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Call it the iPhone “2G.” Two Seattle-area startups that start with the letter “G” are rolling out new iPhone apps today. OK, this would not normally make significant news for us, because new apps appear on a daily basis, but each of these cases provides an interesting update to the company’s mobile strategy, so here we go:

—Glympse has been on a tear since May, when co-founder and CEO Bryan Trussel said the Seattle-area company first started offering its location-sharing service on mobile phones. The idea of the software is that your friends and business contacts can get an immediate “glympse” of where you are on a map, automatically, for a certain amount of time that you set. Today’s announcement that Glympse is available as a free download on the iPhone is no surprise. Last week, the startup’s service was named a showcase application in Windows Marketplace for Mobile, and the company has been working on its iPhone app for some time. It’s all part of Glympse’s strategy to build a mass-consumer audience based on a free service, before working up to paid models and location-based ads.

—Gist has also been picking up steam, in a very different market. The Seattle-based company, led by founder and CEO T.A. McCann, focuses on giving consumers and business customers information about their e-mail and social-network contacts in a quick and easy way. The goal is to help people manage their relationships more efficiently, for example, by feeding them updates from all over the Web about their contacts. Gist opened up to the public last month, and McCann told me then that the company had done some optimization for the iPhone and was more broadly improving its mobile version. The new iPhone app, which is free, makes sense for busy professionals who want to scan the latest info on whoever they’re meeting next, from blogs, articles, and social media, right before their appointment. It also fits into Gist’s strategy for bridging e-mail, search, and social media in order to help people manage all that information.

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Microsoft’s latest reorganization, which involves labs in both the Seattle and Boston areas, has a new face. It’s Lili Cheng, a 14-year Microsoftie with experience in both research (social computing) and products (Windows Vista user experience). Cheng now officially leads three separate groups that are being rolled into one: her Creative Systems Group within Microsoft Research in Redmond, WA; Rich Media Lab led by Kostas Mallios, also in Redmond; and Startup Labs in Cambridge, MA, led by Reed Sturtevant.

Yesterday, chief software architect Ray Ozzie announced the creation of the new entity, called FUSE (Future Social Experience) Labs, which will focus on social computing as applied to Microsoft products in entertainment and business. Sturtevant, the founding managing director of Startup Labs, is leaving the company, while Mallios will continue to report to Ozzie and is taking on business development duties involved with technology incubation.

But back to the lab’s new head, who spoke with me from Cambridge yesterday. Cheng, after inheriting about 70 staff members from Startup Labs and Rich Media Lab, now manages about 80 people in FUSE Labs, and says she will be splitting her time between the Seattle and Boston areas. She said the employees of Startup Labs (there are 30-some staff members) will be staying in Cambridge.

As Cheng explains, the goal of FUSE Labs is to “bridge the gap” between research and products—an oft-heard refrain at Microsoft (and most big companies)—by working on projects that are two to five years away from commercialization, and interacting closely with product teams.

The specific focus of the lab is social computing—applying social media (things like Twitter, Facebook, and other social-network technologies) to problems in business collaboration and entertainment. The high-level strategy here is to “embed social activity into business scenarios” for Microsoft, Cheng says. She didn’t say anything more specific about Microsoft’s plans for social media, or about how the employees in Startup Labs and Rich Media Lab will be integrated into the social theme. But she adds, “Interacting with other people is so personal and emotional to every single person out there. It’s important for every company out there.”

Cheng’s team has previously built applications like Kodu, which lets kids create games and stories using an Xbox controller and share them on a community games channel; and Salsa, a prototype that connects your e-mail inbox with social networks. (The latter sounds a lot like what the Seattle startup Gist, led by ex-Microsoftie T.A. McCann, has built and is actively testing.)

Asked what her greatest challenge is in the new job, Cheng said it’s addressing how to “take best advantage of this amazing opportunity.” Having been in the social computing space for many years, she says, now it’s time to “just go for it.”

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Every time I look at Gist, it’s a little different. Given it’s a scrappy startup trying to navigate the worlds of e-mail, social networking, business software, and Web search—each a huge market opportunity, each hugely competitive—this is probably a good thing.

The Seattle company, backed by Paul Allen’s Vulcan Capital and Colorado-based Foundry Group, is announcing today that its software, which has been in private beta trials for the past year, is now available to the general public. Gist bills itself as an online service that helps people manage their personal and professional relationships more efficiently.

The basic idea is to provide a Web dashboard that finds your contacts from your e-mail inbox and social networks (Outlook, Gmail, Twitter, Salesforce.com), and keeps you up to date about these contacts—even ranking their importance—through online information from blogs, articles, tweets, and updates on Facebook and LinkedIn. So, before your next business meeting, instead of having to Google around or search on Twitter to get up to speed on notable developments, Gist will surface any recent activity involving your contact, says Gist founder and CEO T.A. McCann.

It’s an ambitious product. Since the company’s $6.75 million Series A funding round from Vulcan and Foundry Group was announced in May, Gist has buckled down and focused on listening to customers (about 10,000 and counting) and improving its software and interface. It also moved into new office space near Qwest Field.

Among the new wrinkles in the software: Gist can filter information based on which people you’re meeting with this week, or which people you’ve exchanged new e-mail with; the software can also hook into customer relationship management through your Salesforce.com contacts; you can invite other people to try Gist, so there’s a viral component to the product distribution.

“There are probably a whole bunch of users who can get a lot out of Gist,” McCann says. “We think Gist is something people will want to talk about and share with other professionals.”

For now, the software is free, and will remain so for the rest of the year. But come early next …Next Page »

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On Friday, I wrote about the corporate culture of six Northwest tech startups, boiled down to one word each. From “paranoid” to “easy,” from “humble” to “obsessed,” these companies—which spanned business software, mobile, gaming, and other areas—clearly follow the lead of their CEOs and founders.

Here are three more, from the tech worlds of Internet, healthcare-IT, and e-mail and information discovery. Keep ‘em coming.

Gist (Seattle)
CEO: T.A. McCann
Culture: “Focused”
Comments: With $6.75 million in new funding last spring and an aggressive new set of beta releases, Gist is helping more and more customers manage their e-mail and information flow. (We had to disqualify McCann’s other word choice, “metrics-driven.” No hyphens!)

Talyst (Bellevue, WA)
CEO: Carla Corkern
Culture: “Safety”
Comments: Talyst helps pharmacies manage medications safely, efficiently, and reliably. Corkern says her staff is focused “on doing whatever we can to help our customers increase patient safety. This permeates our culture to test exhaustively, share problems early and broadly, and to work tirelessly when we identify a potential problem.”

TeachStreet (Seattle)
CEO: Dave Schappell
Culture: “Growth”
Comments: Having recently raised $1.2 million in new funding and expanded to seven metro areas around the U.S., TeachStreet is looking to gain some serious traction in the student-teacher networking space.

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The days have gotten longer, and deals are really flowing in the Northwest. In the past week, there has been quite a bit of activity across different sectors of biotech, energy, and software.

—Luke reported that Seattle-based Cell Therapeutics (NASDAQ: CTIC) sold $20 million worth of common stock, and warrants to buy stock, to a single unnamed institutional investor. The biotech firm hopes to swap some of that money, along with the $17.8 million in cash it currently has and some more common stock, to get rid of some $89.2 million in debt that will come due as early as 2010.

—Vancouver, BC-based Tekmira Pharmaceuticals, a maker of RNA interference drug delivery technology, formed a partnership with Swiss healthcare company Roche worth $18.4 million in upfront cash, Luke reported. Tekmira’s lipid-nanoparticle technique will be used in two of Roche’s products, and Tekmira will also receive $32 million in milestone payments if the products reach certain development goals.

—Seattle-based DocuSign, a digital-signature technology company, raised $5 million in Series D funding, led by previous investors Frazier Technology Ventures, Ignition Partners, Sigma Partners, and West River Capital. The software startup, founded in 2003, has raised some $30 million in venture capital.

—Luke reported that Seattle-based Dendreon (NASDAQ: DNDN) raised $197.4 million in a stock offering that is expected to close on May 13. The underwriter of the offering, Deutsche Bank Securities, has an option to buy another 1.27 million shares at the same terms within 30 days, which would amount to an additional $23 million. Dendreon will use the money to expand manufacturing and marketing of its experimental drug for prostate cancer, Provenge.

—Microsoft (NASDAQ: MSFT) is acquiring BigPark, an online gaming company based in Vancouver, BC. Financial terms of the deal were not announced. BigPark, which was co-founded by Hanno Lemke and Microsoft senior vice president Don Mattrick, will become part of Microsoft Game Studios.

—Amazon (NASDAQ: AMZN) has invested in Seattle-based Foodista, an online cooking encyclopedia site. The amount of funding of the Series A round, which included other angel investors, was …Next Page »

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Last November, Microsoft began an ambitious experiment. It would offer free software, development tools, and technical support to startup companies around the world, in exchange for getting its technology into the hands of young developers—and a small fee when startups exit the program. BizSpark, as the program is called (not to be confused with BigPark, the gaming company Microsoft said it is acquiring last week), seems like exactly the type of outreach the Redmond, WA, company needs to do to nurture local software clusters and get its stuff out there into the hands of innovative entrepreneurs.

Now, six months later, Bizspark has launched in nearly 40 countries and has hit 12,000 companies enrolled. “That’s slightly above our plan, and well beyond our expectations,” says Cliff Reeves, general manager of Microsoft’s Emerging Business Team. “We wanted to really push ourselves.”

I wanted to hear more about how the program is doing globally as well as in the Seattle area, where it still seems like relatively few startups use Microsoft’s technology (versus cheaper or free open-source alternatives). Worldwide, Reeves says, growth has been fairly constant and has been driven by big events like Microsoft’s Professional Developers Conference in late October, and by social networks like Twitter since then. “Strangely, there has been very little sniping,” Reeves says, referring to the feedback his team has received so far—one might have expected more complaints about terms, clunky features, or unresponsiveness from the Redmond behemoth. “One unique element is that we work through communities. Our network partner model has worked really well.”

Sixty percent of BizSpark companies are entering the program through these network partners, which number 1,300 worldwide (41 in Washington state). These are organizations that work with startup communities, like the Association of Shareware Professionals, TiE, Mashable, 47Hats, venture organizations, and nPost in Seattle. The approach seems to have kept Microsoft in better touch with its early startup customers, and has built up some good will. Reeves says hosting companies like GoDaddy, Peer1, and Rackspace also have provided support for the Microsoft platform, and are starting to enroll companies in BizSpark.

In terms of geography, the top six countries for BizSpark startups are the U.S. (with a third of them), followed by the United Kingdom, Brazil, Russia, India, and China. “Emerging markets are playing a major role,” Reeves says. “There’s tremendous demand for entrepreneurship there.” Within the U.S., the pattern fits what you might expect: a huge cluster in Silicon Valley, followed by smaller clusters in Boston, northern Virginia, Austin, TX, and Washington state.

Which brings us to the Seattle area. Microsoft has always had a global view, but most local developers I’ve talked to think it should reach out and take better advantage of the …Next Page »

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Every deal has a back story you can learn from. In the case of Gist—the Seattle software startup that announced yesterday it raised $6.75 million in Series A funding from Foundry Group and Vulcan Capital—the key connection came about because of a timely combination of blogs and social networks. Which is fitting because Gist is all about managing those kinds of information streams, which we’re all increasingly being bombarded with, so as to help people build better business relationships.

Gist released its product in beta trials last September. It’s basically a way to put all your information about your business contacts—e-mails, blogs, tweets, articles in the media, and so forth—in one place, with an efficient, user-friendly dashboard interface. Founder T.A. McCann says his target customers fall into three camps: executives and salespeople who spend a lot of time building relationships; “super networkers” who need to keep track of many different contacts; and the “Twitterati” who are the earliest adopters of social software.

An investor like Brad Feld of Boulder, CO-based Foundry Group fits in all three categories. Last fall, managing director Chris Wand from Foundry reached out to Gist about its product and set up a call with McCann. “Our plan was to put our product out there, get feedback, and raise money in the early part of [2009]. Foundry cares a lot about the ‘Implicit Web,’” McCann says, referring to websites and services that aggregate and synthesize personal information from the Internet. “They blog about a lot of their themes. These guys are switched on, they’ve thought about it.”

In November, the Defrag 2008 conference took McCann to Denver. “I went on Twitter and read more about Foundry,” says McCann. “I found out Brad’s a big runner. I said, ‘Hey, I’m going to Denver, I like running, can you recommend a place to run?’” Feld suggested they meet up at the hotel for a run. They put out a general invite on Twitter, but they were the only ones who showed up. Over the next couple of days, McCann and Feld spent three hours running together on local trails, shooting the breeze about running, Gist, Foundry Group, and other topics. “That only happened because Brad published that he likes to run. And because of Twitter,” McCann says. “That afternoon, we showed [Gist] to Foundry. He and the other guys started using it.”

By January, McCann was well into the fundraising process. (Vulcan Capital previously had seeded Gist.) “I was raising money, and I’d use Gist all the time,” he says, adding that the software allowed him to prepare for meetings quickly, keep track of what info he’d sent to whom, and generally be better informed about each person he met. McCann talked with many venture firms around Seattle and elsewhere.

But one thing in particular stood out about Feld and the Foundry team: they really …Next Page »

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It’s always good to hear an outside perspective. Last night, Boulder, CO-based entrepreneur and investor Brad Feld, the co-founder of Foundry Group, Mobius Venture Capital, and TechStars, gave a talk at the Palace Ballroom in Seattle. The event was organized by Dave Schappell of TeachStreet and T.A. McCann of Gist. The crowd amounted to well over 200 people, and there was a ton of buzz about this event.

As there should be. Feld is the author of a popular blog, Feld Thoughts, and he had a lot to say about his entrepreneurial experiences in the 1980s and 90s, as well as lessons learned as an investor. One of his most recent projects, TechStars, is a mentor-driven seed funding program for tech startups. Last week, TechStars announced it is expanding from Boulder to Boston, MA (where Feld went to school—he’s an MIT alum). So Feld had some interesting thoughts on what entrepreneurial communities and innovation clusters need in order to be successful.

Here are my top five takeaways from the evening:

1. Entrepreneurs are king. “Entrepreneurs drive all the innovation that matters,” Feld said. “Especially in times that are economically difficult, when people in powerful positions are in a ‘woe is me’ state.” (I took that to include VCs and heads of big companies.)

2. Entrepreneurial communities need to focus. “Seattle has a lot of interesting things going on,” he said. “Entrepreneurs don’t have that many focal points to engage in. You want breadth, but you also want depth.” People interested in startups and new ideas need more substantive ways to interact than meet-and-greets, he said. (In terms of Seattle, this would seem to include events and educational programs from WTIA and NWEN, as well as mentoring and seed-funding organizations like EO Seattle’s Accelerator and Founder’s Co-op. And content-based events from media outlets like TechFlash and Xconomy.)

3. It’s not the economy, stupid. “There are two categories of people—those who do stuff, and those stuff gets done to,” Feld said. “It doesn’t matter if things are good or bad, people who do stuff will do stuff.” Don’t view raising money as the big goal, he added. If you’re a business person, “find some nerds you want to work with”—and vice versa. “Just do it. Don’t say, ‘I’ll wait ’til this is better or that is better.’”

4. Web 2.0 and online advertising models aren’t dead. “If you’re smart about optimizing your tools, you’ll do well. It’s the same as two years ago,” Feld said. “I agree there’s way too many of the same thing…that’s usually true. The current cycle is challenging some assumptions.” (I took this to mean the field is crowded, but if your technology and business model are sound, you still have as good a chance as anyone. Committed founders will find a way.)

5. The VC model is still strong. “It’s not broken at all,” Feld said, adding that he’s amazed by all the attention from the media and others on “what doesn’t work when things get tough.” Venture funds are a decade-long process—they take 10 years to sort out winners and losers. The pulling back and self-examination that’s going on now is “probably healthy,” he said.

On a related topic, Feld also pointed out that although it’s cheaper to start a software or Web company these days, “it’s not necessarily cheaper to scale a business to a large company…To create a large company, you still need $20-30 milion…it’s not that $250K gets you there.” At the least, venture capitalists have a strong role to play there.

After Feld’s talk, Schappell announced to great applause, “This time next year, TechStars Seattle really needs to happen.” It will be interesting to watch how that program might scale to different cities—and I’m sure Feld will keep an eye on the Northwest (he’s been an investor in local companies AdReady, Smith & Tinker, Shelfari, and Judy’s Book, and is on the board of Impinj).

But perhaps the highlight of the evening was when someone asked Feld for the best Seattle pitch he’d heard that night. His answer marked the return of the Dildo Dude—a legendary local entrepreneur who’s working on a new, uh, application for vibrating electric-toothbrush technology. As Feld summarized it, “Most sex toys get up to 80 Hertz. His goes to 200 Hz.”

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On Friday, there was a really good talk by the noted tech entrepreneur and investor T.A. McCann at a Northwest Entrepreneur Network breakfast in Bellevue, WA. The topic was how to get a startup off the ground: he called it “0-25 mph.” What with the economy these days, advice from someone like McCann seems more valuable than ever. For those who may have missed the talk, here are a few highlights and a link to McCann’s slides.

McCann is a former Microsoftie who has experience at Polaris Venture Partners and Vulcan Capital. He has been involved with a number of tech startups, most recently Evri and Gist, the latter of which he currently leads as founder and CEO. I thought McCann’s comments in his blog about the talk were particularly telling about his approach to entrepreneurship. “I always learn something when I do these kinds of events, both about what I have done right/wrong in the past and how I can be better in the future,” he writes.

At the bottom of his talk slides—which covered everything from strategy and operations to fundraising and hiring—McCann listed “lessons learned.” A few points stood out to me:

—Know your own space, pick customers you want to embrace, and make sure they pay.

—Strategy should not be complicated.

—A team’s value is 5 parts passion, 2 parts brains, and 1 part experience.

—Outsource routine tasks, hire for thought leadership.

—Deliver status updates every two weeks to your investors/board/advisors.

McCann closed with the following five-point summary for entrepreneurs. Points #2 and #5 are really key, I think:

—If it were easy, everyone would do it.

—Love your customers more than your idea.

—Use the right tools, timing, and discipline.

—Know where to spend and save.

—If you were rich, would you still be doing it?

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Sometimes you just have to write the story even when you don’t know all the details yet. This is one of those times. This is the story of H-Farm, an Italian design and investment firm, coming to America.

But it’s only Part One of the story—a preview, really. That’s because it won’t be until next month that I sit down with Riccardo Donadon, the founder of H-Farm, when he visits Seattle. In the meantime, my Italian isn’t what it used to be, so I can’t just call up the company and start asking questions (OK, I never could). So in case I missed something, please do comment or let me know.

The story begins in 2005, when Donadon founded H-Farm as the first private Italian incubator of startups. Before that, he was an Internet entrepreneur, having created the online shopping site Mall Italy Lab (sold to Infostrada in 1999) and E-Tree (sold to Etnoteam Group in 2001). He started H-Farm in the scenic countryside of Cà Tron, near Venice and his hometown of Treviso. The company’s second principal, Maurizio Rossi, joined as an investor. Rossi came from the fashion and design industry, having worked for LVMH and sports-brand marketing firm Vista Point.

It’s an intriguing combination of design and technology expertise—and it shows in the eight or so companies that have been incubated by H-Farm so far. The group includes H-art, an interactive media company that does design for high-end brands like Gucci and Armani, and Zooppa, a user-generated advertising firm. H-Farm’s portfolio also has startups in mobile, graphics, consumer Internet, and retail—including social-shopping site Wishpot, based in Seattle and profiled here last week.

Which brings us to an even bigger Seattle connection. It turns out H-Farm isn’t just an incubator. “Using design thinking,” the company’s website says, “H-Farm is going to develop a worldwide interconnected network of innovative technology and new media start-ups.” In other words, besides spinning off companies, H-Farm seems to want to help its U.S. startups gain a foothold in the European market, while also introducing its broader portfolio to U.S. customers—and that requires setting up an office here.

Last month, H-Farm started renting office space near Seattle’s Pioneer Square—sharing it with Wishpot and another startup in stealth mode. It is H-Farm’s only office in the U.S., and the company plans to make it the major center of operations outside of Italy. H-Farm’s website says, “This operation will endow it with the possibility of significant growth on the other side of the Atlantic as well as the chance to increase its projects and activities.” Why Seattle? Max Ciccotosto, Wishpot’s co-founder, says, “They’d looked in the Bay Area, but they really got feedback that Seattle was the right market for them.”

To me, the West Coast makes sense for H-Farm’s expertise, and I suspect the choice of Seattle boiled down to personal and business relationships in the area. Ciccotosto, a native of Italy, says he originally met H-Farm last year through one of his investors, Rob Monster of Monster Venture Partners. “Rob said, ‘There’s a guy [from H-Farm] coming from Venice, can you meet him?’” It turned out Ciccotosto was going to a fashion-industry party hosted by Nordstrom’s that night, so he relayed the message to the H-Farm visitor, a senior employee named Marco Janeczek (who was born in Poland but raised in Italy). Evidently, the cocktails and fashion models were a hit—and pretty soon Ciccotosto was on his way to securing a Series A investment from H-Farm. The Italian firm has also gained several advisors around town, so it’s a well-connected operation.

I’ll be getting the scoop on H-Farm’s local strategy from Donadon soon. In the meantime, it doesn’t look like the firm is soliciting wide-ranging funding proposals from early-stage startups, à la incubators like Founder’s Co-op or Y Combinator, which we’ve been covering at Xconomy. So its role in the local innovation community is less clear at this point, but its outside perspective could be valuable. “These guys come with heavy global expertise,” says Ciccotosto.

H-Farm is accepting proposals through the end of September in a very specific area: new applications for the Apple iPhone. The company says it has received more than 100 proposals so far, and will invest $250,000 in the winner(s). It also says it will make a new call for proposals in October, in an area yet to be announced, so stay tuned.

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A couple weeks ago, we ran a story about the relationship between Seattle startups and San Francisco Bay Area VCs. We asked, what can Seattle entrepreneurs do to attract more attention from California investors? The responses I got from the tech-business community painted an interesting and complex picture of the local investment scene—but it was just a start. The piece also generated quite a bit of feedback on Seattle versus the Bay Area, which I’d like to follow up on here. (The 49ers’ improbable 33-30 overtime win over the Seahawks yesterday does not help the Northwest cause.)

For instance, Tony Wright of Seattle-based RescueTime wrote in about his most recent fundraising efforts. “If I had it to do over again, I’m sad to say that I’d probably avoid the Seattle investor scene unless a motivated investor fell in my lap,” he commented on the post. “If you’re buying a ‘product’ like investment, it pays to go where there’s a competitive market—you’ll get a faster deal with better terms.” In his latest round, which will be announced soon, Wright says that only one of his “gold-plated collection of seed-stage investors” (out of several, presumably) is from Seattle.

That sort of feedback makes me wonder whether there is, or will be, a brain drain of entrepreneurial talent to the Bay Area. I’ve heard that seed-stage deals can be slow going in Seattle, compared to how fast Bay Area investors move to close them. This also made me wonder if startups tend to stick around in Seattle while seeking capital from elsewhere.

The answers clearly depend on the individual startups, entrepreneurs, and their experience levels. LinkedIn originally started in Seattle but moved to the Bay Area early on. Farecast, which was backed by Madrona Venture Group and several Bay Area firms, stayed in the Seattle area before getting bought by Microsoft in April. In the past couple of months, Seattle-founded DocVerse, a maker of collaborative software for documents, has moved to San Francisco after closing a $1.3 million funding round there. “Our experience was materially different from most of the perspectives you captured in your previous article,” says DocVerse co-founder Shan Sinha. (I’m intrigued to hear more soon.)

Will others follow DocVerse’s lead? At least one experienced entrepreneur thinks the local investment and recruiting scene is just fine—but he acknowledges that there’s much less competition among investors to finance companies in Seattle. “It feels to me like the climate is good,” says T.A. McCann of Seattle-based Gist, which is backed by Vulcan Capital. “There probably needs to be more direct competition [between Seattle investors]. Most VCs here have a space carved out. They could lose a deal to someone in the Valley, but probably not to someone locally.”

McCann’s bottom line is simple. “If I went to the Valley and [a VC firm] said, ‘We’ll fund you, but you’ve got to move here,’ I’d say no. I have a life in Seattle, my developers have a life in Seattle,” he says. “There’s a benefit to knowing the space, knowing how to recruit, and there’s enough good talent in town. If you’ve been here long enough, the referrals come very quick.”

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T.A. McCann has been on my list of people to talk to for months. So when I heard the Seattle-area entrepreneur, a former Microsoftie and pro sailor, has a new website in beta trials, I had to get the scoop from him. The site, and company, is called Gist, and this is its first week in beta. McCann has a really interesting background, and he has some constructive thoughts about the Seattle innovation community, but that’s a story for another time. For now, I just wanted to get the gist of Gist.

The basic idea is to “blend personal communication with the Web,” McCann. We all spend so much time managing new e-mails, searching for old e-mails, learning about new people, and trying to keep up with our contacts’ blogs and other related information about them (I know I do, at least). What Gist does is it tries to put all that stuff in one place, on one page, so “we can get the gist of our communications rapidly,” McCann says.

It does this by starting with your e-mail inbox and figuring out what (and who) you care about. Gist uses proprietary algorithms to rank your contacts by their importance, and then organizes and presents information from the Web about them—articles, blog posts, and the like. “The machine is 80, maybe 90 percent right. It’s never going to get all the right articles,” says McCann. “But the system can learn as you go along.” It does this by taking input from the user via a slider bar that adjusts what’s on his or her dashboard. You could think of it as “a way better Google Alert,” he adds.

Gist is backed by Paul Allen’s Vulcan Capital, and that originally came about through a key string of contacts. McCann says he spent time talking with Steve Arnold of Polaris Ventures’ Seattle office, who called McCann for due diligence on the startup MessageGate. From there, McCann went to Polaris as an entrepreneur in residence. After a year and a half, Arnold introduced McCann to Steve Hall, the managing director of Vulcan Capital. McCann has since worked on five projects within Vulcan Capital, and two have become companies. (The other is Seattle-based Evri, which we covered here.)

Vulcan Capital is different from most VC firms. As McCann puts it, most VCs have many limited partners and are focused on return on investment. Vulcan Capital has one limited partner—Paul Allen—and there’s less emphasis on the returns. “Paul is much more involved in things incubated within Vulcan,” says McCann. “There’s a different dynamic on how decisions are made…We can think bigger, think faster. We sit at a confluence of a lot of big markets.”

Later this year, McCann says, he’ll go out and raise another round of funding with other investors, and Gist will become “more market focused and customer focused…It’s both about creating cool and innovative technology, and creating something customers want.” Which raises the question of who the customers are. McCann says it’s salespeople, C-level executives, and VPs, at least at first. These are the people who bought the BlackBerry first, for instance, and who need “on-demand access to information,” he says. The business model will be mainly subscription-based.

What about competitors? There are certainly other companies out there trying to do things similar to Gist—for instance, startups like Xoopit, Xobni, and Plaxo. But McCann maintains they tend to focus on either the e-mail inbox side of things, or the business-intelligence and Web-info space—not both, as Gist is trying to do. And then there’s the name-brand factor. “All the guys in my space have weird names—I feel pretty good with ‘Gist,’” he quips.

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