Author: Gregory T. Huang

BlueKai Brings In Big Money, Siemens Licenses HealthVault, Intellectual Ventures Buys Avistar Patents, & More Seattle-Area Deals News

Roundup, deals, VC

Gregory T. Huang wrote:

Deal activity picked up a bit in the Northwest this week. But most of the action was in two or three big deals in the software and Internet sectors, with a smattering of deals in biotech and clean IT.

—Portland, OR-based Coaxis raised $10 million in growth capital from Updata Partners, based in Virginia and New Jersey. The money will be used to help Coaxis’s business, Viewpoint Construction Software, expand internationally. Viewpoint’s software, which is built on Microsoft’s .NET platform, is used by construction firms in the U.S., Canada, and Australia.

—SinglePoint, the wireless software firm based in Bellevue, WA, sold off its mobile aggregation business to Swedish giant Ericsson (NASDAQ: ERIC) for an undisclosed amount. SinglePoint makes mobile marketing software, and its service will help Ericsson expand its reach in text messaging.

—Bellevue, WA-based BlueKai raised a $21 million Series C round led by new investor GGV Capital, as Erin reported. Existing investors Battery Ventures and Redpoint Ventures also participated in the deal. BlueKai is a data exchange firm that enables websites to sell data on consumer demographics or buying behavior to companies that want to target their advertising more directly and efficiently. The company has raised about $35 million in venture capital dating back to March 2008.

—Seattle-based Hemaquest Pharmaceuticals raised $6 million in equity financing from undisclosed investors, as Luke reported. Hemaquest is developing experimental treatments for sickle cell anemia and viral-related blood cancers. The company was founded in 2007 and is backed by Forward Ventures, De Novo Ventures, and Lilly Ventures.

—Seattle-based SEOmoz has formed a partnership with U.K.-based Distilled to hand off its consulting business, which will be worth an estimated $1 million in the first year. As part of the deal, Distilled is opening a small office in Seattle. SEOmoz is now focusing solely on its search engine optimization and Web analysis tools and software.

—Seattle-based Voyager Capital co-led a $14 million Series B investment in Coulomb Technologies, a startup focused on electric vehicle infrastructure, based in Campbell, CA. Rho Ventures is the other main investor in the round. Voyager Capital seems to be making a push in the “clean IT” sector.

—Microsoft said that German giant Siemens has licensed its HealthVault technology platform, as Ryan reported. Financial details weren’t given. Germany will be the third country (after the U.S. and Canada) to adopt HealthVault, which enables people to store their personal health records in a secure online account and to share information with their doctors. Microsoft (NASDAQ: MSFT) released the technology in the U.S. in 2007.

—Bellevue, WA-based Intellectual Ventures, the invention firm led by CEO Nathan Myhrvold, acquired the majority of the patent portfolio of Avistar, a video-conferencing technology firm in San Mateo, CA. The deal is worth $11 million upfront, with Avistar also to receive a full grant back license that protects its products under these patents.

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February 3, 2010
Coaxis Coaxes $10M from Updata

deals, Software, funding

Gregory T. Huang wrote:

Portland, OR-based Coaxis, the parent company of Viewpoint Construction Software, has raised $10 million in growth equity funding from Virginia and New Jersey-based Updata Partners. The money will be used to fuel the company’s international expansion in marketing and product distribution. Viewpoint’s software, which is built on Microsoft’s .NET platform, is used by construction firms in the U.S., Canada, and Australia.

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February 3, 2010
Ericsson Buys SinglePoint Biz

deals, Mobile, Software

Gregory T. Huang wrote:

Bellevue, WA-based SinglePoint, a mobile software firm, announced it has sold its mobile aggregation business to Ericsson (NASDAQ: ERIC) for an undisclosed price. The assets will give the Swedish giant connections to mobile operators that will bolster its text messaging reach in the U.S. SinglePoint is focused on mobile marketing and advertising; its messaging service enables publishers, brands, and ad agencies to connect with mobile subscribers. The company also announced that Gowri Shankar has been named CEO. Shankar succeeds Rich Begert, who has led SinglePoint, formerly called Wireless Services, since 2004.

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February 3, 2010
Picnik Vs. Flickr: A Growth Comparison

startups, Internet, Analysis

Gregory T. Huang wrote:

Just a quick observation here. Seattle-based Picnik, the popular photo-editing startup, said yesterday it has reached the “1 billion photos edited” mark. Is this a big deal?

Well, if you compare the growth of Picnik to that of arguably the world’s top social storage site for photos, Flickr, it could be a very revealing milestone. For reference, here’s Flickr’s growth chart, in terms of the number of photos uploaded. The site has had three distinct phases of growth: an exponential rise until June 2007 (when it absorbed Yahoo! Photos), followed by two super-fast linear growth stages bringing it to 3 billion photos about a year ago.

In comparison, Picnik’s chart (see below) shows faster growth than Flickr’s, starting from its launch in 2007—if you compare the exponential portions of the curves. Flickr reached 500 million uploads in its first 3.5 years, whereas Picnik has reached 1 billion uploads in three years since January 2007 (these uploads include photos opened from social sites like Flickr and Facebook). It’s the kind of classic hockey-stick growth you’d show to investors—except, oops, Picnik doesn’t have outside investors, it was all self-funded.

Picnik is celebrating by opening its premium service to all users for free for 24 hours starting at 9 am Pacific Time today.

Here’s Picnik’s growth curve:

.

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February 3, 2010
Mpire Drops Widgetbucks, Switches Strategy to Be All About Optimizing and Verifying Online Ads

Internet, startups, Advertising

Gregory T. Huang wrote:

It has certainly been a busy week in the online advertising sector. On Monday, Bellevue, WA-based BlueKai announced it had raised $21 million in Series C funding in its effort to help transform how companies use customer data to design ad campaigns. And Seattle-based ad technology startup AdReady has formed a partnership with Internet radio service Pandora, based in Oakland, CA, to help the company design and sell advertising to small and medium sized businesses.

Not to be outdone, Seattle-based Mpire is announcing today a major update to its relatively new ad-optimization technology, called AdXpose. The basic idea is to make online ad campaigns perform more effectively, while protecting brands from fraud and from appearing next to inappropriate content such as porn. The latest features of AdXpose include the ability to set smart, real-time alerts for when ads don’t appear where they should (geographically or demographically, say), and preemptive “blocking” that stops ads from being served when the placement violates the terms of the advertising contract.

But Mpire is about more than just its latest product offering. It has bigger ambitions beyond AdXpose, and has reinvented itself as of late. I recently got an in-depth tour of the company’s new focus and strategy. In the process, I learned a lot about the online advertising world—and where Mpire’s real opportunities are.

When I spoke with Mpire last April, then-CEO Matt Hulett had just begun to sell AdXpose to online publishers and advertisers. Back then, Mpire was known for its flagship advertising network, Widgetbucks. Hulett left the company in August to become an executive at RealGames. Since then, Mpire has focused solely on technology for optimizing ads and helping its customers—ad agencies, ad networks, publishers—monitor how their ads are performing.

Mpire’s chief revenue officer, Kirby Winfield, sums it up pretty succinctly. “We are AdXpose. Widgetbucks is on life support,” he says. “Now it’s about [ad] verification and optimization. We want to …Next Page »

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February 3, 2010
Google Funds Research on Mobile Sensing at UW, Energy Efficiency at UC San Diego

Computing, IT, Corporate Research

Gregory T. Huang wrote:

With all the froth around big tech company earnings, device announcements, and mobile app stores, it’s refreshing to see some long-term research in computing being funded. Google announced today it has awarded $1.35 million ($900,000 up front) to the University of Washington for work on mobile data collection for public health and environmental monitoring, and $100,000 to UC San Diego, for research on energy efficiency.

The awards are part of $5.7 million in the first Google Focused Awards Grants being given to a dozen projects led by 31 professors at 10 universities in the U.S. and U.K. The areas of research also include machine learning and privacy. The grants are for two to three years, and give the recipients “access to Google tools, technologies and expertise,” according to a blog post by Alfred Spector, Google’s vice president of research and special initiatives.

The UW grant is to computer science professor (and former Intel Research Seattle director) Gaetano Borriello, in collaboration with Deborah Estrin at UCLA. (Wade and I have previously reported on the work of these two professors in wireless sensor networks.) The new grant is for researching the use of mobile phones as data collection devices for public health and environmental monitoring applications.

“Here at Google Seattle, we deeply appreciate our strong relationship with the University of Washington,” said Brian Bershad, Google Seattle’s engineering director (and former UW computer science professor), in a statement. “With this focused research award, we see an example of how that collaboration and recognition extends broadly across Google.”

Meanwhile, the UCSD grant to computer scientists Tajana Simunic Rosing, Steven Swanson, and Amin Vahdat, is for studying energy efficiency in computing. Energy efficiency has been among the topics of interest at the UC San Diego campus of Calit2, the California Institute for Telecommunications and Information Technology. Calit2 director Larry Smarr views global warming as a serious environmental threat, and has highlighted efforts at UCSD and elsewhere to make data centers and other IT operations more energy-efficient.

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February 2, 2010
Z2Live CEO David Bluhm on Game Community’s “Overwhelming Disappointment” in Apple iPad

Mobile, Gaming, startups

Gregory T. Huang wrote:

The honeymoon is over for Apple. Although it has been quite fashionable to bash the iPad tablet device announced last week, it did seem like a promising platform for gaming and other entertainment apps—at least to an outside observer.

Now the truth comes out. Last week, the local gaming and iPhone app developer community gathered at a meeting hosted by Madrona Venture Group and Z2Live, an intriguing mobile social gaming startup in Seattle. (Z2Live has raised $4 million from Madrona to develop and commercialize a multiplayer software platform for social and casual gaming on mobile devices like the iPhone.) The goal of the meeting was to share business tips and information about the marketplace, and to network. Inevitably, the topic of iPad opportunities came up.

I pinged David Bluhm, the CEO and co-founder of Z2Live (and former Medio Systems co-founder), to ask if he could sum up what the developer community is saying about the iPad. For Z2Live, at least, it sounds like the device is a welcome addition to Apple’s stable. But to most game and app developers, it sounds like the iPad is too big to be easily portable, and for its size, it needs more capabilities. We’ll see how Apple adjusts to the feedback.

Here are the specifics from Z2Live’s Bluhm:

“Inside our community of game and application developers, there is overwhelming disappointment over Apple’s recent iPad reveal (remember, we all live far afield of the Apple partner spin zone). Generally, we expected something more capable with such a large form factor—or a smaller, more nimble device. The big sound bite we have heard was that it is simply a really big iPhone…but not a phone. Most are skeptical that it replaces a good netbook, let alone someone’s laptop computer (as good laptops can be had for under $500).

On the other hand, if it was smaller, then it would comfortably replace both a netbook and an ebook reader with one cool device. I completely agree with this view. The iPad takes two hands to hold—it is something that must first be stabilized on a flat surface to use for any purpose. It cannot be easily dropped into a large purse or [knapsack] so it must be considered a ‘primary’ device.”

Bluhm continues: “The other primary negatives with the current iPad are:

Lack of multiplayer
Droid’s ability for apps to invoke other apps and offering a robust multitasking environment has piqued creativity…and expectations. While the argument for longer, dependable battery life and responsible task management is solid. Apple is right, of course, as independent developers will never be responsible power misers nor will they ever stop to consider management of their tasks against the tasks of any other resident software. The iPad, however, is not a phone. It is a browsing and email device.

No built in camera
A small and likely temporary situation. The available dock/stand seems to reinforce the need for a teleconferencing camera.

No iPad AppStore
Essentially, any new app must compete with 150,000 other apps built for the iPhone or iPod touch. Apple seems to feel that most iPhone apps would make good iPad apps when in reality there is much more to change than the resolution of your graphics. The iPad screen for instance, can handle ten different unique touch inputs which, I would imagine, will expose some very creative uses. I see this also as temporary as Apple evolves their merchandising and discovers the uniqueness of iPad apps.”

Bluhm concludes: “For our purposes, the iPad is another targetable device capable of delivering an even more immersive game experience and therefore, it is a welcomed addition to our iPhone and iPod touch opportunity.”

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February 2, 2010
Previewing Xconomy’s Battle of the Tech Bands (Seattle Vs. Boston) with Dave Dederer from Melodeo and The Presidents of the USA

music, Competition, events

Gregory T. Huang wrote:

OK, I need to weigh in on this whole Battle of the Tech Bands thing. In case you didn’t know, it’s this Thursday night at the Middle East in Cambridge, MA. It has a major new twist this year: Seattle versus Boston. The battle is on.

And I’m torn. I’m from Boston, after all, but I’ve lived and worked in Seattle for the past couple years. I follow the music scene and the tech scene closely in both cities. It’s sort of like the Super Bowl, where Archie Manning has to choose between his son’s team, the Indianapolis Colts, and the New Orleans Saints, where he spent most of his NFL career in the 1970s. (Except I hate the Mannings—I’m a Pats fan. In fact, forget I ever brought this up.)

To help me sort it all out, I pinged Dave Dederer from Seattle startup Melodeo, makers of the nuTsie cloud-based music service, for his thoughts on the bicoastal band rivalry. Dederer is a founding member of the Seattle-based rock band, The Presidents of the United States of America. You probably know them from their early hits: “Lump,” “Peaches,” and “Kitty.” Dederer (pronounced DAY-derer) is the master of the three-string “guitbass” as well as the traditional guitar. Surely he’d have some bulletin-board material to throw Boston’s way?

“I don’t know if I have any trash-talk, other than to note that Boston and Seattle are both rough-and-tumble (formerly, anyway) cities with lots of hills and water all around and a seemingly endless supply of high-quality, distinctive rock and roll music,” Dederer says via e-mail. “The Modern Lovers, Aerosmith, Boston, The Pixies and many more from Boston…The Wailers, The Sonics, The Kingsmen, Heart, Queensryche, Alice in Chains, Soundgarden, Nirvana, Pearl Jam, The Presidents of the USA, Modest Mouse, Death Cab for Cutie and many more from Seattle and environs…well, if you put it that way, we pretty much blow Boston away!”

So there you go. Dederer adds that the Middle East club was the “home base” for his Presidents bandmate Chris Ballew during his years in Boston. “Funny—in a way, [Presidents of the USA] bridges the gap. Chris Ballew spent a long time in Boston and played a lot of music with the late Mark Sandman, one of the key figures there,” he says. Indeed, Sandman was a fixture of the Boston and national music scene in the 1990s, with his seminal bands Treat Her Right and Morphine. I’m lucky to have seen him play live twice.

With all due love and respect to Boston, I am backing the Seattle bands in this one—unless I’m called into duty as a judge, that is, in which case I’ll be, um, totally impartial. Lions Ambition (representing Boeing) and Juda’s Wake (Microsoft) played monstrous sets at our Battle last summer in Seattle. If nothing else, you will remember them—I guarantee it. Plus I have a thing for underdogs, and the boys from the Northwest will be facing a rowdy crowd on the road, in subfreezing temperatures, without most of their fans.

We’ve still got a few tickets left for the event, which is a fundraiser benefiting Science Club for Girls and Year Up Boston; tickets are $25 in advance, $35 at the door. (Check out Erin’s January 28 story for the details on the amazing door prizes we’ve got lined up for the audience, including Rock Band video game bundles, Lord of the Rings Online boxed sets, Xbox 360 games and accessories, H&R Block gift certificates, and iRobot Roomba vacuum cleaners).

McAlister Drive (formerly representing Linedata Services), The Dirty Truckers (representing American Well and formerly Sophos), and Deadbeat Darling (representing Pictela and formerly Akamai) will be formidable opponents for the Seattle bands, especially since they’ll be playing on their home turf. But this one will be won or lost on stage, not in the crowd.

Just like in business, it will all come down to execution. And I wouldn’t miss it for the world. See you Thursday.

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February 2, 2010
From Social Media to the 3-D Internet: Companies Need to Change Up, Says Former RealNetworks Exec Kelly Jo MacArthur

Internet, Leadership, trends

Gregory T. Huang wrote:

Every once in a while, I sit down with a businessperson who brings a unique perspective to a huge global trend—and helps me see things in a profound new light. In this case, that person is Kelly Jo MacArthur, and the global trend is the explosion of social media and its broader impact on corporations.

MacArthur was the former general counsel, senior vice president, and chief of staff at Seattle-based RealNetworks—and she also did a stint at Linden Lab, creators of the virtual world Second Life—so she has her digital media and Internet technologies down cold. A 10-year veteran of Real, she left the company in 2007 and has been focusing on consulting work with startups, big companies, and other organizations across the fields of social media, networking technologies, cleantech and sustainability, traditional media, and arts.

We were talking recently about the future of companies like Twitter and Facebook, and what struck me was the way MacArthur thinks of social media as an inevitable—and inherently predictable—evolution of communication technologies on the Internet. That means smart entrepreneurs and executives should be able to anticipate how all of this is affecting societal behavior, and what the new opportunities will be. What’s more, she’s finding that these technologies are forcing big companies and organizations to completely rethink their core strategy and value proposition—indeed, their very existence.

Here’s an edited transcript of our conversation:

Xconomy: So what are you hearing from companies out in the field?

Kelly Jo MacArthur: In my own work as a strategic advisor to CEOs, various boards, and executives on their corporate strategy, the inevitable conversation is, “What should we be doing with social media?” I’m not a marketing person—they work with their advertising and marketing agencies—but it leads you to the conversation that each business, especially in more traditional, entrenched industries, should be thinking about how they’re relevant in the future. And how we as citizens and consumers are demanding more, and also participating more, in the offerings and opportunities that these businesses have.

There’s a huge opportunity, no matter what business you’re in, if you’re constantly thinking ahead about how we as societies are shifting. Versus focusing on, “Should I be using this tool, or should I have a Facebook page?” You should be using these tools for your …Next Page »

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February 2, 2010
Voyager Capital Makes Cleantech Investment

deals, energy, VC

Gregory T. Huang wrote:

Seattle-based venture firm Voyager Capital has co-led a $14 million Series B investment in Coulomb Technologies, a Campbell, CA-based startup focused on electric vehicle infrastructure. Voyager and Rho Ventures co-led the financing for Coulomb, which makes technologies for vehicle charging stations. Daniel Ahn, a Voyager managing director based in Silicon Valley, is joining the Coulomb board. The deal may signify Voyager’s increasing interest in the “clean IT” sector; the West Coast firm is primarily known for its investments in software, wireless, and digital media.

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February 1, 2010
SEOmoz Hands Off Consulting Biz to U.K. Firm, Doubles Down on Software and Tools

deals, startups, Internet

Gregory T. Huang wrote:

Don’t think of Seattle-based SEOmoz as a consulting firm. It’s all about software and tools now—and pretty much has been for a couple of years.

That’s the message from founder and CEO Rand Fishkin, who spoke with me last week about the search engine optimization company’s strategy. SEOmoz announced today it is officially handing over its consulting business and existing consulting customers to Distilled, a small search marketing firm based in London, U.K. As part of the deal, Distilled is setting up a Seattle office in the next few weeks, its first in the U.S. The estimated revenue from the consulting business for the first year is $1 million, according to the companies. Meanwhile, the former SEOmoz consulting team is switching over to marketing within the company.

SEOmoz and Distilled have worked together informally since 2007. Their mutual customers include Microsoft, RealNetworks, Avvo, Evogear, Etsy, and Scribd. The new partnership will allow SEOmoz to focus solely on its core software products, which should please its investors. “We have an impetus to maximize the shareholder return and investor value,” Fishkin says. He adds that the move is being made, at least in part, to “maximize the multiplier on an exit.” (Since consulting is essentially a steady fee-for-service business, it has less growth potential than software, which can tap into a much bigger market and therefore command a premium from investors.)

Some quick background on SEOmoz: The company was founded in 2004, originally as a consulting shop, and is backed locally by Ignition Partners and Curious Office. It has 21 employees and generated just over $4 million in revenue last year, up from $1.4 million in 2008. And it has been generating more than 85 percent of its business from its software and tools, which it offers primarily to small and medium-sized businesses to help improve their marketing and Web traffic. (One differentiation from companies like Seattle’s Optify and San Diego’s Covario is that those firms …Next Page »

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February 1, 2010
Why the Apple iPad Is a Kindle Killer, or Not—and How Amazon Must Step Up

Digital Books, Software, Competition

Gregory T. Huang wrote:

Almost everyone in the consumer tech industry has been thinking about how the Apple iPad, unveiled on Wednesday, affects their line of business—whether it’s gaming, video, mobile content and advertising, mobile interfaces, or digital books. Especially digital books.

Yesterday, Ben Elowitz, the CEO and co-founder of Seattle-based Wetpaint, argued in TechCrunch that the iPad will put the Amazon Kindle out of business—and he gave his top 10 reasons. Meanwhile, Scott Jacobson of Seattle’s Madrona Venture Group, writing in TechFlash, gave five reasons why the iPad will not kill off the Kindle. I’m waiting for someone to give us 2.5 reasons why we should care.

OK, I’ll do that. One, although the iPad is a multi-purpose device, e-book reading is clearly one of its sweet spots. By rolling out the iBooks store, Apple is saying, we think we can make serious money on this now. Two, it’s super interesting to watch a behemoth like Apple emerge on the scene so suddenly, and in so many different markets—forcing a lot of big companies to raise their game. The corollary to that (reason two-and-a-half) is that Amazon and Apple are prepping for a really major battle over the way consumers experience digital books—and we should all benefit from that. (Well, some of us still like our old-fashioned books, but that’s beside the point.)

From his writing, Elowitz appears to have no big love for Amazon—perhaps his deep experience in online retail at Blue Nile has something to do with that. He points to the superior economics and experience of reading a book on the iPad, as well as the iPad’s support of the ePub format versus the Kindle’s proprietary format, as reasons for the Kindle’s demise. Plus there’s a “cool factor” associated with Apple, he says. “Even those of us who are smart enough to know better still fall in love with Apple products, and carry them with pride. Amazon just doesn’t have that.”

“Amazon is already scared,” Elowitz writes. “The best plan for Amazon isn’t to try to buy customers or try to match Apple’s approach. Rather, they’ll need to re-think their consumer experience from start to finish. They’ve done a great job so far of digitizing books, but now if they want to compete with Steve Jobs’ inventiveness, they’ll have to step up to be a must-have device in consumers’ digital lives.”

Jacobson, on the other hand, is a former Amazon exec who helped launch the original Kindle. He is also a shareholder in both Amazon and Apple, and professes that his household includes two Kindles, four iPhones/iPod Touches, and two iMacs (and soon, an iPad). He points out that the Kindle is designed for hardcore readers—it’s meant to do one thing, and do it really well, and it includes a battle-tested recommendations system. (As compared with iTunes recommendations, which “still suck” when it comes to music, he says.)

Most interestingly, Jacobson argues that Amazon can’t afford to lose this battle. “While the transition from physical to digital will take far longer for books than it has for music, Amazon can’t afford to allow Apple to dominate the market for e-books the way it dominates the market for MP3s,” he writes. “Amazon needs to step up its game. The nice thing about competition is that it fosters innovation. And we the consumers will be the beneficiaries.”

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January 29, 2010
Who Should You Start a Company With? As Seattle Evolves, FounderDating Has an Answer

startups, entrepreneurs, Innovation Community

Gregory T. Huang wrote:

Bill Gates and Paul Allen. Steve Jobs and Steve Wozniak. Larry Page and Sergey Brin. Before they were the co-founders of billion-dollar technology companies—Microsoft, Apple, Google—they were friends, classmates, lab mates.

But most people aren’t lucky enough to meet their ideal co-founder before it’s time to start a company. Is there a more systematic way for today’s most promising entrepreneurs to find the right business partners?

The short answer is no. In Seattle, local events and organizations like Seattle Tech Startups, Seattle 2.0, Open Coffee, Lunch 2.0, nPost, NWEN, and WTIA all play important roles in bringing the entrepreneurial community together. But none focuses solely on matching up potential founders. That’s where FounderDating comes in.

OK, in Seattle we already have Founder’s Co-op (seed-stage tech investment fund) and Founder Institute (entrepreneur training), and Foundry Group’s Brad Feld is a household name in these parts (he’s helping to bring startup bootcamp TechStars to Seattle this year). But FounderDating—this is something entirely different. And it could contribute to the changing face of how early-stage companies get off the ground in this town.

Unlike TechStars and Founder Institute, FounderDating is not looking to provide mentorship or training to entrepreneurs. And unlike most other local tech events, it’s not about content or general-purpose networking. It’s about one thing: hooking up with the right co-founder. (And no, not that kind of hooking up. For that, check out this site, which is edited by Seattle-area tech entrepreneur Jasper Kuria.)

FounderDating was started in the San Francisco Bay Area by Saar Gur of Charles River Ventures and Jessica Alter from Formative Labs. They are bringing the event to Seattle for the first time on February 9, with the help of local organizer Brian Schultz, the co-founder of Seattle’s Ontela and Djinnisys (now Plectix Biosystems), who’s currently on his second tour of duty with Microsoft. The exact format of the event is TBA, but it will involve roughly 25 hand-picked entrepreneurs and potential co-founders meeting in a structured way at a restaurant. It might incorporate some “speed dating” elements or other ways to match up people who have interests in areas like mobile, Internet, commerce, advertising, and aerospace.

Schultz, who worked for Lehman Brothers in a previous life, speaks from experience when he says the big challenge in starting a company is “finding good people to do it with.” That means being able to “diversify the skill set and get momentum around ideas.” He says, “Most likely the sweet spot for FounderDating will be founders who have done it before. They know what they want, and what they need.”

The importance of the team can’t be overstated, it seems. “The number one cause of companies dying is founders not working well together. You don’t hear about those because they’re stillborn,” says Dan Shapiro, a fellow Ontela co-founder and now chief technology officer of Photobucket. “Picking your co-founder is a make-or-break decision for a company.”

I’ve recently talked with a number of Seattle-area entrepreneurs and scientists who are interested in the FounderDating program—either in participating directly, or in its potential to give a boost to the local innovation scene. A common thread is that it’s damn near impossible to …Next Page »

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January 29, 2010
Bill Gates Funds Geoengineering and Climate Projects, Steve Ballmer on China, and Other Microsoft-Related News

Software, IT, Global Innovation

Gregory T. Huang wrote:

Lest Apple take all the headlines this week, a certain software powerhouse in Redmond, WA, is making waves in its own way. Analysts and stockholders are anxiously awaiting the results of Microsoft’s fourth-quarter earnings call today, with some predicting a boost in revenues thanks to Windows 7. But there are other things going on too.

—OK, he doesn’t technically work at Microsoft anymore, but chairman Bill Gates has certainly been in the news a lot lately. One item you might not have noticed, however, was a report this week from Science magazine reporter Eli Kintisch. He wrote that Gates has been funding academic research on geoengineering, climate change, and energy since 2007. According to the story, Gates has put up at least $4.5 million to explore things like altering the stratosphere to reflect some solar energy, filtering carbon dioxide from the atmosphere, and brightening ocean clouds. None of this is surprising, given Gates’s involvement with huge, Earth-scale projects at places like Bellevue, WA-based Intellectual Ventures. But the specific connections to the University of Calgary, the Carnegie Institution for Science, and Silicon Valley inventor Armand Neukermans are interesting.

—Microsoft CEO Steve Ballmer went on the record yesterday about doing business in China. This is a topic I have some familiarity with, having documented Microsoft’s research and development efforts in the Middle Kingdom over the past decade. Ballmer’s post comes on the heels of the flap involving Google in China. He didn’t say anything earth-shattering, but his comments reinforced the notion that Microsoft has been in China far longer than Google has, and has built up deeper relationships with Chinese government officials and businesses.

He wrote, “We have done business in China for more than 20 years and we intend to stay engaged, which means our business must respect the laws of China. That’s true for every company doing business in countries around the world: we are all subject to local laws.” Ballmer continued: “At the same time, Microsoft is opposed to restrictions on peaceful political expression, and we have conversations with governments to make our views known. In every country in which we operate, including China, Microsoft requires proper legal authority before we remove any Internet content; and if we remove content, we give users notice.”

—On the healthcare-IT front, Ryan reported today that Microsoft’s HealthVault software platform for managing electronic health records has expanded to its third country (after the U.S. and Canada), via a licensing deal from German conglomerate Siemens. The partnership was created through Siemens’ IT services and solutions division. Financial terms weren’t given, but it could be an important step in getting Microsoft’s health-related products to be adopted much more widely.

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January 28, 2010
BuddyTV Rising Fast, Looking for New Revenue Streams in a Changed Media Landscape

startups, Internet, strategy

Gregory T. Huang wrote:

This Seattle-based website draws some 6 million visitors a month. It has been seeing annual traffic growth of about 300 percent, and was recently named the #2 fastest-growing website in the U.S., according to comScore.

Yes, I’m talking about BuddyTV, the social site for television fans led by prominent entrepreneur and investor Andy Liu. Fans go to BuddyTV.com to get news about their favorite shows, play TV-related games, and gossip with other fans. I stopped by the company’s office in Lower Queen Anne yesterday for a Seattle Lunch 2.0 meeting (thanks to Josh Maher for organizing it). Very nearby are some other notable startups, including Cheezburger Network and BigDoor Media. It’s an intriguing little pocket of Internet entrepreneurship in Seattle.

Neal Freeland, BuddyTV’s head of marketing (and a former Microsoft and Zango veteran), gave an informal update on the company to a packed room of about 80 entrepreneurs and tech-business types. My take is that 2009 hit everybody hard, especially consumer tech and Web 2.0 startups. And although BuddyTV is doing well—its revenues roughly follow its traffic, Freeland says—the company has been looking beyond its bread-and-butter revenue model of Web advertising to figure out how it can make more money.

The entire medium of television is going through big changes. From broadcast to niche, analog to digital, scheduled to anytime, and—crucially—from advertising-supported to “nobody really knows,” Freeland says. Nevertheless, it’s clear that TV still matters a lot. And online, he says, “Ads are good, but not enough.” The key is that nobody has figured out how to make banner ads really work on the Web, in order to create the kind of demand for advertising you see (or at least used to see) in print, radio, and TV.

Freeland didn’t offer any magic bullets. But he says BuddyTV has been looking at other options besides subscriptions, like virtual currencies—including micropayments, decorative benefits (dressing up your avatar online), and virtual gifts (e-cards, for example)—and lead-generation models. One problem with lead generation and “offer” models, which typically ask consumers to take surveys or sign up for subscriptions to other products, is that they sometimes include hidden fees, or have very low retention rates for subscribers. (People will sign up for Netflix in order to keep playing a game online, say, but then they might immediately cancel their subscription.)

But the virtual currency model has picked up steam, Freeland says, with Café World (from social gaming company Zynga) raking in more than $100 million a year, virtual world IMVU making $25 million a year, and Facebook Gifts hauling in some $50 million annually.

“We’re in a revolution which is changing media consumption and marketing,” Freeland says. I took this to mean, consumer Internet companies beware—but get ready to seize new revenue opportunities in 2010 and beyond.

BuddyTV is still running lean with about 20 employees, including six writers who crank out hundreds of articles a week for the site. The company was founded in 2005 and is backed by Madrona Venture Group, Gemstar-TV Guide, and Charles River Ventures.

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January 28, 2010
The Apple iPad’s Impact on Mobile, Gaming, and E-Books: Local Techies and Startups React

IT, Computing, Hardware

Gregory T. Huang wrote:

[Updated 1/28/10, see below] The wait is over, but the endless mulling of the details and implications is just beginning. As Apple unveiled its long-rumored tablet device, the iPad, at a press event today in San Francisco, mobile industry insiders in Seattle, Boston, and elsewhere were watching closely. Which is exactly what you would expect, given Apple’s track record of disrupting industry after industry with previous iProducts like the iPod, iTunes, and the iPhone.

After all, long before Steve Jobs lifted the cloak of secrecy, the iPad was both feared and revered—feared because of the possibility that it will once again upend the way people consume digital content such as music, movies, TV shows, games, books, newspapers, and magazines, and revered because it could provide creators and distributors in each of these media with new ways to reach customers.

In case you’ve been offline all day, the iPad is basically a giant iPod Touch. It’s a 1.5-pound media device with a 9.7-inch LCD multitouch-sensitive screen and, according to Apple, up to 10 hours of battery life. It will have Wi-Fi Internet connectivity and will come in no fewer than six versions priced from $499 to $829, depending on whether you want 16 gigabytes, 32 gigabytes, or 64 gigabytes of flash memory, and whether you want 3G connectivity in addition to Wi-Fi. 3G data plans, available on a month-to-month (not contract) basis from AT&T, will cost $14.99 per month for up to 250 megabytes of data, and $29.99 per month for unlimited data. The Wi-Fi-only version of the iPad will be available in late March, and the 3G version will be available in April, according to Apple.

Those are the basics—but what will the device mean for consumers, entrepreneurs, application developers, and Apple’s competitors? To start the search for answers, Wade and I pinged a bunch of our favorite tech experts in Seattle and Boston, and below we’ve summarized their early reviews. So far we’ve gathered comments from Bill Baxter and Robbie Cape from Seattle-based Cozi (which makes family software for the home); John Chuang from Boston-based internet appliance maker Litl; Steve Hall, managing director of Seattle’s Vulcan Capital (Paul Allen’s investment firm); Todd Hooper, founder and CEO of Seattle-based Napera Networks; Mark Lowenstein of Brookline, MA-based wireless industry consultancy Mobile Ecosystem; Mike McSherry of Seattle-based Swype; and Greg Raiz, founder and CEO of Raizlabs, a mobile application development firm in Brookline that focuses on iPhone apps.

Our sources expressed a variety of opinions about the iPad, ranging from adulation to surprise to disappointment. One thing is certain: the device is kicking up serious dust in some very diverse consumer markets, including e-books, gaming, music, and video. That means it probably stands to gain much better traction than any tablet computer that has come before (sorry, Microsoft—though we know you have something in the works too).

Without further ado, here are our expert reactions:

Bill Baxter, chief technology officer, Cozi, Seattle:

The iPad is a game changer. The single-minded focus on enterprise was the mistake Microsoft made with Windows Mobile. It is the same mistake they made with the tablet PC. Now technology is such that iPad is a realistic possibility for consumers and nobody is positioned as well as Apple to make it happen.

The impact of this has already begun to ripple through the PC OEMs [original equipment manufacturers]. They are going to have to scramble to …Next Page »

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January 27, 2010
Intellectual Ventures Buys Avistar Patents

deals, intellectual property, Technology

Gregory T. Huang wrote:

Bellevue, WA-based Intellectual Ventures has agreed to pay $11 million upfront to acquire the majority of the patent portfolio of San Mateo, CA-based Avistar, a video-conferencing technology firm. The deal calls for Avistar to receive a full grant back license that protects its products under these patents. Earlier this month, Intellectual Ventures, the invention firm led by CEO Nathan Myhrvold, announced it had hired Adriane Brown as its new president and chief operating officer.

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January 27, 2010
DocuSign Gets New CEO, Chairman

Software, people, IT

Gregory T. Huang wrote:

Seattle-based DocuSign, a maker of software to automate electronic signatures, announced today it has appointed Steve King as new CEO and Keith Krach as chairman of the board. King, a veteran of Virtela, Zantaz, and E*Trade, succeeds Matthew Schiltz, who will now head up strategic business development for the company. Krach is the co-founder and former CEO of Ariba. DocuSign was founded in 2003 and has raised more than $30 million in venture funding.

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January 27, 2010
Steve Singh, CEO of Concur, Joins Voyager Capital Advisory Board

Venture Capital, Software, people

Gregory T. Huang wrote:

[Corrected 1/27/10, 3:00 pm (see below).] Seattle-based venture firm Voyager Capital has added a heavy hitter from the local tech scene to its advisory board. He is Steve Singh, chairman and chief executive of Concur Technologies, the Redmond, WA-based software firm focused on corporate travel and expense management.

It’s another step in Voyager’s recent efforts to bring more talent and expertise to its core investment areas of software, mobile, and digital media. “One thing we were targeting was an executive who had built a successful company and had deep insights into the [software as a service] market, and software in general,” says Bill McAleer, co-founder and managing director of Voyager Capital.

Singh, an electrical engineer by training, has been CEO of Concur (NASDAQ: CNQR) since 1996. He was an original investor in the company, which was founded in 1993, and has built it up from what he calls a “garage startup” into a software giant with some 10,000 corporate customers and $247.6 million in revenue ($25.7 million profit) in fiscal year 2009. Concur acquired Voyager-backed startup Captura in 2002, which is how Singh and McAleer originally got to know each other. [An earlier version of this story said that Singh co-founded Concur; it was actually co-founded by Raj Singh and Mike Hilton. We regret the error—Eds.]

Singh’s role at Voyager will include advising the firm on its portfolio companies and future investments. McAleer says he hopes to make use of Singh’s knowledge and experience in “building a company over an extended period of time, through up and down economies, and up and down sector changes.” Singh, for his part, says he looks forward to “adding some value for apartment-based entrepreneurs” on topics like “how do you build great teams.” He also looks forward to seeing how he might apply lessons from the startup community to his own customer needs at Concur.

He seems particularly jazzed about mobile opportunities—in areas like wireless applications, digital payment, and voice interfaces. I asked what he thinks startups should do to better navigate the increasingly crowded mobile field and avoid getting swept aside by giants like Apple, Amazon, and Google. “Amazon and Apple are platforms, on which great companies can be built,” Singh says. “Look at them as infrastructure. The investments that Voyager and others make are around business opportunities that will sit on top of that infrastructure.”

It’s interesting to note the reach and connections of Voyager’s extended family. Its advisory board includes tech-world luminaries Frank Gill, Jeremy Jaech, Ed Lazowska, and Bruce Chizen (the former Adobe CEO who joined Voyager as a venture partner last September). And Sterling Wilson, the CEO of Voyager-backed mobile startup Ground Truth (which just came out of stealth this week), worked at Concur for six years in the 1990s in executive roles including chief financial officer.

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January 27, 2010
Inside Seattle Genetics’ Big Partnership, Motricity Files for $250M IPO, VC Stats for 2009, & That’s About It for Seattle-Area Deals News

Roundup, deals, VC

Gregory T. Huang wrote:

It was a quiet week for deals in the Northwest—too quiet. Maybe companies are steering clear of breaking news so they don’t get drowned out by all the big quarterly earnings news and Apple’s much-anticipated product announcement tomorrow. Probably there’s a storm coming.

—Ryan took us inside a major partnership between Bothell, WA-based Seattle Genetics (NASDAQ: SGEN) and Millennium in Cambridge, MA. The deal, which we originally reported last month, calls for Millennium to sell Seattle Genetics’ experimental drug for Hodgkin’s and other lymphomas in all markets outside the U.S. and Canada. Millennium, which began a research collaboration with Seattle Genetics back in 2003, is acting as the Bothell firm’s global development and marketing partner, thanks to Millennium’s global parent company, Japan-based Takeda Pharmaceutical.

—Wade reported that Harvest Power, a Boston-area renewable fuels company that has operations in Seattle and Vancouver, BC, has formed a partnership with Waste Management (NYSE: WM), the Texas-based waste hauling giant. Waste Management has invested an undisclosed amount to help Harvest Power expand to more cities, starting with the East and West Coasts.

—Dow Jones VentureSource broke out VC data for Washington state in the fourth quarter of 2009, as Bruce reported. The venture dollars invested shot up almost three-fold in the quarter, when $239.4 million was invested in 25 companies, compared with the same quarter in 2008, when less than $85.6 million was invested in 18 companies. For all of 2009, however, Dow Jones showed a 9 percent decline, with $793.4 million invested in 107 companies, as compared to $875.6 million in 97 companies the prior year.

—Bellevue, WA-based Motricity, a software firm that helps wireless carriers and media companies deliver mobile data services to customers, filed a form S-1 with the SEC, saying it plans to sell up to $250 million in an initial public offering. The company was founded in 2001 and is backed by more than $400 million in venture funding; it moved headquarters from North Carolina to Washington following its $135 million acquisition of the mobile services unit of InfoSpace (NASDAQ: INSP) in 2007. Motricity generated revenues of $117.1 million in the 12 months ending on September 30, 2009, but is not profitable.

—Lastly, we had a fascinating guest post from entrepreneur Jasper Kuria, a former Microsoftie, on the reasons behind the “evil” term sheets that VCs negotiate with startups they want to fund, and the ensuing strategy discussions about company growth and exits.

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January 26, 2010