Author: Wade Roush

Wade Roush wrote:

The Cambridge, MA-based One Laptop Per Child Foundation arguably launched an industry with its XO-1 Laptop, which first went into large-scale production in 2007. The worldwide buzz generated by the little green machine, which was intended mainly for classroom use in technologically underserved areas of the world, inspired computer makers to build an array of low-cost commercial netbooks. But since then, hardware makers have leapfrogged OLPC—with Apple’s iPad, in particular, fueling perceptions that the future of personal computing lies in tablet-style devices with multitouch screens.

This week, the organization unveiled its near-term plans for catching up with the tablet revolution—but it bears little resemblance to the snazzy, dual-screen device OLPC founder Nicholas Negroponte first showed off in May 2008. Instead, the foundation is working with Santa Clara, CA-based Marvell Technology Group to develop a version of Marvell’s planned Moby tablet that will run OLPC’s Linux-based operating system and educational software.

Marvell announced the Moby as a “reference design” in March. Envisioned to cost $99 or less, the device will have Marvell’s own 1-Gigahertz Armada microprocessor inside, and will have a multitouch, high-definition LCD screen. At the website for the Moby initiative, Mobylize.org, the company pitches the device as a low-cost alternative to the iPad for students, who could use it for reading e-textbooks. (In a politically savvy pilot program, Marvell says it plans to donate one Moby tablet to every student in an at-risk public school in the District of Columbia.)

Judging from early mock-ups of the Moby—which will be available this fall, according to Marvell—the device will resemble a somewhat chunky iPad, right down to the single “home” button on the bezel. Marvell hasn’t announced the device’s full specs, but says the tablet will include Wi-Fi, Bluetooth, FM, and GPS radios and will support “multiple software standards including full Adobe Flash, Android, Windows Mobile, and Ubuntu.” (Ubuntu is a variant of Linux.) Like the iPad, the Moby is expected to have a long battery life compared to a laptop, but unlike the iPad, it will have a built-in camera for photography and video conferencing. Marvell also says the device’s virtual keyboard will provide “touch feedback,” although it hasn’t specified how this will work.

With OLPC’s software on board, the Moby tablet should be able to do support all the same educational activities the XO-1 does, including the wireless mesh networking that is a key element of the foundation’s “constructionist” philosophy for computer-mediated learning. Because it won’t have a physical keyboard or many of the other moving parts that go into a laptop, the device may even be more …Next Page »

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Wade Roush wrote:

Waltham, MA-based Xkoto, which makes database virtualization software for businesses, has been acquired by Teradata (NYSE: TDC), the Dayton, OH-based data warehousing and business intelligence giant, according to a report this morning in PE Hub. Neither company has formally announced the deal; a voicemail greeting at Xkoto confirms that the company has been acquired by another organization, but doesn’t name it, and officials at Teradata did not immediately respond to Xconomy’s inquiries. We first covered Xkoto back in 2007, when Boston-based GrandBanks Capital arranged to transplant the company’s headquarters from Toronto to Boston. Xkoto raised a $7.5 million Series B round in 2007 and a $3 million Series C round in 2009 from GrandBanks and GrowthWorks Canadian Fund.

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Wade Roush wrote:

Google unveiled the results of its first state-by-state analysis of the company’s impact on regional economies at press events in 10 cities on Tuesday, including Cambridge, MA, Detroit, and Seattle. For the most part, Google measured the value it generates when local advertisers and Web publishers use its AdWords and AdSense platforms for Web advertising.

Overall, Google claimed that transactions enabled by its search and advertising tools added up to $54 billion across the United States in 2009. About one-fourth of that that activity, $14.13 billion, took place in California. New York felt the second-biggest Google impact, with $6.27 billion in advertising-driven activity, followed by Illinois at $3.24 billion and Texas at $3.18 billion. Xconomy’s other home states of Massachusetts, Michigan, and Washington saw total economic value of $2.2 billion, $906 million, and $2.8 billion, respectively.

“‘What is the value of Google to local businesses?’ is a question we’ve often heard from the press, from advertisers, and from partners,” said Brian Schmidt, director of sales for Google Boston, at a press conference Tuesday at the Pemberton Farms market and garden center in Cambridge. “We take it seriously and we wanted to put some serious thought behind it.”

Advertising on Google is a “growth engine” for local businesses, Schmidt argued. He said that 43,000 of the 175,000 businesses in Massachusetts have advertised on Google. That includes Pemberton Farms, which allocates about 60 percent of its overall advertising budget to buying online ads matched to search keywords such as “gift basket” and “fruit basket,” according to co-owner Mark Saidnawey.

“The actual economic return to the state [of Massachusetts] via our advertising programs totals over $2 billion for 2009 alone. That is a really big number,” Schmidt said. “What’s important to note here is that we are not a California company. We are headquartered in Silicon Valley and that’s our focus, but we’ve built a focus in Massachusetts that we’re proud of. We’ve hired over 200 people, but more importantly we are empowering businesses in Massachusetts.”

Google calculated its economic-impact numbers by assuming that the dollars advertisers spend buying keyword-based advertising on its search pages through the AdWords program have a multiplier effect on their businesses. (After all, the whole point of advertising on Google is to entice Web surfers to click on your ad, arrive at your website, and become customers.) Hal Varian, Google’s chief economist, says businesses earn an average of $2 for every $1 that they spend on AdWords ads.

But when Google factors in not just revenue from AdWords advertising but revenue from clicks on natural search results—which outnumber AdWords clicks by about 5 to 1, acccording to third-party researchers—the multiplier effect grows even larger. Overall, the company calculates that for every dollar AdWords advertisers spend, they get back about eight dollars. (The exact formula that Google used can be seen here in more detail.)

A number of state and local officials attended the Cambridge press event, including Greg Bialecki, Secretary of the Executive Office of Housing and Economic Development under Massachusetts Governor Deval Patrick. In interviews with Xconomy and elsewhere, Bialecki has often promoted high-tech innovation as a path to economic recovery and growth for the state. “When we talk about the ‘innovation economy,’ sometimes people say ‘It sounds like you’re helping high-tech businesses but not …Next Page »

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Wade Roush wrote:

Chelmsford, MA-based OurStage, which runs an online community where indie bands gain recognition through audience voting in monthly contests, has raised $2.63 million in an offering combining equity, options, and warrants, according to a regulatory filing. In 2009 the company collected $3 million out of an intended $6 million Series B round; its backers then included Portland, ME- and Austin, TX-based Signature Capital and a large group of about 100 angel investors. Added to the company’s 2008 series A round of $13 million, the new money brings the startup’s total venture pot to roughly $19 million. In March OurStage announced a strategic partnership with MTV Networks, owned by Viacom (NYSE: VIA).

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Wade Roush wrote:

Attention tech entrepreneurs: We’re looking for a few good startups to tell their stories during the climactic “Xpo” segment of the Xconomy Summit on Innovation, Technology, and Entrepreneurship (XSITE) at Babson College on June 17.

What’s the Xpo? Well, if XSITE were an elegant, absorbing, tightly woven sentence about the work high-tech innovators in New England are doing to reinvent the U.S. economy, then the XSITE Xpo would be its exclamation point.

This final portion of the day-long XSITE conference is a lightning-presentation contest featuring three-minute multimedia presentations by executives at 12 groundbreaking startups. The XSITE audience will vote via text message for their favorite companies in each of our three categories: life sciences, energy/cleantech, and Web/software/IT.

So if you’ve got an up-and-coming company in one of those areas, come to XSITE and compete for the Xpo bragging rights. To nominate your startup for the Xpo, write to us at [email protected]. Tell us why your company is cool and send us some basic info like your Web address, your physical address, and how we can contact you.

If you’re still in stealth mode and you’d like to come out during the Xpo, all the better—we’ll keep your secret until June 17. And if you’re too deep in stealth to even think about presenting but you’d still like to check out the competition, we welcome you at XSITE too. In fact, we just introduced a special startup rate designed to make the conference more affordable for innovators from companies that are under three years old and with fewer than 20 employees.

Last year’s Xpo, at Xconomy’s inaugural XSITE conference, featured high-energy presentations from 12 amazing companies, with Alzheimer’s drug developer Satori Pharmaceuticals, MIT energy spinoff Witricity, and location data provider Skyhook Wireless collecting the audience-favorite prizes. (Witricity founder Eric Giler will be back at XSITE this year to give a keynote “Innovator Profile” presentation.)

Xpo presenters will be eligible to attend the full XSITE event at no charge. And as in 2009, we’ll feature the Xpo finalists in a showcase article leading up to the conference.

So contact us now—we’ll review all of the nominations and let you know very shortly whether you’ve been selected to participate. Thanks!

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Wade Roush wrote:

The Rocket Racing League game coming to the iPhone, iPod Touch, and iPad early this summer is a rare beast: a futuristic video game that’s based on real life.

RRL Games, a wing (or should I say fin?) of the Orlando, FL-based Rocket Racing League, is expected to release its game for the iPhone and iPod Touch this month and for the iPad in June. Judging from previews, it’s a high-octane simulation of the even higher-octane real-world sport of rocket racing, in which pilots fly four-seat, delta-wing airplanes modified with rocket engines that burn liquid oxygen and ethanol.

Rocket racing, which CNN reporter Miles O’Brien has called “a mashup between Stars Wars pod racing and NASCAR,” is the co-creation of investor Granger Whitelaw and X Prize Foundation founder Peter Diamandis, who will give a keynote presentation at the Xconomy Summit on Innovation, Technology, and Entrepreneurship (XSITE) on June 17. Their Rocket Racing League organization raised a $5.5 million venture round last year to advance its vision of a rocket racing circuit that would take place at airfields around the country, with fans watching military, acrobatic, and test pilots competing in four-lap heats around a 5-mile raceway.

The league is recruiting teams for the competitions now, and the first races are tentatively planned for 2011. But meanwhile, eager fans will be able to experience rocket racing on their Apple mobile devices. In screen shots from the game, rocket planes zoom through course markers that define the race course—essentially virtual tunnels in the sky. In actual rocket races, pilots will have heads-up displays showing them much the same information, and fans will be able to watch their progress from the ground on jumbotrons running augmented-reality software. (You have to watch this video from a demonstration in Tulsa, OK, to fully grok this.)

The organization says that eventually, it would like iPhone- or iPad-toting spectators to be able to race virtual planes alongside the actual ones in real time. But that’s a ways off. In the nearer term, gamers will be able to use the apps to compare race times with their friends on Facebook, as Diamandis explained in the following e-mail interview.

Xconomy: Do you hope that the rocket racing video game will help to generate increased interest in rocket racing as a real-world sport?

Peter Diamandis: In the development of any business, especially a sports league, it’s vital that we give our fans as many ways to get involved and be a part of the action as possible. The RRL game allows our fans to design and pilot their very own …Next Page »

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Wade Roush wrote:

If you’re a disciple of the “lean startup” philosophy now in vogue among tech entrepreneurs, you know you’re supposed to “fail fast, fail cheap,” then “pivot to a new vision” before you’re “out of runway.” In ordinary English, the idea is to quickly scrap your product if it’s not flying with customers, and find one that does appeal while you still have some cash.

One lean local startup that has done exactly this, with apparent success, is Pixability. The Cambridge, MA-based company takes advantage of the latest entry-level videocam technology to help businesses make compelling videos for their websites at bargain prices. But that’s not at all the idea that founder and CEO Bettina Hein had in mind when she started out in the fall of 2008. And the story of how Hein “pivoted” to Pixability’s current business model offers some useful lessons to entrepreneurs on how to stay flexible and open-minded. You might even find, as Hein has, that you like your new idea better than the old one.

While millions of consumers own digital or tape-based video cameras and dutifully haul them out for every holiday, birthday party, or beach trip, nobody really wants to suffer through the unedited footage later. Hein’s original idea was to help people pare down these home videos to something more watchable, while adding titles, transitions, music, and other bits of Hollywood sparkle. “Pixability started out taking all that amateur video footage and really polishing it up with editing,” Hein explains.

What made that idea plausible was the plummeting cost of video production and editing. “When Bill Warner started Avid Technology [in 1987], you had to pay $1 million for an editing suite, and he brought it down to maybe $100,000,” says Hein. “Now, for $1,000, you can get a PC and a camera and some decent editing software, so there has been another two-orders-of-magnitude drop.”

Unfortunately, late 2008 wasn’t a great time to be launching a new consumer-oriented service. Amidst the worst economic decline since the Great Depression, “discretionary income fell to almost zero for most consumers,” Hein notes. At the same time, she says, the startup was having trouble getting its message to click with potential customers: “Lots of people don’t understand the value of editing down your memories to something that somebody will actually watch.”

But Hein, a serial entrepreneur who had founded a Zurich-based speech software company called SVOX and then spent a couple of years doing a fellowship at MIT’s Sloan School of Management before deciding to start Pixability, was getting interesting feedback from …Next Page »

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Wade Roush wrote:

Prominent Massachusetts venture firms and CEOs have formally rolled out a mentoring program aimed at supporting “a new generation of technology entrepreneurs” in the state, in the words of an announcement this morning. Called 12×12, the initiative is supported by 12 local CEOs and 12 venture capital partners, and will match entrepreneurs with advisors for hands-on help launching 12 new companies. Michael Greeley, founder and general partner at Flybridge Capital Partners, debuted the idea (which was originally called “12 by 12 by 12 by 12 by 12″) in post for us in June 2009.

According to today’s announcement, which was issued at the Nantucket Conference on Nantucket Island, the participating executives are Colin Angle of iRobot, Jim Baum of Netezza, Jeff Bennett of NameMedia, Joe Chung of Allurent, Helen Greiner of CyPhy Works, Brian Halligan of HubSpot, Tim Healy of EnerNOC, Diane Hessan of Communispace, Scott Savitz of ShoeBuy.com, Brian Shin of Visible Measures, Ram Sudireddy of CHiL Semiconductor, and Michael Weintraub of Humedica.

The venture partners involved are Jon Auerbach, general partner at Charles River Ventures; Liam Donohue, general partner at .406 Ventures; Scott Friend, managing director at Bain Capital Ventures; Jamie Goldstein, general partner at North Bridge Venture Partners; Felda Hardymon, partner at Bessemer Venture Partners; Matt Harris, managing general partner at Village Ventures; Mike Hirshland, general partner at Polaris Venture Partners; Eric Hjerpe, partner at Kepha Partners; Bob Hower, general partner at Advanced Technology Ventures; Paul Maeder, general partner at Highland Capital Partners; Eric Paley, managing partner at Founder Collective; and Carl Stjernfeldt, general partner at Castile Ventures.

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Wade Roush wrote:

Thinking Screen Media, the Wellesley Hllls, MA, startup that pushes news, photos, and other content to Internet-connected screens, is tweaking its business model once again. Formerly called Frame Media, the company started out in 2006 with a focus on delivering information to wireless photo frames. But last year it started thinking bigger—wireless photo frames weren’t really catching on, and the company decided to target the broader category of connected screens, meaning not just digital frames but TVs, cable set-top boxes, game consoles, and Internet radios.

Now the Apple iPad seems poised to kill off the digital frame category completely, in the view of CEO Alan Philips. So the company has raised $2 million, through a Series B financing and the sale of one of its divisions, to work on its applications for the iPad and cable set-top boxes, Philips tells Xconomy.

“We now believe in multipurpose devices,” says Philips. “The wireless photo frame category just has not taken off, and because of the introduction of devices like the iPad and the ability for set-top boxes to have Internet connectivity, it’s unlikely that the frame market will take off. So we are focused on consumer devices that will have a push element, and we think that the iPad is the best example of such a device. If you fast forward two years, you could see 30 percent penetration [of the iPad], at least in the U.S. market, in terms of the number of kitchens and living rooms that have an iPad for remote control or photo-frame or on-demand media access.”

Thinking Screen raised $2 million in Series A funding from CommonAngels and Longworth Venture Partners back in November 2007 and extended that round by another $3 million in May 2008. The new Series B funds come from Scala, which runs a digital advertising and signage business out of Exton, PA. Scala paid $2 million total for an equity stake in Thinking Screen and to purchase Thinking Screen’s SignChannel division, which focuses on digital signage. Three of the 12 staffers in Thinking Screen’s Wellesley Hills office are now Scala employees, Philips says.

The spinoff and fundraising frees up Thinking Screen to concentrate on home information devices. The company launched free and $1.99 versions of its iPad app, called FrameChannel, in early April. The app allows users to choose from approximately 1,000 channels or “widgets” such as news feeds, weather and sports information, National Geographic photos, or photos from Flickr, Picasa, Facebook, or other photo sharing sites. (The free version mixes advertisements in with the other content.) “It’s really about how are you going to use the iPad for the 22 hours a day that you’re not holding it,” says Philips. “During that 22 hours, it’s pushing content based on your preferences to the screen, in the kitchen or living room or bedroom.”

Philips says the company is working on improvements to the app, such as additional widgets as well as channels that are more interactive or that present multiple types of data on a single screen. Similar FrameChannel widgets are available to owners of other devices such as the Roku Player, Tivo DVRs, and digital frames from Samsung, Sony, Philips, Motorola, Kodak, Toshiba, and Viewsonic.

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Wade Roush wrote:

Assured Labor, a Boston-based online services marketplace that launched in January 2009, said today that it has raised $1 million in seed funding from a group including Nexus Venture Partners, Kima Ventures, former Skype CEO Michael Van Swaaij, and OLX.com CEO Fabrice Grinda.

The MIT Media Lab spinoff, which Xconomy profiled shortly after its launch, uses the Web and text messaging to connect mid-to-low-wage workers in developing countries with potential employers. The company tested its service in Boston, but president David Reich says the goal was always to transfer the technology to emerging markets such as Nicaragua, where the company now plans to expand. Reich says the funding round will enable Assured Labor to enhance its Latin American site, EmpleoListo.

“This round is big for Assured Labor in two senses,” Reich wrote in a note to Xconomy this morning. “One, it’s going to allow us to take our disruptive model that we’ve proven in our pilot market, Nicaragua, and apply it in larger countries where the opportunity is exponentially larger. Second, we brought on a rock star team of investors that’s experienced in building massive marketplaces and understands the nuances of emerging markets just as my team does. For instance, Michael van Swaaij was the CEO of Skype and the Chief Strategy Officer at eBay during a period of tremendous growth. Nexus Venture Partners is one of the top venture funds operating in India and will be instrumental when we move in that direction. Also, Fabrice Grinda has built one of the largest marketplaces in the world with OLX.com and Jose Marin was one of the founders of DeRemate (a digital marketplace in Latin America which was sold to MercadoLibre).”

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Wade Roush wrote:

For a while now I’ve been curious about Gather, a privately funded news and social networking site based in downtown Boston. I knew that Gather was founded by marketing pro Tom Gerace, that it is owned in part by the public radio operator American Public Media, that it has an unusual way of paying users for contributing content, and that its traffic has been rising through the roof—the company claims that the number of unique visitors it attracts each month is 7.2 million, a 400 percent increase just in the last five months.

But I didn’t really get Gather. I didn’t understand who reads its articles, who writes them, or how the company makes money. And I was a bit skeptical, to be honest, about whether there’s much value in Gather’s content, which is largely a blend of news, reviews, recipes, celebrity gossip, and how-to articles, much of it seemingly cribbed by users from more traditional journalistic publications. But it’s hard to argue with 7 million unique visitors. Gather claims that its “reach,” meaning the number of households exposed to the site every day, exceeds that of CBS.com, CNBC.com, iVillage.com, PBS.com and even USAToday.com.

I recently sat down with Gerace for a long conversation about the company, which is his second startup, and also his second venture in what he calls “pay-for-performance” marketing. The first was BeFree.com, an affiliate marketing network that he founded in 1996 with his brother Sam. That company’s business was to sign up online merchants to send business to e-retailers like Barnesandnoble.com, LendingTree, and Dell in return for sales commissions. Gerace (pronounced je-RACE) says he learned from BeFree—which was purchased by rival ValueClick in 2002 for $128 million in stock—that paying commissions creates an “ecology” with “directly aligned incentives” where the affiliates themselves figure out how to win more customers over time. “We got to realize the power of that as billions of dollars in commerce flowed over our platform without us doing any business development,” Gerace says.

So the first thing I came to understand about Gather is that it represents Gerace’s attempt to recreate an Internet business driven by a pay-for-performance marketing model, but in the realm of user-generated news and discussion rather than e-retailing. In fact, Gerace, who graduated from Harvard in 1993 and spent three years writing case studies at Harvard Business School before plunging into entrepreneurship, seems to have deliberately gone searching, after the BeFree experience, for an Internet niche where he could apply the same core concept—call it the Tom Sawyer maneuver—of getting your users to do a lot of the work for you.

He chose the online media business, where traditional notions of authority have been blown to smithereens and anyone who can achieve high search-engine rankings can draw in traffic—which can then be monetized through advertising and other forms of marketing. In Gerace’s eyes, it’s all a matter of casting a sufficiently wide net.

“If you go back to 1990, everything we knew we got from one newspaper, a couple of magazines, and likely a nightly news or morning radio show,” Gerace says. “In effect, we were handing off our information sourcing to three or four editorial groups who told us what we needed to know. Today it’s completely different. More than half of all traffic, even to the largest news sites, comes from search. There are 15.5 billion searches run a month, which means 15.5 billion opportunities to …Next Page »

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