Wednesday, May 25, 2011

Its Time to Innovate in Providing Access to Startup Capital

Economic indicators tell us the economy is rebounding. Massachusetts relies on innovation and new companies to supply new high-paying jobs. Boston does have a concentration of repeat entrepreneurs, ideas, world-class universities and access to startup capital. But how many startups is enough to ensure Massachusetts’ leadership in tech innovation and the resulting economic health and jobs that implies?

As we continue the slow recovery, we must marshal our strengths to nurture genius and industry here, and I know the capital is there to support it. Mobile is a great example. Some claim Boston has lost the mobile and social media waves to the West Coast. Well, according to the mobile cluster of the Mass Technology Leadership Council there are more than 400 mobile startups employing 30,000 people in Massachusetts. We are sitting on a strong knowledge base of carrier and enterprise infrastructure, and the next generation of media and content-related expertise. Not only has Boston shined in the traditional area of infrastructure (such as Starent), but we have also produced some of the early and leading companies in mobile advertising (Third Screen, Quattro, et al).

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This article is written by Carl Stjernfeldt, Trustee of MassTLC and General Partner at Castile Ventures. This is the third of 12 articles outlining the MassTLC 2020 Challenge — creating 100,000 new technology jobs by 2020

Tuesday, May 17, 2011

The Cleantech Ecosystem in New England

Today Cleantech is one of the top three venture capital backed sectors in the US with 17% of investments made in Energy. In Q1 of 2011 Cleantech investment was up over 50% from Q1 of 2010 but this only tells part of the story. The Cleantech sector has grown tremendously over the past four years and although investment is up overall, the number of deals and especially dollars invested in seed funding has dropped.

Peter Rothstein, President of the New England Clean Energy Council, painted a complex landscape of the Cleantech sector for attendees of the May 17th MassTLC seminar, The Cleantech Ecosystem in New England. New England is home to over nine clean energy incubators, world-class research institutions, including Boston University and MIT, and one of the nation’s most active Cleantech venture capital pools. Still, a Cleantech start-up without a revenue stream will have difficulty raising money. “Even tougher,” added Marcie Black of Bandgap Engineering, ”is when you have a capital intensive product like a solar panel”. Bandgap’s solution to this challenge is to work within the current parameters of solar wafer manufacturing while still producing a more efficient product.

Martin Flusberg of Powerhouse Dynamics has been shipping energy management software for a year now and with a form of revenue they have been able to raise some seed capital. Strong feelings arouse on the east coast versus west coast funding, the later tends to have more deals and include more Series A deals.

Stuart Patterson has been there. With his company Equilibrium unable to find funding in 2009 he sold the company to EnerNoc. This was lucky for Nexamp a renewable power and clean energy solution provider. Staurt, CEO of Nexamp, wanted the company to be a one stop shop for Energy Management software and services, and renewable energy hardware and implementation. With their successful implementation of solar projects over the past several years though, the company focus had been more on renewable projects and not as much on the software side. With their acquisition of SolVera, Stuart is hoping to focus on the software side of the business while his co-CEO John Malloy will help to run the solar and renewable side of the business.

PepperDash is a self-funded company using revenues from products to fund work on what Howard Nunes, CEO, called a Predictive Facilities Management System. Howard discussed how their company is still in the proto-type phase and currently looking for partnerships to deploy their systems. Their model of self-funding gets around the challenge of finding early funding in New England, but it can also slows down the product development cycle.

Marcie Black, CTO and founder of Bandgap Engineering had always been interested in clean energy and saw it as a way to solve many of the world’s problems. While working at Los Alamos she started Bandgap but did not find the support she needed to move her idea forward until she moved herself and the company to the Boston area. She stated that it was very important for her company to be near an innovation cluster like the one in New England. Having VC backing from the east and west coast, as well as, overseas, Marcie is confident Bandgap’s technology will go to market more quickly.

Tom Zarella, CEO of SustainX, doesn’t worry about funding. The compressed air energy storage company that spun out of Dartmouth College just raised $20 million which should bring them close to commercialization. Their unique technology and ability to reach technological milestones consistently has given investors the confidence to overlook risks involved in Cleantech investments.

The discussion then turned to job creation and market growth. The panelists expressed frustration in the fact that there is not a comprehensive national policy. Each state has different incentives and mandates which makes it challenging to enter new markets in the US. On the other hand, European markets tend to be more standardized. Partnering with utility companies can help to overcome issues of market entry, but they are very slow adopters.

As Peter Rothstein wrapped up the panel, he talked of the future with some hope that new capital and new companies will continue to come to New England. The Cleantech ecosystem is what drives job growth and in turn capital growth. As more companies are created in the ecosystem, they require more services and suppliers creating more jobs.

Since there were more questions than time during the discussion, we would like to continue the conversation on the blog. Please post any questions you had of the panelists and we will post their answers.

Here are some additional links on Cleantech in New England and the panelists’ company websites,

Friday, May 13, 2011

MassTLC: Local Mobile Sector Employs 30,000

In a report released at its spring meeting in Cambridge today, the Mass Technology Leadership Council said that the Greater Boston mobile technology sector now employs 30,000 people in 400 companies.

The industry association’s Mobile Cluster conducted the study of employment at the various companies. MassTLC said in a press release that Massachusetts has “created a mobile hotbed” with growth driven in large part by young entrepreneurs focused on application development.

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MassTLC Spring Meeting - The Global Impact of Mobility

Over 300 entrepreneurs, investors and executives jammed the ballroom at the Kendall Square Marriott for the Council's Spring Meeting, The Global Impact of Mobility. Kicking off the meeting Steve Krom, Council Trustee and VP & GM New England, AT&T, announced that recent research conducted in partnership with BostInnovation revealed over 400+ mobile companies in the region Read full press release here

The morning continued with a lively interactive fireside chat between Kara Swisher, columnist for the Wall Street Journal, and George Bell, CEO, JumpTap. Kara's prediction? It's all about SoMoLo! Translation: social mobile local- take note entrepreneurs!!

Read more highlights here.

Click Here To View the Mobile Eco System Brochure

Kara Swisher learns more about the amazing entrepreneurial ecosystem at CIC...
Following the Spring Meeting Kara joined local entrepreneurs at CIC for an informal conversation on innovation in Massachusetts. There were no wall flowers in the room and the lively (understatement) conversation covered everything from the cool technologies they are working on to the inside scoop on Kara's new hoodie....
A special thanks to Tim Rowe and the folks at CIC for providing us with the space and Stephanie Castilla, CTO, Leaf Holdings; Walt Doyle, President & CEO, Where, Inc.; Brian Halligan, CEO & Founder, HubSpot; Philip Jacob, VP Technology Time, Inc.; Steve Kelly, CEO, Myomo; Matt Lauzon, Founder & President, Gemvara ; Mihael Mikek, CEO & Co-Founder, Celtra; Steve O'Leary, Managing Director, Aeris Partners; Katie Rae, Managing Director, Tech Stars; Meredith Flynn Ripley, President & CEO, HeyWire; David Rose, CEO, Vitality; Tim Rowe, Founder & President, Cambridge Innovation Center; Victoria Song, Associate, Flybridge Capital; and Gus Weber, EIR, Polaris Venture Partners for helping show Kara the amazing energy pouring out of the Massachusetts entrepreneurial ecosystem!!

Mobile Jobs Coverage
MassTLC: Local mobile sector employs 30,000
Study: Mobile industry employs 30,000 in Mass.
Mobile is Hot in Massachusetts: Mobile Companies Employ 30,000 People [Study]
Mobile Makes it in Mass

More Highlights from MassTLC's Global Mobile Spring Meeting

The Massachusetts Technology Leadership Council's conference on the global impact of mobility kicked off with an overview of the state of the global wireless industry. The moderator, Professor Iqbal Z. Quadir of MIT began by noting that while mobile phones are largely a convenience for inhabitants of the wealthy countries in the Northern hemisphere, they may be the key to prosperity for the less fortunate residents of the Southern hemisphere.

He reported that due to the declining cost of digital communications, more than 50% of the population in many of these countries, now have cell phones. In addition to using their phones for person-to-person communications, residents of Southern hemisphere countries also use them to pay bills and salaries. As a result, former cash economies now operate on credit.

The increasing use of cell phones has created business opportunities for software that can process transactions, validate the identity of users, and prevent money laundering. Moreover, countries in East Africa now want to become outsourcing hubs.
One panelist, Steve Whittaker, of BT, commented that thanks to the proliferation of cell phones, and the advent of the cloud, cities can now aggregate large amounts of data and track movement. This information enables them to monitor human traffic and better plan infrastructure.

Another panelist, Nick Sullivan, a fellow at The Fletcher School, observed that cell phone adoption rates differ across markets--and that circumstances drive adoption. In Kenya, the built-in flow of money from city workers to their families in rural areas created a natural application. There, the carrier with 80% market share, and a trusted brand, did a great job of setting up a network of self-employed agents to load money onto the phones at one end and unload money at the other.

In India, panelist Dr. Harmeet Singh of Tejas Networks told us that phones connect farmers to their end market. Now, farmers can quickly check commodity prices and calculate margins without leaving home.

The Q&A session focused on our lack of visibility into what's going on in the rest of the world, the North/South digital divide, the importance of the last mile, and queries about who will capture revenue: banks, carriers, applications or phone vendors.

Next up was a fireside chat with Kara Swisher, co-producer and co-host of D: All Things Digital moderated by George Bell, President and CEO, Jumptap. Those who have heard her will understand when I say that Kara's quips were the highlight of the conference. Unfortunately, I was not able to capture her quick repartee here--you had to be there.

Kara opined that 2011 is very different from the 2000 bubble in that entrepreneurs today place much more focused on revenue, although eyeballs are still important. When asked to identify a winner, she picked Groupon noting that getting local merchants as customers has always been a tough problem to solve.

Kara observed that she had recognized the importance of mobile early on, yet, even she was surprised at the rate at which adoption happened. She discussed how hard it's been for many organizations, especially large ones, to shift business models. For example, newspapers assumed mobile was an adjunct business, yet she asserted mobile is and will be at the center going forward.

Both Kara and George said the biggest change with mobile is that the online and physical worlds are becoming one as devices become more self-aware (due to onboard geo-location). Nevertheless, both speakers are still looking for devices to capitalize on this capability and become better at anticipating their needs. For example, George said that applications should open themselves when appropriate rather than waiting for him to command them to do so.

Kara said that for the first time, the business world is lagging the consumer world. Thanks to iPhones and apps, people's business people have higher expectations of the technology they use at work.

When everything is a screen, it ultimately alters when, where, and how people work. Office space will eventually go away.

Today, Kara said people point their phones at things to find out what they are. Someone asked whether that raises privacy issues when we start pointing our phones at others to discover their identity. This conversation led into one about companies increasing thirst for knowledge about individuals--which is powerful and dangerous at the same time.

After these introductory sessions, the audience split into breakout groups for two hours to explore topics such as mCommerce, mHealth, mobile innovation, and media convergence in greater depth before reconvening for a final session. Kara moderated this last session where the panel of entrepreneurs and VCs discussed ways to make money in mobile. Throughout the day, breaks enabled participants to visit various exhibitors who displayed a wide range of products and services to enhance the mobile experience.

Guest post contributed by Barbara Bix, BB Marketing Plus

Wednesday, May 4, 2011

Software Development: Secrets to Achieving Unprecedented Rates of Growth and Innovation

More than 100 techies turned out Tuesday morning at the British Consulate in Cambridge to learn how successful companies operate at unprecedented levels of business velocity; rapidly adapting and scaling to changing market conditions and customer needs. Jeff Hammond, Principal Analyst at Forrester Research led off the event with a terrific keynote presentation. Jeff focused on the team, building a culture and questioned the audience on what to look for when hiring. He shared a few tips shown below and his presentation can be found here.

Three Steps to a High Performance Team

1. Get (and keep) the right players
2. Create conditions for them to thrive and team
3. Manage with lean techniques and selective measures

Creating the culture or climate to keep and attract the “stars” is critical but not always easy to find or do. Numerous studies show a 10-time difference in productivity and quality among software developers and teams. Three cultural elements that create space for (and attract) intrinsically motivated development team members of stars:

1. Autonomy
2. Mastery
3. Purpose

Following Jeff, 5 senior engineering execs presented their tips for success. The presentations are provided (when available) below:

- Doug Gaff, Director of Technology, NPR Digital Services
- Lars Jankowfsky, Director of Quality Engineering, Kayak
- Michael Madden, Vice President, Integrated Media Enterprise,
Avid Agile and Scrum at Avid presentation- Tim Wegner, VP of Avance Engineering, Stratus Technologies, Avance Agile Process presentation- Andi Zink, CTO, Black Duck Software , High Performance Development at Black Duck presentationAttendees came away with tips on how to break out of the traditional, hiring methods and building a culture, insights into Agile development strategies and the use of open source components to rapidly build out infrastructure, applications and services.
MassTLC is planning additional programming in this area to address the needs of the audience. Watch for upcoming programs on how to build high performance software teams and cultures, and software processes and tools. We would love to hear your ideas and suggestions on software development topics. Please contact

Cloud-based services with athenahealth

About 60 people turned out on Tuesday to hear John Lewis, Regional VP of Sales at athenahealth speak about selling cloud-based solutions to health care organizations. Despite some CIO's concerns about privacy, athenahealth has sold its solution to 33,000 providers in 46 states and representing 60 practice specialties.

John attributed the company's success to its ability to simplify the complexity of health care for its customers. At the rapid rate at which health care is now evolving, John reports his company's customers appreciate not having to install a new version of software every time a reporting requirement changes.

The conversation was lively as audience members questions about athenahealth's future plans, the length of the sales cycle, objections they encounter at large hospitals, how the software will interact with HIEs, and CIO's concerns about SLAs. Afterwards, the health care cluster met to discuss a full roster of exciting programs for the rest of the year. Watch for upcoming programs including a panel discussion with George Brenckle, CIO of UMASS Memorial Health Center, and other senior level executives from the Center, on how health care reform has impacted the hospital’s IT initiatives.