Get Smart on Marketing

Last night we hosted an MIT Enterprise Forum Get Smart program on marketing. Anita Brearton, Managing Director and Boston Forum Leader of Golden Seeds, provided a terrific overview of marketing in a B2B start-up environment. For emerging companies, marketing is often not a top priority when, as Anita pointed out, it should be considered as early as the company inception.

We had a lively discussion among a group that included the CEO of an established company and quite a few early stage entrepreneurs. Topics ranged from developing logos and company names to messaging, media programs, online advertising and social media.

Anita was formerly a CHEN PR client and prior a colleague of ours at Bay Networks. Golden Seeds identifies and invests in women-led ventures and provides women entrepreneurs with strategic business advice and the tools they need for growth.

MIT Enterprise Forum and the Art of Positioning

If you're a PR professional, thinking in terms of positioning and messaging is second nature, but you're probably not very comfortable with molecular mayhem. And if you're a PhD chemist, you're likely more at home in the world of stoichiometric equations than with elevator pitches and mission statements.

Our worlds collided last night at a session on "The Art of Positioning," part of the MIT Enterprise Forum's Start Smart series. Start Smart is a nine-week workshop (a mini-MBA program) designed for new and early stage entrepreneurs looking to delve into each phase of getting a new venture going. This particular Fall series is tailored for medical device entrepreneurs. Different experts present the workshops each week, and last night I teamed up with Kara Della Vecchia of KDV Communications to do the positioning workshop. We blended a dash of Guy Kawasaki and a touch of Geoffrey Moore to present our own take on the fastest path to positioning. Kara presented a case study on her client Starion Instruments, whose CEO (Kirt Kirtland) graciously called in from an airport to field some questions. The variety of presenters seemed to keep the students engaged, and we hope we helped them a bit on their path to commercializing their devices.

Whenever I meet with area entrepreneurs, I'm always impressed with the diversity of business concepts that are percolating out there. We had a gentleman with a device to address COPD, a fellow with a biodegradable staple for surgeries and a PhD physicist with a filtering technology with medical applications, to name just a few.

Thanks to Pete McDonald of Silicon Valley Bank for hosting and facilitating last night's session.

You can check out upcoming MIT Enterprise Forum of Cambridge sessions here.

Attention Entrepreneurs: Start Smart with the MIT Enterprise Forum

The MIT Enterprise Forum puts on some great programs, and they're a great value. Take the Start Smart series, which kicks off next Tuesday March 24th. This series consists of eight sessions (one per week) detailing the major steps involved in launching a successful startup -- all for the low, low price of $525. You couldn't touch a comparable college-level course for that amount of money.

Topics include positioning, pitching, recruiting, raising capital, bootstrapping, partnering and rainmaking. It's an MBA in a nutshell. There are some super presenters, including Doug Levin, who founded Black Duck Software; Lotus veteran Sue Balzano; Steve Zamierowski from Deloitte & Touche and Chad Joshi of Vegawatt (the guys who are turning restaurants' waste vegetable oil into electricity).

The event is hosted at my favorite law firm (because it's our law firm) - Morse, Barnes-Brown & Pendleton.

The DNA of Entrepreneurship: Lessons Learned Across the Generations

We work with the MIT Enterprise Forum, so we attend a lot of their events. One of my favorites is the end-of-the-school-year event, which always features seasoned entrepreneurs, sharing their wisdom with attendees.

This year's event has a twist: It features a father/daughter team and a father/son team from the Hatsopoulos and Schmergel families, respectively. Doug Banks, editor of Mass High Tech, will moderate the session.

Since my husband used to work at Thermo Electron, now ThermoFisher Scientific, I was very familiar with the story of George Hatsopoulos, the legendary and highly respected founder of Thermo. Dr. Hatsopoulos provided his distinguished leadership at Thermo as chairman and CEO from the time of its inception in 1956 until his retirement from those positions in 1999. Under his direction, Thermo Electron innovated and acquired its way to become a powerhouse in multiple markets, and a multi-billion dollar pillar of the local economy.

I've also had the pleasure of hearing his highly articulate daughter, Marina Hatsopoulos, speak at the Nantucket Conference a few years back. She is best known as the founding CEO of Z Corporation, leading it from 1994 to its sale in 2005 for multiples of revenue. The company is a leader in 3D printing. These days, she's a director at GSI Group and Tea Forte. (Haven't we all bought their tea -- in their fancy little silk tea bags - like French lingerie for tea -- as gifts at one time or another?)

I was less familiar with the Schmergel family, but that's only because I was late to the life sciences party around here. Gabriel Schmergel is known as a biotech trailblazer, having led biopharma pioneer, Genetics Institute, Inc. from 1981 until its acquisition by Wyeth in 1996. He holds an honorary doctorate of engineering degree from Worcester Polytechnic Institute.

Schmergel's son Greg is president and CEO of Nantero, a red-hot nanotech company using carbon nanotubes for the development of next-generation semiconductor devices. The company has raised $31.5M in funding to date. The younger Schmergel is a serial entrepreneur, with hot Web properties like About Inc. and ExpertCentral in his pedigree.

Even if the rest of us feel like underachievers by the end of the night, this promises to be an evening of good business and management lessons. And who knows? Maybe the parents among us will get some tips on guiding our progeny to prosperous, fulfilling careers.

MIT $100K Competition Winner: Diagnostics-for-All

The winning team: Krishna Yeshwant, Roozbeh Ghaffari, Hayat Sindi, Carol Waghorne, Jon Puz, and Gilbert Tang. Photo was supplied by MIT to the Boston Globe. Photo credit: Jeremy Gilbert

Yesterday's Globe brought us the news that a heartwarming non-profit won this year's MIT $100K Entrepreneurship Competition. This generation of young entrepreneurs determined to do good warms my jaded, clogged arteries. Here's the Xconomy take as well.

According to the Globe, Diagnostics-For-All (DFA) seeks to deliver affordable point-of-care diagnostic solutions to the global medical community; based on patent-pending technology developed in chemist George Whitesides’ laboratory at Harvard, DFA’s offering will serve as a platform for simple, portable, low-cost, and easy-to-dispose diagnostic tools for developing countries. According to a press release: Field clinicians have applauded DFA for its efforts to date in developing rapid and accurate diagnostic tools for liver, kidney, and metabolic diseases.

This marks the second big win for the fledgling organization, which took home the top prize in the social enterprise track of the Harvard Business School annual Business Plan Contest in late April. That award came with a $10,000 check.

For the first time ever at the MIT $100K competition, the audience got to pick a winner. That $10,000 prize went to Covalent Solar, whose product uses an MIT-invented solar concentrator photovoltaic technology, based on the redirection of light using dyes, which is simpler and less expensive than existing methods.

Josh Wolfe: "America's Leading Authority on Nanotech," Coming to Cambridge

If you live in the world of nanotech, you know Josh Wolfe, who authors a nano report co-branded with Forbes. Wolfe sports various catchy monikers. Forbes calls him "America's Leading Authority on Nanotechnology," while Red Herring has dubbed him "Mr. Nano." He's a co-founder and managing partner at Lux Capital.

Wolfe is coming to town this week, and will be keynoting at an MIT Enterprise Forum event on the evening of April 9. You can register here.

The Forum case study presentations (now called the Innovation Series) are always interesting. It's informative to hear a panel of experts dissect a company's strategy.

This year, the program committee added a keynoter in front of the case study session, and they've drawn some heavy hitters, like Dr. George Whitesides, co-founder of Genzyme, who presented at the March event.

This week's case study, following Wolfe's presentation, will be presented by Seth Coe-Sullivan, CTO of QD Vision, an early stage nanotech venture that manufactures quantum-dot products. A panel of experts will provide feedback on QD Vision's plans and strategy, offering suggestions for commercializing the company's technology.

The expert panel includes Jed Dorsheimer, principal and senior equity analyst, Canaccord Adams; Jack Derby, founder of Derby Management LLC; and Jake M. Reder, Ph.D., director of the Office of New Ventures, Dartmouth Medical School. The panel discussion will be moderated by Roger E. Bohn, MIT Sloan School of Management, visiting professor.

Logistics:
When: Wednesday, April 9, 2008
Networking: 5:30 p.m.
Program: 6:15-8:00 p.m.
Reception: 8:00-9:00 p.m.

Where: Stata Center (Bldg. 32), Kirsch Auditorium, 32 Vassar St., Cambridge

Energy Powering Innovation

The morning session on power during Thursday’s MITEF Innovation Summit kept attendees tuned in as speakers discussed alternative energy topics from wind dams to waste gasification. After a thought-provoking keynote by Dr. John Kao, the conference divided into its three sectors for the remainder of the day.

Stephen Connors, director of the Analysis Group for Regional Energy Alternatives at the MIT Laboratory for Energy and the Environment, kicked off the power sector and didn’t disappoint, discussing some of the most innovative, albeit sometimes far-off, energy technologies out there. Particularly interesting was Connors’ analysis of some of the more far-reaching energy technologies that haven’t yet become, as Connors put it, “the next killer amp.” He pointed out that an overemphasis on technology can lead to serious reliability issues when it comes to saving energy in today’s marketplace. While full of innovation, ideas like Chetwood Associates’ wind dam or the US Department of Energy’s FutureGen clean coal projects raise serious questions about necessity, convenience, reliability and even style – all concerns Connors listed for consumers and investors alike in the world of alternative energy.

Following up on Connors’ talk, the breakout session in the power track featured a panel made up of William Davis, president and CEO of Ze-gen, Jim Gordon, president of Cape Wind, and Dr. Christina Lampe-Onnerud, Founder and CEO of Boston-Power. The panel was moderated by Peter Rothstein, entrepreneur-in-residence at Flagship Ventures. All three of the panelists represented energy companies in fairly early stages and all three came from different areas of the energy marketplace, providing for interesting conversation.

Each speaker talked about the different hurdles they overcame as their companies took shape in the always-changing energy market. Davis, CEO of Ze-gen, a developer of waste gasification technology which converts waste into electrical energy, talked about trying not to upset the large waste management companies and also choosing to use only specific forms of waste in order to make permitting as smooth a process as possible.

For Jim Gordon and Cape Wind, the challenge has always been a NIMBY problem. NIMBY is energy jargon for “not in my backyard,” and for Cape Wind, it represents one of the biggest problems with putting offshore wind turbines on Nantucket Sound. Gordon shared some convincing stats, pointing out that the complete project will produce up to 420 megawatts of energy and will help reduce greenhouse gas emissions by 734,000 tons per year. That seems to me at least as good a reason as any to let Cape Wind do its thing.

Boston-Power Founder and CEO Dr. Christina Lampe-Onnerud (and CHEN PR client) hasn’t faced the ordinary challenges of a start-up due to the intense demand for the company’s next-generation Lithium-ion batteries. Coming off a $45 million round of venture capital funding - the largest round of funding of any New England company in the last quarter of ’07 - Dr. Lampe-Onnerud talked about market opportunities – in particular the opportunity to develop a safe, effective and environmentally friendly product. Dr. Lampe-Onnerud further relayed that the company chose China for its manufacturing facilities because the Chinese have the capability to produce quickly and efficiently, something that will enable Boston-Power to bring its product to market soon - the company is already in mass production.

More Innovation Summit coverage to come…

Gaming To Go

It would seem logical to expect an evening at MIT focused on mobile gaming to attract a very specific, stereotyped crowd. Instead, the room was filled with investors, attorneys, entrepreneurs and students. Ten years ago people involved in a conversation about video games would likely have been limited to young folks, programmers and a handful of pony-tailed Dungeons and Dragons aficionados who perhaps operated out of their mom’s basement.

In 2007 however, the tides have turned and video games are a multi-billion dollar industry and a key component in the business of modern technology. Thus, the people in attendance at Monday night’s MIT Enterprise Forum event on the mobile entertainment industry were not just there to play games.

The title of the night, “An Industry on the Move: When Games Are On the Go and Cross Platforms” did little to prepare me for the oft neglected topic of games designed specifically for mobile phones. As an avid gamer myself (and the owner of numerous cell phones over the years), I was aware of the niche industry that is mobile gaming, but was surprised by the amount of creativity and talent in the industry and on display.

The panel consisted of three industry experts from companies ranging from small start-up to multi-billion dollar giant. Matthew Bellows is GM of Floodgate Entertainment, a software development company focused on mobile gaming (whose award winning Mobile Age of Empires is pictured below), Beth Marcus is president/CEO of Zeetoo, a company founded to improve the quality and usability of handheld devices with mobile hardware, specifically cell phones (pictured right is Zeetoo's accessory the ZeeMote which allows you to wirelessly control games on your cell phone with a their joystick), and rounding out the discussion was Jeff Burdeen, VP of Digital Media and Games at Hasbro.

The discussion began with the panel reflecting on the ways that the mobile gaming industry has fallen short of where it was initially expected to be by the year 2007. Ten years ago, when the concept of games on mobile devices was still in its infancy, many people expected it to be a viable and significant piece of the gaming industry by now. As this has yet to come to pass, the panel voiced why they thought mobile gaming has been bogged down.

They focused primarily on two hurdles that have inhibited the expected advancement of the industry. The first was the hardware. Programming for cell phones is exponentially more difficult than programming for any other gaming platform because there is no consistency to the devices or to their operating systems. Everyone has different phones with different buttons and different programs. Because of this, there is no standard upon which these developers can begin to build their games. Creating a piece of software that works the exact same on a Razr as it does on a Sidekick is no easy task. The medium has “unlimited fragmentation” Bellows said.

The second hurdle mentioned was the carriers. At this point in time, when cell phones are still working their way up to true functionality with the internet, all of the data acquisitions have to go through Sprint, Verizon, AT&T or whomever provides a cell phone with its service. This means that for a company like Floodgate to distribute their games, they have to do so through a carrier and carriers will cut into their profits. If a game costs six dollars to download, and the carrier takes 50% of that total as a distributors fee, there is only three dollars going to the company to pay every hand that was involved with the development of the game, which is simply not enough given how many of these games are actually sold.

While Bellows and Marcus were optimistic throughout about the future of the mobile gaming industry, Burden was much more realistic about the possibilities. As a former employee of Nokia, who was involved in the creation of the N-Gage, (left) he was very aware of the challenges and potential of the medium, yet as a VP in a corporate giant he is now very aware of just how difficult a road these developers have in front of them.

Bellows claimed that technology is nearing the point where the games we see on consoles and computers can finally be mimicked on a cell phone. Strategy games, shooters and more complex sports titles that dominate sales in other markets will be portable to mobile devices. The obvious question to ask was asked by an audience member: “Why would I want to play these games on a phone when I can play them on a TV or a PSP (below)?” Bellows responded by explaining that his goal was not to mimic these games but instead to create games that are innovative and unique to mobile gaming. Games that incorporate the device’s location, the time of day and especially other mobile device users in the vicinity.

While this seemed interesting, Burdeen was quick to chime back in with his sobering realism and say that the games people want to play on their phones are games that can be played with one hand and that don’t require any learning curve. Games like poker, Tetris, Pac-man and pong are the games that thrive on these systems because they are simple and easy. In other countries, specifically Japan, workers commute up to two hours each way and therefore have time to invest in more complex mobile gaming, but here in America, this is rarely the case and the demand for a more in depth experience may be lacking.

Another question posed was by a woman who wanted to know how this panel planned on marketing to Baby Boomers, who still make up the greatest population demographic. Bellows explained that puzzle games and programs focused on brain stimulation (such as Nintendo’s Brain Age (left) which has sold 5-6 million copies in the first months of its existence) will have a large part in selling this industry.

In the end it was very clear that the mobile gaming industry has a lot of challenges looming in front of it as it battles to become a thriving endeavor. Bellows and Marcus were very impressive with their talent and ambitiousness, but it was hard to ignore Burdeen’s all too realistic assessment that developed out of so many frustrating years with Nokia. The one hopeful tidbit Burdeen was willing to leave with the audience was that with a technological development like the iPhone, it is becoming clear that technology can reach previously unthinkable heights very quickly and this technology has the ability to allow for a previously unheard of intersection between wireless and the internet. This being the case, mobile gaming will have many more distribution channels and creative avenues through which they can attempt to finally put their ambitious ideas into code.

David Weinberger is a Mover and Shaker

But then, we already knew that.

At last night's Mass TLC annual awards gala, lots of companies and individuals were recognized in various categories. You can read about all the winners here. Doug Levin took the CEO of the Year for putting Black Duck Software squarely on the map as experts in software licensing for anyone with a software application who cares about its IP pedigree (and let's face it - everyone should).

But I was excited for David Weinberger, who won in the "Movers and Shakers" category, along with Linda Plano, who is a director at the Massachusetts Technology Transfer Center. (Linda also has chaired the MIT Enterprise Forum's Ignite Clean Energy (ICE) Business Presentation Competition for the last two years.

I've heard great things about Linda, but David was my client many years ago when he was at Interleaf. Now he's best-known as the author of The Cluetrain Manifesto, and more recently, Everything is Miscellaneous, which David talks about here. He's a brilliant, humble, dryly witty guy and it was great to reconnect with him a year or so ago.

Congrats David!

MITEF: Robots Rove 'Round Homes, Battlefields

“Engineers make the suckiest user interfaces ever, they really do.”

Dr. Rod Brooks, CTO and cofounder, iRobot and Panasonic Professor of Robotics at MIT

That was my favorite quote of the evening from the brilliant and entertaining Dr. Rod Brooks, CTO and co-founder of iRobot and long-time director of the MIT Computer Science and Artificial Intelligence Laboratory. He keynoted last Wednesday night at the MIT Enterprise Forum of Cambridge event, “The Next Wave of the Robot Revolution.”

Brooks made that remark in the midst of a story about user-interface design for robots. An engineer he worked with complained that users didn’t know how to use his robot, and came to the conclusion that gives engineers a bad rep: “We need smarter users.”

Brooks cited a number of trends that robots are just tailor made to address:

• Industrial societies need to outsource low-cost manufacturing
• Aging populations will require more services
• Cultural expectations of job satisfaction have changed dramatically
• But some jobs can’t be outsourced (if they are location specific, like mining for example)

While we’ve come to accept robots as useful devices for search and rescue or assembly line work, in other cultures, they are more accepted as companions. For robots to make that leap, they will need to manipulate the world and to be more social, said Brooks.

Brooks observed that the more expensive robots are less autonomous; the less expensive robots are more autonomous. Expensive robots have usually been tailored for highly critical, high stakes tasks (space station repair), but tend to require a good deal of intervention. On the other hand, the Sony Aibo (sadly, discontinued) was cheap and pretty autonomous.

People do get attached. We’ve all read stories about folks naming their iRobot Roombas and you can buy a wardrobe for them here. (What’s next, rhinestone collars?)

Brooks shared photos from a war zone of one of iRobot’s bomb-detecting robots that a soldier had named Scooby Doo. Scooby sported his bomb tally in hatch marks right on his chassis, with both a count for IEDs and unexploded ordinance. But eventually one of those IEDs got the best of Scooby and the soldier sent him back to iRobot for repairs. The iRobot staffers explained they’d just send him a new one. The bomb technician replied: “I really want Scooby; we’ve been thru a lot together.”

Here’s Brooks’ recipe for the elements that make a successful robot, which he defines as a device that detects the world, computes and then changes the world external to itself. It’s no modest feat, as it requires:

• The visual object recognition capabilities of a two-year-old child
• The language capabilities of a four-year-old child (because they understand syntax completely)
• The manual dexterity of a six-year-old child
• The social sophistication of an eight-year-old

For background, check out the information on robots being developed at MIT's Computer Intelligence and Artificial Intelligence Lab (CSAIL) here. For a fun video of Domo, pictured above eating a banana, visit here.

In closing Brooks relayed that everyone always asks, “Did you get the company name from the movie, I, Robot?” And he has to respond that both parties stole it from the same place, the Isaac Asimov novel. (You can’t copyright a book title, he notes.)

But he adds that there are some interesting parallels with the movie. (He pops up a slide with a photo of the three iRobot cofounders on the day the company went public: himself, Helen Grenier (the chairman), and Colin Angle, the CEO. He explains that the movie also featured an academic like me, a smart woman like Helen and a dashing male lead like Colin. “But the academic is killed in the first scene, so I don’t like that movie very much.”

Brooks' keynote was followed by a terrific panel made up of executives from established firms like Brooks Automation and ABB Robotics, as well as younger firms – Kiva Systems, North End Technologies and Vecna Technologies. Sorry to shortchange the panel, but I’m out of steam for now.

For other takes on the evening, see Candace Lombardi’s CNET article here, Wade Roush’s Xconomy.com article here and a blog post from Binary Times here.

Announcing...Power, Drugs & Money

No, this is not the name of our annual Red Cross fundraiser. (But now that you mention it, pencil it in for December 4th at the Doubletree Waltham.)

And it's not the name for our non-tech practice group, although it's pretty apt.

It's the moniker for the Cambridge MIT Enterprise Forum's annual winter Innovation Summit, tentatively slated for Feb. 7, 2008. (Watch this space for the confirmation of the date.) The conference committee, which I'm honored to serve on for the third year in a row, is aiming to focus on local innovation in three key sectors -- energy, life sciences and financial services -- and how these industries affect the global economy. We'll try to build on the success of last year's Brave New Web conference, which was sold out at just over 400 attendees.

Kudos to our own Veep Kevin Kosh for blurting out this name at an internal brainstorming. Kudos to the conference organizers for having the sisu to bless it.

CHEN PR Co-founder named MITEF Volunteer of the Year

It was another successful night for the MIT Enterprise Forum of Cambridge, this time at their annual end of the year thank you dinner and bad business plan competition (See Barb Heffner's post on the latter below). The Forum hosts the event to thank its many volunteers and talk about the year's successes. 2006-2007 proved to be quite a year for the Cambridge group with over 4,300 individuals participating in 80 MITEF programs and services and 1,200 entrepreneurs served.

200-plus volunteers pledged their skills, knowledge and time over the past year to help make each MITEF event a top-notch technological gathering. Of those 200 volunteers, one was honored on Wednesday night for his or her exceptional work as the Forum's Volunteer of the Year.

I was proud to be in attendance to see CHEN PR Co-founder Barb Heffner named that one. It was and is my privilege to work with Barb on the MITEF team and as I listened to MITEF Executive Director Trish Fleming describe the 2006-2007 recipient's qualities before handing out the award, I was quite sure Trish was describing Barb.

Barb's guidance and expertise helped the Forum land a number of great local entrepreneurs as event speakers, spread the word about its monthly case presentations and provide the counsel of a true industry guru. It was obvious that Trish and the rest of the Forum staff couldn't have been happier to bestow the honor on Barb and I don't think anyone was more deserving.

MITEF: Bad Business Plan Competition

I'm not sure what it says about me that one of the professional highlights of springtime for me is the annual MIT Enterprise Forum Bad Business Plan Competition. This year's two entrants were especially bad, which is good.The tagline for the competition: "We bring bad things to light!" (A blatant ripoff of the old GE logo and tagline.) A few of the key judging criteria include:

• How quickly will the team lose all its money?
• How impractical is the technology?
• Did they take the power out of PowerPoint?
• How clearly did the team articulate that there is no competition?

The winning of bragging rights this year went to the plan for the NanoBioOpto Energy Corp., whose mission is "harnessing the natural power of sunlight via genetically engineered non-encapsulated, self-assembled lattices of silicon hybrid..." (You get the idea.)

As the presenter (who prefers to remain anonymous - I can't imagine why) explained: "Why ride one bubble when you can ride four?" The plan had something to do with energy production by phytoplankton with hydrogen dirigibles to transport it everywhere. It required a modest investment of $135 million to develop a proof of concept. A sure loser - hence it won!

A close runner-up was the plan for "Whack a Yankee." (Apologies to Yankees fans.) The mission of this enterprise is "to provide a constructive solution to Yankee Induced Stress Syndrome (YISS)." The outfit's tagline? "Don't say yes to YISS!" The pricing model involved a fee to buyers for thwacking Yankee players with a golf club, which was brandished throughout the presentation by the animated would-be CEO.

How to Build a Great Company, from the Experts

Especially with tech companies, you've got to remember the importance of thinking in terms of consumers (using that term broadly) and how they will be using your product. You can't just fall in love with what you're building for its own sake.

That was George Bell's lead lesson at the recent MIT Enterprise Forum session featuring four entrepreneurs sharing their pearls with a packed room of nearly 300 attendees. It was a memorable evening.

When you've got entrepreneurs of the caliber of the presenters at this session, it's hard to know where to start. The stories were wise and sometimes uproariously funny.

After Bell's (General Catalyst, Excite@Home, Upromise) opener, Jeff Taylor (Monster.com and now Eons) noted that back in his classified ad agency days, at his first encounter with Bell, "He fired my ass." The two later became friends, and Bell's General Catalyst is an investor in Eons.

Mike Duffy, a first time CEO at OpenPages, shared his story of reinventing the company. When he joined in 2000, the company had raised $50M and was burning cash at $12M a quarter. The market tanked and the company went from 300 to 40 employees in 2001. Ouch.

Duffy noted that one of the first things he focused on was establishing a culture that everyone could believe in, setting the tone for the way they'd work with customers and employees. The company developed award systems to recognize people who did amazing things. "A big part of building a great company is capturing peoples' hearts," Duffy said.

Taylor agreed: "This whole decade is about your people." He advocates a play hard/work hard culture.

Bell told many marvelous stories, but this was a favorite on the subject of culture. When the company reached 4000 employees, he realized he no longer knew most employees' names. So they began to try to capture the culture in training sessions and via policies. (He summarized the early training programs as: "Here's your PC. Good luck.") By the mid-90s, Excite started offering some quirky benefits -- dogs on campus, a breast-feeding policy. There were 20 or so bicycles on campus (honor system) that employees used to get around campus. The requirement was that when using the bikes, you also had to use the front basket to deliver any documents that needed to travel to your destination.

One day, a young engineer's Lamborghini was being repossessed. Bell stumbled open this scene and asked what happened. Short version: The engineer got in over his head when the stock was booming. Bell stepped in and guaranteed his loan. (Bell joked that this was probably a terrible lesson: "If you get in trouble, the CEO will bail you out.") As you might imagine, that story went through the company like wildfire and created a lot of good will.

Taylor chimed in with another often-told but still charming story. As Monster.com got larger, they had to look at employee productivity. He learned that folks needed time to run errands and pick up the dry cleaning. The company contracted with a local dry cleaner and instituted the Magic Closet, where employees could drop off their dry cleaning for pick up and return. The first week, only 14 people used it. The second week, 50 people used it -- and Taylor picked up the tab. He said he eventually learned that he didn't need to pick up the tab every week, but if he did it now and then, people were amused and word spread. Eventually, they had to have a Magic Room and hundreds of people were using the dry cleaning service.

And then there's the towel story. Monster.com wanted to encourage employees to exercise, so the buildings had showers, so folks could get outside at lunch. But Taylor just didn't feel folks were inspired. This begat the towel service. He had really fluffy Monster-logo'ed towels made up and parked 15 in the ladies' showers, 15 in the men's. They disappeared. A new batch was deposited in a few days. In the first year, they went through 1400 towels, and eventually, employees started giving them away to friends and neighbors. During that period, you'd see a scattering of Monster.com towels on nearly every beach trip.

to be continued...

MITEF - Digital Living Begets Digital Advertising

When it comes to Internet advertising, Baba Shetty, a media guru at Hill Holliday, can’t figure out why the migration from traditional platforms isn’t happening faster. His firm, one of the largest ad agencies in Boston, handles between $200 million and $1 billion in ad placements annually (he had to be cagey about specifics), so he knows whereof he speaks.

In the 1950s, advertisers could reach nearly 70% of their target audience via a hit TV show like “I Love Lucy,” Shetty explained to approximately 200 people attending the MIT Enterprise Forum’s recent “Digital Living” panel. That was back in the days of three major networks and a much less fragmented audience.

But today, prime-time TV reaches about 30% of households and the viewing audience is scattered across hundreds of channels. Internet advertising will grow 19.5% this year, but may not be moving fast enough. Morgan Stanley’s 2007 forecast on ad spending reports that $75 million will be spent this year on television and just $20.4 on Internet advertising. Shetty suggests that, in general, companies are overspending on TV and underspending on the Web.

Earlier this month, The Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) announced estimated Internet advertising revenues for 2006 at $16.8 billion, up 34% over 2005.

What’s holding up a stampede to Internet advertising? It requires a learning curve and a cultural shift. Marketing executives who are unfamiliar with the ins and outs of advertising on the Web perceive risk, and clients and agencies work under a dated model that suits traditional advertising. In some cases, those who own the budget fear giving up control to the unknown, or decision-making may be more distributed, that is – online advertising may live in a different budget.

Shetty observes that a number of factors can accelerate the movement of advertising to the Web:

• A CEO or CFO who gets it
• Analytics that support the move with cold, hard facts
• A strategic process that fundamentally rethinks the process
• Competitors are doing it!
• A marketing culture of innovation

A fun aside from Shetty: He recently heard a Procter & Gamble executive remark that they had considered advertising on podcasts and concluded that their budget would allow the purchase of every bit of advertising available on all podcasts. This, of course, would completely disrupt the economic model of one new medium, and gives you a feeling for just what early days we’re in.

Electric Sheep, Avatars and Laguna Beach

Probably the last place you’d expect to hear a discussion involving MTV’s “Laguna Beach: The Real Orange County” would be an auditorium at MIT. But, in a full house at the most recent MIT Enterprise Forum event, it was Laguna Beach, Showtime’s hit show “The L Word” and the Dave Matthews Band that kept an audience captivated late into the evening. That, and maybe the blonde-haired, pony-tailed avatar walking, talking and flying around a Second Life island.

A thirteenth-hour replacement to an already intriguing panel of experts at MITEF’s “Digital Living" event, Valerie Williamson of the Electric Sheep Company gave an abridged 10-minute presentation that made her an instant celebrity among the attendees.

The Electric Sheep Company, a service provider within 3D virtual worlds, boasts some impressive accomplishments including the Second Life Island that Valtoid Pixie, Valerie’s personal avatar, navigated during her demonstration. Pixie, as she was affectionately referred to, appeared at the Second Life location of Showtime’s “The L Word,” a place created for fans of the show to mingle, chat and even “meet” some of the show’s stars, a project designed by Electric Sheep.

According to Valerie, a Second Life meet and greet is any agent’s dream, providing fans with the opportunity to chat it up with their favorite stars while keeping screaming teenyboppers (or worse) at a safe distance.

Showtime isn’t the only media giant taking advantage of such a service. Valerie listed CBS, AOL/Time Warner and Sony/BMG Records as others that used Electric Sheep for various marketing campaigns.

At “Virtual Laguna Beach,” the home of MTV’s “Laguna Beach”, a reality show featuring the dramatic and glamorous lives of high schoolers in So Cal, Electric Sheep teamed with MTV and Makena Technologies (There.com) to successfully “virtualize” Pepsi, Cingular and Procter & Gamble.

Cingular, the official cell phone sponsor of the show, offers VOIP capability for any member of Virtual Laguna Beach using a virtual Cingular phone. While that might not seem like a jaw-dropping feature, a sixteen-year-old hanging out in Virtual Laguna Beach would so not want to be caught dead without the most stylish of phones.

With close to 400,000 members of Virtual Laguna Beach and growing, Valerie believes that Web 2.0 will soon be replaced by Web 3.0, a 3D virtual world much like that found in today’s Second Life.

It’s estimated that members of Virtual Laguna Beach spend an average of 36 minutes logged in for each visit. If sites like VLB continue to grow at such incredible rates, a “virtually” endless opportunity awaits companies like Electric Sheep. It seems it’s just a matter of time until we all have avatars flying around Second Life, mobbing our favorite celebrities while we chat on our virtual cell phones.

MITEF Cambridge: Digital Living - March 14th

The folks at the MIT Enterprise Forum of Cambridge have come up with another smokin' lineup for their March 14th event: Digital Living - Building Brands in the World of New Media.

Speakers include:

• Jeremy Allaire, founder and CEO of Brightcove, an Internet TV service
• Eric Alderman, founder and CEO of KickApps, a hosted platform for deploying user-generated content and social networking functionality on websites
• Jeff Morris, SVP for Broadband Strategy/Technology Development at Showtime Networks
• Baba Shetty, director of Media and Interactive at Hill Holliday

The event will be moderated by well-known VC Woody Benson of Prism VentureWorks.

The group will chat about opportunities in a consumer-driven marketplace and how we can tap them to reach new audiences.

You can register here.

BNW #2: Money Doesn't Buy Happiness But It Makes Passion Profitable

From Veep and roving correspondent Kevin Kosh...

That was my takeaway from the keynote presentation by Brightcove CEO Jeremy Allaire at the MIT Enterprise Forum’s Brave New Web event. Maybe I’m a romantic, but I wrongly expected a keynote full of grandiose ideas from a man who is a “Web 1.0” legend. It was actually a sobering – and quite educational – way to kick off the day. And in an industry with a voracious appetite for hype, and an event the MITEF folks said had the highest attendance since the bubble days, it was starting off on the right foot in my humble opinion.

Even Jeremy’s introduction signaled that he was all about “value” when he quipped that the audience was going to get “two presentations in one,” one on building a successful startup and one on the opportunities in rich media.

The first presentation was the most educational. Jeremy talked about needing people with big ideas, passion and extraordinary perceptiveness, but tempered that with recommendations such as knowing your limitations, focusing on early customers to make them successful and finding the right partners. In fact, one qualifying statement he repeated numerous times was “…even at the expense of broader ideas/vision.” Such a grounded perspective set exactly the right tone for the day, and even before successive panel members invoked baseball and Billy Beane (hey it is Boston after all), during Jeremy’s session, I had written in quotes, “It’s about small ball.” It’s about careful analysis and executing on the little things, walks, steals, singles, doubles and triples to position yourself for success. Plus it’s always better to have the bases full when you crank that homerun and break an 86-year curse…but I digress.

Brave New Web (BNW) #1: Web 1.0 vs 2.0?

At yesterday's sold out/smash hit Brave New Web conference, HBS Professor Joseph B. Lassiter III kicked off the plenary panel by asking his group to comment on Web 1.0 vs. Web 2.0, or to quibble about that use of terminology, if they desired. The session then debated the merits and shortcomings of Boston/New England as a Web 2.0 incubator (see next post).

Lassiter joked that with Web 2.0 startups, you've got a 46-year-old CEO. With Web 1.0 companies, you had two 23-year-old CEOs. That provoked a laugh. Jeff Taylor, founder of Eons, said, "Hey I am 46. I can't even get into my site" (which is targeted to the 50-something-plus demographic).

Fox Interactive's Adam Bain is a big sports fan. He reminded us that in 2003, the MLB used the slogan "This Time it Counts," when it was decided that the outcome of the All-Star Game would determine the home field advantage for the World Series. He feels this would be a good tagline for Web 2.0. While Web 1.0 gave us lots of great companies that changed the way we do business (Amazon, eBay, Google), Web 2.0 is going to change the way we interact and is producing whole new genres of media and business (rather than Web businesses that were modeled after traditional businesses). (This was a nice tie back to Jeremy Allaire's contention that online video has produced the "voyeurism" genre - a minor but significant example of Bain's point.)

Masthead's Richard Levandov said he's never really bought into these terms. He sees an evolution, a continuum, in the technology.

Michael Skok (North Bridge Venture Partners) noted that Web 2.0 involves shifts in technology, social behavior and business models, and he sees companies taking advantage of all three of these. You've got a technology infrastructure that's ubiquitous and free or cheap (open source and SaaS-based applications). You've got folks swapping four million files on line and interacting as never before. And you are seeing companies with revolutionary business models.

Eon's Jeff Taylor noted that in this new world, it's still all about brand. "If you get your brand right, everything else will come. Our site is about spirit and inspiration - which sure beats drying up like a raisin." Taylor also noted that he loves the fact that he can follow the customer every minute of the day, using new Web tools.

The ever-charming David Weinberger (Cluetrain author, now with the Harvard Berkman Center) noted three important trends:

• Sites are beginning to share their services in a way that lets us build completely new applications
• People have always been what drove the Web forward
• Growth of metadata that allows the loosening of boundaries; it turns out that it's far better to let information go, so that people can collaborate. We're seeing a lessening of corporate control and a resulting reformulation of business.